Document:

[LETTERHEAD OF OREGON STATE UNIVERISTY OFFICE OF TECHNOLOGY TRANSFER]

November 30, 1999

Mr. Joshua Schein, CEO
SIGA Pharmaceuticals, Inc.
420 Lexington Avenue, Suite 620
New York, New York 10170

RE:   Oregon State University Docket No. 97-24
      Chlamydia Vaccine
      Option Agreement Extension

Dear Mr. Schein:

I am pleased to enclose a fully executed amendment to the option agreement for
your files. The exclusive option will be extended to January 13, 2000, and can
be extended an additional three months if SIGA needs more time to work with this
technology.

Please send the $2,500 option extension fee to:

      Director of Technology Transfer
      312 Kerr Administration Bldg.
      Oregon State University
      Corvallis, Oregon 97331

If you have any questions, don't hesitate to call me at 541-737-4437.

Sincerely,

/s/ Laurel Halfpap

Laurel Halfpap
Sr. Licensing Associate

Enclosures

cc:  Dr. Dan Rockey
     Dr. Dennis Hruby

<PAGE>

                             AMENDMENT TO AGREEMENT

This Amendment To Agreement is effective upon the date of last signature by the
parties and is by and between SIGA Pharmaceuticals (hereinafter "Licensee"),
having its principal office at 420 Lexington Avenue, Suite 620, New York, New
York 10170 (hereafter "Company"), and The State of Oregon Acting by and through
the State Board of Higher Education on Behalf of Oregon State University, an
educational institution having a campus at Corvallis, Oregon 97331 (hereafter
"University").

WHEREAS:

Company and University are parties to an April 13, 1998, Exclusive Option
Agreement relating to a Chlamydia Vaccine, Oregon State University Docket No.
97-24, (hereafter the "Agreement"); and

Company and University wish to amend the Agreement as set forth herein.

NOW THEREFORE, Company and University agree as follows:

1.    Under Section 3.3

      The exclusive option period shall be extended for an additional three (3)
      month period, from October 13, 1999 to January 13, 2000.

2.    Under Section 3.2

      Company shall pay a $2,500 option extension fee, due upon execution of
      this Amendment to Agreement. The option extension fee should be made
      payable to Oregon State University and should be mailed to the Director of
      Technology Transfer at the address in Section 5.4.

3.    Except as expressly set forth herein, the Agreement remains in full force
      and effect.

                            ACCEPTED AND AGREED TO:

STATE OF OREGON, Acting by and               SIGA PHARMACEUTICALS
through the STATE BOARD OF
HIGHER EDUCATION on behalf of
OREGON STATE UNIVERSITY

/s/ Benjamin E. Rawlins    22 Nov 99         /s/ Joshua Schein          11/11/99
------------------------------------         -----------------------------------
Benjamin E. Rawlins             Date         Joshua Schein                  Date
Director of Legal Services                   CEO

/s/ Wilson C. Hayes         10/29/99
------------------------------------
Wilson C. "Toby" Hayes          Date
Vice Provost for Research

<PAGE>

      [LETTERHEAD OF OREGON STATE UNIVERISTY OFFICE OF TECHNOLOGY TRANSFER]

March 6, 2000

Mr. Joshua Schein, CEO
SIGA Technologies, Inc.
420 Lexington Avenue, Suite 620
New York, New York 10170

RE:   Oregon State University Docket No. 97-24
      Chlamydia Vaccine
      Second Amendment to the Option Agreement

Dear Josh:

Enclosed is an original fully executed second amendment to the option agreement
for your files. Please make the check for the $2,500 extension fee payable to
Oregon State University and mail it to the Director of Technology Transfer at
312 Kerr Administration Bldg., Oregon State University, Corvallis, OR 97331. I
look forward to completing our pending license agreement.

Sincerely,

/s/ Laurel Halfpap

Laurel Halfpap
Sr. Licensing Associate

Enclosures

cc:  Dr. Dan Rockey, OSU
     Dr. Dennis Hruby, SIGA Technologies

<PAGE>

                          SECOND AMENDMENT TO AGREEMENT

This Amendment To Agreement is effective upon the date of last signature by the
parties and is by and between SIGA Technologies, Inc. (hereinafter "Licensee"),
having its principal office at 420 Lexington Avenue, Suite 620, New York, New
York 10170 (hereafter "Company"), and The State of Oregon Acting by and through
the State Board of Higher Education on Behalf of Oregon State University, an
educational institution having a campus at Corvallis, Oregon 97331 (hereafter
"University").

WHEREAS:

Company and University are parties to an April 13, 1998, Exclusive Option
Agreement relating to a Chlamydia Vaccine, Oregon State University Docket No.
97-24, (hereafter the "Agreement"); and

Company and University wish to amend the Agreement as set forth herein.

NOW THEREFORE, Company and University agree as follows:

1.    Under Section 3.3

      The exclusive option period shall be extended for an additional three (3)
      month period, from January 14, 2000, 1999 to April 14, 2000.

2.    Under Section 3.2

      Company shall pay a $2,500 option extension fee, due upon execution of
      this Amendment to Agreement. The option extension fee should be made
      payable to Oregon State University and should be mailed to the Director of
      Technology Transfer at the address in Section 5.4.

3.    Except as expressly set forth herein, the Agreement remains in full force
      and effect.

                            ACCEPTED AND AGREED TO:

STATE OF OREGON, Acting by and               SIGA Technologies, Inc
through the STATE BOARD OF
HIGHER EDUCATION on behalf of
OREGON STATE UNIVERSITY

/s/ Wendy A. Robinson for     3/3/00         /s/ Joshua Schein           2/18/00
------------------------------------         -----------------------------------
Benjamin E. Rawlins             Date         Joshua Schein                  Date
Director of Legal Services                   CEO
580-300-920129-00

/s/ Wilson C. "Toby" Hayes  02/28/00
------------------------------------
Wilson C. "Toby" Hayes          Date
Vice Provost for Research

<PAGE>

      [LETTERHEAD OF OREGON STATE UNIVERISTY OFFICE OF TECHNOLOGY TRANSFER]

March 6, 2000

Mr. Joshua Schein, CEO
SIGA Technologies, Inc.
420 Lexington Avenue, Suite 620
New York, New York 10170

RE:   Oregon State University Docket No. 97-24
      Chlamydia Vaccine
      License Agreement for Signature

Dear Josh:

Enclosed are three original license documents for your signature. Please sign
all three and be sure to date them March 6, 2000 which is the date you signed
the faxed signature page. Please return them to my attention, and I will get
them signed by Wendy Robinson in the Oregon Department of Justice. One original
will be returned for your files.

I am delighted that SIGA has decided to license this technology, and I am
looking forward to a mutually rewarding partnership between OSU and SIGA
Technologies, Inc. Please call me at 541-737-4437 if you need anything in the
future.

Sincerely,

/s/ Laurel Halfpap

Laurel Halfpap
Sr. Licensing Associate

Enclosures

cc:  Dr. Dan Rockey, OSU
     Dr. Dennis Hruby, SIGA Technologies

<PAGE>

                           EXCLUSIVE LICENSE AGREEMENT

      This Agreement, effective the date of last signature, is between SIGA
Technologies, Inc having a principal place of business at 420 Lexington Avenue,
Suite 620, New York, New York 10170, hereafter referred to as "Company", and the
State of Oregon Acting by and through the State Board of Higher Education on
Behalf of Oregon State University, an institution of higher education in the
State of Oregon, located at Corvallis, Oregon, hereafter referred to as
"University".

                                   WITNESSETH:

      WHEREAS, University is the owner by assignment from Drs. Daniel D. Rockey
and John P. Bannantine of their entire right, title and interest in the
invention entitled "Chlamydia Vaccine" which is the subject of three provisional
United States Patent Applications, Serial Numbers 60/082,438 filed April 20,
1998, 60/082,588 filed April 21, 1998, and 60/086,450 filed May 22, 1998, and
one PCT Application No. US99/08744, filed April 20, 1999, comprising Oregon
State University Docket Number 97-24, hereafter referred to as the "Invention",
and

      WHEREAS, University is committed to a policy that ideas and creative works
produced at University should be used for the greatest possible public benefit;
and

      WHEREAS, University accordingly believes that every reasonable incentive
should be provided for the prompt introduction of such ideas into public use,
all in a manner consistent with public interest; and

      WHEREAS, Company is desirous of obtaining a worldwide license in order to
practice the above-identified Invention, and to manufacture, use and sell in the
commercial marketplace the products made in accordance therewith; and

      WHEREAS, University is desirous of granting such license to Company in
accordance with the terms of this agreement; and

      NOW, THEREFORE, in consideration of the foregoing premises, the parties
agree as follows:

                                    Article I
                                   Definitions

      A. Patent Rights shall mean three provisional United States Patent
Applications, Serial Numbers 60/082,438 filed April 20, 1998, 60/082,588 filed
April 21, 1998, and 60/086,450 filed May 22, 1998, and one PCT Application No.
US99/08744, filed April 20, 1999, all divisions and continuations of these
applications, all US and foreign patents issuing from such application,
divisions, and continuations, and any reissues, reexaminations and extensions of
all such patents.

      B. Licensed Products shall mean products claimed in Patent Rights or
products made in accordance with or by means of Licensed Processes.

      C. Licensed Processes shall mean the processes claimed in Patent Rights.

                                                                    Page 1 of 12
<PAGE>

      D. Licensed Services shall mean all services that utilize the Patent
Rights.

      E. Licensed Combination Products shall mean any product that is comprised
in part of a Licensed Product and in part of one or more other biologically
active diagnostic, preventive or therapeutic agents which are not themselves
Licensed Products (the "Other Agents"). "Other Agents" excludes diluents and
vehicles of Licensed Products.

      F. Know-How shall mean unpatented discoveries, inventions, and
improvements, proprietary information, trade secrets, drawings, plans, designs,
or specifications provided by University pertaining to Licensed Products.

      G. Net Sales with respect to Licensed Products shall mean the amount
billed or invoiced on sales of Licensed Products, Licensed Processes or Licensed
Services less:

            1)    Customary trade, quantity or cash discounts and commissions
                  actually allowed and taken;

            2)    Amounts repaid or credited by reason of rejection or return;
                  or

            3)    To the extent separately stated on purchase orders, invoices
                  or other documents of sales, taxes levied on and/or other
                  governmental charges made as to production, sale,
                  transportation, delivery or use, and paid by or on behalf of
                  Company.

      H. Net Sales with respect to Licensed Combination Products shall mean the
amount billed or invoiced on sales of Licensed Combination Products, less the
deductions set forth in section G.l through G.3 above, multiplied by a fraction
having (i) a numerator of the gross sales price of the Licensed Product included
in such Licensed Combination Product as if sold separately or, if such sales
price is not available, the fair market value of such Licensed Product(s), and
(ii) a denominator of the gross sales price of such Licensed Combination
Product, or if such sales price is not available, the sum of the fair market
values of the Other Agents and the Product(s) contained in such Licensed
Combination Product, The "fair market value" for any Licensed Product or Other
Agent shall be determined for a quantity comparable to that included in the
Licensed Combination Product and of substantially comparable class, purity and
potency, and shall be mutually agreed to by University and Company. When no fair
market value is available, the fraction set forth above shall be changed to a
fraction having (x) a numerator of the cost to Company, its affiliates or
sublicensees, of the Licensed Product(s) included in such Licensed Combination
Product, and (y) a denominator of the sum of such cost plus the cost to Company,
its affiliates or sublicensees of the Other Agents contained in such Licensed
Combination Product, provided that in no event shall the fraction be less than
(A) one-half (1/2), if only one Other Agent is included with a Licensed
Product(s) in such Licensed Combination Product, (B) one-third (1/3), if two
Other Agents are included with a Licensed Product(s) in such Licensed
Combination Product, and (C) one-quarter (1/4), if three or more Other Agents
are included with a Licensed Product(s) in such Licensed Combination Product.
"Cost" as used above means the actual cost paid by Company, and/or its
affiliates or sublicensees in an arm's length transaction, if purchased, or if
not purchased but actually manufactured by any such entity, the sum of the
direct manufacturing cost as determined by such entity's internal cost
accounting system consistently applied.

                                                                    Page 2 of 12
<PAGE>

      I. Field of Use shall mean all fields of use.

      J.Subsidiary shall mean any corporation, company or other entity fifty
percent (50%) or more of whose voting stock is owned or controlled, directly or
indirectly, by Company.

                                   Article II
                                      Grant

      A. Subject to the terms and conditions of this agreement, University
hereby grants to Company a worldwide, exclusive license with right to
sublicense, to use Patent Rights and Know-How, to make, use, sell and have made
Licensed Products, Licensed Combination Products, Licensed Processes, and
Licensed Services in the Field of Use. Sublicensees shall be subject to the
terms and conditions of this Agreement.

      B.Company and sublicensees shall alone have the obligation to ensure that
any Licensed Products or Licensed Combination Products it makes, uses, sells,
leases, or otherwise disposes of is not defective and that any Licensed Product
or Licensed Combination Product satisfies all applicable government regulations.

      C. The University retains an irrevocable, nonexelusive and nontransferable
right to practice for its own educational and research purposes the Patent
Rights and Know How. University reserves the right to supply the Patent Rights
and Know How to academic research scientists, with such supply subject to
limitation of use by such scientists for research purposes and restriction upon
further distribution.

                                   Article III
                                    Diligence

      A. Company shall use its best efforts, consistent with sound and
reasonable business practices and judgment, to effect commercialization of
Licensed Products, Licensed Combination Products, Licensed Processes or Services
as soon as practicable and to maximize these sales. "Best efforts" under this
clause shall mean satisfying the following goals:

                     Development Plan -- Chlamydia Research

  SIGA Research Laboratories, hereafter "Company", and Oregon State University
                 (hereafter "University") Collaborative Project
                               Starting in 2/29/00

      In collaboration with Dr. Dan Rockey at University, Company intends to
      push forward research and development of vaccines for the prevention of
      disease caused by one or more of the following: Chlamydia trachomatis,
      Chlamydia pneumoniae, and Chlamydia psittaci. This work is based on Dr.
      Rockey's discovery of the family of proteins involved in the formation of
      inclusion bodies which are crucial in the Chlamydia life cycle -- IncA,
      IncB, and IncC -- as well as TroA. To accomplish this goal, Company will
      work closely with Dr. Rockey in formulating several vaccine delivery
      strategies for these proteins. To further develop the

                                                                    Page 3 of 12
<PAGE>

      concept, promising early work by Dr. Rockey on the C. psittaci proteins
      will be repeated in a guinea pig model to show that significant protection
      can be achieved. In parallel, proteins from C. trachomatis have already
      been cloned and will be developed using Company's proprietary vaccine
      delivery technology, as well as other delivery systems in a mouse model.

      Company's commitment to this technology includes both financial and
      personnel resources. In meeting this responsibility, Company will use all
      reasonable means to accomplish the proposed goals financially, including,
      but not limited to: applications for Small Business Innovation Research
      Grants (one is currently pending at NIH), review of and application to
      other appropriate government and private Requests for
      Proposals/Applications, and active pursuit of corporate partnerships (one
      such collaborative partnership has just been established).

                                   Article IV
                               Annual License Fee

      University shall have the right to terminate this license in the event
that Company does not pay to University a nonrefundable annual license fee in
the sum of ten thousand dollars ($10,000) one year from the effective date of
this Agreement and every year thereafter with the following exceptions; Company
may omit this annual license fee during the years the milestones, Phase I IND,
Phase II IND, Phase III IND and the Product License Approval (PLA) are paid. The
annual license fee may be deducted from royalties due University during the
calendar year in which the annual license fee is paid.

                                    Article V
                                    Royalties

      A. In addition to the terms of Article IV, Company agrees to pay
University a royalty of two percent (2%) of Net Sales of Licensed Products,
Licensed Combination Products, Licensed Processes or Services sold by Company,
its distributors, affiliates, and its sublicensees.

      B. In the case of sublicenses, Company shall also pay to University twenty
percent (20%) of non-royalty sublicense income (e.g., license issue fees,
license maintenance fees, etc.) excluding research and development support and
milestone payments, to an aggregate maximum of one million ($1,000,000) dollars.

      C. Licensed Products, Licensed Combination Products and Licensed Processes
or Services shall be deemed to have been sold when invoiced, or if not invoiced,
then when delivered, shipped or paid for, whichever is first.

      D. Company agrees to pay University a royalty of one percent (1%) of Net
Sales of Licensed Products, Licensed Combination Products, and Licensed
Processes or Services sold or licensed for exclusive use within foreign
countries in which no patent has been applied for, until such time that Company
can show there exists some competing products which incorporate a material
aspect of the Licensed Product.

                                                                    Page 4 of 12
<PAGE>

                                   Article VI
                               Milestone Payments

As further consideration for the license grant provided in Article II, Company
agrees to pay the University the following amounts in the nature of milestone
payments:

            A.    Seventy-five Thousand ($75,000) Dollars within sixty (60) days
                  of FDA approval of a Phase I Investigational New Drug
                  Application (IND) on a Licensed Product, Licensed Combination
                  Product or Licensed Processes.

            B.    One Hundred Thousand ($100,000) Dollars within sixty (60) days
                  of FDA approval of a Phase II IND on a Licensed Product,
                  Licensed Combination Product or Licensed Process.

            C.    One Hundred and Twenty-five Thousand ($125,000) Dollars within
                  sixty (60) days of FDA approval of a Phase III IND on a
                  Licensed Product, Licensed Combination Product or Licensed
                  Process.

            D.    One Hundred and Fifty Thousand ($150,000) Dollars within sixty
                  (60) days of a Product License Approval (PLA) from the FDA on
                  a Licensed Product, Licensed Combination Product or Licensed
                  Process.

                                   Article VII
                             Reports and Accounting

            A. Prior to sales, Company shall provide written annual development
      reports within thirty (30) days after each calendar year which shall
      include, but not be limited to: reports of progress on research and
      development, regulatory approvals, manufacturing, sublicensing, or
      marketing during the preceding twelve (12) months as well as plans for the
      coming year. After sales of Licensed Products, Licensed Combination
      Products, Licensed Processes or Services begins, Company shall provide
      written quarterly royalty reports within thirty (30) days after each
      calendar quarter which shall include, but not be limited to: reports of
      progress on research and development, regulatory approvals, manufacturing,
      sublicensing, marketing and sales during the preceding three (3) months as
      well as plans for the coming quarter. If progress differs from that
      anticipated in the plan provided under Article III, Company shall explain
      the reasons for the difference and propose a modified plan for
      University's review and approval. Company shall also provide any
      reasonable additional data University requires to evaluate Company's
      performance.

            B. In order to minimize Company time spent on royalty reports, a
      brief one-page royalty report form is provided in Appendix A that will
      satisfy the University's reporting requirements. With each royalty report,
      Company shall pay the amount of royalty due, if any. Such report shall be
      signed by an officer of Company and shall include a detailed listing of
      all deductions from royalties as specified herein. If no royalties are
      due to University for any reporting period, the written report shall so
      state.

            C. Any payments to University shall be made payable to Oregon State
      University and be tendered to the Director of Technology Transfer, Oregon
      State University for distribution in keeping with State Board of Higher
      Education policies.

                                                                    Page 5 of 12
<PAGE>

            D. All payments due hereunder shall be payable in United States
      dollars. Conversion of foreign currency to US dollars shall be made at the
      conversion rate existing in the United States (as reported in the New York
      Times or, if not in the Times, then in the Wall Street Journal) on the
      last working day of each royalty period. Such payments shall be without
      deduction or exchange, collection or other charges.

            E. Late payments shall be subject to an interest charge of one and
      one half percent (1.5%) per month.

                                  Article VIII
                                 Record Keeping

            A. Company shall keep, and shall require sublicensees to keep
      accurate and correct records of Licensed Products, Licensed Combination
      Products or Licensed Processes or Services made, used or sold under this
      Agreement, appropriate to determine the amount of royalties due hereunder
      to University. Such records shall be retained for at least three (3) years
      following a given reporting period. They shall be available during normal
      business hours for inspection at the expense of University by University's
      Internal Audit Department, or by a Certified Public Accountant selected by
      University and approved by Company for the sole purpose of verifying
      reports and payments hereunder. Such accountant shall not disclose to
      University any information other than information relating to accuracy of
      reports and payments made under this Agreement. In the event that any such
      inspection shows an under reporting and under payment in excess of five
      percent (5%) for any twelve (12) month period, then Company shall pay the
      cost of such examination as well as any additional sum that would have
      been payable to University had the Company reported correctly, plus
      interest.

                                   Article IX
               Domestic and Foreign Patent Filing and Maintenance

            A. Company shall reimburse University for all reasonable out of
      pocket expenses University incurs for the preparation, filing, prosecution
      and maintenance of Patent Rights upon execution of this Agreement,
      however, expenses previously reimbursed by Company as part of an earlier
      option agreement will not be included. Company shall reimburse University
      for all such future expenses within thirty (30) days of Company's receipt
      of invoices. University shall take responsibility for the preparation,
      filing, prosecution and maintenance of any and all patent applications and
      patents included in Patent Rights, provided however that University shall
      first consult with Company as to the preparation, filing, prosecution and
      maintenance of such patent applications and patents and shall furnish to
      Company copies of documents relevant to any such preparation, filing,
      prosecution or maintenance,

            B. University and Company shall cooperate fully in the preparation,
      filing, prosecution and maintenance of Patent Rights and of all patents
      and patent applications licensed to Company hereunder, executing all
      papers and instruments or requiring members of University to execute such
      papers and instruments so as to enable University to apply for, to
      prosecute and to maintain patent applications and patents in University's
      name in any country. Each party shall provide to the other prompt notice
      as to all matters which come to its attention and which may affect the
      preparation, filing, prosecution or maintenance of any such patent
      applications or patents.

                                                                    Page 6 of 12
<PAGE>

            C. If Company elects to no longer pay the expenses of a patent
      application or patent included within Patent Rights, Company shall notify
      University not less than sixty (60) days prior to such action and shall
      thereby surrender its rights under such patent or patent application.

                                    Article X
                                  Infringement

            A. With respect to any licensed Patent Rights under which Company is
      exclusively licensed pursuant to this Agreement, Company or its
      sublicensee shall have the right to prosecute in its own name and at its
      own expense, any infringement of such patent, so long as such license is
      exclusive at the time of the commencement of such action. University
      agrees to notify Company promptly of each infringement of such patents of
      which University is or becomes aware. Before Company or its sublicensee
      commences an action with respect to any such infringement, Company shall
      contact University to obtain University's view concerning any potential
      effects such an action may bring and shall report such views to the
      sublicensee.

            B. If Company or its sublicensee elects to commence an action as
      described above and University is a legal party to such action, University
      shall have the right to assign to Company all of University's rights,
      title and interest in licensed Patent Rights (subject to all University's
      obligations to the government and others having rights in such licensed
      Patent Rights). In this event, such assignment shall be irrevocable and
      such action by Company on that patent shall thereafter be brought or
      continued in the name of Company. Notwithstanding any such assignment to
      Company by University, University shall cooperate fully with Company in
      connection with any such action. Regardless of any licensed Patent Rights
      assigned to Company by this clause, Company shall be required to continue
      to meet its obligations to University under this Agreement as if licensed
      Patent Rights were still licensed in the name of University.

            C. If Company or its sublicensee elects to commence an action
      described above and University is a legal party to such action, University
      may join the action as a co-plaintiff. Upon so doing, University shall
      jointly control the action with Company or its sublicensee.

            D.Company shall reimburse University for any costs it incurs as part
      of an action brought by Company or its sublicensee, irrespective of
      whether University shall become a party to such action.

            E. If Company or its sublicensee elects to commence an action as
      described above Company may reduce, by up to fifty percent (50%), the
      royalty due to University earned under the patent subject to suit by fifty
      percent (50%) of the amount of the expenses and costs of such action,
      including attorney fees. In the event that such fifty percent (50%) of
      such expenses and costs exceed the amount of royalties withheld by Company
      for any calendar year, Company may, to that extent, reduce the royalties
      due to University from Company in succeeding calendar years, but never by
      more than fifty percent (50%) of the royalty due in any one year.

            F. No settlement, consent judgment or voluntary final disposition of
      the suit may be entered into without the consent of University, which
      consent shall not be unreasonably withheld.

                                                                    Page 7 of 12
<PAGE>

            G. Recoveries or reimbursements from such action shall first be
      applied to reimburse Company and University for litigation costs not paid
      from royalties and then to reimburse University for royalties withheld.
      Any remaining recoveries or reimbursements shall be shared equally by
      Company and University.

            H. In the event that Company and its sublicensee, if any, elect not
      to exercise their right to prosecute an infringement of Licensed Patent
      Rights pursuant to the above clauses, University may do so at its own
      expense, controlling such action and retaining all recoveries therefrom.

            I. If a declaratory judgment action alleging invalidity of any
      Licensed Patent Rights shall be brought against Company or University,
      then University, at its sole option, shall have the right to intervene and
      take over the sole defense of the action at its own expense.

                                   Article XI
                                      Term

            A. The term of this Agreement shall be five (5) years or the life of
      the last to issue patent in Licensed Patent Rights whichever is greater.

                                   Article XII
                                   Termination

            A. In the event an order for relief is entered against Company under
      the Federal Bankruptcy Code, or an order appointing a receiver for
      substantially all of Company's assets is entered by a court of competent
      jurisdiction, or Company makes an assignment for the benefit of creditors,
      or a levy of execution is made upon substantially all of the assets of
      Company and such levy is not quashed or dismissed within thirty (30) days,
      this Agreement shall automatically terminate effective the date of such
      order or assignment or in the case of such levy, the expiration of such
      thirty (30) day period, provided, however, that such termination shall not
      impair or prejudice any other right or remedy that University might have
      under this Agreement.

            B.Upon any material breach or default of this agreement by Company,
      University shall have the right to terminate this Agreement and the
      rights, privileges and licenses granted hereunder by ninety (90) days
      notice to Company. Such termination shall become effective unless Company
      shall have cured any such breach or default prior to the expiration of the
      ninety (90) day period.

            C. Company shall have the right to terminate this Agreement at any
      time on ninety (90) days notice to University and upon payment of all
      amounts due and payable to University through that date.

            D. If at any time prior to the first commercial sale of Licensed
      Product under this agreement Company shall cease to pursue commercial
      development of Licensed Product as contemplated in Article III herein,
      Company shall be obligated to so notify University and this Agreement
      shall automatically terminate without obligation on the part of University
      to refund any of the fees which may have been paid by Company prior to
      such termination.

                                                                    Page 8 of 12
<PAGE>

            E. If Company stops development efforts as outlined in Article III
      A, during any consecutive 12 month period, University shall have the right
      to terminate this Agreement or make this Agreement non-exclusive by giving
      Company written notice of termination or conversion to a non-exclusive
      license to take effect thirty (30) days after notification as described in
      Article XVI.

            F. Upon termination of this Agreement under this Article XII, but
      subject to the provisions of Article XII Section G, Company shall either
      return to University Licensed Products or Licensed Combination Products in
      its possession or certify to University in writing that Licensed Products
      or Licensed Combination Products in its possession have been destroyed.

            G. Termination of this Agreement for any reason shall not be
      construed to release either party from any obligation that matured prior
      to the effective date of such termination. Company and any sublicensee
      thereof may, however, after the effective date of such termination, have
      six (6) months to sell all Licensed Product or Licensed Combination
      Products completed and in inventory.

            H. Within thirty (30) days of the termination of this Agreement,
      Company shall duly account to University for the sale of Licensed Product
      or Licensed Combination Products and inventory in Company possession as of
      the date of termination.

            I. Upon termination of this Agreement for any reason, each
      sublicense then in effect of any of the rights, privileges and licenses
      granted hereunder shall continue in effect, provided that there then
      exists no circumstance that, with the giving of notice or the lapse of
      time or both, constitutes an event of default under any provisions of the
      sublicense Agreement permitting termination of such sublicense for
      default. Company's rights under all sublicenses continues in effect by the
      provisions of this clause shall be deemed assigned to University upon
      termination of the Agreement and Company agrees to execute any instrument
      reasonably requested to confirm such assignment. Such assignment of rights
      to University shall not impose any obligation on University other than to
      permit the exercise of the licenses granted by such sublicenses.

                                  Article XIII
             Indemnification, Insurance and Limitation of Warranties

            A. Company shall, at all times during the term of this Agreement,
      indemnify, defend and hold University, its members, agents, officers,
      employees and affiliates harmless against all claims and expenses,
      including legal expenses and reasonable attorney fees arising out of the
      death or injury to any person or persons or out of any damage to property
      and against any other claim, proceeding, demand, expense and liability of
      any kind whatsoever resulting from sale, use, lease or distribution of
      Licensed Product, Licensed Combination Product, Licensed Processes and
      Licensed Services by Company and its sublicensees or arising from any
      obligations of Company hereunder, except for any claims or expenses
      arising out of the negligence or willful actions of University or its
      officers, members, agents or employees.

            B. Company shall maintain in effect insurance in the combined amount
      of one million dollars ($1,000,000) per occurrence for bodily injury and
      property damages, including reasonable attorney fees, arising out of any
      alleged defects in Licensed Product, Licensed Combination Product,
      Licensed Processes and Licensed Services or in the use thereof. The policy
      (ies) shall include an endorsement naming University as an additional
      insured insofar as the Agreement is concerned and provide that notice
      shall be given to University at least thirty (30) days prior to

                                                                    Page 9 of 12
<PAGE>

      cancellation or material change in the form of such policy(ies). The
      insurance carrier must be authorized to do business in the State of
      Oregon. Any sublicense to this Agreement shall provide insurance as
      provided in this Article XIII.

            C. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT,
      UNIVERSITY MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND,
      EITHER EXPRESS OR IMPLIED, WITH REGARD TO ANY LICENSED PATENT RIGHTS
      HEREUNDER OR ANY PARTS THEREOF, AND UNIVERSITY EXPLICITLY DISCLAIMS ALL
      WARRANTIES OF MERCHANTABILITY AND OF FITNESS FOR A PARTICULAR PURPOSE.

                                   Article XIV
                                University's Name

            A. Company agrees not to use the name of University or any of its
      employees, in any advertisement or sales promotion relating to any
      Licensed Product, Licensed Combination Product, Licensed Processes and
      Licensed Services without prior written approval by University. University
      will allow Company to use University's name as holder of Patent Rights and
      developer of Licensed Products.

                                   Article XV
                       Transfer of Rights and Obligations

            A. This Agreement shall not be assignable by either party hereto
      without the prior written consent of the other party, except to the
      successor or assignee of all or substantially all of the assignor's
      business to which this Agreement relates. When duly assigned in accordance
      therewith, this Agreement shall be binding on and inure to the benefit of
      the assignee.

                                       Article XVI
                                         Notices

            A. All notices, demands, payments, reports or other writings
      provided for in this Agreement shall be deemed to have been fully given,
      made or sent when made in writing and delivered by hand or deposited in
      the U.S. mail, first class, postage paid, and addressed as follows (unless
      another address has been provided by the party affected):

      To University:

                   Director of Technology Transfer
                   Research Office
                   312 Kerr Administration Building
                   Oregon State University
                   Corvallis, Oregon 97331-2140
                   Telephone: 503-737-0674
                   Facsimile: 503-737-3093

                                                                   Page 10 of 12
<PAGE>

      With a copy to:

                   Director of Legal Services
                   Oregon University System
                   Susan Campbell Hall
                   P.O. Box 3175
                   Eugene, Oregon 97403
                   Telephone: 541-346-5767
                   Facsimile:  541-346-5790

      To Company:  President/CEO
                   SIGA Technologies, Inc.
                   420 Lexington Avenue -- Suite 620
                   New York, New York 10170
                   Telephone: 212-672-9100
                   Facsimile:  212-697-3130

            B. Any notice or communication given in conformity with this Article
      shall be deemed to be effective when received by the addressee, if
      delivered by hand or upon transmission, if delivered by facsimile, and
      five (5) days after mailing, if mailed. The address to which any notice,
      demand, payment or report or other writing may be given, made or sent to
      any party may be changed upon written notice given by such party as above
      provided.

                                  Article XVII
                            Miscellaneous Provisions

            A. This agreement shall be construed in accordance with the laws of
      the State of Oregon. Any action brought hereunder shall be brought and
      conducted solely and exclusively within the United States District Court
      for the District of Oregon.

            B. In the event that any provision hereof is found to be invalid or
      unenforceable pursuant to a final judgement or decree, the remainder of
      this agreement shall remain valid and enforceable according to its terms.

            C. Nothing contained in this Agreement shall be construed as
      creating a joint venture, partnership or employment relationship between
      the parties hereto. Except as specified herein, neither party shall have
      the right, power or implied authority to create any obligation or duty,
      express or implied, on behalf of the other party hereto.

            D. This document represents the entire Agreement between the parties
      as to the matters set forth and integrates all prior discussions or
      understandings between them. This Agreement may only be modified or
      amended in writing by a document signed by an authorized representative of
      University and Company.

            E. The failure of either party to assert a right hereunder or to
      insist upon compliance with any term or condition of the Agreement shall
      not constitute a waiver of that right or excuse a similar subsequent
      failure to perform any such term or condition by the other party.

                                                                   Page 11 of 12
<PAGE>

IN WITNESS WHEREOF, the parties have hereunto set their hands and seals and duly
executed this Agreement effective as of the date of last signature.

STATE OF OREGON, Acting by and               SIGA Technologies, Inc.
through the STATE BOARD OF
HIGHER EDUCATION on behalf of
OREGON STATE UNIVERSITY

                                             /s/ Joshua Schein            3/6/00
------------------------------------         -----------------------------------
Benjamin E. Rawlins             Date         Joshua Schein                  Date
Director of Legal Services                   CEO

/s/ William [Illegible] for   3/6/00
------------------------------------
Wilson C. "Toby" Hayes          Date
Vice Provost for Research

                                                                   Page 12 of 12EMPLOYMENT AGREEMENT

      This Employment Agreement (this "Agreement"), effective as of January 19,
2000, between SIGA TECHNOLOGIES, INC., a Delaware corporation (with its
successors and assigns, referred to as the "Corporation") and Joshua D. Schein
(referred to as "Schein").

                              Preliminary Statement

      The Corporation desires to employ Schein, and Schein wishes to be employed
by the Corporation, upon the terms and subject to the conditions set forth in
this Agreement. The Corporation and Schein also wish to enter into the other
agreements set forth in this Agreement, all of which are related to Schein's
employment under this agreement.

                                    Agreement

      Schein and the Corporation therefore agree as follows:

            1. Employment for Term. The Corporation hereby employs Schein and
Schein hereby accepts employment with the Corporation for the period beginning
on the date of this Agreement and ending January 19, 2005. (the "Initial Term"),
or upon the earlier termination of the Term pursuant to Section 6. This
Agreement shall be automatically renewed for additional one-year periods (the
"Renewal Terms;" together with the Initial Term, the "Term") unless either party
notifies the other in writing of its intention not to so renew this Agreement no
less than 180 days prior to the expiration of the Initial Term or a Renewal
Term. The termination of Schein's employment under this Agreement shall end the
Term but shall not terminate Schein's or the Corporation's other agreements in
this Agreement, except as otherwise provided herein.

      2. Position and Duties. During the Term, Schein shall serve as Chief
Executive Officer of the Corporation. During the Term, Schein shall also hold
such additional positions and titles as the Board of Directors of the
Corporation (the "Board") may determine from time to time. During the Term,
Schein shall devote as much time as is necessary to satisfactorily perform his
duties as an employee of the Corporation.

      3. Compensation.

            (a) Base Salary. The Corporation shall pay Schein a base salary,
beginning on the first day of the Term and ending on the last day of the Term,
of not less than $250,000 per annum, payable at least monthly on the
Corporation's regular pay cycle for professional employees.

            (b) Stock Options. Pursuant to the Corporation's stock option plan
and subject to stockholder approval of the Corporation's Amended 1996 Incentive
and Non-Qualified Stock Option Plan, the Corporation shall grant to Schein
fully-vested options to purchase 500,000 shares of the Corporation's Common
Stock exercisable at $2.00 per share, the closing bid price of the Common Stock
of the Corporation on the date hereof. The options shall expire on the tenth
anniversary of this Agreement.

            (c) Annual Increases. The Base Salary shall be increased at the end
of each year of service by the greater of (i) 5% or (ii) a percentage equal to
the increase, if any, in the United States Department of Labor Consumer Price
Index (or comparable index, if available) for the New York metropolitan area
over the previous 12 months.

                                       1
<PAGE>

            (d) Other and Additional Compensation. The preceding sections
establish the minimum compensation during the Term and shall not preclude the
Board from awarding Schein a higher salary or any bonuses or stock options in
the discretion of the Board during the Term at any time. The Company will adopt
a bonus plan and Schein will be eligible to participate in such plan. The
Corporation shall pay Schein a monthly car allowance of $500.

      4. Employee Benefits. During the Term, Schein shall be entitled to the
employee benefits including vacation, 401(k) plan, health plan and other
insurance benefits made available by the Corporation to any other officers or
key employees of the Corporation.

      5. Expenses. The Corporation shall reimburse Schein for actual
out-of-pocket expenses incurred by him in the performance of his services for
the Corporation upon the receipt of appropriate documentation of such expenses.

      6. Termination.

            (a) General. The Term shall end immediately upon Schein's death. The
Term may also end for Cause or Disability, as defined in Section 7.

            (b) Notice of Termination. Promptly after it ends the Term, the
Corporation shall give Schein notice of the termination, including a statement
of whether the termination was for Cause or Disability (as defined in Section
7(a) and 7(b) below). The Corporation's failure to give notice under this
Section 6(b) shall not, however, affect the validity of the Corporation's
termination of the Term.

            (c) Effective Termination by the Corporation. If the Corporation
reassigns Schein's base of operations outside of New York City, or materially
reduces Schein's duties during the term, including replacing Schein as Chief
Executive Officer, then, at his option, Schein may treat such reduction in
duties as a termination of the Term without Cause by the Corporation.

      7. Severance Benefits.

            (a) "Cause Defined". "Cause" means (i) willful malfeasance or
willful misconduct by Schein in connection with his employment; (ii) Schein's
gross negligence in performing any of his duties under this Agreement; (iii)
Schein's conviction of, or entry of a plea of guilty to, or entry of a plea of
nolo contendre with respect to, any crime other than a traffic violation or
infraction which is a misdemeanor; (iv) Schein's material breach of any written
policy applicable to all employees adopted by the Corporation which is not cured
to the reasonable satisfaction of the Corporation within fifteen (15) business
days after notice thereof; or (v) material breach by Schein of any of his
agreements in this Agreement which is not cured to the reasonable satisfaction
of the Corporation within fifteen (15) business days after notice thereof

            (b) Disability Defined. "Disability" shall mean Schein's incapacity
due to physical or mental illness that results in his being substantially unable
to perform his duties hereunder for six consecutive months (or for six months
out of any nine month period). During a period of Disability, Schein shall
continue to receive his base salary hereunder, provided that if the Corporation
provides Schein with disability insurance coverage, payments of Schein's base
salary shall be reduced by the amount of any disability insurance payments
received by Schein due to such coverage. The Corporation shall give Schein
written notice of termination which shall take effect sixty (60) days after the
date it is sent to Schein unless Schein shall have returned to the performance
of his duties hereunder during such sixty (60) day period (whereupon such notice
shall become void).

                                       2
<PAGE>

            (c) Termination. If the Corporation ends the Term for Cause or
Disability, or if Schein resigns as an employee of the Corporation for reasons
other than a material breach by the Corporation of its obligations under this
Agreement or a material reduction of Schein's duties as provided in Section
6(c), or if Schein dies, then the Corporation shall have no obligation to pay
Schein any amount, whether for salary, benefits, bonuses, or other compensation
or expense reimbursements of any kind, accruing after the end of the Term, and
such rights shall, except as otherwise required by law, be forfeited immediately
upon the end of the Term, except that payments under 3(a) shall continue unless
the Corporation ends the Term for Cause or if Schein resigns for reasons other
than a material breach by the Corporation of its obligations under this
Agreement or a material reduction of his duties as provided in Section 6(c). If
the Corporation ends the Term without Cause, then the Corporation will be
obligated to continue to pay Schein's salary and all other amounts due hereunder
for the remainder of the Term. In addition, in the event of a change in the
ownership of greater than fifty percent (50%) of the Corporation's outstanding
voting stock or any transaction described in Section 9(b), Schein may elect to
terminate this agreement as if it were a termination by the Corporation without
Cause, and the Corporation shall be obligated to pay Schein's salary for the
remainder of the Term.

      8. Confidentiality, Ownership, and Covenants.

            (a) "Corporation Information" and "Inventions" Defined. "Corporation
Information" means all information, knowledge or data of or pertaining to (i)
the Corporation, its employees and all work undertaken on behalf of the
Corporation, and (ii) any other person, firm, corporation or business
organization with which the Corporation may do business during the Term, that is
not in the public domain (and whether relating to methods, processes,
techniques, discoveries, pricing, marketing or any other matters). "Inventions"
collectively refers to any and all inventions, trade secrets, ideas, processes,
formulas, source and object codes, data, programs, other works of authorship,
know-how, improvements, research, discoveries, developments, designs, and
techniques regarding any of the foregoing.

            (b) Confidentiality. (i) Schein hereby recognizes that the value of
all trade secrets and other proprietary data and all other information of the
Corporation not in the public domain disclosed by the Corporation in the course
of his employment with the Corporation may be attributable substantially to the
fact that such confidential information is maintained by the Corporation in
strict confidentiality and secrecy and would be unavailable to others without
the expenditure of substantial time, effort or money. Schein, therefore, except
as provided in the next two sentences, covenants and agrees that all Corporation
Information shall be kept secret and confidential at all times during the Term
and for the five (5) year period after the end of the Term and shall not be used
or divulged by him outside the scope of his employment as contemplated by his
Agreement, except as the Corporation may otherwise expressly authorize by action
of the Board. In the event that Schein is requested in a judicial,
administrative or governmental proceeding to disclose any of the Corporation
Information, Schein will promptly so notify the Corporation so that the
Corporation may seek a protective order of other appropriate remedy and/or waive
compliance with this Agreement. If disclosure of any of the Corporation
Information is required. Schein may furnish the material so required to be
furnished, but Schein will furnish only that portion of the Corporation
Information that legally is required.

            (ii) Schein also hereby agrees to keep the terms of this Agreement
confidential to the same extent that the Corporation maintains such
confidentiality (except with regard to any disclosure by the Corporation
required under applicable securities laws).

            (c) Ownership of Inventions, Patents and Technology. Schein hereby
assigns to the Corporation all of Schein's rights (including patent rights,
copyrights, trade secret rights, and all other rights throughout the world),
title and interest in and to Inventions, whether or not patentable or
registrable under copyright or similar statutes, made or conceived or reduced to
practice or learned by Schein, either alone or jointly with others, during the
course of the performance of services for the Corporation. Schein shall also
assign to, or as directed by, the Corporation, all of Schein's right, title and
interest in and to any and all Inventions, the full title to which is required
to be in the United States government of any of its

                                       3
<PAGE>

agencies. The Corporation shall have all right, title and interest in all
research and work product produced by Schein as an employee of the Corporation,
including, but not limited to, all research materials and lab books.

            (d) Non-Competition Period Defined. "Non-Competition Period" means
the period beginning at the end of the Term and ending one (1) year after the
end of the Term.

            (e) Covenants Regarding the Term and Non-Competition Period. Schein
acknowledges and agrees that his services pursuant to this Agreement are unique
and extraordinary; that the Corporation will be dependent upon Schein for the
development of its products; and that he will have access to and control of
confidential information of the Corporation. Schein further acknowledges that
the business of the Corporation is international in scope and cannot be confined
to any particular geographic area. For the foregoing reasons and to induce the
Corporation to enter this Agreement, Schein covenants and agrees that, subject
to Section 8(h), during the Term and the Non-Competition Period Schein shall not
unless with written consent of the Corporation:

      (i)   engage in any business related to the research and development of
            the products or processes in which the Corporation is engaged in
            during the Term or in any other business conducted by the
            Corporation during the Term (collectively the "Prohibited Activity")
            in the World for his own account;

      (ii)  become interested in any individual, corporation, partnership or
            other business entity (a "Person") engaged in any Prohibited
            Activity in the World, directly or indirectly, as an individual,
            partner, shareholder, officer, director, principal, agent, employee,
            trustee, consultant or in any other relationship or capacity;
            provided, however, that Schein may own directly or indirectly,
            solely as an investment, securities of any Person which are traded
            on any national securities exchange if Schein (x) is not a
            controlling person of, or a member of a group which controls, such
            person or (y) does not, directly or indirectly, own 5% or more of
            any class of securities of such person; or

      (iii) directly or indirectly hire, employ or retain any person who at any
            time during the Term was an employee of the Corporation or directly
            or indirectly solicit, entice, induce or encourage any such person
            to become employed by any other person.

            (f) Remedies. Schein hereby acknowledges that the covenants and
agreements contained in Section 8 are reasonable and valid in all respects and
that the Corporation is entering into this Agreement, inter alia, on such
acknowledgement. If Schein breaches, or threatens to commit a breach, of any of
the Restrictive Covenants, the Corporation shall have the following rights and
remedies, each of which rights and remedies shall be independent of the other
and severally enforceable, and all of which rights and remedies shall be in
addition to, and not in lieu of, any other rights and remedies available to the
Corporation under law or in equity: (i) the right and remedy to have the
Restrictive Covenants specifically enforced by any court having equity
jurisdiction, it being acknowledged and agreed that any such breach or
threatened breach will cause irreparable injury to the Corporation and that
money damages will not provide an adequate remedy to the Corporation; (ii) the
right and remedy to require Schein to account for and pay over to the
Corporation such damages as are recoverable at law as the result of any
transactions constituting a breach of any of the Restrictive Covenants; (iii) if
any court determines that any of the Restrictive Covenants, or any part thereof
is invalid or unenforceable, the remainder of the Restrictive Covenants shall
not thereby be affected and shall be given full effect, without regard to the
invalid portions; and (iv) if any court construes any of the Restrictive
Covenants, or any part thereof, to be unenforceable because of the duration of
such provision or the area covered thereby, such court shall have the power to
reduce the duration or area of such provision and, in its reduced form, such
provision shall then be enforceable and shall be enforced.

            (g) Jurisdiction. The parties intend to and hereby confer
jurisdiction to enforce the Restrictive Covenants upon the courts of any
jurisdiction within the geographical scope of such Covenants. If the courts of
any one or more such jurisdictions hold the Restrictive Covenants wholly
unenforceable by

                                       4
<PAGE>

reason of the breadth of such scope or otherwise, it is the intention of the
parties that such determination not bar or in any way affect the Corporation's
right to the relief provided above in the courts of any other jurisdiction,
within the geographical scope of such Covenants, as to breaches of such
Covenants in such other respective jurisdiction such Covenants as they relate to
each jurisdiction being, for this purpose, severable into diverse and
independent covenants.

            (h) Schein's agreements and covenants under Section 8(e) shall
automatically terminate if the Corporation ends the Terms without Cause or
Schein resigns due to a material breach by the Corporation of its obligations
under this Agreement or a material reduction of Schein's duties as provided in
Section 6(c).

      9. Successors and Assigns.

            (a) Schein. This Agreement is a personal contract, and the rights
and interests that the Agreement accords to Schein may not be sold, transferred,
assigned, pledged, encumbered, or hypothecated by him. All rights and benefits
of Schein shall be for the sole personal benefit of Schein, and no other person
shall acquire any right, title or interest under this Agreement by reason of any
sale, assignment, transfer, claim or judgement or bankruptcy proceedings against
Schein. Except as so provided, this Agreement shall inure to the benefit of and
be binding upon Schein and his personal representatives, distributes and
legatees.

            (b) The Corporation. This Agreement shall be binding upon the
Corporation and inure to the benefit of the Corporation and of its successors
and assigns, including (but not limited to) any corporation that may acquire all
or substantially all of the corporation's assets or business or into or with
which the Corporation may be consolidated or merged. In the event that the
Corporation sells all or substantially all of its assets, merges or
consolidates, otherwise combines or affiliates with another business, dissolves
and liquidates, or otherwise sells or disposes of substantially all of its
assets and Schein does not elect to treat any such transaction as a termination
by the Corporation without Cause pursuant to Section 7(c), then this Agreement
shall continue in fill force and effect. The Corporation's obligations under
this Agreement shall cease, however, if the successor to, the purchaser or
acquirer either of the Corporation or of all or substantially all of its assets,
or the entity with which the Corporation has affiliated, shall assume in writing
the Corporation's obligations under this Agreement (and deliver and executed
copy of such assumption to Schein), in which case such successor or purchaser,
but not the Corporation, shall thereafter be the only party obligated to perform
the obligations that remain to be performed on the part of the Corporation under
this Agreement.

      10. Change in Control. Upon the completion of a transaction resulting in a
Change in Control of the Corporation or any transaction described in Section
9(b), the Corporation shall pay to Schein, in consideration of his work on
behalf of the Corporation, a one time cash payment equal to one and one-half
percent (1.5%) of the total consideration received by the Corporation. "Change
in Control" shall mean any merger or consolidation of the Corporation into or
with another corporation, or any reorganization, recapitalization or like
transaction or series of transactions having substantially equivalent effect and
purpose, at the conclusion of which such merger, consolidation, reorganization,
recapitalization or like transaction the holders of the voting capital stock of
the Corporation immediately prior to such transaction or series of transactions
own less than a majority of the voting capital stock of the acquiring entity or
entity surviving or resulting from such transaction or series of transactions
immediately thereafter, or any sale, transfer or other disposition of all or
substantially all of the assets or capital stock of the Corporation.

      11. Sale, Merger or Spin-out of Subsidiary. Upon the sale, merger or
public spin-out of any wholly-owned or partially-owned subsidiary of the
Corporation, or of any material asset of the Corporation, Schein shall receive a
success fee equal to one and one-half percent (1.5%) of the value of SIGA's
shares of the subsidiary, or of the value of the material asset, upon the sale,
merger or spin-out. In the event the subsidiary or material asset is sold for
cash, the 1.5% success fee shall be paid for in cash. In the event the
subsidiary or material asset is sold for equity in another company, the 1.5%
success fee shall be paid for in the form of equity received by the Corporation.
In the event of a merger or public spin-out of

                                       5
<PAGE>

the subsidiary or of any material asset of the Corporation, the 1.5% success fee
shall be paid for in the form of shares of the subsidiary or in the form of
equity received by the Corporation.

      12. Entire Agreement. This Agreement represents the entire agreement
between the parties concerning Schein's employment with the Corporation and
supersedes all prior negotiations, discussions, understanding and agreements,
whether written or oral, between Schein and the Corporation relating to the
subject matter of this Agreement.

      13. Amendment or Modification, Waiver. No provision of this Agreement may
be amended or waived unless such amendment or waiver is agreed to in writing
signed by Schein and by a duly authorized officer of the Corporation. No waiver
by any party to this Agreement or any breach by another party of any condition
or provision of this Agreement to be performed by such other party shall be
deemed a waiver of a similar or dissimilar condition or provision at the same
time, any prior time or any subsequent time.

      14. Notices. Any notice to be given under this Agreement shall be in
writing and delivered personally or sent by overnight courier or registered or
certified mail, postage prepaid, return receipt requested, addressed to the
party concerned at the address indicated below, or to such other address of
which such party subsequently may give notice in writing:

If to Schein:                  Joshua D. Schein
                               420 Lexington Avenue
                               Suite 620
                               New York, NY 10170
                               Fax: 212-697-3130

If to the Corporation:         SIGA TECHNOLOGIES, INC.
                               420 Lexington Avenue
                               Suite 620
                               New York, NY 10170
                               Fax: 212-697-3130
                               Attention: Judson Cooper

with a copy to:                Orrick, Herrington and Sutcliffe
                               666 Fifth Avenue
                               New York, NY 10103
                               Attention: Jeffrey Fessler

Any notice delivered personally or by overnight courier shall be deemed given on
the date delivered and any notice sent by registered or certified mail, postage
prepaid, return receipt requested, shall be deemed given on the date mailed.

      15. Severability. If any provision of this Agreement or the application of
any such provision to any party or circumstances shall be determined by any
court of competent jurisdiction to be invalid and unenforceable to any extent,
the remainder of this Agreement or the application of such provision to such
person or circumstances other than those to which it is so determined to be
invalid and unenforceable shall not be affected, and each provision of this
Agreement shall be validated and shall be enforced to the fullest extent
permitted by law. If for any reason any provision of this Agreement containing
restrictions is held to cover an area or to be for a length of time that is
unreasonable or in any other way is construed to be too broad or to any extent
invalid, such provision shall not be determined to be entirely null, void and of
no effect; instead, it is the intention and desire of both the Corporation and
Schein that, to the extent that the provision is or would be valid or
enforceable under applicable law, any court of competent jurisdiction shall
construe and interpret or reform this Agreement to provide for a restriction

                                       6
<PAGE>

having the maximum enforceable area, time period and such other constraints or
conditions (although not greater than those contained currently contained in
this Agreement) as shall be valid and enforceable under the applicable law.

      16. Survivorship. The respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations.

      17. Headings. All descriptive headings of sections and paragraphs in this
Agreement are intended solely for convenience of reference, and no provision of
this Agreement is to be construed by reference to the heading of any section or
paragraph.

      18. Withholding Taxes. All salary, benefits, reimbursements and any other
payments to Schein under this Agreement shall be subject to all applicable
payroll and withholding taxes and deductions required by any law, rule or
regulation of and federal, state or local authority.

      19. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together constitute one and same instrument.

      20. Applicable Law; Arbitration. The validity, interpretation and
enforcement of this Agreement and any amendments or modifications hereto shall
be governed by the laws of the State of New York, as applied to a contract
executed within and to be performed in such State. The parties agree that any
disputes shall be definitively resolved by binding arbitration before the
American Arbitration Association in New York, New York and consent to the
jurisdiction to the federal courts of the Southern District of New York or, if
there shall be no jurisdiction, to the state courts located in New York County,
New York, to enforce any arbitration award rendered with respect thereto. Each
party shall choose one arbitrator and the two arbitrators shall choose a third
arbitrator. All costs and fees related to such arbitration (and judicial
enforcement proceedings, if any) shall be borne by the unsuccessful party.

      IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.

                                        SIGA TECHNOLOGIES INC

                                        By:       /s/ Judson Cooper
                                                  -----------------------
                                                  Judson Cooper
                                                  Chairman of the Board

                                                  /s/ Joshua D. Schein
                                                  -----------------------
                                                  Joshua D. Schein

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