Document:

Exhibit 10.1 Securities Purchase Agreement

    
      

    

    Exhibit
      10.1

     

     

    SECURITIES
      PURCHASE AGREEMENT

     

    This
      Securities Purchase Agreement (this “Agreement”)
      is
      dated as of October 18, 2006 among SIGA Technologies, Inc., a Delaware
      corporation (the “Company”),
      and
      the purchasers identified on the signature pages hereto (each, a “Purchaser”
and
      collectively, the “Purchasers”).
      

     

    WHEREAS,
      subject to the terms and conditions set forth in this Agreement and pursuant
      to
      Section 4(2) of the Securities Act of 1933, as amended (the “Securities
      Act”),
      the
      Company desires to issue and sell to each Purchaser, and each Purchaser,
      severally and not jointly, desires to purchase from the Company, certain
      securities of the Company as more fully described in this
      Agreement.

     

    NOW,
      THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
      and for other good and valuable consideration the receipt and adequacy of which
      are hereby acknowledged, the Company and each of the Purchasers, severally
      and
      not jointly, agree as follows:

     

    ARTICLE
      I

    DEFINITIONS

     

    1.1
       Definitions.
      In
      addition to the terms defined elsewhere in this Agreement, the following terms
      have the meanings indicated:

     

    “Affiliate”
      means
      any Person that, directly or indirectly through one or more intermediaries,
      controls or is controlled by or is under common control with a Person, as such
      terms are used in and construed under Rule 144 under the Securities Act. With
      respect to a Purchaser, any investment fund or managed account that is managed
      on a discretionary basis by the same investment manager as such Purchaser will
      be deemed to be an Affiliate of such Purchaser.

     

    “Business
      Day”
means
      any day other than Saturday, Sunday or other day on which commercial banks
      in
      The City of New York are authorized or required by law to remain
      closed.

     

    “Change
      of Control”
      means
      the occurrence of any of the following in one or a series of related
      transactions: (i) an acquisition after the date hereof by an individual or
      legal
      entity or “group” (as described in Rule 13d-5(b)(1) under the Exchange Act) of
      more than one-third of the voting rights or equity interests in the Company;
      (ii) a replacement of more than one-third of the members of the Company's board
      of directors that is not approved by those individuals who are members of the
      board of directors on the date hereof (or other directors previously approved
      by
      such individuals); (iii) a merger or consolidation of the Company or any
      significant Subsidiary or a sale of more than one-third of the assets of the
      Company in one or a series of related transactions, unless following such
      transaction or series of transactions, the holders of the Company's securities
      prior to the first such transaction continue to hold at least two-thirds of
      the

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    voting
      rights and equity interests in the surviving entity or acquirer of such assets;
      (iv) a recapitalization, reorganization or other transaction involving the
      Company or any significant Subsidiary that constitutes or results in a transfer
      of more than one-half of the voting rights or equity interests in the Company;
      (v) consummation of a “Rule 13e-3 transaction” as defined in Rule 13e-3 under
      the Exchange Act with respect to the Company, or (vi) the execution by the
      Company or its controlling shareholders of an agreement providing for or
      reasonably likely to result in any of the foregoing events.

     

    “Closing”
      means
      the closing of the purchase and sale of the Shares and Warrants pursuant to
      Section 2.1.

     

    “Closing
      Date”
      means
      the date of the Closing.

     

    “Closing
      Price”
      means,
      for any date, the price determined by the first of the following clauses that
      applies: (a) if the Common Stock is then listed or quoted on an Eligible Market
      or any other national securities exchange, the closing price per share of the
      Common Stock for such date (or the nearest preceding date) on the primary
      Eligible Market or exchange on which the Common Stock is then listed or quoted;
      (b) if prices for the Common Stock are then quoted on the OTC Bulletin
      Board, the closing bid price per share of the Common Stock for such date (or
      the
      nearest preceding date) so quoted; (c) if prices for the Common Stock are
      then reported in the “Pink Sheets” published by the National Quotation Bureau
      Incorporated (or a similar organization or agency succeeding to its functions
      of
      reporting prices), the most recent closing bid price per share of the Common
      Stock so reported; or (d) in all other cases, the fair market value of a
      share of Common Stock as determined by an independent appraiser selected in
      good
      faith by Purchasers holding a majority of the Securities.

     

    “Commission”
      means
      the Securities and Exchange Commission.

     

    “Common
      Stock”
      means
      the common stock of the Company, par value $0.0001 per share.

     

    "Common
      Stock Equivalents"
      means,
      collectively, Options and Convertible Securities. 

     

    “Company
      Counsel”
      means
      Kramer Levin Naftalis & Frankel LLP, counsel to the Company.

     

    "Convertible
      Securities"
      means
      any stock or securities (other than Options) convertible into or exercisable
      or
      exchangeable for Common Stock. 

     

    “Effective
      Date”
      means
      the date that the Registration Statement is first declared effective by the
      Commission.

     

    “Eligible
      Market”
      means
      any of the New York Stock Exchange, the American Stock Exchange, the NASDAQ
      Global Select Market, NASDAQ Global Market or the NASDAQ Capital
      Market.

     

    
      
        
        

      

      
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    “Exchange
      Act”
      means
      the Securities Exchange Act of 1934, as amended.

     

    “Excluded
      Stock” means
      the
      issuance of Common Stock (A) upon exercise or conversion of any options or
      other
      securities described in Schedule
      3.1(f)
      (provided that such exercise or conversion occurs in accordance with the terms
      thereof, without amendment or modification, and that the applicable exercise
      or
      conversion price or ratio is described in such schedule) or otherwise pursuant
      to any employee benefit plan described in Schedule
      3.1(f)
      or
      hereafter adopted by the Company and approved by its shareholders or (B) in
      connection with any issuance of shares or grant of options to employees,
      officers, directors or consultants of the Company pursuant to a stock option
      plan or other incentive stock plan duly adopted by the Company’s board of
      directors or in respect of the issuance of Common Stock upon exercise of any
      such options. 

     

    “Filing
      Date”
      means
      the 30th
      day
      following the Closing Date with respect to the initial Registration Statement
      required to be filed hereunder, and, with respect to any additional Registration
      Statements that may be required pursuant to Section
      6.1(f),
      the
      10th day following the date on which the Company first knows, or reasonably
      should have known, that such additional Registration Statement is required
      under
      such Section.

     

    “Lien”
means
      any lien, charge, claim, security interest, encumbrance, right of first refusal
      or other restriction.

     

    “Losses”
      means
      any and all losses, claims, damages, liabilities, settlement costs and expenses,
      including, without limitation, costs of preparation and reasonable attorneys’
fees.

     

    “Options”
means
      any rights, warrants or options to subscribe for or purchase Common Stock or
      Convertible Securities (including all Warrants that can be issued under the
      Transaction Documents).

     

    “Person”
      means
      any individual or corporation, partnership, trust, incorporated or
      unincorporated association, joint venture, limited liability company, joint
      stock company, government (or an agency or subdivision thereof) or any court
      or
      other federal, state, local or other governmental authority or other entity
      of
      any kind.

     

    “Per
      Unit Purchase Price”
means
      $4.54.

     

    “Proceeding”
      means an
      action, claim, suit, investigation or proceeding (including, without limitation,
      an investigation or partial proceeding, such as a deposition), whether commenced
      or threatened.

     

    “Prospectus”
      means
      the prospectus included in the Registration Statement (including, without
      limitation, a prospectus that includes any information previously omitted from
      a
      prospectus filed as part of an effective registration statement in reliance
      upon
      Rule 430A promulgated under the Securities Act), as amended or supplemented
      by
      any prospectus supplement, with respect to the terms of the offering of any
      portion of the Registrable Securities covered by the Registration Statement,
      and
      all other amendments

     

    
      
        
        

      

      
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    and
      supplements to the Prospectus including post effective amendments, and all
      material incorporated by reference or deemed to be incorporated by reference
      in
      such Prospectus.

     

    “Purchaser
      Counsel”
      has the
      meaning set forth in Section
      6.2(a).

     

    “Registrable
      Securities”
      means
      any Common Stock (including Underlying Shares) issued or issuable pursuant
      to
      the Transaction Documents, together with any securities issued or issuable
      upon
      any stock split, dividend or other distribution, recapitalization or similar
      event with respect to the foregoing.

     

    “Registration
      Statement”
      means
      each registration statement required to be filed under Article VI, including
      (in
      each case) the Prospectus, amendments and supplements to such registration
      statement or Prospectus, including pre- and post-effective amendments, all
      exhibits thereto, and all material incorporated by reference or deemed to be
      incorporated by reference in such registration statement.

     

    “Required
      Effectiveness Date”
      means
      (i) with respect to the initial Registration Statement required to be filed
      hereunder, the 90th
      day
      following the Closing Date and (ii) with respect to any additional Registration
      Statements that may be required pursuant to Section
      6.1(f),
      the
      30th day following the date on which the Company first knows, or reasonably
      should have known, that such additional Registration Statement is required
      under
      such Section.

     

    “Rule
      144,” “Rule
      415,”
      and
“Rule
      424”
      means
      Rule 144, Rule 415 and Rule 424, respectively, promulgated by the Commission
      pursuant to the Securities Act, as such Rules may be amended from time to time,
      or any similar rule or regulation hereafter adopted by the Commission having
      substantially the same effect as such Rule.

     

    “Securities”
      means
      the Shares, Warrants and the Underlying Shares.

     

    “Shares”
      means
      the shares of Common Stock, which are being issued and sold to the Purchasers
      at
      the Closing.

     

    “Subsidiary”
      means
      any Person in which the Company, directly or indirectly, owns capital stock
      or
      holds an equity or similar interest.

     

    “Trading
      Day”
      means
      (a) any day on which the Common Stock is listed or quoted and traded on its
      primary Trading Market, or (b) if the Common Stock is not then listed or quoted
      and traded on its primary Trading Market, then a day on which trading occurs
      on
      an Eligible Market (or any successor thereto), or (c) if trading ceases to
      occur
      on an Eligible Market (or any successor thereto), any Business Day.

     

    “Trading
      Market”
      means
      the NASDAQ Capital Market or any other Eligible Market, or any national
      securities exchange, market or trading or quotation facility on which the Common
      Stock is then listed or quoted.

     

    
      
        
        

      

      
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    “Transaction
      Documents”
      means
      this Agreement, the Warrants, the Transfer Agent Instructions and any other
      documents or agreements executed in connection with the transactions
      contemplated hereunder.

     

    "Transfer
      Agent Instructions"
      means
      the Irrevocable Transfer Agent Instructions, in the form of Exhibit
      D,
      executed by the Company and delivered to and acknowledged in writing by the
      Company's transfer agent.

     

    “Underlying
      Shares”
      means
      the shares of Common Stock issuable upon exercise of the Warrants.

     

    “Unit”
means
      one Share and a Warrant to acquire 0.50 shares of Common Stock.

     

    “Warrant”
means
      each Common Stock purchase warrant in the form of Exhibit A, collectively the
      “Warrants”.

    

     

    ARTICLE
      II

    PURCHASE
      AND SALE

     

    2.1
       Subject
      to the terms and conditions set forth in this Agreement, at the Closing the
      Company shall issue and sell to each Purchaser, and each Purchaser shall,
      severally and not jointly, purchase from the Company, such number of Units
      indicated below such Purchaser’s name on the signature page of this Agreement at
      the Per Unit Purchase Price. The Closing shall take place at the offices of
      Malhotra & Associates LLP immediately following the execution hereof, or at
      such other location or time as the parties may agree. 

     

    2.2
       Closing
      Deliveries.

     

    (a)
       At
      the
      Closing, the Company shall deliver or cause to be delivered to each Purchaser
      the following:

     

    (i)
       one
      or
      more stock certificates, free and clear of all restrictive and other legends
      (except as expressly provided in Section 4.1(b) hereof), evidencing such number
      of Shares equal to the number of Units indicated below such Purchaser's name
      on
      the signature page of this Agreement, registered in the name of such
      Purchaser;

     

    (ii)
       a
      Warrant, registered in the name of such Purchaser, pursuant to which such
      Purchaser shall have the right to acquire such number of Underlying Shares
      indicated below such Purchaser’s name on the signature page of this Agreement
      under the heading “Warrant Shares”;

     

    (iii)
       a
      legal
      opinion of Company Counsel, in the form of Exhibit
      B,
      executed by such counsel and delivered to the Purchasers; 

     

    (iv)
       duly
      executed Transfer Agent Instructions; and

     

     

    
      
        
        

      

      
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    (v)  a
      certificate from a duly authorized officer certifying on behalf of the Company
      that each of the conditions set forth in Section 5.1 has been
      satisfied;

     

    (b)
       At
      the
      Closing, each Purchaser shall deliver or cause to be delivered an amount equal
      to the Per Unit Purchase Price multiplied by the number of Units indicated
      below
      such Purchaser’s name on the signature page of this Agreement under the heading
      "Units Purchased", in United States dollars and in immediately available funds,
      by wire transfer to an account designated in writing to such Purchaser by the
      Company for such purpose. The total purchase price payable by each Purchaser
      shall be set forth under such Purchaser’s name on the signature page of this
      Agreement under the heading “Purchase Price.”

    

    ARTICLE
      III

    REPRESENTATIONS
      AND WARRANTIES

     

    3.1
       Representations
      and Warranties of the Company.
      The
      Company hereby represents and warrants to each of the Purchasers as
      follows:

     

    (a)
       Subsidiaries.
      The
      Company has no direct or indirect Subsidiaries other than those listed in
      Schedule 3.1(a). Except as disclosed in Schedule 3.1(a), the Company owns,
      directly or indirectly, all of the capital stock or comparable equity interests
      of each Subsidiary free and clear of any Lien and all the issued and outstanding
      shares of capital stock or comparable equity interest of each Subsidiary are
      validly issued and are fully paid, non-assessable and free of preemptive and
      similar rights.

     

    (b)
       Organization
      and Qualification.
      Each of
      the Company and the Subsidiaries is an entity duly organized, validly existing
      and in good standing under the laws of the jurisdiction of its incorporation
      or
      organization (as applicable), with the requisite power and authority to own
      and
      use its properties and assets and to carry on its business as currently
      conducted. Neither the Company nor any Subsidiary is in violation of any of
      the
      provisions of its respective certificate or articles of incorporation, bylaws
      or
      other organizational or charter documents. Each of the Company and the
      Subsidiaries is duly qualified to do business and is in good standing as a
      foreign corporation or other entity in each jurisdiction in which the nature
      of
      the business conducted or property owned by it makes such qualification
      necessary, except where the failure to be so qualified or in good standing,
      as
      the case may be, could not, individually or in the aggregate, (i) adversely
      affect the legality, validity or enforceability of any Transaction Document,
      (ii) have or result in a material adverse effect on the results of operations,
      assets, prospects, business or condition (financial or otherwise) of the Company
      and the Subsidiaries, taken as a whole on a consolidated basis, or (iii)
      adversely impair the Company's ability to perform fully on a timely basis its
      obligations under any of the Transaction Documents (any of (i), (ii) or (iii),
      a
“Material
      Adverse Effect”).

     

    (c)
       Authorization;
      Enforcement.
      The
      Company has the requisite corporate power and authority to enter into and to
      consummate the transactions contemplated by each of the Transaction Documents
      and otherwise to carry out its obligations hereunder and thereunder. The
      execution and delivery of each of the Transaction Documents by the Company
      and
      the consummation by it of the transactions contemplated hereby and thereby
      have
      been duly

     

     

    
      
        
        

      

      
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    authorized
      by all necessary action on the part of the Company and no further consent or
      action is required by the Company, its Board of Directors or its shareholders.
      Each of the Transaction Documents has been (or upon delivery will be) duly
      executed by the Company and, assuming the due authorization, execution and
      delivery by the other parties thereto, is, or when delivered in accordance
      with
      the terms hereof, will constitute, the valid and binding obligation of the
      Company enforceable against the Company in accordance with its
      terms.

     

    (d)
       No
      Conflicts.
      The
      execution, delivery and performance of the Transaction Documents by the Company
      and the consummation by the Company of the transactions contemplated hereby
      and
      thereby do not and will not (i) conflict with or violate any provision of the
      Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws
      or other organizational or charter documents, (ii) conflict with, or constitute
      a default (or an event that with notice or lapse of time or both would become
      a
      default) under, or give to others any rights of termination, amendment,
      acceleration or cancellation (with or without notice, lapse of time or both)
      of,
      any agreement, credit facility, debt or other instrument (evidencing a Company
      or Subsidiary debt or otherwise) or other understanding to which the Company
      or
      any Subsidiary is a party or by which any property or asset of the Company
      or
      any Subsidiary is bound or affected, or (iii) result in a violation of any
      law,
      rule, regulation, order, judgment, injunction, decree or other restriction
      of
      any court or governmental authority to which the Company or a Subsidiary is
      subject (including federal and state securities laws and regulations and the
      rules and regulations of any self-regulatory organization to which the Company
      or its securities are subject), or by which any property or asset of the Company
      or a Subsidiary is bound or affected.

     

    (e)
       Issuance
      of the Securities.
      The
      Securities (including the Underlying Shares) are duly authorized and, when
      issued and paid for in accordance with the Transaction Documents, will be duly
      and validly issued, fully paid and nonassessable, free and clear of all Liens
      and shall not be subject to preemptive rights or similar rights of shareholders.
      The Company has reserved from its duly authorized capital stock the maximum
      number of shares of Common Stock issuable upon exercise of the
      Warrants.

     

    (f)
       Capitalization.
      The
      number of shares and type of all authorized, issued and outstanding capital
      stock, options and other securities of the Company (whether or not presently
      convertible into or exercisable or exchangeable for shares of capital stock
      of
      the Company), as of September 30, 2006, is set forth in Schedule 3.1(f). All
      outstanding shares of capital stock are duly authorized, validly issued, fully
      paid and nonassessable and have been issued in compliance with all applicable
      securities laws. Except as disclosed in Schedule 3.1(f), there are no
      outstanding options, warrants, script rights to subscribe to, calls or
      commitments of any character whatsoever relating to, or securities, rights
      or
      obligations convertible into or exercisable or exchangeable for, or giving
      any
      Person any right to subscribe for or acquire, any shares of Common Stock, or
      contracts, commitments, understandings or arrangements by which the Company
      or
      any Subsidiary is or may become bound to issue additional shares of Common
      Stock, or securities or rights convertible or exchangeable into shares of Common
      Stock. There are no anti-dilution or price adjustment provisions contained
      in
      any security issued by the Company (or in any agreement providing rights to
      security holders) and the issue and sale of the Securities (including the
      Underlying Shares) will not obligate the Company to issue shares of Common
      Stock
      or other securities to any Person (other than the Purchasers) and will not
      result in a right of any holder of Company securities to adjust the exercise,
      conversion, exchange or reset

     

     

    
      
        
        

      

      
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    price
      under such securities. To the knowledge of the Company, except as specifically
      disclosed in Schedule 3.1(f), no Person or group of related Persons beneficially
      owns (as determined pursuant to Rule 13d-3 under the Exchange Act), or has
      the
      right to acquire, by agreement with or by obligation binding upon the Company,
      beneficial ownership of in excess of 5% of the outstanding Common Stock,
      ignoring for such purposes any limitation on the number of shares of Common
      Stock that may be owned at any single time.

     

    (g)
       SEC
      Reports; Financial Statements.
      The
      Company has filed all reports required to be filed by it under the Exchange
      Act,
      including pursuant to Section 13(a) or 15(d) thereof, for the two years
      preceding the date hereof (or such shorter period as the Company was required
      by
      law to file such material) (the foregoing materials (together with any materials
      filed by the Company under the Exchange Act, whether or not required) being
      collectively referred to herein as the “SEC
      Reports”
      and,
      together with this Agreement and the Schedules to this Agreement, the
“Disclosure
      Materials”)
      on a
      timely basis or has received a valid extension of such time of filing and has
      filed any such SEC Reports prior to the expiration of any such extension. The
      Company has delivered to each Purchaser true, correct and complete SEC Reports
      filed by the Company within the 10 days preceding the date hereof. As of their
      respective dates, the SEC Reports complied in all material respects with the
      requirements of the Securities Act and the Exchange Act and the rules and
      regulations of the Commission promulgated thereunder, and none of the SEC
      Reports, when filed, contained any untrue statement of a material fact or
      omitted to state a material fact required to be stated therein or necessary
      in
      order to make the statements therein, in the light of the circumstances under
      which they were made, not misleading. The financial statements of the Company
      included in the SEC Reports comply in all material respects with applicable
      accounting requirements and the rules and regulations of the Commission with
      respect thereto as in effect at the time of filing. Such financial statements
      have been prepared in accordance with United States generally accepted
      accounting principles applied on a consistent basis during the periods involved
      (“GAAP”),
      except
      as may be otherwise specified in such financial statements or the notes thereto,
      and fairly present in all material respects the financial position of the
      Company and its consolidated subsidiaries as of and for the dates thereof and
      the results of operations and cash flows for the periods then ended, subject,
      in
      the case of unaudited statements, to normal, immaterial, year-end audit
      adjustments. All material agreements to which the Company or any Subsidiary
      is a
      party or to which the property or assets of the Company or any Subsidiary are
      subject are included as part of or specifically identified in the SEC
      Reports.

     

    (h)
       Material
      Changes.
      Since
      the date of the latest audited financial statements included within the SEC
      Reports, except as specifically disclosed in the SEC Reports or in Schedule
      3.1(h), (i) there has been no event, occurrence or development that,
      individually or in the aggregate, has had or that could result in a Material
      Adverse Effect, (ii) the Company has not incurred any liabilities (contingent
      or
      otherwise) other than (A) trade payables and accrued expenses incurred in the
      ordinary course of business consistent with past practice and (B) liabilities
      not required to be reflected in the Company’s financial statements pursuant to
      GAAP or required to be disclosed in filings made with the Commission, (iii)
      the
      Company has not altered its method of accounting or the identity of its
      auditors, except as disclosed in its SEC Reports, (iv) the Company has not
      declared or made any dividend or distribution of cash or other property to
      its
      shareholders or purchased, redeemed or made any agreements to purchase
      or

      

     

    
      
        
        

      

      
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    redeem
      any shares of its capital stock, and (v) the Company has not issued any equity
      securities to any officer, director or Affiliate, except pursuant to existing
      Company stock-based plans.

     

    (i)
       Absence
      of Litigation.
      There
      is no action, suit, claim, proceeding, inquiry or investigation before or by
      any
      court, public board, government agency, self-regulatory organization or body
      pending or, to the knowledge of the Company, threatened against or affecting
      the
      Company or any of its Subsidiaries that could, individually or in the aggregate,
      have a Material Adverse Effect. Schedule 3.1(i) contains a complete list and
      summary description of any pending or, to the knowledge of the Company,
      threatened proceeding against or affecting the Company or any of its
      Subsidiaries, without regard to whether it could, individually or in the
      aggregate, have a Material Adverse Effect.

     

    (j)
       Compliance.
      Neither
      the Company nor any Subsidiary (i) is in default under or in violation of (and,
      to the knowledge of the Company, no event has occurred that has not been waived
      that, with notice or lapse of time or both, would result in a default by the
      Company or any Subsidiary under), nor has the Company or any Subsidiary received
      written notice of a claim that it is in default under or that it is in violation
      of, any indenture, loan or credit agreement or any other agreement or instrument
      to which it is a party or by which it or any of its properties is bound (whether
      or not such default or violation has been waived), (ii) is in violation of
      any
      order of any court, arbitrator or governmental body, or (iii) is or has been
      in
      violation of any statute, rule or regulation of any governmental authority,
      including without limitation all foreign, federal, state and local laws relating
      to taxes, environmental protection, occupational health and safety, product
      quality and safety and employment and labor matters, except in each case as
      could not, individually or in the aggregate, have or result in a Material
      Adverse Effect. 

     

    (k)
       Title
      to Assets.
      The
      Company and the Subsidiaries have good and marketable title in fee simple to
      all
      real property owned by them that is material to the business of the Company
      and
      the Subsidiaries and good and marketable title in all personal property owned
      by
      them that is material to the business of the Company and the Subsidiaries,
      in
      each case free and clear of all Liens, except for Liens as do not materially
      affect the value of such property and do not materially interfere with the
      use
      made and proposed to be made of such property by the Company and the
      Subsidiaries. Any real property and facilities held under lease by the Company
      and the Subsidiaries are held by them under valid, subsisting and enforceable
      leases of which the Company and the Subsidiaries are in compliance.

     

    (l)
       Certain
      Fees.
      Except
      for the fees described in Schedule 3.1(l), all of which are payable to
      registered broker-dealers, no brokerage or finder’s fees or commissions are or
      will be payable by the Company to any broker, financial advisor or consultant,
      finder, placement agent, investment banker, bank or other Person with respect
      to
      the transactions contemplated by this Agreement, and the Company has not taken
      any action that would cause any Purchaser to be liable for any such fees or
      commissions.

     

    (m)
       Private
      Placement.
      Neither
      the Company nor any Person acting on the Company’s behalf has sold or offered to
      sell or solicited any offer to buy the Securities by means of any form of
      general solicitation or advertising. Neither the Company nor any of its
      Affiliates nor any Person acting on the Company's behalf has, directly or
      indirectly, at any time within the

     

    
      
        
        

      

      
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    past
      six
      months, made any offer or sale of any security or solicitation of any offer
      to
      buy any security under circumstances that would (i) eliminate the availability
      of the exemption from registration under Regulation D under the Securities
      Act
      in connection with the offer and sale of the Securities as contemplated hereby
      or (ii) cause the offering of the Securities pursuant to the Transaction
      Documents to be integrated with prior offerings by the Company for purposes
      of
      any applicable law, regulation or stockholder approval provisions, including,
      without limitation, under the rules and regulations of any Trading Market.
      The
      Company is not, and is not an Affiliate of, an “investment company” within the
      meaning of the Investment Company Act of 1940, as amended. The Company is not
      a
      United States real property holding corporation within the meaning of the
      Foreign Investment in Real Property Tax Act of 1980.

     

    (n)
       Listing
      and Maintenance Requirements.
      Except
      as set forth in the SEC Reports, the Company has not, in the two years preceding
      the date hereof, received notice (written or oral) from any Trading Market
      on
      which the Common Stock is or has been listed or quoted to the effect that the
      Company is not in compliance with the listing or maintenance requirements of
      such Trading Market. The Company is, and has no reason to believe that it will
      not in the foreseeable future continue to be, in compliance with all such
      listing and maintenance requirements.

     

    (o)
       Registration
      Rights.
      Except
      as described in Schedule 3.1(o), the Company has not granted or agreed to grant
      to any Person any rights (including “piggy-back” registration rights) to have
      any securities of the Company registered with the Commission or any other
      governmental authority that have not been satisfied.

     

    (p)
       Application
      of Takeover Protections.
      There
      is no control share acquisition, business combination, poison pill (including
      any distribution under a rights agreement) or other similar anti-takeover
      provision under the Company’s charter documents or the laws of its state of
      incorporation that is or could become applicable to any of the Purchasers as
      a
      result of the Purchasers and the Company fulfilling their obligations or
      exercising their rights under the Transaction Documents, including, without
      limitation, as a result of the Company's issuance of the Securities and the
      Purchasers' ownership of the Securities.

     

    (q)
       Disclosure.
      The
      Company confirms that neither it nor any other Person acting on its behalf
      has
      provided any of the Purchasers or their agents or counsel with any information
      that constitutes or might constitute material, nonpublic information. The
      Company understands and confirms that each of the Purchasers will rely on the
      foregoing representations in effecting transactions in securities of the
      Company. All disclosure materials provided to the Purchasers regarding the
      Company, its business and the transactions contemplated hereby, including the
      Schedules to this Agreement, furnished by or on behalf of the Company are true
      and correct in all material respects and do not contain any untrue statement
      of
      a material fact or omit to state any material fact necessary in order to make
      the statements made therein, in the light of the circumstances under which
      they
      were made, not misleading. No event or circumstance has occurred or information
      exists with respect to the Company or any of its Subsidiaries or its or their
      business, properties, prospects, operations or financial conditions, which,
      under applicable law, rule or regulation, requires public disclosure or
      announcement by the Company but which has not been so publicly announced or
      disclosed. The Company acknowledges and agrees that (i) no Purchaser makes
      or
      has made any representations or

     

    
      
        
        

      

      
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    warranties
      with respect to the transactions contemplated hereby other than those
      specifically set forth in Section 3.2 or (ii) any statement, commitment or
      promise to the Company or, to its knowledge, any of its representatives which
      is
      or was an inducement to the Company to enter into this Agreement or otherwise.
      

     

    (r)
       Acknowledgment
      Regarding Purchasers' Purchase of Securities.
      The
      Company acknowledges and agrees that each of the Purchasers is acting solely
      in
      the capacity of an arm's length purchaser with respect to this Agreement and
      the
      transactions contemplated hereby. The Company further acknowledges that no
      Purchaser is acting as a financial advisor or fiduciary of the Company (or
      in
      any similar capacity) with respect to this Agreement and the transactions
      contemplated hereby and any advice given by any Purchaser or any of their
      respective representatives or agents in connection with this Agreement and
      the
      transactions contemplated hereby is merely incidental to the Purchasers'
      purchase of the Securities. The Company further represents to each Purchaser
      that the Company's decision to enter into this Agreement has been based solely
      on the independent evaluation of the transactions contemplated hereby by the
      Company and its representatives.

     

    (s)
       Patents
      and Trademarks.
      The
      Company and the Subsidiaries have, or have rights to use, all patents, patent
      applications, trademarks, trademark applications, service marks, trade names,
      copyrights, licenses and other similar rights that are necessary or material
      for
      use in connection with their respective businesses as described in the SEC
      Reports and which the failure to so have could have a Material Adverse Effect
      (collectively, the "Intellectual
      Property Rights").
      Neither the Company nor any Subsidiary has received a written notice that the
      Intellectual Property Rights used by the Company or any Subsidiary violates
      or
      infringes upon the rights of any Person. To the knowledge of the Company, all
      such Intellectual Property Rights are enforceable and there is no existing
      infringement by another Person of any of the Intellectual Property
      Rights.

     

    (t)
       Insurance.
      The
      Company and the Subsidiaries are insured by insurers of recognized financial
      responsibility against such losses and risks and in such amounts as are prudent
      and customary in the businesses in which the Company and the Subsidiaries are
      engaged. Neither the Company nor any Subsidiary has any reason to believe that
      it will not be able to renew its existing insurance coverage as and when such
      coverage expires or to obtain similar coverage from similar insurers as may
      be
      necessary to continue its business without a significant increase in
      cost.

     

    (u)
       Regulatory
      Permits.
      The
      Company and the Subsidiaries possess all certificates, authorizations and
      permits issued by the appropriate federal, state, local or foreign regulatory
      authorities necessary to conduct their respective businesses as described in
      the
      SEC Reports, except where the failure to possess such permits could not,
      individually or in the aggregate, have or result in a Material Adverse Effect
      (“Material
      Permits”),
      and
      neither the Company nor any Subsidiary has received any notice of proceedings
      relating to the revocation or modification of any Material Permit.

     

    (v)
       Transactions
      With Affiliates and Employees.
      Except
      as set forth in SEC Reports filed at least ten days prior to the date hereof,
      none of the officers or directors of the Company and, to the knowledge of the
      Company, none of the employees of the Company is

     

    
      
        
        

      

      
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    presently
      a party to any transaction with the Company or any Subsidiary (other than for
      services as employees, officers and directors), including any contract,
      agreement or other arrangement providing for the furnishing of services to
      or
      by, providing for rental of real or personal property to or from, or otherwise
      requiring payments to or from any officer, director or such employee or, to
      the
      knowledge of the Company, any entity in which any officer, director, or any
      such
      employee has a substantial interest or is an officer, director, trustee or
      partner.

     

    (w)
       Form
      S-3 Eligibility.
      The
      Company is eligible to register the resale of its Common Stock for resale by
      the
      Purchasers under Form S-3 promulgated under the Securities Act.

     

    (x)
       Solvency.
      Based
      on the financial condition of the Company as of the Closing Date, (i) the
      Company’s fair saleable value of its assets exceeds the amount that will be
      required to be paid on or in respect of the Company’s existing debts and other
      liabilities (including known contingent liabilities) as they mature; (ii) the
      Company’s assets do not constitute unreasonably small capital to carry on its
      business for the current fiscal year as now conducted and as proposed to be
      conducted including its capital needs taking into account the particular capital
      requirements of the business conducted by the Company, and projected capital
      requirements and capital availability thereof; and (iii) the current cash flow
      of the Company, together with the proceeds the Company would receive, were
      it to
      liquidate all of its assets, after taking into account all anticipated uses
      of
      the cash, would be sufficient to pay all amounts on or in respect of its debt
      when such amounts are required to be paid. The Company does not intend to incur
      debts beyond its ability to pay such debts as they mature (taking into account
      the timing and amounts of cash to be payable on or in respect of its
      debt).

     

    (y)
       Internal
      Accounting Controls.
      The
      Company and the Subsidiaries maintain a system of internal accounting controls
      sufficient to provide reasonable assurance that (i) transactions are executed
      in
      accordance with management’s general or specific authorizations, (ii)
      transactions are recorded as necessary to permit preparation of financial
      statements in conformity with generally accepted accounting principles and
      to
      maintain asset accountability, (iii) access to assets is permitted only in
      accordance with management’s general or specific authorization, and (iv) the
      recorded accountability for assets is compared with the existing assets at
      reasonable intervals and appropriate action is taken with respect to any
      differences.

     

    (z)
       Sarbanes-Oxley
      Act.
      The
      Company is in compliance with applicable requirements of the Sarbanes-Oxley
      Act
      of 2002 and applicable rules and regulations promulgated by the Commission
      thereunder in effect as of the date of this Agreement, except where such
      noncompliance could not be reasonably expected to have, individually or in
      the aggregate, a Material Adverse Effect.

     

    3.2
       Representations
      and Warranties of the Purchasers.
      Each
      Purchaser hereby, as to itself only and for no other Purchaser, represents
      and
      warrants to the Company as follows:

    (a)
       Organization;
      Authority.
      Such
      Purchaser is an entity duly organized, validly existing and in good standing
      under the laws of the jurisdiction of its organization with the requisite
      corporate or partnership power and authority to enter into and to consummate
      the  

     

    
      
        
        

      

      
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    transactions
      contemplated by the Transaction Documents and otherwise to carry out its
      obligations hereunder and thereunder. The purchase by such Purchaser of the
      Shares and the Warrants hereunder has been duly authorized by all necessary
      action on the part of such Purchaser. This Agreement has been duly executed
      and
      delivered by such Purchaser and constitutes the valid and binding obligation
      of
      such Purchaser, enforceable against it in accordance with its
      terms.

     

    (b)
       Purchaser
      Status.
      At the
      time such Purchaser was offered the Shares and the Warrants, it was, and at
      the
      date hereof it is, an “accredited investor” as defined in Rule 501(a) under the
      Securities Act.

     

    (c)
       Experience
      of such Purchaser.
      Such
      Purchaser, either alone or together with its representatives, has such
      knowledge, sophistication and experience in business and financial matters
      so as
      to be capable of evaluating the merits and risks of the prospective investment
      in the Securities, and has so evaluated the merits and risks of such investment.
      Such Purchaser is able to bear the economic risk of an investment in the
      Securities and, at the present time, is able to afford a complete loss of such
      investment.

     

    

    ARTICLE
      IV

    OTHER
      AGREEMENTS OF THE PARTIES

     

    4.1
       Transfer
      Restrictions.

     

    (a)
       Securities
      may only be disposed of pursuant to an effective registration statement under
      the Securities Act or pursuant to an available exemption from the registration
      requirements of the Securities Act, and in compliance with any applicable state
      securities laws. In connection with any transfer of Securities other than
      pursuant to an effective registration statement or to the Company or pursuant
      to
      Rule 144(k), except as otherwise set forth herein, the Company may require
      the
      transferor to provide to the Company an opinion of counsel selected by the
      transferor, the form and substance of which opinion shall be reasonably
      satisfactory to the Company, to the effect that such transfer does not require
      registration under the Securities Act. Notwithstanding the foregoing, the
      Company hereby consents to and agrees to register on the books of the Company
      and with its transfer agent, without any such legal opinion, any transfer of
      Securities by a Purchaser to an Affiliate of such Purchaser, provided that
      the
      transferee certifies to the Company that it is an “accredited investor” as
      defined in Rule 501(a) under the Securities Act. For so long as any Purchaser
      owns Securities, the Company will not effect or publicly announce its intention
      to effect any exchange, recapitalization or other transaction that effectively
      requires or rewards physical delivery of certificates evidencing the Common
      Stock.

     

    (b)
       The
      Purchasers agree to the imprinting, so long as is required by this Section
      4.1(b),
      of the
      following legend on any certificate evidencing Securities: 

     

    [NEITHER]
      THESE SECURITIES [NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
      EXERCISABLE] HAVE [NOT] BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
      COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
      UPON

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    AN
      EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
      “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
      TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT
      TO
      AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
      REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH
      APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS. NOTWITHSTANDING THE
      FOREGOING, THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE
      SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
      OTHER
      LOAN OR FINANCING ARRANGEMENT SECURED BY SUCH SECURITIES.

     

    Certificates
      evidencing Securities shall not be required to contain such legend or any other
      legend (i) while a Registration Statement covering the resale of such Securities
      is effective under the Securities Act, or (ii) following any sale of such
      Securities pursuant to Rule 144, or (iii) if such Securities are eligible for
      sale under Rule 144(k), or (iv) if such legend is not required under applicable
      requirements of the Securities Act (including judicial interpretations and
      pronouncements issued by the Staff of the Commission). The Company shall cause
      its counsel to issue the legal opinion included in the Transfer Agent
      Instructions to the Company's transfer agent on the Effective Date.
      Following the Effective Date or at such earlier time as a legend is no longer
      required for certain Securities, the Company will use reasonable best efforts
      to
      cause its transfer agent, no later than three Trading Days following the
      delivery by a Purchaser to the Company or the Company’s transfer agent of a
      legended certificate representing such Securities, deliver or cause to be
      delivered to such Purchaser a certificate representing such Securities that
      is
      free from all restrictive and other legends. The Company may not make any
      notation on its records or give instructions to any transfer agent of the
      Company that enlarge the restrictions on transfer set forth in this Section.
      

     

    (c)
       The
      Company acknowledges and agrees that a Purchaser may from time to time pledge
      or
      grant a security interest in some or all of the Securities in connection with
      a
      bona fide margin agreement or other loan or financing arrangement secured by
      the
      Securities and, if required under the terms of such agreement, loan or
      arrangement, such Purchaser may transfer pledged or secured Securities to the
      pledgees or secured parties. Such a pledge or transfer would not be subject
      to
      approval of the Company and no legal opinion of the pledgee, secured party
      or
      pledgor shall be required in connection therewith. Further, no notice shall
      be
      required of such pledge. At the appropriate Purchaser’s expense, the Company
      will execute and deliver such reasonable documentation as a pledgee or secured
      party of Securities may reasonably request in connection with a pledge or
      transfer of the Securities, including the preparation and filing of any required
      prospectus supplement under Rule 424(b)(3) of the Securities Act or other
      applicable provision of the Securities Act to appropriately amend the list
      of
      Selling Stockholders thereunder.

     

    4.2
       Furnishing
      of Information.
      As long
      as any Purchaser owns Securities, the Company covenants to timely file (or
      obtain extensions in respect thereof and file within the applicable grace
      period) all reports required to be filed by the Company after the date
      hereof

     

    
      
        
        

      

      
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    pursuant
      to the Exchange Act. Upon the request of any Purchaser, the Company shall
      deliver to such Purchaser a written certification of a duly authorized officer
      as to whether it has complied with the preceding sentence. As long as any
      Purchaser owns Securities, if the Company is not required to file reports
      pursuant to such laws, it will prepare and furnish to the Purchasers and make
      publicly available in accordance with paragraph (c) of Rule 144 such information
      as is required for the Purchasers to sell the Securities under Rule 144. The
      Company further covenants that it will take such further action as any holder
      of
      Securities may reasonably request to satisfy the provisions of Rule 144
      applicable to the issuer of securities relating to transactions for the sale
      of
      securities pursuant to Rule 144.

     

    4.3  Integration.
      The
      Company shall not, and shall use its best efforts to ensure that no Affiliate
      of
      the Company shall, sell, offer for sale or solicit offers to buy or otherwise
      negotiate in respect of any security (as defined in Section 2 of the Securities
      Act) that would be integrated with the offer or sale of the Securities in a
      manner that would require the registration under the Securities Act of the
      sale
      of the Securities to the Purchasers or that would be integrated with the offer
      or sale of the Securities for purposes of the rules and regulations of any
      Trading Market.

     

    4.4  Reservation
      and Listing of Securities.
      The
      Company shall maintain a reserve from its duly authorized shares of Common
      Stock
      for issuance pursuant to the Transaction Documents in such amount as may be
      required to fulfill its obligations in full under the Transaction Documents.
      In
      the event that at any time the then authorized shares of Common Stock are
      insufficient for the Company to satisfy its obligations in full under the
      Transaction Documents, the Company shall promptly take such actions as may
      be
      required to increase the number of authorized shares. The Company shall in
      the
      time and manner required by its Trading Market, prepare and file with such
      Trading Market an additional shares listing application covering the number
      of
      shares of Common Stock issuable under the Transaction Documents and shall take
      all steps necessary to cause such shares of Common Stock to be approved for
      listing on its Trading Market as soon as possible.

     

    4.5  Subsequent
      Placements.
      

     

    (a) From
      the
      date hereof until the 60th
      Trading
      Day following the Effective Date, the Company will not, directly or indirectly,
      offer, sell, grant any option to purchase, or otherwise dispose of (or announce
      any offer, sale, grant or any option to purchase or other disposition of) any
      of
      its or the Subsidiaries’ equity or equity equivalent securities, including
      without limitation any debt, preferred stock or other instrument or security
      that is, at any time during its life and under any circumstances, convertible
      into or exchangeable or exercisable for Common Stock or Common Stock Equivalents
      (any such offer, sale, grant, disposition or announcement being referred to
      as a
“Subsequent
      Placement”).

     

    (b) The
      restrictions set forth in paragraph (a) of this Section 4.5 shall not apply
      to
      Excluded Stock. 

     

    4.6  Securities
      Laws Disclosure; Publicity.
      The
      Company shall, on or before 8:30 a.m., New York City time on October 19, 2006,
      issue a press release acceptable to the Purchasers disclosing all material
      terms
      of the transactions contemplated hereby. Prior to the second

     

    
      
        
        

      

      
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    business
      day after the Closing Date, the Company shall file a Current Report on Form
      8-K
      with the Commission (the “8-K
      Filing”) describing
      the terms of the transactions contemplated by the Transaction Documents and
      including as exhibits to such Current Report on Form 8-K this Agreement, the
      form of Warrant, in the form required by the Exchange Act. Thereafter, the
      Company shall timely file any filings and notices required by the Commission
      or
      applicable law with respect to the transactions contemplated hereby and provide
      copies thereof to the Purchasers promptly after filing. Except
      with respect to the 8-K Filing and the press release referenced above (a copy
      of
      which will be provided to the Purchasers for their review as early as
      practicable prior to its filing), the
      Company
      shall, at least two Trading Days prior to the filing or dissemination of any
      disclosure required by this paragraph that does not contain any material
      non-public information, provide a copy thereof to the Purchasers for their
      review. The Company and the Purchasers shall consult with each other in issuing
      any press releases or otherwise making public statements or filings and other
      communications with the Commission or any regulatory agency or Trading Market
      with respect to the transactions contemplated hereby, and neither party shall
      issue any such press release or otherwise make any such public statement, filing
      or other communication without the prior consent of the other, except if such
      disclosure is required by law, in which case the disclosing party shall promptly
      provide the other party with prior notice of such public statement, filing
      or
      other communication. Notwithstanding the foregoing, the Company shall not
      publicly disclose the name of any Purchaser, or include the name of any
      Purchaser in any filing with the Commission or any regulatory agency or Trading
      Market, without the prior written consent of such Purchaser, except to the
      extent such disclosure (but not any disclosure as to the controlling Persons
      thereof) is required by law or Trading Market regulations, in which case the
      Company shall provide the Purchasers with prior notice of such disclosure.
      The
      Company shall not, and shall cause each of its Subsidiaries and its and each
      of
      their respective officers, directors, employees and agents not to, provide
      any
      Purchaser with any material nonpublic information regarding the Company or
      any
      of its Subsidiaries from and after the filing of the 8-K Filing without the
      express written consent of such Purchaser. In the event of a breach of the
      foregoing covenant by the Company, any of its Subsidiaries, or any of its or
      their respective officers, directors, employees and agents, in addition to
      any
      other remedy provided herein or in the Transaction Documents, a Purchaser shall
      have the right to make a public disclosure, in the form of a press release,
      public advertisement or otherwise, of such material nonpublic information
      without the prior approval by the Company, its Subsidiaries, or any of its
      or
      their respective officers, directors, employees or agents. No Purchaser shall
      have any liability to the Company, its Subsidiaries, or any of its or their
      respective officers, directors, employees, shareholders or agents for any such
      disclosure. Subject to the foregoing, neither the Company nor any Purchaser
      shall issue any press releases or any other public statements with respect
      to
      the transactions contemplated hereby; provided, however, that the Company shall
      be entitled, without the prior approval of any Purchaser, to make any press
      release or other public disclosure with respect to such transactions (i) in
      substantial conformity with the 8-K Filing and contemporaneously therewith
      and
      (ii) as is required by applicable law and regulations (provided that in the
      case
      of clause (i) each Purchaser shall be consulted by the Company in connection
      with any such press release or other public disclosure prior to its release).
      Each press release disseminated during the 12 months preceding the date of
      this
      Agreement did not at the time of release contain any untrue statement of a
      material fact or omit to state a material fact required to be
      stated
      therein or necessary in order to make the statements therein, in light of the
      circumstances under which they are made, not misleading. 

      

     

    
      
        
        

      

      
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    4.7  Use
      of
      Proceeds.
      Except
      as set forth on Schedule
      4.7,
      the
      Company shall use the net proceeds from the sale of the Securities hereunder
      for
      working capital purposes and not (i) for the satisfaction of any portion of
      the
      Company’s debt (other than payment of trade payables and accrued expenses in the
      ordinary course of the Company’s business and consistent with past practice),
      (ii) to redeem any Company equity or equity-equivalent securities, or (iii)
      to
      settle any outstanding litigation. 

     

    4.8  Reimbursement.
      If any
      Purchaser or any of its Affiliates or any officer, director, partner,
      controlling Person, employee or agent of a Purchaser or any of its Affiliates
      (a
“Related
      Person”)
      becomes involved in any capacity in any Proceeding brought by or against any
      Person in connection with or as a result of the transactions contemplated by
      the
      Transaction Documents, the Company will indemnify and hold harmless such
      Purchaser or Related Person for its reasonable legal and other expenses
      (including the costs of any investigation, preparation and travel) and for
      any
      Losses incurred in connection therewith, as such expenses or Losses are
      incurred, excluding only Losses that result directly from such Purchaser’s or
      Related Person’s gross negligence or willful misconduct. In addition, the
      Company shall indemnify and hold harmless each Purchaser and Related Person
      from
      and against any and all Losses, as incurred, arising out of or relating to
      any
      breach by the Company of any of the representations, warranties or covenants
      made by the Company in this Agreement or any other Transaction Document, or
      any
      allegation by a third party that, if true, would constitute such a breach.
      The
      conduct of any Proceedings for which indemnification is available under this
      paragraph shall be governed by Section 6.4(c) below. The indemnification
      obligations of the Company under this paragraph shall be in addition to any
      liability that the Company may otherwise have and shall be binding upon and
      inure to the benefit of any successors, assigns, heirs and personal
      representatives of the Purchasers and any such Related Persons. The Company
      also
      agrees that neither the Purchasers nor any Related Persons shall have any
      liability to the Company or any Person asserting claims on behalf of or in
      right
      of the Company in connection with or as a result of the transactions
      contemplated by the Transaction Documents, except to the extent that any Losses
      incurred by the Company result from the gross negligence or willful misconduct
      of the applicable Purchaser or Related Person in connection with such
      transactions.
      If
      the
      Company breaches its obligations under any Transaction Document, then, in
      addition to any other liabilities the Company may have under any Transaction
      Document or applicable law, the Company shall pay or reimburse the Purchasers
      on
      demand for all costs of collection and enforcement (including reasonable
      attorneys fees and expenses). Without limiting the generality of the foregoing,
      the Company specifically agrees to reimburse the Purchasers on demand for all
      costs of enforcing the indemnification obligations in this
      paragraph.

     

    4.9  Amendment
      to November Purchase Agreement.
      The
      Company and the Purchasers entered into a Securities Purchase Agreement dated
      as
      of November 1, 2005 (the “November
      Purchase Agreement”)
      pursuant to which the Company (i) had certain participations rights under
Section
      4.5
      thereof
      relating to Subsequent Placements, and (ii) would incur liquidated damages
      under
Section
      6.1(d)
      thereof
      upon a breach of certain events stated therein (a “Event Payments”).
      The
      Company and the Purchasers hereby waive their rights (i) under Section
      4.5
      of the
      November Purchase Agreement and (ii) to receive any Event Payments in connection
      with any
      breach under Section
      6.1(d)
      of the
      November Purchase Agreement.. Nothing herein shall be deemed a waiver or
      amendment to any other provision of the November Purchase Agreement and such
      agreement shall remain in full force. 

     

     

     

    
      
        
        

      

      
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    ARTICLE
      V

    CONDITIONS

    

    5.1
       Conditions
      Precedent to the Obligations of the Purchasers.
      The
      obligation of each Purchaser to acquire Securities at the Closing is subject
      to
      the satisfaction or waiver by such Purchaser, at or before the Closing, of
      each
      of the following conditions:

     

    (a)
       Representations
      and Warranties.
      The
      representations and warranties of the Company contained herein shall be true
      and
      correct in all material respects as of the date when made and as of the Closing
      as though made on and as of such date; and

     

    (b)
       Performance.
      The
      Company and each other Purchaser shall have performed, satisfied and complied
      in
      all material respects with all covenants, agreements and conditions required
      by
      the Transaction Documents to be performed, satisfied or complied with by it
      at
      or prior to the Closing.

     

    (c)
       No
      Injunction.
      No
      statute, rule, regulation, executive order, decree, ruling or injunction shall
      have been enacted, entered, promulgated or endorsed by any court or governmental
      authority of competent jurisdiction that prohibits the consummation of any
      of
      the transactions contemplated by the Transaction Documents;

     

    (d)
       Adverse
      Changes.
      Since
      the date of execution of this Agreement, no event or series of events shall
      have
      occurred that reasonably would be expected to have or result in a Material
      Adverse Effect; and

     

    (e)
       No
      Suspensions of Trading in Common Stock; Listing.
      Trading
      in the Common Stock shall not have been suspended by the Commission or any
      Trading Market (except for any suspensions of trading of not more than three
      Trading Days (whether or not consecutive) solely to permit dissemination of
      material information regarding the Company) at any time since the date of
      execution of this Agreement, and the Common Stock shall have been at all times
      since such date listed for trading on an Eligible Market;

    

    5.2
       Conditions
      Precedent to the Obligations of the Company.
      The
      obligation of the Company to sell Securities at the Closing is subject to the
      satisfaction or waiver by the Company, at or before the Closing, of each of
      the
      following conditions:

     

    (a)
       Representations
      and Warranties.
      The
      representations and warranties of the Purchasers contained herein shall be
      true
      and correct in all material respects as of the date when made and as of the
      Closing Date as though made on and as of such date; and

     

    (b)
       Performance.
      The
      Purchasers shall have performed, satisfied and complied in all material respects
      with all covenants, agreements and conditions required by the Transaction
      Documents to be performed, satisfied or complied with by the Purchasers at
      or
      prior to the Closing.

     

     

    
      
        
        

      

      
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    ARTICLE
      VI

    REGISTRATION
      RIGHTS

     

    6.1
       Shelf
      Registration

     

    (a)
       As
      promptly as possible, and in any event on or prior to the Filing Date, the
      Company shall prepare and file with the Commission a “Shelf” Registration
      Statement covering the resale of all Registrable Securities for an offering
      to
      be made on a continuous basis pursuant to Rule 415. The Registration Statement
      shall be on Form S-3 (except if the Company is not then eligible to register
      for
      resale the Registrable Securities on Form S-3, in which case such registration
      shall be on another appropriate form in accordance herewith as the Purchasers
      may consent) and shall contain (except if otherwise directed by the Purchasers)
      the “Plan of Distribution” attached hereto as Exhibit
      C.

     

    (b)
       The
      Company shall use its best efforts to cause the Registration Statement to be
      declared effective by the Commission as promptly as possible after the filing
      thereof, but in any event prior to the Required Effectiveness Date, and shall
      use its best efforts to keep the Registration Statement continuously effective
      under the Securities Act until the fifth anniversary of the Effective Date
      or
      such earlier date when all Registrable Securities covered by such Registration
      Statement have been sold publicly (the “Effectiveness
      Period”).

     

    (c)
       The
      Company shall notify each Purchaser in writing promptly (and in any event within
      one Trading Day) after receiving notification from the Commission that the
      Registration Statement has been declared effective. 

     

    (d)
       If:
      (i)
      any Registration Statement is not filed on or prior to the Filing Date (if
      the
      Company files such Registration Statement without affording the Purchasers
      the
      opportunity to review and comment on the same as required by Section 6.2(a)
      hereof, the Company shall not be deemed to have satisfied this clause (i)),
      or
      (ii) the Company fails to file with the Commission a request for acceleration
      in
      accordance with Rule 461 promulgated under the Securities Act, within five
      Trading Days after the date that the Company is notified (orally or in writing,
      whichever is earlier) by the Commission that a Registration Statement will
      not
      be “reviewed,” or will not be subject to further review, or (iii) the Company
      fails to respond to any comments made by the Commission within 10 Trading Days
      after the receipt of such comments, or (iv) a Registration Statement filed
      hereunder is not declared effective by the Commission by the Required
      Effectiveness Date, or (v) an amendment to a Registration Statement is not
      filed
      by the Company with the Commission within ten Trading Days after the
      Commission’s having notified the Company that such amendment is required in
      order for such Registration Statement to be declared effective,(any such failure
      or breach being referred to as an “Event,” and for purposes of clause (i) the
      date on which such Event occurs, or for purposes of clause (ii) the date on
      which such five Trading Day period is exceeded, or for purposes of clauses
      (iii)
      the date which such ten Trading Day-period is exceeded, , being referred to
      as
“‘Event Date”), then: (x) on each such Event Date the Company shall pay to each
      Purchaser an amount in cash, as partial liquidated damages and not as a penalty,
      equal to 1% of the aggregate purchase price

     

     

    
      
        
        

      

      
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    paid
      by
such
      Purchaser pursuant to the Purchase Agreement; and (y) on each monthly
      anniversary of each such Event Date thereof (if the applicable Event shall
      not
      have been cured by such date) until the applicable Event is cured, the Company
      shall pay to each Purchaser an amount in cash, as partial liquidated damages
      and
      not as a penalty, equal to 1% of the aggregate purchase price paid by such
      Purchaser pursuant to the Purchase Agreement (the “Event Payments”). Such
      payments shall be in partial compensation to the Purchasers and shall not
      constitute the Purchaser’s exclusive remedy for such events. If the Company
      fails to pay any liquidated damages pursuant to this Section in full within
      seven days after the date payable, the Company will pay interest thereon at
      a
      rate of 18% per annum (or such lesser maximum amount that is permitted to be
      paid by applicable law) to the Purchaser, accruing daily from the date such
      liquidated damages are due until such amounts, plus all such interest thereon,
      are paid in full. Notwithstanding anything to the contrary, the maximum amount
      of Event Payments payable to a Purchaser by the Company under this Section
      6.1(d)
      shall
      not exceed 18% of the aggregate purchase price paid by such
      Purchaser.

     

    (e)
       The
      Company shall not, prior to the Effective Date of the Registration Statement,
      prepare and file with the Commission a registration statement relating to an
      offering for its own account or the account of others (other than as
      contemplated in the Transaction Documents) under the Securities Act of any
      of
      its equity securities.

     

    (f)
       If
      the
      Company issues to the Purchasers any Common Stock pursuant to the Transaction
      Documents that is not included in the initial Registration Statement, then
      the
      Company shall file an additional Registration Statement covering such number
      of
      shares of Common Stock on or prior to the Filing Date and shall use its best
      efforts, but in no event later than the Required Filing Date, to cause such
      additional Registration Statement to become effective by the
      Commission.

    

    6.2
       Registration
      Procedures.
      In
      connection with the Company's registration obligations hereunder, the Company
      shall:

     

    (a)
       Not
      less
      than three Trading Days prior to the filing of a Registration Statement or
      any
      related Prospectus or any amendment or supplement thereto (including any
      document that would be incorporated or deemed to be incorporated therein by
      reference), the Company shall (i) furnish to each Purchaser and any counsel
      designated by any Purchaser (each, a “Purchaser
      Counsel”,
      and
      Iroquois Master Fund Ltd. has initially designated Malhotra & Associates LLP
“LP
      Counsel”)
      copies
      of all such documents proposed to be filed, which documents (other than those
      incorporated or deemed to be incorporated by reference) will be subject to
      the
      review of each Purchaser and Purchaser Counsel, and (ii) cause its officers
      and
      directors, counsel and independent certified public accountants to respond
      to
      such inquiries as shall be necessary, in the reasonable opinion of respective
      counsel, to conduct a reasonable investigation within the meaning of the
      Securities Act. The Company shall not file a Registration Statement or any
      such
      Prospectus or any amendments or supplements thereto to which Purchasers holding
      a majority of the Registrable Securities shall reasonably object.

     

    (b)
       (i)
      Prepare and file with the Commission such amendments, including post-effective
      amendments, to each Registration Statement and the Prospectus used in
connection
      therewith as may be necessary to keep the Registration Statement continuously
      effective as to the applicable Registrable Securities for the Effectiveness
      Period and prepare and file with the Commission such additional Registration
      Statements in order to register for resale under the Securities Act all of
      the
      Registrable Securities; (ii) cause the related Prospectus to be

     

     

    
      
        
        

      

      
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    amended
      or supplemented by any required Prospectus supplement, and as so supplemented
      or
      amended to be filed pursuant to Rule 424; (iii) respond as promptly as
      reasonably possible, and in any event within ten days, to any comments received
      from the Commission with respect to the Registration Statement or any amendment
      thereto and as promptly as reasonably possible provide the Purchasers true
      and
      complete copies of all correspondence from and to the Commission relating to
      the
      Registration Statement; and (iv) comply in all material respects with the
      provisions of the Securities Act and the Exchange Act with respect to the
      disposition of all Registrable Securities covered by the Registration Statement
      during the applicable period in accordance with the intended methods of
      disposition by the Purchasers thereof set forth in the Registration Statement
      as
      so amended or in such Prospectus as so supplemented

     

    (c)
       Notify
      the Purchasers of Registrable Securities to be sold and Purchaser Counsel as
      promptly as reasonably possible, and (if requested by any such Person) confirm
      such notice in writing no later than one Trading Day thereafter, of any of
      the
      following events: (i) the Commission notifies the Company whether there will
      be
      a “review” of any Registration Statement; (ii) the Commission comments in
      writing on any Registration Statement (in which case the Company shall deliver
      to each Purchaser a copy of such comments and of all written responses thereto);
      (iii) any Registration Statement or any post-effective amendment is declared
      effective; (iv) the Commission or any other Federal or state governmental
      authority requests any amendment or supplement to any Registration Statement
      or
      Prospectus or requests additional information related thereto; (v) the
      Commission issues any stop order suspending the effectiveness of any
      Registration Statement or initiates any Proceedings for that purpose; (vi)
      the
      Company receives notice of any suspension of the qualification or exemption
      from
      qualification of any Registrable Securities for sale in any jurisdiction, or
      the
      initiation or threat of any Proceeding for such purpose; or (vii) the financial
      statements included in any Registration Statement become ineligible for
      inclusion therein or any statement made in any Registration Statement or
      Prospectus or any document incorporated or deemed to be incorporated therein
      by
      reference is untrue in any material respect or any revision to a Registration
      Statement, Prospectus or other document is required so that it will not contain
      any untrue statement of a material fact or omit to state any material fact
      required to be stated therein or necessary to make the statements therein,
      in
      the light of the circumstances under which they were made, not
      misleading.

     

    (d)
       Use
      its
      best efforts to avoid the issuance of or, if issued, obtain the withdrawal
      of
      (i) any order suspending the effectiveness of any Registration Statement, or
      (ii) any suspension of the qualification (or exemption from qualification)
      of
      any of the Registrable Securities for sale in any jurisdiction, as soon as
      possible.

     

    (e)
       Furnish
      to each Purchaser and Purchaser Counsel, without charge, at least one conformed
      copy of each Registration Statement and each amendment thereto, including
      financial statements and schedules, all documents incorporated or deemed to
      be
      incorporated therein by reference, and all exhibits to the extent requested
      by
      such Person (including those previously
      furnished or incorporated by reference) promptly after the filing of such
      documents with the Commission.

     

    (f)
       Promptly
      deliver to each Purchaser and Purchaser Counsel, without charge, as many copies
      of the Prospectus or Prospectuses (including each form of prospectus) and each
      amendment or supplement thereto as such Persons may reasonably request.
      The

     

     

    
      
        
        

      

      
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    Company
      hereby consents to the use of such Prospectus and each amendment or supplement
      thereto by each of the selling Purchasers in connection with the offering and
      sale of the Registrable Securities covered by such Prospectus and any amendment
      or supplement thereto.

     

    (g)
       
      (i) In
      the time and manner required by each Trading Market, prepare and file with
      such
      Trading Market an additional shares listing application covering all of the
      Registrable Securities; (ii) take all steps necessary to cause such Registrable
      Securities to be approved for listing on each Trading Market as soon as possible
      thereafter; (iii) provide to the Purchasers evidence of such listing; and (iv)
      maintain the listing of such Registrable Securities on each such Trading Market
      or another Eligible Market.

     

    (h)
       Prior
      to
      any public offering of Registrable Securities, use its reasonable best efforts
      to register or qualify or cooperate with the selling Purchasers and each
      applicable Purchaser Counsel in connection with the registration or
      qualification (or exemption from such registration or qualification) of such
      Registrable Securities for offer and sale under the securities or Blue Sky
      laws
      of such jurisdictions within the United States as any Purchaser requests in
      writing, to keep each such registration or qualification (or exemption
      therefrom) effective during the Effectiveness Period and to do any and all
      other
      acts or things necessary or advisable to enable the disposition in such
      jurisdictions of the Registrable Securities covered by a Registration
      Statement.

     

    (i)
       Cooperate
      with the Purchasers to facilitate the timely preparation and delivery of
      certificates representing Registrable Securities to be delivered to a transferee
      pursuant to a Registration Statement, which certificates shall be free, to
      the
      extent permitted by this Agreement, of all restrictive legends, and to enable
      such Registrable Securities to be in such denominations and registered in such
      names as any such Purchasers may request.

     

    (j)
       Upon
      the
      occurrence of any event described in Section 6.2(c)(vii), as promptly as
      reasonably possible, prepare a supplement or amendment, including a
      post-effective amendment, to the Registration Statement or a supplement to
      the
      related Prospectus or any document incorporated or deemed to be incorporated
      therein by reference, and file any other required document so that, as
      thereafter delivered, neither the Registration Statement nor such Prospectus
      will contain an untrue statement of a material fact or omit to state a material
      fact required to be stated therein or necessary to make the statements therein,
      in the light of the circumstances under which they were made, not
      misleading.

     

    (k)
       Cooperate
      with any due diligence investigation undertaken by the Purchasers in connection
      with the sale of Registrable Securities, including, without limitation, by
      making available any documents and information; provided that the Company will
      not deliver or make available to any Purchaser material, nonpublic information
      unless such Purchaser specifically requests in advance to receive material,
      nonpublic information in writing.

     

    (l) 
If
      Holders of a majority of the Registrable Securities being offered pursuant
      to a
      Registration Statement select underwriters for the offering, the Company shall
      enter into and perform its obligations under an underwriting agreement, in
      usual
      and customary form, including, without limitation, by providing customary legal
      opinions, comfort letters and indemnification and contribution
      obligations.

     

     

    
      
        
        

      

      
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    (m)
       Comply
      with all applicable rules and regulations of the Commission.

    

    6.3
       Registration
      Expenses.
      The
      Company shall pay (or reimburse the Purchasers for) all fees and expenses
      incident to the performance of or compliance with this Agreement by the Company,
      including without limitation (a) all registration and filing fees and expenses,
      including without limitation those related to filings with the Commission,
      any
      Trading Market and in connection with applicable state securities or Blue Sky
      laws, (b) printing expenses (including without limitation expenses of printing
      certificates for Registrable Securities and of printing prospectuses requested
      by the Purchasers), (c) messenger, telephone and delivery expenses, (d) fees
      and
      disbursements of counsel for the Company, (e) fees and expenses of all other
      Persons retained by the Company in connection with the consummation of the
      transactions contemplated by this Agreement, and (f) all listing fees to be
      paid
      by the Company to the Trading Market. 

     

    6.4
       Indemnification

     

    (a)
       Indemnification
      by the Company.
      The
      Company shall, notwithstanding any termination of this Agreement, indemnify
      and
      hold harmless each Purchaser, the officers, directors, partners, members,
      agents, brokers (including brokers who offer and sell Registrable Securities
      as
      principal as a result of a pledge or any failure to perform under a margin
      call
      of Common Stock), investment advisors and employees of each of them, each Person
      who controls any such Purchaser (within the meaning of Section 15 of the
      Securities Act or Section 20 of the Exchange Act) and the officers, directors,
      partners, members, agents and employees of each such controlling Person, to
      the
      fullest extent permitted by applicable law, from and against any and all Losses,
      as incurred, arising out of or relating to any untrue or alleged untrue
      statement of a material fact contained in the Registration Statement, any
      Prospectus or any form of prospectus or in any amendment or supplement thereto
      or in any preliminary prospectus, or arising out of or relating to any omission
      or alleged omission of a material fact required to be stated therein or
      necessary to make the statements therein (in the case of any Prospectus or
      form
      of prospectus or supplement thereto, in the light of the circumstances under
      which they were made) not misleading, except to the extent, but only to the
      extent, that (i) such untrue statements, alleged untrue statements, omissions
      or
      alleged omissions are based solely upon information regarding such Purchaser
      furnished in writing to the Company by such Purchaser expressly for use therein,
      or to the extent that such information relates to such Purchaser or such
      Purchaser's proposed method of distribution of Registrable Securities and was
      reviewed and expressly approved in writing by such Purchaser expressly for
      use
      in the Registration Statement, such Prospectus or such form of Prospectus or
      in
      any amendment or supplement thereto or (ii) in the case of an occurrence of
      an
      event of the type specified in Section 6.2(c)(v)-(vii), the use by such
      Purchaser of an outdated or defective Prospectus after the Company has notified
      such Purchaser in writing that the Prospectus is outdated or defective and
      prior
      to the receipt by such Purchaser of the Advice contemplated in Section 6.5.
      The
      Company shall notify the Purchasers promptly of the institution,
      threat or assertion of any Proceeding of which the Company is aware in
      connection with the transactions contemplated by this Agreement.

     

    (b)
       Indemnification
      by Purchasers.
      Each
      Purchaser shall, severally and not jointly, indemnify and hold harmless the
      Company, its directors, officers, agents and employees, each Person who controls
      the Company (within the meaning of Section 15 of the Securities Act

     

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

     

    and
      Section 20 of the Exchange Act), and the directors, officers, agents or
      employees of such controlling Persons, to the fullest extent permitted by
      applicable law, from and against all Losses (as determined by a court of
      competent jurisdiction in a final judgment not subject to appeal or review)
      arising solely out of any untrue statement of a material fact contained in
      the
      Registration Statement, any Prospectus, or any form of prospectus, or in any
      amendment or supplement thereto, or arising solely out of any omission of a
      material fact required to be stated therein or necessary to make the statements
      therein (in the case of any Prospectus or form of prospectus or supplement
      thereto, in the light of the circumstances under which they were made) not
      misleading to the extent, but only to the extent, that such untrue statement
      or
      omission is contained in any information so furnished in writing by such
      Purchaser to the Company specifically for inclusion in such Registration
      Statement or such Prospectus or to the extent that (i) such untrue statements
      or
      omissions are based solely upon information regarding such Purchaser furnished
      in writing to the Company by such Purchaser expressly for use therein, or to
      the
      extent that such information relates to such Purchaser or such Purchaser's
      proposed method of distribution of Registrable Securities and was reviewed
      and
      expressly approved in writing by such Purchaser expressly for use in the
      Registration Statement, such Prospectus or such form of Prospectus or in any
      amendment or supplement thereto or (ii) in the case of an occurrence of an
      event
      of the type specified in Section
      6.2(c)(v)-(vii),
      the use
      by such Purchaser of an outdated or defective Prospectus after the Company
      has
      notified such Purchaser in writing that the Prospectus is outdated or defective
      and prior to the receipt by such Purchaser of the Advice contemplated in
Section
      6.5.
      In no
      event shall the liability of any selling Purchaser hereunder be greater in
      amount than the dollar amount of the net proceeds received by such Purchaser
      upon the sale of the Registrable Securities giving rise to such indemnification
      obligation.

     

    (c)
       Conduct
      of Indemnification Proceedings.
      If any
      Proceeding shall be brought or asserted against any Person entitled to indemnity
      hereunder (an “Indemnified
      Party”),
      such
      Indemnified Party shall promptly notify the Person from whom indemnity is sought
      (the “Indemnifying
      Party”)
      in
      writing, and the Indemnifying Party shall assume the defense thereof, including
      the employment of counsel reasonably satisfactory to the Indemnified Party
      and
      the payment of all fees and expenses incurred in connection with defense
      thereof; provided, that the failure of any Indemnified Party to give such notice
      shall not relieve the Indemnifying Party of its obligations or liabilities
      pursuant to this Agreement, except (and only) to the extent that it shall be
      finally determined by a court of competent jurisdiction (which determination
      is
      not subject to appeal or further review) that such failure shall have
      proximately and materially adversely prejudiced the Indemnifying
      Party.

     

    An
      Indemnified Party shall have the right to employ separate counsel in any such
      Proceeding and to participate in the defense thereof, but the fees and expenses
      of such counsel shall be at the expense of such Indemnified Party or Parties
      unless: (i) the Indemnifying Party has agreed in writing to pay such fees and
      expenses; or (ii) the Indemnifying Party shall have failed promptly to assume
      the defense of such Proceeding and to employ counsel reasonably satisfactory
      to such Indemnified Party in any such Proceeding; or (iii) the named parties
      to
      any such Proceeding (including any impleaded parties) include both such
      Indemnified Party and the Indemnifying Party, and such Indemnified Party shall
      have been advised by counsel that a conflict of interest is likely to exist
      if
      the same counsel were to represent such Indemnified Party and the Indemnifying
      Party (in which case, if such Indemnified Party notifies the Indemnifying Party
      in writing that it elects to employ separate counsel at the expense of the
      Indemnifying

     

     

    
      
        
        

      

      
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    Party,
      the Indemnifying Party shall not have the right to assume the defense thereof
      and such counsel shall be at the expense of the Indemnifying Party). The
      Indemnifying Party shall not be liable for any settlement of any such Proceeding
      effected without its written consent, which consent shall not be unreasonably
      withheld. No Indemnifying Party shall, without the prior written consent of
      the
      Indemnified Party, effect any settlement of any pending Proceeding in respect
      of
      which any Indemnified Party is a party, unless such settlement includes an
      unconditional release of such Indemnified Party from all liability on claims
      that are the subject matter of such Proceeding.

     

    All
      fees
      and expenses of the Indemnified Party (including reasonable fees and expenses
      to
      the extent incurred in connection with investigating or preparing to defend
      such
      Proceeding in a manner not inconsistent with this Section) shall be paid to
      the
      Indemnified Party, as incurred, within ten Trading Days of written notice
      thereof to the Indemnifying Party (regardless of whether it is ultimately
      determined that an Indemnified Party is not entitled to indemnification
      hereunder; provided, that the Indemnifying Party may require such Indemnified
      Party to undertake to reimburse all such fees and expenses to the extent it
      is
      finally judicially determined that such Indemnified Party is not entitled to
      indemnification hereunder). 

     

    (d)
       Contribution.
      If a
      claim for indemnification under Section
      6.4(a)
      or
(b)
      is
      unavailable to an Indemnified Party (by reason of public policy or otherwise),
      then each Indemnifying Party, in lieu of indemnifying such Indemnified Party,
      shall contribute to the amount paid or payable by such Indemnified Party as
      a
      result of such Losses, in such proportion as is appropriate to reflect the
      relative fault of the Indemnifying Party and Indemnified Party in connection
      with the actions, statements or omissions that resulted in such Losses as well
      as any other relevant equitable considerations. The relative fault of such
      Indemnifying Party and Indemnified Party shall be determined by reference to,
      among other things, whether any action in question, including any untrue or
      alleged untrue statement of a material fact or omission or alleged omission
      of a
      material fact, has been taken or made by, or relates to information supplied
      by,
      such Indemnifying Party or Indemnified Party, and the parties' relative intent,
      knowledge, access to information and opportunity to correct or prevent such
      action, statement or omission. The amount paid or payable by a party as a result
      of any Losses shall be deemed to include, subject to the limitations set forth
      in Section
      6.4(c),
      any
      reasonable attorneys' or other reasonable fees or expenses incurred by such
      party in connection with any Proceeding to the extent such party would have
      been
      indemnified for such fees or expenses if the indemnification provided for in
      this Section was available to such party in accordance with its
      terms.

     

    The
      parties hereto agree that it would not be just and equitable if contribution
      pursuant to this Section
      6.4(d)
      were
      determined by pro rata allocation or by any other method of allocation that
      does
      not take into account the equitable considerations referred to in the
      immediately preceding paragraph. Notwithstanding the provisions of this Section
      6.4(d), no Purchaser shall be required to contribute, in the aggregate, any
      amount in excess of the amount by
      which
      the proceeds actually received by such Purchaser from the sale of the
      Registrable Securities subject to the Proceeding exceeds the amount of any
      damages that such Purchaser has otherwise been required to pay by reason of
      such
      untrue or alleged untrue statement or omission or alleged omission. No Person
      guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
      of
      the Securities Act) shall be entitled to contribution from any Person who was
      not guilty of such fraudulent misrepresentation.

     

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    The
      indemnity and contribution agreements contained in this Section are in addition
      to any liability that the Indemnifying Parties may have to the Indemnified
      Parties.

     

    6.5
       Dispositions.
      Each
      Purchaser agrees that it will comply with the prospectus delivery requirements
      of the Securities Act as applicable to it in connection with sales of
      Registrable Securities pursuant to the Registration Statement. Each Purchaser
      further agrees that, upon receipt of a notice from the Company of the occurrence
      of any event of the kind described in Sections
      6.2(c)(v),
      (vi)
      or
(vii),
      such
      Purchaser will discontinue disposition of such Registrable Securities under
      the
      Registration Statement until such Purchaser's receipt of the copies of the
      supplemented Prospectus and/or amended Registration Statement contemplated
      by
Section
      6.2(j),
      or
      until it is advised in writing (the “Advice”)
      by the
      Company that the use of the applicable Prospectus may be resumed, and, in either
      case, has received copies of any additional or supplemental filings that are
      incorporated or deemed to be incorporated by reference in such Prospectus or
      Registration Statement. The Company may provide appropriate stop orders to
      enforce the provisions of this paragraph.

     

    6.6
       No
      Piggyback on Registrations.
      Neither
      the Company nor any of its security holders (other than the Purchasers in such
      capacity pursuant hereto) may include securities of the Company in the
      Registration Statement other than the Registrable Securities, and the Company
      shall not after the date hereof enter into any agreement providing any such
      right to any of its security holders.

     

    6.7
       Piggy-Back
      Registrations.
      If at
      any time during the Effectiveness Period there is not an effective Registration
      Statement covering all of the Registrable Securities and the Company shall
      determine to prepare and file with the Commission a registration statement
      relating to an offering for its own account or the account of others under
      the
      Securities Act of any of its equity securities, other than on Form S-4 or Form
      S-8 (each as promulgated under the Securities Act) or their then equivalents
      relating to equity securities to be issued solely in connection with any
      acquisition of any entity or business or equity securities issuable in
      connection with stock option or other employee benefit plans, then the Company
      shall send to each Purchaser written notice of such determination and if, within
      fifteen days after receipt of such notice, any such Purchaser shall so request
      in writing, the Company shall include in such registration statement all or
      any
      part of such Registrable Securities such Purchaser requests to be
      registered.

     

    ARTICLE
      VII

    MISCELLANEOUS

     

    7.1
       Termination.
      This
      Agreement may be terminated by the Company or any Purchaser, by written notice
      to the other parties, if the Closing has not been consummated by the
third
      Trading Day following the date of this Agreement; provided that no such
      termination will affect the right of any party to sue for any breach by the
      other party (or parties).

     

    7.2  Fees
      and Expenses.
      At the
      Closing, the Company shall pay to Iroquois Master Fund Ltd. an aggregate of
      $20,000 for their legal fees and expenses incurred in connection with the
      preparation and negotiation of this Agreement. In lieu of the foregoing
      remaining payment, Iroquois Capital LP may retain such amount at the Closing.
      Except as expressly set forth in the

     

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    Transaction
      Documents to the contrary, each party shall pay the fees and expenses of its
      advisers, counsel, accountants and other experts, if any, and all other expenses
      incurred by such party incident to the negotiation, preparation, execution,
      delivery and performance of this Agreement. The Company shall pay all transfer
      agent fees, stamp taxes and other taxes and duties levied in connection with
      the
      issuance of the Securities.

     

    7.3  Entire
      Agreement.
      The
      Transaction Documents, together with the Exhibits and Schedules thereto, contain
      the entire understanding of the parties with respect to the subject matter
      hereof and supersede all prior agreements and understandings, oral or written,
      with respect to such matters, which the parties acknowledge have been merged
      into such documents, exhibits and schedules. At or after the Closing, and
      without further consideration, the Company will execute and deliver to the
      Purchasers such further documents as may be reasonably requested in order to
      give practical effect to the intention of the parties under the Transaction
      Documents. Notwithstanding anything to the contrary herein, Securities may
      be
      assigned to any Person in connection with a bona fide margin account or other
      loan or financing arrangement secured by such Company Securities.

     

    7.4  Notices.
      Any and
      all notices or other communications or deliveries required or permitted to
      be
      provided hereunder shall be in writing and shall be deemed given and effective
      on the earliest of (a) the date of transmission, if such notice or communication
      is delivered via facsimile at the facsimile number specified in this Section
      prior to 6:30 p.m. (New York City time) on a Trading Day, (b) the next Trading
      Day after the date of transmission, if such notice or communication is delivered
      via facsimile at the facsimile number specified in this Section on a day that
      is
      not a Trading Day or later than 6:30 p.m. (New York City time) on any Trading
      Day, (c) the Trading Day following the date of deposit with a nationally
      recognized overnight courier service, or (d) upon actual receipt by the party
      to
      whom such notice is required to be given. The addresses and facsimile numbers
      for such notices and communications are those set forth on the signature pages
      hereof, or such other address or facsimile number as may be designated in
      writing hereafter, in the same manner, by any such Person.

     

    7.5  Amendments;
      Waivers.
      No
      provision of this Agreement may be waived or amended except in a written
      instrument signed, in the case of an amendment, by the Company and each of
      the
      Purchasers or, in the case of a waiver, by the party against whom enforcement
      of
      any such waiver is sought. No waiver of any default with respect to any
      provision, condition or requirement of this Agreement shall be deemed to be
      a
      continuing waiver in the future or a waiver of any subsequent default or a
      waiver of any other provision, condition or requirement hereof, nor shall any
      delay or omission of either party to exercise any right hereunder in any manner
      impair the exercise of any such right. Notwithstanding the foregoing, a waiver
      or consent to depart from the provisions hereof with respect to a matter that
      relates exclusively to the rights of Purchasers under Article
      VI
      and that
      does not directly or indirectly affect the rights of
      other
      Purchasers may be given by Purchasers holding at least a majority of the
      Registrable Securities to which such waiver or consent relates.

     

    7.6  Construction.
      The
      headings herein are for convenience only, do not constitute a part of this
      Agreement and shall not be deemed to limit or affect any of the provisions
      hereof. The language used in this Agreement will be deemed to be the language
      chosen by the parties to express their mutual intent, and no rules of strict
      construction will be applied against any party.

     

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

     

    7.7  Successors
      and Assigns.
      This
      Agreement shall be binding upon and inure to the benefit of the parties and
      their successors and permitted assigns. The Company may not assign this
      Agreement or any rights or obligations hereunder without the prior written
      consent of the Purchasers. Any Purchaser may assign its rights under this
      Agreement to any Person to whom such Purchaser assigns or transfers any
      Securities, provided such transferee agrees in writing to be bound, with respect
      to the transferred Securities, by the provisions hereof that apply to the
“Purchasers.” Notwithstanding anything to the contrary herein, Securities may be
      assigned to any Person in connection with a bona fide margin account or other
      loan or financing arrangement secured by such Securities.

     

    7.8  No
      Third-Party Beneficiaries.
      This
      Agreement is intended for the benefit of the parties hereto and their respective
      successors and permitted assigns and is not for the benefit of, nor may any
      provision hereof be enforced by, any other Person, except that each Related
      Person is an intended third party beneficiary of Section 4.8 and each
      Indemnified Party is an intended third party beneficiary of Section 6.4 and
      (in
      each case) may enforce the provisions of such Sections directly against the
      parties with obligations thereunder.

     

    7.10  Governing
      Law; Venue; Waiver Of Jury Trial.
      ALL
      QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION
      OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE
      WITH THE LAWS OF THE STATE OF NEW YORK. THE COMPANY AND PURCHASERS HEREBY
      IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS
      SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN FOR THE ADJUDICATION
      OF
      ANY DISPUTE BROUGHT BY THE COMPANY OR ANY PURCHASER HEREUNDER, IN CONNECTION
      HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN
      (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE TRANSACTION DOCUMENTS),
      AND HEREBY IRREVOCABLY WAIVE, AND AGREE NOT TO ASSERT IN ANY SUIT, ACTION OR
      PROCEEDING BROUGHT BY THE COMPANY OR ANY PURCHASER, ANY CLAIM THAT IT IS NOT
      PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, OR THAT SUCH SUIT,
      ACTION OR PROCEEDING IS IMPROPER. EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL
      SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION
      OR PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR
      OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE ADDRESS
      IN
      EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE
      SHALL
      CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF.
      NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE
      PROCESS IN ANY MANNER PERMITTED BY LAW. THE COMPANY AND PURCHASERS HEREBY WAIVE
      ALL RIGHTS TO A TRIAL BY JURY.

     

    7.10  Survival.
      The
      representations, warranties, agreements and covenants contained herein shall
      survive the Closing and the delivery and/or exercise of the Securities, as
      applicable. 

     

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

     

    7.11  Execution.
      This
      Agreement may be executed in two or more counterparts, all of which when taken
      together shall be considered one and the same agreement and shall become
      effective when counterparts have been signed by each party and delivered to
      the
      other party, it being understood that both parties need not sign the same
      counterpart. In the event that any signature is delivered by facsimile
      transmission, such signature shall create a valid and binding obligation of
      the
      party executing (or on whose behalf such signature is executed) with the same
      force and effect as if such facsimile signature page were an original
      thereof.

     

    7.12  Severability.
      If any
      provision of this Agreement is held to be invalid or unenforceable in any
      respect, the validity and enforceability of the remaining terms and provisions
      of this Agreement shall not in any way be affected or impaired thereby and
      the
      parties will attempt to agree upon a valid and enforceable provision that is
      a
      reasonable substitute therefor, and upon so agreeing, shall incorporate such
      substitute provision in this Agreement.

     

    7.13  Rescission
      and Withdrawal Right.
      Notwithstanding anything to the contrary contained in (and without limiting
      any
      similar provisions of) the Transaction Documents, whenever any Purchaser
      exercises a right, election, demand or option under a Transaction Document
      and
      the Company does not timely perform its related obligations within the periods
      therein provided, then such Purchaser may rescind or withdraw, in its sole
      discretion from time to time upon written notice to the Company, any relevant
      notice, demand or election in whole or in part without prejudice to its future
      actions and rights.

     

    7.14  Replacement
      of Securities.
      If any
      certificate or instrument evidencing any Securities is mutilated, lost, stolen
      or destroyed, the Company shall issue or cause to be issued in exchange and
      substitution for and upon cancellation thereof, or in lieu of and substitution
      therefor, a new certificate or instrument, but only upon receipt of evidence
      reasonably satisfactory to the Company of such loss, theft or destruction and
      customary and reasonable indemnity, if requested. The applicants for a new
      certificate or instrument under such circumstances shall also pay any reasonable
      third-party costs associated with the issuance of such replacement
      Securities.

     

    7.15  Remedies.
      In
      addition to being entitled to exercise all rights provided herein or granted
      by
      law, including recovery of damages each of the Purchasers and the Company will
      be entitled to specific performance under the Transaction Documents. The parties
      agree that monetary damages may not be adequate compensation for any loss
      incurred by reason of any breach of obligations described in the foregoing
      sentence and hereby agrees to waive in any action for specific performance
      of
      any such obligation the defense that a remedy at law would be
      adequate.

    7.16  Payment
      Set Aside.
      To the
      extent that the Company makes a payment or payments to any Purchaser hereunder
      or pursuant to the Warrants or any Purchaser enforces or exercises its rights
      hereunder or thereunder, and such payment or payments or the proceeds of such
      enforcement or exercise or any part thereof are subsequently invalidated,
      declared to be fraudulent or preferential, set aside, recovered from, disgorged
      by or are required to be refunded, repaid or otherwise restored to the Company
      by a trustee, receiver or any other Person under any law (including, without
      limitation, any bankruptcy law, state or federal law, common law or equitable
      cause of action), then to the extent of any such restoration the obligation
      or
      part thereof

     

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

     

    originally
      intended to be satisfied shall be revived and continued in full force and effect
      as if such payment had not been made or such enforcement or setoff had not
      occurred.

     

    7.17  Adjustments
      in Share Numbers and Prices.
      In the
      event of any stock split, subdivision, dividend or distribution payable in
      shares of Common Stock (or other securities or rights convertible into, or
      entitling the holder thereof to receive directly or indirectly shares of Common
      Stock), combination or other similar recapitalization or event occurring after
      the date hereof, each reference in any Transaction Document to a number of
      shares or a price per share shall be amended to appropriately account for such
      event.

     

    7.18
       Independent
      Nature of Purchasers' Obligations and Rights.
      The
      obligations of each Purchaser under any Transaction Document are several and
      not
      joint with the obligations of any other Purchaser, and no Purchaser shall be
      responsible in any way for the performance of the obligations of any other
      Purchaser under any Transaction Document. The decision of each Purchaser to
      purchase Securities pursuant to this Agreement has been made by such Purchaser
      independently of any other Purchaser and independently of any information,
      materials, statements or opinions as to the business, affairs, operations,
      assets, properties, liabilities, results of operations, condition (financial
      or
      otherwise) or prospects of the Company or of the Subsidiary which may have
      been
      made or given by any other Purchaser or by any agent or employee of any other
      Purchaser, and no Purchaser or any of its agents or employees shall have any
      liability to any other Purchaser (or any other Person) relating to or arising
      from any such information, materials, statements or opinions. Nothing contained
      herein or in any Transaction Document, and no action taken by any Purchaser
      pursuant thereto, shall be deemed to constitute the Purchasers as a partnership,
      an association, a joint venture or any other kind of entity, or create a
      presumption that the Purchasers are in any way acting in concert or as a group
      with respect to such obligations or the transactions contemplated by the
      Transaction Document. The Company hereby confirms that it understands that
      the
      Purchasers are not acting as a “group” as that term is used in Section 13(d) of
      the Exchange Act. Each Purchaser acknowledges that no other Purchaser has acted
      as agent for such Purchaser in connection with making its investment hereunder
      and that no other Purchaser will be acting as agent of such Purchaser in
      connection with monitoring its investment hereunder. Each Purchaser shall be
      entitled to independently protect and enforce its rights, including without
      limitation the rights arising out of this Agreement or out of the other
      Transaction Documents, and it shall not be necessary for any other Purchaser
      to
      be joined as an additional party in any proceeding for such purpose. Each
      Purchaser represents that it has been represented by its own separate legal
      counsel in its review and negotiations of this Agreement and the Transaction
      Documents and each party represents and confirms that Malhotra & Associates
      LLP represents only Iroquois Master Fund Ltd. in connection with this Agreement
      and the other Transaction Documents.

     

     

    [SIGNATURE
      PAGES TO FOLLOW]

    

     

    
 

    30

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
      executed by their respective authorized signatories as of the date first
      indicated above.

     

                        SIGA
      Technologies,
      Inc.

     

                        By: /s/
      Thomas
      N. Konatich

                        Name: Thomas
      N.
      Konatich

                        Title: Vice
      President and Chief Financial Officer

     

                        Address
      for
      Notice:

     

                        420
      Lexington
      Avenue

                        Suite
      408

                        New
      York, NY
      10170

                        Facsimile
      No.: (212)
      697-3130

                        Telephone
      No.: (212)
      672-9100

                        Attn:
      Thomas N.
      Konatich

     

     

    With
      a
      copy to:                           
Kramer
      Levin Naftalis & Frankel LLP

                        1177
      Avenue of the
      Americas

                        New
      York, NY
      10036

                        Facsimile
      No.: (212)
      715-8000

                        Telephone
      No.: (212)
      715-9100

                        Attn:
      James A.
      Grayer, Esq.

    

    

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK

    SIGNATURE
      PAGES FOR PURCHASERS FOLLOW]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

                        IROQUOIS
      MASTER FUND
      LTD.

     

                        By: /s/
      Joshua Silverman

                        Name: Joshua
      Silverman

                        Title: Authorized
      Signatory

     

                        Purchase
      Price               
      $4.54

     

                        Units
      Purchased:        477,974

     

                        Warrant
      Shares:         
238,987

     

                        Address
      for
      Notice:

    

                        Iroquois
      Master Fund
      Ltd.

                   
      641 Lexington Ave, 26th
      Floor

                        New
      York, NY
      10022

                        Facsimile
      No.: (212)
      207-3452

                        Telephone
      No.: (212)
      974-3070

                        Attn:
      Joshua
      Silverman

    

    With
      a
      copy to:                           
Malhotra
      & Associates LLP

                           
      11 Penn Plaza, 5th
      Floor

                        New
      York, New York
      10001

                        Facsimile
      No.: (212)
      504-0863

                        Telephone
      No.: (212)
      593-2284

                        Attn:
      Gary Malhotra,
      Esq.

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

                        Cranshire
      Capital,
      L.P.

                        (Name
      of
      Purchaser)      

     

                        By: /s/
      Mitchell Kopin

                        Name: Mitchell
      Kopin

                        Title: President
      - Downsview Capital

                      The
      General Partner

    

     

                        Purchase
      Price        $2,170,002

     

                        Units
      Purchased:        477,974

     

                        Warrant
      Shares:         
238,987

     

                        Address
      for
      Notice:

    

                        3100
      Dundee
      Road

                        Suite
      703

                        Northbrook,
      IL
      60062

                        Facsimile
      No.:
      847-562-9031

                        Telephone
      No.:
      847-562-9030

                        Attn:
      Mitchell
      Kopin

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

                        Omicron
      Master
      Trust

                        (Name
      of
      Purchaser)

          

                                           OMICRON
      MASTER TRUST

     

                                           By:
      Omicron Capital L.P., as adviser

     

                                       
By:
      Omicron Capital Inc.,

                                              
its
      general partner

     

     

                        By: /s/
      Olivier Morali

                        Name: Olivier
      Morali

                        Title: Authorized
      Signatory

     

                        Purchase
      Price             
      $4.54

     

                        Units
      Purchased:        88,104

     

                        Warrant
      Shares:         
44,052

     

                        Address
      for
      Notice:

    

                        c/o
      Omicron Capital,
      L.P.

                        650
      Fifth
      Ave.

                        24th
      Fl

                        New
      York, NY
      10019

                        Facsimile
      No.:
      212-246-9409

                        Telephone
      No.:
      212-246-9406

                        Attn:
      Olivier
      Morali

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

                        Rockmore
      Investment Master Fund, Ltd.

     

                        By: /s/
      Bruce Bernstein

                        Name: Bruce
      Bernstein

                        Title: Managing
      Partner

    

     

                        Purchase
      Price               
      $4.54

     

                        Units
      Purchased:        477,974

     

                        Warrant
      Shares:         
238,987

     

                        Address
      for
      Notice:

    

                        150
      East
      58th
      Street

                        28th
      Fl

                        New
      York, NY
      10155

                        Facsimile
      No.:
      212-258-2315

                        Telephone
      No.:
      212-258-2301

                        Attn:
      Anya
      Sigalow

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

                        SMITHFIELD
      FIDUCIARY LLC

     

                        By: /s/
      Adam J. Chill

                        Name: Adam
      J.
      Chill

                        Title: Authorized
      Signatory

     

                        Purchase
      Price        $2,170,002

     

                        Units
      Purchased:        477,974

     

                        Warrant
      Shares:         
238,987

     

                        Address
      for
      Notice:

    

                        c/o
      Highbridge
      Capital Management, LLC

                        9
      West 57th
      Street,
      27th
      Floor

                        New
      York, New York
      10019

                        Facsimile
      No.: (212)
      751-0755

                        Telephone
      No.: (212)
      287-4720

                        Attn:
      Ari J.
      Storch/Adam J. Chill

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
 

    Exhibits:

     

    A Form
      of
      Warrant

    B Form
      of
      Opinion of Company Counsel

    C Plan
      of
      Distribution

    D Form
      of
      Transfer Agent Instructions

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

     

    NEITHER
      THESE SECURITIES NOR THE SECURITIES FOR WHICH THESE SECURITIES ARE EXERCISABLE
      HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
      SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
      REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
      ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
      EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
      AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
      REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE STATE
      SECURITIES OR BLUE SKY LAWS. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON
      EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE
      MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

     

    

     

    SIGA
      TECHNOLOGIES, INC.

     

    WARRANT

     

    Warrant
      No. [  ]                                                                                    Dated:
      October 19, 2006

     

    SIGA
      Technologies, Inc., a Delaware corporation (the “Company”),
      hereby certifies that, for value received, [Name of Holder] or its registered
      assigns (the “Holder”),
      is
      entitled to purchase from the Company up to a total of [ ]1 
      shares
      of common stock, $0.0001 par value per share (the “Common
      Stock”),
      of
      the Company (each such share, a “Warrant
      Share”
and
      all
      such shares, the “Warrant
      Shares”)
      at an
      exercise price equal to $4.99 per share (as adjusted from time to time as
      provided in Section
      9,
      the
“Exercise
      Price”),
      at
      any time and from time to time from and after the date hereof (the “Initial
      Exercise Date”) and through and including the seventh anniversary of the date
      hereof (the “Expiration
      Date”),
      and
      subject to the following terms and conditions. This Warrant (this “Warrant”)
      is one
      of a series of similar warrants issued pursuant to that certain Securities
      Purchase Agreement, dated as of the date hereof, by and among the Company and
      the Purchasers identified therein (the “Purchase
      Agreement”).
      All
      such warrants are referred to herein, collectively, as the “Warrants.”

     

    1.
       Definitions.
      In
      addition to the terms defined elsewhere in this Warrant, capitalized terms
      that
      are not otherwise defined herein have the meanings given to such terms in the
      Purchase Agreement.

     

    2.
       Registration
      of Warrant.
      The
      Company shall register this Warrant, upon records to be maintained by the
      Company for that purpose (the “Warrant
      Register”),
      in
      the name of the

     

    -----------------------

    
      1
        Equal to
        50% (aggregate) warrant coverage

    

      

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    record
      Holder hereof from time to time. The Company may deem and treat the registered
      Holder of this Warrant as the absolute owner hereof for the purpose of any
      exercise hereof or any distribution to the Holder, and for all other purposes,
      absent actual notice to the contrary.

     

    3.
       Registration
      of Transfers.
      The
      Company shall register the transfer of any portion of this Warrant in the
      Warrant Register, upon surrender of this Warrant, with the Form of Assignment
      attached hereto duly completed and signed, to the Transfer Agent or to the
      Company at its address specified herein. Upon any such registration or transfer,
      a new warrant to purchase Common Stock, in substantially the form of this
      Warrant (any such new warrant, a “New
      Warrant”),
      evidencing the portion of this Warrant so transferred shall be issued to the
      transferee and a New Warrant evidencing the remaining portion of this Warrant
      not so transferred, if any, shall be issued to the transferring Holder. The
      acceptance of the New Warrant by the transferee thereof shall be deemed the
      acceptance by such transferee of all of the rights and obligations of a holder
      of a Warrant.

     

    4.
       Exercise
      and Duration of Warrants.
      Subject
      to Section 11:

     

    (a)
       This
      Warrant shall be exercisable by the registered Holder at any time and from
      time
      to time on or after the date hereof to and including the Expiration Date. At
      6:30 P.M., New York City time on the Expiration Date, the portion of this
      Warrant not exercised prior thereto shall be and become void and of no value;
      provided that, if the average of the Closing Prices for the five Trading Days
      immediately prior to (but not including) the Expiration Date exceeds the
      Exercise Price on the Expiration Date, then this Warrant shall be deemed to
      have
      been exercised in full (to the extent not previously exercised) on a “cashless
      exercise” basis at 6:30 P.M. New York City time on the Expiration Date if a
“cashless exercise” may occur at such time pursuant to Section 10 below.
      Notwithstanding anything to the contrary herein, the Expiration Date shall
      be
      extended for each day following the Effective Date that the Registration
      Statement is not effective.

     

    (b)
       A
      Holder
      may exercise this Warrant by delivering to the Company (i) an exercise notice,
      in the form attached hereto (the “Exercise
      Notice”),
      appropriately completed and duly signed, and (ii) payment of the Exercise
      Price for the number of Warrant Shares as to which this Warrant is being
      exercised (which may take the form of a “cashless exercise” if so indicated in
      the Exercise Notice and if a “cashless exercise” may occur at such time pursuant
      to this Section 10 below), and the date such items are delivered to the Company
      (as determined in accordance with the notice provisions hereof) is an
“Exercise
      Date.”
The
      Holder shall not be required to deliver the original Warrant in order to effect
      an exercise hereunder. Upon the execution and delivery of the Exercise Notice,
      the Company shall issue a New Warrant to the Holder evidencing the right to
      purchase the remaining number of Warrant Shares.

     

    5.
       Delivery
      of Warrant Shares.
      

     

    (a)
       Upon
      exercise of this Warrant, the Company shall promptly (but in no event later
      than
      three Trading Days after the Exercise Date) issue or cause to be issued and
      cause to be delivered to or upon the written order of the Holder and in such
      name or names as the Holder may designate, a certificate for the Warrant Shares
      issuable upon such exercise, free of restrictive
      legends unless a registration statement covering the resale of the Warrant
      Shares and

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

     

    naming
      the Holder as a selling stockholder thereunder is not then effective and the
      Warrant Shares are not freely transferable without volume restrictions pursuant
      to Rule 144 under the Securities Act. The Holder, or any Person so designated
      by
      the Holder to receive Warrant Shares, shall be deemed to have become holder
      of
      record of such Warrant Shares as of the Exercise Date. The Company shall, upon
      request of the Holder, use its best efforts to deliver Warrant Shares hereunder
      electronically through the Depository Trust Corporation or another established
      clearing corporation performing similar functions.

     

    (b)
       This
      Warrant is exercisable, either in its entirety or, from time to time, for a
      portion of the number of Warrant Shares. Upon surrender of this Warrant
      following one or more partial exercises, the Company shall issue or cause to
      be
      issued, at its expense, a New Warrant evidencing the right to purchase the
      remaining number of Warrant Shares.

     

    (c)
       In
      addition to any other rights available to a Holder, if the Company fails to
      deliver to the Holder a certificate representing Warrant Shares by the third
      Trading Day after the date on which delivery of such certificate is required
      by
      this Warrant, and if after such third Trading Day the Holder purchases (in
      an
      open market transaction or otherwise) shares of Common Stock to deliver in
      satisfaction of a sale by the Holder of the Warrant Shares that the Holder
      anticipated receiving from the Company (a “Buy-In”),
      then
      the Company shall, within three Trading Days after the Holder’s request and in
      the Holder's discretion, either (i) pay cash to the Holder in an amount equal
      to
      the Holder’s total purchase price (including brokerage commissions, if any) for
      the shares of Common Stock so purchased (the “Buy-In
      Price”),
      at
      which point the Company’s obligation to deliver such certificate (and to issue
      such Common Stock) shall terminate, or (ii) promptly honor its obligation to
      deliver to the Holder a certificate or certificates representing such Common
      Stock and pay cash to the Holder in an amount equal to the excess (if any)
      of
      the Buy-In Price over the product of (A) such number of shares of Common Stock,
      times (B) the Closing Price on the date of the event giving rise to the
      Company’s obligation to deliver such certificate.

     

    (d)
       The
      Company’s obligations to issue and deliver Warrant Shares in accordance with the
      terms hereof are absolute and unconditional, irrespective of any action or
      inaction by the Holder to enforce the same, any waiver or consent with respect
      to any provision hereof, the recovery of any judgment against any Person or
      any
      action to enforce the same, or any setoff, counterclaim, recoupment, limitation
      or termination, or any breach or alleged breach by the Holder or any other
      Person of any obligation to the Company or any violation or alleged violation
      of
      law by the Holder or any other Person, and irrespective of any other
      circumstance which might otherwise limit such obligation of the Company to
      the
      Holder in connection with the issuance of Warrant Shares. Nothing herein shall
      limit a Holder’s right to pursue any other remedies available to it hereunder,
      at law or in equity including, without limitation, a decree of specific
      performance and/or injunctive relief with respect to the Company’s failure to
      timely deliver certificates representing shares of Common Stock upon exercise
      of
      the Warrant as required pursuant to the terms hereof.

     

    6.
       Charges,
      Taxes and Expenses.
      Issuance and delivery of certificates for shares of Common Stock upon exercise
      of this Warrant shall be made without charge to the Holder for any issue or
      transfer tax, withholding tax, transfer agent fee or other incidental tax or
      expense in respect
      of the issuance of such certificates, all of which taxes and expenses shall
      be
      paid by the

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

     Company;
      provided, however, that the Company shall not be required to pay any tax which
      may be payable in respect of any transfer involved in the registration of any
      certificates for Warrant Shares or Warrants in a name other than that of the
      Holder or an Affiliate thereof. The Holder shall be responsible for all other
      tax liability that may arise as a result of holding or transferring this Warrant
      or receiving Warrant Shares upon exercise hereof.

     

    7.
       Replacement
      of Warrant.
      If this
      Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or
      cause to be issued in exchange and substitution for and upon cancellation
      hereof, or in lieu of and substitution for this Warrant, a New Warrant, but
      only
      upon receipt of evidence reasonably satisfactory to the Company of such loss,
      theft or destruction and customary and reasonable bond or indemnity, if
      requested. Applicants for a New Warrant under such circumstances shall also
      comply with such other reasonable regulations and procedures and pay such other
      reasonable third-party costs as the Company may prescribe.

     

    8.
       Reservation
      of Warrant Shares.
      The
      Company covenants that it will at all times reserve and keep available out
      of
      the aggregate of its authorized but unissued and otherwise unreserved Common
      Stock, solely for the purpose of enabling it to issue Warrant Shares upon
      exercise of this Warrant as herein provided, the number of Warrant Shares which
      are then issuable and deliverable upon the exercise of this entire Warrant,
      free
      from preemptive rights or any other contingent purchase rights of persons other
      than the Holder (taking into account the adjustments and restrictions of
Section
      9).
      The
      Company covenants that all Warrant Shares so issuable and deliverable shall,
      upon issuance and the payment of the applicable Exercise Price in accordance
      with the terms hereof, be duly and validly authorized, issued and fully paid
      and
      nonassessable. The Company will take all such actions as may be necessary to
      assure that such shares of Common Stock may be issued as provided herein without
      violation of any applicable law or regulation, or of any requirements of any
      securities exchange or automated quotation system upon which the Common Stock
      may be listed.

     

    9.
       Certain
      Adjustments.
      The
      Exercise Price and number of Warrant Shares issuable upon exercise of this
      Warrant are subject to adjustment from time to time as set forth in this
Section
      9.

     

    (a)
       Stock
      Dividends and Splits.
      If the
      Company, at any time while this Warrant is outstanding, (i) pays a stock
      dividend on its Common Stock or otherwise makes a distribution on any class
      of
      capital stock that is payable in shares of Common Stock, (ii) subdivides
      outstanding shares of Common Stock into a larger number of shares, or (iii)
      combines outstanding shares of Common Stock into a smaller number of shares,
      then in each such case the Exercise Price shall be multiplied by a fraction
      of
      which the numerator shall be the number of shares of Common Stock outstanding
      immediately before such event and of which the denominator shall be the number
      of shares of Common Stock outstanding immediately after such event. Any
      adjustment made pursuant to clause (i) of this paragraph shall become effective
      immediately after the record date for the determination of stockholders entitled
      to receive such dividend or distribution, and any adjustment pursuant to clause
      (ii) or (iii) of this paragraph shall become effective immediately after the
      effective date of such subdivision or combination.

     

    (b)  Pro
      Rata Distributions.
      If the
      Company, at any time while this Warrant is outstanding, distributes to all
      holders of Common Stock (i) evidences of its indebtedness, (ii) any

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    security
      (other than a distribution of Common Stock covered by the preceding paragraph),
      (iii) rights or warrants to subscribe for or purchase any security, or (iv)
      any other asset (in each case, “Distributed
      Property”),
      then
      in each such case the Exercise Price in effect immediately prior to the record
      date fixed for determination of stockholders entitled to receive such
      distribution shall be adjusted (effective on such record date) to equal the
      product of such Exercise Price times a fraction of which the denominator shall
      be the average of the Closing Prices for the five Trading Days immediately
      prior
      to (but not including) such record date and of which the numerator shall be
      the
      average of the Closing Prices for the five Trading Days immediately after (but
      not including) such record date. As an alternative to the foregoing adjustment
      to the Exercise Price, at the request of the Holder delivered no later than
      three days prior to such distribution, the Company will deliver to such Holder
      on the effective date of such distribution, the Distributed Property that such
      Holder would have been entitled to receive in respect of the Warrant Shares
      for
      which this Warrant could have been exercised immediately prior to such record
      date. If such Distributed Property is not delivered to a Holder pursuant to
      the
      preceding sentence, then upon expiration of or any exercise of the Warrant
      that
      occurs after such record date, such Holder shall remain entitled to receive,
      in
      addition to the Warrant Shares otherwise issuable upon such exercise (if
      applicable), such Distributed Property.

     

    (c)
       Fundamental
      Transactions.
      If, at
      any time while this Warrant is outstanding, (i) the Company effects any merger
      or consolidation of the Company with or into another Person, (ii) the Company
      effects any sale of all or substantially all of its assets in one or a series
      of
      related transactions, (iii) any tender offer or exchange offer (whether by
      the
      Company or another Person) is completed pursuant to which holders of Common
      Stock are permitted to tender or exchange their shares for other securities,
      cash or property, or (iv) the Company effects any reclassification of the Common
      Stock or any compulsory share exchange pursuant to which the Common Stock is
      effectively converted into or exchanged for other securities, cash or property
      (other than as a result of a subdivision or combination of shares of Common
      Stock covered by Section 9(a) above) (in any such case, a “Fundamental
      Transaction”),
      then
      the Holder shall have the right thereafter to receive, upon exercise of this
      Warrant, the same amount and kind of securities, cash or property as it would
      have been entitled to receive upon the occurrence of such Fundamental
      Transaction if it had been, immediately prior to such Fundamental Transaction,
      the holder of the number of Warrant Shares then issuable upon exercise in full
      of this Warrant (the “Alternate
      Consideration”).
      The
      aggregate Exercise Price for this Warrant will not be affected by any such
      Fundamental Transaction, but the Company shall apportion such aggregate Exercise
      Price among the Alternate Consideration in a reasonable manner reflecting the
      relative value of any different components of the Alternate Consideration.
      If
      holders of Common Stock are given any choice as to the securities, cash or
      property to be received in a Fundamental Transaction, then the Holder shall
      be
      given the same choice as to the Alternate Consideration it receives upon any
      exercise of this Warrant following such Fundamental Transaction. In the event
      of
      a Fundamental Transaction, the Company or the successor or purchasing Person,
      as
      the case may be, shall execute with the Holder a written agreement providing
      that:

    

    (x)
       this
      Warrant shall thereafter entitle the Holder to purchase the Alternate
      Consideration in accordance with this section 9(c), 

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (y) in
      the
      case of any such successor or purchasing Person, upon such consolidation,
      merger, statutory exchange, combination, sale or conveyance such successor
      or
      purchasing Person shall be jointly and severally liable with the Company for
      the
      performance of all of the Company's obligations under this Warrant and the
      Purchase Agreement, and 

    

    (z) if
      registration or qualification is required under the Exchange Act or applicable
      state law for the public resale by the Holder of shares of stock and other
      securities so issuable upon exercise of this Warrant, all rights applicable
      to
      registration of the Common Stock issuable upon exercise of this Warrant shall
      apply to the Alternate Consideration. 

    

    If,
      in
      the case of any Fundamental Transaction, the Alternate Consideration includes
      shares of stock, other securities, other property or assets of a Person other
      than the Company or any such successor or purchasing Person, as the case may
      be,
      in such Fundamental Transaction, then such written agreement shall also be
      executed by such other Person and shall contain such additional provisions
      to
      protect the interests of the Holder as the Board of Directors of the Company
      shall reasonably consider necessary by reason of the foregoing. At the Holder’s
      request, any successor to the Company or surviving entity in such Fundamental
      Transaction shall issue to the Holder a new warrant consistent with the
      foregoing provisions and evidencing the Holder’s right to purchase the Alternate
      Consideration for the aggregate Exercise Price upon exercise thereof. The terms
      of any agreement pursuant to which a Fundamental Transaction is effected shall
      include terms requiring any such successor or surviving entity to comply with
      the provisions of this paragraph (c) and insuring that the Warrant (or any
      such
      replacement security) will be similarly adjusted upon any subsequent transaction
      analogous to a Fundamental Transaction. If any Fundamental Transaction
      constitutes or results in a Change of Control, the Company (or any such
      successor or surviving entity) will purchase the Warrant from the Holder for
      a
      purchase price, payable in cash within five Trading Days after such request
      (or,
      if later, on the effective date of the Fundamental Transaction), equal to the
      Black-Scholes value of the remaining unexercised portion of this Warrant on
      the
      date of such request.

    

    (d)
       Subsequent
      Equity Sales.

     

    (i) If,
      at
      any time while this Warrant is outstanding, the Company or any Subsidiary issues
      additional shares of Common Stock or rights, warrants, options or other
      securities or debt convertible, exercisable or exchangeable for shares of Common
      Stock or otherwise entitling any Person to acquire shares of Common Stock
      (collectively, “Common
      Stock Equivalents”)
      at an
      effective net price to the Company per share of Common Stock (the “Effective
      Price”)
      less
      than the Exercise Price (as adjusted hereunder to such date), then the Exercise
      Price shall be reduced to equal the Effective Price. If, at any time while
      this
      Warrant is outstanding, the Company or any Subsidiary issues Common Stock or
      Common Stock Equivalents at an Effective Price greater than the
      Exercise Price (as adjusted hereunder to such date) but less than the average
      Closing Price over the five Trading Days prior to such issuance (the
“Adjustment
      Price”),
      then
      the Exercise Price shall be reduced to equal the product of (A) the Exercise
      Price in effect

     

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

     

    immediately
      prior to such issuance of Common Stock or Common Stock Equivalents times (B)
      a
      fraction, the numerator of which is the sum of (1) the number of shares of
      Common Stock outstanding immediately prior to such issuance, plus (2) the number
      of shares of Common Stock which the aggregate Effective Price of the Common
      Stock issued (or deemed to be issued) would purchase at the Adjustment Price,
      and the denominator of which is the aggregate number of shares of Common Stock
      outstanding or deemed to be outstanding immediately after such issuance. For
      purposes of this paragraph, in connection with any issuance of any Common Stock
      Equivalents, (A) the maximum number of shares of Common Stock potentially
      issuable at any time upon conversion, exercise or exchange of such Common Stock
      Equivalents (the “Deemed
      Number”)
      shall
      be deemed to be outstanding upon issuance of such Common Stock Equivalents,
      (B)
      the Effective Price applicable to such Common Stock shall equal the minimum
      dollar value of consideration payable to the Company to purchase such Common
      Stock Equivalents and to convert, exercise or exchange them into Common Stock
      (net of any discounts, fees, commissions and other expenses), divided by the
      Deemed Number, and (C) no further adjustment shall be made to the Exercise
      Price
      upon the actual issuance of Common Stock upon conversion, exercise or exchange
      of such Common Stock Equivalents. The Effective Price of Common Stock or Common
      Stock Equivalents issued in any transaction in which more than one type of
      securities are issued shall give effect to the allocation by the Company of
      the
      aggregate amount paid for such securities issued in such
      transaction.

     

    (ii) If,
      at
      any time while this Warrant is outstanding, the Company or any Subsidiary issues
      Common Stock Equivalents with an Effective Price or a number of underlying
      shares that floats or resets or otherwise varies or is subject to adjustment
      based (directly or indirectly) on market prices of the Common Stock (a
“Floating
      Price Security”),
      then
      for purposes of applying the preceding paragraph in connection with any
      subsequent exercise, the Effective Price will be determined separately on each
      Exercise Date and will be deemed to equal the lowest Effective Price at which
      any holder of such Floating Price Security is entitled to acquire Common Stock
      on such Exercise Date (regardless of whether any such holder actually acquires
      any shares on such date).

     

    (iii) Notwithstanding
      the foregoing, no adjustment will be made under this paragraph in respect of
      any
      Excluded Stock.

     

    (e)
       Number
      of Warrant Shares.
      Simultaneously with any adjustments to the Exercise Price pursuant to paragraphs
      (a), (b) or (d) of this Section, the number of Warrant Shares that may be
      purchased upon exercise of this Warrant shall be increased or decreased
      proportionately, so that after such adjustment the aggregate Exercise Price
      payable hereunder for the increased or decreased number of Warrant Shares shall
      be the same as the aggregate Exercise Price in effect immediately prior to
      such
      adjustment.

     

    (f)
       Calculations.
      All
      calculations under this Section
      9
      shall be
      made to the nearest cent or the nearest 1/100th of a share, as applicable.
      The
      number of shares of Common Stock
      outstanding at any given time shall not include shares owned or held by or
      for
      the account of the Company, and the disposition of any such shares shall be
      considered an issue or sale of Common Stock.

     

     

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (g)
       Notice
      of Adjustments.
      Upon
      the occurrence of each adjustment pursuant to this Section
      9,
      the
      Company at its expense will promptly compute such adjustment in accordance
      with
      the terms of this Warrant and prepare a certificate setting forth such
      adjustment, including a statement of the adjusted Exercise Price and adjusted
      number or type of Warrant Shares or other securities issuable upon exercise
      of
      this Warrant (as applicable), describing the transactions giving rise to such
      adjustments and showing in detail the facts upon which such adjustment is based.
      Upon written request, the Company will promptly deliver a copy of each such
      certificate to the Holder and to the Company’s Transfer Agent.

     

    (h)
       Notice
      of Corporate Events.
      If the
      Company (i) declares a dividend or any other distribution of cash, securities
      or
      other property in respect of its Common Stock, including without limitation
      any
      granting of rights or warrants to subscribe for or purchase any capital stock
      of
      the Company or any Subsidiary, (ii) authorizes or approves, enters into any
      agreement contemplating or solicits stockholder approval for any Fundamental
      Transaction or (iii) authorizes the voluntary dissolution, liquidation or
      winding up of the affairs of the Company, then the Company shall deliver to
      the
      Holder a notice describing the material terms and conditions of such
      transaction, at least 20 calendar days prior to the applicable record or
      effective date on which a Person would need to hold Common Stock in order to
      participate in or vote with respect to such transaction, and the Company will
      take all steps reasonably necessary in order to insure that the Holder is given
      the practical opportunity to exercise this Warrant prior to such time so as
      to
      participate in or vote with respect to such transaction; provided, however,
      that
      the failure to deliver such notice or any defect therein shall not affect the
      validity of the corporate action required to be described in such notice.

     

    10.
       Payment
      of Exercise Price.
      The
      Holder shall pay the Exercise Price in immediately available funds; provided,
      however, if at anytime after the Required Effectiveness Date there is no
      effective Registration Statement registering, or no current prospectus available
      for, the resale of the Warrant Shares by the Holder, the Holder may satisfy
      its
      obligation to pay the Exercise Price through a “cashless exercise,” in which
      event the Company shall issue to the Holder the number of Warrant Shares
      determined as follows:

     

    
      	 	
              X
                =
                Y [(A-B)/A]

            
	
              where:

            	 
	 	
              X
                =
                the number of Warrant Shares to be issued to the
                Holder.

            
	 	 
	 	
              Y
                =
                the number of Warrant Shares with respect to which this Warrant is
                being
                exercised.

            
	 	 
	 	
              A
                =
                the arithmetic average of the Closing Prices for the five Trading
                Days
                immediately prior to (but not including) the Exercise
                Date.

            
	 	 
	 	
              B
                =
                the Exercise Price.

            

    

    

    For
      purposes of Rule 144 promulgated under the Securities Act, it is intended,
      understood and acknowledged that the Warrant Shares issued in a cashless
      exercise transaction shall be deemed to have been acquired by the Holder, and
      the holding period for the Warrant

     

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

     

    Shares
      shall be deemed to have commenced, on the date this Warrant was originally
      issued pursuant to the Purchase Agreement.

     

    11.
       Limitation
      on Exercise.
      (a)
      Notwithstanding anything to the contrary contained herein, the
      number of shares of Common Stock that may be acquired by the Holder upon any
      exercise of this Warrant (or otherwise in respect hereof) shall be limited
      to
      the extent necessary to insure that, following such exercise (or other
      issuance), the total number of shares of Common Stock then beneficially owned
      by
      such Holder and its Affiliates and any other Persons whose beneficial ownership
      of Common Stock would be aggregated with the Holder’s for purposes of Section
      13(d) of the Exchange Act, does not exceed 4.999% (the “Threshold
      Percentage”)
      or
      9.999% (the “Maximum
      Percentage”)
      of the
      total number of issued and outstanding shares of Common Stock (including for
      such purpose the shares of Common Stock issuable upon such
      exercise).
      For such
      purposes, beneficial ownership shall be determined in accordance with Section
      13(d) of the Exchange Act and the rules and regulations promulgated thereunder.
      Each delivery of an Exercise Notice hereunder will constitute a representation
      by the Holder that it has evaluated the limitations set forth in this paragraph
      and determined that issuance of the full number of Warrant Shares requested
      in
      such Exercise Notice is permitted under this paragraph. The Company’s obligation
      to issue shares of Common Stock in excess of the limitation referred to in
      this
      Section shall be suspended (and shall not terminate or expire notwithstanding
      any contrary provisions hereof) until such time, if any, as such shares of
      Common Stock may be issued in compliance with such limitation. By written notice
      to the Company, the Holder shall have the right (x) at any time and from time
      to
      time to reduce its Maximum Percentage immediately upon notice to the Company
      in
      the event and only to the extent that Section 16 of the Exchange Act or the
      rules promulgated thereunder (or any successor statute or rules) is changed
      to
      reduce the beneficial ownership percentage threshold thereunder to a percentage
      less than 9.999% and (y) at any time and from time to time, to waive the
      provisions of this Section insofar as they relate to the Threshold Percentage
      or
      to increase or decrease its Threshold Percentage (but not in excess of the
      Maximum Percentage) unless the Holder shall have, by written instrument
      delivered to the Company, irrevocably waived its rights to so increase or
      decrease its Threshold Percentage, but (i) any such waiver, increase or decrease
      will not be effective until the 61st day after such notice is delivered to
      the
      Company, (ii) any such waiver or increase or decrease will apply only to the
      Holder and not to any other holder of Warrants, and (iii) in no event shall
      the
      Holder own, directly or beneficially, more than 19.99% of the outstanding shares
      of Common Stock unless the Company obtains shareholder approval in accordance
      with the rules and regulations of the NASDAQ Stock Market.

     

    (b) Notwithstanding
      anything to the contrary contained herein the maximum number of shares of Common
      Stock that the Company may issue pursuant to the Transaction Documents at an
      effective purchase price less than the Closing Price on the Trading Day
      immediately preceding the Closing Date equals 19.99% of the outstanding shares
      of Common Stock immediately preceding the Closing Date (the “Issuable
      Maximum”),
      unless the Company obtains shareholder approval in accordance with the rules
      and
      regulations of the NASDAQ Stock Market. If, at the time any Holder requests
      an
      exercise of any of the Warrants, the Actual Minimum (excluding any shares issued
      or issuable at an effective purchase price in excess of the Closing Price on
      the
      Trading Day immediately preceding the Closing Date) exceeds the Issuable
Maximum
      (and if the Company has not previously obtained the required shareholder
      approval), then the Company shall issue to the Holder requesting such exercise
      a
      number of shares of

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    Common
      Stock not exceeding such Holder’s pro-rata portion of the Issuable Maximum
      (based on such Holder’s share (vis-à-vis other Holders) of the aggregate
      purchase price paid under the Purchase Agreement and taking into account any
      Warrant Shares previously issued to such Holder). For the purposes hereof,
      “Actual
      Minimum”
shall
      mean, as of any date, the maximum aggregate number of shares of Common Stock
      then issued or potentially issuable in the future pursuant to the Transaction
      Documents, including any Underlying Shares issuable upon exercise in full of
      all
      Warrants, without giving effect to any limits on the number of shares of Common
      Stock that may be owned by a Holder at any one time.

    

    12.
       Fractional
      Shares.
      The
      Company shall not be required to issue or cause to be issued fractional Warrant
      Shares on the exercise of this Warrant. If any fraction of a Warrant Share
      would, except for the provisions of this Section, be issuable upon exercise
      of
      this Warrant, the number of Warrant Shares to be issued will be rounded up
      to
      the nearest whole share.

     

    13.
       Notices.
      Any and
      all notices or other communications or deliveries hereunder (including without
      limitation any Exercise Notice) shall be in writing and shall be deemed given
      and effective on the earliest of (i) the date of transmission, if such notice
      or
      communication is delivered via facsimile at the facsimile number specified
      in
      this Section prior to 6:30 p.m. (New York City time) on a Trading Day, (ii)
      the
      next Trading Day after the date of transmission, if such notice or communication
      is delivered via facsimile at the facsimile number specified in this Section
      on
      a day that is not a Trading Day or later than 6:30 p.m. (New York City time)
      on
      any Trading Day, (iii) the Trading Day following the date of mailing, if sent
      by
      nationally recognized overnight courier service, or (iv) upon actual receipt
      by
      the party to whom such notice is required to be given. The address for such
      notices or communications shall be as set forth in the Purchase
      Agreement.

     

    14.
       Warrant
      Agent.
      The
      Company shall serve as warrant agent under this Warrant. Upon 30 days' notice
      to
      the Holder, the Company may appoint a new warrant agent. Any corporation into
      which the Company or any new warrant agent may be merged or any corporation
      resulting from any consolidation to which the Company or any new warrant agent
      shall be a party or any corporation to which the Company or any new warrant
      agent transfers substantially all of its corporate trust or shareholders
      services business shall be a successor warrant agent under this Warrant without
      any further act. Any such successor warrant agent shall promptly cause notice
      of
      its succession as warrant agent to be mailed (by first class mail, postage
      prepaid) to the Holder at the Holder's last address as shown on the Warrant
      Register.

     

    15.
       Miscellaneous.

     

    (a)
       Subject
      to the restrictions on transfer set forth on the first page hereof, this Warrant
      may be assigned by the Holder. This Warrant may not be assigned by the Company
      except to a successor in the event of a Fundamental Transaction. This Warrant
      shall be binding on and inure to the benefit of the parties hereto and their
      respective successors and assigns. Subject to the preceding sentence, nothing
      in
      this Warrant shall be construed to give to any Person other than the Company
      and
      the Holder any legal or equitable right, remedy or cause of action
      under this Warrant. This Warrant may be amended only in writing signed by the
      Company and the Holder and their successors and assigns.

      

     

    

    
      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

    

    

     

    (b)
       The
      Company will not, by amendment of its governing documents or through any
      reorganization, transfer of assets, consolidation, merger, dissolution, issue
      or
      sale of securities or any other voluntary action, avoid or seek to avoid the
      observance or performance of any of the terms of this Warrant, but will at
      all
      times in good faith assist in the carrying out of all such terms and in the
      taking of all such action as may be necessary or appropriate in order to protect
      the rights of the Holder against impairment. Without limiting the generality
      of
      the foregoing, the Company (i) will not increase the par value of any Warrant
      Shares above the amount payable therefor on such exercise, (ii) will take all
      such action as may be reasonably necessary or appropriate in order that the
      Company may validly and legally issue fully paid and nonassessable Warrant
      Shares on the exercise of this Warrant, and (iii) will not close its shareholder
      books or records in any manner which interferes with the timely exercise of
      this
      Warrant.

     

    
      
        (c)
           GOVERNING LAW; VENUE; WAIVER OF JURY TRIAL.
          ALL
          QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION
          OF THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE
          WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
          PRINCIPLES OF CONFLICTS OF LAW THEREOF. EACH PARTY AGREES THAT ALL LEGAL
          PROCEEDINGS CONCERNING THE INTERPRETATIONS, ENFORCEMENT AND DEFENSE OF
          THE
          TRANSACTIONS CONTEMPLATED BY ANY OF THE TRANSACTION DOCUMENTS (WHETHER
          BROUGHT
          AGAINST A PARTY HERETO OR ITS RESPECTIVE AFFILIATES, DIRECTORS, OFFICERS,
          SHAREHOLDERS, EMPLOYEES OR AGENTS) SHALL BE COMMENCED EXCLUSIVELY IN THE
          STATE
          AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN.
          EACH
          PARTY HERETO HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF
          THE
          STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN
          FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH
          OR WITH
          ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH
          RESPECT
          TO THE ENFORCEMENT OF ANY OF THIS WARRANT), AND HEREBY IRREVOCABLY WAIVES,
          AND
          AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT
          IT IS NOT
          PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT,
          ACTION
          OR PROCEEDING IS IMPROPER. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES
          PERSONAL
          SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT,
          ACTION
          OR PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL
          OR
          OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE ADDRESS
          IN
          EFFECT FOR NOTICES TO IT UNDER THIS WARRANT AND AGREES THAT SUCH SERVICE
          SHALL
          CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING
          CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE
          PROCESS
          IN ANY MANNER PERMITTED BY LAW. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES,
          TO
          THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL
          BY
          JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS WARRANT
          OR ANY
          OF THE TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
          THEREBY.
          IF EITHER PARTY SHALL COMMENCE AN ACTION OR PROCEEDING TO ENFORCE ANY PROVISIONS
          OF THIS WARRANT OR ANY TRANSACTION DOCUMENT, THEN THE PREVAILING PARTY
          IN SUCH
          ACTION OR PROCEEDING SHALL BE REIMBURSED BY THE OTHER PARTY FOR ITS REASONABLE
          ATTORNEYS FEES AND OTHER REASONABLE COSTS AND EXPENSES INCURRED WITH THE
          INVESTIGATION, PREPARATION AND PROSECUTION OF SUCH ACTION OR
          PROCEEDING.

      

       

    

    

    
      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

    

    

     

    (d)
       The
      headings herein are for convenience only, do not constitute a part of this
      Warrant and shall not be deemed to limit or affect any of the provisions
      hereof.

     

    (e)
       In
      case
      any one or more of the provisions of this Warrant shall be invalid or
      unenforceable in any respect, the validity and enforceability of the remaining
      terms and provisions of this Warrant shall not in any way be affected or
      impaired thereby and the parties will attempt in good faith to agree upon a
      valid and enforceable provision which shall be a commercially reasonable
      substitute therefor, and upon so agreeing, shall incorporate such substitute
      provision in this Warrant.

     

    (f) Except
      as
      set forth in Section 9, as applicable, the holder of this Warrant shall have
      no
      rights as a stockholder of the Company by virtue of holding this
      Warrant.

    

    

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK,

    SIGNATURE
      PAGE FOLLOWS]

     

     

     

     

     

     

     

     

    12

     

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    

    IN
      WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by
      its
      authorized officer as of the date first indicated above.

     

    
      	 
	
                                                          SIGA
                TECHNOLOGIES, INC.

            
	 
	 
	
                                                          By:_______________________________
                

            
	
                                                          Name:_____________________________
                

            
	
                                                          Title:______________________________
                

            

    

    

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      

 

    

    FORM
      OF
      EXERCISE NOTICE

     

    (To
      be
      executed by the Holder to exercise the right to purchase shares of Common Stock
      under the foregoing Warrant)

     

    To:
      SIGA
      Technologies, Inc.

     

    The
      undersigned is the Holder of Warrant No. _______ (the “Warrant”)
      issued
      by SIGA Technologies, Inc., a Delaware corporation (the “Company”).
      Capitalized terms used herein and not otherwise defined have the respective
      meanings set forth in the Warrant.

     

    
      	
              1.
                

            	
              The
                Warrant is currently exercisable to purchase a total of ______________
                Warrant Shares.

            

    

     

    
      	
              2.
                

            	
              The
                undersigned Holder hereby exercises its right to purchase
                _________________ Warrant Shares pursuant to the
                Warrant.

            

    

     

    
      	
              3.
                

            	
              The
                Holder intends that payment of the Exercise Price shall be made as
                (check
                one):

            

    

     

    ____ “Cash
      Exercise” under Section 10

     

    ____ “Cashless
      Exercise” under Section 10 (if permitted)

     

    
      	
              4.
                

            	
              If
                the holder has elected a Cash Exercise, the holder shall pay the
                sum of
                $____________ to the Company in accordance with the terms of the
                Warrant.

            

    

     

    
      	
              5.
                

            	
              Pursuant
                to this exercise, the Company shall deliver to the holder _______________
                Warrant Shares in accordance with the terms of the
                Warrant.

            

    

     

    6. The
      Holder hereby certifies to the Company (and acknowledges that the Company and
      its counsel will rely upon this certification for purposes of determining
      compliance with the registration provisions of the Securities Act of 1933,
      as
      amended ("The Act")) that the Holder is an "accredited investor" as that term
      is
      defined in Rule 501 under The Act. 

    

    7. Following
      this exercise, the Warrant shall be exercisable to purchase a total of
      ______________ Warrant Shares.

    
      	 	 	 
	
              Dated:___________
                ,
                _______ 

            	 	
              Name
                of Holder:

            
	 	 	 
	 	 	
              (Print)____________________________
                

            
	 	 	 
	 	 	
              By:______________________________

            
	 	 	
              Name:____________________________

            
	 	 	
              Title:_____________________________

            
	 	 	 
	 	 	
              (Signature
                must conform in all respects to name of holder as specified on the
                face of
                the Warrant)

            

    

     

    
 

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    FORM
      OF
      ASSIGNMENT

     

    [To
      be
      completed and signed only upon transfer of Warrant]

     

    FOR
      VALUE
      RECEIVED, the undersigned hereby sells, assigns and transfers unto
      ________________________________ the right represented by the within Warrant
      to
      purchase ____________ shares of Common Stock of SIGA Technologies, Inc. to
      which
      the within Warrant relates and appoints ________________ attorney to transfer
      said right on the books of SIGA Technologies, Inc. with full power of
      substitution in the premises.

     

    
      	 	 
	 	 
	
              Dated:__________
                ,
                _________ 

            	 
	 	 
	 	 ___________________________________________
	 	
              (Signature
                must conform in all respects to name of holder

               as
                specified on the face of the Warrant)

            
	 	 
	 	 ___________________________________________
	 	
              Address
                of Transferee

               

              __________________________________________________

            
	 	
            
	 	___________________________________________
	
            	
            
	
            	
            
	 	 
	 	 
	
              In
                the presence of:

            	 
	 	 
	_____________________________ 	 
	 	 

    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      K
        R A M E
        R  L
        E V I
        N  N
        A F T A
        L I S &
        F
        R A N K
        E L LLP

    

                                                                                                    EXHIBIT
      B

     

                        October
      __,
      2006

     

    Purchasers
      set forth on Annex A

    

    

    Ladies
      and Gentlemen:

     

    We
      have
      acted as counsel to SIGA Technologies, Inc., a Delaware corporation (the
“Company”),
      in
      connection with the Securities Purchase Agreement, dated as of October 18,
      2006,
      by and among the Company and the Purchasers named therein (the “Purchasers”)
      (the
“Purchase Agreement”).
      This
      opinion is delivered pursuant to Section 2.2 (a)(iii) of the Purchase Agreement.
      Capitalized terms used herein but not otherwise defined herein have the meanings
      assigned to them in the Purchase Agreement.

     

    In
      rendering this opinion, we have examined executed copies of the following
      documents:

     

    (A) the
      Purchase Agreement; and

     

    (B) the
      Warrant Agreement, dated the date hereof, by the Company in favor of the
      Purchasers.

     

    We
      have
      also reviewed such other documents and made such other investigations as we
      have
      deemed appropriate. As to various questions of fact material to this opinion,
      we
      have relied upon the representations and warranties of the Company contained
      in
      the Transaction Documents (as defined below) and upon the statements,
      representations and certificates of officers or representatives of the Company,
      public officials and others. We have not independently verified the facts so
      relied on.

     

    Based
      on
      the foregoing, and subject to the qualifications, limitations and assumptions
      set forth herein, we are of the opinion that:

     

    
      	
              1.

            	
              The
                Company is validly existing and in good standing under the laws of
                the
                State of Delaware and has the corporate power to own its properties
                and to
                conduct its business as now conducted (all as described in the Company’s
                Annual Report on Form 10-K for its fiscal ended December 31,
                2005).

            

    

     

    
      	
              2.

            	
              The
                Company has the corporate power necessary to execute, deliver and
                perform
                its obligations under the Purchase Agreement and the Warrant Agreement
                (collectively, the “Transaction
                Documents”).

            

    

     

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

          

          

          
            KRAMER
              LEVIN NAFTALIS & FRANKEL LLP 

          

          Purchasers
            set forth on Annex A

          October
            __, 2006

          Page
            2

          

          

        

      

    

     

     

    
      	
              3.

            	
              
                The
                  Transaction Documents have been duly authorized, executed and delivered
                  by
                  the Company and constitute the legal, valid and binding obligation
                  of the
                  Company, enforceable against the Company in accordance with their
                  terms.

              

            

    

     

    
      	
              4.

            	
              The
                shares of common stock of the Company to be issued pursuant to the
                Transaction Documents have been duly authorized and will be validly
                issued, fully paid and nonassessable when such shares have been duly
                delivered against payment therefore as contemplated by the Transaction
                Documents.

            

    

     

    
      	
              5.

            	
              Assuming
                that each Purchaser of Shares is an “accredited investor” within the
                meaning of Rule 501(a) of Regulation D promulgated under the Act,
                that
                there have been no sales of any securities of the Company during
                the past
                six months, that no general solicitation or advertising (within the
                meaning of Rule 502(c) of Regulation D) was used in connection with
                the
                sale of the Shares by the Company to the Purchasers thereof and that
                the
                representations and warranties of the Purchasers contained in Sections
                3.2
                of the Purchase Agreement are true and correct, no registration under
                the
                Act is required in connection with the sale and issuance of the Shares
                to
                the Purchasers.

            

    

     

    
      	
              6.

            	
              The
                execution and delivery by the Company of the Transaction Documents
                and the
                consummation by the Company of the transactions contemplated thereby
                do
                not (a) result in a violation of the certificate of incorporation
                or
                by-laws of the Company or (b) result in violation of any Relevant
                Law (as
                defined herein).

            

    

     

    
      	
              7.

            	
              To
                our knowledge without the searching of any docket and except as otherwise
                disclosed pursuant to the Purchase Agreement or any SEC Report, there
                is
                no claim, action, suit, proceeding, arbitration, investigation or
                inquiry,
                pending before any court or governmental or administrative body or
                agency,
                against the Company.

            

    

     

    
      	
              8.

            	
              The
                execution and delivery by the Company of the Transaction Documents
                to
                which the Company is a party, and the consummation by the Company
                of the
                transactions contemplated thereby, do not require approval from or
                any
                filings with any governmental authority under any Relevant Law (as
                hereinafter defined).

            

    

     

    
      	
              9.

            	
              The
                Company is not an “investment company” within the meaning of the
                Investment Company Act of 1940, as
                amended.

            

    

     

    The
      opinion set forth herein is subject to and limited by the following:

     

    
      	 	
              a)

            	
              With
                respect to the opinion expressed in paragraph 1, we have relied solely
                on
                certificates of good standing and bring-down good standing telegrams,
                copies of which have been furnished to
                you.

            

    

     

    
      	 	
               

            	 

    

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

          

          

          
            KRAMER
              LEVIN NAFTALIS & FRANKEL LLP 

          

          Purchasers
            set forth on Annex A

          October
            __, 2006

          Page
            3

          

          

        

      

    

    

    
      	
            	b)	
              The
                opinion set forth in paragraph 3 is qualified (i) by the effects
                of
                applicable laws relating to bankruptcy, insolvency, fraudulent conveyance
                or transfer, and other similar laws relating to or affecting the
                rights
                and remedies of creditors generally, (ii) with respect to the remedies
                of
                specific performance and injunctive and other forms of equitable
                relief,
                by the availability of equitable defenses and the discretion of the
                court
                before which any enforcement thereof may be brought and (iii) by
                general
                principles of equity, including, without limitation, concepts of
                materiality, reasonableness, good faith and fair dealing (regardless
                of
                whether considered in a proceeding in equity or at
                law).

            

    

     

    
      	 	
              c)

            	
              We
                express no opinion as to the validity, binding effect or enforceability
                of
                (i) provisions that purport to establish evidentiary standards, (ii)
                provisions relating to severability, indemnity, contribution, set
                off,
                delay or omission of enforcement of rights or remedies, (iii) provisions
                purporting to waive rights or defenses, (iv) provisions that purport
                to
                restrict available remedies or establish remedies, (v) provisions
                relating
                to consent to jurisdiction, choice of forum or choice of law, or
                (vi) any
                provision if and to the extent that such provision (x) is a liquidated
                damages provision or (y) provides a remedy for breach that may be
                deemed
                to be disproportionate to actual damages or may be deemed to be a
                penalty.

            

    

     

    
      	 	
              d)

            	
              We
                have assumed that each party to the Transaction Documents (other
                than the
                Company): (i) has the requisite power to execute, deliver and perform
                their respective obligations under the Transaction Documents to which
                it
                is a party; and (ii) has duly authorized, executed and delivered
                each of
                the Transaction Documents to which it is a party; and (iii) each
                of the
                Transaction Documents constitutes the valid and binding obligation
                of such
                party, enforceable against such party in accordance with its terms.
                

            

    

     

    
      	 	
              e)

            	
              As
                used in this opinion letter, “to our knowledge,” or “known to us” or any
                phrase or similar import shall mean the current, actual knowledge
                (without
                independent investigation or verification) of those attorneys in
                our firm
                who are currently members or associates of, or counsel to, our firm
                who
                have directly participated in this engagement.

            

    

     

    We
      express no opinion as to any laws other than the laws of the State of New York,
      the General Corporation Law of the State of Delaware, and the federal laws
      of
      the United States of America, that in each case, in our experience, we recognize
      are normally applicable to transactions of the type contemplated by the
      Transaction Documents and are not applicable as a result of the particular
      business, identity or ownership of any of the parties (the “Relevant
      Laws”).
      Without limiting the foregoing, we express no opinion with respect to federal
      or
      state securities laws or antitrust laws, except with respect to the opinion
      expressed in paragraph 5.

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

          

          

          
            KRAMER
              LEVIN NAFTALIS & FRANKEL LLP 

          

          Purchasers
            set forth on Annex A

          October
            __, 2006

          Page
            4

          

          

        

      

    

    

    The
      opinion expressed herein is based upon the Relevant Laws and interpretations
      thereof in effect on the date hereof, and the facts and circumstances in
      existence on the date hereof, and we assume no obligation to revise or
      supplement this opinion letter should any such law or interpretation be changed
      by legislative action, judicial decision or otherwise or should there be any
      change in such facts or circumstances.

     

    This
      opinion letter is being delivered to you in connection with the transactions
      described in the Transaction Documents and may not be relied on or otherwise
      used by any other Person or by you for any other purpose.

     

     

                        Very
      truly
      yours,

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

          

          

          
            KRAMER
              LEVIN NAFTALIS & FRANKEL LLP 

          

          Purchasers
            set forth on Annex A

          October
            __, 2006

          Page
            5

          

          

        

      

    

    

    ANNEX
      “A”

    

    

    Cranshire
      Capital, L.P.

    

    Iroquois
      Master Fund LTD.

    

    Omicron
      Master Trust

    

    Rockmore
      Investment Master Fund, Ltd.

    

    Smithfield
      Fiduciary LLC

     

    

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    
      Exhibit
        C 

       

      Plan
        of Distribution

       

      The
        selling stockholders may, from time to time, sell any or all of their shares
        of
        common stock on any stock exchange, market or trading facility on which the
        shares are traded or in private transactions. These sales may be at fixed
        or
        negotiated prices. The selling stockholders may use any one or more of the
        following methods when selling shares:

       

      	·  	
              ordinary
                brokerage transactions and transactions in which the broker-dealer
                solicits purchasers;

            

       

      	·  	
              block
                trades in which the broker-dealer will attempt to sell the shares
                as agent
                but may position and resell a portion of the block as principal to
                facilitate the transaction;

            

       

      	·  	
              purchases
                by a broker-dealer as principal and resale by the broker-dealer for
                its
                account;

            

       

      	·  	
              an
                exchange distribution in accordance with the rules of the applicable
                exchange;

            

       

      	·  	
              privately
                negotiated transactions;

            

       

      	·  	
              short
                sales;

            

       

      	·  	
              broker-dealers
                may agree with the selling stockholders to sell a specified number
                of such
                shares at a stipulated price per share;

            

       

      	·  	
              a
                combination of any such methods of sale;
                and

            

       

      	·  	
              any
                other method permitted pursuant to applicable
                law.

            

       

      The
        selling stockholders may also sell shares under Rule 144 under the Securities
        Act, if available, rather than under this prospectus.

       

      The
        selling stockholders may also engage in short sales against the box, puts
        and
        calls and other transactions in our securities or derivatives of our securities
        and may sell or deliver shares in connection with these trades.

       

      Broker-dealers
        engaged by the selling stockholders may arrange for other brokers-dealers
        to
        participate in sales. Broker-dealers may receive commissions or discounts
        from
        the selling stockholders (or, if any broker-dealer acts as agent for the
        purchaser of shares, from the purchaser) in amounts to be negotiated. The
        selling stockholders do not expect these commissions and discounts to exceed
        what is customary in the types of transactions involved. Any profits on the
        resale of shares of common stock by a broker-dealer acting as principal might
        be
        deemed to be underwriting discounts or commissions under the Securities Act.
        Discounts, concessions, commissions and similar selling expenses, if any,
        attributable to the sale of shares will be borne by a selling stockholder.
        The
        selling stockholders may agree to indemnify any agent, dealer or broker-dealer
        that participates in transactions involving sales of the shares if liabilities
        are imposed on that person under the Securities Act.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      The
        selling stockholders may from time to time pledge or grant a security interest
        in some or all of the shares of common stock owned by them and, if they default
        in the performance of their secured obligations, the pledgees or secured
        parties
        may offer and sell the shares of common stock from time to time under this
        prospectus after we have filed an amendment to this prospectus under Rule
        424(b)(3) or other applicable provision of the Securities Act of 1933 amending
        the list of selling stockholders to include the pledgee, transferee or other
        successors in interest as selling stockholders under this
        prospectus.

       

      The
        selling stockholders also may transfer the shares of common stock in other
        circumstances, in which case the transferees, pledgees or other successors
        in
        interest will be the selling beneficial owners for purposes of this prospectus
        and may sell the shares of common stock from time to time under this prospectus
        after we have filed an amendment to this prospectus under Rule 424(b)(3)
        or
        other applicable provision of the Securities Act of 1933 amending the list
        of
        selling stockholders to include the pledgee, transferee or other successors
        in
        interest as selling stockholders under this prospectus.

       

      The
        selling stockholders and any broker-dealers or agents that are involved in
        selling the shares of common stock may be deemed to be "underwriters" within
        the
        meaning of the Securities Act in connection with such sales. In such event,
        any
        commissions received by such broker-dealers or agents and any profit on the
        resale of the shares of common stock purchased by them may be deemed to be
        underwriting commissions or discounts under the Securities Act. 

       

      We
        are
        required to pay all fees and expenses incident to the registration of the
        shares
        of common stock. We have agreed to indemnify the selling stockholders against
        certain losses, claims, damages and liabilities, including liabilities under
        the
        Securities Act.

       

      The
        selling stockholders have advised us that they have not entered into any
        agreements, understandings or arrangements with any underwriters or
        broker-dealers regarding the sale of their shares of common stock, nor is
        there
        an underwriter or coordinating broker acting in connection with a proposed
        sale
        of shares of common stock by any selling stockholder. If we are notified
        by any
        selling stockholder that any material arrangement has been entered into with
        a
        broker-dealer for the sale of shares of common stock, if required, we will
        file
        a supplement to this prospectus. If the selling stockholders use this prospectus
        for any sale of the shares of common stock, they will be subject to the
        prospectus delivery requirements of the Securities Act.

       

      The
        anti-manipulation rules of Regulation M under the Securities Exchange Act
        of
        1934 may apply to sales of our common stock and activities of the selling
        stockholders.

       

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

                                                                                                    EXHIBIT
      D

     

    IRREVOCABLE
      TRANSFER AGENT INSTRUCTIONS

     

    

    American
      Stock Transfer & Trust Company

    6201
      15th
      Avenue

    Brooklyn,
      NY 11219

    

    

    Ladies
      and Gentlemen:

    

    Reference
      is made to the Securities Purchase Agreement (the “Purchase Agreement”), dated
      as of October 18, 2006, among SIGA Technologies, Inc., a Delaware corporation
      (the “Company”) and the purchasers named therein (the “Holders”) pursuant to
      which the Company is issuing the Company’s common stock, par value $0.0001 per
      share (the “Common Stock”).

     

    The
      Company has agreed with the Holders that it will instruct you to: (A) issue
      the
      Common Stock free of all restrictive and other legends if, at the time of such
      issue, (i) a registration statement covering the resale of such Common Stock
      has
      been declared and is effective by the Commission under the Securities Act,
      (ii)
      such Common Stock are eligible for sale under Rule 144(k) or (iii) such legend
      is not required under applicable requirements of the Securities Act (including
      judicial interpretations and pronouncements issued by the Staff of the
      Commission); or (B) reissue the Common Stock (if such shares were originally
      issued with a restrictive legend) free of all restrictive and other legends
      (i)
      upon the effectiveness of a registration statement covering the resale of the
      Common Stock or (ii) following any sale of such Common Stock pursuant to Rule
      144 or (iii) such Common Stock are eligible for sale under Rule 144(k) or (iv)
      if such legend is not required under applicable requirements of the Securities
      Act (including judicial interpretations and pronouncements issued by the Staff
      of the Commission).

     

    In
      furtherance of this instruction, upon the effectiveness of the Registration
      Statement (as defined in the Purchase Agreement) we have instructed our counsel
      to deliver to you their opinion letter in the form attached hereto as
Exhibit
      I
      to the
      effect that the Registration Statement has been declared effective by the
      Commission and that Common Stock are freely transferable by the Holders and
      accordingly may be issued (or reissued, as applicable) and delivered to the
      Holders free of all restrictive and other legends.

     

    You
      need
      not require further letters from us or our counsel to effect any future issuance
      or reissuance of shares of Common Stock to the Holders as contemplated by the
      Purchase Agreement and this letter. This letter shall serve as our standing
      irrevocable instructions with regard to this matter.

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    

     

    Please
      be
      advised that the Holders have relied upon this instruction letter as an
      inducement to enter into the Purchase Agreement. Please execute this letter
      in
      the space indicated to acknowledge your agreement to act in accordance with
      these instructions.

     

                    Very
      truly
      yours,

    

                    SIGA
      TECHNOLOGIES,
      INC.

    

                    By:
      _____________________________________

                    Name:
      __________________________________

                    Title:
      ___________________________________

     

     

     

     

     

    
 

    2

     

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

          
            

            

            
              

          

        

      

    

    

                                                                                        Exhibit
      I

    K
      R A M E
      R   L
      E V I
      N   N
      A F T A
      L I S  &  F
      R A N K
      E L  LLP

    

    

    

    __________________,
      2006

    

    American
      Stock Transfer & Trust Company

    6201
      15th
      Avenue

    Brooklyn,
      NY 11219

     

    
      	 	
              Re:

            	
              SIGA
                Technologies, Inc.

            

    

     

    Dear
      Ladies and Gentlemen:

     

    We
      are
      counsel to SIGA Technologies, Inc., a Delaware corporation (the “Company”). We
      are writing to inform you that the Company’s Registration Statement on Form S-3,
      File No. 333-________ (the “Registration Statement”), was declared effective by
      the Securities and Exchange Commission at _________ on ___________ 2006. The
      Registration Statement registers the resale of (a) certain outstanding shares
      of
      the Company’s common stock, .0001 per value per share (the “Common Stock”), and
      (b) shares of Common Stock issuable upon the exercise of certain outstanding
      warrants to purchase shares of Common Stock.

     

    Upon
      (a)
      the sale by any stockholder listed in the first column of Schedule
      I
      attached
      hereto of shares of Common Stock listed in the second column of Schedule
      I
      in
      accordance with the section entitled “Plan of Distribution” in the then current
      prospectus (the “Prospectus”) forming a part of the Registration Statement (a
      copy of the current Prospectus is enclosed with this letter), (b) delivery
      of a
      copy of the Prospectus to the purchaser of such shares, and (c) delivery to
      you
      of a certificate in the form attached to this letter as Annex
      A
      certifying to the foregoing executed by such stockholder, you may then issue
      one
      or more certificates representing the shares of Common Stock so sold in
      accordance with the instructions of such stockholder without any restrictive
      legend. 

     

    However,
      any certificates re-issued in the name of such stockholder representing any
      unsold shares must have affixed thereto any legend that appears on the
      certificate delivered to you for transfer. 

     

     

                    Very
      truly
      yours,

     

                    Kramer
      Levin Naftalis
& Frankel LLP

    

    

    cc: Thomas
      Konatich

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    

    SCHEDULE
      I

    

    
      	 	
              Number
                of Shares of

              Common
                Stock Offered

              Pursuant
                to Registration

            
	
              Name
                of Beneficial Owner

            	
              Statement

            
	 	 
	 	 

    

     

     

     

     

     

     

    4
 

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    CERTIFICATE
      OF SELLING STOCKHOLDER

     

    

    SIGA
      Technologies, Inc.

    420
      Lexington Avenue, Suite 408

    New
      York,
      NY 10170

    

    -and-

    

    American
      Stock Transfer and Trust Company

    6201
      15th
      Avenue

    Brooklyn,
      NY 11219

    

    The
      undersigned does hereby certify that the undersigned is listed as a selling
      securityholder under the Registration Statement on Form S-3 (Registration No.
      333-______) (the “Registration
      Statement”),
      of
      SIGA Technologies, Inc., a Delaware corporation (the “Company”)
      and
      that Kramer Levin Naftalis & Frankel LLP is entitled to rely upon this
      Certificate in rendering an opinion to the transfer agent for the Company with
      respect to my sale of shares (the “Shares”)
      of the
      Company’s common stock, .0001 per value per share (“Common
      Stock”),
      covered by the Registration Statement.

     

    The
      undersigned does hereby further certify that:

     

    1. The
      undersigned has sold ____________________ Shares and is delivering herewith
      to
      the Company one or more certificates representing such Shares.

     

    2. The
      undersigned has delivered a copy of the prospectus dated _________, 2006 forming
      a part of the Registration Statement (the “Prospectus”)
      to
      each person to whom the undersigned sold such Shares.

     

    3. The
      undersigned sold the Shares in compliance with the section entitled “Plan of
      Distribution” in the Prospectus.

     

    4. The
      undersigned shall notify the Company immediately of any occurrence which would
      render the foregoing statements inaccurate.

     

    5. If
      this
      Certificate is executed on behalf of an entity, the undersigned is the duly
      appointed representative of such entity and, as such, has all requisite power
      and authority to execute this Certificate of behalf of, and to bind, such
      entity.

     

    The
      Company and its agents and representatives (including, without limitation,
      the
      Company’s respective counsel) may rely on this representation letter. The
      undersigned will indemnify all such persons and hold them harmless from and
      against any and all loss, damage, claim, liability and expense resulting from
      the breach of any representation herein.

     

     

    5

     

    
 

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    
 

    IN
      WITNESS WHEREOF,
      the
      undersigned has duly executed this Certificate as of ___________________,
      200___.

     

                Name
      of Selling
      Stockholder:

    

    

                Signature:_____________________    

                Title
      (if
      applicable):

    

                Total
      Number of

                Shares
      Sold:___________________    

    

     

     

     

     

     

     

     

    6Exhibit 10.2 Finder's Agreement

    
      

    

     

                                                                                                Exhibit
      10.2

     

     

    

    FINDER'S
      AGREEMENT

    

    This
      Finder's Agreement (this "Agreement") is made as of October 18, 2006 between
      SIGA Technologies, Inc., a Delaware corporation (the "Company"), and Empire
      Financial Group, Inc., a Florida corporation (the "Finder"). The Finder and
      the
      Company agree:

    

    
      	 	
              1.

            	
              Engagement
                of Finder:
                The Company hereby engages the Finder, and the Finder hereby accepts
                such
                engagement, to act as the Company's Finder with respect to sales
                by the
                Company in a private placement transaction (the “Offering”) of up to $10
                million aggregate principal amount of Equity, Equity-Related or Debt
                Securities (the “Securities”) of the Company to the investors during the
                term of this Agreement as set forth in Section
                5.

            

    

    

    
      	 	
              2.

            	
              Offering
                Procedures:
                The Finder will introduce the Company to investors who the Finder
                reasonably believes to be "accredited investors," as that term is
                defined
                in Rule 501 of Regulation D promulgated under the Securities Act
                of 1933,
                as amended (the “1933
                Act”),
                with whom the Finder has a pre-existing substantive relationship
                (the
                “Offerees”).

            

    

    

    
      	3.  	
              Finder's
                Compensation:
                In consideration for the services rendered by the Finder hereunder,
                the
                Company shall pay to the Finder, or cause the Finder to be paid,
                compensation as provided in this section within 3 days of the Company's
                receipt of funds from the Offerees.

            

    

    

    
      	(a)  	
              Cash
                Compensation: The
                Company shall pay to the Finder cash compensation equal to three
                percent
                (3%) of the gross Offering funds received in the Offering. For
                purposes of clarity, the parties understand and agree that such cash
                compensation is only related to funds received at the initial investment
                and not on the exercise of any warrant or option. 

            

    

    

    
      	(b)  	
              Warrants:
                The Finder shall receive one and a half percent (1.5%) warrant
                compensation. The warrant calculation
                translates to 15,000 warrants per $1 million raised. The warrant’s strike
                shall equal the strike, expiration and registration rights of any
                warrants
                sold to Offerees in the Offering, and if the Offering does not provide
                for
                the issuance of warrants, then the warrants issued to the Finder
                shall
                have a strike price equal to the Offering price of any Equity or
                Equity-Related Securities sold, have a five-year term and cashless
                exercise after one year if the underlying shares are not then registered.
                The warrant shares shall be subject to equitable adjustment for stock
                splits, stock dividends and similar events. The warrant shares shall
                have
                “piggyback” registration rights.

            

    

    

    
      	(c)  	
              If,
                at any time prior to one year following the end of the Offering (the
                “Term”) the Company directly or indirectly sells, in a private
                transaction, any type of security to an investor with whom negotiations
                were initiated by the Finder during the Term, the Company shall pay
                the
                Finder the compensation 

            

    

     

     

    
      
         

      

      
        Page
          1

        
          

        

      

      
         

      

    

     

    to
      which it would be entitled under paragraph 3 if
      the transaction had occurred during the Term.

     

     Certain
      Matters Relating to Finder’s Duties:

    

    
      	(a)  	
              The
                Finder’s responsibilities shall be limited to introducing potential
                investors to the Company, and the Finder shall not have authority
                to offer
                or sell the Securities to any potential investor. Finder shall not
                use any
                general solicitation or general advertising within the meaning of
                the
                applicable securities laws in connection with any offering. The Finder
                shall have no responsibility to participate or assist in any negotiations
                between any potential investor and the Company. The Finder will have
                no
                responsibility to act, and the parties contemplate that the Finder
                will
                not act, as a broker or dealer with respect to the offer or sale
                of the
                Securities. Further, the Finder shall have no responsibility for
                fulfilling any SEC reporting or filing requirements as relates to
                the
                Company provided however, Finder agrees to provide Company with reasonable
                assistance related to any registration, qualification or other
                requirements of applicable securities laws and other regulatory matters,
                upon request of the Company.

            

    

    

    
      	(b)  	
              The
                Finder agrees to introduce the Company to Offerees only in states
                in which
                the Finder has been advised by the Company that offers and sales
                of
                Securities can be legally made by the
                Company.

            

    

    

    
      	(c)  	
              The
                Finder shall perform its duties under this Agreement in a manner
                consistent with the instructions of the Company. Such performance
                shall
                include, but not be limited to, the delivery to each Offeree a current
                copy of the Private Placement Memorandum, Subscription Agreement
                and any
                Offering Questionnaire and/or similar documents provided to the Finder
                by
                the Company, as such documents may be amended from time to time by
                the
                Company and delivered to the Finder. The Finder shall consecutively
                number
                each copy of the Private Placement Memorandum (which will include
                the
                first letter of the Finder’s name or other identifying mark sufficient to
                designate an Offeree introduced by the Finder); keep a log of when
                and to
                whom each copy of the Private Placement Memorandum is given, with
                the
                Private Placement Memorandum numbers; maintain a copy of any written
                information the Finder obtains regarding the suitability of each
                Offeree;
                and only use the Private Placement Memorandum in introducing Offerees
                to
                the Company. The Finder shall provide this log and all such written
                information to the Company at any time and promptly upon request
                of the
                Company at the termination of this Agreement. The Company shall,
                promptly
                following execution of this Agreement, provide the Finder with a
                written
                list of prospective Offerees that the Company does not want the Finder
                to
                contact. The Finder agrees to not contact the persons on such list,
                and
                the Finder shall not be entitled to the compensation set forth in
                Section
                3 with respect to any investment made by such person in the Company’s
                Securities.

            

    

     

     

     

    
      
         

      

      
        Page
          2

        
          

        

      

      
         

      

    

    
 

    
      	(d)  	
              The
                Finder is and will hereafter act as an independent contractor and
                not as
                an employee of the Company and nothing in this Agreement shall be
                interpreted or construed to create any employment, partnership, joint
                venture, or other relationship between the Finder and the Company.
                The
                Finder will not hold itself out as having, and will not state to
                any
                person that the Finder has, any relationship with the Company other
                than
                as an independent contractor. The Finder shall have no right or power
                to
                find or create any liability or obligation for or in the name of
                the
                Company or to sign any documents on behalf of the
                Company.

            

    

     

    
      	4.  	
              Right
                of First Refusal.
                In consideration for the Finder acting as the finder in connection
                with
                the proposed offering, the Company hereby grants the Finder a right
                of
                first refusal to serve as the Company’s exclusive financial advisor and
                investment banker in connection with any financial transaction for
                a
                period of 1 year from the closing of the transaction. In the event
                the
                company advises the Finder that it desires to effect any financial
                transaction, the Company and the Finder will negotiate in good faith
                the
                terms of the Finder’s engagement in a separate agreement which would set
                forth, among other matters, compensation for the Finder based upon
                customary fees for the services provided.

            

    

    

    
      	5.  	
              Termination
                of Agreement.
                Either party may terminate this Agreement by notifying the other
                party in
                writing upon a material breach by that other party, unless such breach
                is
                curable and is in fact cured within 15 days after such notice. This
                Agreement will otherwise terminate upon completion or termination
                of the
                Offering. The Company may terminate this Agreement following ninety
                (90)
                days after the date hereof upon written notice. Notwithstanding the
                foregoing, all provisions of this Agreement other than section 1,
                2 and 3
                shall survive the termination of this Agreement with respect to Offerees
                who the Finder introduces to the Company prior to any termination
                with
                respect to the Offering. The Finder shall be entitled to compensation
                under section 3 based on investments made by such Offerees prior
                to the
                termination of this Agreement or at any time within one year
                thereafter.

            

    

    

    
      	6.  	
              Indemnification.
                The Company and the Finder each shall indemnify and defend the other
                and
                the other’s affiliates, directors, officers, employees, agents,
                consultants, attorneys, accountants, and other representatives (each
                an
                “Indemnified
                Person”)
                and shall hold each Indemnified Person harmless, to the fullest extent
                permitted by law, from and against any and all claims, liabilities,
                losses, damages and expenses (including reasonable attorney’s fees and
                costs), as they are incurred, in connection with the Offering, resulting
                from the indemnifying party’s negligence, bad faith or willful misconduct
                in connection with the Offering, any violation by the indemnifying
                party
                (not caused by an Indemnified Person) of Federal or state securities
                laws
                in connection with the Offering, or any breach by the indemnifying
                party
                of this Agreement. In case any litigation or proceeding shall be
                brought
                against any Indemnified Person under this section, the indemnifying
                party
                shall be entitled to assume the defense of such litigation or proceeding
                with counsel of the indemnifying party’s choice at its expense (in which
                case the indemnifying party shall not be responsible for the fees
                and
                expenses of any separate counsel retained by such Indemnified Person,
                except in the limited circumstances described below in this section);
                provided, however, that such counsel shall be reasonably satisfactory
                to
                the 

            

    

     

     

     

    
      
         

      

      
        Page
          3

        
          

        

      

      
         

      

    

     

    Indemnified
      Person. Notwithstanding the indemnifying
      party’s election to assume the defense of such litigation or proceeding (a) such
      Indemnified Person shall have the right to employ separate counsel and to
      participate in the defense of such litigation or proceeding, and (b) the
      indemnifying party shall bear the reasonable fees, costs and expenses of
      separate counsel if (but only if) the use of counsel selected by the
      indemnifying party to represent such Indemnified Person would present such
      counsel with a conflict of interest under applicable laws or rules of
      professional conduct.

    
      	7.  	
              Confidentiality
                of Offeree Information.
                The Company acknowledges that the identity of the Offerees, and all
                confidential information about Offerees received by the Company from
                an
                Offeree or the Finder, is confidential information of the Finder
                and may
                not be shared with any other person without the consent of the
                Finder.

            

    

    

    
      	8.  	
              Notices.
                Any notice, consent, authorization or other communication to be given
                hereunder shall be in writing and shall be deemed duly given and
                received
                when delivered personally, when transmitted by fax, three days after
                being
                mailed by first class mail, or one day after being sent by a nationally
                recognized overnight delivery service, charges and postage prepaid,
                properly addressed to the party to receive such notice, at the following
                address or fax number for such party (or at such other address or
                fax
                number as shall hereafter be specified by such party by like
                notice):

            

    

    

    (a) If
      to the
Company,
      to:

    

    Thomas
      N.
      Konatich 

    Chief
      Financial Officer

    420
      Lexington Ave.

    Suite
      408

    New
      York,
      NY 10170

    Phone:   (212)
      672-9100

    Fax:    (212)
      697-3130

    

    (b)
       If
      to the
Finder,
      to:

    

    Bill
      Corbett

    Managing
      Director

    150
      California Street, 21st
      Floor

    San
      Francisco, CA 94111

    Phone:  (415)
      956-4253

    Fax:    (415)
      956-4192

    E-Mail: bcorbett@empirenow.com

     

    
      	9.  	
              Company
                to Control Transactions.
                The
                prices, terms and conditions under which the Company shall offer
                or sell
                any Securities shall be determined by the Company
                in

            

    

     

     

    
      
         

      

      
        Page
          4

        
          

        

      

      
         

      

    

     

    its
      sole discretion. The Company shall have the
      authority to control all discussions and negotiations regarding any proposed
      or
      actual offering or sale of Securities. Nothing in this Agreement shall obligate
      the Company to actually offer or sell any Securities or consummate any
      transaction. The Company may terminate any negotiations or discussions at any
      time and reserves the right not to proceed with any offering or sale of
      Securities. Compensation pursuant to this Agreement shall only be paid to the
      Finder in the event of an actual Closing of the Offering to an Offeree
      introduced by Finder.

     

    
      	10.  	
              Confidentiality
                of Company Information.
                The Finder, and its officers, directors, employees and agents shall
                maintain in strict confidence and not copy, disclose or transfer
                to any
                other party (1) all confidential business and financial information
                regarding the Company and its affiliates, including without limitation,
                projections, business plans, marketing plans, product development
                plans,
                pricing, costs, customer, vendor and supplier lists and identification,
                channels of distribution, and terms of identification of proposed
                or
                actual contracts and (2) all confidential technology of the Company.
                In
                furtherance of the foregoing, the Finder agrees that it shall not
                transfer, transmit, distribute, download or communicate, in any
                electronic, digitized or other form or media, any of the confidential
                technology of the Company. The foregoing is not intended to preclude
                the
                Finder from utilizing, subject to the terms and conditions of this
                Agreement, the Private Placement Memorandum and/or other documents
                prepared or approved by the Company for use in the
                Offering.

            

    

    

    All
      communications regarding any possible transactions, requests for due diligence
      or other information, requests for facility tours, product demonstrations or
      management meetings, will be submitted or directed to the Company, and the
      Finder shall not contact any employees, customers, suppliers or contractors
      of
      the Company or its affiliates without express permission. Nothing in this
      Agreement shall constitute a grant of authority to the Finder or any
      representatives thereof to remove, examine or copy any particular document
      or
      types of information regarding the Company, and the Company shall retain control
      over the particular documents or items to be provided, examined or copied.
      If
      the Offering is not consummated, or if at any time the Company so requests,
      the
      Finder and its representatives will return to the Company all copies of
      information regarding the Company in their possession.

    

    The
      provisions of this Section shall survive any termination of this
      Agreement.

    

    
      	11.  	
              Press
                Releases, Etc.
                The Company shall control all press releases or announcements to
                the
                public, the media or the industry regarding any offering, placement,
                transaction or business relationship involving the Company or its
                affiliates. Except for communication to Offerees in furtherance of
                this
                Agreement and the provision of the Private Placement Memorandum,
                the
                Finder will not disclose the fact that discussions or negotiations
                are
                taking place concerning a possible transaction involving the Company,
                or
                the status or terms and conditions thereof.
                Notwithstanding
                the foregoing, the Company agrees to issue a press release prior
                to the
                opening of the market on the business day following the Company’s receipt
                of executed agreements binding Offerees to purchase Securities in
                at least
                the amount of 

            

    

     

     

     

    
      
         

      

      
        Page
          5

        
          

        

      

      
         

      

    

     

    the
      minimum Offering (if there is any such minimum)
      setting forth the material terms of the Offering.

     

    
      	12.  	
              Due
                Diligence:
                Neither
                the Company, nor any of its directors, officers or shareholders,
                should,
                in any way rely on the Finder to perform any due diligence with respect
                to
                the Company. It is expressly understood and agreed that to the extent
                due
                diligence is conducted; it will be conducted by the
                investors.

            

    

    

    
      	13.  	
              Expenses,
                Etc.
                The Finder shall be exclusively responsible for any compensation,
                fees,
                commissions or payments of its employees, agents representatives,
                co-Finders or other persons or entities utilized by it in connection
                with
                its activities on behalf of the Company, and the Finder will indemnify
                and
                hold harmless the Company and its affiliates from the claims of any
                such
                persons or entities.

            

    

    

    
      	14.  	
              Compliance
                with Laws.
                The Finder represents and warrants that it is a duly registered
                broker/dealer and in good standing with the SEC, NASD and the State
                of
                California and has and shall maintain such registrations as well
                as all
                other necessary licenses and permits to conduct its activities under
                this
                Agreement, which it shall conduct in compliance with applicable federal
                and state laws relating to a private placement under Regulation D
                of the
                1933 Act. The Finder represents that it is not a party to any other
                agreement, which would conflict with or interfere with the terms
                and
                conditions of this Agreement.

            

    

    

    
      	15.  	
              Assignment
                Prohibited.
                No assignment of this Agreement shall be made without the prior written
                consent of the other party.

            

    

    

    
      	16.  	
              Amendments.
                Neither party may amend this Agreement or rescind any of its existing
                provisions without the prior written consent of the other
                party.

            

    

    

    
      	17.  	
              Governing
                Law.
                This Agreement shall be deemed to have been made in the State of
                California and shall be construed, and the rights and liabilities
                determined, in accordance with the law of the State of California,
                without
                regard to the conflicts of laws rules of such
                jurisdiction.

            

    

    

    
      	18.  	
              Waiver.
                Neither Finder’s nor the Company’s failure to insist at any time upon
                strict compliance with this Agreement or any of its terms nor any
                continued course of such conduct on their part shall constitute or
                be
                considered a waiver by Finder or the Company of any of their respective
                rights or privileges under this
                Agreement.

            

    

    

    
      	19.  	
              Severability.
                If any provision herein is or should become inconsistent with any
                present
                or future law, rule or regulation of any sovereign government or
                regulatory body having jurisdiction over the subject matter of this
                Agreement, such provision shall be deemed to be rescinded or modified
                in
                accordance with such law, rule or regulation. In all other respects,
                this
                Agreement shall continue to remain in full force and effect.
                

            

    

     

     

    
      
         

      

      
        Page
          6

        
          

        

      

      
         

      

    

    
 

    
      	20.  	
              Counterparts.
                This Agreement may be executed in one or more counterparts, each
                of which
                shall be deemed an original, and will become effective and binding
                upon
                the parties at such time as all of the signatories hereto have signed
                a
                counterpart of this Agreement. All counterparts so executed shall
                constitute one Agreement binding on all of the parties hereto,
                notwithstanding that all of the parties are not signatory to the
                same
                counterpart. Each of the parties hereto shall sign a sufficient number
                of
                counterparts so that each party will receive a fully executed original
                of
                this Agreement. 

            

    

    

    
      	21.  	
              Entire
                Agreement.
                This Agreement and all other agreements and documents referred herein
                constitutes the entire agreement between the Company and the Finder.
                No
                other agreements, cove-nants, representations or warranties, express
                or
                implied, oral or written, have been made by any party hereto to any
                other
                party concerning the subject matter hereof. All prior and contemporaneous
                conversations, negotiations, possible and alleged agreements,
                representations, covenants and warranties concerning the subject
                matter
                hereof are merged herein. This is an integrated
                Agreement.

            

    

    

    
      	22.  	
              Arbitration.
                The parties agree that this Agreement and all controversies which
                may
                arise between the Finder and the Company, whether occurring prior,
                on or
                subsequent to the date of this Agreement, will be determined by
                arbitration. The parties understand
                that:

            

    

    

    
      	(a)  	
              Arbitration
                is final and binding on the
                parties.

            

    

    

    
      	(b)  	
              The
                parties are waiving their right to seek remedies in court, including
                the
                right to a jury trial.

            

    

    

    
      	(c)  	
              Pre-arbitration
                discovery is generally more limited than and different from court
                proceedings.

            

    

    

    
      	(d)  	
              The
                arbitrators’ award is not required to include factual findings or legal
                reasoning and any party’s right to appeal or to seek modification or
                rulings by the arbitrators is strictly
                limited.

            

    

    

    
      	(e)  	
              The
                panel of arbitrators will typically include a minority of arbitrators
                who
                were or are affiliated with the securities
                industry.

            

    

     

    

    
      
        
           

        

        
          Page
            7

          
            

          

        

        
           

        

      

    

    

    

    The
      parties agree that any arbitration under this Agreement will be held at the
      facilities of and before an Arbitration Panel appointed by the National
      Association of Securities Dealers, Inc. (“NASD”), or if the NASD refuses to
      accept jurisdiction, then before JAMS/ENDISPUTE in San Francisco, California.
      The award of the arbitrators, or of the majority of them, will be final, and
      judgments upon the award may be entered in any court, state or federal, having
      jurisdiction. The parties hereby submit themselves and their personal
      representatives to the jurisdiction of any state or federal court for the
      purpose of such arbitration and entering such judgment.

    Any
      forbearance to enforce an agreement to arbitrate will not constitute a waiver
      of
      any rights under this Agreement except to the extent stated herein.

    

    THIS
      AGREEMENT IS GOVERNED BY A PRE-DISPUTE ARBITRATION CLAUSE CONTAINED IN PARAGRAPH
      23 OF THIS AGREEMENT

    

    

    Empire
      Financial Group, Inc.
      (the
“Finder”)

    

    

    By:
      /s/
      Bill Corbett

    Bill
      Corbett

    Title:
      Managing Director

    

    

    SIGA
      Technologies, Inc.
      (the
“Company”)

    

    

    By:
      /s/
      Thomas N. Konatich

                           
Thomas
      N.
      Konatich

                   
      Title: Chief Financial Officer

    

     

     

     

    
Page
      8

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