Exhibit 12

                               RESEARCH AGREEMENT

      This Research Agreement ("Agreement") is effective Jan 3, 2001 ("Effective
Date") by and between the University of Maryland, Baltimore ("UM"), a
constituent institution of the University System of Maryland, an agency of the
State of Maryland, having an address at 520 West Lombard Street, Baltimore,
Maryland 21201, and SIGA Research Laboratories, a corporation organized under
the laws of the State of Oregon, with its principal place of business at 4575 SW
Research Way, Suite 230, Corvallis, Oregon 97333 ("Sponsor").

                             ARTICLE 1 - BACKGROUND

1.1 Sponsor desires the research assistance of persons employed by UM who have
access to UM facilities and equipment. Accordingly, Sponsor agrees to fund
research entitled: "Toxicology of Streptococcus gordonii strain SP635/002" and
described in the protocol attached as Exhibit A, to be performed by UM Personnel
(defined below).

1.2 UM is willing to furnish the research services of UM Personnel as described
in Exhibit A upon the terms and conditions of this Agreement.

                             ARTICLE 2 - DEFINITIONS

In this Agreement, the following terms are defined as stated:

2.1 "Confidential Information" means any knowledge, know-how, practice, process
or other information which has not been made public which Sponsor receives from
UM or UM Personnel, or UM or UM Personnel receives from Sponsor. Confidential
Information includes, without limitation, any documents, drawings, sketches,
models, designs, data, memoranda, tapes, records, formulae and algorithms, given
orally, in hard copy form, or in electronic form.

2.2 "Contract Period" means the period January 1, 2001 through December 31,
2001, and any extensions agreed to in accordance with Section 18.3 below, or
permitted under Section 18.4 below, during which time UM will perform the
Project Work.

2.3 "Inventions" means any inventions or discoveries, patentable or otherwise
protectable under law which result from the Project Work and are made during the
Contract Period. For purposes of this Agreement, an Invention is "made" when it
is conceived or first actually reduced to practice.

2.4 "Joint Inventions" means Inventions made jointly by one or more UM Personnel
and one or more employees of Sponsor.

2.5 "Project Work" means the scope of work as described in Exhibit A to be
undertaken by UM, or by UM and Sponsor, under this Agreement, and any amendments
to Exhibit A made in accordance with Section 18.3.


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2.6 "Research Data" means information including, without limitation, documents,
drawings, models, designs, data, memoranda, tapes, records, formulae and
algorithms, in hard copy form or in electronic form, resulting from the Project
Work.

2.7 "Sponsor Inventions" means Inventions made solely by one or more employees
of Sponsor.

2.8 "UM Inventions" means Inventions made solely by one or more UM Personnel.

2.9 "UM Personnel" means employees, students, trainees, and other persons using
UM resources and subject to the UM patent policy.

                            ARTICLE 3 - PROJECT WORK

3.1 UM will commence performance of the Project Work promptly after the
Effective Date of this Agreement, and will undertake to perform the Project Work
substantially in accordance with the terms and conditions of this Agreement.
Sponsor and UM may amend the Project Work at any time in accordance with Section
18.3.

3.2 UM's Principal Investigator ("PI") for the Project Work is Srinivas S. Rao,
DVM, PhD. The Project Work will be supervised by the PI. If for any reason the
PI is unwilling or unable to continue to serve and a substitute PI acceptable to
both UM and Sponsor is not available, this Agreement may be terminated by either
party in accordance with Section 9.4 below.

3.3 Sponsor will provide at no charge to UM, and at a time to be mutually
agreed, an adequate supply of the material SP635/002 (Test Material) for use in
the evaluation activities under this Agreement. Test Material will be considered
Sponsor's Confidential Information and subject to Article 12 (Confidentiality).
UM will not use the material for any other purpose other than as part of the
Project Work without the written permission of Sponsor. Upon termination or
expiration of this Agreement, UM will destroy, discard or return any remaining
Test Material, upon request of Sponsor.

3.4 If applicable, Sponsor represents that it has received the appropriate Food
and Drug approval for the use of Test Materials in the work to be performed
hereunder.

3.5 UM will perform the Project Work in accordance with applicable laws and
regulations. The use of warm-blooded animals in the conduct of this Agreement
will comply with applicable portions of the Animal Welfare Act (7 USC 2131 et
seq.) and 9CFR Subchapter A, Parts 1, 2, 3a-f, as amended and the Public Health
Service Policy on Humane Care and Use of Laboratory Animals, and will follow the
guidelines prescribed in "Guide for the Care and Use of Laboratory Animals".
Experiments involving vertebrate animals will be reviewed and approved by UM's
Institutional Animal Care and Use Committee.


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                       ARTICLE 4 - REPORTS AND CONFERENCES

4.1 Written progress reports will be provided by UM to Sponsor as specific
phases of work are completed. A final report will be submitted by UM within 60
days after the expiration or termination of this Agreement.

4.2 If necessary during the Contract Period, representatives of UM will meet
with representatives of Sponsor at times and places mutually agreed upon to
discuss the progress and results of the Project Work, as well as ongoing plans,
or any changes in the Project Work. Sponsor will reimburse UM for travel costs
associated with these meetings for the PI and other UM Personnel invited to the
meetings with Sponsor's approval if such costs have not been included in the
approved budget.

                  ARTICLE 5 - COST, BILLINGS, AND OTHER SUPPORT

5.1 Subject to modifications in the Project Work, the total costs to Sponsor
under this Agreement will not exceed the sum of $154,872. These costs will be
allocated by UM generally in accordance with the budget incorporated in Exhibit
A. Full payment by Sponsor will be made within 30 days after the Effective Date
or, if Exhibit A specifies a schedule for payments, in accordance with that
schedule.

Payment will be by check payable to the University of Maryland, Baltimore and
sent to:
          University of Maryland, Baltimore
          P.O. Box 41428
          Baltimore, Maryland 21203-6428

5.2 If this Agreement is terminated early, Sponsor will pay all costs accrued by
UM as of the effective date of termination and any costs incurred by UM as a
result of termination. In addition, Sponsor will reimburse UM for non-cancelable
obligations, which includes all non-cancelable contracts and fellowships, and
all postdoctoral or faculty appointments called for in Exhibit A, incurred prior
to the effective date of termination. This Section takes precedence over any
conflicting provision in this Agreement.

5.3 Interest is due on any payments to UM required by any Section of this
Agreement that are more than 30 days late. The interest rate is 10% simple
interest per annum.

                    ARTICLE 6 - RESEARCH DATA AND PUBLICATIONS

6.1 Research Data is owned by UM subject to Sponsor's right to use it in
accordance with the terms of this Agreement. If the Project Work is a
collaborative effort between UM and Sponsor, any Research Data generated by
employees of Sponsor may be obtained and used by UM at any time for research and
educational purposes.

6.2 Sponsor recognizes that under UM academic policy Research Data must be
publishable. Sponsor agrees that UM Personnel engaged in the Project Work
("Researchers") will be permitted to present the methods of the Project Work and
the Research Data at symposia and


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professional meetings, and to publish in journals, theses, dissertations, or
other publications or presentations of their own choosing in accordance with
this Article 6.

6.3 Sponsor will be furnished a copy of any proposed publication or presentation
at least 30 days in advance of the submission of such proposed publication or
presentation to a journal, editor, or other third party. Sponsor will have
thirty 30 days after receipt of the copy to object to the proposed presentation
or publication because there is patentable subject matter which needs protection
or there is Confidential Information of Sponsor contained in the proposed
publication or presentation, or both.

6.4 Confidential Information of Sponsor will be deleted from the proposed
publication or presentation upon Sponsor's request unless the Sponsor agrees to
treat its Confidential Information as patentable information, as set forth in
Section 6.5 below.

6.5 If Sponsor objects in writing to a Researcher's publication or presentation
due to disclosure of patentable information, the Researcher will refrain from
making such publication or presentation for a maximum of 90 days from date of
receipt of Sponsor's objection in order for Sponsor or UM to file patent
application(s) directed to the patentable subject matter contained in the
proposed publication or presentation with the United States Patent and Trademark
Office and/or foreign patent office(s).

6.6 Following publication by Researcher(s) or UM, Sponsor may freely publish,
reproduce, and use any such publication to the extent that any such use is
consistent with 17 U.S.C. Section 107.

                         ARTICLE 7 - INVENTIONS; OPTION

7.1 All right and title to UM Inventions will belong to UM subject to the
terms and conditions of this Agreement. UM will notify Sponsor promptly in
writing of any UM Inventions.

7.2 All right and title to Sponsor's Inventions will belong to Sponsor except
that UM has the right to use Sponsor's Inventions in accordance with Section
7.10. Sponsor will notify UM promptly in writing of any Sponsor Inventions.

7.3 All right and title to Joint Inventions will belong jointly to UM and
Sponsor subject to the terms and conditions of this Agreement. UM will notify
Sponsor promptly in writing of any Joint Inventions.

7.4 If Sponsor directs that a U.S. or foreign patent application for UM
Inventions or Joint Inventions be filed, UM or, at UM's option, Sponsor, will
promptly prepare, file, and prosecute such applications. Sponsor will bear all
costs incurred in connection with the preparation, filing, prosecution, and
maintenance of such U.S. and foreign application(s) directed to UM Inventions
or Joint Inventions. At UM's option, Sponsor will pre-pay or directly pay all
costs incurred in connection with the preparation, filing, prosecution, and
maintenance of such U.S. and foreign application(s) directed to UM Inventions or
Joint Inventions, including charges and statements


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from patent counsel. Sponsor will cooperate with UM to assure that such
application(s) will cover, to the best of Sponsor's knowledge, all items of
commercial interest and importance. If UM is prosecuting the patent
application, UM will be responsible for making decisions regarding scope,
content, and prosecution of the application to be filed, but Sponsor will be
given an opportunity to review the application(s) and to provide input. If
Sponsor is prosecuting the patent application, Sponsor will be responsible for
making decisions regarding scope, content, and prosecution of the application to
be filed, but UM will be given an opportunity to review the application(s) and
to provide input. UM or Sponsor, whichever is prosecuting the patent
application, will keep the other party advised as to all material developments
with respect to such application(s) and will promptly supply to the other party
copies of all papers received and filed in connection with the prosecution of
such application(s) in sufficient time for the other party to comment.

7.5 If Sponsor elects not to file or maintain, or decides to discontinue the
financial support of the prosecution, maintenance or protection of a patent
application or patent for UM Inventions or Joint Inventions, UM will be free
to file or continue to prosecute or maintain any such application(s), and to
maintain any resulting patents in the U.S. and in any foreign country, at UM's
sole expense. Sponsor will have no rights in the application or resulting patent
and, upon request, will confirm by written assignment that UM is sole owner of
Joint Inventions which Sponsor has discontinued support of.

7.6 To the extent UM is able to do so under the University System of Maryland
Patent Policy, under UM's agreements with other sponsors of research, and under
the provisions of 35 U.S.C. Sections 201 et seq. and all implementing
regulations, UM grants to Sponsor the first option, at Sponsor's sole election,
to obtain a worldwide, exclusive, royalty-bearing license to practice
commercially UM Inventions and UM's interest in Joint Inventions. Such option
with respect to each UM Invention or Joint Invention will extend for 120 days
after the date Sponsor receives written notice of the UM Invention or Joint
Invention. Sponsor may exercise its option by executing a license agreement with
UM prior to the end of the 120 day period. UM agrees to negotiate the terms of
a license agreement in good faith. If Sponsor does not execute a license
agreement with UM with respect to UM Inventions or UM's rights in Joint
Inventions within the 120 day period, Sponsor will have no rights in the UM
Inventions or in UM's rights in Joint Inventions and, upon request, will confirm
by written assignment that Sponsor has no rights in such UM Inventions or in
UM's rights in such Joint Inventions.

7.7 Sponsor may elect to have a license covering a limited geographic territory
or restricted to particular uses or applications of the UM Inventions or Joint
Inventions. If Sponsor makes such an election with respect to UM Inventions or
UM's rights in Joint Inventions, UM may license the UM Invention or UM's rights
in Joint Inventions to others on terms consistent with Sponsor's rights.

7.8 If Sponsor elects to obtain a license, the parties will negotiate in good
faith a reasonable royalty rate at the time Sponsor decides to exercise its
option. The royalty and other terms reasonable for a license agreement or
required by terms of this Agreement will be included in a license agreement.


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7.9 Sponsor agrees to exercise reasonable efforts to develop and subsequently to
market products and/or processes arising from UM Inventions or Joint Inventions
and licensed to Sponsor. If Sponsor fails at any time to exercise such effort
during the term of the license, UM will have the right to terminate the license
in its entirety or with respect only to specific products and/or processes as to
which Sponsor has not exercised the required efforts.

7.10 UM has the right of continued use and the option to permit other private or
public educational institutions to use Inventions on a royalty-free basis for
research and education, but not for commercial purposes, subject to
confidentiality requirements.

                 ARTICLE 8 - UNPATENTED INVENTIONS AND SOFTWARE

8.1 Unpatented Inventions.

      8.1.1 During the course of the Project Work it is possible that an
Invention (such as biological materials) may be created but not patented, either
by election of UM or because it is not patentable. All rights in such Inventions
will be owned by UM.

      8.1.2 UM will provide Sponsor with a written offer for an option to obtain
a worldwide, non-exclusive, royalty-bearing license to the Invention. The option
will extend for 120 days after receiving the written offer from UM. Sponsor may
exercise its option by executing a license agreement with UM prior to the end of
the 120 day period. UM agrees to negotiate the terms of a license agreement in
good faith. If Sponsor does not execute a license agreement with UM within the
120 day period, Sponsor will have no rights in the unpatented Invention.

8.2 Software.

      8.2.1 Copyright and all other rights in any software or other works
created in the course of the Project Work will be owned by UM.

      8.2.2 UM will provide Sponsor with a written report disclosing software or
other works described in Section 8.2.1 and at the same time will offer Sponsor
the option to obtain a worldwide, non-exclusive, royalty-bearing license to the
software or other work. The option will extend for 120 days after receiving the
written offer from UM. Sponsor may exercise its option by executing a license
agreement with UM prior to the end of the 120 day period. UM agrees to negotiate
the terms of a license agreement in good faith. If Sponsor does not execute a
license agreement with UM within the 120 day period, Sponsor will have no rights
in the software or other work.

                        ARTICLE 9 - TERM AND TERMINATION

9.1 This Agreement will continue in effect for the Contract Period unless sooner
terminated in accordance with the provisions of this Article 9. The parties may
extend the term of this Agreement for additional periods by proper amendment of
this Agreement.

9.2 If any payment due from Sponsor is not received by UM on or before the
payment date specified in this Agreement or in Exhibit A, UM may terminate this
Agreement by giving 30


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days prior written notice to Sponsor. If Sponsor pays the amount due within the
30 day notice period, the Agreement will continue in full force and effect.

9.3 Except as provided in Section 9.2, if either party materially breaches any
of the terms or conditions of this Agreement, the other party may terminate this
Agreement by giving 60 days prior written notice of termination to the other
party. If the breach is corrected within the 60 day period, the Agreement will
continue in full force and effect.

9.4 Either party may terminate this Agreement by giving 90 days prior written
notice to the other party.

9.5 If Sponsor terminates this Agreement for any reason other than a material
breach by UM, Sponsor will relinquish any and all rights it may have in the
Research Data to UM.

9.5 Termination does not relieve either party of any obligation for payment or
reporting which arises before termination including obligations under Articles
4, 5, 7 and 8. Articles 11 and 15 and Sections 7.6, 8.1.2 and 8.2.2 will survive
termination and terminate in accordance with their terms. Articles 6 and 14 and
Sections 7.10, 10.2, and 10.3 will survive termination.

                   ARTICLE 10 - INDEMNIFICATION AND INSURANCE

10.1 UM and its officers and employees acting within the scope of their
employment by UM are subject to the Maryland Tort Claims Act ("the Act"), Title
12, Subtitle 1, State Government Article, Annotated Code of Maryland, which
permits claims in tort against the State of Maryland under certain
circumstances. In order to file a claim under the Act, a claimant must submit a
written claim to the Treasurer of the State of Maryland or a designee of that
office within one year after the injury to the person or property that is the
basis of the claim.

10.2 Sponsor warrants and represents that it maintains comprehensive liability
and property damage insurance coverage for itself, its officers, employees and
agents, in the following minimum amounts per policy period:

            (a) Comprehensive liability (including product liability): (bodily
injury and loss of life) $1,000,000 per claim; $3,000,000 aggregate;

            (b) Property damage: $500,000 per claim; $1,500,000 aggregate.

Sponsor warrants that its comprehensive liability insurance covers contractually
assumed liabilities referred to in Section 10.3, and agrees to maintain such
coverage throughout the term of this Agreement. A certificate evidencing
required insurance coverage will be delivered to UM at or before execution of
this Agreement. Sponsor also warrants that its comprehensive liability insurance
is an occurrence policy, or if it is a claims made policy, Sponsor will purchase
extended reporting insurance.

10.3 Sponsor will defend, indemnify, and hold harmless UM, the University System
of Maryland, and the State of Maryland, and regents, officers, employees,
students, and agents of UM (collectively, "UM Parties") against any and all
claims, costs or liabilities, including attorney's fees and court costs at both
trial and appellate levels, for any loss, damage, personal


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injury, or loss of life, (a) caused by the actions of Sponsor or its officers,
servants, or agents, or third parties acting on behalf of or under authorization
from Sponsor in the performance of this Agreement; (b) arising out of use by
Sponsor, its officers, servants, or agents, or by any third party acting on
behalf of or under authorization from Sponsor of products or processes
(including licensed Inventions); or (c) arising out of use, by UM or its
employees or students, of products, processes, or protocols developed by
Sponsor, its officers, servants, or agents, or by third parties acting on behalf
of or under authorization from Sponsor. Sponsor's agreement to defend, indemnify
and hold harmless the UM Parties is conditioned upon (a) UM promptly notifying
Sponsor in writing after UM receives notice of any claim, and (b) UM and any
involved UM Parties fully cooperating with Sponsor in the defense of any such
claim. Sponsor's agreement to defend, indemnify and hold harmless the UM Parties
will not apply to any claim, cost, or liability attributable solely to the
negligence of UM or a UM Party.

10.4 UM and Sponsor further agree that nothing in this Agreement will be
interpreted as: (a) a denial to either party of any remedy or defense available
to it under the laws of the State of Maryland; (b) the consent of the State of
Maryland or its agents and agencies to be sued; or (c) a waiver of sovereign
immunity or any other governmental immunity of the State of Maryland and UM
beyond the extent of any waiver provided by law.

                          ARTICLE 11 - CONFIDENTIALITY

11.1 It may be necessary for either party to disclose to the other certain
Confidential Information. Disclosures by UM are deemed to refer to disclosures
by any UM Personnel. Disclosures by Sponsor are deemed to refer to disclosures
by Sponsor officers, directors, employees or agents. Confidential Information
may be disclosed only in accordance with the following provisions:

      (a) Except as hereafter specifically authorized in writing by the
disclosing party, the receiving party will not, for a period of 5 years after
the date of receipt of Confidential Information, disclose or use the
Confidential Information.

      (b)(l) These obligations of non-disclosure and nonuse do not apply to any
Confidential Information which the receiving party can demonstrate by reliable
written evidence:

            (i) was generally available to the public at the time of disclosure
to the receiving party; or

            (ii) was already in the possession of the receiving party at the
time of the disclosure, other than pursuant to a confidential disclosure
agreement between the parties and not due to any unauthorized act by the
receiving party; or

            (iii) was developed by the receiving party prior to the disclosure;
or

            (iv) the receiving party is required by law to disclose.

      (b)(2) These obligations of non-disclosure and nonuse will not continue to
apply to any Confidential Information which the receiving party can demonstrate
by reliable written evidence:

            (i) has become generally available to the public other than through
a breach of this Agreement by the receiving party after disclosure;

            (ii) has been acquired by the receiving party on a nonconfidential
basis from any third party having a lawful right to disclose it to the receiving
party; or

            (iii) corresponds to information developed by the receiving party
independent of and with no reliance upon the disclosing party's Confidential
Information.


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      (c) Each party will use that level of care to prevent the use or
disclosure of the other party's Confidential Information as it exercises in
protecting its own Confidential Information.

      (d) All Confidential Information will be clearly marked as confidential by
the disclosing party and if not in written or tangible form when disclosed, will
be so indicated on disclosure as confidential and then summarized in writing and
so marked as confidential within 30 days after disclosure to the receiving
party.

      (e) Notwithstanding the foregoing, Sponsor, its Affiliates and its
Sublicensees are permitted to disclose and use the Confidential Information to
the extent reasonably necessary to exercise Sponsor's license or sublicenses
hereunder, provided that any disclosure is made subject to confidentiality
restrictions consistent with those accepted by Sponsor in this Agreement.

      (f) Sponsor recognizes that UM is an educational institution with
standards and practices for protection of Confidential Information which differ
from Sponsor's standards and practices. By this Agreement UM undertakes to use
reasonable efforts to protect the confidentiality of Sponsor's Confidential
Information. Sponsor agrees that, provided such efforts are made, it will not
seek to hold UM or UM Personnel liable in the event of disclosure of Sponsor's
Confidential Information.

      (g) Sponsor recognizes that the records of UM are subject to the Maryland
Access to Public Records Law. Sponsor asserts that any Confidential Information
of Sponsor is confidential, proprietary, and trade secret information, not
subject to disclosure under Maryland's Access to Public Records Law. UM agrees
to assert this position in response to any request for public information
applicable to Sponsor's Confidential Information or annual sales reports, and to
promptly notify Sponsor upon receipt of requests for its Confidential
Information. The Maryland Access to Public Records Law is at Title 10, Subtitle
6, Part III, State Government Article, Annotated Code of Maryland.

      (h) Upon termination of this Agreement for any reason other than those set
forth in Section 9.1 or a material breach by UM, Sponsor will return to UM all
material provided to Sponsor which is Confidential Information, together with
all copies and other forms of reproduction, except that a single archive copy
may be kept in Sponsor's legal files. Each party agrees that termination of this
Agreement does not alter the 5 year obligation of confidentiality set forth in
Section 11.1(a).

                             ARTICLE 12 - PUBLICITY

      Neither Sponsor nor UM will use the name of the other or the name of any
employee of the other, or any adaptation of such names, in any advertising,
promotional, or sales literature without obtaining the prior written consent
from the other party. Either party may make this Agreement available for public
inspection on the condition that Confidential Information will remain
confidential in accordance with Article 11. Either party may publicize the fact
that the parties have made this Agreement and the general nature of the Project
Work.

                              ARTICLE 13 - NOTICES

      All notices, consents and other communications required or allowed under
this Agreement must be in writing and are effective upon receipt: (a) when
delivered by hand; or (b) when received by the addressee after being mailed by
registered or certified mail (air mail if mailed overseas), return receipt
requested; or (c) when received by the addressee by express


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delivery service (return receipt requested), in each case addressed to the party
at its address set forth below (or to another address that a party may later
designate by notice to the other party):

If to UM:      Executive Director
               Office of Research and Development
               University of Maryland, Baltimore
               515 West Lombard Street, Suite 500
               Baltimore, Maryland 21201-1602

Copy to:       University Counsel
               University of Maryland, Baltimore
               520 West Lombard Street, Second Floor
               Baltimore, Maryland 21201-1627

If to Sponsor: Dennis Hruby, Ph.D.
               Vice President -- Chief Scientific Officer
               Siga Research Laboratories
               4575 SW Research Way, Suite 230
               Corvallis, OR 97333

Copy to:       Joshua D. Schein, Ph.D.
               Chief Executive Officer
               Siga Technologies, Inc.
               420 Lexington Ave., Suite 620
               New York, NY 10170

                        ARTICLE 14 - FEDERAL REQUIREMENTS

14.1 The use and disclosure of technical information acquired pursuant to this
Agreement and the use of patent rights under any licenses granted under the
terms of this Agreement are subject to the export, assets, and financial control
regulations of the United States of America, including, but not limited to,
restrictions under regulations of the United States that may be applicable to
direct or indirect re-exportation of such technical information or of equipment,
products, or services directly produced by use of such technical information.
Sponsor is responsible for taking any steps necessary to comply with such
regulations.

14.2 If Inventions arising out of this Agreement were made with equipment or
facilities funded in whole or in part by agencies of the United States
government or embody or are dependent upon background intellectual property
funded in whole or in part by agencies of the United States government, products
of Sponsor for use or sale in the United States that embody Inventions or are
produced through the use of Inventions will be manufactured substantially in the
United States.


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                         ARTICLE 15 - STATE REQUIREMENTS

      Consistent with the Maryland Public Ethics Law, Sponsor will not knowingly
employ or compensate, directly or indirectly, any person working in the Project
Work while the person is employed by UM or for 2 years thereafter, unless UM
provides Sponsor with prior written consent of the UM President to the
employment or compensation by Sponsor. "Compensation" includes but is not
limited to: stock option or stock purchase agreements, consulting agreements,
any other form of agreement executed between a UM employee and Sponsor, and cash
payments. "Employment" includes both uncompensated and compensated service to
Sponsor. A request to employ or compensate a UM employee will be considered by
UM as provided in the Public/Private Partnership Act, Section 15-523 of the
Maryland Public Ethics Law. The Ethics Law is at Title 15, Subtitle 5, State
Government Article, Annotated Code of Maryland.

                    ARTICLE 16 - INTEGRATION AND SEVERABILITY

16.1 This Agreement, together with any Exhibits specifically referenced and
attached, embodies the entire understanding between Sponsor and UM. There are no
contracts, understandings, conditions, warranties or representations, oral or
written, express or implied, with reference to the subject matter hereof which
are not merged herein.

16.2 If any condition or provision in any Article of this Agreement is held to
be invalid or illegal or contrary to public policy by a court of competent
jurisdiction from which there is no appeal, this Agreement will be construed as
though the provision or condition did not appear. The remaining provisions of
this Agreement will continue in full force and effect.

                         ARTICLE 17 - DISPUTE RESOLUTION

17.1 If a dispute between the parties related to this Agreement arises, either
party, by notice to the other party, may have the dispute referred to the
parties' respective officers designated below, or their successors, for
attempted resolution by good faith negotiations within 30 days after the notice
is received. The designated officers are as follows:

For Sponsor: Thomas N. Konatich
             Chief Financial Officer
             Siga Technologies, Inc.
             420 Lexington Avenue, Suite 620
             New York, NY 10170

For UM:      Joann A. Boughman, Ph.D.
             Vice President, Academic Affairs
             University of Maryland, Baltimore
             515 West Lombard Street
             Baltimore, MD 21201

17.2 If the designated officers are not able to resolve the dispute within this
30 day period, or any agreed extension, they will confer in good faith with
respect to the possibility of resolving


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the matter through mediation with a mutually acceptable third party or a
national mediation organization. If the parties agree to mediate, they will
participate in any mediation sessions in good faith in an effort to resolve the
dispute in an informal and inexpensive manner. All expenses of the mediator will
be shared equally by the parties. Any applicable statute of limitations will be
tolled during the pendency of the dispute resolution process initiated under
this Agreement. Evidence of anything said or any admission made in the course of
any mediation will not be admissible in evidence in any civil action between the
parties. In addition, no document prepared for the purpose of, or in the course
of, or pursuant to, the mediation, or copy thereof, will be admissible in
evidence in any civil action between the parties. However, the admissibility of
evidence will not be limited if all parties who participated in the mediation
consent to disclosure of the evidence.

                           ARTICLE 18 - MISCELLANEOUS

18.1 Governing Law.

      18.1.1 This Agreement is made and construed in accordance with the laws
of the State of Maryland without regard to choice of law issues, except that all
questions concerning the construction or effect of patents will be decided in
accordance with the laws of the country in which the particular patent concerned
has been granted.

      18.1.2 Sponsor submits itself to the jurisdiction of the State courts of
the State of Maryland and Federal courts within the State of Maryland for
purposes of any suit relating to this Agreement and agrees that the State and
Federal courts located in Baltimore City, Maryland provide a proper venue for
determining any legal action relating to this Agreement.

18.2 Assignment.

      Neither party may assign this Agreement in whole or in part without the
prior written consent of the other party, which consent will not be unreasonably
withheld.

18.3 Amendments.

      This Agreement, including Exhibits, may not be amended, nor may any right
or remedy of either party be waived, unless the amendment or waiver is in
writing and signed by a duly authorized representative of each party.

18.4 Force Majeure.

      Neither party is liable for failure or delay in performing any of its
obligations under this Agreement if the failure or delay is required in order to
comply with any governmental regulation, request or order, or necessitated by
other circumstances beyond the reasonable control of the party so failing or
delaying, including but not limited to Acts of God, war (declared or
undeclared), insurrection, fire, flood, accident, labor strikes, work stoppage
or slowdown (whether or not such labor event is within the reasonable control of
the parties), or inability to obtain raw materials, supplies, power or equipment
necessary to enable a party to perform its obligations. Each party will: (a)
promptly notify the other party in writing of an event of force majeure, the
expected duration of the event and its anticipated effect on the ability of the
party to perform its obligations; and (b) make reasonable efforts to remedy the
event of force majeure.


11.27.00                               12
<PAGE>

18.5 Independent Contractors.

      UM and Sponsor are not (and nothing in this Agreement may be construed to
constitute them as) partners, joint venturers, agents, representatives or
employees of the other, nor is there any status or relationship between them
other than that of independent contractors. Neither party has any responsibility
or liability for the actions of the other party except as specifically provided
in this Agreement. Neither party has any right or authority to bind or obligate
the other party in any manner or make any representation or warranty on behalf
of the other party.

18.6 Duplicates: Headings.

      This Agreement is signed in duplicate originals. The headings used in this
Agreement are for convenience of reference only and do not affect the meaning or
construction of this Agreement.

The parties have caused this Agreement to be executed by their duly authorized
representatives on the dates indicated below.

UNIVERSITY OF MARYLAND, BALTIMORE       Witness:

By: /s/ Marjorie Forster                /s/ Wanda Alston
   --------------------------------     ----------------------------------------
        Marjorie Forster
        Executive Director, Office of
            Research and Development

Date:           1/17/01
     ------------------------------


SIGA TECHNOLOGIES, INC.                 Attest:

By: /s/ Thomas N. Konatich              /s/ Jennifer S Libroia
   --------------------------------     ----------------------------------------

Title: CHIEF FINANCIAL OFFICER                    JENNIFER S LIBROIA
      -----------------------------        Notary Public, State of New York
                                                   No. 01LI6030700
Date: JANUARY 3, 2001                          Qualified in Kings County
     ------------------------------      Commission Expires September 20, 2001

Acknowledged and agreed:


/s/ Srinivas S. Rao
----------------------------------
Srinivas S. Rao, DVM, PhD
Principal Investigator, UM  1/16/01


11.27.00                               13
<PAGE>

                                    EXHIBIT A

                                                      SIGA Research Laboratories

TOXICOLOGY OF STREPTOCOCCUS GORDONII STRAIN, SP635/002: A VACCINE TO PREVENT
GROUP A STREPTOCOCCAL PHARYNGITIS

PROPOSED WORK OUTLINE

Introduction

Group A streptococci (GAS) remain an important cause of multifactorial disease
in the pediatric population worldwide. In addition to the more common
pharyngitis and impetigo caused by this organism, GAS are also responsible for
post-streptococcal sequelae, chiefly acute rheumatic fever and acute
post-streptococcal glomerulonephritis. GAS also occasionally cause the rare, but
more lethal, toxic shock-like syndrome and necrotizing fasciitis in all age
groups.

SIGA's vaccine for the prevention of GAS disease is based on the conserved C
repeat region (CRR) of the GAS M protein, the primary virulence factor for this
organism. This region of the molecule is conserved among most, if not all, GAS
strains associated with rheumatic fever. The human commensal bacterium,
Streptococcus gordonii has been engineered to express this region of the M
protein on its surface. The parent, non-recombinant strain, SP204(1-l), is
currently in a Phase IA safety trial at the Center for Vaccine Development at
the University of Maryland Medical School through the sponsorship of the
National Institutes of Health.

GAS M protein has been associated with the production of heart cross reactive
antibodies in rabbits and, humans infected with GAS (particularly those with
rheumatic fever) have circulating antibodies which are reactive with human heart
tissue and with M protein. Preliminary data using the CRR as an immunogen showed
that no cross reactive antibodies were produced in rabbits immunized with S.
gordonii expressing the CRR or in rabbits injected with the purified CRR in
adjuvant. Although no published study has shown that cross reactive antibodies
are linked with the onset of acute rheumatic fever, and other GAS antigens are
also capable of inducing cross reactive antibodies, there is still
understandable concern that SIGA's vaccine does not result in the induction of
such antibodies or other post-streptococcal pathology.

In addition to other preclinical protocols aimed at preparing for an
Investigational New Drug application to the FDA for strain SP635/002, SIGA has
outlined the following plan (still pending FDA approval) to determine the
toxicity of this strain in rabbits.

Rabbit Toxicology Studies

Heart Reactive Antibodies

As mentioned above, GAS and M protein have a long history of association with
cross-reactive antibodies in both experimental animals and man. Traditionally,
heart reactive antibodies have been raised in rabbits as a result of multiple
injections of purified M protein (the N-terminal half, not including the CRR) in
adjuvant. To determine if the vaccine strain, SP-635/002, is capable of inducing
such antibodies, New Zealand White rabbits will be implanted at weeks 0, 4, and
8 (50 (micro)L per nostril and 100 (micro)L orally). Prior to implantation,
streptomycin (5 g/L) will be added to the drinking water to clear normal oral
flora. The table below outlines the dosage and schedule of administration:


CONFIDENTIAL                        Page 1                         April 7, 2000
<PAGE>

                                                      SIGA Research Laboratories

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
      Rabbit Immunization Protocol for Heart Reactivity, Immunogenicity & Toxicology Testing
---------------------------------------------------------------------------------------------------
Immunogen/Controls       No. of Rabbits(a)                 Dose                     Dosage Schedule
---------------------------------------------------------------------------------------------------
<S>                             <C>             <C>                                     <C>
                                                                                        Day 0
       PBS                       6                50 (micro)L per nostril               Day 28
(negative control)                                  100 (micro)L orally                 Day 56
---------------------------------------------------------------------------------------------------
                                                      1-5 x 10^8 CFU                    Day 0
    SP635/002                   12               (50 (micro)L per nostril;              Day 28
                                                    100 (micro)L orally)                Day 56
---------------------------------------------------------------------------------------------------
                                                      1-5 x 10^9 CFU                    Day 0
    SP635/002                   12               (50 (micro)L per nostril;              Day 28
                                                    100 (micro)L orally)                Day 56
---------------------------------------------------------------------------------------------------
                                                     1-5 x 10^10 CFU                    Day 0
    SP635/002                   12               (50 (micro)L per nostril;              Day 28
                                                    100 (micro)L orally)                Day 56
---------------------------------------------------------------------------------------------------
                                                     1-5 x 10^10 CFU                    Day 0
   SP635/002(b)                  6               (50 (micro)L per nostril;              Day 28
                                                    100 (micro)L orally)                Day 56
---------------------------------------------------------------------------------------------------
                                                 200 (micro)g in complete
  Recombinant M6                                  Freund's adjuvant; IM                 Day 0
     protein                     6              ---------------------------------------------------
(Positive control)                              100 (micro)g in incomplete
                                                  Freund's adjuvant; IM                 Day 28
                                                ---------------------------------------------------
                                                100 (micro)g in incomplete
                                                  Freund's adjuvant; IM                 Day 56
---------------------------------------------------------------------------------------------------
</TABLE>
(a)   All groups of rabbits will be evenly divided between males and females;
      rabbits will be sacrificed at Day 112 (except group^[b])
(b)   This group of rabbits will be followed for extended biweekly, oral
      culturing through week 26 (Day 182)
--------------------------------------------------------------------------------

The oral cavity, including the pharynx, gingiva, and teeth of immunized rabbits
will be swabbed at weekly intervals to monitor colonization levels. In addition,
the group of animals designated ^[b] in the above table will be cultured
biweekly for an additional 10 weeks to monitor the natural course of
colonization for a total of 26 weeks. During that period, any two consecutive
negative cultures will result in the termination of those rabbits. The dosage
level (1-5 x 10^8-10^10 CFU) brackets the dose given mice (1-5 x 10^9 CFU),
which has resulted in significant systemic and local mucosal immune responses.
The implantation schedule was chosen, because, generally, the onset of rheumatic
fever is believed to be within 4-6 weeks after the initial streptococcal
infection. Previous studies have indicated that rabbits remain colonized for
periods of up to at least 5 weeks. The proposed protocol, therefore, will allow
for continuous exposure of the rabbits to streptococcal antigens during a time
frame in which rheumatic fever symptoms would occur. If heart reactive
antibodies are to be induced by this route of administration, then multiple
dosing over the designated period should provide ample time to develop such
antibodies. Animals will be bled every two weeks during the implantation
protocol (Days 0, 14, 28, 42, and 56), and then monthly through the termination
of the study at 16 weeks (days 84 and 112). Each serum sample will be tested for
reactivity with human heart tissue sections by immunofluorescence. In addition,
each serum sample will be tested for reactivity to human cardiac myosin and
tropomyosin by ELISA. A summary of the sampling schedule and the corresponding
procedures is presented in the table below. Purified M6 protein will be injected


CONFIDENTIAL                        Page 2                         April 7, 2000
<PAGE>

                                                      SIGA Research Laboratories

intramuscularly in multiple doses in adjuvant as a positive control and
administered phosphate buffered saline orally and nasally as a negative control
in these studies.

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------
                      Rabbit Sampling Protocol for Heart Reactivity, Immunogenicity & Toxicology Testing
------------------------------------------------------------------------------------------------------------------------------
                                                                          Days
------------------------------------------------------------------------------------------------------------------------------
Sample           Assay             0  7  14  21  28  35  42  49  56  63  70  77  84  91  98  105  112  126  140  154  168  182
------------------------------------------------------------------------------------------------------------------------------
<S>         <C>                   <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>  <C>  <C>  <C>  <C>  <C>  <C>
            Reactivity to
            human heart            X      X       X       X       X               X                X
            sections (IF)
            ------------------------------------------------------------------------------------------------------------------
            ELISA
            (Immunogenicity
Blood       & reactivity to        X      X       X       X       X               X                X
            myosin &
            tropomyosin)
            ------------------------------------------------------------------------------------------------------------------
            Hematology &
            Clinical               X      X       X       X       X               X                X
            chemistry
------------------------------------------------------------------------------------------------------------------------------
Urine       Clinical
            urinalysis             X      X       X       X       X               X                X
------------------------------------------------------------------------------------------------------------------------------
            ELISA
Saliva      (Immunogenicity)       X      X       X       X       X               X                X
------------------------------------------------------------------------------------------------------------------------------
Oral
Swabs       Colonization           X  X   X   X   X   X   X   X   X   X   X   X   X   X   X   X    X    *    *    *    *    *
------------------------------------------------------------------------------------------------------------------------------
Internal    Gross &
Organs      histopathology                                                                         X
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*     These cultures represent those rabbits in group^[b] from the previous
      table, which will be swabbed biweekly through week 26 (Day 182)
--------------------------------------------------------------------------------

Toxicology

Because of the association of GAS with rheumatic fever, glomerulonephritis, and
other disease syndromes, a number of tissue samples will be assessed for
possible pathology as a result of implantation with the vaccine strain,
SP-635/002. In addition, the rabbits implanted above will be monitored for any
overt signs of disease, fever, etc., during the administration period. After
necropsy, all major organs will be examined for gross pathology, then removed
and fixed for future examination, if necessary. Those tissues potentially
involved in streptococcal disease will then be sectioned for microscopic
histopathology.

o     Heart -- The primary concern with any M protein-based vaccine is the
      connection between GAS and acute rheumatic fever. Hearts will be observed
      for damage or cell infiltration to the endocardium, cardiac muscle, and to
      the valves. And, although rare in experimental animals, the presence of
      Aschoff bodies will also be determined.
o     Kidney -- Although the M protein region specified in this vaccine
      construct is principally conserved in GAS strains associated with acute
      rheumatic fever, there are also sequence similarities to M proteins from
      "nephritogenic" GAS strains. Kidneys will be examined for overall damage,
      but particularly the glomeruli.
o     Joints -- Due to a potential association between GAS and arthritis,
      pathological examination will also include representative joints from
      immunized animals.


CONFIDENTIAL                        Page 3                         April 7, 2000
<PAGE>

                                                      SIGA Research Laboratories

o     Brain -- Cross reactivity between GAS antigens and brain tissue has also
      been observed, possibly associated with the onset of rheumatic chorea.
      Therefore, sections of brain from colonized animals, particularly the
      subthalamic and caudate nuclei, will be observed for pathological changes.
      In addition, the inferior surface of the brain, the olfactory bulb, and
      the meninges surrounding these areas will be examined for histopathology,
      due to their potential involvement following intranasal immunization.
o     Nasopharyngeal passages -- As with any nasally delivered drug or vaccine,
      there exists a potential for irritation of the nasopharyngeal passages.
      Therefore, this region will be examined for gross irritation as well as
      sectioned to examine the histopathology of these tissues, including the
      turbinates and soft tissues.
o     Blood and urine -- Blood and urine collected from the immunized rabbits
      will be subjected to routine hematology and clinical chemistry (blood) and
      urinalysis (urine). Blood and urine samples will be taken at two-week
      intervals through week 8 and then at 12 and 16 weeks.


CONFIDENTIAL                        Page 4                         April 7, 2000
<PAGE>

                                                      SIGA Research Laboratories

Heart Reactivity of Sera from Rabbits Implanted with Recombinant S. gordonii

Indirect Immunofluorescence Assay

o     Cut 4-5 (micro)m serial sections from a human heart biopsy, using a
      cryotome with a disposable knife at the recommended temperature for heart
      tissue (-18 to -200C).
o     Affix sections to glass slides
o     Dry slides under vacuum for minimum of 18 hr.
o     Fix slides in acetone -- 2 min/room temperature (RT). (Slides may be
      further processed at this point or stored at -80(degrees)C. If slides are
      store at -80(degrees)C, they should be dried again under vacuum.)
o     Wash in PBS -- l0 min/RT.

      All subsequent incubations should be performed in a moist chamber.

o     Cover sections with 100 (micro)L normal goat serum (50 (micro)L Vector
      Labs. ABC Kit Yellow Reagent + 3 (micro)L of PBS) -- 30 min/RT
o     Blot dry
o     Incubate with preimmune or immune rabbit serum (at dilution in PBS to be
      determined) -- 1 hr/RT
o     Wash in PBS -- 15 min/RT
o     Incubate with goat anti-rabbit IgG fluorescein conjugate (~1:100 dilution
      in PBS) -- 45 min/RT.
o     Wash in PBS -- l5 min/RT.
o     Mount wet with PBS/glycerol
o     The presence or absence of heart reactivity is then observed under a
      fluorescence microscope.

Controls: Negative = PBS and normal rabbit serum; Positive = serum from rabbits
injected with M6 protein in adjuvant and positive control serum supplied by
sponsor. Reactivity is scored from (-) for PBS to (+++) for positive controls.
Slides should be read by blinded, highly experienced individuals.


CONFIDENTIAL                        Page 5                         April 7, 2000