SEPARATION AND CONSULTING AGREEMENT

This Separation and Consulting Agreement (this “Separation and Consulting Agreement”) is made and entered into by and between Ayelet Dugary and SIGA Technologies, Inc., a Delaware corporation.

As used throughout this Separation and Consulting Agreement:

1.           “Dugary” refers to Ayelet Dugary, her heirs, executors, administrators, agents, successors, assigns and dependents.

2.           “SIGA” refers to SIGA Technologies, Inc., its past and present parents, subsidiaries, affiliates and related entities, and each of their respective past and present officers, directors, stockholders, agents, employees, predecessors, successors and assigns, in both their individual and corporate capacities.

3.           Hereinafter Dugary and SIGA may be referred to as the “Parties.”

WHEREAS, Dugary has been employed by SIGA since December 15, 2004;

WHEREAS, Dugary’s employment with SIGA is being terminated by Dugary pursuant to Section 4(e) of that certain employment agreement, dated as of January 22, 2007, by and between SIGA and Dugary, as amended (the “Employment Agreement”); and

WHEREAS, Dugary shall resign all officer positions with SIGA.

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and in exchange for the good and valuable consideration set forth herein, the adequacy of which is specifically acknowledged, intending to be and being legally bound hereby, the Parties agree as follows:

1.     Dugary’s employment with SIGA will terminate effective on the date this Separation and Consulting Agreement becomes effective (the “Termination Date”). Dugary hereby resigns all positions Dugary holds at SIGA effective as of the Termination Date and agrees to execute any documentation necessary to effectuate such resignations.

2.     The parties agree that Dugary shall receive the payments and benefits in the manner and at the times set forth in Section 5(c) of the Employment Agreement; provided, however, that SIGA’ s obligations to provide the payments set forth in Section 5(c)(ii) of the

3.     Dugary shall act as a consultant to SIGA to assist in projects as directed by SIGA’s Chief Executive Officer for a maximum of 100 hours during a period of 90 days from the Termination Date (the “Consulting Period”). Dugary shall make herself reasonably available during the first 30 days of the Consulting Period and shall make herself available as her schedule permits and subject to Dugary’s obligations to a future employer or other commitments to other parties as a consultant for the remaining 60 days of the Consulting Period. Dugary shall perform such consulting services at SIGA’s offices in New York City if reasonably required. SIGA shall pay Dugary $45,000 as a fee for her consulting services, in 6 equal installments of $7,500 in twice-monthly payments to be paid in arrears during the 90 days of the Consulting Period. SIGA shall also reimburse Dugary for business expenses necessarily and reasonably paid by Dugary in performing such services upon presentation of such supporting information as SIGA may reasonably require. Dugary shall inform SIGA on a weekly basis of the hours she has spent providing such services, which count shall be binding for purposes of this Separation and Consulting Agreement unless promptly objected to by SIGA. If SIGA wishes to utilize Dugary’s services further and Dugary wishes to continue to provide services at such time, the parties will agree on a fee or rate for such additional services. SIGA may terminate this consulting arrangement and shall thereafter be relieved of any further obligations under this paragraph 3 in the event Dugary materially breaches her obligations under this Separation and Consulting Agreement, including without limitation those provisions of the Employment Agreement referred to in paragraph 7 of this Separation and Consulting Agreement and does not cure any such breach within 10 days of receiving written notice of such breach.

4.     Dugary represents that she does not have any claim, action, or proceeding pending against SIGA (without waiver of any claim that may later exist by reason of this Separation and Consulting Agreement or Section 5(c) of the Employment Agreement).

5.     (a)           In accordance with Section 5(f) of the Employment Agreement, except as necessary to enforce the terms of this Separation and Consulting Agreement and Section 5(c) of the Employment Agreement, and in exchange for and in consideration of the promises, covenants and agreements set forth herein, Dugary hereby releases SIGA to the maximum extent permitted by law from any and all manner of claims, demands, causes of action, obligations, damages, or liabilities whatsoever of every kind and nature, at law or in equity, known or unknown, and whether or not discoverable, which Dugary has or may have for any period prior to her execution of this Separation and Consulting Agreement, including, but not limited to, any claim of wrongful discharge, defamation, fraud, misrepresentation or breach of contract, any claim for additional compensation, unpaid wages, unreimbursed expenses, severance pay, bonuses, stock options or restricted stock, or any claims of discrimination under the Age Discrimination in Employment Act of 1967, Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act of 1990 and all other federal, state and local laws, including