Exhibit 10(rr)

                              SEPARATION AGREEMENT

            THIS AGREEMENT (this "Agreement"), made and entered into as of this
30th day of March, 2001, by and between SIGA Technologies, Inc., 420 Lexington
Avenue, Suite 620, New York, New York 10170, and Joshua D. Schein, Ph.D., 524
Clubhouse Road, Woodmere, New York, 11598. As used throughout this Agreement:
"Company" refers to SIGA Technologies, Inc., together with its their past and
present parents, subsidiaries, and affiliates, and each of their respective past
and present officers, directors, agents, employees, successors and assigns, in
both their individual and corporate capacities; and "Executive" refers to Joshua
D. Schein, Ph.D., his heirs, executors, administrators, agents, successors,
assigns and dependents.

                                   WITNESSETH:
                                   ----------

            WHEREAS, Executive is serving as the Chief Executive Officer of SIGA
Technologies, Inc. and as a member of the Board of Directors of SIGA
Technologies, Inc.; and

            WHEREAS, by mutual agreement between Executive and the Company,
Executive has agreed to resign as an employee, officer and director of the
Company effective as of April 16, 2001 or such other date as is consented to by
Donald G. Drapkin (the "Effective Date"); and

            WHEREAS, SIGA Technologies, Inc, Executive, Judson A. Cooper,
Gabriel M. Cerrone, Thomas E. Constance, Donald G. Drapkin and Eric A. Rose,
M.D. are entering into a letter agreement of even date herewith (the
"Restructuring Agreement") in reliance, in part, upon the execution and delivery
of, and performance under, this Agreement.

            WHEREAS, there has been a "Change of Control" as such term is
defined in the Employment Agreement (as defined herein).

            NOW, THEREFORE, for and in consideration of the mutual promises,
covenants and obligations contained herein, the parties hereto agree as follows:

ARTICLE I: RESIGNATION AND TERMINATION OF EMPLOYMENT AGREEMENT

      1.1 Resignation and Termination. Executive hereby resigns as an employee,
officer and director of the Company effective as of the close of business on the
Effective Date. Notwithstanding any provision of the Amended and Restated
Employment Agreement between the SIGA Technologies, Inc. and Executive, dated
October 6, 2000 (the "Employment Agreement"), to the contrary, such resignation
shall not be deemed to be a breach by Executive or the Company of the Employment
Agreement. Except as otherwise expressly provided in this Agreement, Executive
agrees that this Agreement supersedes the Employment Agreement (and any other
existing employment agreements between Executive and the Company). Without
limiting the generality of the foregoing, Executive, in consideration of the
benefits received hereunder and under the Restructuring Agreement, waives
payment of any Change of Control Amount as defined in the Employment Agreement.

<PAGE>

            1.2 Certain Representations. Executive represents and warrants that,
other than the Employment Agreement and as provided for under the Restructuring
Agreement, Executive is not party to any agreement or arrangement respecting
employment by the Company. Executive also represents and warrants that, to the
best of his knowledge, he has fully complied with his obligations under the
Employment Agreement and has done nothing contrary to its terms.

ARTICLE II: SEVERANCE PAYMENTS AND BENEFITS

      Section 2.1 Payments. On the Effective Date, SIGA Technologies, Inc. shall
pay Executive, any accrued, but unpaid Base Salary (as defined in the Employment
Agreement) through the Effective Date in full and complete satisfaction of any
and all amounts due to Executive from the Company upon termination of
employment.

      Section 2.2 Options. The terms of certain options held by Executive shall
be modified in accordance with, and subject to, the terms and conditions of the
Restructuring Agreement.

      Section 2.3 Company Benefits. SIGA Technologies, Inc. shall provide
Executive with certain health insurance benefits in accordance with, and subject
to, the terms and conditions of the Restructuring Agreement.

      Section 2.4 Withholding of Taxes. The Company will withhold from any
benefits or compensation payable under this Agreement or the Restructuring
Agreement all federal, state and local taxes, social security and all other
customary withholdings as may be required pursuant to any law or governmental
regulation or ruling.

      Section 2.5 No Other Payments. Except as specifically provided in this
Article 2 or in the Restructuring Agreement or as otherwise required by law,
Executive shall not be entitled to receive any sums of money, payments, benefits
or severance amounts from the Company following the Effective Date, whether
pursuant to the Employment Agreement or otherwise.

      ARTICLE III: CONFIDENTIAL INFORMATION AND RETURN OF PROPERTY

      Section 3.1 Confidentiality. Executive acknowledges that during his
service and employment with the Company he has been privy and made party to
confidential information, including but not limited to knowledge or data
relating to the Company and the Company's businesses and investments,
information regarding vendors, employees, strategic and business plans, and
analysis of competitors ("Confidential Information") and Trade Secrets (as
defined below).

            (a) It is a material condition of this Agreement that Executive
complies with the terms of Section 9 of the Employment Agreement (entitled
"Confidentiality, Ownership, and Covenants"), the terms of which are
incorporated by reference herein; provided, however, that Executive shall be
relieved of his obligations under Subsection (d) and clauses (i) and (ii) of


                                        2

<PAGE>

Subsection (e) thereof. Matters concerning notice an severability in connection
with Section 9 of the Employment Agreement shall continue to be governed by
Sections 15 and 16 of the Employment Agreement, each of which is incorporated by
reverence herein.

            (b) In addition to, and not limited by, the provisions of Section 9
of the Employment Agreement, Executive agrees that, following the Effective
Date, Executive shall hold in a fiduciary capacity for the benefit of the
Company all Trade Secrets and Confidential Information, which shall have been
obtained by Executive during his service and employment with the Company and
which is not generally available public knowledge (other than by acts by
Executive). Executive shall not at any time, without the prior written consent
of SIGA Technologies, Inc. or as may otherwise be required by law or any legal
process (in which case Executive shall use his reasonable best efforts in
cooperating with the Company in obtaining a protective order against disclosure
by a court of competent jurisdiction), communicate or divulge any such Trade
Secrets or Confidential Information to anyone other than the Company and those
expressly designated by the Company. For purposes of this Agreement, "Trade
Secrets" shall mean all information, without regard to form, including, but not
limited to, technical or non-technical data, formulae, patterns, compilations,
programs, devices, methods, techniques, drawings, processes, financial data,
financial plans, business projections, product plans, distribution lists or
lists of actual or potential customers, advertisers or suppliers which is not
commonly known by or available to the public and which information: (a) derives
economic value, actual or potential, from not being generally known to, and not
being readily ascertainable by proper means by, other persons who can obtain
economic value from its disclosure or use and (b) is the subject of efforts that
are reasonable under the circumstances to maintain its secrecy.

      Section 3.2 Return of Property. All records, files, drawings, documents,
models, equipment, and the like relating to the Company's business and any and
all property (in what ever form or medium) of the Company in Executive's
possession, custody or control shall be returned to SIGA Technologies, Inc. on
or before the Effective Date. Executive hereby assigns to SIGA Technologies,
Inc. all rights, title and interest in and to Trade Secrets and other products
relating to the Company's business developed by him alone or in conjunction with
others at any time while employed by or in the service of the Company. Executive
shall take all such further actions as are reasonably necessary to effectuate
the provisions of this Section 3.2.

ARTICLE IV: NO ADMISSION.

      In executing this Agreement, neither the Company nor Executive admits any
liability or wrongdoing, and the considerations exchanged herein do not
constitute an admission of any liability, error, contract violation, or
violation of any federal, state, or local law or regulation.

ARTICLE V: RELEASE

      Section 5.1 Release of Claims by Executive.

            (a) Except as necessary to enforce the terms of this Agreement and
the Restructuring Agreement, and in exchange for and in consideration of the
promises, covenants


                                       3
<PAGE>

and agreements set forth herein and therein, Executive hereby releases the
Company 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 Executive has or may have for any period
prior to and including the date of his execution of this Agreement, including,
but not limited to, any claim of defamation, wrongful discharge, breach of
contract, claims for unpaid wages, claims arising under or related to the
Employment Agreement and claims of discrimination under the Age Discrimination
in Employment Act of 1967 and all other federal, state and local laws, and any
claim for attorneys' fees or costs.

            (b) Executive represents that he does not have any claim, action or
proceeding pending against the Company or which arises out of his employment by
the Company. Executive represents and warrants that he has not assigned or
subrogated any of his rights, claims and causes of action, including any claims
referenced in this Agreement, or authorized any other person or entity to assert
such claim or claims on his behalf, and he agrees to indemnify and hold harmless
the Company against any assignment of said rights, claims and/or causes of
action.

      Section 5.2 Release of Claims by the Company. Except as necessary to
enforce the terms of this Agreement and the Restructuring Agreement, and in
exchange for and in consideration of the promises, covenants and agreements set
forth herein, the Company hereby releases Executive 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, arising out of Executive's employment by the
Company which the Company has or may have for any period prior to and including
the date of the execution of this Agreement; provided, however, that the Company
does not release herein any claims the Company may now or in the future have
against Executive for acts of intentional misconduct committed by Executive
during Executive's employment with the Company.

ARTICLE VI: FORM S-8

      The Company shall have obligations with respect to the Registration
Statement on Form S-8 registering Common Stock issued in connection with the
Company's employee stock incentive plan in accordance with, and subject to the
terms and conditions of, the Restructuring Agreement.

ARTICLE VII: INDEMNIFICATION AND DIRECTORS AND OFFICERS INSURANCE

      The Company shall indemnify Executive in accordance with, and subject to
the terms and conditions of the Restructuring Agreement. The Company shall cause
Executive to be covered by its directors and officers liability insurance policy
so long as it maintains such a policy for any current or former directors or
officers; provided that this obligation shall cease upon the expiration of all
applicable statutes of limitations applicable to potential causes of action
against Executive which could be covered under such insurance policy.

ARTICLE VIII: MISCELLANEOUS


                                        4

<PAGE>

      Section 8.1 Remedy. Should Executive engage in or perform, either directly
or indirectly, any of the acts prohibited by Article 3 or, in any other way,
violate such Article, it is agreed that the Company would suffer irreparable
harm that would be impossible to quantify. Accordingly, the Company shall be
entitled to full injunctive relief, to be issued by any competent court of
equity, enjoining and restraining Executive and each and every other person,
firm, organization, association, or corporation concerned therein, from the
continuance of such violative acts. The foregoing remedy shall not be deemed to
limit or prevent the exercise by the Company of any or all further rights and
remedies which may be available to the Company hereunder or at law or in equity.

      Section 8.2 Notices. For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly given when personally delivered, sent by facsimile or when mailed
by United States registered or certified mail, return receipt requested, postage
prepaid, addressed to such address as provided in the preamble hereto or sent to
such other address or facsimile number as each party may furnish to the other in
writing from time to time in accordance with this Section 8.2.

      Section 8.3 Applicable Law. This Agreement is entered into under, and
shall be governed for all purposes by, the laws of the State of New York without
giving effect to any choice of law principles or to where the parties are
located at the time a dispute arises.

      Section 8.4 No Waiver. No failure by either party hereto at any time to
give notice of any breach by the other party of, or to require compliance with,
any condition or provision of this Agreement shall (i) be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time or (ii) preclude insistence upon strict compliance in the
future.

      Section 8.5 Severability. If a court of competent jurisdiction determines
that any provision of this Agreement is invalid or unenforceable, then the
invalidity or unenforceability of that provision shall not affect the validity
or enforceability of any other provision of this Agreement, and all other
provisions shall remain in full force and effect and such invalid or
unenforceable provision shall be reformulated by such court to preserve the
intent of the parties hereto.

      Section 8.6 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together will constitute one and the same Agreement.

      Section 8.7 Headings. The Article, Section and Subsection headings used
herein have been inserted for purposes of convenience only and shall not be used
for interpretive purposes.

      Section 8.8 Gender and Plurals. Wherever the context so requires, the
masculine gender includes the feminine or neuter, and the singular number
includes the plural and conversely.


                                        5

<PAGE>


      Section 8.9 Affiliate. As used in this Agreement, "affiliate," with
respect to any person or entity, shall mean any other person or entity which
directly or indirectly through any one or more intermediaries owns or controls,
is owned or controlled by, or is under common ownership or control with such
person or entity.

      Section 8.10 Assignment. No rights or obligations of Executive hereunder
may be assigned by Executive to any other person or entity, except by will or
the laws of descent and distribution. In the event of Executive's death prior to
receipt by Executive of all amounts payable to Executive hereunder, such amounts
shall be payable to Executive's designated beneficiaries on the same schedule as
provided for in this Agreement. No rights or obligations of SIGA Technologies,
Inc. under this Agreement may be assigned or delegated to any other person or
entity, except to a successor to the business or substantially all of the assets
of SIGA Technologies, Inc.

      Section 8.11 Entire Agreement. Except as otherwise expressly provided
herein, this Agreement, together with the Restructuring Agreement, constitutes
the entire agreement of the parties with regard to the subject matter hereof,
contains all the covenants, promises, representations, warranties and agreements
between the parties with respect to Executive's resignation from the Company and
supersedes all prior employment or severance agreements between Executive and
the Company, including, but not limited to, the Employment Agreement (except as
otherwise expressly provided herein). Executive acknowledges and agrees that the
consideration provided for herein is adequate consideration for Executive
waiving his rights under the Employment Agreement. Except as otherwise expressly
provided herein, each party to this Agreement acknowledges that no
representation, inducement, promise or agreement, oral or written, has been made
by either party, or by anyone acting on behalf of either party, which is not
embodied herein or in the Restructuring Agreement, and that no agreement,
statement, or promise relating to Executive's resignation from the Company, that
is not contained in this Agreement or the Restructuring Agreement, shall be
valid or binding. Any modification of this Agreement will be effective only if
it is in writing and signed by the parties and consented to in writing by each
party to the Restructuring Agreement. Each Party to the Restructuring Agreement
that is not also a party hereto shall be a third party beneficiary of this
Agreement.

      Section 8.12 Legal Fees. The Company shall reimburse Executive for certain
legal fees and expenses in accordance with, and subject to, the terms and
conditions of the Restructuring Agreement.

ARTICLE IX: EXECUTIVE ACKNOWLEDGEMENTS

      Section 9.1 Executive acknowledges that he has read and understands the
terms of this Agreement and has voluntarily agreed to these terms without
coercion or undue persuasion by the Company.


                                        6

<PAGE>

      Section 9.2 Executive acknowledges that he has been advised to consult
with an attorney prior to executing this Agreement. Executive also acknowledges
that he has had an adequate opportunity to review this Agreement before its
execution.

      Section 9.3 Executive acknowledges that he has been afforded an
opportunity to take at least twenty-one (21) days to consider this Agreement and
has been advised to consult with the attorneys of his choice prior to executing
this Agreement. Executive further acknowledges that he will have a period of
seven (7) calendar days following his execution of this Agreement in which to
revoke his consent, and that such revocation will be effective only if received
in writing by Kramer Levin Naftalis & Frankel LLP, 919 Third Avenue, New York,
New York, 10022, Attention: David M. Zlotchew, Esq., on or before the expiration
of this seven (7) day period. This Agreement will not become effective or
enforceable until the revocation period has expired.


                                        7
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.

                                          SIGA TECHNOLOGIES, INC.


                                          By: /s/ Thomas N. Konatich
                                             -----------------------------------
                                             Thomas N. Konatich
                                             Vice President-Chief Financial
                                             Officer


                                             -----------------------------------
                                             Joshua D. Schein, Ph.D.


                                       8
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.

                                          SIGA TECHNOLOGIES, INC.


                                          By:
                                             -----------------------------------


                                             /s/ Joshua D. Schein
                                             -----------------------------------
                                             Joshua D. Schein, Ph.D.