Document:

Ex 10.54

                              EMPLOYMENT AGREEMENT

      THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into by and between
William R. Stewart ("Stewart") and Chugach Electric Association, Inc., an Alaska
electrical cooperative association headquartered in Anchorage, Alaska ("Chugach"
or "Employer"), retroactive as of July 1, 2006.

      WITNESSETH:

      WHEREAS, Chugach is engaged in the business of production, transmission
and distribution of electricity in Alaska;

      WHEREAS, Stewart has skills and experience in electric utility management
generally and with the business and technology associated with the production,
transmission and distribution of electricity; and

      WHEREAS, Chugach desires to obtain Stewart's services as the Chief
Executive Officer of its business, and Stewart desires to be employed in that
position by Chugach;

      NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein set forth, the parties hereto agree as follows:

      1. Employment. Chugach hereby employs Stewart as its Chief Executive
Officer, and Stewart hereby accepts such employment upon the terms and
conditions hereinafter set forth.

      2.    Duties.

            a. Stewart shall serve as Chugach's Chief Executive Officer and
shall perform his services as such within the framework of Chugach's Bylaws,
policies, procedures and goals as Chugach's Board of Directors shall from time
to time determine, including but not limited to the following:

                  (i) Board Policy 106, Delegations of Authority from the Board
of Directors to the Chief Executive Officer, Appendix A hereto;

                  (ii) Board Policy 107, Board of Directors - Chief Executive
Officer Relationship, Appendix B hereto; and

                  (iii) Board Policy 118, Delegation of Certain of the
Secretary's and Treasurer's Duties to the Chief Executive Officer, Appendix C
hereto.

In such capacity, Stewart (i) shall exercise general supervisory responsibility
and management authority over Chugach and all of its controlled affiliates and
(ii) shall

EMPLOYMENT AGREEMENT - 1

<PAGE>

perform such other duties commensurate with his position as may be assigned to
him from time to time by the Chugach Board of Directors.

            b. Stewart shall devote substantially all his business time,
attention and energies to the performance of his duties and functions under this
Agreement and shall not during the term of his employment hereunder be engaged
in any other substantial business activity for gain, profit or other pecuniary
advantage. Stewart shall faithfully, loyally and diligently perform his assigned
duties and functions and shall not engage in any activities whatsoever that
conflict with his obligations to Chugach during the term of his employment
hereunder. Notwithstanding the foregoing, nothing in the foregoing shall be
construed so as to limit or prohibit personal investments by Stewart; provided
that such investments shall not amount to a controlling interest in any entity
(other than trusts, limited partnerships or other entities adopted by Stewart
for estate planning purposes). Stewart also agrees that he will not participate
in any political activity that will or may reflect adversely upon Chugach
without obtaining the prior consent of Chugach's Board of Directors.

            c. Chugach shall furnish Stewart with an office and other facilities
at Chugach's headquarters location and services that are suitable to his
position and adequate for the performance of his duties and functions hereunder.

      3. Term of the Agreement. The term of this Agreement shall be for a period
of three (3) years commencing retroactively on July 1, 2006. This Agreement may
be extended by mutual written agreement of the parties reached on or before July
1, 2008, for a minimum of a one (1) year term, and thereafter for additional
terms of one or more years on mutual written agreement reached not less than
twelve (12) months prior to expiration of the then remaining term.
Notwithstanding the foregoing, this Agreement will automatically be extended for
successive one-year terms if the Board of Directors does not take formal action
otherwise on or before July 1, 2008, and annually thereafter, or unless
terminated as provided in Section 10 of this Agreement.

      4. Compensation. Chugach shall pay to Stewart, in consideration of and as
compensation for the services agreed to be rendered by Stewart hereunder, the
following:

            a. Salary. During the first year of this Agreement (July 1, 2006 -
June 30, 2007), Chugach shall pay to Stewart an annual salary of Two Hundred
Twenty Thousand Dollars ($220,000 US) (the "Base Salary"), payable in regular
installments on Chugach's normal paydays, less withholdings required by law and
as authorized by Stewart. On each July 1 anniversary date thereafter, the Base
Salary shall be adjusted based upon the percentage increase, if any, in the then
most current semi-annual Anchorage CPI-U index published by the U.S. Bureau of
Labor Statistics. The Base Salary shall not be decreased due to any reduction in
the CPI-U index.

EMPLOYMENT AGREEMENT - 2

<PAGE>

            b. Discretionary Performance-Based Bonus Program. The Board of
Directors may, in its sole discretion, establish annual or other
performance-based objectives for Stewart and assign fixed dollar amount or
percentage of Base Salary bonuses for the successful achievement of those
objectives. The stated objective(s) will be set forth in Appendix D hereto, to
be updated from time to time as the Board sees fit. For each objective met,
Stewart will be awarded the bonus associated with that objective, said
payment(s) to be made within thirty (30) days of the Board's determination, less
withholdings required by law or as authorized by Stewart. The parties
acknowledge that such bonus payments to Stewart, if any, are not considered
compensation under any of retirement plans offered by Chugach and therefore will
not be considered in determining Stewart's retirement benefits.

            c. Use of Company Vehicles. During the Employment Term, Stewart
shall be permitted to use Chugach vehicles on company business on a de minimus
basis. Stewart shall not be entitled to a company vehicle for personal use.

      5. Chugach-Provided Benefits. During the term of this Agreement and if
available then, Stewart shall be entitled to participate in all group health,
pension, 401(k), deferred compensation plans and other benefit plans maintained
by Chugach and provided to its salaried administrative personnel, on the same
terms as apply to participation therein by such personnel generally (except as
otherwise provided herein). Further, during the term of this Agreement, Stewart
shall be entitled to participate in all fringe benefit programs and shall
receive all perquisites if and to the extent that Chugach's Board of Directors
establishes and makes such benefits and perquisites available to its salaried
administrative personnel generally, including, but not limited to, Employer-paid
long-term disability insurance and life insurance coverage.

      6. Holidays, Sick Leave and Annual Leave. Stewart shall be entitled to
such holidays, sick leave and annual leave as are provided to Chugach's salaried
administrative personnel generally.

      7. Expenses. During the term of this Agreement, Chugach shall reimburse
Stewart for all reasonable travel, entertainment and other business expenses
incurred or paid by Stewart in performing his duties and functions hereunder,
subject to Stewart's accounting for and reporting such expenses pursuant to
applicable Chugach policies.

      8. Non-Competition. During the term of this Agreement, during any
extension thereof, and for a period of six (6) months after termination of this
Agreement, Stewart shall not enter into or participate in any business
competitive to the business carried on by Chugach in Southcentral Alaska or at
such additional locations, if any, outside Southcentral Alaska at which Chugach
conducts business. As used herein, the term "business competitive to the
business carried on by

EMPLOYMENT AGREEMENT - 3

<PAGE>

Chugach" means any business that involves the production, transmission or
distribution of electricity, and the words "Southcentral Alaska" mean a business
conducted in whole or in part within the boundaries of the Municipality of
Anchorage, the Kenai Peninsula Borough, or the Matanuska-Susitna Borough. The
provisions of this paragraph 8 shall survive the expiration and/or termination
of this Agreement. If a court of competent jurisdiction or arbitrator, as the
case may be, should declare any or all of this provision unenforceable because
of any unreasonable restriction of duration and/or geographical area, then such
court or arbitrator shall have the express authority to reform this provision to
provide for reasonable restrictions and/or to grant Chugach such other relief,
at law or in equity, as is reasonably necessary to protect its interests.

      9. Confidential Information. During the term of this Agreement and for so
long thereafter as the information remains confidential, Stewart will not use
for his own advantage or disclose to any unauthorized person any confidential
information relating to the business operations or properties of Chugach and any
affiliate of Chugach. Upon the expiration or termination of this Agreement, upon
Chugach's request, Stewart will surrender and deliver to Chugach all documents
and information of every kind relating to or connected with Chugach and its
affiliates. As used herein "confidential information" means all information,
whether written or oral, tangible or intangible, of a private, secret,
proprietary or confidential nature, of or concerning Chugach and its business
and operations, including without limitation, any trade-secrets or know-how,
computer software programs in both source code and object code, information
regarding any product or service, development, technology, technique, process or
methodology, any sales, promotional or marketing plans, programs, techniques,
practices or strategies, any expansion or acquisition plans, any operational and
management guidelines, any cost, pricing or other financial data or projections,
and any other information which is to be treated as confidential because of any
duty of confidentiality owed by Chugach to any third party or any other
information that Chugach shall, in the ordinary course of its business, possess
or use and not release externally without restriction on use or disclosure. The
foregoing confidential information provision shall not apply to information
which: (i) is or becomes publicly known through no wrongful act of Stewart, (ii)
is rightfully received from any third party without restriction and without
breach by Stewart of this Agreement; or (iii) is independently developed by
Stewart after the term of his employment hereunder or is independently developed
by a competitor of Chugach at any time. The provisions of this paragraph 9 shall
survive the expiration and/or termination of this Agreement.

      10.   Termination.

            a. Termination for Cause. Chugach may terminate Stewart's employment
for "cause" immediately upon written notice to Stewart, provided, however, that
Stewart has been given ten (10) days written notice of cause for termination and
has failed to, or is unable to, cure such cause within that time. Such

EMPLOYMENT AGREEMENT - 4

<PAGE>

notice shall specify in reasonable detail the acts or omissions that constitute
cause for termination. For purposes of this Agreement, "cause" means a
business-related reason that is not arbitrary, capricious or illegal and which
is based on facts (i) supported by substantial evidence and (ii) reasonably
believed by the Board of Directors to be true. Examples of "cause" for
termination of employment are provided in Chugach Operating Policy 013 dated
September 19, 2001, and are incorporated herein by reference to the extent they
are consistent with this Agreement. In the event of the involuntary termination
of his employment for cause, Stewart shall not be entitled to receive any
compensation hereunder other than his Salary and employee benefits and leave as
accrued through the effective date of such termination. Stewart's obligations
under Paragraphs 8 and 9 shall continue under the terms and conditions of this
Agreement.

            b. Termination Without Cause. Chugach may terminate Stewart's
employment without cause at any time during the term of this Agreement or any
extension thereof, provided however, that Chugach shall continue to pay Stewart
his Base Salary and shall provide him all benefits that he would have received
had his employment not been terminated then, said payments and benefits to
continue without interruption through the end of the then remaining term of this
Agreement.

            c. Voluntary Termination. Stewart may voluntarily terminate his
employment under this Agreement at any time upon sixty (60) days' prior written
notice to Chugach's Board of Directors, whereupon Chugach's employment of
Stewart shall terminate at the end of the sixty (60) day notice period. In the
event of Stewart's voluntary termination of employment, he shall not be entitled
to receive any compensation hereunder other than his Salary and employee
benefits as accrued through the effective date of such termination. Stewart's
obligations under Paragraphs 8 and 9 shall continue under the terms and
conditions of this Agreement.

            d. Disability. Chugach may terminate Stewart's employment after
having established Stewart's Disability, subject to applicable state and/or
federal law. For purposes of this Agreement, "Disability" means a physical or
mental disability which impairs Stewart's ability to substantially perform his
duties under this Agreement and which results in Stewart becoming eligible for
long-term disability benefits under Chugach's long-term disability plan (or, if
Chugach has no such plan in effect, which impairs Stewart's ability to
substantially perform his duties under this Agreement for a period of 180
consecutive days). Stewart shall be entitled to the compensation and benefits
provided for under this Agreement for (i) any period during the term of this
Agreement and prior to the establishment of Stewart's Disability during which
Stewart is unable to work due to a physical or mental disability, or (ii) any
period of Disability which is prior to Stewart's termination of employment
pursuant to this paragraph.

EMPLOYMENT AGREEMENT - 5

<PAGE>

            e. Death. This Agreement shall automatically terminate the day after
Stewart's death if it has not already terminated prior to that date.

            f. Miscellaneous. In the event of any termination or attempted
termination hereof: (i) if multiple events, occurrences or circumstances are
asserted as bases for such termination or attempted termination, the event,
occurrence or circumstance that is earliest in time, and any termination or
attempted termination found to be proper hereunder based thereon, shall take
precedence over the others; (ii) no termination of this Agreement shall relieve
or release either party from liability hereunder based on any breach of the
terms hereof by such party occurring prior to the termination date; and (iii)
the terms of this Agreement relevant to performance or satisfaction of any
obligation hereunder expressly remaining to be performed or satisfied in whole
or in part at the termination date shall continue in force until such full
performance or satisfaction has been accomplished and otherwise neither party
hereto shall have any other or further remaining obligations to the other party
hereunder.

            g. No Set-off; No Duty of Mitigation. There shall be no right of
setoff or counterclaim, in respect of any actual or alleged claim, debt or
obligation, against any payments or benefits required to be made or provided to
Stewart hereunder, including, without limitation, pursuant to subparagraph
10(b). In the event of any termination of Stewart's employment under
subparagraph 10(b), Stewart shall be under no obligation to seek other
employment and shall be entitled to all payments or benefits required to be made
or provided to Stewart hereunder, without any duty of mitigation of damages and
regardless of any other employment obtained by Stewart.

      11. Injunctive Relief. It is agreed that the services of Stewart are
unique and that any breach or threatened breach by Stewart of any provision of
this Agreement cannot be remedied solely by damages. Accordingly, in the event
of a breach by Stewart of his obligations under this Agreement, Chugach shall be
entitled to seek and obtain interim restraints and permanent injunctive relief,
restraining Stewart and any business, firm, partnership, individual, corporation
or entity participating in such breach or attempted breach. Nothing herein,
however, shall be construed as prohibiting either party from seeking injunctive
relief to require resolution of disputes or controversies arising out of or
relating to this Agreement to be resolved pursuant to paragraph 12 below.

      12. Arbitration. Any dispute or controversy arising out of or relating to
this Agreement or any claimed breach hereof shall be resolved, at the request of
either party, by a private arbitration proceeding. The request for arbitration
shall be made in writing no later than thirty (30) days after the alleged act or
omission on which it is based. The arbitration proceeding shall be conducted
pursuant to the Alaska Revised Uniform Arbitration Act, AS 09.43.300 - 09.43.595
(the "Act") and the most current version of the employment arbitration rules
published by the dispute

EMPLOYMENT AGREEMENT - 6

<PAGE>

resolution organization whose services are used by these parties (the
"Arbitration Rules"), each of which is incorporated herein by this reference to
the extent that the Act and the Arbitration Rules are consistent with this
Agreement. The arbitrator shall be an impartial arbitrator qualified to serve in
accordance with the Arbitration Rules. The arbitrator shall be selected by
mutual agreement of the parties. If the parties are unable to agree to a
mutually acceptable arbitrator within twenty-one (21) days of the request for
arbitration, Chugach shall select an impartial dispute resolution organization
to provide the parties a list of seven (7) arbitrators. After a coin toss to
determine who makes the first strike, the parties shall strike names from the
list alternately until the name of one arbitrator remains. That arbitrator shall
be deemed mutually acceptable to both parties unless the arbitrator is
unavailable, in which case the last arbitrator whose name was struck shall be
deemed acceptable to the parties, and so on. The arbitration hearing shall be
held in Anchorage, Alaska, or in such other place as may be mutually agreed upon
by the parties, at a time and location determined by the arbitrator. Within
thirty (30) days of the close of the arbitration hearing, the arbitrator shall
hand down a written decision and award. The decision shall explain the basis for
the arbitrator's award. The arbitrator shall have authority to interpret and
enforce this Agreement, but shall not have authority to alter, amend or
supersede any provision of this Agreement. The decision and award shall be final
and binding on the parties, subject only to such appeal rights as are available
under the Act. Either party may seek entry of judgment upon such decision and
award in any court having jurisdiction over the parties. The expenses of the
arbitration proceeding shall be borne by Chugach. Each party shall pay for and
bear the cost of its own experts, witnesses and legal counsel in such
arbitration proceeding.

      13.   Indemnification.

            a. Chugach shall indemnify Stewart (as a "protected person") to the
fullest extent permitted by AS 10.25.145 (the terms of which are incorporated
herein by this reference) against all costs, expenses, liabilities and losses
(including, without limitation, attorneys' fees, judgments, penalties and
amounts paid in settlement) reasonably incurred by Stewart in connection with
any action, suit or proceeding, whether civil, criminal, administrative or
investigative in which Stewart is made, or is threatened to be made, a party to
or a witness in such action, suit or proceeding by reason of the fact that he is
or was an officer or agent of Chugach or of any of Chugach's controlled
affiliates or is or was serving as an officer, trustee, agent or fiduciary of
any other entity at the request of Chugach (a "Proceeding").

            b. Chugach shall advance to Stewart all reasonable costs and
expenses incurred by him in connection with a Proceeding within twenty (20) days
after receipt by Chugach of a written request for such advance, accompanied by
an itemized list of the actual or anticipated costs and expenses and Stewart's
written undertaking to repay to Chugach on demand the amount of such advance if
it shall ultimately be determined that Stewart is not entitled to be indemnified
against such

EMPLOYMENT AGREEMENT - 7

<PAGE>

costs and expenses. Stewart shall periodically account to Chugach for all such
costs and expenses incurred by Stewart in connection with his defense of the
Proceeding.

            c. The indemnification provided to Stewart hereunder is in addition
to, and not in lieu of, any additional indemnification to which he may be
entitled pursuant to Chugach's Certificate of Incorporation or Bylaws, any
insurance maintained by Chugach from time to time providing coverage to Stewart
and other officers and directors of Chugach, or any separate written agreement
with Stewart. The provisions of this paragraph 13 shall survive any termination
of this Agreement.

      14. Amendment and Modification. This Agreement contains the entire
agreement between the parties with respect to the subject matter hereof, and
supersedes any and all prior agreements, arrangements or understandings between
the parties hereto with respect to the subject matter hereof, whether written or
oral, including but not limited to the parties' Memorandum of Agreement in
Principle and the agreements under which Stewart served as Chugach's interim
Chief Executive Officer. Subject to applicable law and upon the consent of
Chugach's Board of Directors, this Agreement may be amended, modified and
supplemented by written agreement of Chugach and Stewart with respect to any of
the terms contained herein.

      15. Waiver of Compliance. Any failure of either party to comply with any
obligation, covenant, agreement or condition on its part contained herein may be
expressly waived in writing by the other party, but such waiver or failure to
insist upon strict compliance shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. Whenever this Agreement requires or
permits consent by or on behalf of any party, such consent shall be given in
writing.

      16. Notices. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given if delivered by hand, sent by registered or certified U.S. Mail,
postage prepaid, commercial overnight courier service or transmitted by
facsimile and shall be deemed served or delivered to the addressee at the
address for such notice specified below when hand delivered, upon confirmation
of sending when sent by fax, on the day after being sent when sent by overnight
delivery or five (5) days after having been mailed, certified or registered,
with postage prepaid:

                If to Chugach:                  If to Stewart:

      Chugach Electric Association, Inc.   William R. Stewart
      P.O. Box 196300                      3200 Discovery Bay Drive
      Anchorage, AK 99519-6300             Anchorage, AK 99515

EMPLOYMENT AGREEMENT - 8

<PAGE>

        Facsimile: (907) 762-4688                         Facsimile:
        Attention: Chairman of Board of Directors

or, in the case of either such party, to such substitute address as such party
may designate from time to time for purposes of notices to be given to such
party hereunder, which substitute address shall be designated as such in a
written notice given to the other party addressed as aforesaid.

      17. Assignment. This Agreement shall inure to the benefit of Stewart and
Chugach and be binding upon the successors and general assigns of Employer. This
Agreement shall not be assignable by either party except to the extent set forth
in paragraph 20.

      18. Enforceability. In the event it is determined that this Agreement is
unenforceable in any respect, it is the mutual intent of the parties that it be
construed to apply and be enforceable to the maximum extent permitted by
applicable law.

      19. Applicable Law. This Agreement shall be construed and enforced in
accordance with the laws applicable to contracts executed, delivered and fully
to be performed in the State of Alaska.

      20. Beneficiaries: Executive's Representative. Stewart shall be entitled
to select (and to change, from time to time, except to the extent prohibited
under any applicable law) a beneficiary or beneficiaries to receive any
payments, distributions or benefits to be made or distributed hereunder upon or
following Stewart's death. Any such designation shall be made by written notice
to Chugach. In the event of Stewart's death or of a judicial determination of
Stewart's incompetence, references in this Agreement to Stewart shall be deemed,
as appropriate, to refer to his designated beneficiary, to his estate or to his
executor or personal representative ("Stewart's Representative") solely for the
purpose of providing a clear mechanism for the exercise of Stewart's rights
hereunder in the case of Stewart's death or disability.

//
//
//

EMPLOYMENT AGREEMENT - 9

<PAGE>

      IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective on and as of the day and year first above written.

                                            CHUGACH ELECTRIC ASSOCIATION, INC.

                                            By: /s/ JEFF LIPSCOMB
                                                -------------------------------
                                            Name: JEFF LIPSCOMB
                                            Title: CHAIRMAN OF THE BOARD

                                            WILLIAM R. STEWART

                                            /s/ WILLIAM R. STEWART
                                            -----------------------------------

EMPLOYMENT AGREEMENT - 10EXHIBIT 10.1

<TABLE>
<S>                                    <C>                                              <C>                     <C>
ADB No. N01-AI-60014                                                                         OMB Approval 2700-0042 / 0990-0115
====================================================================================================================================
                                      |1. THIS CONTRACT IS A RATED ORDER               |RATING                    |PAGE  OF  PAGES
                                      |   UNDER DPAS (15 CFR 350)              >       |                          |        |
            AWARD/CONTRACT            |                                                | N/A                      |   1    |   33
------------------------------------------------------------------------------------------------------------------------------------
2. CONTRACT (Proc. Inst. Ident.) NO.  |3. EFFECTIVE DATE                      |4. REQUISITION/PURCHASE REQUEST/PROJECT NO.
   HHSN266200600014C                  |   September 29, 2006                  |     DMID 2006-0473
------------------------------------------------------------------------------------------------------------------------------------
5. ISSUED BY                    CODE|                            |6. ADMINISTERED BY (If other than Item 5)  CODE |   N/A
                                     ----------------------------|                                                 -----------------
    National Institutes of Health, NIAID                         |
    DEA, Office of Acquisitions                                  |    MID RCB-A
    6700-B Rockledge Dr., Room 3214, MSC 7612                    |
    Bethesda, Maryland 20892-7612                                |
                                                                 |
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7. NAME AND ADDRESS OF CONTRACTOR (No. street, county, state and ZIP Code)             |8. DELIVERY
                                                                                       |   [ ] FOB ORIGIN    [X] OTHER (See below)
SIGA Technologies, Inc.                                                                |                     FOB Destination
4575 SW Research Way, Suite 230                                                        |--------------------------------------------
Corvallis, OR 97333                                                                    |9/ DISCOUNT FOR PROMPT PAYMENT
                                                                                       |   N/A
                                                                                       |
                                                                                       |--------------------------------------------
                                                                                       |10. SUBMIT INVOICES       |ITEM
---------------------------------------------------------------------------------------|                          |
CODE                                    |FACILITY CODE                                 |ADDRESS SHOWN IN:         |Art. G.3
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11. SHIP TO/MARK FOR              CODE  | N/A                    |12. PAYMENT WILL BE MADE BY            CODE     | N/A
                                         ------------------------|                                                 -----------------
                                                                 |
  Article F.1                                                    |  See Article G.3
                                                                 |
-----------------------------------------------------------------|------------------------------------------------------------------
13. AUTHORITY FOR USING OTHER FULL AND OPEN COMPETITION: N/A     |14. ACCOUNTING AND APPROPRIATION DATA:
                                                                 |    EIN: 1-133864870-AI SOC 25.55 CAN: 6-8467101
  [ ] 10 U.S.C. 2304(c)( )          [ ] 41 U.S.C. 253(c)( )      |    Obligate: $8,191,538
                                                                 |
-----------------------------------------------------------------|------------------------------------------------------------------
   15A. ITEM NO.   |            15B. SUPPLIES/SERVICES           | 15C. QUANTITY | 15D. UNIT |   15E. UNIT PRICE  |   15F. AMOUNT
-----------------------------------------------------------------|---------------|-----------|--------------------|-----------------
                                                                 |FY06           |           |                    |$ 3,191,538
Title: NDA Enabling Development for SIGA-246: A Smallpox         |FY07           |           |                    |$10,368,051
Antiviral Drug                                                   |FY08           |           |                    |$ 2,984,928
Period: September 29, 2006 - September 28, 2009                  |               |           |                    |
Contract Type: Cost Reimbursement Completion                     |               |           |                    |
RFP No.: BAA-NIH-NIAID-DMID-06-35                                |               |           |                    |
------------------------------------------------------------------------------------------------------------------|-----------------
                                                               15G. TOTAL AMOUNT OF CONTRACT                  >   |$16,554,517
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                                                       16. TABLE OF CONTENTS
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 (X)| SEC. |                DESCRIPTION                | PAGE(S) | (X) | SEC. |                DESCRIPTION                | PAGE(S)
-----------------------------------------------------------------|------------------------------------------------------------------
                      PART I - THE SCHEDULE                      |                    PART II - CONTRACT CLAUSES
-----------------------------------------------------------------|------------------------------------------------------------------
 [X]|  A   |SOLICITATION/CONTRACT FORM                 |     1   | [X] |  I   |CONTRACT CLAUSES                           |   25
----|------|-------------------------------------------|---------|------------------------------------------------------------------
 [X]|  B   |SUPPLIES OR SERVICES AND PRICE/COST        |     4   |     PART III - LIST OF DOCUMENTS, EXHIBITS AND OTHER ATTACH.
----|------|-------------------------------------------|---------|------------------------------------------------------------------
 [X]|  C   |DESCRIPTION/SPECS./WORK STATEMENT          |     7   | [X] |  J   |LIST OF ATTACHMENTS                        |   32
----|------|-------------------------------------------|---------|------------------------------------------------------------------
 [X]|  D   |PACKAGING AND MARKING                      |    12   |            PART IV - REPRESENTATIONS AND INSTRUCTIONS
----|------|-------------------------------------------|---------|------------------------------------------------------------------
 [X]|  E   |INSPECTION AND ACCEPTANCE                  |    12   | [X] |  K   |REPRESENTATIONS, CERTIFICATIONS            |   33
----|------|-------------------------------------------|---------|     |      |AND OTHER STATEMENTS OF OFFERORS           |
 [X]|  F   |DELIVERIES OR PERFORMANCE                  |    13   |     |      |                                           |
----|------|-------------------------------------------|---------|-----|------|-------------------------------------------|---------
 [X]|  G   |CONTRACT ADMINISTRATION DATA               |    15   | [ ] |  L   |INSTRS., CONDS., AND NOTICES TO OFFERORS   |
----|------|-------------------------------------------|---------|-----|------|-------------------------------------------|---------
 [X]|  H   |SPECIAL CONTRACT REQUIREMENTS              |    17   | [ ] |  M   |EVALUATION FACTORS FOR AWARD               |
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                                    CONTRACTING OFFICER WILL COMPLETE ITEM 17 OR 18 AS APPLICABLE
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17.  [X]  CONTRACTOR'S   NEGOTIATED  AGREEMENT   (Contractor  is | 18.  [ ]  AWARD   (Contractor  is  not  required  to  sign  this
required  to sign  this  document  and  return  __2__  copies to | document.)     Your     offer     on     Solicitation     Number
issuing  office.)  Contractor  agrees to furnish and deliver all | __________________________,  including  the additions or changes
items  or  perform  all the  services  set  forth  or  otherwise | made by you which  additions  or  changes  are set forth in full
identified  above  and  on  any  continuation   sheets  for  the | above,  is hereby  accepted as to the items  listed above and on
consideration  stated herein.  The rights and obligations of the | any  continuation  sheets.  This award  consummates the contract
parties to this contract shall be subject to and governed by the | which consists of the following documents:  (a) the Government's
following   documents:   (a)   this   award/contract,   (b)  the | solicitation  and your offer,  and (b) this  award/contract.  No
solicitation, if any, and (c) such provisions,  representations, | further contractual document is necessary.
certifications,   and   specifications,   as  are   attached  or |
incorporated  by  reference  herein.   (Attachments  are  listed |
herein.)                                                         |
-----------------------------------------------------------------|------------------------------------------------------------------
19A. NAME AND TITLE OF SIGNER (Type or print)                    |20A. NAME OF CONTRACTING OFFICER
                                                                 |
     Dennis E. Hruby Chief Scientific Officer                    |Yvette R. Brown, Contracting Officer, MID RCB-A, OA, DEA, NIAID
-----------------------------------------------------------------|------------------------------------------------------------------
19B. NAME OF CONTRACTOR                   |19C. DATE SIGNED      |20B. UNITED STATES OF AMERICA                   |20C. DATE SIGNED
                                          |                      |                                                |
 /s/ Dennis E. Hruby                      |                      |BY   /s/ Yvette R. Brown                        |
 ---------------------------------------  |                      |     ----------------------------------         |
 (Signature of person authorized to sign) | 9/26/06              |     (Signature of Contracting Officer)         | 9/26/06
====================================================================================================================================
NSN 7540-01-152-8069                                          26-107                            STANDARD FORM 26 (REV. 4-85)
PREVIOUS EDITION UNUSABLE                               Computer Generated                      Prescribed by GSA
                                                                                                FAR (48 CFR) 53.214(a)
</TABLE>

<PAGE>

                                                  Contract No. HHSN266200600014C

                       DETAILED TABLE OF CONTRACT CONTENTS

<TABLE>
<S>                                                                                                                          <C>
PART I - THE SCHEDULE

   SECTION A - SOLICITATION/CONTRACT FORM

   SECTION B - SUPPLIES OR SERVICES AND PRICES/COSTS .....................................................................    4
      ARTICLE B.1. BRIEF DESCRIPTION OF SUPPLIES OR SERVICES .............................................................    4
      ARTICLE B.2. ESTIMATED COST AND FIXED FEE ..........................................................................    4
      ARTICLE B.3. PROVISIONS APPLICABLE TO DIRECT COSTS .................................................................    4
      ARTICLE B.4. ADVANCE UNDERSTANDINGS ................................................................................    5
   SECTION C - DESCRIPTION/SPECIFICATIONS/WORK STATEMENT .................................................................    7
      ARTICLE C.1. STATEMENT OF WORK .....................................................................................    7
      ARTICLE C.2. REPORTING REQUIREMENTS ................................................................................    7
      ARTICLE C.3. INVENTION REPORTING REQUIREMENT .......................................................................   12
   SECTION D - PACKAGING, MARKING AND SHIPPING ...........................................................................   12
   SECTION E - INSPECTION AND ACCEPTANCE .................................................................................   12
   SECTION F - DELIVERIES OR PERFORMANCE .................................................................................   13
      ARTICLE F.1. DELIVERIES ............................................................................................   13
      ARTICLE F.2. CLAUSES INCORPORATED BY REFERENCE .....................................................................   15
   SECTION G - CONTRACT ADMINISTRATION DATA ..............................................................................   15
      ARTICLE G.1. PROJECT OFFICER .......................................................................................   15
      ARTICLE G.2. KEY PERSONNEL .........................................................................................   16
      ARTICLE G.3. INVOICE SUBMISSION/CONTRACT FINANCING REQUEST AND CONTRACT FINANCIAL REPORT ...........................   16
      ARTICLE G.4. INDIRECT COST RATES ...................................................................................   16
      ARTICLE G.5. POST AWARD EVALUATION OF CONTRACTOR PERFORMANCE .......................................................   17
   SECTION H - SPECIAL CONTRACT REQUIREMENTS .............................................................................   17
      ARTICLE H.1. HUMAN SUBJECTS ........................................................................................   17
      ARTICLE H.2. REQUIRED EDUCATION IN THE PROTECTION OF HUMAN RESEARCH PARTICIPANTS ...................................   18
      ARTICLE H.3. DATA AND SAFETY MONITORING IN CLINICAL TRIALS .........................................................   18
      ARTICLE H.4. RESEARCH INVOLVING RECOMBINANT DNA MOLECULES ..........................................................   18
      ARTICLE H.5. CONTINUED BAN ON FUNDING OF HUMAN EMBRYO RESEARCH .....................................................   19
      ARTICLE H.6. NEEDLE EXCHANGE .......................................................................................   19
      ARTICLE H.7. PRIVACY ACT ...........................................................................................   19
      ARTICLE H.8. ANIMAL WELFARE ........................................................................................   19
      ARTICLE H.9. OMB CLEARANCE .........................................................................................   20
      ARTICLE H.10. SALARY RATE LIMITATION LEGISLATION PROVISIONS ........................................................   20
      ARTICLE H.11. PUBLICATION AND PUBLICITY ............................................................................   20
      ARTICLE H.12. PRESS RELEASES .......................................................................................   20
      ARTICLE H.13. REPORTING MATTERS INVOLVING FRAUD, WASTE AND ABUSE ...................................................   21
      ARTICLE H.14. ANTI -LOBBYING .......................................................................................   21
      ARTICLE H.15. OBTAINING AND DISSEMINATING BIOMEDICAL RESEARCH RESOURCES ............................................   21
      ARTICLE H.16. POSSESSION USE AND TRANSFER OF SELECT BIOLOGICAL AGENTS OR TOXINS ....................................   21
      ARTICLE H.17. HOTEL AND MOTEL FIRE SAFETY ACT OF 1990 (P.L. 101-391) ...............................................   22
      ARTICLE H.18. PROHIBITION ON CONTRACTOR INVOLVEMENT WITH TERRORIST ACTIVITIES ......................................   23
      ARTICLE H.19. NIH POLICY ON ENHANCING PUBLIC ACCESS TO ARCHIVED PUBLICATIONS RESULTING FROM NIH-FUNDED RESEARCH ....   23
      ARTICLE H.20. SHARING RESEARCH DATA ................................................................................   23
      ARTICLE H.21. INTELLECTUAL PROPERTY OPTION TO COLLABORATOR .........................................................   23
      ARTICLE H.22. HUMAN MATERIALS ......................................................................................   24
      ARTICLE H.23. HUMAN MATERIALS (ASSURANCE OF OHRP COMPLIANCE) .......................................................   24
</TABLE>

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                                                  Contract No. HHSN266200600014C

<TABLE>
<S>                                                                                                                          <C>
PART II - CONTRACT CLAUSES ...............................................................................................   25
   SECTION I - CONTRACT CLAUSES ..........................................................................................   25
      ARTICLE I.1. GENERAL CLAUSES FOR A COST-REIMBURSEMENT RESEARCH AND DEVELOPMENT CONTRACT ............................   25
      ARTICLE I.2 AUTHORIZED SUBSTITUTION OF CLAUSES .....................................................................   28
      ARTICLE I.3. ADDITIONAL CONTRACT CLAUSES ...........................................................................   28
      ARTICLE I.4. ADDITIONAL FAR CONTRACT CLAUSES INCLUDED IN FULL TEXT .................................................   29

PART III-LIST OF DOCUMENTS, EXHIBITS AND OTHER ATTACHMENTS ...............................................................   32
   SECTION J - LIST OF ATTACHMENTS .......................................................................................   32
      1.    Statement of Work ............................................................................................   32
      2.    Invoice/Financing Request and Contract Financial Reporting Instructions for NIH Cost-Reimbursement Type
            Contracts ....................................................................................................   32
      3.    Inclusion Enrollment Report ..................................................................................   32
      4.    Privacy Act System of Records ................................................................................   31
      5.    Safety and Health ............................................................................................   32
      6.    Procurement of Certain Equipment .............................................................................   32
      7.    Research Patient Care Costs ..................................................................................   32
      8.    Disclosure of Lobbying Activities, SF-LLL ....................................................................   32
      9.    Commitment To Protect Non-Public Information .................................................................   32

PART IV ..................................................................................................................   33
   SECTION K - REPRESENTATIONS AND CERTIFICATIONS ........................................................................   33
      1.    Annual Representations and Certifications ....................................................................   33
      2.    Human Subjects Assurance Identification Number ...............................................................   33
      3.    Animal Welfare Assurance Number ..............................................................................   33
</TABLE>

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                                                  Contract No. HHSN266200600014C

SECTION B -  SUPPLIES OR SERVICES AND PRICES/COSTS

ARTICLE B.1. BRIEF DESCRIPTION OF SUPPLIES OR SERVICES

The purpose of this  contract is to advance  development  of SIGA-246 as a novel
therapeutic agent for the treatment of smallpox and related orthopoxviruses.

ARTICLE B.2. ESTIMATED COST AND FIXED FEE

a.    The estimated cost of this contract is $15,908,190.

b.    The fixed fee for this  contract is $636,327.  The fixed fee shall be paid
      in  installments  based  on the  percentage  of  completion  of  work,  as
      determined  by the  Contracting  Officer,  and subject to the  withholding
      provisions  of the  clauses  ALLOWABLE  COST AND  PAYMENT  and  FIXED  FEE
      referenced in the General  Clause Listing in Part II, ARTICLE I.1. of this
      contract.  Payment  of fixed fee  shall  not be made in less than  monthly
      increments.

c.    The Government's obligation,  represented by the sum of the estimated cost
      plus fixed fee, is $16,544,517.

d.    Total funds currently  available for payment and allotted to this contract
      are $8,191,538, of which $8,068,787 represents the estimated costs, and of
      which  $122,751  represents  the fixed  fee.  For  further  provisions  on
      funding, see the LIMITATION OF FUNDS clause referenced in Part II, ARTICLE
      I.2. Authorized Substitutions of Clauses.

e.    It is estimated that the amount currently  allotted will cover performance
      of the contract through September 19, 2007.

f.    The Contracting Officer may allot additional funds to the contract without
      the concurrence of the Contractor.

g.    Future  increments  to be  allotted  to this  contract  are  estimated  as
      follows:

      FISCAL YEAR   PERIOD              COST         FEE        TOTAL AMOUNT
      -----------   -----------------   ----------   --------   ------------
      2007          09/20/07-09/28/08   $4,969,280   $398,771   $  5,368,051
      2008          09/29/08-09/28/09   $2,870,123   $114,805   $  2,984,928

ARTICLE B.3. PROVISIONS APPLICABLE TO DIRECT COSTS

a.    Items Unallowable Unless Otherwise Provided

      Notwithstanding  the clauses,  ALLOWABLE COST AND PAYMENT,  and FIXED FEE,
      incorporated  in  this  contract,  unless  authorized  in  writing  by the
      Contracting  Officer, the costs of the following items or activities shall
      be unallowable as direct costs:

      (1)   Acquisition, by purchase or lease, of any interest in real property;

      (2)   Special rearrangement or alteration of facilities;

      (3)   Purchase or lease of any item of general purpose office furniture or
            office  equipment  regardless  of  dollar  value.  (General  purpose
            equipment  is defined as any items of  personal  property  which are
            usable for purposes  other than research,  such as office  equipment
            and furnishings, pocket calculators, etc.);

      (4)   Travel to attend general scientific meetings;

      (5)   Foreign travel - See subparagraph b. below;

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                                                  Contract No. HHSN266200600014C

      (6)   Consultant costs;

      (7)   Subcontracts;

      (8)   Patient care costs;

      (9)   Accountable  Government  property (defined as both real and personal
            property  with an  acquisition  cost of  $1,000  or more  and a life
            expectancy of more than two years) and  "sensitive  items"  (defined
            and  listed in the  Contractor's  Guide for  Control  of  Government
            Property), 1990, regardless of acquisition value.

      (10)  Light Refreshments and Meal Expenditures

            Requests to use contract funds to provide light refreshments  and/or
            meals to either federal or  non-federal  employees must be submitted
            to the project officer,  with a copy to the contracting  officer, at
            least six (6) weeks in  advance  of the  event.  The  request  shall
            contain the following  information:  (a) name, date, and location of
            the event at which  the  light  refreshments  and/or  meals  will be
            provided; (b) a brief description of the purpose of the event; (c) a
            cost breakdown of the estimated light refreshment and/or meal costs;
            (d) the number of non-federal and federal attendees  receiving light
            refreshments  and/or  meals;  and  (e) if the  event  will  be  held
            somewhere other than a government  facility,  provide an explanation
            of why the event is not being held at a government facility.

            Refer  to  NIH  Manual  Chapter  1160-1,  Entertainment,   for  more
            information  on NIH's  policy on the use of  appropriated  funds for
            light refreshments and meals.

b.    Travel Costs

      (1)   Domestic Travel

            (a)   Total   expenditures  for  domestic  travel   (transportation,
                  lodging,  subsistence,  and incidental  expenses)  incurred in
                  direct  performance  of this contract shall not exceed $58,630
                  without the prior written approval of the Contracting Officer.

            (b)   The Contractor  shall invoice and be reimbursed for all travel
                  costs in accordance with Federal Acquisition Regulations (FAR)
                  31.205-46.

      (2)   Foreign Travel

            Requests for foreign  travel must be submitted at least six weeks in
            advance and shall contain the following: (a) meeting(s) and place(s)
            to be visited,  with costs and dates;  (b)  name(s) and  title(s) of
            Contractor  personnel to travel and their  functions in the contract
            project;  (c) contract purposes to be served by the travel;  (d) how
            travel of  contractor  personnel  will  benefit  and  contribute  to
            accomplishing  the contract  project,  or will otherwise justify the
            expenditure of NIH contract funds;  (e) how such advantages  justify
            the costs for travel and  absence  from the project of more than one
            person if such are suggested;  and (f) what additional functions may
            be performed by the  travelers to accomplish  other  purposes of the
            contract and thus further benefit the project.

ARTICLE B.4. ADVANCE UNDERSTANDINGS

Other  provisions  of this contract  notwithstanding,  approval of the following
items  within  the  limits  set  forth  is  hereby   granted   without   further
authorization from the Contracting Officer.

a.    Subcontracts

      To negotiate the following cost  reimbursement  type  subcontracts  for an
      amount  not to exceed  $11,005,000.  Award of the  subcontracts  shall not
      proceed without the prior written approval of the Contracting Officer upon
      review of the  supporting  documentation  as required by the  Subcontracts
      clause of the General Clauses

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                                                  Contract No. HHSN266200600014C

      incorporated in this contract. (After written approval of the subcontracts
      by the  Contracting  Officer,  a copy  of  each  of the  signed,  approved
      subcontract shalls be provided to the Contracting Officer.):

            (1)   Advanced Biologics not to exceed $7,425,000
            (2)   Cedarburg not to exceed $1,398,000
            (3)   DSM not to exceed $1,000,000
            (4)   Metrics not to exceed $150,000
            (5)   MPI Research not to exceed $1,032,000

b.    Consultants

      Consultant fees to be paid to the following individuals:

<TABLE>
<CAPTION>
                                  Rate
                                   Per     Number of Hours             Total Cost
                Name              Hour      Not to Exceed    Including Travel Not to Exceed
      -------------------------------------------------------------------------------------
      <S>                       <C>        <C>               <C>
      Dr. Josef Strasser        $ 175.00        333                      $61,475

      External Advisory - TBD   $ 350.00        270                      $78,000
</TABLE>

c.    Invoices - Cost and Personnel Reporting, and Variances from the Negotiated
      Budget

      (1)   The contractor agrees to provide a detailed breakdown on invoices of
            the following cost categories:

            (a)   Direct  Labor  - List  individuals  by  name,  title/position,
                  hourly/annual rate, level of effort, and amount claimed

            (b)   Fringe Benefits - Cite rate and amount

            (c)   Overhead - Cite rate and amount

            (d)   Materials & Supplies - Include  detailed  breakdown when total
                  amount is over $1,000

            (e)   Travel - Identify travelers,  dates,  destination,  purpose of
                  trip, and amount.  Cite COA, if appropriate  List  separately,
                  domestic  travel,   general  scientific  meeting  travel,  and
                  foreign travel

            (f)   Consultant Fees - Identify individuals and amounts

            (g)   Subcontracts - Attach subcontractor invoice(s)

            (h)   Equipment - Cite authorization and amount

            (i)   G&A - Cite rate and amount

            (j)   Total Cost

            (k)   Fixed Fee

            (l)   Total CPFF

            Monthly invoices must include the cumulative total expenses to date,
            adjusted  (as  applicable)  to show  any  amounts  suspended  by the
            government.

      (2)   The contractor agrees to immediately notify the contracting  officer
            in  writing  if there is an  anticipated  overrun  (any  amount)  or
            unexpended  balance (greater than 10 percent) of the amount allotted
            to the contract, and the reasons for the variance. Also refer to the
            requirements  of the  Limitation  of Funds  and  Limitation  of Cost
            Clauses in the contract.

d.    Publications

      Any manuscript or scientific  meeting  abstract  containing data generated
      under this contract must be submitted for NIAID Project  Officer review no
      less than thirty  (30)  calendar  days for  manuscripts  and fifteen  (15)
      calendar days for abstracts before  submission for public  presentation or
      publication.   Contract   support  shall  be   acknowledged  in  all  such
      publications.  A "publication"  is defined as an issue of printed material
      offered for  distribution  or any  communication  or oral  presentation of
      information.  The NIAID Project  Officer will review all  manuscripts  and
      abstracts in a period of time not to exceed  thirty (30) calendar days for
      manuscripts and fifteen

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                                                  Contract No. HHSN266200600014C

      (15) calendar days for abstract from receipt, and will either agree to the
      publication/disclosure or recommend changes.

e.    Contract Number Designation

      On all correspondence submitted under this contract, the contractor agrees
      to clearly  identify the two contract numbers that appear on the face page
      of the contract as follows:

            Contract No. HHSN266200600014C
            ADB Contract No. N01-AI-60014.

SECTION C - DESCRIPTION/SPECIFICATIONS/WORK STATEMENT

ARTICLE C.1. STATEMENT OF WORK

a.    Independently and not as an agent of the Government,  the Contractor shall
      furnish  all  the  necessary  services,  qualified  personnel,   material,
      equipment,  and  facilities,  not otherwise  provided by the Government as
      needed to perform the Statement of Work,  dated,  September 29, 2006,  set
      forth in SECTION J-List of Attachments, attached hereto and made a part of
      this contract.

b.    The following described document is attached hereto and hereby made a part
      of this contract: (SEE SECTION J-List of Attachments.)

     Document Title             Date               Description of Document
------------------------     ---------     -------------------------------------
NDA Enabling Development
for SIGA-246: A Smallpox
Antiviral Drug                             SIGA Technologies Proposed Statement
BAA NIH-NIAID-DMID-06-35     9/29/2006     of Work and Deliverables

c.    If  there  is  any  inconsistency  between  the  attached  portion  of the
      proposal,  identified in subparagraph b. above,  and the work described in
      subparagraph a. of this ARTICLE,  the terms and conditions of subparagraph
      a. of this ARTICLE shall control.

ARTICLE C.2.  REPORTING REQUIREMENTS

All  reports  required  herein  shall be  submitted  in  electronic  format.  In
addition, one (1) hard copy of each report shall be submitted to the Contracting
Officer, unless otherwise specified herein.

a.    Progress Reports

In addition to the required  reports set forth  elsewhere in this Schedule,  the
preparation and submission of regularly  recurring  Technical  Progress  Reports
will be required in any contract resulting from this solicitation. These reports
will require descriptive  information about the activities undertaken during the
reporting  period and will require  information  about  planned  activities  for
future  reporting  periods.  The frequency and specific content of these reports
will be determined prior to contract award.

      1) Monthly Technical Progress Reports

      On the 15th of each month, the Contractor shall submit a Monthly Technical
      Progress Report that includes the following:

            a) A Cover page that  includes  the contract  number and title;  the
            type of report and period  that it covers;  the  Contractor's  name,
            address,  telephone number, fax number,  and email address;  and the
            date of submission;

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                                                  Contract No. HHSN266200600014C

            b) SECTION I - An Introduction covering the purpose and scope of the
            contract effort;

            c) SECTION II - PROGRESS

                  i) SECTION II Part A:  OVERALL  PROGRESS  - A  description  of
                  overall progress;

                  ii) SECTION II Part B: MANAGEMENT AND ADMINISTRATIVE  UPDATE -
                  A description  of all meetings,  conference  calls,  etc. that
                  have taken place during the reporting period. Include progress
                  on administration and management issues (e.g. evaluating,  and
                  managing subcontractor  performance);

                  iii) SECTION II Part C: TECHNICAL PROGRESS - For each activity
                  document  the  results  of work  completed  and cost  incurred
                  during the period  covered in relation  to proposed  progress,
                  effort and budget. The report shall be in sufficient detail to
                  explain  comprehensively the results achieved. The description
                  shall  include  pertinent  data  and/or  graphs in  sufficient
                  detail  to  explain  any  significant   results  achieved  and
                  preliminary conclusions resulting from analysis and scientific
                  evaluation of data accumulated to date under the contract. The
                  report shall include a description of problems encountered and
                  proposed  corrective action;  differences  between planned and
                  actual  progress,  why the differences  have occurred and what
                  corrective  actions  are  planned;   preliminary   conclusions
                  resulting  from  analysis and  scientific  evaluation  of data
                  accumulated to date under the project;

                  iv)  SECTION  II Part D:  PROPOSED  WORK - A  summary  of work
                  proposed for the next reporting period; and

                  v) Preprints and reprints of papers and abstracts.

      A Monthly Technical Progress Report will not be required in the same month
      that the Annual Technical Progress Report is submitted.

      2) Annual Technical Progress Reports

      Annual  Technical  Progress  Reports shall be submitted by the 15th of the
      month  following  the end of each 12  months of the  contract  performance
      period. Each Annual Report shall include:

      a) A Cover page that includes the contract  number and title;  the type of
      report  and  period  that  it  covers;  the  Contractor's  name,  address,
      telephone  number,  fax  number,  and  email  address;  and  the  date  of
      submission;

      b) SECTION I: EXECUTIVE  SUMMARY - A brief overview of the work completed,
      and the  major  accomplishments  achieved  during  the  current  reporting
      period;

      c) SECTION II: PROGRESS

                  i) SECTION II Part A:  OVERALL  PROGRESS  - A  description  of
                  overall progress;

                  ii) SECTION II Part B: MANAGEMENT AND ADMINISTRATIVE  UPDATE -
                  A description  of all meetings,  conference  calls,  etc. that
                  have taken place during the reporting period. Include progress
                  on administration and management issues (e.g. evaluating,  and
                  managing  subcontractor  performance;   regulatory  compliance
                  audits);

                  iii)  SECTION  II  Part C:  TECHNICAL  PROGRESS  - A  detailed
                  description  of the work  performed  structured  to follow the
                  activities   and  decision  gates  outlined  in  the  approved
                  Strategic  Staged  Product   Development  Plan.  Any  problems
                  (technical  or  financial)  that  occurred or were  identified
                  during  the  reporting  period,  and how these  problems  were
                  resolved;

                  iv)  SECTION  II Part D:  PROPOSED  WORK - A  summary  of work
                  proposed  for the next year period.

                  v)  Copies  of  manuscripts   (published   and   unpublished),
                  abstracts, and any protocols or methods developed specifically
                  under the  contract  during the  reporting  period;  and

                  vi) A summary of any inventions developed during the course of
                  the contract.

      3) Draft Final  Technical  Progress  Report and Final  Technical  Progress
      Report

      The Final Technical Report shall document and summarize the results of the
      entire  contract  period of  performance.  This report  shall be submitted
      sixty (60) calendar days before the completion  date of the contract.  The
      report shall conform to the following format:

      (1)   Cover  page  to  include  the  contract   number,   contract  title,
            performance period covered, Contractor's name and address, telephone
            number, fax number, email address and submission date;

      b)    SECTION I:  EXECUTIVE  SUMMARY - Summarize  the purpose and scope of
            the contract effort including

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                                                  Contract No. HHSN266200600014C

            a summary  of the major  accomplishments  relative  to the  specific
            activities set forth in the Statement of Work.

      c)    SECTION II: RESULTS - A detailed  description of the work performed,
            the  results  obtained,  and  the  impact  of  the  results  on  the
            scientific  and/or public health  community,  including a listing of
            all  manuscripts   (published  and  in  preparation)  and  abstracts
            presented during the entire period of performance,  and a summary of
            all inventions.

      Draft Final  Technical  Progress  Report:  The  Contractor  is required to
      submit the Draft Final  Technical  Progress  Report to the Project Officer
      and Contracting  Officer.  This report is due 120 calendar days before the
      completion  date of the  contract.  The Project  Officer  and  Contracting
      Officer will review the Draft Final Technical  Progress Report and provide
      the Contractor with comments within 45 calendar days after receipt.

      Final  Technical  Progress  Report:  The Contractor will deliver the final
      version of the Final Progress Technical Report as specified in the Article
      F.1.

      Summary of Salient Results: The Contractor will be required to prepare and
      submit,  with the Final Technical  Progress  Report,  a summary of salient
      results (not to exceed 200 words) of salient  results  achieved during the
      performance of the contract. This report will be required on or before the
      expiration date of the contract.

b.    Technical Reports

      1) Decision Gate Report

      A  Decision  Gate  Report  shall  be  submitted  when the  Contractor  has
      completed  a stage  of  product  development  and has  reached  a Go/No Go
      decision  point,  as  defined in the  approved  Strategic  Staged  Product
      Development  Plan. These reports shall be in sufficient  detail to explain
      comprehensively  the results achieved.  The description shall also include
      pertinent  data  and/or  conclusions   resulting  from  the  analysis  and
      scientific evaluation of data accumulated to date under the project.

      Decision Gate Reports shall include the following specific information:

      a)    Cover page that lists the contract  number and title,  the period of
            performance  being  reported,  the  Contractor's  name and  address,
            telephone  number,  fax  number,  email  address,  and  the  date of
            submission;

      b)    An  introduction  covering  the  purpose,  the scope of the contract
            effort,  and the specific  Decision Gate that has been  reached;

      c)    Document and summarize the results of work  undertaken that supports
            the  completion  of the stage of product  development,  including an
            analysis  of  the  data  as  it  relates  to  the   qualitative  and
            quantitative criteria established for Go/No Go decision-making;

      d)    Actual costs incurred in relation to costs estimated in the original
            approved budget; and

      e)    A  description  of the  next  stage  of  product  development  to be
            initiated  and a request  for NIAID  approval to proceed to the next
            stage of product development.

      2) Decision Gate Change or Deviation Request

      The Contractor  shall submit a written  request for a change in the agreed
      time lines  and/or  decision  gate as  approved  in the  Strategic  Staged
      Product Development Plan. This request shall include the following:

      a)    A discussion of the justification/rationale for the request based on
            current  data  and a  description  of those  data;

      b)    Options for addressing the needed change/deviation from the approved
            time lines and/or decision gates,  including a cost-benefit analysis
            of each option; and

      c)    A  recommendation  for the  preferred  option  that  includes a full
            analysis and  discussion  of the effects of the change on the entire
            product development program, time lines, and budget.

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                                                  Contract No. HHSN266200600014C

      3) Audit Reports

      Within thirty (30) calendar days of an audit related to conformance to FDA
      regulations  and  guidance,   including  adherence  to  GLP,  GMP  or  GCP
      guidelines,  the Contractor shall provide copies of the audit report and a
      plan  for  addressing  areas  of  nonconformance  to FDA  regulations  and
      guidance for GLP, GMP or GCP  guidelines  as identified in the final audit
      report.

      4) Clinical Trial Protocols

      The NIAID has a  responsibility  to ensure that  mechanisms and procedures
      are in place  to  protect  the  safety  of  participants  in  NIAID-funded
      clinical  trials.  Therefore,  as described in the NIAID Clinical Terms of
      Award   (http://www.niaid.nih.gov/ncn/pdf/clinterm.pdf),   the  Contractor
      shall develop a protocol for each clinical  trial and submit all protocols
      and  protocol  amendments  for  approval  by the  NIAID  Project  Officer.
      Protocols must be submitted using the approved DMID template and include a
      sample  Informed  Consent and Clinical  Trials  Monitoring  Plan. The DMID
      templates  and other  important  information  regarding  performing  human
      subjects           research           are           available           at
      (http://www.niaid.nih.gov/dmid/clinresearch/).  These  updates  are  to be
      included in the Monthly Technical Progress Report.

      5) Final Clinical Study Report

      The Final  Clinical  Study  Report  shall  follow  the ICH  guidelines  on
      Structure     and    Content    of    Clinical     Study     Reports    E3
      (http://www.pharmacontract.ch/support/su_ich_liste.htm).  Final   Clinical
      Study  Reports  shall be provided  within thirty (30) calendar days of the
      completion of the analysis of all data generated in the clinical trial.

      6) Final Animal Efficacy Study Report

      The Final Animal Efficacy Study Report shall include a complete
      description of the experimental design, protocol, methods, reagents, data
      analysis, and conclusions of studies performed to demonstrate efficacy of
      therapeutic product for the indication (i.e., post-exposure prophylaxis or
      treatment) being sought.

c.    Other Reports

      1) Strategic Staged Product Development Plan

      Within  fourteen  (14)  calendar  days of  contract  award  and  prior  to
      initiation of product development activities,  unless otherwise negotiated
      with the NIAID  Project  Officer and the NIAID  Contracting  Officer,  the
      Contractor   shall  submit  for  approval  the  Strategic  Staged  Product
      Development Plan. This Plan shall include:

            a) Clearly  defined goals,  product  development  stages and product
            development activities;

            b) Go/No Go decision gates;

            c)  Quantitative   and   qualitative   criteria  for  assessing  the
            scientific  merit and  feasibility  of  moving to the next  stage of
            product development; and

            d) A detailed  time line for each  stage  covering  the  initiation,
            conduct  and  completion  of  product  development  activities,  the
            analysis of outcomes and findings,  and the  preparation of detailed
            reports summarizing the results of work completed and an analysis of
            the data as it relates to the qualitative and quantitative  criteria
            established for Go/No Go decision-making.

      2) Annual Review Meeting Reports

      A report of the post-award kick-off meeting and the annual review meetings
      shall be prepared by the Contractor and submitted  within  twenty-one (21)
      calendar days following the date of the meeting. This report shall include
      the  slide  presentations  and  all  other  meeting  materials  as well as
      summaries of all discussions.

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                                                  Contract No. HHSN266200600014C

      3)  Copies of FDA Correspondence and Meeting Summaries

      Within thirty (30) calendar days of receiving correspondence or meeting
      with the FDA, submit copies of the correspondence or meeting
      minutes/summaries to the NIAID Project Officer.

      4)  Annual   Technical   Progress  Report  for  Clinical   Research  Study
      Populations

      The Contractor shall submit  information  about the inclusion of women and
      members of minority  groups and their sub populations for each study being
      performed   under  this  contract.   The  contractor   shall  submit  this
      information in the format indicated in the attachment entitled, "Inclusion
      Enrollment Report," which is set forth in Section J of this contract.  The
      contractor  also shall use this format,  modified to indicate that it is a
      final report, for reporting purposes in the final report.

      The  contractor  shall submit the report in  accordance  with ARTICLE F.1.
      DELIVERIES of this contract. In addition, the NIH Policy and Guidelines on
      the Inclusion of Women and  Minorities  as Subjects in Clinical  Research,
      Amended, October, 2001 applies. If this contract is for Phase III clinical
      trials,  see II.B of these guidelines.  The Guidelines may be found at the
      following website:

  http://grants.nih.gov/grants/funding/women_min/guidelines_amended_10_2001.htm

      Include a description of the plans to conduct analyses, as appropriate, by
      sex/gender and/or  racial/ethnic  groups in the clinical trial protocol as
      approved by the IRB,  and  provide a  description  of the  progress in the
      conduct of these analyses,  as appropriate,  in the annual progress report
      and the final report.  If the analysis  reveals no subset  differences,  a
      brief  statement to that effect,  indicating  the subsets  analyzed,  will
      suffice.  The Government strongly  encourages  inclusion of the results of
      subset analysis in all publication  submissions.  In the final report, the
      contractor  shall include all final analyses of the data on sex/gender and
      race/ethnicity.

      5) Sample of Therapeutics

      The   Contractor   shall  submit  to  NIAID  samples  of  candidate   drug
      therapeutics and GMP material  manufactured  with NIAID contract  funding.
      Fifty (50) doses of drug  substance will be provided to NIH (assuming that
      500 mg is the selected  dose, 25 g will be provided).  Fifty (50) doses of
      SIGA-246 drug product, strength to be determined, will be provided to NIH.
      The  Contractor  will be advised by the NIAID Project  Officer how samples
      are to be packaged and where samples are to be shipped.

      6) Animal Models

      Technology  Transfer packages that include complete protocols and critical
      reagents for animal models developed and/or improved with contract funding
      must be submitted at the request of the NIAID Project Officer.

      7) Copies of other reports generated during the contract period related to
      performance  of the  contract,  including:  Process  Development  Reports,
      Qualification  Plan/Report,  Validation Plan/Report,  Batch Records, SOPs,
      Master Production  Records,  Certificate of Analysis at the request of the
      NIAID Project Officer.

      8) Institutional BioSafety Approval

      The  Contractor  shall provide  documentation  of materials  submitted for
      Institutional  Biosafety Committee Review and documentation of approval of
      experiments at the request of the NIAID Project Officer.

      9) Data

      Provide raw data or  specific  analysis of data  generated  with  contract
      funding at the request of the NIAID Project Officer.

                                       11

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                                                  Contract No. HHSN266200600014C

ARTICLE C.3. INVENTION REPORTING REQUIREMENT

All reports and documentation  required by FAR Clause 52.227-13  including,  but
not limited to, the invention  disclosure report, the confirmatory  license, and
the  government  support  certification,  shall be  directed  to the  Extramural
Inventions and Technology  Resources  Branch,  OPERA, NIH, 6705 Rockledge Drive,
Room 1040 A, MSC 7980, Bethesda, Maryland 20892-7980 (Telephone:  301-435-1986).
In addition,  one copy of an annual utilization  report, and a copy of the final
invention  statement,  shall be submitted to the Contracting  Officer. The final
invention  statement  (see  FAR  27.303(a)(2)(ii))  shall  be  submitted  to the
Contracting Officer on the expiration date of the contract.

The  annual  utilization  report  shall  be  submitted  in  accordance  with the
DELIVERIES Article in SECTION F of this contract.  The final invention statement
(see FAR  27.303(a)(2)(ii))  shall be  submitted on the  expiration  date of the
contract. All reports shall be sent to the following address:

      Contracting Officer
      National Institutes of Health
      National Institute of Allergy and Infectious Diseases
      Office of Acquisition
      6700-B Rockledge Drive, Room 3214, MSC 7612
      Bethesda, Maryland  20892 -7612

If no  invention  is  disclosed  or no activity  has  occurred  on a  previously
disclosed  invention during the applicable  reporting  period, a negative report
shall be submitted to the Contracting Officer at the address listed above.

To assist contractors in complying with invention reporting  requirements of the
clause,  the NIH has developed  "Interagency  Edison," an  electronic  invention
reporting system.  Use of Interagency Edison is encouraged as it streamlines the
reporting process and greatly reduces paperwork. Access to the system is through
a secure  interactive  Web site to  ensure  that all  information  submitted  is
protected.  Interagency  Edison and information  relating to the capabilities of
the  system  can  be  obtained  from  the  Web  (http://www.iedison.gov),  or by
contacting the Extramural  Inventions and Technology  Resources  Branch,  OPERA,
NIH.

SECTION D - PACKAGING, MARKING AND SHIPPING

All  deliverables  required  under this contract  shall be packaged,  marked and
shipped  in  accordance  with  Government  specifications.  At  a  minimum,  all
deliverables  shall be marked with the contract number and contractor  name. The
Contractor  shall  guarantee that all required  materials  shall be delivered in
immediate usable and acceptable condition.

SECTION E - INSPECTION AND ACCEPTANCE

a.    The Contracting Officer or the duly authorized representative will perform
      inspection and acceptance of materials and services to be provided.

b.    For the purpose of this  SECTION  the  designated  Project  Officer is the
      authorized representative of the Contracting Officer.

c.    Inspection and acceptance will be performed at:

            Division of Microbiology and Infectious Diseases, NIAID, NIH
            6610 Rockledge Drive; Bethesda, MD 20892

      Acceptance may be presumed  unless  otherwise  indicated in writing by the
      Contracting Officer or the duly authorized  representative  within 30 days
      of receipt.

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<PAGE>

                                                  Contract No. HHSN266200600014C

d.    This contract  incorporates  the following  clause by reference,  with the
      same force and effect as if it were given in full text. Upon request,  the
      Contracting Officer will make its full text available.

      FAR Clause 52.246-5, Inspection Of Services--Cost Reimbursement (April
      1984).

      FAR Clause 52.246-8, Inspection Of Research And Development--Cost
      Reimbursement (May 2001).

SECTION F - DELIVERIES OR PERFORMANCE

ARTICLE F.1.  DELIVERIES

Satisfactory  performance  of the final  contract  shall be deemed to occur upon
performance  of the work described in the STATEMENT OF WORK Article in SECTION C
of this contract and upon delivery and acceptance by the Contracting Officer, or
the duly  authorized  representative,  of the following items in accordance with
the stated delivery schedule:

a.    The items  specified  below as  described  in the  REPORTING  REQUIREMENTS
      Article in SECTION C of this  contract.  will be required to be  delivered
      F.o.b.  Destination  as set forth in FAR  52.247-35,  F.o.b.  DESTINATION,
      WITHIN CONSIGNEES PREMISES (APRIL 1984), and in accordance with and by the
      date(s) specified below:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
Item                              No. of         Addresses/
No.   Type of Report              Copies         Distribution            Due Date
      -----------------------------------------------------------------------------------------------
      PROGRESS REPORTS
-----------------------------------------------------------------------------------------------------
<S>   <C>                         <C>            <C>                     <C>
1.    Monthly Technical           3 paper        Original hard copy      The 15th of each month
      Progress Report             2 electronic   and one (1)             following the first full
                                                 electronic copy:        month of contract award.
                                                 Contracting Officer     The monthly report will
                                                 Two (2) paper and one   not be required on months
                                                 (1) electronic:         when an Annual
                                                 Project Officer         Technical Report is due.
-----------------------------------------------------------------------------------------------------
2.    Annual Technical            3 paper        Same as CO and PO       15th of the month following
      Progress Report             2 electronic   above                   the end of each 12 months
                                                                         of the performance period.
-----------------------------------------------------------------------------------------------------
3.    Final Technical Progress    3 paper        Same as CO and PO       Sixty (60) calendar days
      Report                      2 electronic   above                   prior to completion date of
                                                                         the contract
-----------------------------------------------------------------------------------------------------
      TECHNICAL REPORTS
-----------------------------------------------------------------------------------------------------
4.    Decision Gate Report        3 paper        Same as CO and PO       Following completion of a
                                  2 electronic   above                   pre-defined stage of
                                                                         product development and
                                                                         prior to initiation of a
                                                                         new stage.
-----------------------------------------------------------------------------------------------------
5.    Decision Gate Change or     3 paper        Same as CO and PO       As soon as the Contractor
      Deviation Request           2 electronic   above.                  has sufficient data to
                                                                         support the need for a
                                                                         change from the approved
                                                                         Strategic Staged Product
                                                                         Development Plan.
-----------------------------------------------------------------------------------------------------
</TABLE>

                                                  13

<PAGE>

                                                  Contract No. HHSN266200600014C

<TABLE>
-----------------------------------------------------------------------------------------------------
<S>   <C>                         <C>            <C>                     <C>
6.    Audit Reports               3 paper        Same as CO and PO       Within 30 calendar days
                                  2 electronic   above.                  of the audit.
-----------------------------------------------------------------------------------------------------
7.    Clinical Trials Protocols   3 paper        Same as PO above        To be negotiated with the
                                  2 electronic                           NIAID Project Officer and
                                                                         prior to IND submission or
                                                                         enrollment of human
                                                                         subjects.
-----------------------------------------------------------------------------------------------------
8.    Final Clinical Study        3 paper        Same as CO and PO       Thirty (30) calendar days
      Report                      2 electronic   above                   of completion of analysis
                                                                         of clinical trial data.
-----------------------------------------------------------------------------------------------------
9.    Final Animal Efficacy       3 paper        Same as CO and PO       Thirty (30) calendar days
      Study Reports               2 electronic   above                   of completion of all
                                                                         analysis of animal
                                                                         efficacy study data.
-----------------------------------------------------------------------------------------------------
      OTHER REPORTS
-----------------------------------------------------------------------------------------------------
10.   Strategic Staged Product    3 paper        Same as CO and PO       Within fourteen (14)
      Development Plan            2 electronic   above                   calendar days of contract
                                                                         award and prior to
                                                                         initiation of product
                                                                         development activities
-----------------------------------------------------------------------------------------------------
11.   Annual Review Meeting       3 paper        Same as CO and PO       Within twenty-one (21)
      Report                      2 electronic   above                   calendar days following
                                                                         the date of the Annual
                                                                         Review Meeting.
-----------------------------------------------------------------------------------------------------
12.   FDA Correspondence and      3 paper        Same as PO above        Within thirty (30) calendar
      Meeting Summaries           2 electronic                           days of receiving
                                                                         correspondence or
                                                                         meeting with the FDA.
-----------------------------------------------------------------------------------------------------
13.   Technical Progress Report   2 paper        Original paper and      Due on/before the 30th of
      for Clinical Research       1 electronic   one (1) electronic to   the month following each
      Study Populations                          CO                      anniversary of the contract.
                                                 Two (2) paper and
                                                 one (1) electronic to
                                                 PO
-----------------------------------------------------------------------------------------------------
14.   Invention Report - Annual   1 paper        Original paper and      Due on/before the 30th of
      Utilization Report          1 electronic   one (1) electronic to   the month following each
                                                 OPERA                   anniversary of the contract.
                                                 One (1) paper to CO
-----------------------------------------------------------------------------------------------------
15.   Final Invention Statement   2 paper        Original paper and      Due on/before the
                                  1 electronic   one (1) electronic to   completion date of the
                                                 OPERA                   contract.
                                                 One (1) paper to CO
-----------------------------------------------------------------------------------------------------
</TABLE>

                                       14

<PAGE>

                                                  Contract No. HHSN266200600014C

b.    The above items shall be addressed and delivered to:

--------------------------------------------------------------------------------
     Addressee            Deliverable Item No.       Quantity
--------------------------------------------------------------------------------
Contracting Officer       1. to 15.                  Original paper and one (1)
                                                     electronic
--------------------------------------------------------------------------------
Project Officer           1. to 13.                  Two (2) paper and one (1)
                                                     electronic
--------------------------------------------------------------------------------
EITRB, Office of          14. and 15.                Original paper and one (1)
Biodefense Research                                  electronic
Affairs, NIH
--------------------------------------------------------------------------------

ARTICLE F.2. CLAUSES INCORPORATED BY REFERENCE, FAR 52.252-2 (FEBRUARY 1998)

This contract  incorporates the following clause(s) by reference,  with the same
force and effect as if it were given in full text. Upon request, the Contracting
Officer will make its full text  available.  Also, the full text of a clause may
be        accessed         electronically         at        this        address:
http://www.acquisition.gov/comp/far/index.html.

FEDERAL ACQUISITION REGULATION (48 CFR CHAPTER 1) CLAUSE:

      52.242-15, Stop Work Order (August 1989) with Alternate I (April 1984).

SECTION G - CONTRACT ADMINISTRATION DATA

ARTICLE G.1.  PROJECT OFFICER

The following  Project  Officer(s) will represent the Government for the purpose
of this contract:

    Primary:  Helen Schiltz, Ph.D.
              Program Officer, BioDefense Drug Development Section
              Office of Biodefense Research Affairs
              Division of Microbiology and Infectious Diseases, NIAID, NIH, DHHS
              6610 Rockledge Drive, Room 5107
              Bethesda, MD 20892
              301-451-3245
              Hschiltz@niaid.nih.gov

The  Project  Officer  is  responsible  for:  (1)  monitoring  the  Contractor's
technical progress, including the surveillance and assessment of performance and
recommending  to  the  Contracting   Officer   changes  in   requirements;   (2)
interpreting  the  Statement  of  Work  and  any  other  technical   performance
requirements;  (3) performing technical  evaluation as required;  (4) performing
technical  inspections  and  acceptances  required  by  this  contract;  and (5)
assisting  in  the   resolution  of  technical   problems   encountered   during
performance.

The Contracting Officer is the only person with authority to act as agent of the
Government under this contract.  Only the Contracting  Officer has authority to:
(1) direct or  negotiate  any changes in the  Statement  of Work;  (2) modify or
extend  the  period of  performance;  (3)  change  the  delivery  schedule;  (4)
authorize  reimbursement  to  the  Contractor  any  costs  incurred  during  the
performance of this contract;  or (5) otherwise  change any terms and conditions
of this contract.

The Government may unilaterally change its Project Officer designation.

                                       15

<PAGE>

                                                  Contract No. HHSN266200600014C

ARTICLE G.2.  KEY PERSONNEL

Pursuant to HHSAR Clause 352.270-5, Key Personnel,  incorporated in Section I of
this contract, the following  individual(s) is/are considered to be essential to
the work being performed hereunder:

                 Name                                     Title
--------------------------------------------------------------------------------
        Dennis E. Hruby, Ph.D.                   Principal Investigator

Prior to diverting  any of the  specified  individuals  to other  programs,  the
Contractor shall notify the Contracting  Officer reasonably in advance and shall
submit justification  (including proposed substitutions) in sufficient detail to
permit  evaluation of the impact on the program.  No diversion  shall be made by
the Contractor without the written consent of the Contracting Officer; provided,
that the  Contracting  Officer  may ratify in writing  such  diversion  and such
ratification  shall  constitute  the  consent of the  Contracting  Officer.  The
contract may be modified  from time to time during the course of the contract to
either add or delete personnel, as appropriate

ARTICLE  G.3.  INVOICE   SUBMISSION/CONTRACT   FINANCING  REQUEST  AND  CONTRACT
FINANCIAL REPORT

a.    Invoice/Financing  Request  Instructions and Contract Financial  Reporting
      for NIH Cost-Reimbursement  Type Contracts NIH(RC)-4 are attached and made
      part of this contract.  The instructions and the following  directions for
      the submission of invoices/financing  request must be followed to meet the
      requirements of a "proper" payment request pursuant to FAR 32.9.

      These  instructions  also  provide for the  submission  of  financial  and
      personnel reporting required by HHSAR 342.7002.

      (1)   Invoices/financing requests shall be submitted as follows:

            (a)   To be  considered a "proper"  invoice in  accordance  with FAR
                  32.9,  each invoice  shall  clearly  identify the two contract
                  numbers  that  appear  on the  face  page of the  contract  as
                  follows:

                      Contract No. HHSN266200600014C
                      ADB Contract No. N01-AI-60014

            (b)   An original and two copies to the following designated billing
                  office:

                      Contracting Officer
                      Office of Acquisitions
                      National Institute of Allergy and Infectious Diseases, NIH
                      6700-B Rockledge Drive, Room 3214, MSC 7612
                      Bethesda, MD 20892-7612

            (2)   Inquiries  regarding payment of invoices should be directed to
                  the designated billing office, (301) 496-0612.

ARTICLE G.4.  INDIRECT COST RATES

In  accordance  with  Federal  Acquisition  Regulation  (FAR) (48 CFR Chapter 1)
Clause 52.216-7 (d)(2),  Allowable Cost and Payment incorporated by reference in
this  contract  in  PART  II,  SECTION  I,  the  cognizant  Contracting  Officer
representative  responsible  for negotiating  provisional  and/or final indirect
cost rates is identified as follows:

                  Director, Division of Financial Advisory Services
                  Office of Acquisition Management and Policy
                  National Institutes of Health
                  6100 Building, Room 6B05
                  6100 Executive Blvd. MSC-7540
                  Bethesda, MD 20892-7540

                                       16

<PAGE>

                                                  Contract No. HHSN266200600014C

These rates are hereby  incorporated  without  further action of the Contracting
Officer.

ARTICLE G.5. POST AWARD EVALUATION OF CONTRACTOR PERFORMANCE

a.    Contractor Performance Evaluations

      Interim and final  evaluations of contractor  performance will be prepared
      on this  contract  in  accordance  with FAR 42.15.  The final  performance
      evaluation will be prepared at the time of completion of work. In addition
      to the final evaluation,  interim evaluations will be prepared annually to
      coincide with the anniversary date of the contract.

      Interim and final  evaluations  will be provided to the Contractor as soon
      as practicable after completion of the evaluation.  The Contractor will be
      permitted  thirty  days to review the  document  and to submit  additional
      information  or a  rebutting  statement.  If  agreement  cannot be reached
      between the  parties,  the matter will be  referred to an  individual  one
      level above the Contracting Officer, whose decision will be final.

      Copies of the evaluations,  contractor responses,  and review comments, if
      any,  will be retained as part of the  contract  file,  and may be used to
      support future award decisions.

b.    Electronic Access to Contractor Performance Evaluations

      Contractors that have Internet capability may access evaluations through a
      secure Web site for review and comment by completing the registration form
      that can be obtained at the following address:

            http://oamp.od.nih.gov/OD/CPS/cps.asp

      The registration process requires the contractor to identify an individual
      that will serve as a primary contact and who will be authorized  access to
      the evaluation for review and comment. In addition, the contractor will be
      required to  identify an  alternate  contact who will be  responsible  for
      notifying  the  cognizant  contracting  official  in the event the primary
      contact is  unavailable  to process  the  evaluation  within the  required
      30-day time frame.

SECTION H - SPECIAL CONTRACT REQUIREMENTS

ARTICLE H.1.  HUMAN SUBJECTS

Research  involving  human subjects  shall not be conducted  under this contract
until the protocol developed in Phase I has been approved by the NIAID,  written
notice of such approval has been provided by the  Contracting  Officer,  and the
Contractor  has  provided  to  the  Contracting  Officer  a  properly  completed
"Protection     of     Human     Subjects      Assurance      Identification/IRB
Certification/Declaration  of  Exemption",  Form  OMB  No.  0990-0263  (formerly
Optional Form 310) certifying IRB review and approval of the protocol. The human
subject  certification  can be  met  by  submission  of  the  Contractor's  self
designated  form,  provided  that it contains  the  information  required by the
"Protection     of     Human     Subjects      Assurance      Identification/IRB
Certification/Declaration  of  Exemption",  Form  OMB  No.  0990-0263  (formerly
Optional Form 310).

When research involving Human Subjects will take place at collaborating sites or
other  performance  sites,  the  Contractor  shall  obtain,  and keep on file, a
properly completed  "Protection of Human Subjects  Assurance  Identification/IRB
Certification/Declaration  of  Exemption",  Form  OMB  No.  0990-0263  (formerly
Optional Form 310) certifying IRB review and approval of the research.

                                       17

<PAGE>

                                                  Contract No. HHSN266200600014C

ARTICLE H.2. REQUIRED EDUCATION IN THE PROTECTION OF HUMAN RESEARCH PARTICIPANTS

NIH policy  requires  education on the protection of human subject  participants
for all investigators receiving NIH contract awards for research involving human
subjects.  For a complete description of the NIH Policy announcement on required
education in the protection of human subject participants, the contractor should
access the NIH Guide for Grants and Contracts Announcement dated June 5, 2000 at
the following web site:

       http://grants.nih.gov/grants/guide/notice-files/NOT-OD-00-039.html.

The information below is a summary of the NIH Policy Announcement:

The contractor shall maintain the following information: (1) a list of the names
and titles of the principal investigator and any other individuals working under
the contract who are  responsible for the design and/or conduct of the research;
(2) the title of the education  program(s) in the  protection of human  subjects
that has been  completed  for  each  named  personnel  and;  (3) a one  sentence
description of the educational  program(s) listed in (2) above. This requirement
extends to investigators  and all individuals  responsible for the design and/or
conduct of the research who are working as  subcontractors  or consultants under
the contract.

Prior to any substitution of the Principal Investigator or any other individuals
responsible  for the design and/or  conduct of the research  under the contract,
the  contractor  shall  provide  the  following   written   information  to  the
Contracting  Officer:  the title of the  education  program  and a one  sentence
description of the program that has been completed by the replacement.

ARTICLE H.3. DATA AND SAFETY MONITORING IN CLINICAL TRIALS

The contractor is directed to the full text of the NIH Policy regarding Data and
Safety  Monitoring  and Reporting of Adverse  Events,  which may be found at the
following web sites:

      http://grants.nih.gov/grants/guide/notice-files/not98-084.html
      http://grants.nih.gov/grants/guide/notice-files/not99-107.html
      http://grants.nih.gov/grants/guide/notice-files/NOT-OD-00-038.html

The contractor must comply with the NIH Policy cited in these NIH  Announcements
and any other data and safety  monitoring  requirements  found elsewhere in this
contract.

Data and Safety  Monitoring  shall be performed in accordance  with the approved
Data and Safety Monitoring Plan.

The Data and Safety  Monitoring  plan shall be established and approved prior to
beginning the conduct of the clinical trial.

ARTICLE H.4. RESEARCH INVOLVING  RECOMBINANT DNA MOLECULES (Including Human Gene
Transfer Research)

All  research  involving   Recombinant  DNA  Molecules  shall  be  conducted  in
accordance  with the NIH  Guidelines  for  Research  Involving  Recombinant  DNA
Molecules  (http://www4.od.nih.gov/oba/rac/guidelines/guidelines.html)  and  the
May 28, 2002 Notice,  Compliance with the NIH Guidelines for Research  Involving
Recombinant                             DNA                            Molecules
(http://grants1.nih.gov/grants/guide/notice-files/NOT-OD-02-052.html)  (and  any
subsequent  revisions  to the  Guide  Notice)  which  stipulates  biosafety  and
containment  measures for  recombinant  DNA research  and  delineates  critical,
ethical principles and key safety reporting requirements for human gene transfer
research  (See Appendix M of the  Guidelines).  These  guidelines  apply to both
basic and clinical research studies.

The  Recombinant  DNA  Advisory  Committee  (RAC) is charged  with the safety of
manipulation of genetic  material through the use of recombinant DNA techniques.
Prior to beginning any clinical trials involving the transfer of recombinant DNA
to humans,  the trial must be registered with the RAC. If this contract involves
new protocols  that contain  unique  and//or novel issues,  the RAC must discuss
them in a public forum and then the Institutional Biosafety Committee (IBC), the
Institutional  Review  Board  (IRB),  and the project  officer  and  contracting
officer must approve

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                                                  Contract No. HHSN266200600014C

the protocol prior to the start of the research.

Failure to comply with these requirements may result in suspension,  limitation,
or termination of the contract for any work related to Recombinant  DNA Research
or  a  requirement  for  contracting  officer  prior  approval  of  any  or  all
Recombinant DNA projects under this contract.  This includes the requirements of
the     Standing     Institutional     Biosafety     Committee     (IBC)    (See
http://www4.od.nih.gov/oba/IBC/IBCindexpg.htm ).

As  specified in Appendix  M-1-C-4 of the NIH  Guidelines,  any serious  adverse
event must be reported  immediately  to the IRB,  the IBC,  the Office for Human
Research  Protections  (if  applicable),  and the NIH Office  for  Biotechnology
Activities  (OBA),  followed  by  the  filing  of a  written  report  with  each
office/group  and  copies  to  the  project  officer  and  contracting  officer.
(http://www4.od.nih.gov/oba/rac/guidelines_02/Appendix_M.htm#_Toc7255836)

ARTICLE H.5. CONTINUED BAN ON FUNDING OF HUMAN EMBRYO RESEARCH

a.    Pursuant to Public Law(s) cited in paragraph b. , below, NIH is prohibited
      from using appropriated  funds to support human embryo research.  Contract
      funds may not be used for (1) the  creation  of a human  embryo or embryos
      for research purposes;  or (2) research in which a human embryo or embryos
      are  destroyed,  discarded,  or  knowingly  subjected to risk of injury or
      death  greater than that allowed for research on fetuses in utero under 45
      CFR  46.204(b)  and Section  498(b) of the Public  Health  Service Act (42
      U.S.C. 289g(b)). The term "human embryo or embryos" includes any organism,
      not  protected  as a human  subject  under 45 CFR 46 as of the date of the
      enactment of this Act, that is derived by fertilization,  parthenogenesis,
      cloning,  or any  other  means  from one or more  human  gametes  or human
      diploid cells.

      Additionally,  in accordance with a March 4, 1997 Presidential Memorandum,
      Federal funds may not be used for cloning of human beings.

b.    Public Law and Section No.          Fiscal Year      Period Covered
      P.L. 109-149, Title V-General          2006          (10/1/2005-9/30/2006)
      Provisions Section 509

ARTICLE H.6. NEEDLE EXCHANGE

a.    Pursuant to Public  Law(s) cited in paragraph b.,  below,  contract  funds
      shall not be used to carry out any program of distributing sterile needles
      or syringes for the hypodermic injection of any illegal drug.

b.    Public Law and Section No.          Fiscal Year      Period Covered
      P.L. 109-149, Title V-General          2006          (10/1/2005-9/30/2006)
      Provisions Section 505

ARTICLE H.7 . PRIVACY ACT

This  procurement  action  requires  the  Contractor  to do one or  more  of the
following:  design,  develop,  or operate a system of records on  individuals to
accomplish an agency function in accordance with the Privacy Act of 1974, Public
Law 93-579,  December 31, 1974 (5 USC 552a) and applicable  agency  regulations.
Violation of the Act may involve the imposition of criminal penalties.

The  Privacy  Act  System  of  Records  applicable  to this  project  is  Number
09-25-0200. This document is incorporated into this contract as an Attachment in
SECTION J of this contract.

ARTICLE H.8. ANIMAL WELFARE

All research involving live, vertebrate animals shall be conducted in accordance
with the  Public  Health  Service  Policy on Humane  Care and Use of  Laboratory
Animals. This policy may be accessed at:

      http://grants1.nih.gov/grants/olaw/references/phspol.htm

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                                                  Contract No. HHSN266200600014C

ARTICLE H.9. OMB CLEARANCE

In accordance  with HHSAR  352.270-7,  Paperwork  Reduction  Act, the Contractor
shall not  proceed  with  surveys  or  interviews  until  such time as Office of
Management  and  Budget  (OMB)  Clearance  for  conducting  interviews  has been
obtained by the Project Officer and the  Contracting  Officer has issued written
approval to proceed.

ARTICLE H.10. SALARY RATE LIMITATION LEGISLATION PROVISIONS

a.    Pursuant to the P.L.(s) cited in paragraph  b., below,  no NIH Fiscal Year
      funds may be used to pay the direct salary of an  individual  through this
      contract  at a rate  in  excess  of the  applicable  amount  shown  or the
      applicable  Executive Level for the fiscal year covered.  Direct salary is
      exclusive  of fringe  benefits,  overhead  and general and  administrative
      expenses  (also  referred  to  as  "indirect  costs"  or  "facilities  and
      administrative  (F&A)  costs").  Direct salary has the same meaning as the
      term  "institutional  base  salary."  An  individual's  direct  salary (or
      institutional base salary) is the annual  compensation that the contractor
      pays for an individual's  appointment  whether that  individual's  time is
      spent on  research,  teaching,  patient care or other  activities.  Direct
      salary  (or  institutional  base  salary)  excludes  any  income  that  an
      individual  may be permitted to earn outside of duties to the  contractor.
      The per year salary rate limitation  also applies to individuals  proposed
      under subcontracts. It does not apply to fees paid to consultants. If this
      is a multiple year contract, it may be subject to unilateral modifications
      by the  Government  if an  individual's  salary  rate  used  to  establish
      contract   funding  exceeds  any  salary  rate   limitation   subsequently
      established in future HHS appropriation acts.

b.    Public Law No.             Fiscal Year  Dollar Amount of Salary Limitation
      P.L. 109-149, Public          FY 06     Executive Level I
      Health & Social Services
      Emergency Fund General
      Provisions, Section 204

c.    Payment of direct salaries is limited to the Executive Level I* rate which
      was in effect on the date(s) the expense was incurred.

      For the period 10/1/05 - 12/31/05, the Executive Level I rate is $180,100.
      Effective  January  1,  2006,  the  Executive  Level I rate  increased  to
      $183,500  and will  remain at that rate until it is  revised.  See the web
      site listed below for the Executive Schedule rates of pay:

      FOR FY-06 EXECUTIVE LEVEL SALARIES EFFECTIVE JANUARY 1, 2006:

            http://www.opm.gov/oca/06tables/html/ex.asp

      (Note:  This site shows the FY-06  rates.  For  previous  years,  click on
      "salaries  and wages" and then  scroll  down to the bottom of the page and
      click on the year to locate the desired Executive Level salary rates.)

ARTICLE H.11. PUBLICATION AND PUBLICITY

The  contractor  shall  acknowledge  the support of the National  Institutes  of
Health  whenever  publicizing  the work  under  this  contract  in any  media by
including an acknowledgment substantially as follows:

      "This  project has been funded in whole or in part with Federal funds from
      the  National  Institute  of Allergy  and  Infectious  Diseases,  National
      Institutes  of  Health,  Department  of Health and Human  Services,  under
      Contract No.HHSN266200600014C."

ARTICLE H.12. PRESS RELEASES

a.    Pursuant to Public  Law(s) cited in paragraph b.,  below,  the  contractor
      shall clearly state, when issuing statements, press releases, requests for
      proposals,  bid solicitations and other documents  describing  projects or
      programs funded in whole or in part with Federal money: (1) the percentage
      of the total costs of the program or project  which will be financed  with
      Federal  money;  (2) the dollar amount of Federal funds for the project or
      program;  and (3) the  percentage  and dollar amount of the total costs of
      the project or program that will be financed by non governmental sources.

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                                                  Contract No. HHSN266200600014C

b.    Public Law and Section No.      Fiscal Year   Period Covered
      P.L. 109-149, Title V-General      2006       (10/1/2005-9/30/2006)
      Provisions Section 506

ARTICLE H.13. REPORTING MATTERS INVOLVING FRAUD, WASTE AND ABUSE

Anyone who becomes aware of the existence or apparent  existence of fraud, waste
and abuse in NIH funded programs is encouraged to report such matters to the HHS
Inspector General's Office in writing or on the Inspector General's Hotline. The
toll free number is 1-800-HHS-TIPS (1-800-447-8477). All telephone calls will be
handled confidentially.  The e-mail address is Htips@os.dhhs.gov and the mailing
address is:

            Office of Inspector General
            Department of Health and Human Services
            TIPS HOTLINE P.O. Box 23489
            Washington, D.C.  20026

ARTICLE H.14. ANTI -LOBBYING

a.    Pursuant to Public  Law(s) cited in paragraph c.,  below,  contract  funds
      shall  only  be  used  for  normal  and  recognized  executive-legislative
      relationships.  Contract  funds  shall  not  be  used,  for  publicity  or
      propaganda purposes; or for the preparation,  distribution,  or use of any
      kit,  pamphlet,   booklet,   publication,   radio,  television,  or  video
      presentation  designed to support or defeat legislation pending before the
      Congress or any State legislature,  except in presentation to the Congress
      or any State legislature itself.

b.    Contract  funds  shall  not be  used  to pay  salary  or  expenses  of the
      contractor or any agent acting for the contractor, related to any activity
      designed to influence  legislation  or  appropriations  pending before the
      Congress or any State legislature.

c.    Public Law and Section No.            Fiscal Year   Period Covered
      for a., above:  P.L. 109-149, Title      FY-06      (10/1/2005-9/30/2006)
                      V-General Provisions
                      Section 503a.

      for b., above:  P.L. 109-149, Title      FY-06      (10/1/2005-9/30/2006)
                      V-General Provisions
                      Section 503b.

ARTICLE H.15. OBTAINING AND DISSEMINATING BIOMEDICAL RESEARCH RESOURCES

Unique research resources arising from NIH-funded research are to be shared with
the scientific research  community.  NIH provides guidance,  entitled,  "Sharing
Biomedical Research  Resources:  Principles and Guidelines for Recipients of NIH
Research Grants and Contracts," (Federal Register Notice,  December 23, 1999 [64
FR 72090]),  concerning the appropriate  terms for  disseminating  and acquiring
these     research     resources.      This     guidance,     found     at     :
http://ott.od.nih.gov/NewPages/64FR72090.pdf.  is intended  to help  contractors
ensure that the  conditions  they impose and accept on the  transfer of research
tools  will  facilitate  further  biomedical   research,   consistent  with  the
requirements of the Bayh-Dole Act and NIH funding policy.

Note: For the purposes of this Article,  the terms,  "research tools," "research
materials," and "research  resources" are used interchangeably and have the same
meaning.

ARTICLE H.16. POSSESSION USE AND TRANSFER OF SELECT BIOLOGICAL AGENTS OR TOXINS

The contractor  shall not conduct work  involving  select agents or toxins under
this  contract  until it and any  associated  subcontractor(s)  comply  with the
following:

      For prime or  subcontract  awards to domestic  institutions  that possess,
      use, and/or  transfer  Select Agents under this contract,  the institution
      must comply with the provisions of 42 CFR part 73, 7 CFR part 331, and/or

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<PAGE>

                                                  Contract No. HHSN266200600014C

      9 CFR part 121
      (http://www.aphis.usda.gov/programs/ag_selectagent/ FinalRule3-18-05.pdf),
      as required,  before using NIH funds for research involving Select Agents.
      No NIH funds can be used for research involving Select Agents if the final
      registration certificate is denied.

      For prime or subcontract awards to foreign institutions that possess, use,
      and/or transfer Select Agents under this contract,  before using NIH funds
      for any work directly involving the Select Agents, the foreign institution
      must  provide  information  satisfactory  to the NIAID,  NIH that  safety,
      security,  and training standards  equivalent to those described in 42 CFR
      part 73, 7 CFR part 331, and/or 9 CFR part 121 at:
      (http://www.aphis.usda.gov/programs/ag_selectagent/FinalRule3-18-05.pdf)
      are in place and will be  administered  on behalf of all Select Agent work
      sponsored  by these  funds.  The  process  for making  this  determination
      includes  inspection  of  the  foreign  laboratory  facility  by an  NIAID
      representative.  During  this  inspection,  the foreign  institution  must
      provide the following information:  concise summaries of safety, security,
      and training  plans;  names of individuals at the foreign  institution who
      will have access to the Select  Agents and  procedures  for ensuring  that
      only approved and appropriate individuals,  in accordance with institution
      procedures,  will have access to the Select Agents under the contract; and
      copies of or links to any  applicable  laws,  regulations,  policies,  and
      procedures  applicable  to  that  institution  for  the  safe  and  secure
      possession,  use,  and/or  transfer  of select  agents.  An  NIAID-chaired
      committee of U.S.  federal  employees  (including  representatives  of NIH
      grants/contracts  and scientific program  management,  CDC,  Department of
      Justice and other federal intelligence  agencies, and Department of State)
      will ultimately assess the results of the laboratory facility  inspection,
      and the regulations,  policies,  and procedures of the foreign institution
      for  equivalence to the U.S.  requirements  described in 42 CFR part 73, 7
      CFR part 331, and/or 9 CFR part 121
      (http://www.aphis.usda.gov/programs/ag_selectagent/FinalRule3-18-05.pdf).
      The committee will provide recommendations to the DEA Director, NIAID. The
      DEA Director  will make the approval  decision and notify the  Contracting
      Officer.  The Contracting  Officer will inform the prime contractor of the
      approval status of the foreign  institution.  No NIH funds can be used for
      research  involving  Select  Agents at a foreign  institution  until NIAID
      grants this approval.

Listings of HHS select agents and toxins, and overlap select agents or toxins as
well as information  about the registration  process for domestic  institutions,
are available on the Select Agent Program Web site at http://www.cdc.gov/od/sap/
and  http://www.cdc.gov/od/sap/docs/salist.pdf.  Listings of USDA select  agents
and toxins as well as information  about the  registration  process for domestic
institutions are available on the APHIS/USDA website at:

      http://www.aphis.usda.gov/programs/ag_selectagent/index.html; and
      http://www.aphis.usda.gov/programs/ag_selectagent/ag_bioterr_forms.html.

For foreign institutions, see the NIAID Select Agent Award information:

      http://www.niaid.nih.gov/ncn/clinical/default_biodefense.htm

ARTICLE H.17. HOTEL AND MOTEL FIRE SAFETY ACT OF 1990 (P.L. 101-391)

Pursuant to Public Law 101-391,  no Federal funds may be used to sponsor or fund
in whole or in part a meeting,  convention,  conference or training seminar that
is conducted in, or that otherwise uses the rooms, facilities,  or services of a
place of  public  accommodation  that do not meet the  requirements  of the fire
prevention  and  control  guidelines  as  described  in  the  Public  Law.  This
restriction applies to public accommodations both foreign and domestic.

Public   accommodations   that  meet  the   requirements  can  be  accessed  at:
http://www.usfa.fema.gov/hotel/index.htm

ARTICLE H.18. PROHIBITION ON CONTRACTOR INVOLVEMENT WITH TERRORIST ACTIVITIES

The contractor  acknowledges that U.S. Executive Orders and Laws,  including but
not limited to E.O. 13224 and P.L. 107-56,  prohibit  transactions with, and the
provision of resources and support to, individuals and organizations  associated
with  terrorism.  It is the legal  responsibility  of the  contractor  to ensure
compliance with these Executive

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                                                  Contract No. HHSN266200600014C

Orders and Laws. This clause must be included in all  subcontracts  issued under
this contract.

ARTICLE H.19.  NIH POLICY ON ENHANCING  PUBLIC  ACCESS TO ARCHIVED  PUBLICATIONS
RESULTING FROM NIH-FUNDED RESEARCH

The Policy requests that beginning May 2, 2005, NIH-funded  investigators submit
to the NIH  National  Library  of  Medicine's  (NLM)  PubMed  Central  (PMC)  an
electronic  version  of the  author's  final  manuscript,  upon  acceptance  for
publication,  resulting from research  supported in whole or in part with direct
costs from NIH. NIH defines the author's  final  manuscript as the final version
accepted  for journal  publication,  and  includes  all  modifications  from the
publishing peer review process.  The PMC archive will preserve permanently these
manuscripts for use by the public, health care providers, educators, scientists,
and  NIH.  The  Policy  directs  electronic   submissions  to  the  NIH/NLM/PMC:
http://www.pubmedcentral.nih.gov.

Additional information is available at
http://grants.nih.gov/grants/guide/notice-files/NOT-OD-05-022.html.

ARTICLE H.20. SHARING RESEARCH DATA

The data sharing plan submitted by the contractor is acceptable.  The contractor
agrees to adhere to its plan and shall request prior approval of the Contracting
Officer for any changes in its plan.

The NIH endorses the sharing of final research data to expedite the  translation
of research  results into knowledge,  products,  and procedures to improve human
health.  this contract is expected to generate research data that must be shared
with the public and other researchers. NIH's data sharing policy may be found at
the following Web site:

       http://grants.nih.gov/grants/guide/notice-files/NOT-OD-03-032.html

NIH recognizes  that data sharing may be complicated or limited,  in some cases,
by institutional policies,  local IRB rules, as well as local, state and Federal
laws  and   regulations,   including   the  Privacy   Rule  (see   HHS-published
documentation  on the Privacy Rule at  http://www.hhs.gov/ocr/).  The rights and
privacy of people who  participate  in NIH-funded  research must be protected at
all times;  thus,  data  intended for broader use should be free of  identifiers
that would permit  linkages to individual  research  participants  and variables
that could lead to deductive disclosure of the identity of individual subjects.

ARTICLE H.21. INTELLECTUAL PROPERTY OPTION TO COLLABORATOR

NIAID may collaborate with an outside investigator who has proprietary rights to
compounds which may be assigned under this contract.  This  collaborator will be
identified  by the Project  Officer (PO) at the time of  assignment  and in this
case,  the  following  option  regarding  Intellectual  Property  Rights will be
applicable.

Contractor agrees to promptly notify the NIAID and  "Collaborator" in writing of
any inventions,  discoveries or innovations made by the  contractor's  principal
investigator  or any  other  employees  or  agents  of the  contractor,  whether
patentable or not, which are conceived and/or first actually reduced to practice
in the performance of this study using  Collaborator's  Study Agent (hereinafter
"Contractor Inventions").

Contractor  agrees  to  grant  to  Collaborator:  (1)  a  paid-up  nonexclusive,
nontransferable,  royalty-free,  world-wide license to all Contractor Inventions
for research purposes only; and (2) a time-limited  first option to negotiate an
exclusive  world-wide  royalty-bearing  license  for  all  commercial  purposes,
including the right to grant sub-licenses, to all Contractor Inventions on terms
to be  negotiated in good faith by  Collaborator  and  Contractor.  Collaborator
shall notify Contractor,  in writing,  of its interest in obtaining an exclusive
license to any  Contractor  Invention  within  six (6) months of  Collaborator's
receipt  of  notice  of  such  Contractor   Invention(s).   In  the  event  that
Collaborator  fails to so notify Contractor or elects not to obtain an exclusive
license, then Collaborator's option shall expire with respect to that Contractor
Invention,  and  Contractor  will be free to  dispose of its  interests  in such
Contractor  Invention in  accordance  with its own policies.  If Contractor  and
Collaborator  fail  to  reach  agreement  within  ninety  (90)  days,  (or  such
additional  period as Collaborator and Contractor may agree) on the terms for an
exclusive license for a particular  Contractor  Invention,  then for a period of
six (6) months thereafter,  Contractor shall not offer to license the Contractor
Invention to any third party on materially  better terms than those last offered
to Collaborator without first

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                                                  Contract No. HHSN266200600014C

offering such terms to  Collaborator,  in which case  Collaborator  shall have a
period of thirty (30) days in which to accept or reject the offer.

Contractor  agrees that  notwithstanding  anything  herein to the contrary,  any
inventions, discoveries or innovations, whether patentable or not, which are not
Subject  Inventions  as  defined  in 35  U.S.C.  201(e),*  arising  out  of  any
unauthorized use of the Collaborator's  Study Agent shall be the property of the
Collaborator (hereinafter "Collaborator  Inventions").  Contractor will promptly
notify the Collaborator in writing of any such  Collaborator  Inventions and, at
Collaborator's  request  and  expense,  Contractor  will cause to be assigned to
Collaborator  all  right,  title  and  interest  in an to any such  Collaborator
Inventions and provide Collaborator with reasonable assistance to obtain patents
(including   causing  the  execution  of  any  invention   assignment  or  other
documents).  Contractor  may also be conducting  other more basic research using
Study Agent under the authority of a separate Material Transfer Agreement (MTA),
or other such agreement with the  Collaborator.  Inventions  arising  thereunder
shall be subject to the terms of the MTA, and not to this clause.

*35  U.S.C.  (e):  The term  "subject  invention"  means  any  invention  of the
contractor conceived or first actually reduced to practice in the performance of
work  under a funding  agreement:  Provided,  that in the case of a  variety  of
plant, the date of determination (as defined in section 41(d)(FOOTNOTE 1) of the
Plant  Variety  Protection  Act (7 U.S.C.  2401(d)))  must also occur during the
period of contract performance.

                         Protection of Proprietary Data

Data generated using an investigational agent proprietary to a Collaborator will
be kept  confidential and shared only with the NIAID and the  Collaborator.  The
Contractor retains the right to publish research results subject to the terms of
this contract.

ARTICLE H.22. HUMAN MATERIALS

The  acquisition  and supply of all human  specimen  material  (including  fetal
material)  used under this contract  shall be obtained by the Contractor in full
compliance  with  applicable  State and  Local  laws and the  provisions  of the
Uniform  Anatomical  Gift Act in the United  States,  and no undue  inducements,
monetary or otherwise, will be offered to any person to influence their donation
of human material.

ARTICLE H.23. HUMAN MATERIALS (ASSURANCE OF OHRP COMPLIANCE)

The  acquisition  and supply of all human  specimen  material  (including  fetal
material)  used under this contract  shall be obtained by the Contractor in full
compliance  with  applicable  State and  Local  laws and the  provisions  of the
Uniform  Anatomical  Gift Act in the United  States,  and no undue  inducements,
monetary or otherwise, will be offered to any person to influence their donation
of human material.

The Contractor  shall provide  written  documentation  that all human  materials
obtained as a result of research  involving human subjects  conducted under this
contract,  by collaborating  sites, or by  subcontractors  identified under this
contract,  were  obtained with prior  approval by the Office for Human  Research
Protections  (OHRP) of an Assurance to comply with the requirements of 45 CFR 46
to  protect  human  research   subjects.   This   restriction   applies  to  all
collaborating  sites  without  OHRP-approved  Assurances,  whether  domestic  or
foreign, and compliance must be ensured by the Contractor.

Provision by the Contractor to the Contracting  Officer of a properly  completed
"Protection     of     Human     Subjects      Assurance      Identification/IRB
Certification/Declaration  of  Exemption",  Form  OMB  No.  0990-0263  (formerly
Optional  Form 310),  certifying  IRB review and approval of the  protocol  from
which the human materials were obtained  constitutes  the written  documentation
required.  The human  subject  certification  can be met by submission of a self
designated  form,  provided  that it contains  the  information  required by the
"Protection     of     Human     Subjects      Assurance      Identification/IRB
Certification/Declaration  of  Exemption",  Form  OMB  No.  0990-0263  (formerly
Optional Form 310)

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                                                  Contract No. HHSN266200600014C

                           PART II - CONTRACT CLAUSES

SECTION I - CONTRACT CLAUSES

ARTICLE I.1. GENERAL CLAUSES FOR A  COST-REIMBURSEMENT  RESEARCH AND DEVELOPMENT
CONTRACT - FAR 52.252-2, CLAUSES INCORPORATED BY REFERENCE (FEBRUARY 1998)

This contract  incorporates  the following  clauses by reference,  with the same
force  and  effect  as if they  were  given  in full  text.  Upon  request,  the
Contracting Officer will make their full text available.  Also, the full text of
a    clause    may    be    accessed    electronically    at    this    address:
http://www.acquisition.gov/comp/far/index.html.

a.    FEDERAL ACQUISITION REGULATION (FAR) (48 CFR CHAPTER 1) CLAUSES:

   FAR
 CLAUSE NO.     DATE     TITLE
-----------     ----     -----
52.202-1      Jul 2004   Definitions (Over $100,000)

52.203-3      Apr 1984   Gratuities (Over $100,000)

52.203-5      Apr 1984   Covenant Against Contingent Fees (Over $100,000)

52.203-6      Jul 1995   Restrictions on Subcontractor Sales to the Government
                         (Over $100,000)

52.203-7      Jul 1995   Anti-Kickback Procedures (Over $100,000)

52.203-8      Jan 1997   Cancellation, Rescission, and Recovery of Funds for
                         Illegal or Improper Activity (Over $100,000)

52.203-10     Jan 1997   Price or Fee Adjustment for Illegal or Improper
                         Activity (Over $100,000)

52.203-12     Sep 2005   Limitation on Payments to Influence Certain Federal
                         Transactions (Over $100,000)

52.204-4      Aug 2000   Printed or Copied Double-Sided on Recycled Paper
                         (Over $100,000)

52.204-7      Jul 2006   Central Contractor Registration

52.209-6      Jan 2005   Protecting the Government's Interests When
                         Subcontracting With Contractors Debarred, Suspended, or
                         Proposed for Debarment (Over $25,000)

52.215-2      Jun 1999   Audit and Records - Negotiation (Over $100,000)

52.215-8      Oct 1997   Order of Precedence - Uniform Contract Format

52.215-10     Oct 1997   Price Reduction for Defective Cost or Pricing Data

52.215-12     Oct 1997   Subcontractor Cost or Pricing Data (Over $500,000)

52.215-14     Oct 1997   Integrity of Unit Prices (Over $100,000)

52.215-15     Oct 2004   Pension Adjustments and Asset Reversions

52.215-18     Jul 2005   Reversion or Adjustment of Plans for Post-Retirement
                         Benefits (PRB) other than Pensions

52.215-19     Oct 1997   Notification of Ownership Changes

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                                                  Contract No. HHSN266200600014C

52.215-21     Oct 1997   Requirements for Cost or Pricing Data or Information
                         Other Than Cost or Pricing Data - Modifications

52.216-7      Dec 2002   Allowable Cost and Payment

52.216-8      Mar 1997   Fixed Fee

52.219-8      May 2004   Utilization of Small Business Concerns (Over $100,000)

52.219-9      Jul 2005   Small Business Subcontracting Plan (Over $500,000,
                         $1,000,000 for Construction)

52.219-16     Jan 1999   Liquidated Damages - Subcontracting Plan
                         (Over $500,000, $1,000,000 for Construction)

52.222-2      Jul 1990   Payment for Overtime Premium (Over $100,000) (Note: The
                         dollar amount in paragraph (a) of this clause is $0
                         unless otherwise specified in the contract.)

52.222-3      Jun 2003   Convict Labor

52.222-21     Feb 1999   Prohibition of Segregated Facilities

52.222-26     Apr 2002   Equal Opportunity

52.222-35     Dec 2001   Equal Opportunity for Special Disabled Veterans,
                         Veterans of the Vietnam Era, and Other Eligible
                         Veterans

52.222-36     Jun 1998   Affirmative Action for Workers with Disabilities

52.222-37     Dec 2001   Employment Reports on Special Disabled Veterans,
                         Veterans of the Vietnam Era, and Other Eligible
                         Veterans

52.222-50     Apr 2006   Combating Trafficking in Persons

52.223-6      May 2001   Drug-Free Workplace

52.223-14     Aug 2003   Toxic Chemical Release Reporting (Over $100,000)

52.225-1      Jun 2003   Buy American Act - Supplies

52.225-13     Feb 2006   Restrictions on Certain Foreign Purchases

52.227-1      Jul 1995   Authorization and Consent, Alternate I (Apr 1984)

52.227-2      Aug 1996   Notice and Assistance Regarding Patent and Copyright
                         Infringement (Over $100,000)

52.227-11     Jun 1997   Patent Rights - Retention by the Contractor
                         (Short Form) (Note: In accordance with FAR 27.303(a)
                         (2), paragraph (f) is modified to include the
                         requirements in FAR 27.303(a)(2)(i) through (iv). The
                         frequency of reporting in (i) is annual.

52.227-14     Jun 1987   Rights in Data - General

52.232-9      Apr 1984   Limitation on Withholding of Payments

52.232-17     Jun 1996   Interest (Over $100,000)

52.232-20     Apr 1984   Limitation of Cost

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                                                  Contract No. HHSN266200600014C

52.232-23     Jan 1986   Assignment of Claims

52.232-25     Oct 2003   Prompt Payment, Alternate I (Feb 2002)

52.232-33     Oct 2003   Payment by Electronic Funds Transfer--Central
                         Contractor Registration

52.233-1      Jul 2002   Disputes

52.233-3      Aug 1996   Protest After Award, Alternate I (Jun 1985)

52.233-4      Oct 2004   Applicable Law for Breach of Contract Claim

52.242-1      Apr 1984   Notice of Intent to Disallow Costs

52.242-3      May 2001   Penalties for Unallowable Costs (Over $500,000)

52.242-4      Jan 1997   Certification of Final Indirect Costs

52.242-13     Jul 1995   Bankruptcy (Over $100,000)

52.243-2      Aug 1987   Changes - Cost Reimbursement, Alternate V (Apr 1984)

52.244-2      Aug 1998   Subcontracts, Alternate I (January 2006)

52.244-5      Dec 1996   Competition in Subcontracting (Over $100,000)

52.244-6      Feb 2006   Subcontracts for Commercial Items

52.245-5      May 2004   Government Property (Cost-Reimbursement, Time and
                         Material, or Labor-Hour Contract)

52.245-9      Aug 2005   Use and Charges

52.246-23     Feb 1997   Limitation of Liability (Over $100,000)

52.249-6      Sep 1996   Termination (Cost-Reimbursement)

52.249-14     Apr 1984   Excusable Delays

52.253-1      Jan 1991   Computer Generated Forms

b.    DEPARTMENT OF HEALTH AND HUMAN SERVICES ACQUISITION REGULATION (HHSAR) (48
      CFR CHAPTER 3) CLAUSES:

   HHSAR
 CLAUSE NO.     DATE     TITLE
-----------     ----     -----
352.202-1     Jan 2001   Definitions - with Alternate paragraph (h) (Jan 2001)

352.216-72    Oct 1990   Additional Cost Principles

352.228-7     Dec 1991   Insurance - Liability to Third Persons

352.232-9     Apr 1984   Withholding of Contract Payments

352.233-70    Apr 1984   Litigation and Claims

352.242-71    Apr 1984   Final Decisions on Audit Findings

352.270-5     Apr 1984   Key Personnel

352.270-6     Jul 1991   Publications and Publicity

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                                                  Contract No. HHSN266200600014C

352.270-7  Jan 2001  Paperwork Reduction Act

[End of GENERAL CLAUSES FOR A COST-REIMBURSEMENT RESEARCH AND DEVELOPMENT
CONTRACT - Rev. 07/2006].

ARTICLE I.2 AUTHORIZED SUBSTITUTION OF CLAUSES

      ARTICLE I.1. of this SECTION is hereby modified as follows:

      Alternate IV (October 1997) of FAR Clause 52.215-21, Requirements For Cost
      Or   Pricing   Data  Or   Information   Other   Than   Cost   Or   Pricing
      Data--Modifications (October 1997) is added.

      FAR Clause  52.232-20,  Limitation Of Cost (April 1984), is deleted in its
      entirety  and FAR Clause  52.232-22,  Limitation  Of Funds (April 1984) is
      substituted  therefor.  [NOTE:  When this  contract is fully  funded,  FAR
      Clause 52.232-22,  LIMITATION OF FUNDS will no longer apply and FAR Clause
      52.232-20, LIMITATION OF COST will become applicable.]

ARTICLE I.3. ADDITIONAL CONTRACT CLAUSES

This contract  incorporates  the following  clauses by reference,  with the same
force  and  effect,  as if they  were  given in full  text.  Upon  request,  the
contracting officer will make their full text available.

a.    FEDERAL ACQUISITION REGULATION (FAR) (48 CFR CHAPTER 1) CLAUSES

      (1)   FAR  Clause  52.219-4,  Notice of Price  Evaluation  Preference  for
            HUBZone Small Business Concerns (July 2005).

            "(c)  Waiver of evaluation preference.....

                  [ ]    Offeror elects to waive the evaluation preference."

      (2)   FAR Clause 52.224-1, Privacy Act Notification (April 1984).

      (3)   FAR Clause 52.224-2, Privacy Act (April 1984).

      (4)   FAR Clause 52.227-14, Rights in Data - General (June 1987).

      (5)   Alternate  I  (June   1987),   FAR  Clause   52.227-14,   Rights  in
            Data--General (June 1987).

      (6)   Alternate  II  (June  1987),   FAR  Clause   52.227-14,   Rights  in
            Data--General (June 1987).

            Additional  purposes  for which the limited  rights data may be used
            are:

      (7)   Alternate  III  (June  1987),  FAR  Clause   52.227-14,   Rights  in
            Data--General (June 1987).

            Additions to, or limitations on, the restricted  rights set forth in
            the Restricted  Rights Notice of  subparagraph  (g)(3) of the clause
            are expressly stated as follows:

      (8)   FAR Clause 52.227-16, Additional Data Requirements (June 1987).

      (9)   FAR Clause  52.227-23,  Rights to Proposal  Data  (Technical)  (June
            1987).

      (10)  FAR Clause 52.242-3, Penalties for Unallowable Costs (May 2001).

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                                                  Contract No. HHSN266200600014C

b.    DEPARTMENT OF HEALTH AND HUMAN SERVICES ACQUISITION REGULATION (HHSAR) (48
      CHAPTER 3) CLAUSES:

      (1)   HHSAR Clause  352.223-70,  Safety and Health  (January  2001).  This
            clause is provided in full text in Section J - Attachments.

      (2)   HHSAR Clause 352.224-70,  Confidentiality of Information (April 1984
            - including  revisions  mandated by the  1/3/2005  Federal  Register
            notice which was effective March 2005).

      (3)   HHSAR Clause 352.270-1,  Accessibility of Meetings,  Conferences and
            Seminars to Persons with Disabilities (January 2001).

      (4)   HHSAR Clause 352.270-8, Protection of Human Subjects (March 2005).

      (5)   HHSAR  Clause  352.270-9,  Care of Live  Vertebrate  Animals  (March
            2005).

c.    NATIONAL INSTITUTES OF HEALTH (NIH) RESEARCH CONTRACTING (RC) CLAUSES:

      The following clauses are attached and made a part of this contract:

      (1)   NIH (RC)-7, Procurement of Certain Equipment (April 1984) (OMB
            Bulletin 81-16).

      (2)   NIH(RC)-11, Research Patient Care Costs (4/1/84).

ARTICLE I.4. ADDITIONAL FAR CONTRACT CLAUSES INCLUDED IN FULL TEXT

This contract incorporates the following clauses in full text.

FEDERAL ACQUISITION REGULATION (FAR)(48 CFR CHAPTER 1) CLAUSES:

a.    FAR Clause 52.222-39,  Notification Of Employee Rights Concerning  Payment
      Of Union Dues Or Fees (December 2004)

      (a)   Definition. As used in this clause--

            United States means the 50 States, the District of Columbia,  Puerto
            Rico, the Northern Mariana Islands,  American Samoa,  Guam, the U.S.
            Virgin Islands, and Wake Island.

      (b)   Except as provided in paragraph (e) of this clause,  during the term
            of this contract, the Contractor shall post a notice, in the form of
            a poster,  informing  employees  of their  rights  concerning  union
            membership and payment of union dues and fees, in conspicuous places
            in and about all its plants and offices,  including all places where
            notices to  employees  are  customarily  posted.  The  notice  shall
            include  the  following  information  (except  that the  information
            pertaining to National Labor  Relations  Board shall not be included
            in notices  posted in the plants or offices of  carriers  subject to
            the Railway Labor Act, as amended (45 U.S.C. 151-188)).

                                   Notice to Employees

                  Under Federal law,  employees cannot be required to join
                  a union or  maintain  membership  in a union in order to
                  retain their jobs.  Under  certain  conditions,  the law
                  permits  a  union  and  an  employer  to  enter  into  a
                  union-security  agreement  requiring  employees  to  pay
                  uniform  periodic  dues and  initiation  fees.  However,
                  employees  who are not union  members  can object to the
                  use of their payments for certain  purposes and can only
                  be required  to pay their share of union costs  relating
                  to collective bargaining,  contract administration,  and
                  grievance adjustment.

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                                                  Contract No. HHSN266200600014C

                  If you do not want to pay that  portion  of dues or fees
                  used to support  activities  not  related to  collective
                  bargaining,   contract   administration,   or  grievance
                  adjustment, you are entitled to an appropriate reduction
                  in your  payment.  If you  believe  that you  have  been
                  required  to pay  dues or fees  used in part to  support
                  activities   not  related  to   collective   bargaining,
                  contract  administration,  or grievance adjustment,  you
                  may  be  entitled  to a  refund  and  to an  appropriate
                  reduction in future payments.

                  For further information  concerning your rights, you may
                  wish to  contact  the  National  Labor  Relations  Board
                  (NLRB)  either at one of its Regional  offices or at the
                  following address or toll free number:

                        National Labor Relations Board
                        Division of Information
                        1099 14th Street, N.W.
                        Washington, DC 20570
                        1-866-667-6572
                        1-866-316-6572 (TTY)

                  To locate the nearest NLRB office, see NLRB's website at
                  http://www.nlrb.gov.

(c)   The Contractor  shall comply with all provisions of Executive  Order 13201
      of February 17, 2001, and related implementing  regulations at 29 CFR part
      470, and orders of the Secretary of Labor.

(d)   In  the  event  that  the  Contractor  does  not  comply  with  any of the
      requirements  set forth in paragraphs  (b), (c), or (g), the Secretary may
      direct that this contract be cancelled,  terminated, or suspended in whole
      or in part, and declare the Contractor  ineligible for further  Government
      contracts  in  accordance  with  procedures  at 29 CFR part  470,  Subpart
      B--Compliance   Evaluations,   Complaint  Investigations  and  Enforcement
      Procedures.  Such  other  sanctions  or  remedies  may be  imposed  as are
      provided by 29 CFR part 470, which implements Executive Order 13201, or as
      are otherwise provided by law.

(e)   The  requirement  to post the employee  notice in  paragraph  (b) does not
      apply to--

      (1)   Contractors and subcontractors that employ fewer than 15 persons;

      (2)   Contractor  establishments or construction work sites where no union
            has been formally  recognized by the  Contractor or certified as the
            exclusive bargaining representative of the Contractor's employees;

      (3)   Contractor  establishments  or construction  work sites located in a
            jurisdiction  named in the  definition of the United States in which
            the law of that jurisdiction  forbids  enforcement of union-security
            agreements;

      (4)   Contractor   facilities  where  upon  the  written  request  of  the
            Contractor,  the Department of Labor Deputy Assistant  Secretary for
            Labor-Management  Programs has waived the posting  requirements with
            respect  to  any  of  the  Contractor's  facilities  if  the  Deputy
            Assistant  Secretary  finds  that the  Contractor  has  demonstrated
            that--

            (i)   The  facility is in all respects  separate  and distinct  from
                  activities of the Contractor  related to the  performance of a
                  contract; and

            (ii)  Such  a  waiver  will  not   interfere   with  or  impede  the
                  effectuation of the Executive order; or

      (5)   Work outside the United States that does not involve the recruitment
            or employment of workers within the United States.

(f)   The  Department  of Labor  publishes the official  employee  notice in two
      variations;  one for  contractors  covered by the Railway  Labor Act and a
      second for all other contractors. The Contractor shall--

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<PAGE>

                                                  Contract No. HHSN266200600014C

      (1)   Obtain the  required  employee  notice  poster from the  Division of
            Interpretations and Standards, Office of Labor-Management Standards,
            U.S. Department of Labor, 200 Constitution  Avenue, NW, Room N-5605,
            Washington,  DC 20210, or from any field office of the  Department's
            Office of  Labor-Management  Standards or Office of Federal Contract
            Compliance Programs;

      (2)   Download  a copy of the poster  from the Office of  Labor-Management
            Standards website at http://www.olms.dol.gov; or

      (3)   Reproduce  and use  exact  duplicate  copies  of the  Department  of
            Labor's official poster.

(g)   The  Contractor  shall  include  the  substance  of this  clause  in every
      subcontract  or purchase  order that  exceeds the  simplified  acquisition
      threshold,  entered into in connection with this contract, unless exempted
      by the Department of Labor Deputy Assistant Secretary for Labor-Management
      Programs  on account of special  circumstances  in the  national  interest
      under authority of 29 CFR 470.3(c).  For indefinite quantity subcontracts,
      the Contractor  shall include the substance of this clause if the value of
      orders in any calendar year of the  subcontract  is expected to exceed the
      simplified  acquisition  threshold.  Pursuant to 29 CFR part 470,  Subpart
      B--Compliance   Evaluations,   Complaint  Investigations  and  Enforcement
      Procedures,  the Secretary of Labor may direct the Contractor to take such
      action in the enforcement of these  regulations,  including the imposition
      of sanctions for  noncompliance  with respect to any such  subcontract  or
      purchase  order. If the Contractor  becomes  involved in litigation with a
      subcontractor  or vendor,  or is threatened  with such  involvement,  as a
      result of such  direction,  the  Contractor may request the United States,
      through the Secretary of Labor,  to enter into such  litigation to protect
      the interests of the United States.

                                       31

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