Document:

Exhibit 10(qq)

                                Donald G. Drapkin
                               35 East 62nd Street
                            New York, New York 10021

                                 March 30, 2001

SIGA Technologies, Inc.
420 Lexington Avenue, Suite 620
New York, New York 10170

Gabriel M. Cerrone
265 East 66th Street, Suite 16G
New York, New York 10021

Thomas E. Constance
c/o Kramer Levin Naftalis & Frankel LLP
919 Third Avenue
New York, New York 10022

Eric A. Rose, M.D.
112 East 78th Street
New York, New York 10021

Judson A. Cooper
c/o SIGA Technologies, Inc.
420 Lexington Avenue, Suite 620
New York, New York 10170

Joshua D. Schein, Ph.D.
c/o SIGA Technologies, Inc.
420 Lexington Avenue, Suite 620
New York, New York 10170

         Re: SIGA Technologies, Inc. ("SIGA").
             ---------------------------------

Gentlemen:

      This letter is to confirm the understanding (the "Agreement") among Donald
G. Drapkin ("Drapkin"), SIGA, Gabriel M. Cerrone ("Cerrone"), Thomas E.
Constance ("Constance"), Eric A. Rose, M.D. ("Rose"), Judson A. Cooper
("Cooper") and Joshua D. Schein, Ph.D. ("Schein" and, together with Drapkin,
SIGA, Cerrone, Constance, Rose and Cooper, the "Parties"), with respect to
certain matters relating to SIGA.

      1. Resignations. On or before April 16, 2001 or such other date as is
consented to by Drapkin (the "Effective Date"), each of Cooper and Schein shall
(i) resign from the Board of Directors of SIGA (the "Board") and from any and
all offices held with SIGA and (ii) use his best

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efforts to cause each of the Resigning Directors (as defined below) to resign
from the Board and from any and all offices held with SIGA by each such
Resigning Director, in each case, at no cost to SIGA. "Resigning Director" shall
mean each member of the Board other than Schein and Cooper; provided, however,
that the "Resigning Directors" shall not be construed to include Drapkin or any
of his designees.

      2. Appointments. Cooper and Schein shall use their best efforts to cause
Drapkin and his designees to be elected to the Board.

      3. Termination of Employment Agreements. (a) On the Effective Date, each
of Cooper and Schein shall cause any agreement or other arrangement relating to
their respective employment by SIGA, including, without limitation, the
respective Amended and Restated Employment Agreements between SIGA and each of
Cooper and Schein, dated as of October 6, 2000, to be immediately terminated
voluntarily and at no cost to SIGA, pursuant to the respective Separation
Agreement between each such Party and SIGA of even date herewith (the
"Separation Agreements"), other than costs expressly provided for in this
Agreement.

            (b) At Drapkin's request, on or after the Effective Date, each of
Cooper and Schein shall cause any consulting agreements or other arrangements
between SIGA and any entity controlled by Cooper or Schein, including, without
limitation, Prism Ventures LLC, to be immediately terminated at no cost to SIGA.

            (c) On the Effective Date, SIGA shall enter into Mutual Releases
with each of Cooper and Schein and with each Resigning Director, in the form
attached hereto as Exhibit A.

      4. Cooperation. (a) From the period commencing on the Effective Date and
terminating on the first anniversary thereof, each of Cooper and Schein shall
cooperate with SIGA, if and as reasonably requested by SIGA, to effect a
transition of their respective responsibilities and to ensure that their
respective successors and SIGA are aware of all matters that had been handled by
such Party. Such cooperation by each of Cooper and Schein shall include, without
limitation, performing up to ten hours per month of consulting services to SIGA
if and as reasonably requested by SIGA. After receiving an invoice therefor,
SIGA shall pay such Party $175 per hour consulting work actually performed
pursuant to, and within the scope of, a request for such services made by the
Chief Executive Officer of SIGA.

            (b) Following the Effective Date, each of Cooper and Schein shall,
upon reasonable notice, furnish such information and assistance to SIGA as may
reasonably be required by SIGA in connection with any legal action, suit,
proceeding, claim, complaint, dispute or investigation, whether at law, in
equity, in arbitration or before the government of any nation, state, city,
locality or other political subdivision thereof or any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, and including any external or internal investigation,
involving SIGA or any of its affiliates or in which any of them is, or may
become, a party.

      5. Books and Records. On the Effective Date, each of Cooper and Schein
shall turn over, and shall cause SIGA to turn over, to Drapkin or Drapkin's
designee, all books and records of SIGA.

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<PAGE>

      6. Lock-Up. (a) Each of Cooper and Schein shall not, and shall cause its
respective affiliates to not, directly or indirectly, offer, sell, pledge,
hypothecate, contract to sell, acquire any option to sell, grant any option to
purchase, short or otherwise dispose of (or announce any offer, sale, contract
of sale or other disposition of) (collectively, "Transfer") any shares acquired
either prior to April 16, 2001 or pursuant to grants or vesting of either stock
options or restricted stock thereafter, or any interest acquired either prior to
April 16, 2001 or pursuant to grants or vesting of either stock options or
restricted stock thereafter in any shares, of common stock, par value $0001 per
share ("Common Stock"), other capital stock of SIGA or any Convertibles (as
defined below), during the period commencing on the date hereof and ending on
April 16, 2003 (the "Lock-Up Period"), except that each of Cooper and Schein
shall, notwithstanding the above restrictions, be entitled to Transfer (i) any
such securities pursuant to a pledge or hypothecation to the extent necessary to
margin them in a brokerage account (a "Permitted Pledge"), (ii) 250,000 in the
case of Schein, or 220,500 in the case of Cooper, shares of Common Stock on or
after October 16, 2001 and (iii) an additional 125,000 shares of Common Stock on
or after each of April 16, 2002, July 16, 2002, October 16, 2002 and January 16,
2003; provided that, in any event, such Party shall not Transfer in any one day
more than the greater of (x) 10,000 shares of Common Stock and (y) a number of
shares of Common Stock equal to 5% of the total volume of shares of Common Stock
traded on the open market on such day. Notwithstanding Cooper's relationship
with his children, they shall not be deemed an "affiliate" of Cooper for
purposes of this Agreement.

            (b) Subject to the conditions contained in Section 13 hereof, Each
of Drapkin, Cerrone, Constance and Rose shall not, and shall cause its
respective affiliates to not Transfer any shares acquired either prior to April
16, 2001 or pursuant to grants or vesting of either stock options or restricted
stock thereafter, or any interest acquired either prior to April 16, 2001 or
pursuant to grants or vesting of either stock options or restricted stock
thereafter in any shares, of Common Stock, other capital stock of SIGA or any
Convertibles, during the Lock-Up Period, except that each of Drapkin, Cerrone,
Constance and Rose shall, notwithstanding the above restrictions, be entitled to
Transfer (i) any such securities pursuant to a Permitted Pledge, (ii) on or
after October 16, 2001, 24.2% of the securities "beneficially owned" (as defined
below) by such person as of October 16, 2001 which remain subject to such
restrictions, (iii) on or after April 16, 2002, 16.0% of the securities
beneficially owned by such person as of April 16, 2002 which remain subject to
such restrictions, (iv) on or after July 16, 2002, 19.0% of the securities
beneficially owned by such person as of July 16, 2002 which remain subject to
such restrictions, (v) on or after October 16, 2002, 23.5% of the securities
beneficially owned by such person as of October 16, 2002 which remain subject to
such restrictions and (vi) on or after January 16, 2003, 30.7% of the securities
beneficially owned by such person as of January 16, 2003 which remain subject to
such restrictions; provided that, in any event, such Party shall not Transfer in
any one day more than the greater of (x) 10,000 shares of Common Stock and (y) a
number of shares of Common Stock equal to 5% of the total volume of shares of
Common Stock traded on the open market on such day. As used in this Agreement,
the term beneficially ownership shall have the meaning ascribed to it in Rule
13d-3 promulgated under the Securities Exchange Act of 1934, as amended, except
that, for purposes hereof: (A) all Common Stock issuable upon conversion or
exercise of Convertibles shall be deemed "beneficially owned," notwithstanding
any limitation on the conversion or exercise thereof based on the amount of
securities beneficially owned by the holder thereof; and (B) the 11,750 shares
of Common Stock owned by the Drapkin Family Charity Foundation (the "Charity")
shall not be deemed beneficially owned by Drapkin. Furthermore,

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notwithstanding Drapkin's relationship with the Charity, the Charity shall not
be deemed an "affiliate" of Drapkin for purposes of this Agreement.

            (c) At any time or times, at Drapkin's option, the provisions of
Subsections 6(a) and 6(b) (the "Lock-Up") may be (i) terminated as a whole and
rendered null and void; or (ii) modified so that the number of shares of Common
Stock that each Party is allowed to Transfer shall be increased, pro rata in
accordance with their respective beneficial ownership of Common Stock, by such
amount as Drapkin shall decide in his sole discretion. Any such termination or
modification of the Lock-Up shall be effective on and after the date specified
in a notice from Drapkin to each other Party, which notice is sent no fewer than
five days prior to such termination or modification of the Lock-Up. In the case
of any modification of the Lock-Up in accordance with clause (ii) of the first
sentence of this Subsection 6(c), Drapkin shall state the amount of such
modification in the notice thereof required by the immediately preceding
sentence.

            (d) If a Party or an affiliate of such Party consummates any
Transfer in violation of Subsection 6(a) or 6(b), such Party shall immediately
pay to SIGA an amount of liquidated damages equal to the gross sales price of
such securities or interest.

            (e) No Party shall hold any shares of Common Stock, Convertibles or
other capital stock of SIGA through any broker that has not agreed to send
copies of all confirmation with respect to such securities to SIGA. SIGA shall
keep records of all such confirmations received, and each Party shall have the
right, upon at least five days prior written notice to SIGA, to inspect such
records during SIGA's regular business hours, at SIGA's offices, at such
inspecting Party's expense; provided, however, that no Party may exercise such
inspection right more than once in any period of 90 consecutive calendar days.
Upon at least ten days prior written notice from any Party (in such capacity the
"Inspector") to any Party other than SIGA (in such capacity the "Inspected"),
the Inspected shall provide the Inspector with copies of the inspector's two
most recent monthly statements for each of such Inspector's securities accounts
that contains Common Stock, Convertibles or other capital stock of SIGA, which
copies may be redated so long as the information relating to holdings of, and
transactions in, any such SIGA securities subject to the Lock-Up are visible;
provided, however, that no Inspector may exercise such inspection right more
than once in any period of 180 consecutive calendar days with respect to the
same Inspected. No Party shall give SIGA's transfer agent stop transfer
instructions solely on account of the Lock-Up; provided that such stop transfer
instructions may be given with respect to any shares held by a Party that has
breached this Section 6, including without limitation, any shares held in
violation of the first sentence of this Subsection 6(e). The provisions of this
Subsection 6(e) shall terminate 90 days after the end of the Lock-Up Period.

            (f) On the Effective Date, Cooper and Schein shall grant to Drapkin
an irrevocable proxy for the duration of the Lock-Up Period, in substantially
the form attached hereto as Exhibit B, with respect to all shares of capital
stock of SIGA held by such Party.

      7. Representations and Warranties. Each of Cooper and Schein hereby
represents and warrants, as of the date hereof and as of the Effective Date,
each of the following:

            (a) Since December 15, 2000, SIGA has taken no action for which
approval of the Board was required nor has the Board approved any action, except
for (i) the execution and

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delivery of and performance under this Agreement and (ii) filing a Registration
Statement on Form S-8 registering Common Stock issued in connection with the
Plan (as defined below), which actions have been duly authorized by the Board.

            (b) Since December 15, 2000, no options or other rights to purchase
securities of SIGA have vested or otherwise become exercisable nor have the
provisions of any such options or other rights been amended or modified, except
(i) the vesting pursuant to the original terms thereof of options to purchase
Common Stock held by each of Thomas Konatich and David Kaufman, to the extent of
12,500 shares each, (ii) the vesting pursuant to the original terms thereof of
options to purchase 25,000 shares of Common Stock held by Dennis Hruby and (iii)
as expressly provided in this Agreement.

            (c) SIGA has no contingent liabilities (whether known or unknown).

            (d) Except as set forth on Schedule 7(d) hereto, SIGA is neither
contemplating, nor is obligated to engage in, any transaction or transactions
whereby SIGA would pay or receive compensation (in any form) that could
reasonably be valued at $5,000 or more individually or S20,000 or more in the
aggregate. Except for transactions pursuant to Sections 8 and 9 of this
Agreement, as of the date hereof and as of the Effective Date, SIGA has not and
will not have consummated, nor does or will SIGA have any binding obligation
with respect to, is SIGA or will SIGA be obligated to incur any cost for failing
to consummate, any transaction described on Schedule 7(d).

            (e) Except as set forth on Schedule 7(e) hereto, there are no: (i)
outstanding options, warrants or other rights to acquire Common Stock; (ii)
securities convertible into or exchangeable for Common Stock; nor (iii) any
rights (contingent or otherwise) to acquire, directly or indirectly, any of (i)
or (ii), above ((i), (ii) and (iii), above, are referred to collectively as
"Convertibles"). Schedule 7(e) sets forth, for each Convertible, all vesting and
expiration dates and the number of shares of Common Stock subject thereto.

            (f) Except as set forth on Schedule 7(f), no spouse or child of
either Cooper or Schein owns any Common Stock, Convertibles or other securities
of SIGA.

            (g) Neither Cooper nor Schein beneficially owns any Common Stock,
Convertibles or other securities of SIGA except as set forth on Schedule 7(g).

            (h) Except as set forth on Schedule 7(h) SIGA is not party to any
agreements or other arrangements or any amendments, renewals or other
modifications thereof relating to the employment by SIGA of any person other
than Cooper and Schein.

            (i) The exercise price applicable to the Unvested Options (as
defined below) is $1.125 per share of Common Stock. The Expiring Options (as
defined below) were issued in three equal tranches, and the respective exercise
prices applicable to each tranche of the Expiring Options are $1.50, $5.00 and
$4.00 per share of Common Stock.

            (j) Other than the Common Stock, SIGA does not have any other
classes of voting securities outstanding.

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<PAGE>

            (k) Except as expressly provided in this Agreement or disclosed in
SIGA's public filings under the Securities Exchange Act of 1934, as amended, up
to and including SIGA's proxy statement filed September 28, 2000, as of the date
hereof and as of the Effective Date, none of the terms of any of the Resigning
Directors' stock options, restricted stock or other awards, whether granted
under the Plan or otherwise, have been modified, nor have any agreements or
arrangements been entered into to so modify them.

            (i) The modifications to the terms of the Unvested Options
and the Expiring Options pursuant to Section 8 hereof is permissible under the
Plan.

The representations and warranties contained in this Section 7 shall survive
until April 16, 2003.

      8. Adjustments to Certain Options. Subject to the conditions of Section 13
hereof: (i) SIGA shall cause any employee stock options held by Cooper and
Schein that are scheduled to vest on November 1, 2001, to the extent of options
to purchase up to 37,500 shares of Common Stock each (the "Unvested Options"),
to instead vest on the Effective Date; and (ii) SIGA shall cause any employee
stock options held by Cooper and Schein, that would expire within 90 days of
such Party's termination, to the extent of options to purchase up to 50,001
shares of Common Stock each (the "Expiring Options"), to remain exercisable
until such options would otherwise expire in accordance with their terms.

      9. Fees of Counsel. SIGA shall pay for Cooper and Schein's reasonable
attorneys' fees and disbursements, of no more than $20,000 in the aggregate, in
connection with this Agreement upon an accounting therefore. SIGA shall pay for
Drapkin's reasonable attorneys' fees and disbursements in connection with this
Agreement upon an accounting therefor.

      10. Mutual Release. (a) Drapkin, on behalf of himself and each of his
predecessors, successors, heirs, executors, administrators, assigns ("Drapkin
Releasor") hereby releases, remises and forever discharges each of Cooper,
Schein and the members of the current Board of Directors of SIGA, together with
each and all of their respective predecessors, successors, heirs, executors,
administrators, assigns ("Drapkin Releasees") from the Released Claims (as
defined below). "Released Claims" means all actions, causes of action, suits,
debts, dues, sums of money, accounts, controversies, agreements, promises,
variances, trespasses, damages, judgments, abstracts of judgments, liens,
extents, executions, claims and demands whatsoever, in law, admiralty or equity
(collectively, "Claims"), which the Releasor ever had, now has or hereafter can,
shall or may have against any or all of the Releasees, for, upon or by reason of
any matter, cause or thing whatsoever regarding SIGA or Drapkin's investment in
SIGA from the beginning of the world to the day of the date of this Agreement,
except for (i) Claims arising out of or related to this Agreement and (ii)
Claims arising out of or resulting from any Drapkin Releasee's fraud or
intentional misconduct. Drapkin Releasor further covenants and agrees not to
bring suit against the Drapkin Releasees for any Released Claims

            (b) Each of Cooper and Schein, on behalf of themselves, each other
and the members of the current Board of Directors of SIGA, in each case
together with each and all of their respective predecessors, successors, heirs,
executors, administrators, assigns (collectively, the "Insider Releasors")hereby
releases, remises and forever discharges Drapkin, together with each and all of
his predecessors, successors, heirs, executors, administrators and assigns
("Insider

                                       6

<PAGE>

Releasees") from all Claims which any Insider Releasor ever had, now has or
hereafter can, shall or may have against any or all of the Insider Releasees,
for, upon or by reason of any matter, cause or thing whatsoever regarding SIGA
or Drapkin's investment in SIGA from the beginning of the world to the day of
the date of this Agreement, except for (i) Claims arising out of or related to
this Agreement and (ii) Claims arising out of or resulting from any Insider
Releasee's fraud or intentional misconduct. Each Insider Releasor further
covenants and agrees not to bring suit against any Insider Releasees for any
Released Claims.

      11. Registration. Subject to any suspension or black-out periods that are
applicable generally to SIGA's securities that are registered under the
Securities Act of 1933, as amended (the "Securities Act"), SIGA shall use its
best efforts to have its Registration Statement on Form S-8 registering Common
Stock issued in connection with SIGA's employee stock incentive plan (the
"Plan") remain effective with respect to each option issued to Cooper and Schein
under the Plan until the earlier of (i) the later of (A) the date of expiration
of such option and (B) the one year anniversary of the last date on which any
portion of such option is actually exercised and (ii) the one year anniversary
of the date on which such option or any remaining portion of such option has
been exercised in full. If SIGA fails to comply with the provisions of this
Section 11, lost profits sustained by Cooper or Schein shall be deemed ordinary
damages, to the extent proven to be caused by SIGA's breach of this Section 11.

      12. Insurance and Indemnification. Except as otherwise provided herein:

            (a) SIGA shall use its best efforts to provide each of Cooper and
Schein with the same health insurance benefits that SIGA currently provides such
Party until the earlier of (i) such Party's obtaining employment by an entity
other than SIGA and (ii) April 16, 2003.

            (b) SIGA shall use its best efforts to maintain Directors and
Officers insurance at least as protective as its current policy.

            (c) SIGA shall indemnify, in accordance with and to the full extent
permitted by law, Cooper, Schein and any Resigning Director (each an
"Indemnified Party") that is a party or is threatened to be made a party to any
pending or threatened action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of Indemnified Party's acting as a
director of SIGA, against any liability or expense actually and reasonably
incurred by such Indemnified Party in respect thereof; Provided, however, that,
SIGA shall not be obligated to indemnify any such Indemnified Party (i) with
respect to proceedings, claims or actions initiated or brought voluntarily by
such Indemnified Party and not by way of defense, (ii) for any amounts paid in
settlement of an action effected without the prior written consent of SIGA to
such settlement or (iii) with respect to proceedings, claims or actions based
upon or attributable to such Indemnified Party gaining in fact a personal profit
or advantage to which such Indemnified Party is not entitled, (iv) with respect
to proceedings, claims or actions resulting from such Indemnified Party's gross
negligence or willful misconduct or (v) with respect to proceedings, claims or
actions, the indemnification in respect of which by SIGA is not permitted by
applicable law ((i) through (v) are collectively referred to herein as the
"Indemnification Exclusions").

            (d) If any Indemnified Party receives notice with respect to any
matter that may give rise to a claim for indemnification under Subsection 12(c),
then such Indemnified Party shall

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<PAGE>

promptly thereafter (and in any event within ten days of receipt of notice of
such matter) notify SIGA, describing the nature of the claim and stating that
indemnification may be sought with respect to such matter. The Indemnified Party
shall cooperate with SIGA to familiarize SIGA with the nature of the claim,
including providing copies of all information and materials relating to the
claim. SIGA shall be entitled to assume the defense of any matter for which
indemnification is sought in accordance with Subsection 12(c); provided,
however, that SIGA shall pay the reasonable fees and expenses of separate
counsel retained by the Indemnified Party if SIGA's counsel determines, in its
sole discretion, that there is a conflict of interest. In the event that SIGA
does not assume the defense of the matter, then the Indemnified Party shall be
entitled to defend against the matter; provided that the assumption of the
defense of the matter by the Indemnified Party shall not prejudice the right of
SIGA to later assume the defense of the matter (and as long as such assumption
would not reasonably be expected to have a material adverse impact on the
conduct of the defense of the matter). In the event that SIGA incurs expenses of
any kind (including, without limitation, legal fees and disbursements) in
defending, or in reimbursing the defense of, any Indemnified Party from, or in
satisfaction or settlement of, any proceeding, claim or action, and it is ever
determined that any of the Indemnification Exclusions apply, then such
Indemnified Party shall immediately reimburse SIGA for all such expenses,
together with interest thereon at prevailing rates.

      13. Certain Conditions. The rights of Cooper and Schein under this
Agreement, including, without limitation, (i) the release of Cooper and Schein
by Drapkin contained in Section 10 hereof, (ii) SIGA's obligation to pay the
fees for counsel to Cooper and Schein contained in Section 9 hereof, (iii) the
adjustments to certain options held by Cooper and Schein, pursuant to Section 8
hereof, (iv) the right of Cooper and Schein to Transfer certain securities
during the Lock-Up Period, as provided in Subsection 6(a) hereof, and (v)
Drapkin's, Cerrone's, Constance's and Rose's respective obligations regarding
restrictions on Transfer of certain securities during the Lock-Up Period, as
provided in Subsection 6(b), are all subject to the following conditions:

            (a) Drapkin and his designees shall be elected to the Board;

            (b) Cooper, Schein and each Resigning Director shall resign from the
Board and from any and all offices held by such Resigning Director with SIGA, in
each case, at no cost to SIGA except to the extent expressly provided herein;
and,

            (c) Any consulting agreements or other arrangements between SIGA and
any entity controlled by Cooper or Schein, including, without limitation, Prism
Ventures LLC, that Drapkin requests to be terminated shall be terminated at no
cost to SIGA.

      14. Securityholdings of Dapkin, Cerrone, Constance and Rose. Each of
Drapkin, Cerrone, Constance nor Rose represents and warrants that, except as set
forth on Schedule 14, such Party does not beneficially own any Common Stock,
Convertibles or other securities of SIGA, excluding any such securities with
respect to which such Party may be deemed the beneficial owner solely as the
holder of a proxy with respect thereto.

      15. Schedule 14f-l. Cooper, Schein and SIGA shall cause a Schedule 14f-1
Information Statement regarding the transactions contemplated by this Agreement,
in form and substance reasonably satisfactory to Drapkin, to be filed with the
Securities and Exchange

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<PAGE>

Commission and transmitted to the stockholders of SIGA at least 10 days prior to
the Effective Date.

      16. Successors and Assigns. All authority herein conferred or agreed to be
conferred shall survive the death or incapacity of any Party hereto and any
obligations of any Party shall be binding upon the heirs, personal
representatives, successors, and assigns of such Party.

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            If this reflects your understanding of the Agreement, please sign
below and return a copy of this letter to the undersigned.

                                        /s/ Donald G. Drapkin
                                        ----------------------------------------
                                        Donald G. Drapkin

Accepted and Agreed to:

SIGA TECHNOLOGIES, INC.

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

/s/ Gabriel M. Cerrone
-----------------------------------
Gabriel M. Cerrone

/s/ Eric A. Rose, M.D.
-----------------------------------
Eric A. Rose, M.D.

/s/ Thomas E. Constance
-----------------------------------
Thomas E. Constance

/s/ Judson A. Cooper
-----------------------------------
Judson A. Cooper

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

                                       10

<PAGE>

            If this reflects your understanding of the Agreement, please sign
below and return a copy of this letter to the undersigned.

                                        ----------------------------------------
                                        Donald G. Drapkin

Accepted and Agreed to:

SIGA TECHNOLOGIES, INC.

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

-----------------------------------
Gabriel M. Cerrone

-----------------------------------
Thomas E. Constance

-----------------------------------
Eric A. Rose, M.D.

-----------------------------------
Judson A. Cooper

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

                                       9Exhibit 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.

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