Document:

Change in Control and Severance Agreement

 Exhibit 10.4 
 Execution Copy 
 THE WET SEAL, INC. 

CHANGE IN CONTROL AND SEVERANCE AGREEMENT 

This Change in Control and Severance Agreement (the “Agreement”) is made and entered into by and
between John Goodman (“Executive”) and The Wet Seal, Inc., a Delaware corporation (the “Company”), this 7th day of January, 2013, effective as of the date Executive commences employment with the Company (the “Effective
Date”). 
 WHEREAS, The Board of Directors of the Company (the “Board”) recognizes that
Executive’s role at the Company and that the possibility of an acquisition of the Company or an involuntary termination can be a distraction to Executive and can cause Executive to consider alternative employment opportunities. The Board has
determined that it is in the best interests of the Company and its shareholders to assure that the Company will have the continued dedication and objectivity of Executive, notwithstanding the possibility, threat or occurrence of such an event.

 WHEREAS, the Board believes that it is in the best interests of the Company and its shareholders to provide Executive
with an incentive to continue Executive’s employment and to motivate Executive to maximize the value of the Company upon a Change in Control (as defined below) for the benefit of its stockholders. 

WHEREAS, the Board believes that it is imperative to provide Executive with severance benefits upon certain terminations of
Executive’s service to the Company that enhance Executive’s financial security and provide incentive and encouragement to Executive to remain with the Company notwithstanding the possibility of such an event. 

WHEREAS, unless otherwise defined herein, capitalized terms used in this Agreement are defined in Section 10 below.

 NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable
consideration, including the agreements set forth below, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 
 1. Term of Agreement. 
 This Agreement shall become effective as of
the Effective Date and terminate upon the date that all obligations of the parties hereto with respect to this Agreement have been satisfied. 
 2. At-Will Employment. 
 The Company and Executive acknowledge that
Executive’s employment shall be “at-will,” as defined under applicable law. If Executive’s employment terminates for any reason, Executive shall not be entitled to any payments, benefits, damages, awards or compensation other
than as provided by this Agreement, the Indemnification Agreement, the Company’s bylaws (as may be amended from time to time), the Company’s Restated Certificate of Incorporation (as may be amended from time to time), and/or any other
agreement evidencing the grant to Executive of equity compensation that is hereafter entered into by the parties. 
 3.
Covered Termination Other Than During a Change in Control Period. 
 If Executive experiences a Covered Termination
at any time other than during a Change in Control Period, and if Executive delivers to the Company a general release of all claims against the Company and its affiliates that becomes effective and irrevocable in accordance with Section 15(a)(v)
hereof in the form of Exhibit A hereto (a “Release of Claims”), then in addition to any accrued but unpaid salary, bonus (including any bonus for any completed prior fiscal year, paid when it otherwise would have been paid
had Executive continued employment), vacation and expense reimbursement payable in accordance with applicable law, or benefits (other than severance) under any Company benefit plan, program or practice (provided or paid in accordance

  
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with the terms thereof) (the “Accrued Amounts”) the Company shall provide Executive with the following: 
 (a) Severance. Executive shall be entitled to receive an amount equal to two times (2x) Executive’s annual base salary at the rate in effect immediately prior to the Termination Date (but
not less than the rate of his Base Salary under the employment agreement entered into by the Executive and the Company as of the same date hereof (the “Employment Agreement”)) paid in a single cash lump sum, less authorized
deductions and applicable withholding taxes, on the first payroll date following the date the Release of Claims becomes effective and irrevocable. 
 (b) Equity Awards. Each outstanding and unvested equity award, including, without limitation, each stock option and restricted stock award, held by Executive that vests solely based upon
Executive’s continued employment shall automatically become vested and, if applicable, exercisable and any forfeiture restrictions or rights of repurchase thereon shall immediately lapse, as of immediately prior to the Termination Date with
respect to that number of shares of Company Class A Common Stock that would have vested had Executive continued employment with the Company through the first anniversary of the Termination Date. In addition, any time-based vesting requirement
with respect to any outstanding and unvested performance-based equity award, including, without limitation, any performance-based stock option and performance stock award, held by Executive as of the Termination Date shall be waived such that any
such outstanding and unvested performance-based equity award shall immediately vest and, if applicable, become exercisable and any forfeiture restrictions or rights of repurchase thereon shall immediately lapse, as of immediately prior to the
Termination Date with respect to all of the shares of Company Class A Common Stock subject thereto for which the applicable performance goal has been achieved, provided that, if the performance period for any such equity awards has not yet
expired and 

  
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Executive’s termination of employment occurs on or after the date on which at least fifty percent (50%) of the performance period applicable to any such equity awards has lapsed, the
employment condition shall be deemed satisfied but the performance goals shall be adjusted to account for, and measured through, the fiscal quarter end nearest to the Termination Date and any vesting based on the performance goals shall be prorated
based on the period of the performance measuring period during which Executive was employed by the Company (the acceleration described in this paragraph, the “Partial Acceleration”). 

(c) Continued Healthcare. If Executive elects to receive continued healthcare coverage pursuant to the provisions of the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall directly pay, or reimburse Executive for, the premium for Executive and Executive’s covered dependents, if any, through the
earliest of (i) the twenty-four (24) month anniversary of the Termination Date, (ii) the date Executive and Executive’s covered dependents, if any, become eligible for healthcare coverage under another employer of Executive
plan(s) and (iii) the date that Executive and/or Executive’s covered dependents, if any, become no longer eligible for COBRA. Any such payment or reimbursement shall be subject to any required withholding taxes. After the Company ceases to
pay premiums pursuant to the preceding sentence, Executive may, if eligible, elect to continue healthcare coverage at Executive’s expense in accordance the provisions of COBRA. 

(d) Pro Rata Bonus. In the event Executive’s Covered Termination occurs after fifty percent (50%) or more of the
measurement period for Executive’s annual bonus has lapsed, Executive shall receive a pro rata bonus for the fiscal year of termination based on achievement of the applicable performance goals for the fiscal year of termination adjusted to
account for, and measured through, the fiscal quarter end nearest to the Termination Date and the number of days in 

  
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the fiscal year during which Executive was employed as compared to 365. Such bonus, if any, shall be paid in a single cash lump sum, less authorized deductions and applicable withholding taxes,
on the first payroll date following the date the Release of Claims becomes effective and irrevocable (the “Pro Rata Bonus”). 
 4. Covered Termination During a Change in Control Period. 
 If
Executive experiences a Covered Termination during a Change in Control Period, and if Executive executes and does not revoke a Release of Claims in accordance with Section 15(a)(v) hereof, then in addition to any Accrued Amounts, the Company
shall provide Executive with the following: 
 (a) Severance. Executive shall be entitled to receive an amount equal to
two times (2x) the sum of Executive’s annual base salary and annual target bonus opportunity, in each case, at the rate in effect immediately prior to the Termination Date (but in no event less than the rates specified in the Employment
Agreement) payable in a cash lump sum, less authorized deductions and applicable withholding taxes, on the first payroll date following the date the Release of Claims becomes effective and irrevocable. 

(b) Equity Awards. Each outstanding and unvested equity award, including, without limitation, each stock option, restricted stock
award and performance stock award, held by Executive shall automatically become vested and, if applicable, exercisable and any forfeiture restrictions or rights of repurchase thereon shall immediately lapse, as of immediately prior to the
Termination Date with respect to one hundred percent (100%) of the unvested shares underlying Executive’s equity awards (with any performance goals deemed achieved at target). In all other respects Executive’s equity awards shall
continue to be bound by and subject to the terms of their respective agreements and equity plans. 

  
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 (c) Continued Healthcare. If Executive elects to receive continued healthcare
coverage pursuant to the provisions of COBRA, the Company shall directly pay, or reimburse Executive for, the premium for Executive and Executive’s covered dependents, if any, through the earliest of (i) the twenty-four (24) month
anniversary of the Termination Date, (ii) the date Executive and Executive’s covered dependents, if any, become eligible for healthcare coverage under another employer of Executive plan(s) and (iii) the date that Executive and/or
Executive’s covered dependents, if any, become no longer eligible for COBRA. Any such payment or reimbursement shall be subject to any required withholding taxes. After the Company ceases to pay premiums pursuant to the preceding sentence,
Executive may, if eligible, elect to continue healthcare coverage at Executive’s expense in accordance the provisions of COBRA. 
 (d) Pro Rata Bonus. In the event Executive’s Covered Termination occurs after fifty percent (50%) or more of the measurement period for Executive’s annual bonus has lapsed, Executive
shall receive a Pro Rata Bonus. 
 5. Non-Renewal of Employment Agreement. 

In the event the Company provides Executive a Notice of Non-Renewal in accordance with Section 1(b) of the Employment Agreement and
Executive’s employment with the Company terminates at the end of the then current Term (as defined in the Employment Agreement) (a “Non-Renewal Termination”), and if Executive executes and does not revoke a Release of Claims in
accordance with Section 15(a)(v) hereof, then in addition to any Accrued Amounts, the Company shall provide Executive with Partial Acceleration. 
 6. In Contemplation. 
 In the event Executive is terminated in
Contemplation of a Change in Control, Executive shall receive the amounts under Section 3 hereof, provided that, if the Change of Control actually 

  
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occurs and that Change in Control satisfies the requirements of Treasury Regulation 1.409A-3(i)(5), upon such Change in Control an extra payment and vesting shall be immediately made to Executive
of any difference between the amounts due under Section 3 and the amounts due under Section 4. 
 7. Other
Terminations. 
 If Executive’s service with the Company is terminated by the Company or by Executive for any or no
reason other than as a Covered Termination or a Non-Renewal Termination, then Executive shall only be entitled to Accrued Amounts and, if as a result of death or a Disability Termination, Executive shall receive a pro rata bonus for the fiscal year
of termination based on achievement of the applicable performance goals for the fiscal year of termination and the number of days in the fiscal year during which Executive was employed as compared to 365. Such bonus, if any, shall be paid when it
would have been paid if Executive had continued employment. 
 8. Deemed Resignation. 

Upon termination of Executive’s employment for any reason, Executive shall be deemed to have resigned from all offices and
directorships, if any, then held with the Company or any of its affiliates, and, at the Company’s request, Executive shall execute such documents as are necessary or desirable to effectuate such resignations. 

9. Limitation on Payments. 
 Notwithstanding anything in this Agreement to the contrary, if any payment or distribution Executive would receive pursuant to this Agreement or otherwise (“Payment”) would
(a) constitute a “parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and (b) but for this sentence, be subject to the excise tax imposed by
Section 4999 of the Code (the “Excise Tax”), then such Payment shall either be (i) delivered in full or (ii) delivered as to such lesser extent which would result in no portion of such Payment being subject to

  
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the Excise Tax, whichever of the foregoing amounts, taking into account the applicable federal, state and local income and payroll taxes and the Excise Tax, results in the receipt by Executive on
an after-tax basis, of the largest payment, notwithstanding that all or some portion the Payment may be taxable under Section 4999 of the Code. The accounting firm engaged by the Company for general audit purposes as of the day prior to the
effective date of the Change in Control or, in the event such accounting firm is precluded from performing calculations hereunder, such other accounting firm of national reputation determined by the Company, and reasonably acceptable to Executive,
shall perform the foregoing calculations. The Company shall bear all expenses with respect to the determinations by such accounting firm required to be made hereunder. The accounting firm shall provide its calculations to the Company and Executive
within fifteen (15) calendar days after the date on which Executive’s right to a Payment is triggered (if requested at that time by the Company or Executive) or such other time as requested by the Company or Executive. Any good faith
determinations of the accounting firm made hereunder shall be final, binding and conclusive upon the Company and Executive. Any reduction in payments and/or benefits pursuant to this Section 9 will occur in the following order:
(1) reduction of cash payments; (2) cancellation of accelerated vesting of equity awards other than stock options (with the later vesting reduced first) (3) cancellation of accelerated vesting of stock options (with the later vesting
reduced first) and (4) reduction of other benefits payable to Executive. 
 10. Definition of Terms.

 The following terms referred to in this Agreement shall have the following meanings: 

(a) Cause. “Cause” means (i) any act of material willful misconduct or material dishonesty by Executive in
the performance of his duties; (ii) any willful failure, neglect or refusal by Executive to attempt in good faith to perform his duties under this Agreement or to follow the 

  
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lawful instructions of the Board (except as a result of physical or mental incapacity or illness) which is not promptly cured after written notice; (iii) Executive’s commission of any
fraud or embezzlement against the Company (whether or not a misdemeanor); (iv) any material breach of the Employment Agreement, which breach has not been cured by Executive (if curable) within thirty (30) days after written notice thereof
to Executive by the Company; (v) Executive’s being convicted of (or pleading guilty or nolo contendere to) any felony or misdemeanor involving theft, embezzlement, dishonesty or moral turpitude; and/or (vi) Executive’s failure to
materially comply with the material policies of the Company in effect from time to time relating to conflicts of interest, ethics, codes of conduct, insider trading, or discrimination and harassment, or other breach of Executive’s fiduciary
duties to the Company, which failure or breach is materially injurious to the business or reputation of the Company. 
 (b)
Change in Control. “Change in Control” means either: 
 (i) any “person” (as such term is
defined in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes, after the Effective Date, a “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company’s then outstanding securities
eligible to vote for the election of the Board (the “Company Voting Securities”); provided, however, that an event described in this clause (i) shall not be deemed to be a Change in Control if any of following becomes such a
beneficial owner: (A) the Company or any majority-owned subsidiary (provided, that this exclusion applies solely to the ownership levels of the Company or the majority-owned subsidiary), (B) any tax-qualified, broad-based employee benefit
plan sponsored or maintained by the Company or any majority-owned subsidiary, (C) any 

  
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underwriter temporarily holding securities pursuant to an offering of such securities, or (D) any person pursuant to a Non-Qualifying Transaction (as defined in clause (ii)); or 

(ii) the consummation of a merger, consolidation, statutory share exchange or similar form of corporate transaction involving the
Company or any of its subsidiaries that requires the approval of the Company’s stockholders, whether for such transaction or the issuance of securities in the transaction (a “Business Combination”), unless immediately following
such Business Combination: (A) more than fifty percent (50%) of the total voting power of (x) the corporation resulting from such Business Combination (the “Surviving Corporation”), or (y) if applicable, the
ultimate parent corporation that directly or indirectly has beneficial ownership of one hundred (100%) of the voting securities eligible to elect directors of the Surviving Corporation (the “Parent Corporation”), is represented
by Company Voting Securities that were outstanding immediately prior to such Business Combination (or, if applicable, is represented by shares into which such Company Voting Securities were converted pursuant to such Business Combination), and such
voting power among the holders thereof is in substantially the same proportion as the voting power of such Company Voting Securities among the holders thereof immediately prior to the Business Combination, (B) no person (other than any employee
benefit plan (or related trust) sponsored or maintained by the Surviving Corporation or the Parent Corporation), is or becomes the beneficial owner, directly or indirectly, of more than fifty percent (50%) of the total voting power of the
outstanding voting securities eligible to elect directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation) and (C) at least a majority of the members of the board of directors of the Parent
Corporation (or if there is no Parent Corporation, the Surviving Corporation) following the consummation of the Business Combination were members of the Board as of the date hereof at the time of the Board’s approval of the execution of the
initial agreement 

  
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providing for such Business Combination (any Business Combination which satisfies all of the criteria specified in (A), (B) and (C) above shall be deemed to be a “Non-Qualifying
Transaction”). 
 (c) Change in Control Period. “Change in Control Period” means the 12-month
period of time commencing upon a Change in Control. 
 (d) “Contemplation of a Change in Control” means a
Covered Termination that occurs as a result of an action directed or requested by a person that directly or indirectly undertakes a transaction that constitutes a Change in Control of the Company. 

(e) Covered Termination. “Covered Termination” means Executive’s resignation for Good Reason or the
termination of Executive’s employment by the Company other than for Cause that, in each case and to the extent necessary, constitutes a Separation from Service (as defined below), provided, that in no event shall a Non-Renewal Termination
constitute a Covered Termination. 
 (f) “Disability Termination” means a termination of employment by the
Company of the Executive after the Executive has been unable for 180 days in any 365 day period to perform his material duties because of physical or mental incapacity or illness. 

(g) Good Reason. “Good Reason” means the occurrence, without Executive’s written consent, of any of the
following: (i) a material diminution in Executive’s base compensation; (ii) a material diminution in Executive’s job responsibilities, duties or authorities, (iii) a material change of at least fifty (50) miles in the
geographic location at which Executive must regularly perform Executive’s services or (iv) any material breach of the Employment Agreement by the Company. Notwithstanding the foregoing, Executive shall not be deemed to have “Good
Reason” unless: (x) the condition giving rise to such resignation continues more than thirty (30) days following Executive’s providing to the Company a written notice of detailing such condition
(y)

  
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such written notice is provided to the Company within ninety (90) days of the initial occurrence of such condition and (z) Executive’s resignation is effective within thirty
(30) days following the expiration of the Company cure period pursuant to subclause (x). For the avoidance of doubt, the provision by the Company of a Notice of Non-Renewal shall not constitute Good Reason hereunder. 

(h) Termination Date. “Termination Date” means the date Executive experiences a Covered Termination. 

11. Assignment and Successors. 
 The Company may, subject to the next sentence and only with the Employment Agreement, assign its rights and obligations under this Agreement to any successor to all or substantially all of the business or
the assets of the Company (by merger or otherwise). Any successor to the Company (whether direct or indirect and whether by purchase, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company’s business and/or
assets shall assume the obligations under this Agreement and the Employment Agreement and agree expressly to perform the obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such
obligations in the absence of a succession. For all purposes under this Agreement, the term “Company” shall include any successor to the Company’s business and/or assets in accordance with the first sentence of this Section
which executes and delivers the assumption agreement described in this Section 11 or which becomes bound by the terms of this Agreement by operation of law. This Agreement shall be binding upon and inure to the benefit of the Company, Executive
and their respective successors, permitted assigns, personnel and legal representatives, executors, administrators, heirs, distributees, devisees, and legatees, as applicable. None of Executive’s rights or obligations may be assigned or
transferred by Executive, other than 

  
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Executive’s rights to payments hereunder, which may be transferred only by will or operation of law. 
 12. Notices. 
 Any notice, request, claim, demand, document and
other communication hereunder to any party shall be effective upon receipt (or refusal of receipt) and shall be in writing and delivered personally or sent by facsimile or certified or registered mail, postage prepaid (or if it is sent through any
other method agreed upon by the parties), as follows: 
 (i) if to the Company: 

Company: The Wet Seal, Inc. 
 Address: 26972 Burbank 
 Foothill Ranch, CA 92610 

Attn: Board of Directors 
 Facsimile: (949) 206-4977 
 (ii) if to Executive, at the address set forth
in Executive’s personnel file with the Company; or 
 (iii) at any other address as any party shall have specified by
notice in writing to the other party. 
 13. Confidentiality; Non-Disparagement. 

(a) Confidentiality. Executive shall enter into and abide by the Company’s standard Confidentiality and Non-Solicitation
Agreement (the “Confidential Information Agreement”). Notwithstanding the foregoing or anything in the Confidential Information Agreement to the contrary, in the event of a conflict or inconsistency between the Confidential
Information Agreement and this Agreement or the Employment Agreement, the terms of this 

  
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Agreement or the Employment Agreement, as applicable, shall apply. For the purposes of the Confidential Information Agreement, this Agreement shall be deemed to be an employment agreement.

 (b) Non-Disparagement. Executive agrees that he shall not disparage, criticize or defame the Company, its affiliates
and their respective affiliates, directors, officers, agents, partners, shareholders or employees, either publicly or privately, except in the reasonable good faith performance of his duties to the Company. The Company agrees that for the same
period it shall not, and it shall instruct its officers and members of its Board to not, disparage, criticize or defame Executive, either publicly or privately. Nothing in this Section 13(b) shall have application to any evidence, testimony or
disclosure required by any court, arbitrator or government agency. 
 14. Dispute Resolution. 

The parties agree that if any disputes should arise between Executive and the Company (including claims against its employees, officers,
directors, shareholders, agents, successors and assigns) relating or pertaining to or arising out of Executive’s employment with the Company, the dispute will be submitted exclusively to binding arbitration before a neutral arbitrator in
accordance with the rules of the American Arbitration Association in Los Angeles, California. This means that disputes will be decided by an arbitrator rather than a court or jury, and that both Executive and the Company waive their respective
rights to a court or jury trial, except to enforce the decision of the arbitrator. The parties understand that the arbitrator’s decision will be final and exclusive, and cannot be appealed. Nothing in this Agreement is intended to prevent
either Executive or the Company from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration. Notwithstanding the foregoing, Executive and the

  
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Company each have the right to resolve any issue or dispute over intellectual property rights by Court action instead of arbitration. 

15. Miscellaneous Provisions. 
 (a) Section 409A. 
 (i) Separation from
Service. Notwithstanding any provision to the contrary in this Agreement, no amount deemed deferred compensation subject to Section 409A of the Code shall be payable pursuant to Sections 3, 4 or 5 above unless Executive’s termination
of employment constitutes a “separation from service” with the Company within the meaning of Section 409A of the Code and the Department of Treasury regulations and other guidance promulgated thereunder (“Separation from
Service”) and, except as provided under Section 15(a)(ii) of this Agreement, any such amount shall not be paid, or in the case of installments, commence payment, until the sixtieth (60th) day following Executive’s Separation from Service. Any
installment payments that would have been made to Executive during the sixty (60) day period immediately following Executive’s Separation from Service but for the preceding sentence shall be paid to Executive on the sixtieth (60th) day following Executive’s Separation from Service and the
remaining payments shall be made as provided in this Agreement. 
 (ii) Specified Employee. Notwithstanding any
provision to the contrary in this Agreement, if Executive is deemed at the time of his separation from service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, to the extent delayed commencement of
any portion of the benefits to which Executive is entitled under this Agreement is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such portion of Executive’s benefits shall not be provided
to Executive prior to the earlier of (A) the expiration of the six (6)-month period measured from the date of Executive’s Separation from 

  
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Service or (B) the date of Executive’s death. Upon the first business day following the expiration of the applicable Code Section 409A(a)(2)(B)(i) period, all payments deferred
pursuant to this Section 15(a)(ii) shall be paid in a lump sum to Executive, and any remaining payments due under this Agreement shall be paid as otherwise provided herein. 

(iii) Expense Reimbursements. To the extent that any reimbursements payable pursuant to this Agreement are subject to the
provisions of Section 409A of the Code, any such reimbursements payable to Executive pursuant to this Agreement shall be paid to Executive no later than December 31 of the year following the year in which the expense was incurred, the
amount of expenses reimbursed in one year shall not affect the amount eligible for reimbursement in any subsequent year, and Executive’s right to reimbursement under this Agreement will not be subject to liquidation or exchange for another
benefit. 
 (iv) Installments. For purposes of Section 409A of the Code (including, without limitation, for
purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), Executive’s right to receive any installment payments under this Agreement shall be treated as a right to receive a series of separate payments and, accordingly, each such
installment payment shall at all times be considered a separate and distinct payment. 
 (v) Release. Notwithstanding
anything to the contrary in this Agreement, to the extent that any payments due under this Agreement as a result of Executive’s termination of employment are subject to Executive’s execution and delivery of a Release of Claims,
(A) the Company shall deliver the Release of Claims to Executive within ten (10) business days following the Termination Date, (B) if Executive fails to execute the Release of Claims on or prior to the Release Expiration Date (as
defined below) or timely revokes his acceptance of the Release of Claims thereafter, Executive shall not be entitled to any payments or benefits otherwise conditioned 

  
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on the Release of Claims, and (C) in any case where the Termination Date and the Release Expiration Date fall in two separate taxable years, any payments required to be made to Executive
that are conditioned on the Release of Claims and are treated as nonqualified deferred compensation for purposes of Section 409A shall be made in the later taxable year. For purposes of this Section 15(a)(v), “Release Expiration
Date” shall mean the date that is twenty-one (21) days following the date upon which the Company timely delivers the Release of Claims to Executive or, in the event that Executive’s termination of employment is “in connection
with an exit incentive or other employment termination program” (as such phrase is defined in the Age Discrimination in Employment Act of 1967), the date that is forty-five (45) days following such delivery date. To the extent that any
payments of nonqualified deferred compensation (within the meaning of Section 409A) due under this Agreement as a result of Executive’s termination of employment are delayed pursuant to this Section 15(a)(v), such amounts shall be
paid in a lump sum on the first payroll date following the date that Executive executes and does not revoke the Release of Claims (and the applicable revocation period has expired) or, in the case of any payments subject to Section 15(a)(v)(C),
on the first payroll period to occur in the subsequent taxable year, if later. 
 (b) Withholding. The Company shall be
entitled to withhold from any amounts payable under this Agreement any federal, state, local or foreign withholding or other taxes or charges which the Company is required to withhold. The Company shall be entitled to rely on an opinion of counsel
if any questions as to the amount or requirement of withholding shall arise. 
 (c) Amendment; Waiver. This Agreement may
not be modified, amended, or terminated except by an instrument in writing, signed by Executive and approved by the Board. By an instrument in writing similarly executed, Executive or, following approval by the Board, the individual authorized by
the Board in such approval, as applicable, may waive compliance by the 

  
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other party with any specifically identified provision of this Agreement that such other party was or is obligated to comply with or perform; provided, however, that such waiver
shall not operate as a waiver of, or estoppel with respect to, any other or subsequent failure. No failure to exercise and no delay in exercising any right, remedy, or power hereunder preclude any other or further exercise of any other right,
remedy, or power provided herein or by law or in equity. 
 (d) Entire Agreement. The terms of this Agreement,
collectively with the Employment Agreement and the Confidential Information Agreement, is intended by the Parties to be the final expression of their agreement with respect to the employment of Executive by the Company and supersede all prior
understandings and agreements, whether written or oral. The parties further intend that this Agreement, collectively with the Employment Agreement and the Confidential Information Agreement, shall constitute the complete and exclusive statement of
their terms and that no extrinsic evidence whatsoever may be introduced in any judicial, administrative, or other legal proceeding to vary the terms of this Agreement. 
 (e) Choice of Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of California. 

(f) Severability. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the
validity or enforceability of any other provision hereof, which shall remain in full force and effect. 
 (g)
Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument. 

(Signature page follows) 

  
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 IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the
Company by its duly authorized officer, as of the day and year set forth below. 
  

			
	THE WET SEAL, INC.
		
	By:	 	  

		
	Title:	 	 Chairman of the Board of Directors

		
	Date:	 	January 7, 2013
	
	EXECUTIVE
	
	  
 John
Goodman

		
	Date:	 	January 7, 2013

 SIGNATURE PAGE TO CHANGE IN CONTROL AND SEVERANCE AGREEMENT 

 Exhibit A 

Form of Release 
 1. Termination of Employment. John Goodman (“Executive”) acknowledges that his last day of employment with The Wet Seal, Inc. and any of its affiliates (the
“Company”) is             (the “Termination Date”). 
 2. Full Release. For the consideration set forth in the Change in Control and Severance Agreement, by and between the Company and Executive, dated as of January 7, 2013 (the
“Severance Agreement”) and for other fair and valuable consideration therefor, Executive, for himself, his heirs, executors, administrators, successors and assigns (hereinafter collectively referred to as the
“Releasors”), hereby fully releases and discharges the Company, its parents, subsidiaries, affiliates, insurers, successors, and assigns, and their respective officers, directors, employees, and agents (all such persons, firms,
corporations and entities being deemed beneficiaries hereof and are referred to herein as the “Company Entities”) from any and all actions, causes of action, claims, obligations, costs, losses, liabilities, damages and demands of
whatsoever character, whether or not known, suspected or claimed, which the Releasors have, from the beginning of time through the date of this Release, against the Company Entities arising out of or in any way related to Executive’s employment
or termination of his employment; provided, however, that this shall not be a release with respect to any amounts and benefits owed to Executive pursuant to the Severance Agreement upon termination of employment, employee benefit plans
of the Company, Executive’s equity awards and equity in the Company, or Executive’s right to indemnification as provided in Executive’s Indemnification Agreement with the Company, the Company’s bylaws (as amended from time to
time), the Restated Certificate of Incorporation of the Company (as amended from time to time), any other plan or agreement or at law, or Executive’s coverage under any directors and officers liability insurance policies. 

3. Waiver of Rights Under Other Statutes. Executive understands that this Release waives all claims and rights Executive
may have under certain federal, state and local statutory and regulatory laws, as each may be amended from time to time, including but not limited to, the Age Discrimination in Employment Act (including the Older Workers Benefit Protection Act)
(“ADEA”), Title VII of the Civil Rights Act; the Employee Retirement Income Security Act of 1974; the Equal Pay Act; the Rehabilitation Act of 1973; the Americans with Disabilities Act; the Worker Adjustment and Retraining
Notification Act; the California Fair Employment and Housing Act, the California Family Rights Act, California law regarding Relocations, Terminations, and Mass Layoffs, the California Labor Code; and all other statutes, regulations, common law, and
other laws in any and all jurisdictions (including, but not limited to, California) that in any way relate to Executive’s employment or the termination of his employment. 
 4. Informed and Voluntary Signature. No promise or inducement has been made other than those set forth in this Release. This Release is executed by Executive without reliance on any
representation by Company or any of its agents. Executive states that he is fully competent to 

 
manage his business affairs and understands that he may be waiving legal rights by signing this Release. Executive hereby acknowledges that he has carefully read this Release and has had the
opportunity to thoroughly discuss the terms of this Release with legal counsel of his choosing. Executive hereby acknowledges that he fully understands the terms of this Release and its final and binding effect and that he affixes his signature
hereto voluntarily and of his own free will. 
 5. Waiver of Rights Under the Age Discrimination Act. Executive
understands that this Release waives all of his claims and rights under the ADEA. The waiver of Executive’s rights under the ADEA does not extend to claims or rights that might arise after the date this Release is executed. The monies to be
paid to Executive are in addition to any sums to which Executive would be entitled without signing this Release. For a period of seven (7) days following execution of this Release, Executive may revoke the terms of this Release by a written
document received by the Chief Financial Officer of the Company no later than 11:59 p.m. of the seventh day following Executive’s execution of this Release. The Release will not be effective until said revocation period has expired. Executive
acknowledges that he has been given up to twenty-one (21) days to decide whether to sign this Release. Executive has been advised to consult with an attorney prior to executing this Release and has been given a full and fair opportunity to do
so. 
 6. Waiver Of Civil Code Section 1542. It is the intention of the parties in signing this Release that
it should be effective as a bar to each and every claim, demand and cause of action stated above. In furtherance of this intention, Executive hereby expressly waives any and all rights and benefits conferred upon Executive by the provisions of
SECTION 1542 OF THE CALIFORNIA CIVIL CODE and expressly consents that this Release shall be given full force and effect according to each and all of its express terms and provisions, including those relating to unknown and unsuspected claims,
demands and causes of action, if any, as well as those relating to any other claims, demands and causes of action referred to above. SECTION 1542 provides: 
 “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE
MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.” 
 7. Miscellaneous. 

(a) This Release shall be governed in all respects by the laws of the State of California without regard to the principles of conflict of
law. 
 (b) In the event that any one or more of the provisions of this Release is held to be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby. Moreover, if any one or more of the provisions contained in this Release is held to be excessively broad as to duration,
scope, activity or subject, such provisions will be construed by limiting and reducing them so as to be enforceable to the maximum extent compatible with applicable law. 

  
 -2-

 (c) This Release may be executed in two or more counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the same instrument. 
 (d) The paragraph headings used in this
Release are included solely for convenience and shall not affect or be used in connection with the interpretation of this Release. 
 (e) This Release and the Severance Agreement represent the entire agreement between the parties with respect to the subject matter hereto and may not be amended except in a writing signed by the Company
and Executive. If any dispute should arise under this Release, it shall be settled in accordance with the arbitration provisions of the Severance Agreement. 
 (f) This Release shall be binding on the executors, heirs, administrators, successors and assigns of Executive and the successors and assigns of Company and shall inure to the benefit of the respective
executors, heirs, administrators, successors and assigns of the Company Entities and the Releasors. 
 IN WITNESS
WHEREOF, the parties hereto have executed this Release on                     , 20        . 

 

			
	THE WET SEAL, INC.
		
	By:	 	  

		 	Name:
		 	Title:
	
	  
 John
Goodman

  
 -3-LOAN AND SECURITY AGREEMENT

     THIS LOAN
AND SECURITY AGREEMENT, dated as of December
31, 2012 (as amended, restated, supplemented or otherwise modified from time to
time, this “Agreement”), is among General Electric Capital Corporation
(“GECC”),
in its capacity as administrative and collateral agent for Lenders (together
with its successors and assigns in such capacity, “Agent”), the financial institutions
who are or hereafter become parties to this Agreement as lenders (together with
GECC, collectively the “Lenders”, and each individually, a
“Lender”),
SIGA Technologies, Inc., a Delaware
corporation (“Borrower”), and the other Persons (as
defined below), if any, who are or hereafter become parties to this Agreement as
guarantors (each a “Guarantor” and collectively, the “Guarantors”, and together with
Borrower, each a “Loan Party” and collectively, “Loan
Parties”). 

Loan Parties, Agent and Lenders agree
as follows: 

1.
DEFINITIONS. 

    
1.1 Defined Terms. Capitalized terms used
herein shall have the meanings set forth in Section 11 to the extent defined
therein. All other capitalized terms used but not defined herein shall have the
meaning given to such terms in the UCC. Any accounting term used but not defined
herein shall be construed in accordance with GAAP and all calculations shall be
made in accordance with GAAP. The term “financial statements” shall include the
accompanying notes and schedules. 

    
1.2 Section References. Any section,
subsection, schedule or exhibit references are to this Agreement unless
otherwise specified. 

2.
THE LOANS.

    
2.1 Loan Commitments. 

         
(a) Term Loan Commitment. 

    
(i) Subject to the terms and conditions of this Agreement and in reliance
upon the representations and warranties of the Loan Parties contained herein,
each Lender with a Term Loan Commitment severally and not jointly agrees to make
a loan (such loans, either individually or collectively, as the context
requires, the “Term Loan”) in Dollars to Borrower on the Closing Date, in an amount
equal to such Lender’s Term Loan Commitment. Upon the funding of such Term Loan,
the Term Loan Commitment shall terminate. 

    
(ii) Once the Term Loan is repaid or prepaid, it cannot be reborrowed.

    
(iii) The Term Loan made by each Lender is evidenced by this Agreement, and if
requested by such Lender, a Note payable to such Lender. 

         
(b) Revolving Loan Commitments. 

    
(i) Subject to the terms and conditions of this Agreement and in reliance
upon the representations and warranties of the Loan Parties contained herein,
each Lender with a Revolving Loan Commitment severally and not jointly agrees to
make loans (each such loan, a “Revolving Loan” and collectively, the
“Revolving Loans”) in Dollars to Borrower on any Business Day during the period from the
Closing Date to but not including the Revolving Loan Commitment Termination
Date, in an aggregate amount not to exceed at any time outstanding such Lender’s
Revolving Loan Commitment; provided, however, that, after giving effect to
any advance of Revolving Loans, the aggregate principal amount of all
outstanding Revolving Loans shall not exceed the Maximum Revolving Loan Balance.
Subject to the other terms and conditions hereof, amounts borrowed under this
Section 2.1(b) may be repaid and reborrowed from time to time. The “Maximum Revolving Loan Balance” on any date of determination will be the lesser of: (x) the Borrowing
Base (as calculated pursuant to the then-most recently delivered Borrowing Base
Certificate) in effect on such date, or (y) the aggregate amount of the
Revolving Loan Commitments in effect on such date, in each case less those
Reserves imposed by Agent in its Permitted Discretion. Agent, in its Permitted
Discretion, may from time to time adjust the Borrowing Base by applying
percentages (known as “liquidity factors”) to Eligible Accounts by payor class
based upon Borrower’s actual recent collection history for each such payor class
in a manner consistent with Agent’s underwriting practices and procedures. In
addition to any other reserves provided for in this Agreement, (A) a reserve of
$40,000,000 shall be maintained against Eligible Accounts (before the
application of the advance rate (which, for the avoidance of doubt, is 85% as of
the Closing Date)) at all times and (B) a reserve of $2,500,000 shall be
maintained against the Borrowing Base at all times. 

    (ii) The Revolving Loans made by each Lender are evidenced by this Agreement,
and if requested by such Lender, a Note payable to such Lender. 

    
2.2 Borrowing and Funding Procedures.

         
(a) Borrowing Procedures. 

    (i)
Revolving Loans. 

     (1)
Each advance of a Revolving Loan shall be made
upon Borrower’s irrevocable written notice delivered to Agent, which notice
shall be in form acceptable to Agent and must be received by Agent prior to 2:00
p.m. (New York time) on the date which is three (3) Business Days prior to the
requested date for such Revolving Loan. Such notice shall
specify: 

	                         	(A)	     	
      the amount of the requested
      Revolving Loan (which shall be in an aggregate minimum principal amount of
      $100,000); and

		 
		(B)		
      the requested borrowing date of
      such Revolving Loan, which shall be a Business
  Day.

     (2)
Promptly after receiving such notice for a
Revolving Loan, Agent shall notify each Lender of the contents of such notice
and of the amount of such Lender’s Pro Rata Share of such Revolving Loan.

     (ii)
Agent and Lenders may act without liability upon
the basis of any written notice believed in good faith by Agent to be from any
authorized officer of Borrower. Agent and Lenders shall have no duty to verify
the authenticity of the signature appearing on any such written
notice. 

         
(b) Funding Procedures.
Upon the terms and subject to the conditions
set forth herein, each Lender, severally but not jointly, shall make available
to Agent its Pro Rata Share of the requested Term Loan or Revolving Loan, as
applicable, in Dollars in immediately available funds, to the Collection Account
prior to 11:00 a.m. (New York time) on the date specified for the Term Loan or
Revolving Loan. Unless any of the conditions set forth in Section 4.1 or
4.2, as
applicable, has not been satisfied, Agent shall credit the amounts received by
it in like funds to Borrower (net of any amounts due and payable to or on behalf
of Agent and/or Lenders) on such day by wire transfer to the following deposit
account of Borrower (unless Agent is otherwise directed in writing by Borrower):

	Bank
      Name:	       	CitiBank, N.A.
	Bank
      Address:		New York, NY
	ABA#:	 		 
	Account #:			 
	Account Name:		SIGA Operating Account
	Ref:		GECC Loan

2 

    
2.3 Interest. 

          (a) Term Loan. The Term Loan
shall accrue interest in arrears from the date made until such Term Loan is
fully repaid at a fixed per annum rate of interest equal to 9.85%. 

         
(b) Revolving Loans. Each Revolving Loan shall accrue interest
in arrears from the date made until such Revolving Loan is fully repaid at a
floating per annum rate of interest equal to the Reference Rate plus five and one-quarter
of one percent (5.25%) per annum. 

         
(c) Computation. All computations of
interest and fees calculated on a per annum basis shall be made by Agent on the
basis of a three hundred sixty (360) day year, in each case for the actual
number of days occurring in the period for which such interest and fees are
payable. Such method of calculation will result in an effective rate that
exceeds the rate stated in this Section. Each determination of an interest rate
or the amount of a fee under the Loan Documents shall be made by Agent and shall
be conclusive, binding and final for all purposes, absent manifest error.

         
(d) Default Rate. All Loans and other
Obligations shall bear interest from and after the occurrence and during the
continuation of an Event of Default at a rate equal to the Default Rate. The
application of the Default Rate shall not be interpreted or deemed to extend any
cure period or waive any Default or Event of Default or otherwise limit Agent’s
or any Lender’s right or remedies hereunder. All interest payable at the Default
Rate shall be payable on demand. 

         
(e) Maximum Lawful Rate. Anything herein
or any other Loan Document to the contrary notwithstanding, the obligations of
Loan Parties hereunder and thereunder shall be subject to the limitation that
payments of interest shall not be required, for any period for which interest is
computed hereunder, to the extent (but only to the extent) that contracting for
or receiving such payment by Agent and Lenders would be contrary to the
provisions of any Requirement of Law applicable to Agent and Lenders limiting
the highest rate of interest which may be lawfully contracted for, charged or
received by Agent and Lenders, and in such event Loan Parties shall pay Agent
and Lenders interest at the highest rate permitted by applicable Requirements of
Law (“Maximum Lawful Rate”); provided, however, that if at any time thereafter the rate of interest payable
hereunder or thereunder is less than the Maximum Lawful Rate, Loan Parties shall
continue to pay interest hereunder and thereunder at the Maximum Lawful Rate
until such time as the total interest received by Agent and Lenders is equal to
the total interest that would have been received had the interest payable
hereunder been (but for the operation of this paragraph) the interest rate
payable since the making of the Initial Loans as otherwise provided in this
Agreement or any other Loan Document. 

    
2.4 Payments. 

         
(a) Interest Payments. For each Loan,
Borrower shall pay interest to Agent, for the benefit of Lenders in accordance
with their Pro Rata Shares, at the rate of interest for such Loan determined in
accordance with Section 2.3 in arrears on each Scheduled Payment Date, commencing (i) on
February 1, 2013 with respect to the Term Loan, and (ii) with respect to all
other Loans, on the first day of the calendar month occurring after the month
during which such Loan was made. 

         
(b) Principal Payments. 

    
(i) Term Loan. For the Term Loan, Borrower shall pay
principal to Agent, for the benefit of Lenders in accordance with their Pro Rata
Shares, in twenty-nine (29) (the “Number
of Payments”) equal consecutive payments of
$166,666.67 (the “Monthly Amortization
Amount”) on each Scheduled Payment Date,
commencing on July 1, 2013 (the “Initial
Principal Payment Date”) and one final payment in an
amount equal to the entire remaining principal balance of the Term Loan on
December 1, 2015; provided, however, if the BARDA Milestone has occurred and
Borrower delivers a written request to Agent requesting an extension of the
Initial Principal Payment Date and supplies Agent with evidence satisfactory to
Agent that the BARDA Milestone has occurred, each on or before June 24, 2013,
then, provided no Default or Event of Default shall have occurred and be
continuing on the Initial Principal Payment Date, the “Number of Payments” shall
be reduced to twenty-six (26), the “Monthly
Amortization Amount” shall be increased to
$185,185.18 and, the “Initial Principal Payment Date” shall be extended to
October 1, 2013. 

3

     (ii) Revolving Loans. Borrower
shall repay in full on the date specified in clause (a) of the definition of
“Revolving Loan Commitment Termination Date” the aggregate principal amount of
the Revolving Loans outstanding on the Revolving Loan Commitment Termination
Date. 

         
(c) Maturity. Notwithstanding the
foregoing provisions of Section
2.4(b), all outstanding Obligations are due
and payable in full on the earlier of (i) the Final Maturity Date or (ii) the
date that the Loans otherwise become due and payable pursuant to the terms
hereof, whether by acceleration of the Obligations pursuant to Section 8.2 or otherwise.

         
(d) Method of Payments. All payments
(including prepayments) to be made by any Loan Party under any Loan Document
shall be made by wire transfer or ACH transfer in immediately available funds
(which shall be the exclusive means of payment hereunder) in Dollars, without
setoff, recoupment, counterclaim or deduction of any kind, to the Collection
Account before 2:00 p.m. (New York time) on the date when due. All payments
received by Agent after 2:00 p.m. (New York time) on any Business Day or at any
time on a day that is not a Business Day may, in Agent’s sole discretion, be
deemed to be received on the next Business Day. For purposes of calculating
interest with respect to the Revolving Loans, all payments applied to reduce the
outstanding principal balance of Revolving Loans shall be subject to a three (3)
Business Day clearance period, which amount shall be for Agent’s sole account.
Whenever any payment required under any Loan Document would otherwise be due on
a date that is not a Business Day, such payment shall instead be due on the next
Business Day, and applicable fees and interest shall continue to accrue and be
payable for the period of such extension. All payments of interest and principal
due to Agent and Lenders on a Scheduled Payment Date under Section 2.4(a) and
(b) shall
be effected by automatic debit of the appropriate funds from Borrower’s
operating account specified on the Automatic Payment Authorization
Agreement. 

         
(e) Withholdings and Increased Costs.

     (i)
All payments by any Loan Party under any Loan
Document shall be made free and clear of all Indemnified Taxes. If any
Indemnified Taxes shall be required by any Requirement of Law to be withheld or
deducted from or in respect of any sum payable under any Loan Document to Agent
or any Lender, (A) an additional amount shall be payable as may be necessary so
that, after making all required withholdings or deductions (including
withholdings or deductions applicable to additional sums payable under this
Section), Agent or such Lender receives an amount equal to the sum it would have
received had no such withholdings or deductions been made, (B) Loan Parties
shall make such withholdings or deductions, (C) Loan Parties shall pay the full
amount withheld or deducted to the relevant taxing authority or other authority
in accordance with any applicable Requirement of Law, and (D) Loan Parties shall
deliver to Agent or such Lender evidence of such payment. 

     (ii)
On or prior to the date on which any Lender
becomes a Lender under this Agreement (including any entity to which any Lender
grants a participation in this Agreement) and from time to time thereafter upon
reasonable request of Borrower or Agent, such Lender shall deliver to Borrower
and Agent two copies of Internal Revenue Service Forms W-8 or W-9 and other
required certifications, as applicable, to certify that such Lender is exempt
from U.S. federal withholding tax or U.S. federal backup withholding tax, as
applicable. If a payment made to a Lender under any Loan Document would be
subject to U.S. federal withholding tax imposed by FATCA if such Lender were to
fail to comply with the applicable reporting requirements of FATCA, such Lender
shall deliver to Borrower and Agent at the time or times prescribed by law and
at such time or times reasonably requested by Borrower or Agent such
documentation prescribed by applicable law and such additional documentation
reasonably requested by Borrower or Agent as may be necessary for Borrower and
Agent to comply with their obligations under FATCA and to determine that such
Lender has complied with such Lender’s obligations under FATCA or to determine
the amount to deduct and withhold from such payment. Solely for purposes of this
clause (ii), “FATCA” shall include any amendments made to FATCA after the date
of this Agreement. 

4 

     (iii) If the introduction of or any change in, after the Closing
Date, any Requirement of Law increases Agent’s or any Lender’s costs or reduces
its income for any Loan, then Borrower shall upon demand by Agent or such Lender
(with a copy of such demand to Agent) promptly pay to Agent for its own account
or for the account of such Lender, as the case may be, the increase in cost or
reduction in income or additional expense; provided that all requests, rules,
guidelines or directives issued or promulgated under, in connection with or
pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act or
Basel III shall be deemed to be a change in a Requirement of Law, regardless of
the date enacted, adopted or issued. Agent and each Lender agrees that it shall
allocate any such increased costs among its customers similarly affected in good
faith and in a manner consistent with Agent’s or such Lender’s customary
practice. This Section 2.4(e)(iii) shall not apply to increased costs due to
Indemnified Taxes, which are the subject of Section 2.4(e)(i) of this Agreement.

         
(f) Loan Account. Agent, on behalf of the
Lenders, shall record on its books and records the amount of each Loan made, the
interest rate applicable, all payments of principal and interest thereon and the
principal balance thereof from time to time outstanding. Such record shall,
absent manifest error, be conclusive evidence of the amount of the Loans made by
the Lenders to Borrower and the interest and payments thereon. Any failure to so
record or any error in doing so shall not, however, limit or otherwise affect
the obligation of Borrower hereunder (and under any Note) to pay any amount
owing with respect to the Loans or provide the basis for any claim against
Agent. 

         
(g) Payment of Obligations. Without
limiting Section 2.4(d), Agent is authorized to, and at its sole election may,
debit funds from Borrower’s operating account specified in the Automatic Payment
Authorization Agreement to pay all Obligations under any Loan Document if and to
the extent Borrower fails to promptly pay any such amounts within three (3)
Business Days after receipt of an invoice therefor. In addition to the
foregoing, Borrower hereby authorizes Agent and each Revolving Lender to make a
Revolving Loan to pay all Obligations under any Loan Document if any such amount
is not paid within three (3) Business Days after receipt by the Borrower of an
invoice therefor, even if the result thereof would cause the outstanding
principal balance of the Revolving Loans to exceed the Maximum Revolving Loan
Balance at such time. 

    
2.5 Prepayments and Commitment Terminations. 

         
(a) Voluntary Prepayments and Commitment Terminations. Borrower may, upon five (5) Business Days’ prior written
notice to Agent, (i) voluntarily prepay the Term Loan in full, but not in part, or
(ii) terminate (but not reduce in part) the Revolving Loan Commitments. Upon
any such termination of the Revolving Loan Commitments, Borrower’s right to
request Revolving Loans shall automatically be terminated. 

         
(b) Mandatory Prepayments. 

     (i)
Revolving Loan Commitment
Termination. If Borrower terminates the
Revolving Loan Commitments pursuant to Section
2.5(a), or if the Revolving Loan Commitments
are terminated under Section
8.2 or otherwise, then Borrower shall
immediately pay all Obligations in full. 

     (ii)
Maximum Revolving Loan Balance. If at any time the then aggregate outstanding principal
balance of Revolving Loans exceeds the Maximum Revolving Loan Balance, then
Borrower shall immediately prepay outstanding Revolving Loans in an amount
sufficient to eliminate such excess. 

     (iii)
Exclusive License. If an exclusive License exists (whether granted by Borrower or ordered
by a court) on all or any part of the Product, then Borrower shall immediately
pay all Obligations in full and the Commitments shall terminate. 

5

         
(c) Prepayment Amounts.
Upon the date of (i) any voluntary prepayment
of the Term
Loan in accordance with Section
2.5(a) or (ii) any mandatory prepayment of
the Term Loan required under this Agreement (whether pursuant to Section 2.5(b)(i), by
acceleration of the Obligations pursuant to Section 8.2 or otherwise, but, for
purposes of clarity, not including any regularly scheduled installments of
principal pursuant to Section 2.4(b)(i)), Borrower shall pay to Agent, for the
benefit of Lenders in accordance with their Pro Rata Shares, a sum equal to (A)
all outstanding principal and all accrued interest thereon and other Obligations
with respect to the Term Loan, plus (B) the Final Payment Fee for the
Term Loan, plus (C) a prepayment premium (as yield maintenance for the loss of a bargain
and not as a penalty) equal to: (1) 3% of the principal amount of the Term Loan
being prepaid, if such prepayment is made on or before the one year anniversary
of the Term Loan, (2) 2% of the principal amount of the Term Loan being prepaid,
if such prepayment is made after the one year anniversary of the Term Loan but
on or before the two year anniversary of the Term Loan, and (3) 1% of the
principal amount of the Term Loan being prepaid, if such prepayment is made
after the two year anniversary of the Term Loan but before the Final Maturity
Date. Upon the date of (i) any voluntary termination of the Revolving Loan
Commitments in accordance with Section
2.5(a) or (ii) any mandatory prepayment of
the Revolving Loan required under this Agreement (whether pursuant to
Section 2.5(b)(i), by acceleration of the Obligations pursuant to Section 8.2 or otherwise),
Borrower shall pay to Agent, for the benefit of Lenders in accordance with their
Pro Rata Shares, a sum equal to (A) all outstanding principal and all accrued
interest thereon and other Obligations with respect to the Revolving Loan,
plus (B) a
prepayment premium (as yield maintenance for the loss of a bargain and not as a
penalty) equal to: (1) 3% of the Revolving Loan Commitment (immediately prior to
such termination), if such termination is made on or before the one year
anniversary of the Closing Date, (2) 2% of the Revolving Loan Commitment
(immediately prior to such termination), if such termination is made after the
one year anniversary of the Closing Date but on or before the two year
anniversary of the Closing Date, and (3) 1% of the Revolving Loan Commitment
(immediately prior to such termination), if such termination is made after the
two year anniversary of the Closing Date but before the Final Maturity
Date.

     2.6 Lender Fees. 

          (a) Closing
Fee. On the Closing Date, Borrower shall pay
to Agent, for the benefit of Lenders in accordance with their Pro Rata Shares, a
non-refundable closing fee in an amount equal to $120,000, which fee shall be
fully earned when paid. 

          (b) Agency
Fee. On the Closing Date, Borrower shall pay
to Agent, for the account of Agent, a non-refundable agency fee in an amount
equal to $70,000, which fee shall be fully earned when paid. 

          (c) Final Payment
Fee. On the date upon which the outstanding
principal amount of the Term Loan is repaid in full, or if earlier, is required
to be repaid in full (whether by scheduled payment, voluntary prepayment,
mandatory prepayment pursuant to Section
2.5(b)(i), acceleration of the Obligations
pursuant to Section 8.2 or otherwise), Borrower shall pay to Agent, for the
benefit of Lenders in accordance with their Pro Rata Shares, a non-refundable
fee equal to 3% of the original principal amount of the Term Loan (the
“Final Payment Fee”), which Final Payment Fee shall be deemed to be fully earned on the
date such Term Loan is made. If for any reason the Term Loan is prepaid in part
prior to the Final Maturity Date (which for the avoidance of doubt shall not be
permitted under this Agreement), (i) Borrower shall pay on the date of any such
partial prepayment a fee equal to 3% of the principal amount of the Term Loan so
prepaid, and (ii) the Final Payment Fee due and payable on the date the Term
Loan is repaid in full or required to be repaid in full shall be reduced by the
aggregate amount of any such payments described in the foregoing clause (i).

          (d) Unused Revolving
Commitment Fee. Borrower shall pay to Agent a
fee (the “Unused Revolving Commitment
Fee”) for the account of each Revolving
Lender in an amount equal to: (i) the average daily balance of the Revolving
Loan Commitment of such Revolving Lender during the preceding calendar month,
less (ii)
the average daily balance of all Revolving Loans held by such Revolving Lender;
multiplied by (iii) three-quarters of one percent (0.750%) per annum. The total fee
paid by Borrower will be equal to the sum of all of the fees due to the
Revolving Lenders. Such fee shall be payable monthly in arrears on the first day
of each calendar month following the Closing Date. The Unused Revolving
Commitment Fee provided in this Section
2.6(c) shall accrue at all times from and
after the execution and delivery of this Agreement. For purposes of this
Section 2.6(c), the Revolving Loan Commitment of any Non-Funding Lender shall be deemed
to be zero. 

          (e) Annual Management
Fee. On
the Closing Date and on each anniversary thereof, Borrower shall pay to Agent,
for the account of Agent, a non-refundable annual management fee in an amount
equal to $20,000.00 on each such date, which fee shall be fully earned when
paid. 

    
2.7 [Intentionally Omitted.] 

6 

     2.8 Eligible Accounts. All of the Accounts
owned by each Loan Party and properly reflected as “Eligible Accounts” in the
most recent Borrowing Base Certificate delivered by Borrower to Agent shall be
“Eligible Accounts” for purposes of this Agreement, except any Account to which any of the
exclusionary criteria set forth below applies. Agent shall have the right to
establish, modify or eliminate Reserves against Eligible Accounts from time to
time in its Permitted Discretion. In addition, Agent reserves the right, at any
time and from time to time after the Closing Date, to adjust any of the
applicable criteria and to establish new criteria and to adjust advance rates
with respect to Eligible Accounts, in its Permitted Discretion, subject to the
approval of Requisite Lenders in the case of adjustments, new criteria or
changes in advance rates which have the effect of making more credit available.
Eligible Accounts shall not include the following Accounts of a Loan Party:

         
(a) Past Due Accounts. Accounts that are
not paid (i) prior to BARDA Acceptance, within one hundred fifty (150) days
after Product Acceptance, and (ii) after BARDA Acceptance, within the later of
sixty (60) days after BARDA Acceptance or one hundred fifty (150) days following
its original invoice date; 

         
(b) Product Acceptance. Prior to BARDA
Acceptance, Accounts associated with Product for which there has not been a
Product Acceptance; 

         
(c) Cross Aged Accounts. Accounts that are
the obligations of an Account Debtor if fifty percent (50%) or more of the
Dollar amount of all Accounts owing by such Account Debtor are ineligible under
the other criteria set forth in this Section
2.8; 

         
(d) Foreign Accounts. Accounts that are
the obligations of an Account Debtor located in a foreign country unless payment
thereof is assured by a letter of credit assigned and delivered to Agent,
satisfactory to Agent as to form, amount and issuer; 

         
(e) Government Accounts. Accounts that are
the obligation of an Account Debtor that is the United States government or a
political subdivision thereof, or any state, county or municipality or
department, agency or instrumentality thereof unless Agent, in its sole
discretion, has agreed to the contrary in writing, or the applicable Loan Party
has complied with respect to such obligation with the Federal Assignment of
Claims Act of 1940, or any applicable state, county or municipal law restricting
the assignment thereof with respect to such obligation; 

         
(f) Contra Accounts. Accounts to the
extent any Loan Party or any Subsidiary thereof is liable for goods sold or
services rendered by the applicable Account Debtor to any Loan Party or any
Subsidiary thereof but only to the extent of the potential offset; 

         
(g) Chargebacks/Partial Payments/Disputed.
Any Account to the extent that any defense, counterclaim, setoff or dispute is
asserted as to such Account; 

         
(h) Inter-Company/Affiliate Accounts.
Accounts that arise from a sale or provision of services to any Affiliate of any
Loan Party; 

         
(i) Credit Risk. Accounts that are
otherwise determined to be unacceptable by Agent in its Permitted Discretion,
upon the delivery of prior or contemporaneous notice (oral or written) of such
determination to Borrower; 

         
(j) Pre-Billing. Accounts (other than from
the BARDA Contract) with respect to which an invoice, reasonably acceptable to
Agent in form and substance, has not been sent to the applicable Account Debtor;

         
(k) Defaulted Accounts; Bankruptcy.
Accounts where: 

    
(i) the Account Debtor obligated upon such Account suspends business, makes a
general assignment for the benefit of creditors or fails to pay its debts
generally as they come due; or 

7 

     (ii) a petition is filed by or against any Account Debtor obligated
upon such Account under any bankruptcy law or any other federal, state or
foreign (including any provincial) receivership, insolvency relief or other law
or laws for the relief of debtors; 

         
(l) Employee Accounts. Accounts that arise
from a sale or provision of services to any director, officer or other employee,
of, or to any entity that has any common officer or director with, any Loan
Party; 

         
(m) Progress Billing. Accounts (other than
from the BARDA Contract) (i) as to which a Loan Party is not able to bring suit
or otherwise enforce its remedies against the Account Debtor through judicial
process, or (ii) if the Account represents a progress billing consisting of an
invoice for goods sold or used or services rendered pursuant to a contract under
which the Account Debtor’s obligation to pay that invoice is subject to a Loan
Party’s completion of further performance under such contract or is subject to
the equitable lien of a surety bond issuer; 

         
(n) Bill and Hold. Accounts that arise
with respect to goods that are delivered on a bill-and-hold basis; 

         
(o) C.O.D.. Accounts that arise with
respect to goods that are delivered on a cash-on-delivery basis; 

         
(p) Credit Limit. Accounts to the extent
such Account exceeds any credit limit established by Agent, in its Permitted
Discretion, following prior notice of such limit by Agent to Borrower;

         
(q) Non-Acceptable Currency. Accounts that
are payable in any currency other than Dollars; 

         
(r) Other Liens Against Receivables.
Accounts that (i) are not owned by a Loan Party or (ii) are subject to any
right, claim, Lien or other interest of any other Person, other than Liens in
favor of Agent, securing the Obligations; 

         
(s) Conditional Sale. Accounts that arise
with respect to goods that are placed on consignment, guarantied sale or other
terms by reason of which the payment by the Account Debtor is conditional
(excluding any type of condition specified in the BARDA Contract relating to
minimum delivery of 500,000 courses of Product prior to invoicing); 

         
(t) Judgments, Notes or Chattel Paper.
Accounts that are evidenced by a judgment, Instrument or Chattel Paper;

         
(u) Not Bona Fide. Accounts that are not
true and correct statements of bona fide indebtedness incurred in the amount of
such Account for merchandise sold to or services rendered and accepted by the
applicable Account Debtor; 

         
(v) Ordinary Course; Sales of Equipment or Bulk Sales. Accounts that do not arise from the sale of goods or the
performance of services by a Loan Party in good faith in the ordinary course of
business and consistent with past practice, including, without limitation, bulk
sales; or 

         
(w) Not Perfected. Accounts as to which
Agent’s Lien thereon, on behalf of itself and the other Lenders, is not a first
priority perfected Lien. 

         
(x) Private Payor. Accounts from an Account Debtor that is a private payor.

3.
CREATION OF SECURITY INTEREST. 

    
3.1 Grant of Security Interest. As
security for the prompt and complete payment and performance when due, whether
at the stated maturity, by acceleration or otherwise, of all Obligations, and as
security for the prompt and complete payment and performance when due by each
Guarantor of the Guaranteed Obligations (as defined in the Guaranty), each Loan
Party hereby grants to Agent, for the benefit of Agent and Lenders, a lien on
and security interest in all of its right, title and interest in, to and under
the following Property: 

8

All of such Loan Party’s personal
property of every kind and nature whether now owned or hereafter acquired by, or
arising in favor of, such Loan Party, and regardless of where located,
including, without limitation, (i) all of such Loan Party’s Accounts, Chattel
Paper (whether tangible or electronic), Commercial Tort Claims, Deposit
Accounts, Documents, Equipment, Financial Assets, Fixtures, Goods, Instruments,
Investment Property (including, without limitation, all Securities Accounts),
Inventory, Letter-of-Credit Rights, letters of credit, Securities, Supporting
Obligations, cash, Cash Equivalents, any other contract rights (including,
without limitation, rights under any license agreements, leases, and franchise
agreements or rights to the payment of money), General Intangibles (including,
without limitation, Intellectual Property), and (ii) all books and records of
such Loan Party relating to each of the foregoing, and all additions,
attachments, accessories, accessions and improvements to such Property, all
substitutions, replacements or exchanges therefor, and all Proceeds, insurance
claims, products, profits and other rights to payments not otherwise included in
the foregoing, including in the case of clause (ii) all of such Property related
to or resulting from the Product (including Proceeds). 

     Notwithstanding the foregoing, the grant of a lien and security interest
herein shall not extend to and the term “Collateral” shall not include (i) more
than 65% of the issued and outstanding voting Stock (but shall include 100% of
the issued and outstanding non-voting Stock) of SIGA (Europe), (ii) any
“intent-to-use” trademark or service mark application prior to the filing and
acceptance of a “Statement of Use” or an “Amendment to Allege Use” with respect
thereto, to the extent that, and solely during the period in which, the grant of
a security interest therein would impair the validity or enforceability of such
intent-to-use application or any registration that issues therefrom under
applicable federal law, or (iii) the Product or any Intellectual Property
related to the Product (the Property listed in clauses (i) through (iii), the
“Excluded Property”), provided however, “Excluded Property” shall not include any proceeds,
products, substitutions or replacements of Excluded Property (unless such
proceeds, products, substitutions or replacements would otherwise constitute
Excluded Property).

     Each Loan Party hereby represents
and covenants that, upon the filing of a UCC financing statement or upon the
recordation of one or more Intellectual Property Security Agreements with the
U.S. Patent and Trademark Office and/or the U.S. Copyright Office, such security
interest will constitute a valid, first priority perfected security interest in
the Collateral in existence on the Closing Date, and will constitute a valid,
first priority perfected security interest in Collateral acquired after the
Closing Date, in each case to the extent that a security interest can be
perfected by such filings and recordations. Each Loan Party hereby covenants
that it shall give written notice to Agent promptly upon the acquisition by such
Loan Party or creation in favor of such Loan Party of any commercial tort claim.
In order to perfect or protect Agent’s security interest and other rights in
each Loan Party’s Intellectual Property (as applicable), each Loan Party hereby
authorizes Agent to file, as applicable and in each case in form and substance
satisfactory to Agent, a patent security agreement and/or a trademark security
agreement, to be filed with the United States Patent and Trademark Office, and a
copyright security agreement to be filed with the United States Copyright Office
(each of the foregoing, an “Intellectual
Property Security Agreement”). 

     3.2
Financing Statements. Each Loan Party hereby authorizes Agent to file UCC
financing statements in all appropriate jurisdictions and amendments thereto
describing the Collateral as “all assets of the debtor other than (i) the final
drug product under the brand name ST-246®, (ii) the final drug
product whose active ingredient has the USAN designation Tecovirimat, (iii) any
final drug product chemically derived from the active ingredient that has the
USAN designation Tecovirimat, (iv) any other orthopox related small molecule
therapeutic product derived from the same family of tricyclononenes from which
ST-246 was derived and (v) intellectual property related to the foregoing items
(i) through (iv)” or words of similar import and containing any other
information required by the applicable UCC to perfect Agent’s security interest
(for the benefit of itself and the Lenders) granted hereby. 

     3.3
Termination of Security
Interest. Upon the Termination Date, (a)
Agent’s lien on and security interest in the Collateral shall be automatically
terminated without delivery of any instrument or performance of any act and (b)
at the request of any Loan Party, Agent shall, at the Loan Parties’ sole cost
and expense and without any recourse, representation or warranty, execute and
deliver to such Loan Party such documents as such Loan Party shall reasonably
request to evidence such termination. 

9 

4.
CONDITIONS OF CREDIT
EXTENSIONS. 

     4.1 Conditions Precedent to Initial Loans. No Lender shall be obligated to make its Pro Rata Share of the Initial
Loans, or to take, fulfill, or perform any other action hereunder, until the
following have been delivered to Agent, in form and substance satisfactory to
Agent and Lenders (the date on which Lenders make the Initial Loans, the
“Closing Date”): 

          (a) a counterpart of this
Agreement duly executed by each Loan Party, each Lender and Agent; 

          (b) a certificate duly executed by
the Secretary of each Loan Party, in substantially the form attached as
Exhibit A,
providing verification of incumbency and certifying as to and attaching (i) such
Loan Party’s board resolutions approving the transactions contemplated by the
Loan Documents and (ii) such Loan Party’s formation documents certified by the
Secretary of State of such Loan Party’s state of formation as of a recent date
reasonably acceptable to Agent and such Loan Party’s governing documents;

          (c) copies of UCC financing
statements, collateral assignments, and termination statements, with respect to
the Collateral, as Agent shall reasonably request, in each case in form and
substance ready for filing; 

          (d) certificates of insurance
evidencing the insurance coverage and additional insured and lender loss payable
endorsements reasonably satisfactory to Agent, in each case as required pursuant
to Section 6.4; 

          (e) certified copies, dated as of
a recent date reasonably acceptable to Agent, of UCC, judgment, bankruptcy and
tax lien search results demonstrating that there are no Liens on the Collateral
other than Permitted Liens; 

          (f) a certificate of status/good
standing of each Loan Party from the jurisdiction of such Loan Party’s
organization and a certificate of foreign qualification from each jurisdiction
where such Loan Party’s failure to be so qualified could reasonably be expected
to have a Material Adverse Effect, in each case certified as of a recent date
reasonably acceptable to Agent; 

          (g) an Access Agreement for each
leased location or third party location to the extent required pursuant to
Section 6.6; 

          (h) an executed legal opinion of
Loan Parties’ counsel, in form and substance reasonably satisfactory to Agent;

          (i) an Automatic Payment
Authorization Agreement, duly executed by Borrower;

          (j) a Perfection Certificate
completed and duly executed by each Loan Party;

          (k) a Disbursement Letter, duly
executed by each Loan Party, Agent and Lenders; 

          (l) one or more Account Control
Agreements, duly executed by the applicable Loan Parties and the applicable
depository or financial institution, to the extent required pursuant to
Section 6.10; 

          (m) a Pledge Agreement, duly
executed by each Loan Party, together with the certificates and instruments
required to be delivered in connection therewith and related undated powers and
endorsements duly executed in blank; 

          (n) the Intellectual Property
Security Agreement required by Section 3.1, duly executed by each Loan
Party; 

          (o) evidence that Borrower has
received at least $12,000,000 in unrestricted net cash proceeds from BARDA for
achieving the labeling plan milestone under the BARDA Contract; 

10 

          (p) a certificate from an authorized officer of Borrower confirming that each
of the conditions in Section
4.2 applicable to funding of the Initial
Loans have been satisfied; and

          (q) all fees required to be paid
by Borrower under the Loan Documents, and Borrower shall have reimbursed Agent
and Lenders for all fees, costs and expenses presented as of the Closing Date.

     4.2
Conditions Precedent to All Loans.
No Lender shall be obligated to make its Pro
Rata Share of any Loan, including the Initial Loans, if as of the date thereof:

          (a) (i) any representation or
warranty contained in any Loan Document shall be untrue, inaccurate or
incomplete in any material respect (but in all respects if such representation
or warranty is qualified by “material” or “Material Adverse Effect”) as of the
date of such Loan (except in the case of representations or warranties made as
of a specific date in which case the representations or warranties shall be
true, accurate and complete in all material respects (but in all respects if
such representation or warranty is qualified by “material” or “Material Adverse
Effect”) as of such specific date), or (ii) any Default or Event of Default has
occurred and is continuing or will result from the making of such Loan, and in
the case of clauses (i) and (ii) with respect to any advance of a Revolving
Loan, Agent or Requisite Lenders have determined not to make such Revolving Loan
as a result of the fact that such representation or warranty is untrue,
inaccurate or incomplete or as a result of that Default or Event of Default, as
applicable; 

          (b) in Agent's reasonable
discretion, there has been a material impairment in the general affairs,
management, results of operations, financial condition or the prospect of
repayment of the Obligations or any material adverse deviation by Borrower from
the most recent business plan of Borrower presented to and accepted by Agent;

          (c) with respect to the first
advance of a Revolving Loan, Agent shall not have conducted a “field audit” in
accordance Section 6.8(d);

          (d) with respect to any advance of
a Revolving Loan, after giving effect to such Revolving Loan, the aggregate
outstanding principal amount of the Revolving Loans would exceed the Maximum
Revolving Loan Balance; 

          (e) with respect to any advance of
a Revolving Loan, Agent shall not have received a Borrowing Base Certificate,
certified by Borrower's president, chief executive officer, chief financial
officer or treasurer setting forth the Borrowing Base of Borrower as at the end
of the most-recently ended fiscal month or as at such other date as Agent may
approve; and 

          (f) Agent shall not have received
such other documents, agreements, instruments or information as Agent shall
reasonably request. 

     The request by Borrower and
acceptance by Borrower of the proceeds of any Loan shall be deemed to
constitute, as of the date thereof, (i) a representation and warranty by
Borrower that the conditions in this Section
4.2 have been satisfied and (ii) a
reaffirmation by each Loan Party of the granting and continuance of Agent’s
Liens, on behalf of itself and the Lenders, securing the Obligations.

5.
REPRESENTATIONS AND WARRANTIES OF LOAN
PARTIES. 

     Each Loan Party, jointly and
severally, represents and warrants to Agent and each Lender that: 

     5.1
Due Organization and Authorization.
Each Loan Party’s exact legal name is as set
forth in the Perfection Certificate, and each Loan Party is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization as specified in the Perfection Certificate, has its chief executive
office at the location specified in the Perfection Certificate, and is duly
qualified and licensed in every jurisdiction wherever necessary to carry on its
business and operations, except where the failure to be so qualified and
licensed could not reasonably be expected to have a Material Adverse Effect. As
of the Closing Date, all information set forth on the Perfection Certificate
pertaining to each of the Loan Parties is accurate and complete in all material
respects. This Agreement and the other Loan Documents have been duly authorized,
executed and delivered by each Loan Party and constitute
the legal, valid and binding obligations of each such Person that is a party
thereto, enforceable against such Person in accordance with their respective
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, or similar laws affecting the enforcement of creditors’ rights
generally or by equitable principles relating to enforceability. Each Loan Party
has all requisite power and authority to own its assets, carry on its business
as currently conducted and execute, deliver and perform its obligations under
the Loan Documents to which it is a party. 

11 

     5.2 No
Conflicts. The execution, delivery and
performance by each Loan Party of the Loan Documents to which it is a party will
not (a) contravene any of the organizational documents of such Loan Party, (b)
violate any material Requirement of Law, (c) require any action by, filing,
registration, qualification with, or approval, consent or withholding of
objections from, any Governmental Authority or any other Person, except those
which have been obtained and are in full force and effect, (d) result in the
creation of any Lien on any of such Loan Party’s Property (except for Liens in
favor of Agent, on behalf of itself and Lenders), or (e) result in any breach of
or constitute a default under, or permit the termination or acceleration of, any
Material Agreement to which such Loan Party is a party. A list of all Material
Agreements as of the Closing Date is set forth on Schedule 5.2 hereto. No Loan Party is
in default under any agreement to which it is a party or by which it is bound
which could reasonably be expected to have a Material Adverse Effect.

     5.3
Litigation.
There are no actions, suits, proceedings or investigations pending (or to the
knowledge of any Loan Party, threatened in writing) against any Loan Party or
any of its Subsidiaries or their respective properties, which (a) except as set
forth on Schedule 5.3, could reasonably be expected to result in monetary
judgment(s) or relief individually in excess of $250,000 or in excess of
$500,000 in the aggregate, (b) except as set forth on Schedule 5.3, seek an injunction or
other equitable relief that could reasonably be expected to have a Material
Adverse Effect, or (c) affect or involve the Loan Documents or any transaction
contemplated hereby or thereby. 

     5.4
Financial Statements. All consolidated financial statements for Borrower and any of
its Subsidiaries delivered to Agent or Lenders have been prepared in accordance
with GAAP (subject, in the case of unaudited financial statements, to the
absence of footnotes and normal year-end audit adjustments) and fairly present
in all material respects Borrower’s consolidated financial condition and
consolidated results of operations. Since the date of the most recent audited
financial statements, no event has occurred which has had or could reasonably be
expected to have a Material Adverse Effect. There has been no material adverse
deviation from the most recent annual operating plan of Borrower delivered to
Agent. 

     5.5
Use of Proceeds; Margin Stock.
The proceeds of the Loans shall be used for
working capital and general corporate purposes. No Loan Party and no Subsidiary
of any Loan Party is engaged in the business of purchasing or selling Margin
Stock or extending credit for the purpose of purchasing or carrying Margin
Stock. As of the Closing Date, no Loan Party and no Subsidiary of any Loan Party
owns any Margin Stock. 

     5.6
Collateral.

          (a) Each Loan Party has good title
to, has rights in, and the power to grant a Lien on and to Transfer each item of
the Collateral upon which it purports to grant a Lien under any Loan Document,
free and clear of any and all Liens except Permitted Liens. As of the Closing
Date, all tangible Collateral (other than inventory or equipment in transit) is
located at a location specified on the Perfection Certificate. 

          (b) No Loan Party owns any Stock
or Stock Equivalents, except for Permitted Investments. 

          (c) As of the Closing Date, no
Loan Party has any Deposit Accounts, Securities Accounts, commodity accounts or
other investment accounts other than those described in the Perfection
Certificate. 

          (d) As of the Closing Date, no
Loan Party owns any real property. 

12 

     5.7
Compliance with Laws. 

          (a) Each Loan Party is in compliance with all Requirements of Law applicable
to it, except to the extent that any such non-compliance, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect. 

          (b) Without limiting the
generality of the immediately preceding clause (a), each Loan Party and each
Subsidiary of a Loan Party is in compliance in all material respects with all
U.S. economic sanctions laws, Executive Orders and implementing regulations as
promulgated by OFAC, and all applicable anti-money laundering and
counter-terrorism financing provisions of the Bank Secrecy Act and all
regulations issued pursuant to it. No Loan Party nor any Affiliate of a Loan
Party (i) is a Person designated by the U.S. Government on the list of the
Specially Designated Nationals and Blocked Persons (the “SDN List”) with which a
U.S. Person cannot deal with or otherwise engage in business transactions, (ii)
is a Person who is otherwise the target of U.S. economic sanctions laws such
that a U.S. Person cannot deal or otherwise engage in business transactions with
such Person, or (iii) is controlled by (including without limitation by virtue
of such Person being a director or owning voting Stock), or acts, directly or
indirectly, for or on behalf of, any Person on the SDN List or a foreign
government that is the target of U.S. economic sanctions prohibitions such that
the entry into, or performance under, any Loan Document would be prohibited
under U.S. law. 

          (c) Each Loan Party and each of
its Affiliates is in compliance with (i) the Trading with the Enemy Act of 1917,
Ch. 106, 40 Stat. 411, as amended, and each of the foreign assets control
regulations of the United States Treasury Department (31 CFR, Subtitle B Chapter
V, as amended) and any other enabling legislation or executive order relating
thereto, (ii) the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001, P.L. 107-56, as
amended (the “Patriot Act”), and (iii) to the extent applicable, other federal or state
laws relating to “know your customer” and anti-money laundering rules and
regulations. No part of the proceeds of any Loan will be used directly or
indirectly for any payments to any government official or employee, political
party, official of a political party, candidate for political office, or anyone
else acting in an official capacity, in order to obtain, retain or direct
business or obtain any improper advantage, in violation of the United States
Foreign Corrupt Practices Act of 1977. 

          (d) No Loan Party is an
“investment company” or a company “controlled” by an “investment company” within
the meaning of the Investment Company Act of 1940. 

          (e) No Property of any Loan Party
has been used by any Loan Party or, to any Loan Party’s knowledge, by previous
Persons, in disposing, producing, storing, treating, or transporting any
hazardous substance other than in material compliance with applicable
Requirements of Law. 

     5.8
Intellectual Property. A list of all of each Loan Party’s Intellectual Property and
all license agreements (including all in-bound license agreements, but excluding
over-the-counter software that is commercially available to the public) as of
the Closing Date is set forth on Schedule
5.8 hereto, which indicates, for each such
item of Property: (a) the name of the Loan Party owning such Intellectual
Property or licensing such Intellectual Property, (b) the Loan Party’s
identifier for such property (e.g., name of patent, license, etc.), (c) whether
such Property is Intellectual Property (or application therefor) that is owned
by such Loan Party or is licensed by such Loan Party, (d) the expiration date of
such Intellectual Property or license agreement, and (e) whether such
Intellectual Property is material to the condition (financial or otherwise),
business or operations of any Loan Party. In the case of any Intellectual
Property described in the foregoing clause (e) that is an in-bound license
agreement, Schedule 5.8 further indicates, for each: (i) the name and address of the
licensor, (ii) the name and date of the agreement pursuant to which such item of
Intellectual Property is licensed, (iii) whether or not such license agreement
grants an exclusive license to a Loan Party, (iv) whether there are any
purported restrictions in such license agreement as to the ability of a Loan
Party to grant a security interest in, or to Transfer any of its rights as a
licensee under, such license agreement, and (v) whether a default under or
termination of such license agreement could interfere with Agent’s right to sell
or assign such license or any other Collateral. Each Loan Party’s Intellectual
Property is valid and enforceable and each Loan Party owns or has rights to use
all Intellectual Property material to the conduct of its business as now or
heretofore conducted by it or proposed to be conducted by it, without, except
for the PharmAthene Litigation, any actual (or, to its best knowledge, written
claim of) infringement, upon the rights of third parties. Except as specified on
Schedule 5.8, as of the Closing Date, each Loan Party is the sole owner of its
Intellectual Property, and such Intellectual Property is free and clear of all
Liens, except for non-exclusive licenses of Intellectual Property granted by a
Loan Party to third parties in the ordinary course of its business. No Loan
Party has entered into any agreement or financing arrangement (other than any
Loan Document) prohibiting or otherwise restricting the
existence of any Lien upon any of its Intellectual Property. Upon filing of the
Intellectual Property Security Agreements with the United States Patent and
Trademark Office and the United States Copyright Office, as applicable, and the
filing of appropriate financing statements, all action necessary or desirable to
protect and perfect Agent’s Lien on each Loan Party’s Intellectual Property
shall have been duly taken.

13 

     5.9 Solvency. Both before and after giving
effect to each Loan, the transactions contemplated herein, and the payment and
accrual of all transaction costs in connection with the foregoing, each Loan
Party is Solvent. 

     5.10
Taxes; Pension. Each Loan Party and its Subsidiaries has timely filed all required tax
returns and reports with the appropriate Governmental Authority and timely paid
all federal and state, and all material local and foreign taxes, assessments,
deposits and contributions owed by such Person, excluding such amounts that are
the subject of a Permitted Contest. No Loan Party is aware of any claims or
adjustments proposed in writing for any prior tax year that could reasonably be
expected to result in additional taxes becoming due and payable by a Loan Party
or any of its Subsidiaries. Proper and accurate amounts have been withheld by
each Loan Party from its respective employees for all periods in compliance with
applicable Requirements of Law and such withholdings have been timely paid to
the respective Governmental Authorities. Each Loan Party has paid all amounts
necessary to fund all pension, profit sharing, deferred compensation and other
retirement plans in accordance with their terms and as may be required under
ERISA or other applicable Requirements of Law, and no Loan Party has withdrawn
from participation in, or has permitted partial or complete termination of, or
permitted the occurrence of any other event with respect to, any such plan which
could reasonably be expected to result in any liability of a Loan Party,
including any liability to the Pension Benefit Guaranty Corporation or its
successors or any other Governmental Authority. 

     5.11
Full Disclosure. No representation, warranty or other statement made by or on behalf of a
Loan Party to Agent or any Lender (including in any certificate, instrument,
agreement or document delivered pursuant to any Loan Document) contains any
untrue statement of a material fact or omits to state a material fact necessary
to make the statements contained therein not misleading (it being recognized
that the projections and forecasts provided by Loan Parties in good faith and
based upon reasonable and stated assumptions are not to be viewed as facts and
that actual results during the period or periods covered by any such projections
and forecasts may differ from the projected or forecasted results). 

     5.12
Regulatory Compliance. 

          (a) Each Loan Party has, and it
and its products are in conformance in all material respects with, all
Registrations that are required to conduct its business. To the knowledge of
each Loan Party, the FDA is not considering limiting, suspending, or revoking
such Registrations or making adverse changes to the marketing classification or
labeling or other significant and adverse changes to the products of any Loan
Party. To the knowledge of each Loan Party, any third party that is a
manufacturer or contractor for any Loan Party is in compliance in all material
respects, and has been in compliance for the previous six years, with all
Registrations required by the FDA and all Public Health Laws insofar as they
reasonably pertain to the manufacture of product components or products
regulated as drugs or medical devices and, to the extent applicable, marketed or
distributed by such Loan Party. 

          (b) To the extent applicable, all
products designed, developed, investigated, manufactured, prepared, assembled,
packaged, tested, labeled, distributed, sold or marketed by or on behalf of any
Loan Party that are subject to the jurisdiction of the FDA have been and are
being designed, developed, investigated, manufactured, prepared, assembled,
packaged, tested, labeled, distributed, sold and marketed in compliance in all
material respects with the Public Health Laws and have been for the previous six
years. All activities conducted by the Loan Parties are conducted in compliance
with the Public Health Laws. 

          (c) No Loan Party is subject to any material
obligation arising under a Regulatory Action and, to the knowledge of each Loan
Party, no such material obligation or Regulatory Action has been threatened.
There is no Regulatory Action or other civil, criminal or administrative action,
suit, demand, claim, complaint, hearing, investigation, demand letter,
proceeding or request for information pending against any Loan Party,
Responsible Officers or, to the knowledge of each Loan Party, any other officer,
director, or employee of any Loan Party alleging that any operation or activity
of such Person is in noncompliance with the Public Health Laws and, to each Loan Party’s knowledge, no Loan Party has any liability
(whether actual or contingent) for failure to comply in any material respect
with any Public Health Laws. 

14 

          (d) As of the Closing Date, no Loan Party is undergoing any FDA inspection
related to any activities or products of any Loan Party that are subject to
Public Health Laws, or any other comparable Governmental Authority
investigation. 

          (e) No Loan Party has received any
written notice or communication from the FDA alleging material noncompliance
with any Public Health Law. No product has been seized, withdrawn, recalled,
detained, or subject to a suspension (other than in the ordinary course of
business) of research, manufacturing, distribution or commercialization
activity. No proceedings in the United States or any other jurisdiction seeking
the withdrawal, recall, revocation, suspension, import detention, or seizure of
any product are pending or, to the knowledge of each Loan Party, threatened
against any Loan Party. 

          (f) No Loan Party or Responsible
Officer nor, to the knowledge of each Loan Party, any other of its respective
officers, directors, employees, agents or contractors (i) has been excluded or
debarred from any federal healthcare program or any other federal program or
(ii) has received written notice from the FDA proposing to debar or disqualify
such Person, which could reasonably be expected to have a Material Adverse
Effect. 

     5.13
Government Contracts. Except as set forth on Schedule 5.13, as of the Closing Date,
no Loan Party is a party to any contract or agreement with any Governmental
Authority and no Loan Party’s Accounts are subject to the Federal Assignment of
Claims Act (31 U.S.C. Section 3727) or any similar state, county or municipal
law. 

     5.14
Customer and Trade Relations. As of the Closing Date, there exists no actual or, to the
knowledge of any Loan Party, written threat of termination or cancellation of,
or any material adverse modification or change in (a) the business relationship
of any Loan Party with BARDA or any other Governmental Authority or (b) the
business relationship of any Loan Party with any supplier essential to its
operations. 

     5.15
Bonding. As
of the Closing Date, no Loan Party is a party to or bound by any surety bond
agreement, indemnification agreement therefor or bonding requirement with
respect to products or services sold by it. 

6.
AFFIRMATIVE COVENANTS. 

     6.1
Good Standing. Each Loan Party shall maintain, and shall cause each of its Subsidiaries
to maintain, its existence and good standing in its jurisdiction of organization
and maintain qualification in each jurisdiction in which the failure to so
qualify could reasonably be expected to have a Material Adverse Effect. Each
Loan Party shall maintain, and shall cause each of its Subsidiaries to maintain,
in full force all permits, licenses, approvals and agreements, the loss of which
could reasonably be expected to have a Material Adverse Effect. 

     6.2
Notice to Agent and the
Lenders. 

          (a) Each Loan Party shall promptly
(but in any event within three (3) Business Days after a Responsible Officer of
a Loan Party becomes aware) provide Agent and each Lender with written notice of
(i) the occurrence of any Default or Event of Default, (ii) the commencement of,
or any material development in, any litigation or proceeding affecting any Loan
Party or any of its Subsidiaries or its respective Property (A) in which the
amount of damages claimed is $250,000 or more, (B) which could reasonably be
expected to have a Material Adverse Effect or (C) in which the relief sought is
an injunction or other stay of performance of any Loan Document, and (iii) any
material amendments to (and copies of all statements, reports and notices (other
than non-material statements, reports and notices delivered in the ordinary
course of business) delivered to or by a Loan Party in connection with) any
Material Agreement or any Loan Party entering into any Material Agreement or any
termination or material breach thereof. 

          (b) Each Loan Party shall promptly
(but in any event within three (3) days) after the receipt or occurrence thereof
notify Agent of (i) any written notice received by a Loan Party or any
Subsidiary of Loan Party alleging potential or actual
violations of any Public Health Law, (ii) any written notice that the FDA is
limiting, suspending or revoking any Registration, making changes to the
marketing classification or labeling or other changes to the products of any
Loan Party, or considering any of the foregoing, (iii) any notice that any Loan
Party has become subject to any Regulatory Action, (iv) the exclusion or
debarment from any federal healthcare program or debarment or disqualification
by FDA of any Loan Party or its Responsible Officers or, to the knowledge of the
Loan Parties, any other of its respective officers, directors, employees,
agents, or contractors, or (v) any notice that any product of any Loan Party has
been seized, withdrawn, recalled, detained, or subject to a suspension of
manufacturing, or the commencement of any proceedings in the United States or
any other jurisdiction seeking the withdrawal, recall, suspension, import
detention, or seizure of any product are pending or threatened in writing
against any Loan Party. 

15 

     6.3 Financial Statements; Reports; Borrowing Base Certificates; Collateral
Reporting. 

          (a) Borrower shall deliver to
Agent and Lenders (i) as soon as available and in any event within 30 days after
the end of each fiscal month, unaudited consolidated (and if available,
consolidating) balance sheets, statements of income or operations and cash flow
statements of Borrower and its Subsidiaries as of the end of such fiscal month
and that portion of the fiscal year ending as of the close of such fiscal month,
in a form reasonably acceptable to Agent and certified by Borrower’s president,
chief executive officer or chief financial officer, (ii) as soon as available
and in any event within 45 days after the end of each fiscal quarter, unaudited
consolidated (and if available, consolidating) balance sheets, statements of
income or operations and cash flow statements of Borrower and its Subsidiaries
as of the end of such fiscal quarter and that portion of the fiscal year ending
as of the close of such fiscal quarter, in a form reasonably acceptable to
Agent and
certified by Borrower’s president, chief executive officer or chief financial
officer and (iii) as soon as available and in any event within ninety (90) days
after the end of each fiscal year, audited consolidated (and if available,
consolidating) balance sheets, statements of income or operations and cash flow
statements of Borrower and its Subsidiaries as of the end of such fiscal year,
together with a report of PricewaterhouseCoopers LLC or another independent
certified public accounting firm reasonably acceptable to Agent, which report shall contain
an unqualified opinion stating
that such audited financial statements fairly
present in all material respects the financial position of Borrower and its
Subsidiaries for the periods indicated therein in conformity with GAAP applied
on a basis consistent with prior years without qualification as to the scope of
the audit or as to going concern and without any similar qualification. All such
financial statements shall be prepared in accordance with GAAP (subject, in the
case of unaudited financial statements, to the absence of footnotes and normal
year end audit adjustments). 

          (b) Concurrently with the delivery
of the financial statements specified in this Section 6.3, Borrower shall deliver to
Agent and Lenders a compliance certificate, signed by the chief financial
officer of Borrower, substantially in the form attached hereto as
Exhibit B. 

          (c) Borrower shall deliver to
Agent and Lenders (i) copies of all statements, reports and notices made
available generally by any Loan Party to the holders of its Stock or Stock
Equivalents or to any holders of Subordinated Indebtedness, all notices sent to
any Loan Party by the holders of such Subordinated Indebtedness, and all
documents filed with the SEC or any securities exchange or Governmental
Authority exercising a similar function, promptly (but in any event within three
(3) Business Days) after delivering or receiving such information to or from
such Persons, (ii) an annual operating plan for Borrower, on a consolidated (and
if available, consolidating) basis, for the current fiscal year within five (5)
days after such plan is approved by the Board of Directors of Borrower (but in
any event not later than seventy-five (75) days after the end of the immediately
preceding fiscal year of Borrower), and (iii) such budgets, sales projections,
or other business, financial, corporate affairs and other information as Agent
or any Lender may reasonably request from time to time. 

          (d) As soon as available and in
any event within ten (10) days after the end of each calendar month, and at such
other times as Agent may reasonably require, Borrower shall deliver to Agent and
the Revolving Lenders a Borrowing Base Certificate, certified by Borrower’s
president, chief executive officer, chief financial officer or treasurer,
setting forth the Borrowing Base of Borrower as at the end of the most-recently
ended fiscal month or as at such other date as Agent may reasonably
require. 

16 

          (e) Borrower shall deliver to
Agent the following reports and documents at the times and in the manner set
forth below: 

     (i) concurrently with the delivery of the Borrowing Base Certificate, a
monthly trial balance showing Accounts outstanding aged from invoice date as
follows: 1 to 30 days, 31 to 60 days, 61 to 90 days, 91 days to 120 days, 121 days to 150
days and 151 days or more, accompanied by such supporting detail and
documentation as shall be requested by Agent in its reasonable discretion; and

     (ii)
at the time of delivery of each of the monthly
financial statements delivered pursuant to subsection 6.3(a); 

     (1)
a reconciliation of the most recent Borrowing
Base Certificate, general ledger and month-end accounts receivable aging of
Borrower to Borrower’s general ledger and monthly financial statements delivered
pursuant to Section 6.3(a), in each case, accompanied by such supporting detail and
documentation as shall be requested by Agent in its reasonable discretion; and

     (2)
a listing of any governmental contracts of any
Loan Party subject to the Federal Assignment of Claims Act (31 U.S.C. Section
3727) or any similar state, county or municipal law that have been entered into
during the prior fiscal month. 

Notwithstanding anything herein to the
contrary, documents required to be delivered pursuant to this Section 6.3 may be
delivered by (x) electronic mail in accordance with Section 10.2 or (y) Borrower’s posting
such documents, or providing a link thereto, on Borrower’s website on the
Internet at www.siga.com, and such documents shall be deemed delivered in the
case of clause (y) on the date on which Agent receives written notification of
such posting (which notification may be made by electronic mail in accordance
with Section 10.2). 

     6.4
Insurance.
Each Loan Party, at its expense, shall maintain, and shall cause each Subsidiary
to maintain, insurance (including, without limitation, comprehensive general
liability, hazard, and business interruption insurance) with respect to all of
its properties and businesses (including, the Collateral), in such amounts and
covering such risks as is carried generally in accordance with sound business
practice by companies in similar businesses similarly situated and in any event
with deductible amounts, insurers and policies that shall be reasonably
acceptable to Agent. Borrower shall deliver to Agent certificates of insurance
evidencing such coverage, together with endorsements to such policies naming
Agent as a loss payee or additional insured, as appropriate, in form and
substance reasonably satisfactory to Agent. Each policy shall provide that
coverage may not be canceled or altered by the insurer except upon thirty (30)
days prior written notice to Agent and shall not be subject to co-insurance.
Each Loan Party appoints Agent as its attorney-in-fact to make, settle and
adjust all claims under and decisions with respect to such Loan Party’s policies
of insurance, and to receive payment of and execute or endorse all documents,
checks or drafts in connection with insurance payments, provided that, Agent
shall not act as such Loan Party’s attorney-in-fact unless an Event of Default
has occurred and is continuing. The appointment of Agent as any Loan Party’s
attorney in fact is a power coupled with an interest and is irrevocable until
the Termination Date. Proceeds of insurance shall be applied, at the option of
Agent, to repair or replace the Collateral or to reduce any of the Obligations.
Notwithstanding the foregoing, if a Loan Party delivers to Agent a certificate,
signed by such Loan Party’s chief financial officer, that it intends within one
hundred twenty (120) days of receipt of such insurance proceeds (the
“Reinvestment Period”) to use all or a portion of such proceeds to purchase
assets used or useful in the ordinary course of business or to make payments to
a contract manufacturing organization in the ordinary course of business, then
so long as no Default or Event of Default shall have occurred and be continuing
on the date such Loan Party receives such insurance proceeds or at any point
during such Reinvestment Period, such Loan Party may use all or such portion of
such proceeds in the manner set forth in such certificate; provided that (a) the
aggregate amount of such insurance proceeds so used shall not exceed $250,000 in
the aggregate in any fiscal year and (ii) any such proceeds not so used or
committed to such use pursuant to a binding agreement within the Reinvestment
Period shall, on the first Business Day immediately following such period, be
applied in accordance with the immediately preceding sentence. Pending such
reinvestment, such insurance proceeds shall be delivered to Agent, for
distribution to the Revolving Lenders, as a prepayment of the Revolving Loans
(to the extent of Revolving Loans then outstanding), but not as a permanent
reduction of the Revolving Loan Commitments; provided that insurance proceeds of
up to $250,000 for claims relating to losses incurred prior to the Closing Date
shall not be required to prepay the Revolving Loans.

17 

     6.5 Taxes; Pension. Each Loan Party shall,
and shall cause each Subsidiary to, timely file all tax reports and returns with
the appropriate Governmental Authority and pay and discharge all federal and
state, and material local and foreign taxes, assessments, deposits and
contributions owed by such Person, excluding such amounts that are the subject
of a Permitted Contest. Each Loan Party shall pay all amounts necessary to fund
all present pension, profit sharing, deferred compensation and other retirement
plans in accordance with their terms and as may be required under ERISA or other
applicable Requirements of Law. 

     6.6
Access Agreements. Unless otherwise agreed to by Agent in writing, each Loan Party shall
obtain and maintain an Access Agreement with respect to any real property (other
than real property owned by such Loan Party) (a) that is such Loan Party’s
principal place of business, (b) where such Loan Party’s books or records are
maintained or (c) where any Collateral is stored or maintained; provided,
however, that the Loan Parties shall not be required to obtain an Access
Agreement with respect to one or more locations described in the foregoing
clause (c) if the value of the Collateral at all such locations is less than
$100,000 in the aggregate and Borrower gives written notice to Agent of the
existence of each such location. If Agent agrees in writing that a Loan Party is
not required to obtain an Access Agreement with respect to any real property
that would otherwise require an Access Agreement pursuant to the immediately
preceding sentence, then within ten (10) Business Days after the due date for
any rental payments with respect to such real property, Borrower shall deliver
to Agent (i) evidence in form reasonably satisfactory to Agent that such rental
payment was made and (ii) a certification that no default or event of default
exists under any such lease. 

     6.7
Protection of Intellectual Property.
Each Loan Party shall (a) protect, defend and
maintain the validity and enforceability of any Intellectual Property material
to the conduct of its business, (b) promptly advise Agent in writing of material
infringements of any Intellectual Property material to such Loan Party’s
business, (c) not allow any Intellectual Property material to such Loan Party’s
business to be abandoned, forfeited or dedicated to the public without Agent’s
written consent, and (d) notify Agent promptly, but in any event within three
(3) Business Days, if it knows or has reason to know that any application or
registration relating to any patent, trademark or copyright (now or hereafter
existing) material to its business may become abandoned or dedicated, or if any
adverse determination or development occurs (including the institution of, or
any such determination or development in, any proceeding in the United States
Patent and Trademark Office, the United States Copyright Office or any court, it
being acknowledged that the Agent and the Lenders have been informed of all
developments as of the Closing Date related to the PharmAthene Litigation)
regarding such Loan Party’s ownership of any Intellectual Property material to
its business, or its right to register the same or to keep and maintain the
same. Each Loan Party shall at all times conduct its business without knowingly
infringing, misappropriating, diluting, violating, or otherwise impairing the
Intellectual Property of any other Person. Each Loan Party shall remain liable
under each of its Intellectual Property licenses pursuant to which it is a
licensee that are material to such Loan Party’s business, and shall observe and
perform all of the conditions and obligations to be observed and performed by it
thereunder. None of Agent or any Lender shall have any obligation or liability
under any such license by reason of or arising out of any Loan Document, the
granting of a Lien, if any, in such license or the receipt by Agent (on behalf
of itself and Lenders) of any payment relating to any such license. If after the
Closing Date any Loan Party (i) obtains any patent, registered trademark or
servicemark, registered copyright, registered mask work, or any pending
application for any of the foregoing, whether as owner, licensee or otherwise,
or (ii) applies for any patent or the registration of any trademark,
servicemark, copyright or mask work, then such Loan Party shall concurrently
provide written notice thereof to Agent and shall promptly execute an
Intellectual Property Security Agreement (or updates to the Exhibits to the
Intellectual Property Security Agreement previously delivered if not filed at
such time by Agent) and other documents and take such other actions as Agent
shall request in its good faith business judgment to protect or perfect and
maintain a first priority perfected security interest (which will be effective
as provided herein) in favor of Agent, for the benefit of Lenders, in such
Property, provided that the foregoing shall not require any Loan Party to grant
a Lien to Agent on the Product. If requested by Agent, each Loan Party shall
promptly provide to Agent copies of all applications that it files for patents
or for the registration of trademarks, servicemarks, copyrights or mask works.

     6.8
Collateral.

          (a) Each Loan Party shall maintain
all of the Collateral in the continental United States. 

          (b) Each Loan Party shall maintain
and preserve in good working order and condition, normal wear and tear excepted,
all of its Property necessary in the conduct of its business. 

18 

          (c) Each Loan Party shall maintain proper books of record and account, in
which full, true and correct entries shall be made in accordance with GAAP and
all other applicable Requirements of Law of all financial transactions and
matters involving the assets and business of such Loan Party. 

          (d) Each Loan Party shall, during
normal business hours and upon reasonable prior notice (unless a Default or
Event of Default has occurred and is continuing in which event no notice shall
be required and Agent and Lenders shall have access at all times during the
continuance thereof), as frequently as Agent determines to be appropriate,
permit Agent (who may be accompanied by representatives of any Lender) and any
of its Related Persons (i) to have access to the properties, facilities, and
employees (including officers) of each Loan Party and to the Collateral, (ii) to
conduct field examinations and to inspect, audit and make extracts and copies of
any Loan Party’s books and records (or at the request of Agent, deliver true and
correct copies of such books and records to Agent), and (iii) to inspect, audit,
appraise, review, evaluate or make test verifications and counts of the Accounts
and any other Collateral. The Loan Parties shall only be required to reimburse
Agent and any applicable Lender for the expenses of three (3) such field
examinations, inspections and audits per calendar year (unless a Default or
Event of Default has occurred and is continuing in which case Loan Parties shall
be responsible for all such expenses). Upon Agent’s request, each Loan Party
will promptly notify Agent in writing of the location of any Collateral.

     6.9
Compliance with Law. Each Loan Party shall comply with all applicable Requirements
of Law except where the failure to comply could not reasonably be expected to
have, either individually or in the aggregate, a Material Adverse Effect.
Without limiting the generality of the foregoing, each Loan Party shall comply,
in all material respects, with all Public Health Laws and their implementation
by any applicable Governmental Authority. Each Loan Party shall continue to
operate all facilities, locations, and processes in compliance, in all material
respects, with all Registrations and Public Health Laws. All products designed,
developed, investigated, manufactured, prepared, assembled, packaged, tested,
labeled, distributed, sold or marketed by or on behalf of any Loan Party that
are subject to the jurisdiction of the FDA shall be designed, developed,
investigated, manufactured, prepared, assembled, packaged, tested, labeled,
distributed, sold and marketed in compliance, in all material respects, with the
Public Health Laws. 

     6.10
Deposit Accounts and Securities Accounts; Cash
Management Procedures. 

          (a) Each Loan Party shall hold all
of its cash and Cash Equivalents in a Deposit Account or Securities Account, and
each Loan Party shall enter into, and cause each depository or securities
intermediary to enter into, a deposit account control agreement or securities
account control agreement, as the case may be, in form and substance reasonably
satisfactory to Agent (an “Account Control
Agreement”) with respect to each Deposit
Account and Securities Account maintained by such Person, prior to or
concurrently with the establishment of such Deposit Account or Securities
Account (or in the case of any such Deposit Account (other than any deposit
account credited in pursuant to the last sentence of this clause (a)) or
Securities Account maintained as of the Closing Date, on or before the Closing
Date). Such Account Control Agreement shall provide for (i) “springing” cash
dominion with respect to each account, including each disbursement account
(each, a “Disbursement Account”) and (ii) from and after the first advance of a Revolving
Loan (“Revolving Loan
Activation”) for “full” cash dominion with
respect to each account that is not a Disbursement Account. With respect to each
Account Control Agreement providing for “springing” cash dominion, Agent will
not deliver to the relevant depository institution a notice or other instruction
which provides for exclusive control over such account by Agent until an Event
of Default has occurred and is continuing. From and after the Revolving Loan
Activation, the Loan Parties shall not maintain cash on deposit in Disbursement
Accounts in excess of outstanding checks and wire transfers payable from such
Disbursement Accounts and amounts necessary to meet minimum balance
requirements. The Loan Parties shall create or designate a dedicated deposit
account or accounts to be used exclusively for payroll or withholding tax
purposes (“Payroll Accounts”), which Payroll Accounts shall not be required to be subject
to Account Control Agreements if such Payroll Accounts are used exclusively for
payroll, payroll taxes, or other employee wage and benefit payments to or for
the benefit of the Loan Parties’ employees, provided that the aggregate balance
in such Payroll Accounts do not exceed the amount necessary to make the
immediately succeeding payroll, payroll tax or benefit payment (or such minimum
amount as may be required by any Requirement of Law with respect to such
accounts), as applicable. 

19 

          (b)
To the extent that any Loan Party receives any
payments with respect to Accounts, all such amounts shall be deposited to an
account that is not a Disbursement Account (“Sweep Account”). On or before the date
of the Revolving Loan Activation and continuing until the Termination Date,
Agent, the Loan Parties and the applicable depository institution
where each Sweep Account is maintained (“Sweep
Bank”), as applicable, shall enter into an
Account Control Agreement which shall provide for “full” cash dominion and,
among other things, that (i) the Sweep Bank shall comply exclusively with all
instructions of Agent without further consent of such Loan Party with respect to
such Sweep Account, and (ii) the Sweep Bank agrees to transfer all funds on
deposit in the Sweep Account, to the Collection Account on a daily basis. From
and after the Revolving Loan Activation to the extent that any collections of
Accounts or other proceeds of the Accounts are not sent directly to a Sweep
Account, but are received by a Loan Party, such collections shall be held in
trust for the benefit of Agent and immediately remitted, in the form received,
to the applicable Sweep Account, for transfer to the Collection Account
immediately upon receipt by any Loan Party. 

          (c) Subject to Section 8.3, Agent shall apply, on a daily basis, all funds transferred
into the Collection Account from a Sweep Account to reduce the outstanding
principal amount of the Revolving Loans. If a credit balance exists with respect
to the Collection Account, such credit balance shall not accrue interest in
favor of any Loan Party, but shall be available to Borrower at any time or times
for so long as no Default or Event of Default exists. 

    
6.11 Further Assurances. Each Loan Party
shall, upon request of Agent, furnish to Agent such further information, execute
and deliver to Agent such documents and instruments (including, without
limitation, UCC financing statements) and shall do such other acts and things as
Agent may at any time reasonably request relating to the perfection or
protection of the security interest created by any Loan Document or for the
purpose of carrying out the intent of the Loan Documents. If any Loan Party
acquires any fee ownership of real property, such Loan Party shall notify Agent
in writing and simultaneously with such acquisition, execute and/or deliver to
Agent a mortgage or such other agreements and documents as Agent shall
reasonably require to grant to Agent, for the ratable benefit of the Agent and
the Lenders, a security interest over such real property as security for the
Obligations, and shall satisfy such other requirements as Agent shall reasonably
request (including, without limitation, appraisal, insurance, environmental and
survey requirements). 

    
6.12 Post Closing. Borrower shall comply
with the requirements on Schedule
6.12. 

7.
NEGATIVE COVENANTS. 

    
7.1 Liens. No Loan Party shall, and no
Loan Party shall permit any of its Subsidiaries to, (a) create, incur, assume or
permit to exist any Lien on any of its Property, other than Permitted Liens, or
(b) enter into, assume or become subject to any agreement or other contractual
obligation (other than this Agreement) prohibiting or otherwise restricting the
existence of any Lien upon any of its Property (including, without limitation,
any of its Intellectual Property), whether now owned or hereafter
acquired.

    
7.2 Indebtedness. No Loan Party shall, and
no Loan Party shall permit any of its Subsidiaries to, directly or indirectly
create, incur, assume, permit to exist, guarantee or otherwise become or remain
directly or indirectly liable with respect to, any Indebtedness, except for
Permitted Indebtedness. 

    
7.3 Dispositions. No Loan Party shall, and
no Loan Party shall permit any of its Subsidiaries to, Transfer any of its
Property, except for Permitted Dispositions. 

    
7.4 Change in Name, Location or Executive Office; Change in Business; Change
in Fiscal Year. No Loan Party shall, and no
Loan Party shall permit any of its Subsidiaries to, (a) change its legal name,
its jurisdiction of organization, its organizational structure or type, or any
organizational identification number (if any) assigned by its jurisdiction of
organization, (b) relocate its chief executive office without thirty (30) days
prior written notification to Agent, (c) engage in any business other than or
reasonably related or incidental to, and reasonable extensions of, the
businesses currently engaged in by such Person, (d) cease to conduct business
substantially in the manner conducted by such Person as of the date of this
Agreement (including, without limitation, terminating the employment of all or
substantially all of its employees) or (e) change its fiscal year end.

    
7.5 Mergers and Investments. No Loan Party
shall, and no Loan Party shall permit any of its Subsidiaries to, directly or
indirectly, (a) merge or consolidate with or into any other Person (other than
mergers of a Subsidiary of Borrower into Borrower so long as Borrower is the
surviving entity), or (b) acquire, own or make any Investment in or to any
Person other than Permitted Investments. 

20 

    
7.6 Restricted Payments. No Loan Party
shall, and no Loan Party shall permit any of its Subsidiaries to, (a) declare or
pay any dividends or make any other distribution or payment on account of or
redeem, retire, defease or purchase any Stock or Stock Equivalent (other than
(i) the payment of dividends to Borrower, (ii) the payment of dividends or
distributions payable solely in such Loan Party’s Stock or Stock Equivalents,
(iii) the issuance of Stock upon the exercise or conversion of Stock
Equivalents, and (iv) so long as no Default or Event of Default is then
continuing or would result therefrom, the repurchase of Borrower’s Stock and
Stock Equivalents from current or former officers, employees or directors (or
their permitted transferees or estates) upon their death, disability or
termination of employment, or as part of tax withholding relating to the vesting
of Borrower’s equity securities, in an aggregate amount not to exceed $250,000
in any fiscal year for repurchases that involve death, disability or termination
of employment and $500,000 (such amount shall be increased to $1,500,000 when
Borrower has $30,000,0000 in cash and Cash Equivalents in accounts subject to an
Account Control Agreement) in any fiscal year for purchases that involve tax
withholding relating to the vesting of equity securities, (b) purchase, redeem,
defease or prepay any principal of, premium, if any, interest or other amount
payable in respect of any Indebtedness (other than with respect to the
Obligations as described in Section
2.5) prior to its scheduled maturity, (c)
purchase or make any payment on or with respect to any Subordinated
Indebtedness, except as expressly permitted by the applicable Subordination
Agreement, (d) pay any management, consulting or similar fees to any Affiliate
or holder of Stock or Stock Equivalents of a Loan Party (other than (i)
director’s fees and reimbursement of actual out of pocket expenses incurred in
connection with attending board of director meetings not to exceed in the
aggregate, with respect to all such items, $500,000 in any fiscal year, (ii)
bona fide consulting and service fees on arm’s-length terms paid to such
Affiliates or holders of Stock or Stock Equivalents for actual services rendered
to the Loan Parties in the ordinary course of business in an aggregate amount
not to exceed $250,000 in any fiscal year, (iii) lease payments to MacAndrews
& Forbes Group LLC relating to a sublease of office space at 660 Madison
Ave, New York, NY, and (iv) legal fees to Kramer Levin Naftalis & Frankel
LLP)), or (e) be a party to or bound by an agreement that restricts a Loan Party
or any Subsidiary of a Loan Party from paying dividends or otherwise making any
payments or distributions to any Loan Party. 

    
7.7 Transactions with Affiliates. Except
as set forth in Schedule 7.7, no Loan Party shall, and no Loan Party shall
permit any of its Subsidiaries to, directly or indirectly enter into or permit
to exist any transaction with or for the benefit of any Affiliate of a Loan
Party except for (a) transactions that are in the ordinary course of such Loan
Party’s or such Subsidiary’s business, upon fair and reasonable terms that are
no more favorable to such Affiliate than would be obtained in an arm’s length
transaction and (b) other transactions involving payments in an aggregate amount
in any calendar year not to exceed $250,000.

    
7.8 Compliance. No Loan Party shall, and
no Loan Party shall permit any of its Subsidiaries to, (a) fail to comply with
the laws and regulations described in clauses
(b) or (c) of Section 5.7, (b) use any portion of
the Loans to purchase or carry, become engaged in the business of purchasing or
selling, or extend credit for the purpose of purchasing or carrying Margin
Stock, or (c) fail to meet the minimum funding requirements of ERISA, permit a
Reportable Event or Prohibited Transaction, as defined in ERISA, to occur, fail
to comply with the Federal Fair Labor Standards Act, withdraw from participation
in, permit partial or complete termination of, or permit the occurrence of any
other event with respect to, any present pension, profit sharing and deferred
compensation plan which could reasonably be expected to result in any liability
of any Loan Party, including any liability to the Pension Benefit Guaranty
Corporation or its successors or any other Governmental Authority. 

    
7.9 Amendments to Other Agreements. No
Loan Party shall amend, modify or waive any provision of (a) any Material
Agreement or any of such Loan Party’s organizational documents, unless the net
effect of such amendment, modification or waiver is not adverse to any Loan
Party, Agent or Lenders, or (b) any document relating to any Material
Indebtedness. 

    
7.10 Financial Covenants. 

         
(a) DSO
Covenant. From and after the date that is sixty (60) days after the date on
which BARDA Acceptance occurs, the Loan Parties shall not allow their Days Sales
Outstanding to exceed ninety (90)
days for any calendar month. Days Sales
Outstanding shall be measured in accordance with GAAP, on a consolidated basis
and at the end of each calendar month. 

         
(b) Liquidity Covenant. Until Borrower has received a payment from BARDA
after the BARDA Acceptance, the Loan Parties shall not allow at any time its
unrestricted cash and Cash Equivalents maintained in one or more Deposit
Accounts or Securities Accounts subject to an Account Control Agreement to be
less than $2,500,000. 

21 

     7.11 SIGA (Europe). SIGA (Europe) shall not
have any material operations or liabilities and shall not have assets with a
fair market value in excess of 5,000 British pounds sterling. No Loan Party
shall, and no Loan Party shall permit any of its Subsidiaries to, directly or
indirectly enter into or permit to exist any transaction with or for the benefit
of SIGA (Europe). 

8.
DEFAULT AND REMEDIES. 

    
8.1 Events of Default. Each of the
following shall be an “Event of
Default”: 

         
(a) any
Loan Party shall fail to pay (i) any principal when due, or (ii) any interest,
fees or other Obligations (other than as specified in clause (i)) within three
(3) Business Days after the due date thereof (other than on the Final Maturity
Date or the Revolving Loan Commitment Termination Date); 

         
(b) any
Loan Party breaches any of its obligations under Section 6.1 (solely as it relates to
maintaining its existence), Section
6.2, Section 6.3, Section 6.4,
Section 6.8(a), and (d), Section 6.10, Section
6.12 or Article 7; 

         
(c) any
Loan Party breaches any of its other obligations under any of the Loan Documents
and fails to cure such breach within thirty (30) days after the earlier of (i)
the date on which an officer of such Loan Party becomes aware, or through the
exercise of reasonable diligence should have become aware, of such failure and
(ii) the date on which notice shall have been given to any Loan Party from Agent
or the Requisite Lenders; 

         
(d) (i) any
representation, warranty or statement made or deemed made by or on behalf of any
Loan Party in any of the Loan Documents or otherwise made in writing in
connection with any of the Obligations shall be incorrect or misleading in any
material respect (or in any respect if qualified by “material” or “Material
Adverse Effect”) when made or deemed made, or (ii) any information contained in
any Borrowing Base Certificate is untrue or incorrect in any respect (other than
(A) inadvertent, immaterial errors not exceeding $50,000 in the aggregate in any
Borrowing Base Certificate, and (B) errors that have the effect of understating
the Borrowing Base; 

         
(e) (i)
service of process is made that seeks to attach any funds (in excess of $10,000)
of a Loan Party on deposit in any Deposit Account or Securities Account, (ii) a
notice of Lien, levy, or assessment is filed against any Loan Party’s assets by
any Governmental Authority, and the same under the preceding subclauses (i) and
(ii) are not, within twenty (20) days after the occurrence thereof, discharged
or stayed (whether through the posting of a bond or otherwise), or (iii) any
portion of the assets of the Loan Parties with an aggregate value in excess of
$150,000 is attached, seized, levied on, or comes into possession of a trustee
or receiver; 

         
(f) one or
more judgments, orders or decrees shall be rendered against any Loan Party or
any Subsidiary of a Loan Party that exceeds by more than $250,000 any insurance
coverage applicable thereto (to the extent the relevant insurer has been
notified of such claim and has not denied coverage therefor) or one or more
non-monetary judgments, orders or decrees shall be rendered against any Loan
Party or any Subsidiary of a Loan Party that could reasonably be expected to
result in a Material Adverse Effect, and in either case (i) enforcement
proceedings shall have been commenced by any creditor upon any such judgment,
order or decree or (ii) such judgment, order or decree shall not have been
vacated or discharged for a period of fifteen (15) Business Days and there shall
not be in effect (by reason of a pending appeal or otherwise) any stay of
enforcement thereof; provided that an Event of Default under this
clause (f)
shall only arise with respect to the PharmAthene Litigation (or any dispute that
is the subject of the PharmAthene Litigation) if and to the extent that the
Borrower’s monetary liability or performance obligations thereunder are
materially less favorable (it being understood that a change of more than
$250,000 is materially less favorable) to the Borrower than the terms of the
judgment issued by the Delaware Court of Chancery on May 31, 2012 in respect of
the PharmAthene Litigation; 

         
(g) (i) any
Loan Party or any Subsidiary of a Loan Party shall generally not pay its debts
as such debts become due, shall admit in writing its inability to pay its debts
generally, shall make a general assignment for the benefit of creditors, or
shall cease doing business as a going concern, (ii) any proceeding shall be
instituted by or against any Loan Party or any
Subsidiary of a Loan Party seeking to adjudicate it as bankrupt or insolvent or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, composition of it or its debts or any similar order, in each
case under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors or seeking the entry of an order for relief or the appointment
of a custodian, receiver, trustee, conservator, liquidating agent, liquidator,
other similar official or other official with similar powers, in each case for
it or for any substantial part of its Property and, in the case of any such
proceedings instituted against (but not by or with the consent of) such Loan
Party or such Subsidiary, either such proceedings shall remain undismissed or
unstayed for a period of forty-five (45) days or more or any action sought in
such proceedings shall occur, (iii) any Loan Party or any Subsidiary of a Loan
Party shall take any corporate or similar action or any other action to
authorize any action described in clauses (i) or (ii) above, or (iv) if Borrower is a
public company, Borrower’s Stock ceases to be traded on a major United States
stock exchange; 

22 

         
(h) a
Material Adverse Effect has occurred; 

         
(i) (i) any
provision of any Loan Document shall fail to be valid and binding on, or
enforceable against, a Loan Party that is a party thereto, (ii) any Loan
Document purporting to grant a security interest to secure any Obligation shall
fail to create a valid and enforceable security interest on any Collateral
purported to be covered thereby or such security interest shall fail or cease to
be a perfected Lien with the priority required in the relevant Loan Document, or
(iii) the holder of any Subordinated Indebtedness shall breach the terms of the
applicable Subordination Agreement, or any subordination provision set forth in
the Subordination Agreement or any other document evidencing or relating to any
Subordinated Indebtedness shall, in whole or in part, terminate or otherwise
fail or cease to be valid and binding on, or enforceable against, any agent for
or holder of the Subordinated Indebtedness (or such Person shall so state in
writing), or any Loan Party shall state in writing that any of the events
described in clauses (i), (ii) or (iii) above shall have occurred; 

         
(j) (i) any
Loan Party or any Subsidiary of a Loan Party defaults under any Material
Agreement (after any applicable grace period contained therein), and as a result
of such default the other party thereto has the right to terminate such Material
Agreement, (ii) (A) any Loan Party or any Subsidiary of a Loan Party fails to
make (after any applicable grace period) any payment when due (whether due
because of scheduled maturity, required prepayment, acceleration, demand or
otherwise) on any Material Indebtedness, (B) any other event shall occur or
condition shall exist under any contractual obligation relating to any Material
Indebtedness, if the effect of such event or condition is to accelerate, or to
permit the acceleration of (without regard to any subordination terms with
respect thereto), the maturity of such Material Indebtedness or (C) any Material
Indebtedness shall become or be declared to be due and payable, or be required
to be prepaid, redeemed, defeased or repurchased (other than by a regularly
scheduled required prepayment), prior to the stated maturity thereof, or (iii)
any Loan Party defaults (beyond any applicable grace period) under any
obligation for payments due or otherwise under any lease agreement that meets
the criteria for the requirement of an Access Agreement under Section 6.6 and, as a
result thereof, the landlord thereunder has the right to terminate such lease
agreement); provided that for purposes of this clause (j), Subordinated
Indebtedness of less than $250,000 shall not constitute Material Indebtedness
and an agreement relating thereto shall not constitute a Material Agreement;

         
(k) (i) any
of the chief executive officer, the chief financial officer or the chief
scientific officer of Borrower shall cease to be involved in the day to day
operations (including research development) or management of the business of
Borrower, unless an appropriately qualified (in accordance with industry
standards) successor of such officer is appointed by the Board of Directors of
Borrower and employed on an interim or permanent basis within ninety (90) days
of such cessation of involvement, and such successor is in compliance with OFAC,
money-laundering, anti-terrorism, SEC, drug/device laws and regulations, and
other similar regulations (in each case, to the extent applicable to a natural
Person), (ii) during any period of twelve consecutive calendar months,
individuals who at the beginning of such period constituted the Board of
Directors of Borrower (together with any new directors whose election by the
Board of Directors of Borrower, or whose nomination for election by the
directors then still in office who either were directors at the beginning of
such period or whose election or nomination for election was previously so
approved was approved by a vote of at least two-thirds of the stockholders of
Borrower) cease for any reason other than death or disability to constitute a
majority of the directors then in office; (iii) the acquisition, directly or
indirectly, by any Person or group (as such term is used in Section 13(d)(3) of
the Securities Exchange Act of 1934) (other than MacAndrews & Forbes
Holdings Inc.) of more than thirty-five percent (35%) of the voting Stock of
Borrower, or (iv) the occurrence of any “change of control” or any term of
similar effect under any Material Indebtedness document; or 

23 

         
(l) (i) The
FDA initiates a Regulatory Action or any other enforcement action against any
Loan Party or any supplier of a Loan Party that causes any Loan Party to recall,
withdraw, remove or discontinue marketing any of its products; (ii) the FDA
issues a warning letter to any Loan Party with respect to any of its activities
or products which could reasonably be expected to have a Material Adverse
Effect; (iii) any Loan Party conducts a mandatory or voluntary recall which
could reasonably be expected to result in liability and expense to the Loan
Parties of $100,000 or more; (iv) any Loan Party enters into a settlement
agreement with the FDA that results in aggregate liability as to any single or
related series of transactions, incidents or conditions, of $100,000 or more, or
that could reasonably be expected to have a Material Adverse Effect; or (v) the
FDA revokes any authorization or permission granted under any Registration, or
any Loan Party withdraws any Registration, that could reasonably be expected to
have a Material Adverse Effect. 

     8.2 Lender Remedies. Upon the occurrence
and during the continuance of any Event of Default, upon the written request of
the Requisite Lenders, Agent shall terminate or suspend any Commitment (if
outstanding) and/or declare any or all of the Obligations to be immediately due
and payable, without demand or notice to any Loan Party, and the accelerated
Obligations shall bear interest at the Default Rate, provided that, upon the
occurrence of any Event of Default specified in Section 8.1(g), the Obligations shall
be automatically accelerated. After the occurrence and during the continuance of
an Event of Default, Agent shall have (on behalf of itself and Lenders) all of
the rights and remedies of a secured party under the UCC and under any other
applicable Requirement of Law. Without limiting the foregoing, upon the
occurrence and during the continuance of an Event of Default, (a) at the written
request of the Requisite Lenders, Agent shall, or (b) upon the termination of
the Commitments or the acceleration of the Obligations pursuant to this
Section 8.2, or upon receipt of written request of the Requisite Lenders to exercise
remedies generally, Agent may, (w) notify any Account Debtor or any obligor on
any instrument which constitutes part of the Collateral to make payments to
Agent (for the benefit of itself and Lenders), (x) with or without legal
process, enter any premises where the Collateral may be and take possession of
and remove the Collateral from the premises or store it on the premises, (y)
sell the Collateral at public or private sale, in whole or in part, and have the
right to bid and purchase at such sale, or (z) lease or otherwise dispose of all
or part of the Collateral, applying proceeds from such disposition to the
Obligations in accordance with Section
8.3. If requested by Agent, Loan Parties
shall promptly assemble the Collateral and make it available to Agent at a place
to be designated by Agent. Agent may also render any or all of the Collateral
unusable at a Loan Party’s premises and may dispose of such Collateral on such
premises without liability for rent or costs. Any notice that Agent is required
to give to a Loan Party under the UCC of the time and place of any public sale
or the time after which any private sale or other intended disposition of the
Collateral is to be made shall be deemed to constitute reasonable notice if such
notice is given in accordance with this Agreement at least ten (10) days prior
to such action. Effective only upon the occurrence and during the continuance of
an Event of Default, each Loan Party hereby irrevocably appoints Agent (and any
of Agent’s Related Persons) as such Loan Party’s true and lawful attorney to:
(i) take any of the actions specified above in this paragraph; (ii) endorse such
Loan Party’s name on any checks or other forms of payment or security that may
come into Agent’s possession; (iii) settle and adjust disputes and claims
respecting the Accounts directly with Account Debtors, for amounts and upon
terms which Agent determines to be reasonable; and (iv) do such other and
further acts and deeds in the name of such Loan Party that Agent may deem
necessary or desirable to enforce its rights in or to any of the Collateral or
to perfect or better perfect Agent’s security interest (on behalf of itself and
Lenders) in any of the Collateral. For the purpose of enabling Agent to exercise
rights and remedies under this Section
8.2 at such time as Agent shall be lawfully
entitled to exercise such rights and remedies, each Loan Party hereby grants to
Agent (on behalf of itself and Lenders), (A) an irrevocable, nonexclusive,
worldwide license (exercisable without payment of royalty or other compensation
to such Loan Party), to use or sublicense any Intellectual Property now owned or
hereafter acquired by such Loan Party and including in such license access to
all media in which any of the licensed items may be recorded or stored and to
all computer software and programs used for the compilation or printout thereof
and (B) an irrevocable license (without payment of rent or other compensation to
such Loan Party) to use, operate and occupy all real property owned, operated,
leased, subleased or otherwise occupied by such Loan Party. The appointment of
Agent as each Loan Party’s attorney in fact is a power coupled with an interest
and is irrevocable until the Termination Date. Notwithstanding anything to the
contrary contained in this Section
8.2, Agent shall not be required to obtain
the consent of any Lender to take any action to protect, preserve or take
possession of any Collateral that is subject to an Exigent Circumstance.

    
8.3 Application of Proceeds. Proceeds from
any Transfer of the Collateral, including, without limitation, the Intellectual
Property (other than Permitted Dispositions) and all payments made to or
Proceeds of Collateral, including, without limitation, Intellectual Property
received by Agent during the continuance of an Event of
Default may be applied to the Obligations in Agent’s sole and absolute
discretion. Borrower shall remain fully liable for any deficiency. Each Loan
Party irrevocably waives the right to direct the application during the
continuance of an Event of Default of any and all payments in respect of any
Obligation and any proceeds of Collateral, including, without limitation, the
Intellectual Property. 

24 

9.
THE AGENT.

     9.1 Appointment of Agent. 

         
(a) Each
Lender hereby appoints GECC (together with any successor Agent pursuant to
Section 9.7) as Agent under the Loan Documents and authorizes Agent to (i) execute
and deliver the Loan Documents and accept delivery thereof on its behalf from
any Loan Party, (ii) take such action on its behalf and to exercise all rights,
powers and remedies and perform the duties as are expressly delegated to Agent
under such Loan Documents and (iii) exercise such powers as are reasonably
incidental thereto. 

         
(b) Without
limiting the generality of clause (a) above, Agent shall have the sole and
exclusive right and authority (to the exclusion of the Lenders), and is hereby
authorized, to (i) act as the disbursing and collecting agent for the Lenders
with respect to all payments and collections arising in connection with the Loan
Documents (including in any other bankruptcy, insolvency or similar proceeding),
and each Person making any payment in connection with any Loan Document to any
Lender is hereby authorized to make such payment to Agent, (ii) file and prove
claims and file other documents necessary or desirable to allow the claims of
Agent and Lenders with respect to any Obligation in any bankruptcy, insolvency
or similar proceeding (but not to vote, consent or otherwise act on behalf of
such Lender), (iii) act as collateral agent for Agent and each Lender for
purposes of the perfection of all Liens created by the Loan Documents and all
other purposes stated therein, (iv) manage, supervise and otherwise deal with
the Collateral, (v) take such other action as is necessary or desirable to
maintain the perfection and priority of the Liens created or purported to be
created by the Loan Documents, (vi) except as may be otherwise specified in any
Loan Document, exercise all remedies given to Agent and the other Lenders with
respect to the Loan Parties and/or the Collateral, whether under the Loan
Documents, applicable Requirements of Law or otherwise and (vii) execute any
amendment, consent or waiver under the Loan Documents on behalf of any Lender
that has consented in writing to such amendment, consent or waiver;
provided,
however,
that Agent hereby appoints, authorizes and directs each Lender to act as
collateral sub-agent for Agent and the Lenders for purposes of the perfection of
all Liens with respect to the Collateral, including any Deposit Account
maintained by a Loan Party with, and cash and Cash Equivalents held by, such
Lender, and may further authorize and direct the Lenders to take further actions
as collateral sub-agents for purposes of enforcing such Liens or otherwise to
transfer the Collateral subject thereto to Agent, and each Lender hereby agrees
to take such further actions to the extent, and only to the extent, so
authorized and directed. Agent may, upon any term or condition it specifies,
delegate or exercise any of its rights, powers and remedies under, and delegate
or perform any of its duties or any other action with respect to, any Loan
Document by or through any trustee, co-agent, employee, attorney-in-fact and any
other Person (including any Lender). Any such Person shall benefit from this
Article 9
to the extent provided by Agent. 

         
(c) Under
the Loan Documents, Agent (i) is acting solely on behalf of the Lenders, with
duties that are entirely administrative in nature, notwithstanding the use of
the defined term “Agent”, the terms “agent”, “Agent” and “collateral agent” and
similar terms in any Loan Document to refer to Agent, which terms are used for
title purposes only, (ii) is not assuming any obligation under any Loan Document
other than as expressly set forth therein or any role as agent, fiduciary or
trustee of or for any Lender or any other Person and (iii) shall have no implied
functions, responsibilities, duties, obligations or other liabilities under any
Loan Document, and each Lender, by accepting the benefits of the Loan Documents,
hereby waives and agrees not to assert any claim against Agent based on the
roles, duties and legal relationships expressly disclaimed in clauses (i)
through (iii) above. Except as expressly set forth in the Loan Documents, Agent
shall not have any duty to disclose, and shall not be liable for failure to
disclose, any information relating to any Loan Party or any of its Subsidiaries
that is communicated to or obtained by GECC or any of its Affiliates in any
capacity. 

    
9.2 Binding Effect; Use of Discretion; E-Systems. 

         
(a) Each
Lender, by accepting the benefits of the Loan Documents, agrees that (i) any
action taken by Agent or Requisite Lenders (or, if expressly required in any
Loan Document, a greater proportion of the Lenders) in accordance with the
provisions of the Loan Documents, (ii) any action taken by Agent in reliance
upon the instructions of Requisite Lenders (or, where so required, such greater
proportion) and (iii) the exercise by Agent or Requisite Lenders (or, where so
required, such greater proportion) of the powers set forth herein or therein,
together with such other powers as are reasonably incidental thereto, shall be
authorized and binding upon all of Lenders. 

25 

          (b) If Agent shall request instructions from Requisite Lenders or all
affected Lenders with respect to any act or action (including failure to act) in
connection with any Loan Document, then Agent shall be entitled to refrain from
such act or taking such action unless and until Agent shall have received
instructions from Requisite Lenders or all affected Lenders, as the case may be,
and Agent shall not incur liability to any Person by reason of so refraining.
Agent shall be fully justified in failing or refusing to take any action under
any Loan Document (i) if such action would, in the opinion of Agent, be contrary
to any Requirement of Law or any Loan Document, (ii) if such action would, in
the opinion of Agent, expose Agent to any potential liability under any
Requirement of Law or (iii) if Agent shall not first be indemnified to its
satisfaction against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action. Without limiting
the foregoing, no Lender shall have any right of action whatsoever against Agent
as a result of Agent acting or refraining from acting under any Loan Document in
accordance with the instructions of Requisite Lenders or all affected Lenders,
as applicable. 

         
(c) Agent
is hereby authorized by each Loan Party and each Lender to establish procedures
(and to amend such procedures from time to time) to facilitate administration
and servicing of the Loans and other matters incidental thereto. Without
limiting the generality of the foregoing, Agent is hereby authorized to
establish procedures to make available or deliver, or to accept, notices,
documents (including, without limitation, Borrowing Base Certificates) and
similar items on, by posting to or submitting and/or completion, on E-Systems.
Each Loan Party and each Lender acknowledges and agrees that the use of
transmissions via an E-System or electronic mail is not necessarily secure and
that there are risks associated with such use, including risks of interception,
disclosure and abuse, and each Loan Party and each Lender assumes and accepts
such risks by hereby authorizing the transmission via E-Systems or electronic
mail. Each “e-signature” on any such posting shall be deemed sufficient to
satisfy any requirement for a “signature”, and each such posting shall be deemed
sufficient to satisfy any requirement for a “writing”, in each case including
pursuant to any Loan Document, any applicable provision of any UCC, the federal
Uniform Electronic Transactions Act, the Electronic Signatures in Global and
National Commerce Act and any substantive or procedural Requirement of Law
governing such subject matter. All uses of an E-System shall be governed by and
subject to, in addition to this Section, the separate terms, conditions and
privacy policy posted or referenced in such E-System (or such terms, conditions
and privacy policy as may be updated from time to time, including on such
E-System) and related contractual obligations executed by Agent, Loan Parties
and/or Lenders in connection with the use of such E-System. ALL E-SYSTEMS AND
ELECTRONIC TRANSMISSIONS SHALL BE PROVIDED “AS IS” AND “AS AVAILABLE”. NO
REPRESENTATION OR WARRANTY OF ANY KIND IS MADE BY AGENT, ANY LENDER OR ANY OF
THEIR RELATED PERSONS IN CONNECTION WITH ANY E-SYSTEMS. 

    
9.3 Agent’s Reliance, Etc. Agent may,
without incurring any liability hereunder, (a) treat the payee of any Note as
its holder until such Note has been assigned in accordance with Section 10.1, (b) consult
with any of its Related Persons and, whether or not selected by it, any other
advisors, accountants and other experts (including advisors to, and accountants
and experts engaged by, any Loan Party) and (c) rely and act upon any document
and information (including those transmitted by electronic transmission) and any
telephone message or conversation, in each case believed by it to be genuine and
transmitted, signed or otherwise authenticated by the appropriate parties. None
of Agent and its Related Persons shall be liable for any action taken or omitted
to be taken by any of them under or in connection with any Loan Document, and
each Lender and each Loan Party hereby waives and shall not assert (and each
Loan Party shall cause its Subsidiaries to waive and agree not to assert) any
right, claim or cause of action based thereon, except to the extent of
liabilities resulting from the gross negligence or willful misconduct of Agent
or, as the case may be, such Related Person (each as determined in a final,
non-appealable judgment of a court of competent jurisdiction) in connection with
the duties of Agent expressly set forth herein. Without limiting the foregoing,
Agent: (i) shall not be responsible or otherwise incur liability for any action
or omission taken in reliance upon the instructions of the Requisite Lenders or
for the actions or omissions of any of its Related Persons, except to the extent
that a court of competent jurisdiction determines in a final non-appealable
judgment that Agent acted with gross negligence or willful misconduct in the
selection of such Related Person; (ii) shall not be responsible to any Lender or
other Person for the due execution, legality, validity, enforceability,
effectiveness, genuineness, sufficiency or value of, or
the attachment, perfection or priority of any Lien created or purported to be
created under or in connection with, any Loan Document; (iii) makes no warranty
or representation, and shall not be responsible, to any Lender or other Person
for any statement, document, information, representation or warranty made or
furnished by or on behalf of any Loan Party or any Related Person of any Loan
Party in connection with any Loan Document or any transaction contemplated
therein or any other document or information with respect to any Loan Party,
whether or not transmitted or (except for documents expressly required under any
Loan Document to be transmitted to the Lenders) omitted to be transmitted by
Agent, including as to completeness, accuracy, scope or adequacy thereof, or for
the scope, nature or results of any due diligence performed by Agent in
connection with the Loan Documents; and (iv) shall not have any duty to
ascertain or to inquire as to the performance or observance of any provision of
any Loan Document, whether any condition set forth in any Loan Document is
satisfied or waived, as to the financial condition of any Loan Party or as to
the existence or continuation or possible occurrence or continuation of any
Default or Event of Default, and shall not be deemed to have notice or knowledge
of such occurrence or continuation unless it has received a notice from Borrower
or any Lender describing such Default or Event of Default that is clearly
labeled “notice of default” (in which case Agent shall promptly give notice of
such receipt to all Lenders, provided that Agent shall not be
liable to any Lender for any failure to do so, except to the extent that such
failure is attributable to Agent’s gross negligence or willful misconduct as
determined by a final non-appealable judgment of a court of competent
jurisdiction); and, for each of the items set forth in clauses (i) through (iv)
above, each Lender and each Loan Party hereby waives and agrees not to assert
(and each Loan Party shall cause its Subsidiaries to waive and agree not to
assert) any right, claim or cause of action it might have against Agent based
thereon. 

26 

     9.4 Agent Individually. Agent and its
Affiliates may make loans and other extensions of credit to, acquire Stock and
Stock Equivalents of, engage in any kind of business with, any Loan Party or
Affiliate thereof as though it were not acting as Agent and may receive separate
fees and other payments therefor. To the extent Agent or any of its Affiliates
makes any Loans or otherwise becomes a Lender hereunder, it shall have and may
exercise the same rights and powers hereunder and shall be subject to the same
obligations and liabilities as any other Lender and the terms “Lender”,
“Requisite Lender” and any similar terms shall, except where otherwise expressly
provided in any Loan Document, include, without limitation, Agent or such
Affiliate, as the case may be, in its individual capacity as Lender, or as one
of the Requisite Lenders. 

    
9.5 Lender Credit Decision; Agent Report. Each Lender acknowledges that it shall, independently and without
reliance upon Agent, any Lender or any of their Related Persons or upon any
document solely or in part because such document was transmitted by Agent or any
of its Related Persons, conduct its own independent investigation of the
financial condition and affairs of each Loan Party and make and continue to make
its own credit decisions in connection with entering into, and taking or not
taking any action under, any Loan Document or with respect to any transaction
contemplated in any Loan Document, in each case based on such documents and
information as it shall deem appropriate. Except for documents expressly
required by any Loan Document to be transmitted by Agent to the Lenders, Agent
shall not have any duty or responsibility to provide any Lender with any credit
or other information concerning the business, prospects, operations, Property,
financial and other condition or creditworthiness of any Loan Party or any
Affiliate of any Loan Party that may come in to the possession of Agent or any
of its Related Persons. Each Lender agrees that is shall not rely on any field
examination, audit or other report provided by Agent or its Related Persons (an
“Agent Report”). Each Lender further acknowledges that any Agent Report (a) is
provided to the Lenders solely as a courtesy, without consideration, and based
upon the understanding that such Lender will not rely on such Agent Report, (b)
was prepared by Agent or its Related Persons based upon information provided by
the Loan Parties solely for Agent’s own internal use, and (c) may not be
complete and may not reflect all information and findings obtained by Agent or
its Related Persons regarding the operations and condition of the Loan Parties.
Neither Agent nor any of its Related Persons makes any representations or
warranties of any kind with respect to (i) any existing or proposed financing,
(ii) the accuracy or completeness of the information contained in any Agent
Report or in any related documentation, (iii) the scope or adequacy of Agent’s
and its Related Persons’ due diligence, or the presence or absence of any errors
or omissions contained in any Agent Report or in any related documentation, and
(iv) any work performed by Agent or Agent’s Related Persons in connection with
or using any Agent Report or any related documentation. Neither Agent nor any of
its Related Persons shall have any duties or obligations in connection with or
as a result of any Lender receiving a copy of any Agent Report. Without limiting
the generality of the forgoing, neither Agent nor any of its Related Persons
shall have any responsibility for the accuracy or completeness of any Agent
Report, or the appropriateness of any Agent Report for any Lender’s purposes,
and shall have no duty or responsibility to correct or update any Agent Report
or disclose to any Lender any other information not embodied in any Agent
Report, including any supplemental information obtained
after the date of any Agent Report. Each Lender releases, and agrees that it
will not assert, any claim against Agent or its Related Persons that in any way
relates to any Agent Report or arises out of any Lender having access to any
Agent Report or any discussion of its contents, and agrees to indemnify and hold
harmless Agent and its Related Persons from all claims, liabilities and expenses
relating to a breach by any Lender arising out of such Lender’s access to any
Agent Report or any discussion of its contents. 

27 

     9.6 Indemnification. Each Lender agrees to
reimburse Agent and each of its Related Persons (to the extent not reimbursed by
any Loan Party) promptly upon demand for its Pro Rata Share of any out-of-pocket
costs and expenses (including, without limitation, fees, charges and
disbursements of financial, legal and other advisors and any taxes or insurance
paid in the name of, or on behalf of, any Loan Party) incurred by Agent or any
of its Related Persons in connection with the preparation, syndication,
execution, delivery, administration, modification, amendment, consent, waiver or
enforcement of, or the taking of any other action (whether through negotiations,
through any work-out, bankruptcy, restructuring or other legal or other
proceeding (including, without limitation, preparation for and/or response to
any subpoena or request for document production relating thereto) or otherwise)
in respect of, or legal advice with respect to, its rights or responsibilities
under, any Loan Document. Each Lender further agrees to indemnify Agent and each
of its Related Persons (to the extent not reimbursed by any Loan Party), ratably
according to its Pro Rata Share, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever (including, to the
extent not indemnified by the applicable Lender, taxes, interests and penalties
imposed for not properly withholding or backup withholding on payments made to
or for the account of any Lender) that may be imposed on, incurred by, or
asserted against Agent or any of its Related Persons in any matter relating to
or arising out of, in connection with or as a result of any Loan Document or any
other act, event or transaction related, contemplated in or attendant to any
such document, or, in each case, any action taken or omitted to be taken by
Agent or any of its Related Persons under or with respect to the foregoing;
provided
that no Lender shall be liable to Agent or any of its Related Persons under this
Section 9.6
to the extent such liability has resulted from the gross negligence or willful
misconduct of Agent or, as the case may be, such Related Person, as determined
by a final non-appealable judgment of a court of competent jurisdiction. To the
extent required by any applicable Requirement of Law, Agent may withhold from
any payment to any Lender under a Loan Document an amount equal to any
applicable withholding tax. If the Internal Revenue Service or any other
Governmental Authority asserts a claim that Agent did not properly withhold tax
from amounts paid to or for the account of any Lender for any reason, or if
Agent reasonably determines that it was required to withhold taxes from a prior
payment to or for the account of any Lender but failed to do so, such Lender
shall promptly indemnify Agent fully for all amounts paid, directly or
indirectly, by Agent as tax or otherwise, including penalties and interest, and
together with all expenses incurred by Agent. Agent may offset against any
payment to any Lender under a Loan Document, any applicable withholding tax that
was required to be withheld from any prior payment to such Lender but which was
not so withheld, as well as any other amounts for which Agent is entitled to
indemnification from such Lender under the immediately preceding sentence of
this Section 9.6. 

    
9.7 Successor Agent. Agent may resign at
any time by delivering notice of such resignation to the Lenders and Borrower,
effective on the date set forth in such notice or, if no such date is set forth
therein, upon the date such notice shall be effective, in accordance with the
terms of this Section 9.7. If Agent delivers any such notice, the Requisite Lenders
shall have the right to appoint a successor Agent. If, after 30 days after the
date of the retiring Agent’s notice of resignation, no successor Agent has been
appointed by the Requisite Lenders that has accepted such appointment, then the
retiring Agent may, on behalf of the Lenders, appoint a successor Agent from
among the Lenders. Effective immediately upon its resignation, (a) the retiring
Agent shall be discharged from its duties and obligations under the Loan
Documents, (b) the Lenders shall assume and perform all of the duties of Agent
until a successor Agent shall have accepted a valid appointment hereunder, (c)
the retiring Agent and its Related Persons shall no longer have the benefit of
any provision of any Loan Document other than with respect to any actions taken
or omitted to be taken while such retiring Agent was, or because such Agent had
been, validly acting as Agent under the Loan Documents, and (iv) subject to its
rights under Section 9.2(b), the retiring Agent shall take such action as may be
reasonably necessary to assign to the successor Agent its rights as Agent under
the Loan Documents. Effective immediately upon its acceptance of a valid
appointment as Agent, a successor Agent shall succeed to, and become vested
with, all the rights, powers, privileges and duties of the retiring Agent under
the Loan Documents. 

28 

    
9.8 Release of Collateral. Each Lender
hereby consents to the release and hereby directs Agent to release (or in the
case of clause (b)(ii) below, release or subordinate) the following: 

         
(a) any
Guarantor if all of the Stock of such Subsidiary owned by any Loan Party is sold
or transferred in a transaction permitted under the Loan Documents (including
pursuant to a valid waiver or consent), to the extent that, after giving effect
to such transaction, such Subsidiary would not be required to guaranty any
Obligations pursuant to any Loan Document; and 

         
(b) any
Lien held by Agent for the benefit of itself and the Lenders against (i) any
Collateral that is sold or otherwise disposed of by a Loan Party in a
transaction permitted by the Loan Documents (including pursuant to a valid
waiver or consent), (ii) any Collateral subject to a Lien that is expressly
permitted under clause (d) of the definition of the term “Permitted Lien” and
(iii) all of the Collateral and all Loan Parties, upon (A) termination of all of
the Commitments, (B) payment in full in cash of all of the Obligations that
Agent has theretofore been notified in writing by the holder of such Obligation
are then due and payable, and (C) to the extent requested by Agent, receipt by
Agent and Lenders of liability releases from the Loan Parties in form and
substance acceptable to Agent (the satisfaction of the conditions in this clause
(iii), the “Termination Date”). 

    
9.9 Setoff and Sharing of Payments. In
addition to any rights now or hereafter granted under any applicable Requirement
of Law and not by way of limitation of any such rights, upon the occurrence and
during the continuance of any Event of Default and subject to Section 9.10(d), each
Lender is hereby authorized at any time or from time to time upon the direction
of Agent, without notice to any Loan Party or any other Person, any such notice
being hereby expressly waived, to setoff and to appropriate and to apply any and
all balances held by it at any of its offices for the account of the Loan
Parties (regardless of whether such balances are then due to the Loan Parties)
and any other properties or assets at any time held or owing by that Lender or
that holder to or for the credit or for the account of any Loan Party against
and on account of any of the Obligations that are not paid when due. Any Lender
exercising a right of setoff or otherwise receiving any payment on account of
the Obligations in excess of its Pro Rata Share thereof shall purchase for cash
(and the other Lenders or holders shall sell) such participations in each such
other Lender’s or holder’s Pro Rata Share of the Obligations as would be
necessary to cause such Lender to share the amount so offset or otherwise
received with each other Lender or holder in accordance with their respective
Pro Rata Shares of the Obligations. Each Loan Party agrees, to the fullest
extent permitted by law, that (a) any Lender may exercise its right to offset
with respect to amounts in excess of its Pro Rata Share of the Obligations and
may purchase participations in accordance with the preceding sentence and (b)
any Lender so purchasing a participation in the Loans made or other Obligations
held by other Lenders or holders may exercise all rights of offset, bankers’
lien, counterclaim or similar rights with respect to such participation as fully
as if such Lender or holder were a direct holder of the Loans and the other
Obligations in the amount of such participation. Notwithstanding the foregoing,
if all or any portion of the offset amount or payment otherwise received is
thereafter recovered from the Lender that has exercised the right of offset, the
purchase of participations by that Lender shall be rescinded and the purchase
price restored without interest. 

    
9.10 Advances; Payments; Non-Funding Lenders; Actions in
Concert. 

(a) Advances; Payments. 

     (i) Term Loans. If Agent receives any payment
with respect to a Term Loan for the account of Lenders on or prior to 2:00 p.m.
(New York time) on any Business Day, Agent shall pay to each applicable Lender
such Lender’s Pro Rata Share of such payment on such Business Day. If Agent
receives any payment with respect to a Term Loan for the account of Lenders
after 2:00 p.m. (New York time) on any Business Day, Agent shall pay to each
applicable Lender such Lender’s Pro Rata Share of such payment on the next
Business Day. 

     (ii) Revolving Loans. At least once during
each calendar week or more frequently at Agent’s election (each, a
“Settlement Date”), Agent shall advise each Revolving Lender by telephone or facsimile of
the amount of such Lender’s Pro Rata Share of principal, interest and fees paid
for the benefit of Revolving Lenders with respect to each applicable Revolving
Loan. Agent shall pay to each Revolving Lender (other than a Non-Funding Lender)
such Revolving Lender’s Pro Rata Share of principal, interest and fees paid by
Borrower since the previous Settlement Date for the benefit of such Revolving
Lender on the Revolving Loans held by it. Such payments shall be made by wire
transfer to such Revolving Lender on the next Business Day following each
Settlement Date. 

29 

(b) Return of Payments. 

     (i) If Agent pays an amount to a Lender under this Agreement in the belief or
expectation that a related payment has been or will be received by Agent from a
Loan Party and such related payment is not received by Agent, then Agent will be
entitled to recover such amount (including interest accruing on such amount at
the rate otherwise applicable to such Obligation) from such Lender on demand
without setoff, counterclaim or deduction of any kind. 

     (ii) If Agent determines at any time that any amount received by Agent under
any Loan Document must be returned to a Loan Party or paid to any other Person
pursuant to any insolvency law or otherwise, then, notwithstanding any other
term or condition of any Loan Document, Agent will not be required to distribute
any portion thereof to any Lender. In addition, each Lender will repay to Agent
on demand any portion of such amount that Agent has distributed to such Lender,
together with interest at such rate, if any, as Agent is required to pay to a
Loan Party or such other Person, without setoff, counterclaim or deduction of
any kind and Agent will be entitled to set off against future distributions to
such Lender any such amounts (with interest) that are not repaid on demand.

(c) Non-Funding Lenders. 

     (i) Unless Agent shall have received notice from a Lender prior to the date
of any Loan
that such Lender will not make available to Agent such Lender’s Pro Rata Share
of such Loan, Agent may assume that such Lender will make such amount available
to it on the date of such Loan in accordance with Section 2.2(b), and Agent may (but
shall not be obligated to), in reliance upon such assumption, make available a
corresponding amount for the account of Borrower on such date. If and to the
extent that such Lender shall not have made such amount available to Agent, such
Lender and Borrower severally agree to repay to Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the day
such amount is made available to Borrower until the day such amount is repaid to
Agent, at a rate per annum equal to the interest rate applicable to the
Obligation that would have been created when Agent made available such amount to
Borrower had such Lender made a corresponding payment available. If such Lender
shall repay such corresponding amount to Agent, the amount so repaid shall
constitute such Lender’s portion of such Loan for purposes of this Agreement.

     (ii) To the extent that any Lender has failed to fund any Loan or any other
payments required to be made by it under the Loan Documents after any such Loan
is required to be made or such payment is due (a “Non-Funding Lender”), Agent shall be
entitled to set off the funding short-fall against that Non-Funding Lender’s Pro
Rata Share of all payments received from the Loan Parties. The failure of any
Non-Funding Lender to make any Loan or any payment required by it hereunder
shall not relieve any other Lender (each such other Lender, an “Other Lender”) of its
obligations to make such Loan, but neither any Other Lender nor Agent shall be
responsible for the failure of any Non-Funding Lender to make such Loan or make
any other payment required hereunder. Notwithstanding anything set forth herein
to the contrary, a Non-Funding Lender shall not have any voting or consent
rights under or with respect to any Loan Document or constitute a “Lender” (or
be included in the calculation of “Requisite Lender” hereunder) for any voting
or consent rights under or with respect to any Loan Document. A Non-Funding
Lender shall not earn, and Borrower shall not be required to pay, such Lender’s
portion of the Unused Revolving Commitment Fee described in Section 2.6(c)
during the time such Lender is a Non-Funding
Lender. At Borrower’s request, Agent or a Person reasonably acceptable to Agent
shall have the right with Agent’s consent and in Agent’s sole discretion (but
Agent or any such Person shall have no obligation) to purchase from any
Non-Funding Lender, and each Lender agrees that if it becomes a Non-Funding
Lender it shall, at Agent’s request, sell and assign to Agent or such Person,
all of the Term Loan Commitment (if any), and all of the outstanding Term Loan,
and/or all of the Revolving Loan Commitment (if any) and the outstanding
Revolving Loans of that Non-Funding Lender for an amount equal to the aggregate
outstanding principal balance of the Term Loan and/or the Revolving Loans, as
applicable, held by such Non-Funding Lender and all accrued
interest with respect thereto through the date of sale, such purchase and sale
to be consummated pursuant to an executed Assignment Agreement.

30 

          (d) Actions in Concert.
Anything in this Agreement to the contrary notwithstanding, each Lender hereby
agrees with each other Lender that no Lender shall take any action to protect or
enforce its rights arising out of any Loan Document (including exercising any
rights of setoff) without first obtaining the prior written consent of Agent or
Requisite Lenders, it being the intent of Lenders that any such action to
protect or enforce rights under any Loan Document shall be taken in concert and
at the direction or with the consent of Agent or Requisite Lenders. 

10.
MISCELLANEOUS. 

    
10.1 Assignment. 

         
(a) Each Lender may sell, transfer or assign, at any time or times, all or a
portion of its rights and obligations hereunder and under the other Loan
Documents (including, without limitation, all or a portion of its Commitments
and its rights and obligations with respect to its Loans) to any Qualified
Assignee; provided, however, that any such sale, transfer or assignment shall (i) require
the execution of an assignment agreement in form and substance reasonably
satisfactory to, and acknowledged by, Agent (an “Assignment Agreement”), (ii) be
in an amount of not less than $1,000,000, unless such assignment is made to an
existing Lender or an Affiliate of an existing Lender or is of the assignor’s
(together with its Affiliates’) entire interest in such facility or is made with
the prior written consent of Agent, (iii) unless otherwise agreed to by Agent,
be in an equal proportion of such Lender’s Revolving Loans and Terms Loan and
its Revolving Loan Commitment and Term Loan Commitment, and (iv) include a
payment to Agent of an assignment fee of $3,500 (unless otherwise agreed by
Agent). In the case of an assignment by a Lender under this Section 10.1(a), the
assignee shall have, to the extent of such assignment, the same rights, benefits
and obligations as all other Lenders hereunder. The assigning Lender shall be
relieved of its obligations hereunder with respect to the assigned portion of
its Commitments and Loans from and after the date of such assignment. Borrower
hereby acknowledges and agrees that any assignment shall give rise to a direct
obligation of Borrower to the assignee and that the assignee shall be considered
to be a “Lender”. In the event any Lender assigns or otherwise transfers all or
any part of the Commitments or Loans, Borrower shall, upon the assignee’s or the
assignor’s request, execute new Notes in exchange for the Notes, if any, being
assigned. Agent may amend Schedule
A to this Agreement to reflect assignments
made in accordance with this Section
10.1. 

         
(b) In
addition to the other rights provided in this Section 10.1, each Lender may, without
notice to or consent from any other Person, sell participations to one or more
Persons in or to all or a portion of its rights and obligations under the Loan
Documents (including all of its rights and obligations with respect to the
Loans); provided, however, that, whether as a result of any term of any Loan Document or
of such participation, (i) no such participant shall have a commitment, or be
deemed to have made an offer to commit, to make any Loan hereunder, and, no such
participant shall be liable for any obligation of such Lender hereunder, (ii)
such Lender’s rights and obligations, and the rights and obligations of the Loan
Parties and Agent and other Lenders towards such Lender, under any Loan Document
shall remain unchanged and each other party hereto shall continue to deal solely
with such Lender, which shall remain the holder of the Obligations, and in no
case shall a participant have the right to enforce any of the terms of any Loan
Document, and (iii) the consent of such participant shall not be required
(either directly, as a restraint on such Lender’s ability to consent hereunder
or otherwise) for any amendments, waivers or consents with respect to any Loan
Document or to exercise or refrain from exercising any powers or rights such
Lender may have under or in respect of the Loan Documents (including the right
to enforce or direct enforcement of the Obligations), except for those described
in clauses (ii), (iii) and (iv) of Section
10.6(a). 

    
10.2 Notices. All notices or other
communications given in connection with the Loan Documents shall be in writing,
shall be addressed to the parties at their respective addresses set forth on the
signature pages hereto below such parties’ name or in the most recent Assignment
Agreement executed by any Lender (unless and until a different address may be
specified in a written notice to the other party delivered in accordance with
this Section 10.2), and shall be deemed given (a) on the date of receipt if delivered by
hand, (b) on the date of sender’s receipt of confirmation of proper transmission
if sent by facsimile transmission, (c) on the next Business Day after being sent
by a nationally-recognized overnight courier, (d) on the fourth Business Day
after being sent by registered or certified mail, postage prepaid, (e) on the
date of proper transmission if sent by electronic mail, provided that
transmissions may be made by electronic mail only for notices or other
communications if such transmission is specifically
authorized in a Loan Document and such transmission is delivered in compliance
with procedures of Agent applicable at the time and previously communicated to
Borrower, or (f) on the later of the Business Day of such posting and the
Business Day access to such posting is given to the recipient thereof in
accordance with the standard procedures applicable to such E-System, if posted
to any E-System approved by or set-up by or at the direction of Agent.

31 

    
10.3 Payment of Fees and Expenses. Loan
Parties agree, jointly and severally, to pay or reimburse upon demand for all
reasonable fees, costs and expenses incurred by Agent and Lenders in connection
with (a) the investigation, preparation, negotiation, execution, administration
of, or any amendment, modification, waiver or termination of, any Loan Document,
(b) any legal advice relating to Agent’s rights or responsibilities under any
Loan Document, (c) the administration of the Loans and the facilities hereunder
and any other transaction contemplated under any Loan Document and (d) the
enforcement, assertion, defense or preservation of Agent’s and Lenders’ rights
and remedies under the Loan Documents, including, without limitation,
preparation for and/or response to any subpoena or request for document
production relating thereto, in each case of clauses (a) through (d), including,
without limitation, reasonable attorneys’ fees and expenses, reasonable fees and
expenses of consultants, auditors (including internal auditors) and appraisers,
internal audit reviews and field examinations and UCC and other corporate search
and filing fees and wire transfer fees. Each Loan Party further agrees that such
fees, costs and expenses shall constitute Obligations. 

     10.4 Indemnity. Each Loan Party agrees,
jointly and severally, to indemnify, hold harmless and defend Agent, each
Lender, and each of their respective Related Persons (each an “Indemnitee”) from and
against all liabilities, losses, damages, expenses, penalties, claims, actions
and suits (including, without limitation, related reasonable attorneys’ fees and
expenses) of any kind whatsoever arising, directly or indirectly, that may be
imposed on, incurred by or asserted against such Indemnitee as a result of or in
connection with any Loan Documents, any E-System, or any of the transactions
contemplated hereby or thereby, including, without limitation, any actual or
prospective investigation, litigation or other proceeding, whether or not
brought by any such Indemnitee or any of its Related Persons or whether or not
any such Person is a party thereto (the “Indemnified Liabilities”);
provided
that, no Loan Party shall have any obligation to any Indemnitee with respect to
any Indemnified Liabilities to the extent such Indemnified Liabilities arise
from the gross negligence or willful misconduct of such Indemnitee as determined
by a final non-appealable judgment of a court of competent jurisdiction. In no
event shall any Indemnitee be liable on any theory of liability for any special,
indirect, consequential or punitive damages (including, without limitation, any
loss of profits, business or anticipated savings). Each Loan Party waives,
releases and agrees (and shall cause each other Loan Party to waive, release and
agree) not to sue upon any such claim for any special, indirect, consequential
or punitive damages, whether or not accrued and whether or not known or
suspected to exist in its favor. This Section 10.4 shall not apply with respect
to Indemnified Taxes that are the subject of Section 2.4(e)(i) other than taxes
that represent losses, claims or damages from non-tax claims. 

    
10.5 Rights Cumulative. Agent’s and
Lenders’ rights and remedies under the Loan Documents or otherwise arising are
cumulative and may be exercised singularly or concurrently. Neither the failure
nor any delay on the part of Agent or any Lender to exercise any right, power or
privilege under any Loan Document shall operate as a waiver, nor shall any
single or partial exercise of any right, power or privilege preclude any other
or further exercise of that or any other right, power or privilege. NEITHER
AGENT NOR ANY LENDER SHALL BE DEEMED TO HAVE WAIVED ANY OF ITS RESPECTIVE RIGHTS
UNDER ANY LOAN DOCUMENT OR UNDER ANY OTHER AGREEMENT, INSTRUMENT OR PAPER SIGNED
BY A LOAN PARTY UNLESS SUCH WAIVER IS EXPRESSED IN WRITING AND SIGNED BY AGENT,
REQUISITE LENDERS OR ALL LENDERS, AS APPLICABLE. A waiver on any one occasion
shall not be construed as a bar to or waiver of any right or remedy on any
future occasion. 

    
10.6 Amendments, Waivers. 

         
(a) No
amendment or waiver of any provision of any Loan Document, and no consent with
respect to any departure by any Loan Party therefrom, shall be effective unless
the same shall be in writing and signed by Agent, Requisite Lenders (or by Agent
with the consent of Requisite Lenders) and Borrower; provided that no such amendment,
waiver or consent shall, unless in writing and signed by all Lenders directly
affected thereby (or by Agent with the consent of all Lenders directly affected
thereby), in addition to Agent, Requisite Lenders (or by Agent with the consent
of Requisite Lenders) and Borrower, do any of the following: (i) increase or
decrease the amount of, or extend the term of, any Commitment (which shall be
deemed to affect all Lenders), (ii) reduce the principal
of or rate of interest on (other than waiving the imposition of the Default
Rate) any Loan or reduce the amount of any fees payable under any Loan Document,
(iii) postpone the date fixed for or reduce or waive any scheduled installment
of principal or any payment of interest or fees due to any Lender under the Loan
Documents, (iv) release or subordinate the Lien on all or substantially all of
the Collateral, or consent to a transfer of all or substantially all of the
Product, in each case, except as otherwise may be provided in any Loan Document
(which shall be deemed to affect all Lenders), (v) release a Loan Party from, or consent to a Loan
Party’s assignment or delegation of, such Loan Party’s obligations under the
Loan Documents (which shall be deemed to affect all Lenders), except as otherwise may be
provided in any Loan Document, (vi) amend, modify, terminate or waive
Sections 8.3, 9.9, or 10.6(a), or (vii) amend or modify the definition of “Requisite Lenders” or any
provision providing for the consent or other action by all Lenders.

32 

          (b) Notwithstanding any provision in this Section 10.6 to the
contrary, (i) no amendment, modification, termination or waiver affecting or
modifying the rights or obligations of Agent under any Loan Document shall be
effective unless signed by Borrower, Agent and Requisite Lenders, (ii) Agent may
amend Schedule A to reflect assignments permitted hereunder, and (iii) Agent and
Borrower may amend or modify any Loan Document to (A) grant a new Lien, extend
an existing Lien over additional Property or join additional Persons as Loan
Parties, in each case for the benefit of Agent and Lenders and (B) correct any
obvious mistake, error, omission. 

    
10.7 Performance. Time is of the essence of
the Loan Documents. 

    
10.8 Binding Effect. This Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that any assignment by any Lender
shall be subject to the provisions of Section
10.1, and provided further that no Loan Party
may assign or transfer any of its rights or obligations under this Agreement
without the prior written consent of Agent and each Lender. No other Person
shall be deemed a third party beneficiary of this Agreement. This Agreement
shall continue in full force and effect until the Termination Date;
provided,
however, that the provisions of this Section 10.8 and Sections 2.4(e), 9.6, 10.3, 10.4, 10.11 and 10.12 and the other
indemnities contained in the Loan Documents shall survive the Termination Date.
The surrender, upon payment or otherwise, of any Note or any other Loan Document
evidencing any of the Obligations shall not affect the right of Agent to retain
the Collateral for such other Obligations as may then exist or as it may be
reasonably contemplated will exist in the future. To the extent Agent or any
Lender receives any payment in respect of the Obligations and such payment is
subsequently, in whole or in part, invalidated, declared to be fraudulent or
preferential, set aside or otherwise required to be paid to any other Person,
then to the extent of such recovery, the Obligation or part thereof originally
intended to be satisfied, and all Liens, rights and remedies therefor, shall be
revived and continued in full force and effect as if such payment had not
occurred. 

    
10.9 Creditor-Debtor Relationship. The
relationship between Agent and each Lender, on the one hand, and the Loan
Parties, on the other hand, is solely that of creditor and debtor. Neither Agent
nor any Lender has any fiduciary relationship or duty to any Loan Party arising
out of or in connection with, and there is no agency, tenancy or joint venture
relationship between Agent or Lenders and Loan Parties by virtue of, any Loan
Document or any transaction contemplated herein or therein. 

    
10.10 Tombstones and Related Matters. Upon
obtaining the applicable Loan Party’s consent, Agent or any Lender may make
public disclosure of any press releases, tombstone, advertising or other
promotional materials (including, without limitation, via any electronic
transmission) relating to the financing transaction contemplated by this
Agreement using such Loan Party’s name, product, photographs, logo or trademark.
No Loan Party shall, and no Loan Party shall permit any of its Affiliates to,
issue any press release or other public disclosure (other than any document
filed with any Governmental Authority relating to a public offering of the
securities of any Loan Party) using the name, logo or otherwise referring to
General Electric Capital Corporation, GE Healthcare Financial Services, Inc. or
of any of their respective Affiliates, the Loan Documents or any transaction
contemplated herein or therein to which any of them is a party without the prior
written consent of Agent except to the extent required to do so under applicable
Requirements of Law and then, only after consulting with Agent. 

    
10.11 Waiver of Jury Trial. EACH OF THE LOAN
PARTIES, AGENT AND LENDERS UNCONDITIONALLY WAIVES ANY AND ALL RIGHT TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS, ANY OF THE INDEBTEDNESS SECURED
HEREBY, ANY DEALINGS AMONG LOAN PARTIES, AGENT AND/OR
LENDERS RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION OR ANY RELATED
TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED AMONG LOAN
PARTIES, AGENT AND/OR LENDERS. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL
ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT. THIS WAIVER
IS IRREVOCABLE. THIS WAIVER MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING. THE
WAIVER ALSO SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENTS, OR TO ANY OTHER
DOCUMENTS OR AGREEMENTS RELATING TO THIS TRANSACTION OR ANY RELATED TRANSACTION.
THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

33 

     10.12 Governing Law and Jurisdiction.

         
(a) GOVERNING LAW. THIS AGREEMENT, THE
OTHER LOAN DOCUMENTS (EXCLUDING THOSE LOAN DOCUMENTS THAT BY THEIR OWN TERMS ARE
EXPRESSLY GOVERNED BY THE LAWS OF ANOTHER JURISDICTION) AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL IN ALL RESPECTS BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK (WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES OF SUCH STATE),
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, REGARDLESS OF
THE LOCATION OF THE COLLATERAL, PROVIDED, HOWEVER, THAT IF THE LAWS OF ANY
JURISDICTION OTHER THAN NEW YORK SHALL GOVERN IN REGARD TO THE VALIDITY,
PERFECTION OR EFFECT OF PERFECTION OF ANY LIEN OR IN REGARD TO PROCEDURAL
MATTERS AFFECTING ENFORCEMENT OF ANY LIENS IN COLLATERAL, SUCH LAWS OF SUCH
OTHER JURISDICTIONS SHALL CONTINUE TO APPLY TO THAT EXTENT. 

         
(b) Submission to Jurisdiction. Any legal
action or proceeding with respect to the Loan Documents shall be brought
exclusively in the courts of the State of New York located in the City of New
York, Borough of Manhattan, or of the United States of America for the Southern
District of New York and, by execution and delivery of this Agreement, each Loan
Party hereby accepts for itself and in respect of its Property, generally and
unconditionally, the jurisdiction of the aforesaid courts. Notwithstanding the
foregoing, Agent and Lenders shall have the right to bring any action or
proceeding against any Loan Party (or any Property of such Loan Party) in the
court of any other jurisdiction Agent or Lenders deem necessary or appropriate
in order to realize on the Collateral or other security for the Obligations. The
parties hereto hereby irrevocably waive any objection, including any objection
to the laying of venue or based on the grounds of forum non conveniens, that any of them
may now or hereafter have to the bringing of any such action or proceeding in
such jurisdictions. 

         
(c) Service of Process. Each Loan Party
hereby irrevocably waives personal service of any and all legal process,
summons, notices and other documents and other service of process of any kind
and consents to such service in any suit, action or proceeding brought in the
United States of America with respect to or otherwise arising out of or in
connection with any Loan Document by any means permitted by applicable
Requirements of Law, including by the mailing thereof (by registered or
certified mail, postage prepaid) to the address of Borrower specified herein
(and shall be effective when such mailing shall be effective, as provided
therein). Each Loan Party agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. 

         
(d) Non-exclusive Jurisdiction. Nothing
contained in this Section
10.12 shall affect the right of Agent or
Lenders to serve process in any other manner permitted by applicable
Requirements of Law or commence legal proceedings or otherwise proceed against
any Loan Party in any other jurisdiction. 

    
10.13 Confidentiality. Each Lender and Agent
agrees to use all reasonable efforts to maintain, in accordance with its
customary practices, the confidentiality of information obtained by it pursuant
to any Loan Document, except that such information may be disclosed (a) with
Borrower’s consent, (b) to such Lender’s or Agent’s Related Persons, as the case
may be, that are advised of the confidential nature of such information and are
instructed to keep such information confidential in accordance with the terms
hereof, (c) to the extent such information presently is or hereafter becomes (i)
publicly available other than as a result of a breach of this Section 10.13 or (ii) available to
such Lender or Agent or any of their Related Persons, as the case may be, from a
source (other than any Loan Party) not known by them to
be subject to disclosure restrictions, (d) to the extent disclosure is required
by any applicable Requirements of Law, or other legal, administrative,
governmental or regulatory request, order or proceeding or otherwise requested
or demanded by any Governmental Authority, (e) to the extent necessary or
customary for inclusion in league table measurements, (f) (i) to the National
Association of Insurance Commissioners or any similar organization, any examiner
or any nationally recognized rating agency or (ii) otherwise to the extent
consisting of general portfolio information that does not identify Loan Parties,
(g) to current or prospective assignees or participants and to their respective
Related Persons, in each case to the extent such assignees, participants or
Related Persons agree to be bound by provisions substantially similar to the
provisions of this Section
10.13 (and such Persons may disclose
information to their respective Related Persons in accordance with clause (b)
above), (h) to any other party hereto, and (i) in connection with the exercise
or enforcement of any right or remedy under any Loan Document, in connection
with any litigation or other proceeding to which such Lender or Agent or any of
their Related Persons is a party or bound, or to the extent necessary to respond
to public statements or disclosures by Loan Parties or their Related Persons
referring to a Lender or Agent or any of their Related Persons. In the event of
any conflict between the terms of this Section
10.13 and those of any other contractual
obligation entered into with any Loan Party (whether or not a Loan Document),
the terms of this Section 10.13 shall govern. 

34 

     10.14 USA Patriot Act. Each Lender that is
subject to the Patriot Act hereby notifies Loan Parties that pursuant to the
requirements of the Patriot Act, it is required to obtain, verify and record
information that identifies each Loan Party, which information includes the name
and address of each Loan Party and other information that will allow such Lender
to identify each Loan Party in accordance with the Patriot Act. 

    
10.15 Severability. Any provision of any
Loan Document being held illegal, invalid or unenforceable in any jurisdiction
shall not affect any part of such provision not held illegal, invalid or
unenforceable, any other provision of any Loan Document or any part of such
provision in any other jurisdiction. 

    
10.16 Entire Agreement; Counterparts. The
Loan Documents constitute the entire agreement of the parties and supersede all
prior agreements and understandings (whether written, verbal or implied) with
respect to the subject matter thereof (including, without limitation, any
proposal letter or confidentiality agreement between the parties hereto or any
of their respective Affiliates relating to a financing of substantially similar
form, purpose or effect). Section headings contained in this Agreement have been
included for convenience only, and shall not affect the construction or
interpretation of this Agreement. This Agreement may be executed in any number
of counterparts and by different parties in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which when taken
together shall constitute one and the same agreement. Delivery of an executed
signature page of this Agreement by facsimile transmission or electronic
transmission shall be as effective as delivery of a manually executed
counterpart hereof. 

    
10.17 Duty of Agent With Respect to Collateral; Marshaling. Agent’s sole duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession shall be to deal with
it in the same manner as Agent deals with similar property for its own account.
The powers conferred on Agent hereunder are solely to protect Agent’s interest
in the Collateral and shall not impose any duty upon Agent to exercise any such
powers. Agent shall be accountable only for amounts that it receives as a result
of the exercise of such powers, and neither Agent nor any Indemnitee shall be
responsible to any Loan Party for any act or failure to act hereunder, except
for their own gross negligence or willful misconduct as finally determined by a
non-appealable judgment of a court of competent jurisdiction. In addition, Agent
shall not be liable or responsible for any loss or damage to any Collateral, or
for any diminution in the value thereof, by reason of the act or omission of any
warehousemen, carrier, forwarding agency, consignee or other bailee if such
Person has been selected by Agent in good faith. Agent may (but shall not be
obligated to) pay taxes on behalf of any Loan Party, satisfy any Liens against
the Collateral or the Product (other than Permitted Liens), purchase insurance
to protect Agent’s and Lenders’ interest if Loan Parties fail to maintain the
insurance required hereunder and may pay for the maintenance, insurance,
protection and preservation of the Collateral and the Product and effect
compliance with the terms of any Loan Document. Each Loan Party agrees to
reimburse Agent, on demand, for all costs and expenses incurred by Agent in
connection with such payment or performance and agrees that such amounts shall
constitute Obligations and authorizes Agent and each Revolving Lender to make a
Revolving Loan to pay all such amounts, even if the result thereof would cause
the outstanding principal balance of the Revolving Loans to exceed the Maximum
Revolving Loan Balance at such time. Each Loan Party hereby (a) waives any right
under the UCC or any other applicable Requirement of Law to receive notice
and/or copies of any filed or recorded financing statements, amendments thereto,
continuations thereof or termination statements and (b)
releases and excuses Agent and each Lender from any obligation under the UCC or
any other applicable law to provide notice or a copy of any such filed or
recorded documents. Neither Agent nor any Lender shall be under any obligation
to marshal any property in favor of any Loan Party or any other Person or
against or in payment of any Obligation.

35 

    
10.18 Joint and Several; Waiver of Defense.
The obligations of the Loan Parties under the Loan Documents are joint and
several. Each Loan Party waives (a) any suretyship defenses available to it
under the UCC or any other applicable Requirement of Law, and (b) any right to
require Agent and Lenders to proceed against any other Loan Party or any other
Person, proceed against or exhaust any security, or pursue any other remedy.
Agent and Lenders may exercise or not exercise any right or remedy they have
against any Loan Party, any Collateral or any other security (including the
right to foreclose by judicial or non-judicial sale) without affecting any other
Loan Party’s liability. Notwithstanding any other provision of any Loan
Document, each Loan Party irrevocably waives all rights that it may have under
any Requirement of Law or in equity (including, without limitation, any
Requirement of Law subrogating any Loan Party to the rights of Agent and Lenders
under any Loan Document) to seek contribution, indemnification or any other form
of reimbursement from any other Loan Party, or any other Person now or hereafter
primarily or secondarily liable for any of the Obligations, for any payment made
by any Loan Party with respect to the Obligations in connection with any Loan
Document or otherwise and all rights that it might have to benefit from, or to
participate in, any security for the Obligations as a result of any payment made
by any Loan Party with respect to the Obligations in connection with any Loan
Document or otherwise. Any agreement providing for indemnification,
reimbursement or any other arrangement prohibited under this Section shall be
null and void. If any payment is made to a Loan Party in contravention of this
Section, such Loan Party shall hold such payment in trust for Agent and Lenders
and such payment shall be promptly delivered to Agent for application to the
Obligations, whether matured or unmatured. 

11.
Defined Terms. The following terms are defined in the Sections or subsections referenced
opposite such terms: 

	“Account Control Agreement”	       	Section
      6.10
	“Agent”		Preamble
	“Agreement”		Preamble
	“Assignment Agreement”		Section
      10.1(a)
	“Borrower”		Preamble
	“Closing Date”		Section
      4.1
	“Disbursement Account”		Section
      6.10
	“Eligible Account”		Section
      2.8
	“Event of Default”		Section
      8.1
	“GECC”		Preamble
	“Guarantor” and
      “Guarantors”		Preamble
	“Indemnitee”	 	Section
      10.4
	“Indemnified Liabilities”		Section
      10.4
	“Intellectual Property Security
      Agreements”		Section
      3.1
	“Intercompany Note”		Definition of
      “Permitted
			Indebtedness”
	“Lender” and
      “Lenders”		Preamble
	“Loan Party” and
      “Loan Parties”		Preamble
	“Maximum Lawful Rate”		Section
      2.3(c)
	“Maximum Revolving Loan
      Balance”		Section
      2.1(b)
	“Non-Funding Lender”		Section
      9.10(c)
	“Other Lender”		Section
      9.10(c)
	“Patriot Act”		Section
      5.7(c)
	“Payroll Accounts		Section
      6.10
	“Revolving Loan” and
      “Revolving Loans”		Section
      2.1(b)
	“Revolving Loan Activation”		Section
      6.10
	“Reinvestment Period”		Section
      6.4
	“SDN List”		Section
      5.7(b)
	“Settlement Date”		9.10(a)(ii)
	“Sweep Account”		Section
      6.10
	“Sweep Bank”		Section
      6.10
	“Term Loan”		Section
      2.1(a)
	“Termination Date”		Section
      9.8(b)

36 

     In addition to
the terms defined elsewhere in this Agreement, the following terms have the
following meanings: 

    
“Access Agreement” means a landlord consent and/or bailee letter, substantially
in the forms of Exhibit C-1 and C-2 respectively, in favor of Agent executed by the applicable
landlord or bailee and the applicable Loan Party. 

    
“Account” means, as at any date of determination, all “accounts” (as such term is
defined in the UCC) of the Loan Parties, including, without limitation, the
unpaid portion of the obligation of a customer of a Loan Party in respect of
Inventory purchased by and shipped to such customer and/or the rendition of
services by a Loan Party, as stated on the respective invoice of a Loan Party,
net of any credits, rebates or offsets owed to such customer. 

    
“Account Debtor” means the customer of a Loan Party who is obligated on or
under an Account. 

    
“Affiliate” means, with respect to any Person, (a) each officer, director, partner
or joint-venturer of such Person (and in the case of any Person that is a
limited liability company, each manager and member of such Person), and (b) any
other Person that, directly or indirectly, controls, is controlled by or is
under common control with such Person. 

    
“Automatic Payment Authorization
Agreement” means an automatic payment
authorization agreement, substantially in the form of Exhibit D, executed by Borrower.

    
“Availability” means, as of any date of determination, the amount by which
(a) the Maximum Revolving Loan Balance exceeds (b) the aggregate outstanding
principal balance of Revolving Loans. 

    
“BARDA” means the U.S. Department of Health and Human Services Biomedical
Advanced Research and Development Authority. 

    
“BARDA Acceptance” means the earlier to occur of (a) the date on which 500,000
courses of Product have been delivered to the Centers for Disease Control and
Prevention Strategic National Stockpile and (b) the date on which the Loan
Parties have been authorized by BARDA to invoice BARDA for the acceptance of at
least 500,000 courses of Product. 

    
“BARDA Contract” means that certain contract designated as HHSO100201100001C
and dated May 13, 2011 between BARDA and Borrower, as the same has been amended
through the Closing Date. 

    
“BARDA Milestone” means when Borrower has received at least $8,000,000 in
unrestricted net cash proceeds after the Closing Date from BARDA for achieving
the commercial validation report milestone under the BARDA Contract. 

    
“Borrowing Base” means, as of any date of determination by Agent, an amount
equal to 85% of the book value of Eligible Accounts at such time. 

    
“Borrowing Base
Certificate” means a certificate of Borrower,
on behalf of each Loan Party, in substantially the form of Exhibit E hereto, duly
completed as of a date acceptable to Agent in its sole
discretion. 

    
“Business Day” means and includes any day other than Saturdays, Sundays, or
other days on which commercial banks in New York, New York are required or
authorized to be closed. 

    
“Cash Equivalents” means (a) any readily-marketable securities (i) issued by,
or directly, unconditionally and fully guaranteed or insured by the United
States federal government or (ii) issued by any agency of the United States
federal government the obligations of which are fully backed by the full faith
and credit of the United States federal government, (b)
any readily-marketable direct obligations issued by any other agency of the
United States federal government, any state of the United States or any
political subdivision of any such state or any public instrumentality thereof,
in each case having a rating of at least “A-1” from S&P or at least “P-1”
from Moody’s, (c) any commercial paper rated at least “A-1” by S&P or
“P-1” by
Moody’s and issued by any Person organized under the laws of any state of the
United States, (d) any Dollar-denominated time deposit, insured certificate of
deposit, overnight bank deposit or bankers’ acceptance issued or accepted by (i)
Agent or (ii) any commercial bank that is (A) organized under the laws of the
United States, any state thereof or the District of Columbia, (B) “adequately
capitalized” (as defined in the regulations of its primary federal banking
regulators) and (C) has Tier 1 capital (as defined in such regulations) in
excess of $250,000,000 or (e) shares of any United States money market fund that
(i) has substantially all of its assets invested continuously in the types of
investments referred to in clause
(a), (b), (c) or (d) above with maturities as set forth
in the proviso below, (ii) has net assets in excess of $500,000,000 and (iii)
has obtained from either S&P or Moody’s the highest rating obtainable for
money market funds in the United States; provided, however, that the maturities of all
obligations specified in any of clauses
(a), (b), (c) and (d) above shall not exceed 365 days.
For the avoidance of doubt, “Cash Equivalents” does not include (and each Loan
Party is prohibited from purchasing or purchasing participations in) any auction
rate securities or other corporate or municipal bonds with a long-term nominal
maturity for which the interest rate is reset through a Dutch auction.

37 

     “Code” means the Internal Revenue Code of 1986, as amended, and any
regulations promulgated thereunder. 

    
“Collateral” means all Property and interests in Property and proceeds thereof now
owned or hereafter acquired by any Loan Party in or upon which a Lien is granted
or purported to be granted in favor of Agent for the benefit of Agent and
Lenders pursuant to any Loan Document. 

    
“Collection Account” means the following account of Agent (or such other account
as Agent shall identify in writing to Borrower or Lenders, as applicable):

		
      Bank Name: Deutsche Bank
Bank
      Address: New York, NY
ABA Number: 021 001 033
Account Number:
      50271079 
Account Name: GECC HH Cash
      Flow Collections
Ref: SIGA Technologies, Inc. /Model Id: HFS4040
    
	

     “Commitments” means the Term Loan Commitments and the Revolving Loan Commitments.

    
“Days Sales Outstanding” means (a) the gross Accounts of Loan Parties divided by (b)
the quotient of the gross “amounts invoiced by” Loan Parties for the last six
(6) months divided by one hundred eighty (180). 

    
“Default” means any event, which with the giving of notice or the passage of
time, or both, would constitute an Event of Default. 

    
“Default Rate” means a rate of interest equal to 5.0% per annum above the
rate of interest otherwise in effect for the applicable Obligation. 

    
“Disbursement Letter” means a disbursement instruction letter, in form and
substance satisfactory to Agent, among each Loan Party, Agent and each Lender.

    
“Dollars” and “$” each mean lawful money of the United States of America.

    
“ERISA” means the United States Employee Retirement Income Security Act of
1974, as amended. 

     “E-System” means any electronic system approved by Agent, including any Internet
or extranet-based site, whether such electronic system is owned, operated or
hosted by Agent, any of its Related Persons or any other Person, providing for
access to data protected by passcodes or other security system. 

38 

    
“Exigent Circumstance” means any event or circumstance that, in the reasonable
judgment of Agent, imminently threatens the ability of Agent to realize upon all
or any material portion or material piece of the Collateral, such as, without
limitation, fraudulent removal, concealment, or abscondment thereof, destruction
or material waste thereof, or failure of any Loan Party after reasonable demand
to maintain or reinstate adequate casualty insurance coverage, or which, in the
judgment of Agent, could result in a material diminution in value of the
Collateral (including, for the avoidance of doubt and without limitation,
circumstances where Agent reasonably believes the Loan Parties’ remaining cash
and Cash Equivalents are being, or are likely to be, significantly and
imminently diminished). 

    
“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof and any agreements entered into
pursuant to Section 1471(b)(1) of the Code.

    
“FDA” means the U.S. Food and Drug Administration or any successor thereto or
any other comparable Governmental Authority. 

    
“Final Maturity Date” means December 31,
2015. 

    
“GAAP” means generally accepted accounting principles in the United States of
America, as in effect from time to time. 

    
“Governmental Authority” means any nation, sovereign or government, any state or
other political subdivision thereof, any agency, authority or instrumentality
thereof and any entity or authority exercising executive, legislative, taxing,
judicial, regulatory or administrative functions of or pertaining to government,
including any central bank, stock exchange, regulatory body, arbitrator, public
sector entity, supra-national entity and any self-regulatory organization.

    
“Guaranty Agreement” means a guaranty agreement, in form and substance
satisfactory to Agent, made by Guarantors in favor of Agent, for the benefit of
Agent and Lenders, it being understood and agreed that in no event shall SIGA
Europe be required to be a party to the Guaranty Agreement. 

    
“Indebtedness” means, with respect to any Person, at any date, without
duplication, (a) all indebtedness for borrowed money, (b) all obligations
evidenced by bonds, debentures, notes or other similar instruments, (c) all
obligations to pay the deferred purchase price of Property or services,
including earnouts or similar payments (other than trade payables incurred in
the ordinary course of business), (d) all capital lease obligations, (e) the
principal balance outstanding under any synthetic lease, tax retention operating
lease, off-balance sheet loan or similar off-balance sheet financing product,
(f) all contingent or non-contingent obligations of such Person to reimburse any
bank or other Person in respect of amounts paid under a letter of credit, surety
bond or other similar instrument, (g) all equity securities of such Person
subject to repurchase or redemption other than at the sole option of such
Person, (h) all indebtedness secured by a Lien on any asset of such Person,
whether or not such indebtedness is an obligation of such Person, (i) the net
settlement obligations under any foreign exchange contract, currency swap
agreement, interest rate swap, cap or collar agreement or other similar
agreement or arrangement designed to alter the risks of that Person arising from
fluctuations in currency values or interest rates, and (j) all indebtedness,
obligations or liabilities of others guaranteed, endorsed (other than in the
ordinary course of business), co-made, discounted with recourse or sale with
recourse by such Person or for which such Person is otherwise directly or
indirectly liable. 

    
“Indemnified Taxes” means any and all present or future taxes, levies, imposts,
deductions, charges or withholdings and all liabilities with respect thereto
(other than (a) taxes measured by net income and franchise taxes imposed in lieu
of net income taxes, in each case imposed on Agent or any Lender as a result of
a present or former connection between Agent or such Lender and the jurisdiction
of the Governmental Authority imposing such tax or any political subdivision or
taxing authority thereof or therein, except for such connection arising solely
from Agent or such Lender having executed, delivered or performed its
obligations or received a payment under, or enforced, any Loan Document, (b) in
the case of a Lender, U.S. federal withholding taxes imposed on amounts payable
to or for the account of such Lender with respect to an applicable interest in
the Loans or Commitments pursuant to a law in effect on the date on which such
Lender acquires such interest in the Loan or Commitment (except to the extent
such Lender is a direct or indirect assignee of another Lender that was
entitled, at the time the assignment to such Lender
became effective, to receive additional amounts under Section 2.4(e) of this
Agreement), and (c) taxes directly attributable to Agent’s or any Lender’s
failure to comply with Section 2.4(e)(ii) of this Agreement). 

39 

     “Initial Loans” means the Term Loan made on the Closing Date. 

    
“Intellectual Property” means all copyright rights, copyright applications,
copyright registrations and like protections in each work of authorship and
derivative work, whether published or unpublished, any patents, patent
applications and like protections, including improvements, divisions,
continuations, renewals, reissues, extensions, and continuations-in-part of the
same, trademarks, trade names, service marks, mask works, rights of use of any
name, domain names, or any other similar rights, any applications therefor,
whether registered or not, and the goodwill of the business of any Person
connected with and symbolized thereby, know-how, operating manuals, trade secret
rights, clinical and non-clinical data, and rights to unpatented inventions.

    
“Interest Period” means, as applicable, (a) the period commencing on the
Closing Date and ending on the day immediately preceding the first Business Day
of the next succeeding calendar month, or (b) subsequent to the period described
in clause (a), the period commencing on the first Business Day of the calendar
month and ending on the day immediately preceding the first Business Day of the
next succeeding calendar month.

    
“Investment” means, with respect to any Person, directly or indirectly, (a) to
purchase or acquire any Stock or Stock Equivalents, or any obligations or other
securities of, or any interest in, any Person, including the establishment or
creation of a Subsidiary, (b) to make or commit to make any acquisition of all
or substantially all of the assets of another Person, or of any business,
division or other unit operation of any Person or (c) make or purchase any
advance, loan, extension of credit or capital contribution to, or any other
investment in, any Person. 

    
“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment,
charge, deposit arrangement, encumbrance, easement, lien (statutory or
otherwise), security interest or other security arrangement and any other
preference, priority or preferential arrangement of any kind or nature
whatsoever, including any conditional sale contract or other title retention
agreement, the interest of a lessor under a capital lease and any synthetic or
other financing lease having substantially the same economic effect as any of
the foregoing. 

    
“Loan” means the Term Loan, each Revolving Loan, and any other loan made or
deemed made by any Lender hereunder. 

    
“Loan Documents” means this Agreement, the Notes (if any), the Intellectual
Property Security Agreements, the Account Control Agreements, the Access
Agreements, the Perfection Certificate, the Pledge Agreement (if any), the
Guaranty (if any), any Subordination Agreement, the Disbursement Letter, any
Borrowing Base Certificate and all other agreements, instruments, documents and
certificates delivered to Agent or any Lender from time to time in connection
with any of the foregoing. 

    
“Margin Stock” means “margin stock” within the meaning of Regulations T, U
and X of the Board of Governors of the Federal Reserve System. 

    
“Material Adverse
Effect” means a material adverse effect on
any of (a) the operations, business, assets, properties, or condition (financial
or otherwise) of Borrower, individually, or the Loan Parties, taken as a whole,
(b) the ability of a Loan Party to perform any of its obligations under any Loan
Document to which it is a party, (c) the legality, validity or enforceability of
any Loan Document, (d) the rights and remedies of Agent or Lenders under any
Loan Document or (e) the validity, perfection or priority of any Lien in favor
of Agent, on behalf of itself and Lenders, on any of the Collateral. 

    
“Material Agreement” means (a) any agreement or contract to which a Loan Party is
a party and involving the receipt or payment of amounts in the aggregate
exceeding $250,000 per year, (b) any agreement or contract to which a Loan Party
is a party of which the breach, nonperformance, termination or failure to renew
could reasonably be expected to have a Material Adverse Effect, or (c) each
agreement relating to any Subordinated Indebtedness. 

    
“Material Indebtedness” means (a) any Subordinated Indebtedness and (b) any other
Indebtedness (other than the Obligations) of a Loan Party or any of its
Subsidiaries having an aggregate principal amount (including undrawn committed or available amounts and including amounts owing to all
creditors under any combined or syndicated credit arrangement) of more than
$250,000. 

40 

     “Note” means a promissory note of Borrower, in form and substance satisfactory
to Agent, payable to a Lender in a principal amount equal to the amount of such
Lender’s Term Loan Commitment, or Revolving Loan Commitment, as applicable.

    
“OFAC” means U.S. Treasury Department’s Office of Foreign Assets Control.

    
“Obligations” means all Loans and all other debts, obligations and liabilities of any kind
whatsoever owing by the Loan Parties to Agent and Lenders under the Loan
Documents, whether for principal, interest, fees, expenses, prepayment premiums,
indemnities, reimbursements or other sums, and whether or not such amounts
accrue after the filing of any petition in bankruptcy or after the commencement
of any insolvency, reorganization or similar proceeding, and whether or not
allowed in such case or proceeding, whether direct or indirect (including those
acquired by assignment), absolute or contingent, due or to become due, now
existing or hereafter arising and howsoever acquired, and whether or not
evidenced by any instrument or for the payment of any money. 

    
“Perfection Certificate” means a perfection certificate in the form provided by
Agent, completed and duly executed by each Loan Party. 

    
“Permitted Contest” means the contesting in good faith by appropriate
proceedings diligently conducted and with respect to which adequate reserves or
other appropriate provisions are maintained on the books of the applicable Loan
Party in accordance with GAAP and which do not involve, in the reasonable
judgment of Agent, any risk of the sale, forfeiture or loss of any of the
Collateral. 

    
“Permitted Discretion” means a determination made in good faith and in the exercise
of reasonable (from the perspective of a secured asset-based lender) business
judgment. 

    
“Permitted Dispositions” means (a) sales of inventory in the ordinary course of
business, (b) dispositions of equipment that is worn out, damaged or no longer
used or useful in the business of a Loan Party for cash so long as no Default or
Event of Default has occurred and is continuing at the time of such disposition
or would result after giving effect thereto, (c) the use of cash and Cash
Equivalents (i) to make required payments in connection with the PharmAthene
Litigation and any PharmAthene Settlement and (ii) otherwise to the extent not
prohibited under any Loan Document, (d) dispositions not otherwise permitted
hereunder that are made for fair market value; provided that (i) at the time of any
disposition, no Default or Event of Default shall exist or shall result from
such disposition, (ii) not less than 75% of the aggregate sales price from such
disposition shall be paid in cash, and (iii) the aggregate fair market value of
all assets so disposed of by the Loan Parties and their Subsidiaries shall not
exceed $100,000 in any calendar year, (e) discounts or forgiveness of accounts
receivable in the ordinary course of business or in connection with collection
or compromise thereof so long as no Default or Event of Default has occurred and
is continuing at the time of such discount or forgiveness, or would result after
giving effect thereto, and which shall not exceed $100,000 in the aggregate in
any calendar year, (f) issuances of Stock or Stock Equivalents to qualifying
directors to the extent not otherwise prohibited under any Loan Document and (g)
transactions permitted under Sections
7.5 and 7.6. 

    
“Permitted Indebtedness” means (a) the Obligations, (b) Indebtedness existing on the
Closing Date and set forth on Schedule
7.2, (c) Indebtedness consisting of
capitalized lease obligations and purchase money Indebtedness, in each case
incurred by any Loan Party or any of its Subsidiaries to finance the
acquisition, repair, improvement or construction of fixed or capital assets of
such Person; provided that (i) the aggregate outstanding principal amount of all
such Indebtedness does not exceed $250,000 at any time and (ii) the principal
amount of such Indebtedness does not exceed the lower of the cost or fair market
value of the property so acquired or built or of such repairs or improvements
financed with such Indebtedness (each measured at the time of such acquisition,
repair, improvement or construction is made), (d) Indebtedness owing by any Loan
Party to another Loan Party, provided that (i) each Loan Party shall have
executed and delivered to each other Loan Party a demand note (each, an
“Intercompany Note”) to evidence such intercompany loans or advances owing at any time by
each Loan Party to the other Loan Parties, which Intercompany Note shall be in
form and substance reasonably satisfactory to Agent and shall be pledged and
delivered to Agent pursuant to a Pledge Agreement as additional Collateral for
the Obligations, (ii) any and all Indebtedness of any Loan Party to another Loan
Party shall be subordinated to the Obligations pursuant to the subordination terms set forth in
each Intercompany Note, and (iii) no Default or Event of Default shall result
after giving effect to any such Indebtedness,
(e)
Subordinated Indebtedness, (f) Indebtedness
incurred in favor of insurance companies (or their financing affiliates) in
connection with the financing of insurance premiums of the Loan Parties not to
exceed $750,000 in the aggregate per calendar year, and (g) after BARDA
Acceptance, unsecured Indebtedness of up to $500,000.

41 

     “Permitted Investments” means (a) Investments existing on the Closing Date and set
forth on Schedule 7.5, (b) subject to Section
6.10, Investments in cash and Cash
Equivalents, (c) endorsements for collection or deposit in the ordinary course
of business consistent with past practice, (d) extensions of trade credit (other
than to Affiliates of a Loan Party) in the ordinary course of business, (e)
Investments received in connection with the bankruptcy or reorganization of
customers or suppliers and in settlement of delinquent obligations of, and other
disputes with, customers or suppliers arising in the ordinary course of
business, (f) loans and advances to employees of any Loan Party to finance
travel, entertainment and relocation expenses and other business purposes in the
ordinary course of business in an aggregate outstanding principal amount not to
exceed $250,000 at any time, (g) Investments consisting of non-cash loans made
by Borrower to officers, directors and employees of a Loan Party which are used
by such Persons to purchase simultaneously the Stock of Borrower, (h) advances
by a Loan Party to another Loan Party in accordance with the terms and
conditions described in clause (d) of the definition of “Permitted
Indebtedness”, (i) joint ventures or strategic alliances in the ordinary course
of business consisting of the non-exclusive licensing of technology, the
development of technology or the providing of technical support, but in no event
consisting of Investments of cash, Cash Equivalents or tangible assets, (j)
deposit accounts maintained in the ordinary course of business and in compliance
with the provisions of the Loan Documents; (k) deposits made (to Persons that
are not Affiliates) in the ordinary course of business securing obligations or
performance under contracts, such as in connection with real estate or personal
property leases; and (l) other Investments (excluding the creation or
acquisition of any Subsidiary or the acquisition of all or substantially all of
the assets or Stock of any Person or any business, division or other unit
operation of any Person) not listed above in the aggregate amount not to exceed
$500,000 at any one time outstanding and which were not made while a Default or
Event of Default then existed. 

     “Permitted Liens” means each of the
following: (a) Liens created pursuant to any Loan Document, (b) Liens existing
on the Closing Date and set forth on Schedule
7.1, (c) Liens (i) with respect to the
payment of taxes, assessments or other governmental charges or (ii) of
suppliers, carriers, materialmen, warehousemen, workmen or mechanics and other
similar Liens, in each case imposed by law and arising in the ordinary course of
business, and securing amounts that are not yet due or that are subject to a
Permitted Contest, (d) Liens securing Indebtedness permitted under clause (c) of
the definition of “Permitted Indebtedness”, provided that (i) such Liens exist
prior to the acquisition of, or attach substantially simultaneous with, or
within 20 days after, the acquisition, repair, improvement or construction of,
such property financed by such Indebtedness and (ii) such Liens do not extend to
any Property of a Loan Party other than the Property (and proceeds thereof)
acquired or built, or the improvements or repairs, financed by such
Indebtedness, (e) Liens of a collection bank on items in the course of
collection arising under Section 4-208 of the UCC, (f) pledges or cash deposits
made in the ordinary course of business (i) in connection with workers’
compensation, unemployment insurance or other types of social security benefits
(other than any Lien imposed by ERISA), (ii) to secure the performance of bids,
tenders, leases (other than capital leases), sales or other trade contracts
(other than for the repayment of borrowed money) or (iii) made in lieu of, or to
secure the performance of, surety, customs, reclamation or performance bonds (in
each case not related to judgments or litigation, except with respect to the
supersedes bond posted prior to the Closing Date in connection with the
PharmAthene Litigation), (g) judgment liens (other than for the payment of
taxes, assessments or other governmental charges) securing judgments and other
proceedings not constituting an Event of Default under Section 8.1(f) and pledges or cash
deposits made in lieu of, or to secure the performance of, judgment or appeal
bonds in respect of such judgments and proceedings, (h) Liens arising by reason
of zoning restrictions, easements, licenses, reservations, restrictions,
covenants, rights-of-way, encroachments, minor defects or irregularities in
title (including leasehold title) and other similar encumbrances on the use of
real property that do not materially (i) impair the value or marketability of
such real property or (ii) interfere with the ordinary conduct of the business
conducted and proposed to be conducted at such real property, (i) licenses
described in clause (c) of the definition of “Permitted Disposition,” (j) Liens
on premium refunds granted in favor of insurance companies (or their financing
affiliates) in connection with the financing of insurance premiums to the extent
permitted in this Agreement, (k) Liens on brokerage accounts incurred in the
ordinary course of business securing obligations to settle trades made by Loan
Parties to the extent such accounts are subject to an Account Control Agreement,
and (l) Liens arising from precautionary uniform commercial code financing
statements filed under any lease permitted by this Agreement. 

42 

     “Person” means any individual, partnership, corporation (including a business
trust and a public benefit corporation), joint stock company, estate,
association, firm, enterprise, trust, limited liability company, unincorporated
association, joint venture and any other entity or Governmental Authority.

     “PharmAthene” means PharmAthene, Inc.,
a Delaware corporation. 

     “PharmAthene Litigation” means the
legal proceeding in the Court of Chancery of the State of Delaware in re
PharmAthene, Inc., v. SIGA Technologies, Inc., Civil Action No. 2627-VCP,
including any appeal from any judgment or order issued in connection therewith
or any other proceeding initiated by PharmAthene or the Borrower in response to
any order, judgment or opinion issued in connection therewith. 

     “PharmAthene Settlement” means any
final, binding settlement of the PharmAthene Litigation pursuant to which the
Borrower would be released from all further liability with respect to the
matters that are the subject thereof and pursuant to which the Borrower would
use cash or Cash Equivalents to make one or more payments, including without
limitation a series of payments, to PharmAthene, or holders of PharmAthene debt
or equity, or successors to PharmAthene’s claim, provided that, immediately
after each such payment, the Borrower would have cash or Cash Equivalents in
accounts subject to Agent’s control in an aggregate amount of at least (1) $2.5
million, plus (2) an amount equal to, as of any date of any such payment, the
then outstanding aggregate principal amount of the Term Loan. 

     “Pledge Agreement” means a pledge
agreement in form and substance satisfactory to Agent executed by each Loan
Party and Agent. 

     “Product” means (i) the final drug
product under the brand name ST-246®, (ii) the final drug product
whose active ingredient has the USAN designation Tecovirimat, (iii) any final
drug product chemically derived from the active ingredient that has the USAN
designation Tecovirimat, and (iv) any other orthopox related small molecule
therapeutic product derived from the same family of tricyclononenes that ST-246
was derived from. 

     “Product Acceptance” means any written
documentation received from an authorized representative at a strategic national
stockpile warehouse or BARDA that confirms the number of courses accepted into
the strategic national stockpile and the date of such acceptance. 

     “Property” means any interest in any
kind of property or asset, whether real, personal or mixed, and whether tangible
or intangible. 

     “Pro Rata Share” means: 

          (a)
with respect to a Lender’s obligation to make the Term Loan and right to receive
payments of interest, fees and principal with respect thereto, the percentage
obtained by dividing (a) the aggregate outstanding principal amount of the Term
Loan owing to such Lender at such time by (b) the aggregate outstanding
principal amount of the Term Loan owing to all Lenders at such time; 

          (b)
with respect to a Lender’s obligation to make Revolving Loans and right to
receive payments of interest, fees and principal with respect thereto at any
time, the percentage obtained by dividing (a) the Revolving Loan Commitment of
such Lender then in effect (or, if such Revolving Loan Commitment is terminated
at such time, the aggregate outstanding principal amount of the Revolving Loans
at such time owing to such Lender) by (b) the Revolving Loan Commitments of all
Lenders at such time (or, if the Revolving Loan Commitments of all such Lenders
are terminated at such time, the aggregate outstanding principal amount of the
Revolving Loans owing to all Lenders at such time); and 

          (c)
with respect to all other matters at any time, the percentage obtained by
dividing (i) such Lender’s Commitments at such time (or if any Commitment of
such Lender is terminated at such time, the aggregate outstanding principal
amount of the applicable Loan at such time owing to such Lender), by (ii) the
Commitments of all Lenders at such time (or, if any Commitments of all such
Lenders are terminated at such time, the aggregate outstanding principal amount
of the applicable Loan owing to all Lenders at such time). 

43 

     “Public Health Laws” means all Requirements of Law relating to the procurement,
development, clinical and non-clinical evaluation, product approval or
clearance, manufacture, production, analysis, distribution, dispensing,
importation, exportation, use, handling, quality, sale, labeling, promotion, or
postmarket requirements of any drug, medical device, food, dietary supplement,
or other product (including, without limitation, any ingredient or component of
the foregoing products) subject to regulation under the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. et seq.) and similar state laws, controlled substances
laws, pharmacy laws, or consumer product safety laws. 

     “Qualified Assignee” means (a) any
Lender (other than a Non-Funding Lender), (b) any Affiliate of any Lender (other
than a Non-Funding Lender), (c) any commercial bank, savings and loan
association or savings bank or any other entity which is an “accredited
investor” (as defined in Regulation D under the Securities Act of 1933, as
amended) which extends credit or buys loans as one of its businesses, including
insurance companies, mutual funds, lease financing companies and commercial
finance companies, in each case of this clause (c), which either (i) has a
rating of BBB or higher from Standard & Poor’s Rating Group and a rating of
Baa2 or higher from Moody’s Investor Service, Inc. at the date that it becomes a
Lender, or (ii) together with its Affiliated entities, holds loan assets in
excess of $250,000,000 or (d) any other Person (other than a natural person)
approved by Agent, provided however, that notwithstanding the foregoing, unless
approved by Agent, “Qualified Assignee” shall not include (A) any Person who is
not capable of lending to Borrower without the imposition of any withholding or
similar taxes, or (B) any Loan Party or any Affiliate of a Loan Party or any
Person or Affiliate of such Person that holds any subordinated debt or Stock or
Stock Equivalents issued by any Loan Party or its Affiliates (other than any
Person that is a Lender on the Closing Date or any Affiliate thereof).

     “Reference Rate” means, for each day
during an Interest Period, the higher of (a) one and one-half of one percent
(1.50%) per annum and (b) a rate of interest determined by Agent equal to:

          (a)
the offered rate for deposits in Dollars for a term of three (3) calendar months
that appears on Reuters Screen LIBOR01 Page as of 11:00 a.m. (London time), on
the second full Business Day on which banks in the City of London, England are
generally open for interbank or foreign exchange transactions (such Business Day
a “LIBOR Business Day”) immediately prior to the first day of such Interest
Period; divided by 

          (b) a
number equal to 1.0 minus the aggregate (but without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on the day
that is two (2) LIBOR Business Days prior to the beginning of such Interest
Period (including basic, supplemental, marginal and emergency reserves under any
regulations of the Federal Reserve Board or other applicable Governmental
Authority having jurisdiction with respect thereto, as now and from time to time
in effect) for Eurocurrency funding (currently referred to as “Eurocurrency
Liabilities” in Regulation D of the Federal Reserve Board) that are required to
be maintained by a member bank of the Federal Reserve System. 

          If the
rate described in clause (a) above shall cease to be available from Reuters or
otherwise, such rate shall be determined from such financial reporting service
or other information as Agent shall reasonably select. 

     “Registrations” means registrations,
authorizations, approvals, licenses, permits, clearances, certificates, and
exemptions issued or allowed by the FDA (including, without limitation, new drug
applications, abbreviated new drug applications, biologics license applications,
investigational new drug applications, over-the-counter drug monograph, device
pre-market approval applications, device pre-market notifications,
investigational device exemptions, product recertifications, manufacturing
approvals, registrations and authorizations, CE Marks, pricing and reimbursement
approvals, labeling approvals or their foreign equivalent, controlled substance
registrations, and wholesale distributor permits). 

     “Regulatory Action” means an
administrative or regulatory enforcement action, proceeding, investigation or
inspection, FDA Form 483 notice of inspectional observation, warning letter,
untitled letter, other notice of violation letter, recall, seizure, Section 305
notice or other similar written communication, or consent decree, issued by the
FDA. 

     “Related Persons” means, with respect
to any Person, each Affiliate of such Person and each director, officer,
employee, agent, trustee, representative, attorney, accountant and each
insurance, environmental, legal, financial and other advisor and other
consultants and agents of or to such Person or any of its Affiliates.

44 

     “Requirement of Law” means, with respect to any Person, any law (statutory or
common), ordinance, treaty, rule, regulation, order, policy, judgment, writ,
injunction, decree, or other legal requirement or determination of an arbitrator
or of a Governmental Authority, in each case applicable to or binding upon such
Person or any of its Property or to which such Person or any of its Property is
subject. 

     “Requisite Lenders” means Lenders whose
Pro Rata Shares aggregate more than 50%. 

     “Reserves” means, reserves established
by Agent in its Permitted Discretion from time to time pursuant to Section
2.1(b), including, without limitation, with respect to known or anticipated
liabilities, offsets, or liquidity needs of Loan Parties. Without limiting the
generality of the foregoing, Reserves established to ensure the payment of
accrued interest, fees, expenses and other liabilities (including without
limitation rent reserves with respect to any leased locations) shall be deemed
to be an exercise of Agent’s Permitted Discretion. Reserves may be established
against the Borrowing Base and the aggregate Revolving Loan Commitments then in
effect as determined to be appropriate by Agent in the exercise of its Permitted
Discretion.

     “Responsible Officer” shall mean, to
the extent such exists, the chief executive officer, president, chief financial
officer, chief operating officer, chief technology officer, chief scientific
officer, vice president of finance, general counsel, vice president of
regulatory affairs and compliance, and any other officer with substantially the
same responsibility as any of the above. 

     “Revolving Lender” means each Lender
with a Revolving Loan Commitment (or if the Revolving Loan Commitments have
terminated, who hold Revolving Loans). 

     “Revolving Loan Commitment” means, with
respect to each Lender, the amount set forth opposite such Lender’s name on
Schedule A
hereto under the caption “Revolving Loan Commitment”, as amended from time to
time to reflect any permitted assignments and as such amount may be reduced or
terminated pursuant to this Agreement. “Revolving Loan Commitments” means the
Revolving Loan Commitments of all Lenders with a Revolving Loan Commitment.

     “Revolving Loan Commitment Termination Date” means the earlier to occur of: (a) December 31, 2015; and (b) the date
on which the Revolving Loan Commitments shall terminate for any reason in
accordance with the provisions of this Agreement. 

     “Scheduled Payment Date” means the
first day of each calendar month. 

     “SEC” means the Securities and Exchange
Commission. 

     “SIGA (Europe)” means SIGA
Pharmaceuticals (Europe) Limited, a private limited company incorporated under
the laws of England and Wales. 

     “Solvent” means, with respect to any
Person as of any date of determination, that, as of such date, (a) the value of
the assets of such Person (both at fair value and present fair saleable value)
is greater than the total amount of liabilities (including contingent and
unliquidated liabilities) of such Person, (b) such Person is able to pay all
liabilities of such Person as such liabilities mature and (c) such Person does
not have unreasonably small capital. In computing the amount of contingent or
unliquidated liabilities at any time, such liabilities shall be computed at the
amount that, in light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability. 

     “Stock” means all shares of capital
stock (whether denominated as common stock or preferred stock), equity
interests, beneficial, partnership or membership interests, joint venture
interests, participations or other ownership or profit interests in or
equivalents (regardless of how designated) of or in a Person (other than an
individual), whether voting or non-voting. 

     “Stock Equivalents” means all
securities convertible into or exchangeable for Stock or any other Stock
Equivalent and all warrants, options or other rights to purchase, subscribe for
or otherwise acquire any Stock or any other Stock Equivalent, whether or not
presently convertible, exchangeable or exercisable. 

45 

     “Subordinated
Indebtedness” means any unsecured
Indebtedness owing by any Loan Party to any Person that is not a holder of any
Stock or Stock Equivalents of any Loan Party on the date such Indebtedness is
incurred, which Indebtedness is subordinated to the Obligations pursuant to a
Subordination Agreement. 

     “Subordination Agreement” means, with
respect to any Subordinated Indebtedness, a subordination agreement in form and
substance satisfactory to Agent executed by Agent, the Loan Parties and each
holder of such Subordinated Indebtedness. 

     “Subsidiary” means, with respect to any
Person, any entity the management of which is, directly or indirectly controlled
by, or of which an aggregate of more than 50% of the outstanding voting Stock
is, at the time, owned or controlled, directly or indirectly by, such Person or
one or more Subsidiaries of such Person. 

     “Term Loan Commitment” means, with
respect to each Lender, the amount set forth opposite such Lender’s name on
Schedule A hereto under the caption “Term Loan Commitment”, as amended from time
to time to reflect any permitted assignments and as such amount may be reduced
or terminated pursuant to this Agreement. “Term Loan Commitments” means the Term
Loan Commitments of all Lenders with a Term Loan Commitment. 

     “Term Loan Lender” means each Lender
with a Term Loan Commitment, or if the Term Loan Commitment is no longer in
effect, each Lender owning a Term Loan. 

     “Transfer” means, with respect to any
Property, to sell, convey, transfer, assign, license, rent, lease, sublease,
mortgage, transfer or otherwise dispose of any interest therein or to permit any
Person to acquire any such interest. 

     “UCC” means the Uniform Commercial Code
as from time to time in effect in the State of New York; provided, however, that, in the event
that, by reason of mandatory provisions of any applicable Requirement of Law,
any of the attachment, perfection or priority of Agent’s or any other Lender’s
security interest in any Collateral is governed by the Uniform Commercial Code
of a jurisdiction other than the State of New York, “UCC” shall mean the Uniform Commercial
Code as in effect in such other jurisdiction for purposes of the provisions
hereof relating to such attachment, perfection or priority and for purposes of
the definitions related to or otherwise used in such provisions. 

[Signature Page Follows]

46 

     IN
WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed and delivered by their duly authorized
officers as of the day and year first written above. 

BORROWER: 

SIGA TECHNOLOGIES,
INC. 

	By:   	   /s/ Daniel J. Luckshire
	 	Name:     	Daniel J. Luckshire
		Title:	EVP and CFO

Address For Notices For Loan Party:

35 East 62nd Street
New
York, NY 10065
Attention: Roy Cysner,
Controller 

AGENT AND LENDER: 

GENERAL ELECTRIC CAPITAL CORPORATION

	By:   	   /s/ Alan
      M. Silbert
		Name:     	Alan M. Silbert
	 	Title:	Duly Authorized
  Signatory

Address For Notices: 

General Electric Capital
Corporation
c/o GE Healthcare Financial Services, Inc.
Two Bethesda Metro
Center, Suite 600
Bethesda, Maryland 20814
Attention: Senior Vice President of Risk – Life Science Finance
Phone:
(301) 961-1640
Facsimile: (301) 664-9855 

Except in the case of notices under
Section 6.3, with a copy to: 

General Electric Capital
Corporation
c/o GE Healthcare Financial Services, Inc.
Two Bethesda Metro
Center, Suite 600
Bethesda, Maryland 20814
Attention: General
Counsel
Phone: (301) 961-1640
Facsimile: (301) 664-9866 

EXHIBIT A 

SECRETARY’S CERTIFICATE OF AUTHORITY

[DATE] 

          Reference is made to the Loan and Security Agreement, dated as
of December __, 2012 (as amended, restated, supplemented or otherwise modified
from time to time, the “Agreement”), among SIGA Technologies,
Inc., a Delaware corporation (the “Borrower”), the guarantors from time
to time party thereto, General Electric Capital Corporation, a Delaware
corporation (“GECC”), as a lender and as agent (in such capacity, together with its
successors and assigns in such capacity, “Agent”), and the other lenders
signatory thereto from time to time (GECC and such other lenders, the
“Lenders”).
Capitalized terms used but not defined herein are used with the meanings
assigned to such terms in the Agreement. 

I, [_________________________], do hereby certify that: 

(i) I am the duly elected, qualified
and acting [Assistant] Secretary of [INSERT NAME OF LOAN
PARTY] (the “Company”); 

(ii) attached hereto as Exhibit A are true,
complete and correct copies of the Company’s [Certificate/Articles of Incorporation or Articles of
Organization/Certificate of Formation] and
the [Bylaws/LLC Agreement/Partnership
Agreement], each of which is in full force
and effect on and as of the date hereof; 

(iii) each of the following named
individuals is a duly elected or appointed, qualified and acting officer of the
Company who holds the offices set opposite such individual’s name, and such
individual is authorized to sign the Loan Documents to which the Company is a
party and all other notices, documents, instruments and certificates to be
delivered pursuant thereto, and the signature written opposite the name and
title of such officer is such officer’s genuine signature: 

	Name	 	               	Title	 	               	Signature	 
	 				
	 				
	 				

(iv) attached hereto as Exhibit B are true,
complete and correct copies of resolutions adopted by the Board of
Directors/Members of the Company (the “Board”) authorizing the execution,
delivery and performance of the Loan Documents to which the Company is a party,
which resolutions were duly adopted by the Board on [DATE] and all such resolutions are in
full force and effect on the date hereof in the form in which adopted without
amendment, modification, rescission or revocation; 

(v) the foregoing authority shall
remain in full force and effect, and Agent and each Lender shall be entitled to
rely upon same, until written notice of the modification, rescission or
revocation of same, in whole or in part, has been delivered to Agent and each
Lender, but no such modification, rescission or revocation shall, in any event,
be effective with respect to any documents executed or actions taken in reliance
upon the foregoing authority before such written notice is delivered to Agent
and each Lender; and 

(vi) no Default or Event of Default has
occurred and is continuing or will result from the making of the
Loan[s],
and all representations and warranties of the Company in the Loan Documents are
true, accurate and complete in all material respects (but in all respects if
such representation or warranty is qualified by “material” or “Material Adverse
Effect”) on and as of the date hereof, except to the extent such representations
and warranties expressly relate to an earlier date, in which case such
representations and warranties were true, accurate and complete in all material
respects (but in all respects if such representation or warranty is qualified by
“material” or “Material Adverse Effect”) on and as of such earlier date.

[Signature Page Follows]

IN WITNESS WHEREOF, I have hereunto set my hand as of the first date written
above 

	Name:     		 
	Title:	[Assistant]
      Secretary	 

     The undersigned does hereby certify on
behalf of the Company that he/she is the duly elected or appointed, qualified
and acting [TITLE] of the Company and that [NAME FROM
ABOVE] is the duly elected or appointed, qualified and acting [Assistant] Secretary of
the Company, and that the signature set forth immediately above is his/her
genuine signature. 

	Name:     		
	Title:		 

EXHIBIT B TO SECRETARY’S CERTIFICATE
OF AUTHORITY 

[FORM OF] RESOLUTIONS 

BOARD RESOLUTIONS

_____________ ___, 20__

WHEREAS, SIGA Technologies, Inc.,
a
Delaware corporation (“Borrower”) has requested
that General Electric Capital Corporation, a Delaware corporation
(“GECC”),
as agent (in such capacity, together with its successors and assigns in such
capacity, the “Agent”) and lender, and certain other lenders (GECC and such other
lenders, collectively, the “Lenders”) provide a credit facility in
a maximum principal amount not to exceed $12,000,000 (the “Credit Facility”); and

WHEREAS, the terms of the Credit Facility are set forth in a loan and security
agreement by and among Borrower, the guarantors from time to time party thereto,
Agent, and the Lenders and certain related agreements, documents and instruments
described in detail below; and 

[WHEREAS, as a subsidiary of Borrower,
__________, the “Company”) will benefit from the making of the loan(s) to
Borrower under the Credit Facility; and]

WHEREAS, the Board of Directors of [Borrower] [Company] (the “Directors”) deems it
advisable and in the best interests of [Borrower] [Company] to execute, deliver and
perform its obligations under those transaction documents described and referred
to below. 

NOW, THEREFORE, be it 

RESOLVED, that the Credit Facility be, and it hereby is, approved; and further

RESOLVED, that the form of Loan and Security Agreement (the “Loan and Security Agreement”), by and among [Borrower], [Company,] the [other] guarantors from time to time
party thereto, Agent and the Lenders, as presented to the Directors, be and it
hereby is, approved and the [President, the
Chief Executive Officer, Chief Financial Officer, the Vice President or
Treasurer] of [Borrower] [Company] (collectively, the
“Proper Officers”)
be, and each of them hereby is, authorized and directed on behalf of
[Borrower]
[Company]
to execute and deliver to Agent the Loan and Security Agreement, in
substantially the form as presented to the Directors, with such changes as the
Proper Officers may approve, such approval to be conclusively evidenced by
execution and delivery thereof; and further 

[RESOLVED, that the form of
Promissory Note (the “Note”), as presented to the
Directors, be, and it hereby is, approved and the Proper Officers be, and each
of them hereby is, authorized and directed on behalf of Borrower to execute and
deliver to Lender one or more promissory Notes, in substantially the form as
presented to the Directors, with such changes as the Proper Officers may
approve, such approval to be conclusively evidenced by execution and delivery
thereof; and further] 

[RESOLVED, that the form(s) of
[Intellectual Property Security Agreements] [and] [Account Control Agreement]
[(collectively, the “Security
Documents”)] [and the form of the
Preferred Stock Warrant,] [Disbursement Letter,] [Guaranty,] [INCLUDE OTHER
DOCUMENTS AS APPROPRIATE] (together with the Security Documents, the
“Ancillary
Documents”), each as presented to the
Directors, be, and each of them hereby is, approved and the Proper Officers be,
and each of them hereby is, authorized and directed on behalf of Borrower to
execute and deliver to Agent each of the Ancillary Documents, in substantially
the form as presented to the Directors, with such changes as the Proper Officers
may approve, such approval to be conclusively evidenced by execution and
delivery thereof; and further] 

RESOLVED, that the Proper Officers be, and each of them hereby is, authorized and
directed to execute and deliver any and all other agreements, certificates,
security agreements, financing statements, indemnification agreements,
instruments and documents (together with the Loan and Security Agreement,
[the Notes] [, and the Ancillary Documents], the “Loan
Documents”) and take any and all other
further action, in each case, as may be required or which they may deem
appropriate, on behalf of [Borrower]
[Company], in connection with the Credit
Facility and carrying into effect the foregoing resolutions, transactions and
matters contemplated thereby; and further 

RESOLVED, that [Borrower]
[Company] is hereby authorized to perform its
obligations under the Loan Documents, [including, without limitation, the borrowing of any advances made under
the Credit Facility and] the granting of any
security interest in [Borrower’s]
[Company’s] assets contemplated thereby to
secure [Borrower’s] [Company’s]
obligations in connection therewith; and
further 

RESOLVED, that in addition to executing any documents approved in the preceding
resolutions, the Secretary or any Assistant Secretary of [Borrower] [Company] may
attest to such Loan Documents, the signature thereon or the corporate seal of
[Borrower] [Company] thereon; and further 

RESOLVED, that any actions taken by the Proper Officers prior to the date of
these resolutions in connection with the transactions contemplated by these
resolutions are hereby ratified and approved; and further 

RESOLVED, that these resolutions shall be valid and binding upon [Borrower] [Company].

EXHIBIT B 

COMPLIANCE CERTIFICATE

[DATE] 

     Reference is
made to the Loan and Security Agreement, dated as of December ___, 2012 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Agreement”), among SIGA Technologies, Inc., a Delaware corporation (the
“Borrower”), the guarantors from time to time party thereto, General Electric
Capital Corporation, a Delaware corporation (“GECC”), in its capacity as agent (in
such capacity, together with its successors and assigns, in such capacity, the
“Agent”)
and lender, and the other lenders signatory thereto (GECC and such other
lenders, the “Lenders”). Capitalized terms used but not defined herein are used
with the meanings assigned to such terms in the Agreement. 

I, [_________________________], do hereby certify that: 

(i) I am the duly elected, qualified
and acting chief financial officer of Borrower; 

(ii) attached hereto as Exhibit A are the financial
statements required to be delivered in accordance with Section 6.3(a) of the
Agreement, which financial statements are correct and complete and fairly
present, in all material respects, in accordance with GAAP the financial
position and the results of operations of Borrower and its Subsidiaries as of
the dates of and for the periods covered by such financial statements (subject,
in the case of interim financial statements, to normal year-end adjustments and
the absence of footnote disclosure); 

(iii) no Default or Event of Default
has occurred under the Agreement which has not been previously disclosed, in
writing, to Agent; 

(iv) all representations and warranties
of the Loan Parties stated in the Loan Documents are true and correct in all
material respects (but in all respects if such representation or warranty is
qualified by “material” or “Material Adverse Effect”) on and as of the date
hereof, except to the extent such representations and warranties expressly
relate to an earlier date, in which case such representations and warranties
were true and correct in all material respects (but in all respects if such
representation or warranty is qualified by “material” or “Material Adverse
Effect”) on and as of such earlier date; 

(v) the Loan Parties own no Margin
Stock; 

(vi) attached is a list of new
applications or registrations that any Loan Party has made or filed (or
acquired) in respect of any Intellectual Property of a Loan Party or any change
in status of any outstanding application or registration since the date of the
last Compliance Certificate delivered to Agent; and 

(vii) set forth below is a list of all
Deposit Accounts and Securities Accounts maintained in the name of each Loan
Party and whether such account has been opened since the date of the last
Compliance Certificate. 

			   Bank/Financial Institution	     	  Account Number	     	New Account?
	1	)	 	 		 	Yes	No
	2	)	 			 	Yes	No
	3	)					Yes	No
	4	)					Yes	No

IN WITNESS WHEREOF, I have hereunto set my hand as of the first date written
above 

			
	Name:    	 	 
	Title:	 	 

EXHIBIT C-1 

FORM OF LANDLORD CONSENT

[Landlord]
[Address]

[__________, ____] 

Ladies and Gentlemen: 

     General
Electric Capital Corporation (together with its successors and assigns, if any,
“Agent”)
and certain other lenders (the “Lenders”) have entered into, or are
about to enter into, a Loan and Security Agreement, dated as of December __,
2012 (as amended, restated, supplemented or otherwise modified from time to
time, the “Agreement”) with SIGA Technologies, Inc. (“Borrower”) [and __________ (“Company”)], pursuant to which [Borrower] [Company] has granted, or
will grant, to Agent, on behalf of itself and the Lenders, a security interest
in certain assets of [Borrower]
[Company], including, without limitation, all
of [Borrower’s] [Company’s] cash, cash equivalents, accounts, books and records, goods,
inventory, machinery, equipment, furniture and trade fixtures (such as equipment
bolted to floors), together with all additions, substitutions, replacements and
improvements to, and proceeds, including, insurance proceeds, of the foregoing,
but excluding any and all building fixtures (such as plumbing, lighting and HVAC
systems that are permanently attached to the Premises) (collectively, the
“Collateral”). Some or all of the Collateral is, or will be, located at certain
premises known as [__________________] in the City or Town of [_____________, County of _________________________ and State of
_______] (“Premises”), and [Borrower] [Company]
occupies the Premises pursuant to a lease, dated as of [DATE], between
[Borrower] [Company], as tenant, and you, [NAME], as [owner/landlord/mortgagee/realty manager] (as amended, restated, supplemented or otherwise modified from time to
time, the “Lease”). 

    
By your signature below, you hereby agree that: (i) the Lease is in full
force and effect and you are not aware of any existing defaults thereunder, (ii)
the Collateral is, and shall remain, personal property regardless of the method
by which it may be, or become, affixed to the Premises; (iii) you agree to use
your best efforts to provide Agent with written notice of any default by
[Borrower] [Company] under the Lease resulting in a termination of the Lease
(“Default Notice”) and Agent shall have the right, but not the obligation to cure such
default within 15 days following Agent’s receipt of such Default Notice, (iv)
any security interest, landlord’s lien or other lien or interest that you may
have in the Collateral and any proceeds thereof (including, without limitation,
proceeds of any insurance therefor) shall be, and remain, subject and
subordinate to the security interest of Agent in the Collateral, and you agree
not to levy upon any Collateral or to assert any landlord lien, right of
distraint or other claim against the Collateral for any reason; (v) Agent, and
its employees and agents, shall have the right, from time to time, to enter into
the Premises for the purpose of inspecting the Collateral; and (vi) Agent, and
its employees and agents, shall have the right, upon any default by
[Borrower] [Company] under the Agreement, to enter into the Premises and to remove
or otherwise deal with the Collateral, including, without limitation, by way of
public auction or private sale (provided that, if Agent conducts a public
auction or private sale of the Collateral at the Premises, Agent shall use
reasonable efforts to notify Landlord first and to hold such auction or sale in
a manner that would not unduly disrupt Landlord’s or any other tenant’s use of
the Premises). Agent agrees to repair or reimburse you for any physical damage
actually caused to the Premises by Agent, or its employees or agents, during any
such removal or inspection (other than ordinary wear and tear), provided that it
is understood by the parties hereto that Agent shall not be liable for any
diminution in value of the Premises caused by the removal or absence of the
Collateral therefrom. You hereby acknowledge that Agent shall have no obligation
to remove or dispose of the Collateral from the Premises and no action by Agent
pursuant to this Consent shall be deemed to be an assumption by Agent of any
obligation under the Lease and, except as provided in the immediately preceding
sentence, Agent shall not have any obligation to you. 

    
You hereby acknowledge and agree that [Borrower’s] [Company’s] granting of a
security interest in the Collateral in favor of Agent, on behalf of itself and
the Lenders, shall not constitute a default under the Lease nor permit you to
terminate the Lease or re-enter or repossess the Premises or otherwise be the
basis for the exercise of any remedy available to you. 

     This Consent
and the agreements contained herein shall be binding upon, and shall inure to
the benefit of, any successors and assigns of the parties hereto (including any
transferees of the Premises). This Consent shall terminate upon the indefeasible
payment of Borrower’s indebtedness in full in immediately available funds and
the satisfaction in full of Borrower’s [and
Company’s] performance of its obligations
under the Agreement and the related documents. 

    
This Consent and any amendments, waivers, consents or supplements hereto
or in connection herewith may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. Delivery of an executed signature page of this Consent or any delivery
contemplated hereby by facsimile or electronic transmission shall be as
effective as delivery of a manually executed counterpart thereof. 

     We appreciate your cooperation in this
matter of mutual interest. 

GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent 

	By:	
	Name:  	
	Title:	                                                         

General Electric Capital Corporation

c/o GE Healthcare Financial Services, Inc. 
Two Bethesda Metro Center,
Suite 600 
Bethesda, Maryland 20814
Attention: Senior Vice President of Risk – Life Science Finance
Phone:
(301) 961-1640
Facsimile: (301) 664-9855 

With a copy to: 

General Electric Capital Corporation

c/o GE Healthcare Financial Services, Inc. 
Two Bethesda Metro Center,
Suite 600 
Bethesda, Maryland 20814 
Attention: General Counsel 
Phone:
(301) 961-1640 
Facsimile: (301) 664-9866 

AGREED TO AND ACCEPTED BY: 

[NAME], as [owner/landlord/mortgagee/realty
manager] 

	By:	
	Name:  	
	Title:	                                                         

Address: 

AGREED TO AND ACCEPTED BY: 

SIGA TECHNOLOGIES,
INC. 

	By:	
	Name:  	
	Title:	                                                         

	Interest in the Premises (check applicable
  box)
	           
      	o	           
      	Owner
		o		Mortgagee
		o		Landlord
	 	o		Realty Manager
		 
	Address: 35 East 62nd Street
				New York, NY 10065
				Attn.: Roy Cysner,
  Controller

EXHIBIT C-2 

FORM OF BAILEE CONSENT

[Letterhead of GE Capital] 

_____ ___, 20__ 

	[NAME OF
      BAILEE]
	 	 
		 

Re: [Name of the Loan Party] (the
“Company”) 

Dear Sirs: 

     Please accept
this letter as notice that we have entered into or may enter into financing
arrangements with the Company under which the Company has granted to us
continuing security interests in substantially all personal property and assets
of the Company and the proceeds thereof, including, without limitation, certain
[equipment/inventory/goods] owned by the Company held by you at the [manufacturing/warehouse]
facility (the “Premises”) owned by you and located at [______________](the “Personal Property”).

    
Please acknowledge that as a result of such arrangements, you are holding
all of the Personal Property solely for our benefit and subject only to the
terms of this letter and our instructions; provided, however, that until you
receive further written notice from us, you are authorized to use and/or release
any and all of the Personal Property in your possession as directed by the
Company in the ordinary course of business. The foregoing instructions shall
continue in effect until we modify them in writing, which we may unilaterally do
without any consent or approval from the Company. Upon receipt of our
instructions, you agree that (a) you will release the Personal Property only to
us or our designee; (b) you will cooperate with us in our efforts to assemble,
sell (whether by public or private sale), take possession of, and remove all of
the Personal Property located at the Premises; (c) you will permit the Personal
Property to remain on the Premises for forty-five (45) days after your receipt
of our instructions or at our option, to have the Personal Property removed from
the Premises within a reasonable time, not to exceed forty-five (45) days after
your receipt of our instructions; (d) you will not hinder our actions in
enforcing our liens on the Personal Property; and (e) after receipt of our
instructions, you will abide solely by our instructions with respect to the
Personal Property, and not those of the Company. 

    
You hereby waive and release in our favor: (a) any contractual lien,
security interest, charge or interest and any other lien which you may be
entitled to whether by contract, or arising at law or in equity against any
Personal Property; (b) any and all rights granted under any present or future
laws to levy or distrain for rent or any other charges which may be due to you
against the Personal Property; and (c) any and all other claims, liens, rights
of offset, deduction, counterclaim and demands of every kind which you have or
may hereafter have against the Personal Property. 

    
You agree that (i) you have not and will not commingle the Personal
Property with any other property of a similar kind owned or held by you in any
manner such that the Personal Property is not readily identifiable, (ii) you
have not and will not issue any negotiable or non-negotiable documents or
instruments relating to the Personal Property, and (iii) the Personal Property
is not and will not be deemed to be fixtures. 

    
Notwithstanding the foregoing, all of your charges of any nature
whatsoever shall continue to be charged to and paid by the Company and we shall
not be liable for such charges. 

    
You hereby authorize us to file at any time such financing statements
naming you as the debtor/bailee, Company as the secured party/bailor, and us as
the Company’s assignee, indicating as the collateral goods of the Company now or
hereafter in your custody, control or possession and proceeds thereof, and
including any other information with respect to the Company required under the
Uniform Commercial Code for the sufficiency of such financing statement or for
it to be accepted by the filing office of any applicable jurisdiction (and any
amendments or continuations with respect thereto). 

     The
arrangement as outlined herein is to continue without modification, until we
have given you written notice to the contrary. 

    
EACH OF THE PARTIES HERETO HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS LETTER.

    
Any notice(s) required or desired to be given hereunder shall be directed
to the party to be notified at the address stated herein. 

    
The terms and conditions contained herein are to be construed and
enforced in accordance with the laws of the State of New York. 

    
This terms and conditions contained herein shall inure to the benefit of
and be binding upon the parties hereto and their respective successors and
permitted assigns. 

The Company has signed below to
indicate its consent to, and agreement with, the foregoing arrangements, terms
and conditions. By your signature below, you hereby agree to be bound by the
terms and conditions of this letter. 

Very truly yours, 

GENERAL ELECTRIC CAPITAL CORPORATION

	By:	 
	Name:  	 
	Title: Duly Authorized
      Signatory

General Electric Capital
Corporation
c/o GE Healthcare Financial Services, Inc. 
Two Bethesda Metro
Center, Suite 600
Bethesda, Maryland 20814 
Attention: Senior Vice President of Risk – Life Science Finance

Phone: (301) 961-1640 
Facsimile: (301) 664-9855 

With a copy to: 

General Electric Capital Corporation

c/o GE Healthcare Financial Services, Inc. 
Two Bethesda Metro Center,
Suite 600 
Bethesda, Maryland 20814 
Attention: General Counsel 
Phone:
(301) 961-1640 
Facsimile: (301) 664-9866 

Agreed to: 

SIGA TECHNOLOGIES,
INC. 

	By:	 
	Name:   	 
	Title:	 
	Address: 35 East 62nd
      Street
	New York, NY
    10065
	Attention: Roy Cysner,
      Controller

	[NAME OF
      BAILEE]
	 
	By:	 
	Name:	 
	Title:	 
	Address:   	 
	 
	 

	EXHIBIT D
	AUTOMATIC PAYMENT AUTHORIZATION
      AGREEMENT

Introduction: When you use the automatic payment service, the payment is
automatically made by electronic transfer directly from your bank account at the
financial institution specified below. An “authorized check signer” must
complete, sign and submit one copy of this Authorization Agreement. 

Authorization Agreement for
Automatic Payment Service (ACH Debits) 

1. SIGA Technologies, Inc.
(“Borrower”) hereby authorizes General Electric Capital Corporation
(“Agent”),
to the extent permitted under the Loan Agreement identified below, to initiate
debit entries from the account identified below for amounts due under the Loan
and Security Agreement, dated as of December [__], 2012 (as amended, restated,
supplemented or otherwise modified from time to time, the “Loan Agreement”), among
Borrower, the guarantors from time to time party thereto, Agent and the lenders
from time to time party thereto and the other Loan Documents. Capitalized terms
used herein but not defined herein are used herein as defined in the Loan
Agreement. 

2. Borrower understands that the
payment of all Obligations are solely its responsibility. If payment is not
satisfied due to account closure, insufficient funds, or cancellation of any
required automated payment services, Borrower agrees to remit payment plus any
additional amounts due as set forth in the Loan Agreement. 

3. It is incumbent upon Borrower to
give written notice to Agent of any changes to this Authorization Agreement or the below referenced bank
account information 10 days prior to payment date. Borrower may revoke this
Authorization Agreement by giving 10 days written notice to Agent unless
otherwise stipulated in the Loan Agreement. 

4. If the account identified below is a
joint account, all of the account holders must sign this Authorization Agreement. 

Account: 
Provide the following information
regarding the account to be debited. 

	Account type:  	o Checking	     	o Savings

	Financial Institution:	 

	Name of Account:	 

	Address of Financial Institution:	 

	City/State/Zip:	 

	Account #:	 

	ABA Routing #:	 

	SIGA TECHNOLOGIES,
      INC.
	 
	By:	 	 
	Name:
	Title:

	[INSERT NAME OF EACH
      JOINT-ACCOUNT HOLDER, IF ANY]
	By:	                                                         
      	 
	Name:
	Title:

EXHIBIT F 

FORM OF BORROWING BASE CERTIFICATE

This Borrowing Base Certificate is
given by SIGA Technologies, Inc.,
a Delaware corporation (“Borrower”), pursuant to the
Loan and Security Agreement, dated as of December ___, 2012 (as amended,
restated, supplemented or otherwise modified from time to time, the
“Agreement”), among Borrower, the guarantors from time to time party thereto,
General Electric Capital Corporation, a Delaware corporation (“GECC”), in its capacity as
agent (in such capacity, together with its successors and assigns, in such
capacity, the “Agent”) and lender, and the other lenders signatory thereto (GECC
and such other lenders, the “Lenders”). Capitalized terms used but
not defined herein are used with the meanings assigned to such terms in the
Agreement. 

The undersigned is duly authorized to
execute and deliver this Borrowing Base Certificate [on behalf of the
Borrowers]. By executing this Borrowing Base Certificate such officer of
Borrower hereby certifies to Agent and Lenders [on behalf of the Borrowers] and
without personal liability that: 

	               	(a)	     	Attached hereto as
      Schedule 1 is a calculation of the Borrowing Base for the period ending on
      _________________ (the “Reporting
      Date”);
		 
		(b)		Based on such
      schedule, the Borrowing Base as of the Reporting Date is:
		 
				                                
      $[_____]
		 
		(c)		The effective date of
      this Borrowing Base Certificate will be the date this Borrowing Base
      Certificate is received by Agent.

IN WITNESS WHEREOF, Borrower has caused
this Borrowing Base Certificate to be executed by its [______________] this [__ day of _____,
20__].

	SIGA
      TECHNOLOGIES, INC.
	 
	 
	By:	 	 
	Name:   	 	 
	Its:

Schedule I to Borrowing Base Certificate

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