kl06023_ex10-1.htm


    
      

    


    Exhibit
10.1

     

     

    MacAndrews
& Forbes LLC

    35
East 62nd
Street

    New
York, New York 10065

    


                June 19,
2008

    


    SIGA
Technologies, Inc.

    420
Lexington Avenue, Suite 408

    New York,
NY  10170

    


    Attn:       Eric
A. Rose

    Chief Executive Officer and Chairman of
the Board

    


    Thomas N. Konatich

    Chief Financial Officer

    


    Gentlemen:

    


    You have
indicated an interest in an additional investment by MacAndrews & Forbes LLC
in common stock and warrants of SIGA Technologies, Inc. (the "Company") in an
amount of up to $8,000,000.  I am pleased to present, for your board's
consideration, the terms on which we would agree to make such an
investment.

    


    As set
forth in more detail in the term sheet attached to this letter we agree to
invest up to $8,000,000 in the Company, with such commitment remaining available
to the Company, at its option, for a period of one year from the date of this
letter.  In exchange, the definitive agreement will provide that the
Company will issue to us on each funding date (i) common stock at a per share
purchase price equal to the lesser of (A) $3.06 and (B) the average of the
volume-weighted average price per share for the 5 trading days immediately
preceding each funding date, and (ii) warrants to purchase 40% of the number of
shares of common stock acquired, exercisable at 115% of the common stock
purchase price on such funding date.

    


    In
consideration for our binding commitment, upon the execution of this letter, the
Company will issue us warrants to acquire 238,000 shares of common stock,
exercisable at $3.06 per share of common stock.  The warrants shall be
exercisable for a period of four years commencing on the date of issuance of
such warrants.  We shall also have the option, during the commitment
period, to invest in the Company on the commitment terms.

    


    The
Company would use the proceeds of any such investment to fund research and
development, to enhance the Company’s ability to make and sell its products
commercially, to pursue growth opportunities and for general corporate
purposes.

    


    Our
commitment hereunder and our agreement to perform our obligations described
herein are subject to the negotiation and execution of a mutually acceptable
definitive documentation with respect to the investment.

    


    This
letter and the attached term sheet shall, upon execution, be binding on the
parties hereto.  All obligations under this letter and the attached
term sheet shall remain in full force and effect until the earlier of (i) the
execution of definitive documentation or (ii) the one-year anniversary of this
letter.  The completion of the transactions contemplated by this
letter and the term sheet are subject, among other things, to the negotiation
and execution of a definitive agreement acceptable to each of us.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    Neither
this letter nor any of the provisions hereof may be amended, modified, changed
or waived except by an instrument in writing signed by the parties
hereto.  This letter shall be governed by and construed in accordance
with the laws of the State of New York.  This letter and the attached
term sheet contains the full and entire understanding and agreement between the
parties with regard to the subject matters hereof and supersedes all prior
understandings and agreements relating to the matters set forth herein or in the
term sheet. This letter may be executed in counterparts, each of which shall be
deemed to constitute an original but all of which together shall constitute one
and the same instrument.

    


    We
continue to be excited about the Company and its prospects.  We look
forward to implementing a transaction that would be in the best interests of the
Company's stockholders, officers and other employees, and
customers.

    


    


    [Remainder
of page intentionally left blank.]

     

    
 

    
      
         


      

      
         


        
          

        

      

      
         


      

    


                    

                                                Very truly
yours,

    


                    MACANDREWS &
FORBES LLC

    


                    By: /s/ Barry F.
Schwartz

                    Name: Barry F.
Schwartz

                    Title: Executive Vice
Chairman

    


    


    


    


    AGREED
AND ACCEPTED:

    


    SIGA
TECHNOLOGIES, INC.

    


    By: /s/ Eric A.
Rose

    Name: Eric
A. Rose, M.D.

    Title:
Chief Executive Officer

    


     

    
 

    
      
         


      

      
         


        
          

        

      

      
         


      

    


    


    SUMMARY
OF TERMS

    $8,000,000
INVESTMENT

    SIGA
TECHNOLOGIES, INC.

    June
19, 2008

    


    This term
sheet ("Term Sheet") summarizes the principal terms of an investment by
MacAndrews & Forbes LLC ("Investor") of up to $8,000,000 in SIGA
Technologies, Inc. (the "Company").

     

    
      	
              Investment
      Commitment:

            	
              Investor
      commits to invest up to an aggregate of $8,000,000 (such investment, the
      "Investment Amount") in the Company, at the Company's option, in one or
      more but no more than three tranches during the one-year period (the
      "Commitment Period") following execution of the letter to which this Term
      Sheet is attached (the "Commitment
Letter").

            


    

    


    
      	
              Investment
      Option:

            	
              At
      any time during the Commitment Period, Investor may, at Investor's option,
      elect to invest up to the Investment Amount in the Company in one or more
      but no more than three tranches on the terms of the Investment Commitment;
      provided that in no event will the aggregate amount of the investments
      pursuant to the Investment Commitment and the Investment Option exceed
      $8,000,000.

            


    

    


    
      	
              Securities
      to be Issued:

            	
              Upon
      either of the Company's election to effect an investment pursuant to the
      Investment Commitment or Investor's election to effect an investment
      pursuant to the Investment Option (an "Investment"), subject to the terms
      and conditions of the Investment Agreement (defined below), the Company
      will issue to Investor on each funding
date:

            


    

    


    
      	
               
      

            	
              Common Stock - Such
      number of shares (the "Shares") of common stock, par value $0.0001 per
      share ("Common Stock"), of the Company, with a value equal to the
      Investment, at a per share valuation ("Per Share Price") equal to the
      lesser of (i) $3.06 and (ii) the average of the volume-weighted average
      price per share for the 5 trading days immediately preceding each funding
      date.

            


    

    


    
      	
               
      

            	
              Warrants - For no
      additional consideration, warrants (the "Warrants") to purchase a number
      of shares of Common Stock equal to 40% of the Shares issued on such
      funding date, at an exercise price per share equal to 115% of the Per
      Share Price on such funding date, payable in cash or by cashless
      exercise.  The Warrants shall be exercisable for a period of
      four years commencing on the date of issuance of such
      Warrants.  Except as otherwise noted herein, the Warrants shall
      have terms substantially similar to the Investor's existing
      warrants.

            


    

    


    
      	
               
      

            	
              The
      Investment Agreement will provide that, to the extent that the
      consummation of any portion of the investment transactions requires
      shareholder approval under applicable Nasdaq rules, the parties shall be
      obligated to consummate only that portion of the investment transaction
      that will not require such shareholder
approval.

            


    

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    
      	
              Use
      of Proceeds:

            	
              To
      fund research and development, to enhance the Company’s ability to make
      and sell its products commercially, to pursue growth opportunities and for
      general corporate purposes.

            


    

    


    
      	
              Commitment
      Fee:

            	
              In
      consideration of the Investment Commitment, upon the execution of the
      Commitment Letter, the Company will issue to Investor warrants (the
      "Commitment Fee Warrants") to purchase 238,000 shares of Common Stock, at
      an exercise price per share of $3.06, payable in cash or by cashless
      exercise.  The Commitment Fee Warrants shall be exercisable for
      four years commencing on the date of execution of the Commitment
      Letter.   Except as otherwise noted herein, the Commitment
      Fee Warrants shall have terms substantially similar to the Investor's
      existing warrants.

            


    

    


    
      	
              Definitive
      Documentation:

            	
              This
      term sheet is subject to negotiation and execution of a mutually
      acceptable definitive commitment agreement (the "Investment
      Agreement").

            


    

    


    
      	
              Expenses:

            	
              Counsel
      to Investor will prepare initial drafts of all documents.  The
      Company shall pay all reasonable fees and expenses of Investor's
      counsel.

            


    

    


    
      	
              Registration
      Rights:

            	
              The
      Shares, Warrants, Commitment Warrants and any other securities acquired in
      connection with any Investment shall be covered by the Registration Rights
      Agreement, dated as of August 13, 2003, between the Company and Investor
      (the "Registration Rights Agreement").  Prior to the closing of
      any Investment, the parties shall agree to enter into an amendment to the
      Registration Rights Agreement necessary to effect the
      foregoing.

            


    

    


    
      	
               
      

            	
              Representations

            


    

    
      	
              and
      Warranties:

            	
              The
      Investment Agreement will include standard representations and warranties
      by the Company.

            


    

    


    
      	
              Conditions
      to Closing:

            	
              The
      Investment Agreement will include standard conditions to closing of each
      tranche, including, without limitation, (i) the Company being in
      compliance with all applicable Nasdaq Marketplace Rules (both before and
      after giving effect to the applicable closing), (ii) the Common Stock
      remaining listed for trading on the Nasdaq Capital Market and (iii) the
      Shares to be then issued having been listed for trading on the Nasdaq
      Capital Market.