shl Doc 934 Filed 05/16/16 Entered 05/16/16 11:22:30 Main Document Pg 1 of 25

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1 Pg 1 of 25 KING & SPALDING LLP 1185 Avenue of the Americas New York, New York Arthur J. Steinberg, Esq. Telephone: (212) Facsimile: (212) Hearing Date: June 8, 2016 at 11:00 a.m. (Eastern Time) Objection Date: June 1, 2016 at 4:00 p.m. (Eastern Time) Counsel for Nantahala Capital Partners UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK x : In re: : : Chapter 11 SIGA TECHNOLOGIES, INC., : Case No (SHL) : Debtor. : x NOTICE OF APPLICATION OF NANTAHALA CAPITAL PARTNERS PURSUANT TO 11 U.S.C. 503(b) FOR ALLOWANCE OF ADMINISTRATIVE EXPENSES FOR COUNSEL FEES AND OTHER EXPENSES IN MAKING A SUBSTANTIAL CONTRIBUTION IN THIS CASE PLEASE TAKE NOTICE that a hearing on the annexed Application of Nantahala Capital Partners for an Order Pursuant to 11 U.S.C. 503(b) for Allowance of Administrative Expenses for Counsel Fees and Other Expenses in Making a Substantial Contribution in This Case ( Application ), will be held before the Honorable Sean H. Lane, United States Bankruptcy Judge, at the United States Bankruptcy Court for the Southern District of New York, Alexander Hamilton Customs House, Courtroom 701, One Bowling Green, New York, New York (the Bankruptcy Court ), on June 8, 2016, at 11:00 a.m. (prevailing Eastern Time). PLEASE TAKE FURTHER NOTICE that objections, if any, to the relief sought in the Application shall be in writing, state with particularity the basis for the objection, and be filed DMSLIBRARY01\ v3

2 Pg 2 of 25 with the Bankruptcy Court in accordance with the Local Rules by users of the Bankruptcy Court's case filing system, and by all other parties, on a 3.5 inch disk, with a hard copy to Chambers, and served in accordance with the Local Rules and upon (i) counsel to Nantahala Capital Partners, King & Spalding, LLP, 1185 Avenue of the Americas, New York, New York 10036, Attn: Arthur J. Steinberg, Esq. and Jennifer A. Asher, Esq., (ii) the Debtor, SIGA Technologies, Inc., Attn: Daniel Luckshire, 600 Madison Avenue, Suite 1700, New York, New York 10965; (iii) counsel to the Debtor, Weil, Gotshal & Manges LLP, Attn: Stephen Karotkin, Esq., 767 Fifth Avenue, New York, New York 10153, (iv) counsel to the statutory creditors committee, Proskauer Rose LLP, Attn: Martin J. Bienenstock, Esq. and Scott K. Rutsky, Esq., Eleven Times Square, New York, New York 10036, and (v) the Office of the United States Trustee for the Southern District of New York, 201 Varick Street, Room 1006, New York, NY 10014, Attn: Richard C. Morrissey, Esq., so as to be received no later than 4:00 p.m. (prevailing Eastern Time) on June 1, 2016 ( Objection Deadline ). PLEASE TAKE FURTHER NOTICE that if an objection to the Application is not received by the Objection Deadline, the relief requested shall be deemed unopposed, and the Bankruptcy Court may enter an order granting the relief sought without a hearing. Dated: May 16, 2016 New York, New York KING & SPALDING LLP /s/ Arthur J. Steinberg Arthur J. Steinberg 1185 Avenue of the Americas New York, NY Telephone: (212) Facsimile: (212) Counsel for Nantahala Capital Partners DMSLIBRARY01\ v3 2

3 Pg 3 of 25 Hearing Date: June 8, 2016 at 11:00 a.m. (Eastern Time) Objection Date: June 1, 2016 at 4:00 p.m. (Eastern Time) KING & SPALDING LLP 1185 Avenue of the Americas New York, New York Arthur J. Steinberg, Esq. Telephone: (212) Facsimile: (212) Counsel for Nantahala Capital Partners UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK x : In re: : : Chapter 11 SIGA TECHNOLOGIES, INC., : Case No (SHL) : Debtor. : x APPLICATION OF NANTAHALA CAPITAL PARTNERS PURSUANT TO 11 U.S.C. 503(b) FOR ALLOWANCE OF ADMINISTRATIVE EXPENSES FOR COUNSEL FEES AND OTHER EXPENSES IN MAKING A SUBSTANTIAL CONTRIBUTION IN THIS CASE Nantahala Capital Partners ( Nantahala ), a significant equity holder of the Debtor, by its counsel, submits this application ( Application ), for entry of an order, substantially in the form annexed hereto as Exhibit A, pursuant to sections 503(b)(3)(D) and 503(b)(4) of Chapter 11 of Title 11 of the United States Code ( Bankruptcy Code ), for the allowance and reimbursement of professional fees and expenses in the amount of $91, for making a substantial contribution in this case. In support thereof, Nantahala represents as follows: PRELIMINARY STATEMENT 1. This bankruptcy case was commenced after PharmAthene, Inc. ( PharmAthene ), obtained a substantial judgment ( Judgment ) against the Debtor in DMSLIBRARY01\ v3

4 Pg 4 of 25 Delaware state court, and the Debtor could not post a bond to stay enforcement of the Judgment, pending its appeal thereof. 2. During the bankruptcy case, the Creditors Committee (through PharmAthene s active participation) and the Debtor engaged in active litigation as to whether a plan of reorganization could be crafted before the Delaware Supreme Court ruled on the appeal of the Judgment. Millions of dollars were spent jockeying for position on this endeavor. 3. Ultimately, the Debtor acquiesced to the Creditors Committee s efforts and agreed to a plan predicated on the outcome of the appellate process, and if necessary, additional time to repay the Judgment. Unfortunately, that plan was written as if there were only two participants -- MacAndrews & Forbes Incorporated ( M&F ), an equity holder that controlled the Debtor, and PharmAthene (who controlled the Creditors Committee). The plan proponents did not account for the interests and concerns of the non-insider public equity holders, who were not represented by an Estate fiduciary. 4. M&F s interests were not fully aligned with the other public equity holders. By way of example, the plan provided for (a) a release to M&F for no consideration when the Creditors Committee consistently claimed that there were substantial Estate claims against M&F; (b) a potential below-market equity raise by M&F to pay the Judgment (in essence, a squeeze down of the non-insider public equity holders for the benefit of M&F); and (c) potential trading restrictions on the equity (as decided by the Debtor). 5. The plan was devoid of any detail as to how the PharmAthene Judgment would be repaid. In particular, there was no information as to how the public equity holders would be impacted by a capital transaction structured by M&F. The common theme of the plan was that DMSLIBRARY01\ v3 2

5 Pg 5 of 25 public shareholders would be stripped of their participation rights, and the Bankruptcy Court would have no jurisdiction to review what had been done. 6. The Plan was a jumble of contradictions: the equity would be impaired but was not entitled to vote on the plan, even though they would retain their interests in the Debtor. The creditors would receive post-petition interest as if the Debtor was solvent, yet equity holders would have no post-confirmation shareholder rights. The Bankruptcy Court was being asked to give M&F, and all Estate fiduciaries, a prospective release on an unspecified, post-plan, capital transaction. At the same time, PharmAthene reserved the right to pay their special counsel a $2 million bonus for their investigation of M&F. The Debtor s post-plan activities were heavily monitored by the Creditors Committee, while the non-insider public equity holders had no equivalent rights to protect their interests. The Debtor reserved the right to restrict the trading of the equity post-confirmation without telling the non-insider public equity holders what may be in store for them. 7. The Creditors Committee was essentially negotiating the Plan on behalf of PharmAthene, since, under the plan, all other creditors were being paid in full. For M&F, who essentially controlled the Debtor s Board of Directors, the Debtor s professionals represented its interest. In sharp contrast, there was no Equity Committee in place to represent the interests of the non-insider public equity holders. And as detailed above, the plan, as proposed, had significant, problematic issues for the non-insider public equity holders. 8. To make matters worse, the plan proponents put into place aggressive deadlines as to when the plan needed to be confirmed. These were artificial barriers which functioned as impediments for the equity holders to object to the Debtor s plan. There was only one entity that would vote on the Debtor s plan -- that was PharmAthene, who already had negotiated terms DMSLIBRARY01\ v3 3

6 Pg 6 of 25 acceptable to it. A primary purpose of the plan was to disenfranchise the rights of the unrepresented non-insider public equity holders. 9. Nantahala and the entities it manages own collectively around 5.7% of the equity of the Debtor. It was prepared to let the appellate process run its course, with minimal expense incurred by it. Certainly, if the Judgment was overturned, the bankruptcy case would have been dismissed since the remaining creditors of the Debtor held claims less than $5 million in the aggregate, and the Debtor had cash substantially in excess of that amount to prepay those debts. When the case did not proceed in this direction, Nantahala, was forced to act on behalf of itself and the other non-insider public equity holders, to address the short comings of the proposed plan as it related to the non-insiders equity holders position Many of Nantahala s efforts and results for non-insider public equity holders were played out in front of the Court. But some of its efforts were achieved outside of the Courtroom. Nantahala prepared a draft objection to the Disclosure Statement, shared it with the Debtor and the Creditors Committee, and then negotiated a partial resolution of the issues raised, reserving the balance of the issues to confirmation, where they were ultimately resolved. At the confirmation hearing, the Court took note of the objections filed and appreciated how they triggered positive and necessary changes to the plan. 11. The Bankruptcy Code s substantial contribution provision was included to encourage this type of constructive and necessary participation in Chapter 11 proceedings. For these reasons, and the ones set forth below, Nantahala respectfully requests that this Application be granted. 1 As the Court knows, Esopus Creek also filed pleadings on behalf of non-insider equity holders. Esopus had equity holdings much smaller than Nantahala s, and Nantahala was concerned that Esopus would act in its own interest (as it was entitled to do) and, if advantageous, trade out of its position before the non-insider equity holder issues were fully resolved. Thus, Nantahala needed to stay actively involved as it tried to work through the main issues for the non-insider public equity holders. DMSLIBRARY01\ v3 4

7 Pg 7 of 25 BACKGROUND 12. The Debtor filed for chapter 11 protection due to a pre-petition judgment entered by the Delaware Court of Chancery against the Debtor in favor of PharmAthene in the amount of approximately $195 million (plus additional costs). 13. The Debtor filed its original plan on December 15, 2015 [ECF No. 694], and moved for approval of a disclosure statement and solicitation procedures on January 5, 2016 [ECF No. 720]. 14. Nantahala thereafter provided the Debtor with a draft objection to the disclosure statement, and after some negotiations, changes were made to the plan. The Debtor s filed the First Amended Chapter 11 Plan on February 9, 2016 [ECF No. 763], and the First Amended Disclosure Statement for Debtor s First Amended Chapter 11 Plan on February 16, 2016 [ECF No. 772], which incorporated changes suggested by Nantahala. 15. On February 16, 2016, the Court held a status conference to discuss its views with the Debtor s plan. Like Nantahala, the Court had concerns that the plan authorized the Debtor to consummate a capital transaction without notice to shareholders, or the necessary Court oversight. See Hearing Transcript (Feb. 16, 2016), at 7: On March 23, 2016, Nantahala filed the Objection of Nantahala Capital Partners to Confirmation of Debtor s First Amended Chapter 11 Plan [ECF 840] ( Objection ). The Objection set forth additional concerns with provisions in the plan relating to the non-insider public equity holders. 17. The Debtor s Second Amended Chapter 11 Plan was filed on March 30, 2016 (ECF No. 849). This version of the plan took into account additional, but not all of the concerns raised by Nantahala s Objection. Ultimately, at the confirmation hearing, the Debtor and the DMSLIBRARY01\ v3 5

8 Pg 8 of 25 Creditors Committee agreed to make the other changes requested by Nantahala. Specifically, the Plan includes notice and court approval procedures for all PharmAthene repayment alternatives (other than the turnover of stock). 18. The Plan was filed on April 7, 2016 and confirmed the following day. The Effective Date of the Plan occurred on April 12, SUMMARY OF ATTORNEYS FEES AND EXPENSES REQUESTED 19. A summary of fees and expenses incurred by Nantahala through May 16, 2016 is set forth in Exhibit B attached hereto. King & Spalding s time and expense records are contained in Exhibit C attached hereto. There is an estimate of additional time through the hearing on this Application of $5,000. The matter was essentially staffed with one partner with the assistance of one associate. There was no duplication of effort with others. 20. Nantahala requests that King & Spalding s fees and expenses in the amount of $91, be paid. 2 ARGUMENT A. Legal Standard 21. Section 503(b)(3)(D) of the Bankruptcy Code provides that an equity security holder shall be allowed as administrative expenses, the actual and necessary expenses in making a substantial contribution in a Chapter 11 case. See 11 U.S.C. 503(b)(3)(D). Section 503(b)(4) allows for reimbursement of reasonable compensation for services rendered, and for reimbursement of actual and necessary expenses incurred, by an attorney of any such entity. See 11 U.S.C. 503(b)(4). See, e.g., In re McLean Indus., Inc., 88 B.R. 36, 39 (Bankr. S.D.N.Y. 1988); In re Texaco, Inc., 90 B.R. 622, 627 (Bankr. S.D.N.Y. 1988) (finding that work 2 This amount reflects a courtesy discount given to the client of approximately 4.5%. DMSLIBRARY01\ v3 6

9 Pg 9 of 25 performed by attorneys that resulted in adequate disclosure to the shareholders and elucidation of facts, was a substantial contribution to the debtors' Chapter 11 cases). 22. The substantial contribution inquiry under section 503(b)(3)(D) of the Bankruptcy Code is a factual inquiry. See In re Bayou Grp., LLC, 431 B.R. 549, 560 (Bankr. S.D.N.Y. 2010) (granting substantial contribution claim asserted by unofficial creditors committee comprised of defrauded investors). The substantial contribution test is satisfied where the services rendered have substantially contributed to an actual and demonstrable benefit to the debtor s estate, its creditors, and to the extent relevant, the debtor s shareholders. In re United States Lines, Inc., 103 B.R. 427, 429 (Bankr. S.D.N.Y. 1989) aff d 1991 U.S. Dist. Lexis 5262 (S.D.N.Y. Apr. 19, 1991); In re Best Products Co., Inc., 173 B.R. 862, 865 (Bankr. S.D.N.Y. 1994) (citations omitted); In re Randall s Island Family Golf Ctrs. Inc., 300 B.R. 590, 598 (Bankr. S.D.N.Y. 2003) (citations omitted). Such compensable services are those that facilitate and enhance, rather than retard and interrupt, the progress of the debtor s reorganization. United States Lines, Inc., 103 B.R. at 429 (citation omitted). The substantial contribution test is intended to promote meaningful participation in the reorganization process. Id. 23. Courts in the Second Circuit have considered various factors in determining whether an applicant has conferred an actual demonstrable benefit, including: (i) whether the services benefited the creditor/equity holder, the estate itself or all of the parties in the bankruptcy case; (ii) whether the services resulted in a significant and demonstrably positive benefit to the estate; and (iii) whether the services duplicated the efforts by others. Trade Creditor Group v. L. J. Hooker Corp. (In re Hooker Invs., Inc.), 188 B.R. 117, 120 (S.D.N.Y. DMSLIBRARY01\ v3 7

10 Pg 10 of ), aff d, 104 F.3d 349 (2d Cir. 1996); In re Bethlehem Stee1 Corp., 2003 WL , at *6 (Bankr. S.D.N.Y. July 28, 2003). 24. Another important consideration is whether a party took an active role in facilitating the negotiation and successful confirmation of the plan. See In re Granite Partners, 213 B.R. 440, (Bankr. S.D.N.Y. 1997) (canvassing cases); In re Richton Int'l Corp., 15 B.R. 854, 856 (Bankr. S.D.N.Y. 1981) (granting substantial contributions award and concluding that creditor s attorney facilitated the progress of these cases and... substantially aided the formulation and adoption of the Plan of Reorganization ); Marcus, Montgomery, Wolfson & Burten, P.C. v. AM Int l, Inc. (In re AM Int l, Inc.), 203 B.R. 898, 905 (D. Del. 1996) (equity shareholders that opposed prepackaged plan and negotiated settlement had made a substantial contribution). 25. The services provided by King & Spalding clearly meet the substantial contribution standards outlined above. B. Nantahala Rendered Services That Provided a Direct, Significant and Demonstrable Benefit To the Estate 26. Nantahala s efforts in protecting all non-insider public shareholders paved the way for a just, fair and equitable resolution of all outstanding issues that resulted in a confirmable plan. Among other things, Nantahala was persistent in requiring that the Plan include notice and court-approval procedures for various financing options for the PharmAthene claim. The Court agreed and appreciated the concerns voiced by Nantahala on behalf of the equity holders. DMSLIBRARY01\ v3 8

11 Pg 11 of 25 C. The Payment of King & Spalding s Fees and Expenses for Making a Substantial Contribution to the Bankruptcy Case Is Justified Under the Circumstances 27. Section 503(b)(4) permits an equity holder who makes a substantial contribution to an estate to recover its reasonable legal fees and expenses. Here, the time records and other detail attached as Exhibits B and C demonstrate that the fees and expenses sought are, in fact, reasonable in light of the complexity of the negotiations, and the successful results obtained. The reasonableness of this fee request is demonstrated by the lean staffing provided, and the comparative amount sought by others in the bankruptcy case. NOTICE 28. Notice of the Application will be provided to all required parties in accordance with the Order Pursuant To 11 U.S.C. 105(a) and (d) and Bankruptcy Rules 2002(m) and 9007 Implementing Certain Notice And Case Management Procedures, entered on November 14, 2014 [ECF No. 138]. WHEREFORE, Nantahala respectfully requests entry of an order, substantially in the form annexed hereto as Exhibit A, (i) granting King & Spalding s fees and expenses in the amount of $91,486.55, pursuant to sections 503(b)(3)(D) and 503(b)(4) of the Bankruptcy Code, and (ii) providing such other and further relief as the Court deems just and proper. Dated: May 16, 2016 New York, New York KING & SPALDING LLP By: /s/ Arthur J. Steinberg. Arthur J. Steinberg 1185 Avenue of the Americas New York, New York Telephone: (212) Facsimile: (212) asteinberg@kslaw.com Counsel for Nantahala Capital Partners DMSLIBRARY01\ v3 9

12 Pg 12 of 25 EXHIBIT A DMSLIBRARY01\ v3

13 Pg 13 of 25 UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK x : In re: : : Chapter 11 SIGA TECHNOLOGIES, INC., : Case No (SHL) : Debtor. : x ORDER GRANTING THE APPLICATION OF NANTAHALA CAPITAL PARTNERS PURSUANT TO 11 U.S.C. 503(B) FOR ALLOWANCE OF ADMINISTRATIVE EXPENSES FOR COUNSEL S SERVICES INCURRED IN MAKING A SUBSTANTIAL CONTRIBUTION IN THESE CHAPTER 11 CASES Upon consideration of the Application, 1 dated May 16, 2016, of Nantahala Capital Partners ( Nantahala ) for allowance and payment of a Chapter 11 administrative expense claim for reasonable professional fees and actual, necessary expenses incurred by their counsel King & Spalding pursuant to 11 U.S.C. 503(b)(3)(D) and 503(b)(4) for making a substantial contribution; and it appearing that this Court has jurisdiction to consider the Application and the relief requested therein; and it further appearing that adequate and proper notice of the Application has been given, and that no other notice is necessary; and after due consideration and sufficient cause appearing therefor, it is hereby: ORDERED that the Application is granted as set forth below; and it is further ORDERED that King & Spalding is hereby granted, pursuant to sections 503(b)(3)(D) and 503(b)(4) of the Bankruptcy Code, an allowed administrative expense claim in the amount of $91, ( Allowed Claim Amount ) against the Debtor; and it is further ORDERED that the Reorganized Debtor is hereby authorized and directed to promptly pay King & Spalding the Allowed Claim Amount within 5 days of the entry of this Order; and it is further 1 Capitalized terms used but not defined herein shall have the meaning ascribed to such terms in the Application.

14 Pg 14 of 25 ORDERED that this Court shall retain jurisdiction to determine all matters arising from or related to the relief granted in this Order. Dated: New York, New York, 2016 HONORABLE SEAN H. LANE UNITED STATES BANKRUPTCY JUDGE DMSLIBRARY01\ v3 2

15 Pg 15 of 25 EXHIBIT B DMSLIBRARY01\ v3

16 Pg 16 of 25 KING & SPALDING LLP 1185 Avenue of the Americas New York, New York Arthur J. Steinberg, Esq. Telephone: (212) Facsimile: (212) Counsel for Nantahala Capital Partners UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK x : In re: : : Chapter 11 SIGA TECHNOLOGIES, INC., : Case No (SHL) : Debtor. : x SUMMARY OF FEES AND EXPENSES REQUESTED APPLICATION OF NANTAHALA CAPITAL PARTNERS PURSUANT TO 11 U.S.C. 503(b) FOR ALLOWANCE OF ADMINISTRATIVE EXPENSES FOR COUNSEL FEES AND OTHER EXPENSES IN MAKING A SUBSTANTIAL CONTRIBUTION IN THIS CASE Name of Applicant: King & Spalding LLP Date of Retention: February 17, 2014 Role in the Case: This is: Period for which compensation and reimbursement is sought: Amount of compensation sought as actual, necessary and reasonable: $ 86, Amount of expense reimbursement sought as $ actual, necessary, and reasonable: Blended rate of professionals (including paraprofessionals): $ Blended rate of professionals (excluding paraprofessionals): $ 1, Estimate of Future Fees: $ 5, Counsel for the Nantahala Capital Partners Application Pursuant To 11 U.S.C. 503(b) for Allowance of Administrative Expenses September 4, 2014 through and including May 16, 2016 DMSLIBRARY01\ v3 1

17 Pg 17 of 25 SUMMARY OF APPLICATION COMPENSATION BY PROFESSIONAL PERSON KING & SPALDING LLP SEPTEMBER 4, 2014 THROUGH MAY 16, 2016 Professional Position Date Admitted to Bar Billing Year/Rate Total Hours Billed Total Fees Billed 2014: $1, $ Arthur Steinberg Partner 1980 NY 2015: $1, $ 13, : $1, $ 55, Jennifer Asher Associate 2012 NJ 2013 NY 2015: $ $ 2, : $ $ 16, Carol Splaine Paralegal N/A 2016: $ $ John McCullough Susan Shen- Frattura Practice Support N/A 2016: $ $ Paralegal N/A 2016: $ $ Total: $ 90, Less Courtesy Discount: $ 3, Total Fees Billed: $ 86, Total Professional and Paraprofessional Hours: 86.7 Total Professional Hours: 82.7 Total Paraprofessional Hours: 4.0 Blended Rate (Total Fees/Total Hours): $ DMSLIBRARY01\ v3 2

18 Pg 18 of 25 SUMMARY OF APPLICATION EXPENSE SUMMARY KING & SPALDING LLP SEPTEMBER 4, 2014 THROUGH MAY 16, 2016 Category of Disbursement Amount Transportation $ Mailing Expenses (UPS, Postage/Express Mail, etc.) $ Administrative Expenses (Duplicating, Court Call, Conference Calls, etc.) $ Grand Total: $ DMSLIBRARY01\ v3 3

19 Pg 19 of 25 EXHIBIT C DMSLIBRARY01\ v3

20 Pg 20 of 25 FEDERAL I.D Nantahala Capital Management, LLC ATTN: Daniel Mack 100 First Stamford Place 2nd Floor Stamford, CT Remit To: King & Spalding LLP P.O. Box Atlanta, GA By Wire: SunTrust Bank ABA: SWIFT: SNTRUS3A USD Account: Account Name: King & Spalding Client No. Matter No RE: Creditors Rights For questions, contact: Arthur Steinberg For Professional Services Rendered through 5/16/16: Fees 90, Less Courtesy Discount -3, Fees $ 86, Expenses Estimate of Future Fees 5, Total this Invoice $ 91, DMSLIBRARY01\ v2

21 Pg 21 of Nantahala Capital Partners Invoice No PROFESSIONAL SERVICES Date Timekeeper Description Hours 09/04/14 A Steinberg Miscellaneous call regarding investment; office conference 0.7 with Bender; review case; note from Buba 01/13/15 A Steinberg Call regarding SIGA; review document /14/15 J Asher Monitor docket and obtain various orders as instructed by 0.3 A.Steinberg; correspondence with client 01/15/15 A Steinberg Correspondence to D. Mack and J. Asher /03/15 A Steinberg Correspondence with D. Mack /23/15 A Steinberg Correspondence regarding SIGA /22/15 A Steinberg Correspondence regarding SIGA /30/15 A Steinberg Note to client /13/15 A Steinberg Telephone call with Harkey, Mack and Buba regarding SIGA /15/15 J Asher Review documents and compile as directed by A. Steinberg /15/15 A Steinberg Review correspondence and pleadings; telephone call with 1.4 client 10/28/15 A Steinberg Review SIGA pleading; note to W. Harkey /02/15 J Asher Review exclusivity motion and discuss with A. Steinberg /02/15 A Steinberg Review docket; note to client /03/15 A Steinberg Note to W. Harkey /04/15 A Steinberg Office conference with J. Asher /05/15 J Asher Review docket and filings; prepare for and attend hearing on 1.6 exclusivity; summarize hearing and discuss with A. Steinberg 11/05/15 A Steinberg Note to client; office conference with J. Asher /09/15 A Steinberg Telephone call with J. Bubba /11/15 J Asher Review docket and filings; summarize motion to further extend 0.8 exclusivity and discuss with A. Steinberg; circulate to client 11/24/15 A Steinberg Note to client /03/15 A Steinberg Correspondence regarding bankruptcy /11/15 A Steinberg Correspondence from committee; note to client /15/15 A Steinberg Attend hearing call with client notes to client /16/15 A Steinberg Call with client; correspondence regarding plan /17/15 A Steinberg Call with client and Bienstock; note to client /24/15 A Steinberg Correspondence to Bienenstock and Mack /29/15 J Asher Review docket and filings; summarize order to further extend 0.4 exclusivity and discuss with A. Steinberg; circulate to client 12/31/15 A Steinberg Notes to J. Asher /04/16 J Asher Review docket and filings; correspondence with A. Steinberg; correspondence with creditor s committee regarding trade restrictions /04/16 A Steinberg Note to J. Asher /05/16 J Asher Correspondence with A. Steinberg; additional correspondence with creditor s committee regarding trade restrictions; monitor docket and circulate disclosure statement /05/16 A Steinberg Correspondence with J. Asher 0.3

22 Pg 22 of Nantahala Capital Partners Invoice No Date Timekeeper Description Hours 01/06/16 J Asher Correspondence with A. Steinberg; correspondence with client /06/16 A Steinberg Notes to J. Asher /15/16 A Steinberg Review disclosure statement and plan /17/16 A Steinberg Draft disclosure statement objection /19/16 A Steinberg Revise objection; draft letter; call with client /20/16 A Steinberg Note to Beinenstock; telephone call with Karotkin; telephone 0.5 call with client 01/21/16 A Steinberg Call with Committee counsel /25/16 A Steinberg Notes to clients and counsel /26/16 J Asher Correspondence with A. Steinberg; correspondence with client /26/16 A Steinberg Telephone call with S. Karotkin and client; note to client /27/16 A Steinberg Correspondence and calls with client and Karotkin /28/16 A Steinberg Review objection; note to client; telephone call with S. Karotkin /29/16 J Asher Correspondence with A. Steinberg; correspondence with client /29/16 A Steinberg Correspondence with client /01/16 J Asher Correspondence with A. Steinberg; compile documents in 0.4 preparation for hearing 02/01/16 A Steinberg Review objections; telephone call with client; office conference 0.7 with J. Asher 02/02/16 J Asher Correspondence with A. Steinberg; draft notice of appearance 0.7 and arrange for filing; monitor docket and circulate filings 02/02/16 A Steinberg Court hearing; call with client /03/16 A Steinberg Call with Karotkin and client /04/16 A Steinberg Review pleadings /05/16 A Steinberg Correspondence to Weil /09/16 A Steinberg Telephone call with S. Karotkin /10/16 J Asher Correspondence with A. Steinberg; review filings /10/16 A Steinberg Note to client /11/16 J Asher Correspondence with A. Steinberg; review filings and circulate 0.6 various pleadings 02/11/16 A Steinberg Review pleadings /12/16 A Steinberg Review correspondence /14/16 A Steinberg Note to J. Buba and S. Karotkin /15/16 J Asher Review docket and circulate pleading /15/16 A Steinberg Review responses; notes to client /16/16 J Asher Review filings and prepare for hearing; correspondence with court regarding telephonic appearance; continue to prepare for court hearing; participate in hearing and summarize hearing; correspondence with A. Steinberg /16/16 A Steinberg Office conference with J. Asher; note to client; review status 1.0 report 02/17/16 A Steinberg Review correspondence /22/16 A Steinberg Note to J. Bubba; review statement 0.4

23 Pg 23 of Nantahala Capital Partners Invoice No Date Timekeeper Description Hours 03/04/16 A Steinberg Review statement /15/16 A Steinberg Note to J. Asher /16/16 A Steinberg Call with client; review documents; telephone call with Karotkin /17/16 A Steinberg Telephone call with Karotkin; review plan; telephone call with 1.4 Rut Sky 03/18/16 J Asher Discuss objection with A. Steinberg and draft objection; review 1.0 correspondence regarding objection 03/18/16 A Steinberg Telephone call with client; S. Karotkin; revise objection; draft 2.0 proposal 03/19/16 A Steinberg Notes to client and S. Karotkin /21/16 J Asher Correspondence regarding objection; monitor docket and 0.6 circulate objections to confirmation 03/21/16 A Steinberg Calls with S. Karotkin; notes to client /22/16 J Asher Correspondence regarding objection; monitor docket and 0.4 circulate objections to confirmation 03/22/16 A Steinberg Revise response; review Esopus; note to J. Asher; telephone call 1.4 with S. Karotkin 03/23/16 J Asher Revise objection to confirmation; correspondence with A. Steinberg; conduct research regarding duty of loyalty; finalize objection and arrange for filing and service /23/16 S Shen-Frattura Assist C. Splaine in Bankruptcy filing for Siga /23/16 C Splaine Review and ECF file Objection of Nantahala Capital Partners To Confirmation of Debtor s First Amended Chapter 11 Plan and prepare service via overnight mailing to selected parties of interest; conference with J. Asher and S. Shen-Fratura re same; telephone conference with Court Clerk, B Busch re changing related filing link on docket /23/16 A Steinberg Revise objection; notes to and from client /24/16 A Steinberg Telephone call with Schulte; review Esopus objection /25/16 A Steinberg Telephone call with Shulte, Seth and Karotkin; note to Karotkin /28/16 A Steinberg Telephone call wiuth Karotkin /29/16 A Steinberg Call with client /30/16 A Steinberg Review pleadings /31/16 A Steinberg Review pleadings /01/16 A Steinberg Review pleadings; telephone call with Karotkin /04/16 J Asher Review recent filings and compile documents in preparation for 0.7 hearing 04/04/16 A Steinberg Telephone call with S. Karotkin, client and Esopus; review 2.0 drafts 04/05/16 A Steinberg Call with client; attend Confirmation Hearing /06/16 A Steinberg Review plan; confirmation order; telephone call with S. 1.0 Karotkin 04/12/16 A Steinberg Telephone call with J. Asher /14/16 A Steinberg Correspondence regarding SIGA 0.3

24 Pg 24 of Nantahala Capital Partners Invoice No Date Timekeeper Description Hours 04/18/16 J Asher Monitor docket for post-confirmation dates /19/16 A Steinberg Telephone call with Karotkin and Asher /26/16 J Asher Review plan and confirmation order in connection to drafting substantial contribution application; start to draft substantial contribution application /27/16 J Asher Continue to draft substantial contribution application /28/16 J Asher Continue to draft substantial contribution application /28/16 A Steinberg Note to J. Asher /02/16 J Asher Continue to draft substantial contribution application /03/16 J Asher Continue to draft substantial contribution application /04/16 J Asher Continue to draft substantial contribution application; draft 2.7 exhibits to substantial contribution application 05/06/16 A. Steinberg Office conference with J. Asher /09/16 A. Steinberg Call with S. Goldman; telephone call with J.Asher regarding 0.6 application; note to Karotkin 05/10/16 J Asher Discuss application with A. Steinberg and revise substantial 1.2 contribution application 05/11/16 A Steinberg Office conference with J. Asher /13/16 A Steinberg Review and revise application /15/16 J Asher Review A. Steinberg comments and revise application /15/16 A Steinberg Review and edit application /16/16 J Asher Finalize application; arrange for filing and service /16/16 C Splaine Prepare for and file substantial contribution application and file; arrange for service of application /16/16 J McCullough File substantial contribution application and file 0.5 TIMEKEEPER SUMMARY Timekeeper Status Hours Arthur Steinberg Partner 53.6 Jennifer Asher Associate 29.1 Susan Shen-Frattura Paralegal 1.5 Carol Splaine Paralegal 2.0 John McCullough Practice Support 0.5 Total

25 Pg 25 of Nantahala Capital Partners Invoice No Expenses Incurred 12/15/15 Telephone/Conference Calls VENDOR: Steinberg, Arthur INVOICE # DATE: 12/21/2015 Arthur Steinberg 12/15/ /15/2015 New York City, New York: Telephonic court call for SIGA /29/16 Duplicating Costs /02/16 Transportation Costs VENDOR: Steinberg, Arthur, INVOICE # DATE: 2/2/16 Arthur Steinberg 02/02/ /02/2016 New York City, New York: Parking in order to attend court hearing for SIGA /22/16 Professional Fees VENDOR: Courtcall, LLC INVOICE#: DATE: /22/16 Hearing 2/16/16 03/31/16 Duplicating Costs /23/16 Document Delivery - VENDOR: United Parcel Service (KY) INVOICE#: A8138R-136 DATE: 3/26/2016 Attn: Thomas B. Walp - Munger, Tolles & Olson LLP Los Angeles, CA /23/16 Document Delivery - VENDOR: United Parcel Service (KY) INVOICE#: A8138r-136 DATE: 3/26/2016 Attn: Stephen Karotk - Weil, Gotshal & Manges LLP New York - NY 03/23/16 Document Delivery - VENDOR: United Parcel Service (KY) INVOICE#: A8138R-136 DATE: 3/26/2016 Attn: Martin J. Bien - Proskauer Rose LLP - New York - NY 03/23/16 Document Delivery - VENDOR: United Parcel Service (KY) INVOICE#: Attn: Richard C. Mor - The Office of the United States Tru - NEW YORK NY 03/23/16 Document Delivery - VENDOR: United Parcel Service (KY) INVOICE#: A8138R-136 DATE: 3/26/2016 Attn: Daniel J.Lucks - SIGA Technologies, Inc. New York - NY 03/23/16 Document Delivery - VENDOR: United Parcel Service (KY) INVOICE#: A8138R-136 DATE: 3/26/2016 The Honorable Sean H - United States Bankruptcy Court SDNY New York NY 03/23/16 Document Retrieval - VENDOR: Pacer Service Center (NYC) INVOICE#: Q12016 DTE: 4/7/2016 PACER Usage for 1/1/16 3/31/16 03/23/16 Document Retrieval - VENDOR: Pacer Service Center (NYC) INVOICE#: Q12016 DTE: 4/7/2016 PACER Usage for 1/1/16 3/31/16 03/23/16 Document Retrieval - VENDOR: Pacer Service Center (NYC) INVOICE#: Q12016 DTE: 4/7/2016 PACER Usage for 1/1/16 3/31/16 03/23/16 Document Retrieval - VENDOR: Pacer Service Center (NYC) INVOICE#: Q12016 DTE: 4/7/2016 PACER Usage for 1/1/16 3/31/16 04/05/16 Hotel and/or Other Travel VENDOR: Steinberg, Arthur INVOICE# DATE: 4/5/ Total Expenses