CO-DEVELOPMENT AGREEMENT

THIS  AGREEMENT (the  "Agreement")  is entered into and effective this 19 day of
May 1998, the same date affixed hereto by the party last signing this Agreement,
by and between  Bioheal Ltd  ("Bioheal") of  International  House,  Church Road,
Hendon, London and Christopher Wood ("C B Wood") of The Cedars,  Hollybush Hill,
Stoke Poges, Bucks SL2 4QN

WITNESSETH

WHEREAS,  C B Wood has rights in patents and technical  information  relating to
the development and uses of a a gene marker and  immunomodulator  system for use
in gene therapy and related technologies [Technology(s)];

WHEREAS,   Bioheal  recognizes  that  its  anticipated  business  activity  will
encompass the practice of technology that requires a license under  intellectual
property owned by C B Wood; and

WHEREAS,  Bioheal wishes to acquire certain rights to practice the inventions of
such patents and technical information; and

NOW THEREFORE,  in  consideration  of the mutual  covenants herein contained and
intending to be legally bound thereby, the parties agree as follows:

1. DEFINITIONS

As usual herein the following terms shall have the meanings set forth below:

Co-Development Program means the joint development of the Technology by C B Wood
and Bioheal.

B. Field  means,  and is limited to, the practice of the Patent,  Invention  and
Technical  information  licensed  hereunder  for use in human and animal  health
applications.

C. Net Sale Price means the gross amount recognized by Bioheal or its affiliates
for the sale of a Product(s) through normal distribution channels (as determined
by generally accepted accounting  principles),  less any discounts or deductions
for value added taxes incurred and not recovered by Bioheal or the equivalent in
Great Britain or elsewhere in the Territory.

D.  Invention  means  patented  and  unpatented,  patentable  and  unpatentable,
proprietary technology  ("Technology") related to a cell-based vector system for
use in gene therapy and related  technologies,  developed by or on behalf of C B
Wood,  that is (i)  related  to human  and  animal  health  applications  of the
Technology or (ii) necessary for the practice of Technology for human and animal
health applications as disclosed and claimed in the Patent(s).


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2. LICENSE AND CO-DEVELOPMENT PROGRAM

The parties to this Agreement hereby agree to jointly  co-develop the Technology
according to the terms of this Agreement  which  supersedes all other written or
verbal agreements,  express or implied, between Bioheal and C B Wood relating to
co-development of the Technology.

C B Wood hereby grants to Bioheal, to the extent of the Field for the Territory,
an  exclusive  license to make,  have made,  use and sell  Product(s),  provided
Bioheal sells Product(s) under existing  trade-marks or under new  trade-mark(s)
to be agreed by both  parties and the terms of clause 6H shall apply to such new
trade-mark(s).

The  exclusive  license set forth herein shall remain  exclusive  for so long as
Bioheal  meets the payments and other  obligations  set forth with regard to the
development and  commercialization  of the Licensed  Technology or a Product. If
such  conditions  are not met, C B Wood,  in his sole  discretion,  may elect to
terminate  the  Co-Development  Agreement  or take  whatever  actions  it  deems
necessary.

     The licence  shall  continue  in force until  expiry of the last patent for
which the  product is  covered,  this term to include  new  patents  applied for
during the course of this Agreement.

3. TECHNICAL INFORMATION LICENSE

A. To the extent it is able to do so, C B Wood hereby grants to Bioheal,  to the
extent of the Field for the Territory, an exclusive license to use the Technical
Information  necessary  to practice the  Technology  such that Bioheal may make,
have made,  use and sell  Product(s),  including  disclosures  of the  Technical
Information  as needed  to obtain  patent  rights  or  authorization  to sell or
manufacture Products or services in the Field within any political  jurisdiction
requiring such disclosure.

B. The exclusive  license set forth herein shall remain exclusive for so long as
Bioheal  meets the payments and other  obligations  set forth with regard to the
development and  commercialization  of the Licensed  Technology or a Product. If
such  conditions  are not met,  C B Wood in his  sole  discretion  may  elect to
terminate  the  Co-Development  Agreement  or  take  whatever  action  it  deems
necessary

C. (1) C B Wood  shall  make  efforts to make  available  to  Bioheal  Technical
Information  in his possession  related to the Technology  that C B Wood has the
obligation to disclose under this Agreement. Bioheal shall not disclose to third
parties any Technical  Information  furnished by CB Wood during the term of this
Agreement,  or any time thereafter,  provided,  however,  that disclosure may be
made of any such  Technical  Information at any time: (i) with the prior written
consent of C B Wood, or (ii) to the extent necessary,  to Bioheal's sublicensees
and


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purchasers of Bioheal's  Product(s)  or services,  or (iii) after the same shall
have  entered  into the public  domain  through no fault of Bioheal or Bioheal's
subsidiaries.  Disclosure of Technical  Information is permitted without a prior
written  consent  of C B  Wood  to the  extent  required  by  statute,  rule  or
regulation of a governing  body during the course of Bioheal's  normal  business
practices,  or in the  application or  prosecution of an application  for patent
rights,  or in  connection  with  securing  financing  for  the  development  or
commercialization of the Technology or a Product.  Bioheal shall inform C B Wood
of any such  disclosure and use its best efforts to protect its  confidentiality
under such  disclosure.  Any combination of Technical  Information  shall not be
considered in the public domain merely because  individual  elements thereof are
in the public  domain.  To the extent  that any such  Technical  Information  is
disclosed to Bioheal's  sublicensees  and purchasers of Bioheal's  Product(s) or
services,  the  agreements  contained in this  Section  shall be made by Bioheal
under a confidentiality  agreement to apply to and be made binding upon all such
parties.

(2) The  fact  that  some or all of the  Technical  Information  becomes  public
knowledge  shall not affect the financial  obligations  for use of the Technical
Information licensed under this Agreement if such Technical Information was used
or usable in the discovery, development,  manufacture, or approval for sale of a
Product within the Field.

4. LICENSE FEE AND RESEARCH AND DEVELOPMENT FUNDING

Bioheal shall pay the costs of any further pre-clinical  development work deemed
necessary  prior to  commencing  clinical  trials,  and this shall  include  the
development  of the  Product  for  other  therapeutic  applications,  the use of
different  formulations and preparations of the Product.  The pre-clinical costs
not to exceed $1.5 million, unless agreed to buy both parties.

B. Bioheal shall pay the costs of clinical  trials of the Product.  The costs of
such development will not exceed $4 million (four million U.S. dollars).

C Bioheal shall pay the cost of prosecuting,  filing and maintaining patents and
defending  revocation  proceedings  on patents and patent  applications,  on the
Product within the Territory.


5. ACQUISITION

     Acquisition  of the  Licensed  Technology  is meant in its  broadest  sense
including assignment,  transfer, sublicense, merger, joint venture and so on and
so forth.

A. If all or part of the rights granted to Bioheal are acquired by a third party
all current or future payments derived by Bioheal from the transfer,  whether in
cash, shares,  property or any other form of payment,  including but not limited
to up-front  payments,  milestone payments and royalties will be divided equally
between



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C B Wood and  Bioheal,  after  repayment  to  Bioheal of all  development  costs
incurred by Bioheal.

ROYALTY PAYMENTS

A. Bioheal  shall have  exclusive  rights to market the Product in the Territory
under the following  terms:  For the Patent and Technical  Information  licenses
granted  herein,  Bioheal shall pay to C B Wood a royalty of 10% of the Net Sale
Price of all  Product(s)  sold to an  unaffiliated  third party,  likely to be a
distributor or wholesaler, but not limited to such, where Bioheal is responsible
for the marketing of the Product.

B. If the Product  incorporates  inventions,  patents, or technical  information
that is necessary for the successful  commercialization  of the Product and that
is obtained from sources other than C B Wood,  the Parties agree to negotiate in
good faith a new royalty  rate to reflect the  contribution  of such third party
inventions, patents, or technical information, but in no event shall the royalty
rate be reduced by more than 50%.

C.  If this  Agreement  is for  any  reason  terminated  before  all the  earned
royalties herein provided for have been paid, Bioheal shall immediately pay to C
B Wood any remaining unpaid balance of earned royalties even though the due date
provided in Article 8 has not been reached.

If Bioheal shall sell the rights to the Technology in combination with the sale,
acquisition,  merger or disposition of Bioheal Ltd.,  Bioheal,  C B Wood and the
third  party(ies)  shall  negotiate in good faith the specific  details for such
sale  of  rights,  subject  to the  approval  of C B  Wood  which  shall  not be
unreasonably withheld.

7. SUBLICENSING

A. Bioheal shall have the right to sublicense in the Field for the Territory.

B. Bioheal will keep C B Wood routinely  updated on progress of discussions  and
negotiations  with  potential  sub-licensees.  C B Wood  shall have the right to
review the form of sublicenses to be granted hereunder prior to the execution of
the same by Bioheal.  Bioheal agrees that sublicense agreements shall conform in
all material respects to the terms and conditions of this Agreement. If C B Wood
has not objected within thirty (30) days of receiving the form of such agreement
describing  the  material  terms,  Bioheal  may proceed to  negotiate  and grant
sublicenses without further review by C B Wood if the form of the sublicense has
not  materially  changed.  Bioheal  shall  provide  C B Wood with a copy of each
sublicense  within  thirty  (30) days of  execution,  and shall not grant to its
sublicensees any rights not conveyed by this Agreement.

C. If this Agreement is terminated for any reason,  except breach of contract by
Bioheal,  any  sublicense  shall  automatically  transfer  to C B  Wood,  unless
sublicensee is in breach or default of sublicense,  and remain in full force and
effect so long as



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the  sublicensees  performs the obligations of the sublicense,  and Bioheal will
execute such documents as may be requested by C B Wood to attest to the transfer
to C B Wood of all  sublicense  rights,  including  the right to receive  future
payments.

8. PAYMENTS AND REPORTS

Payments owed to C B Wood shall be payable within thirty (30) days of receipt by
Bioheal  except as stated  otherwise  elsewhere in this Agreement and except for
royalties and  profit-sharing  compensation  as a result of direct  marketing of
Product by Bioheal.

B. Royalties and  profit-sharing  compensation owed to C B Wood as a consequence
of direct marketing of Product by Bioheal shall be due for each calendar quarter
beginning  with the first  calendar  quarter in which  sales  occur and shall be
payable to C B Wood within  forty-five  (45)days  following  the last day of the
applicable calendar quarter. All payments from Bioheal to C B Wood shall be made
in Pounds Sterling  (pounds,) by bank credit transfer to C B Wood at the address
designated in writing by C B Wood from time-to-time.

C. In the event that  Bioheal is  prevented  from making any payment to C B Wood
under  this  Agreement  by virtue of  restrictions  on  currency  conversion  or
repatriation under the statutes,  laws, codes or governmental regulations of the
country from which the payment is to be made,  then such payments may be paid by
depositing them in the currency in which accrued to C B Wood's account in a bank
acceptable to C B Wood in the country whose  currency is involved.  If the local
currency  cannot be converted or remitted to C B Wood within  twelve (12) months
from the initial  deposit,  Bioheal  shall pay C B Wood the  equivalent  of such
amount  at the  initially  computed  conversion  rate  (including  any  interest
earnings)  in  Pounds  Sterling  (pounds),  and  the  local  currency  shall  be
transferred to an account in a bank acceptable to C B Wood in that country.

D.  Payments to C B Wood  hereunder  shall be deemed paid as of the day on which
they are received at the address designated.  Any part of a payment which is not
paid on or before the date when due shall accrue interest thereon from such date
until the date of its payment in full at two (2) percentage  points over the per
annum  interest  rate  published as the "Prime Rate" in The Wall Street  Journal
(Eastern  Edition),  but in no event  shall such rate  exceed the  maximum  rate
permitted by applicable law.

E. Bioheal shall deliver to C B Wood within  forty-five  (45) days after the end
of each calendar quarter a report,  certified by the chief financial officer (or
equivalent) of Bioheal,  setting forth in reasonable  detail the  calculation of
payments made during the quarter and for each calendar quarter,  including gross
sales,  value added  taxes,  number of units sold,  unit price and the like on a
country-by-country  basis by Bioheal,  sublicensees,  joint  ventures  and their
affiliates.




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F. The Bioheal report to C B Wood shall be supported by and based upon a similar
financial  report  or, if  permitted,   a copy from each  sublicensee  and other
commercialization entity(ies).

G.  The  parties  will  promptly  share  all  information  generated  under  the
Co-Development Program pursuant to the confidentiality  provisions of Article 21
and with particular respect to the pre-clinical studies and clinical trials.

9. RECORDS

Bioheal  shall  keep  accurate  records  of all  operations  affecting  payments
hereunder,  and shall permit C B Wood or a duly authorized  agent to inspect all
such records and to make copies of or extracts from such records  during regular
business hours throughout the term of this Agreement and for a reasonable period
of not less than three (3) years thereafter. The fees charged for an audit shall
be  paid  by C B  Wood;  provided,  however,  that  if  an  audit  discloses  an
underpayment  by Bioheal of more than five percent (5%) for such audited period,
Bioheal  shall  pay  the  reasonable  fees  and  expenses  charged  by the  firm
conducting the audit.

10. OWNERSHIP OF THE TECHNOLOGY, TECHNICAL INFORMATION AND IMPROVEMENTS

C B Wood and  Bioheal  shall  each  retain  full  ownership  of  their  existing
intellectual  property rights including rights in the process of being protected
and rights conceived but not yet reduced to practice as of the effective date of
this Agreement.

All  Improvements  developed  under  projects  funded,  in whole or in part,  by
Bioheal shall be owned by C B Wood and shall be included in the licenses granted
in this Agreement.  In the event that a conflicting obligation prevents C B Wood
from including  such an  Improvement,  C B Wood shall use reasonable  efforts to
assist Bioheal to obtain rights from the appropriate third party or parties.

All  Improvements  made during the first three (3) years from the effective date
of the Agreement and not developed under projects  funded,  in whole or in part,
by Bioheal,  shall be owned by C B Wood and if deemed  reasonably  necessary for
Bioheal's  practice  of  the  Technology,  without  which  such  practice  would
constitute an infringement of Bioheal's rights,  shall be included to the extent
necessary,  as  decided  solely by C B Wood,  in the  licenses  granted  in this
Agreement,  unless inclusion is not possible due to C B Wood's  obligations to a
third party. In the event that a conflicting  obligation  prevents C B Wood from
including such an Improvement, he shall use reasonable efforts to assist Bioheal
to obtain rights from the appropriate third party or parties.

Bioheal  shall  have  the  first  right of  negotiation  to a  license  or other
commercial  arrangement to any C B Wood  intellectual  property  developed under
projects funded,  in whole or in part, by Bioheal,  which does not constitute an
Improvement.



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11.PATENT PROSECUTION

A. Bioheal shall file,  prosecute and maintain all of the Patent(s) that are the
property of C B Wood as of the date of this Agreement.

B. Bioheal shall bear all patenting expenses related to the filing,  prosecution
or maintenance of all Patent and Improvement  licensed  hereunder in whole or in
part.

C. C B Wood shall  furnish  Bioheal with copies of all allowed  claims when such
claims  are  allowed  in the  Field  and in the  Territory  for all  Patent  and
Improvement licensed hereunder.

D. C B Wood shall provide  Bioheal with draft copies of all  correspondence  and
filings and related prosecution documents on the Patent and Improvement licensed
hereunder and Bioheal shall promptly provide comments,  if any, to C B Wood. C B
Wood shall confer with Bioheal,  and make reasonable  efforts to adopt Bioheal's
suggestions  regarding  prosecution  tactics and strategy.  Notwithstanding  the
foregoing,  Bioheal shall have the right to take such actions as are  reasonably
necessary,  in its good faith judgement, to preserve all rights under the Patent
and Improvement  throughout the Territory.  As soon as practical,  subsequent to
the filing of any  prosecution  document,  Bioheal shall provide C B Wood with a
copy of such  document.  In  addition,  Bioheal  shall  copy C B Wood  with  any
official  office action and responses  and  submissions.  Bioheal shall bear the
expenses of the activities noted in this Article 11.E.

 .E.  Bioheal will inform C B Wood at least sixty (60) days prior to any decision
having  as a  result  the  failure  to  file,   or  the  abandonment  of  Patent
applications or failure to maintain a Patent,  Patents and Improvements licensed
hereunder  so  that  Bioheal  may  take  over  and  maintain   such  Patent  and
Improvements in force.

 .F.  Provided that Bioheal has been informed by Bioheal at least sixty (60) days
in advance,  in the event that Bioheal decides not to pay patenting  expenses in
any jurisdiction, C B Wood may elect to maintain such Patent and Improvements in
force and terminate  Bioheal's licenses granted as for the jurisdiction in which
Bioheal abandoned or failed to file or maintain such Patent rights.

12. INFRINGEMENT BY THIRD PARTY

Either party shall  notify the other party of any  suspected  infringement  by a
third party of the Patent in the Field and the  Territory,  and each party shall
inform the other of any evidence of such infringement(s).

Bioheal shall have the first right to institute suit for  infringement(s) in the
Field and Territory so long as this Agreement  remains  exclusive.  At Bioheal's
expense,  C B Wood will  reasonably  assist Bioheal in such  prosecutions  if so
requested  by Bioheal,  and will lend his name to such  actions if  requested by
Bioheal or required by law.  Notwithstanding  the  foregoing C B Wood shall have
the right to


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participate  and be represented in any such  prosecutions  by his own counsel at
his own expense.

If C B Wood notifies Bioheal of his desire to institute suit for infringement(s)
and Bioheal  fails to exercise its first right to do so within  ninety (90) days
of such notice,  then C B Wood may, at his own  expense,  bring suit or take any
other appropriate action. At Bioheal's expense, Bioheal will reasonably assist C
B Wood in such  prosecutions if so requested by C B Wood, and will lend its name
to such actions if requested by C B Wood or required by law. Notwithstanding the
foregoing C B Wood shall have the right to participate and be represented in any
such prosecutions by his own counsel at his own expense.

No settlement of any suspected  infringement(s),  whether or not a suit has been
instituted,  may be entered into without the express written consent of C B Wood
and Bioheal.

     Any amounts  recovered  pursuant to an  infringement  suit,  settlement  or
otherwise  shall be retained by and be the  property of the party  bringing  the
action. In the event Bioheal receives any monies or other  consideration  from a
third  party  as a  result  of  Bioheal's  exercise  of its  rights  under  this
Agreement, Bioheal shall first be reimbursed for expenses incurred and paid for,
C B Wood shall then receive a portion of the  remainder in  accordance  with the
applicable  provision(s)  of Article 6 as  applied  to all such  monies or other
considerations  whether  such  monies or other  considerations  are  denoted  as
"royalties," "damages," "releases" from prior acts, or any other designation.

     If  Bioheal  fails  to  exercise  its  first  right to  institute  suit for
infringement(s)  and C B Wood elects not to institute  suit, then C B Wood shall
provide  Bioheal  with at least  sixty  (60)  days  notice of its  intention  to
terminate  Bioheal's  licenses  granted in those  jurisdictions  affected by the
infringement or to take any other action it sees fit in its best judgement.

13. REVOCATION PROCEEDINGS

In the event either party becomes aware of the  institution  by a third party of
any proceedings for the revocation of any Patent, patents or Improvements in any
country in the Territory licensed hereunder to Bioheal,  such party shall notify
the other party promptly.  Bioheal shall defend any such  proceedings at its own
expense, in its own name.

B. C B Wood shall have the right to participate in such  revocation  proceedings
at Bioheal's expense, and will lend its name to such proceedings if requested by
C B Wood or required by law.  Sublicensees  of Bioheal shall also have the right
to participate in such revocation proceedings.

C. Settlement of any revocation  proceedings shall be subject to the approval of
C B Wood; such approval shall not be unreasonably withheld.


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14.    INFRINGEMENT OF THIRD PARTY RIGHTS

     C B Wood will  reasonably  assist  Bioheal  to defend or settle  such third
party claim if so requested and at the expense of Bioheal.

B C B Wood shall have the right to  participate  and be  represented in any such
claim by a third party by its own counsel.

C. No  settlement  of any third  party  claim may be entered  into  without  the
express written consent of C B Wood.

D. In the event,  by way of  counterclaim  or  otherwise,  either  party or both
parties  recover any damages or other sums in any action,  suit,  or  proceeding
involving a claim by a third party,  or in  settlement  thereof,  such  recovery
shall be applied and shared as mutually agreed.

15. REPRESENTATIONS

A. C B Wood represents that it has the right to grant all of the rights herein.

      C B Wood is unaware of any claims  asserted  against C B Wood by any third
parties  with  respect to Patent  infringement  or any other  type of  liability
relevant  to  licensing  of the  Inventions,  which have not been  disclosed  to
Bioheal as of the Effective Date of this Agreement.

     C B Wood  represents  that he has full power,  authority and legal right to
enter  into this  contemplated  Agreement  and to  consummate  the  transactions
contemplated therein.

D. Bioheal represents that it has full power, authority and legal right to enter
into this contemplated Agreement and to consummate the transactions contemplated
therein.

E.  Bioheal  shall  accept  liability  to the  extent  of the  Field and for the
Territory for or on account of any injury, loss or damage, of any kind or nature
sustained by, or any damage assessed or asserted against, or any other liability
incurred by or imposed upon either party arising out of or in connection with or
resulting from (i) the production, use or sale of any Product(s) or (ii) the use
of any  technical  information,  techniques,  or  practices  disclosed by either
party, or (iii) any advertising or other promotional  activities with respect to
any of the  foregoing.  If a  sublicense  is granted by Bioheal to a third party
that third party shall accept all  liability  for any injury,  loss or damage as
defined above.

16. INDEMNIFICATION

     Bioheal hereby agrees to indemnify,  hold harmless and defend  liability to
the extent of the Field and for the  Territory C B Wood and his  representatives
and


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agents  from and against any and all  demands,  claims,  suits or actions of any
character  presented  or brought on account of any  injuries,  losses or damages
sustained by any person or property in consequence of (i) any act or omission of
Bioheal or its  agents,  employees  or  subcontractors,  or (ii) any  liability,
except for any  injuries,  losses or damages that  specifically  result from the
negligence or willful  misconduct  of Bioheal.  The  foregoing  indemnity  shall
include  but  not  be  limited  to  court  costs,   attorneys'  fees,  costs  of
investigation and costs of defense associated with such demands,  claims,  suits
or actions.  The foregoing indemnity shall apply only to the extent of the Field
and in the Territory.

17. INSURANCE

Bioheal shall maintain, during the term of this Agreement, reasonable amounts of
comprehensive   general  liability   insurance,   including  products  liability
insurance, with reputable and financially secure insurance carriers to cover the
activities of C B Wood and his  affiliates.  Such insurance  shall be written to
cover  claims  incurred,  discovered,  manifested,  or made during or beyond the
expiration or termination of this Agreement  during the period that any product,
process,  or service,  relating to, or developed  pursuant to, this Agreement is
being commercially distributed or sold by Bioheal or by a sublicensee, affiliate
or  agent  of  Bioheal.  Bioheal  shall  furnish  to C B Wood a  certificate  of
insurance  evidencing  such coverage and  periodically,  upon  request,  provide
evidence that the coverage is still in effect.

18. TERM AND TERMINATION

A. This  Agreement  shall  commence on the  Effective  Date and,  unless  sooner
terminated under this Article 18, shall expire upon the later of: (i) expiration
of the last to expire of all Patent(s),  Improvement(s),  and Patent(s) licensed
under  this  Agreement  including  any  extensions  thereof  and any  periods of
exclusivity granted by regulatory agencies or other governmental  bodies; (ii) C
B Wood is no longer due any payments from Sublicensee(s); or (iii) Bioheal is no
longer directly marketing a Product.

     The payment  obligations under the licenses granted to Bioheal for Licensed
Patents and Technical  Information shall continue throughout the term as defined
in this  Agreement  but would be subject to good faith  renegotiations  upon the
expiration  of the  last  to  expire  of  the  Licensed  Patents,  or  upon  the
abandonment of the last to be abandoned of any patent applications if no patents
have been  issued,  whichever  is the later,  unless  this  Agreement  is sooner
terminated.  Such  good  faith  renegotiations  shall  take  into  account  on a
country-by-country  or  regional  basis  but  not be  limited  to:  (i)  Product
competition; (ii) utilization, incorporation and value of Technical Information;
(iii) value of Technical  Information if no longer  confidential  or proprietary
through no fault of Bioheal, its Sublicensee(s),  contractors, financiers or any
other Bioheal  agent(s) or  purchasers  of Product or services  having access to
Technical  Information;  (iv) the applicable contract or patent law or (v) prior
payment commitments.


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C.  Bioheal  may  terminate  this  Agreement  at any time upon  ninety (90) days
written  notice to C B Wood and upon payment of all amounts due C B Wood through
the effective date of the termination.

     Upon  termination of this  Agreement,  neither party shall be released from
any  obligation  that matured prior to the effective  date of such  termination.
Bioheal and any  sublicensee  may,  however,  after the  effective  date of such
termination, sell all Products in inventory provided that Bioheal shall pay to C
B Wood the royalties and profit-sharing  thereon as required by Article 6 hereof
and submit the reports required by Article 8 hereof.

      Except as  provided in above,  if either  party shall be in default of any
obligation  hereunder,  the other party may terminate  this  Agreement by giving
Notice of  Termination  by Certified or  Registered  Mail to the party at fault,
specifying  the  basis for  termination.  If within  sixty  (60) days  after the
receipt of such Notice of  Termination,  the party in default  shall  remedy the
condition  forming the basis for  termination  such Notice of Termination  shall
cease to be operative, and this Agreement shall continue in full force.

     C B Wood shall have the right to terminate  this Agreement if Bioheal shall
cease to carry out its business as related to the Product(s), become bankrupt or
insolvent,  apply for or consent to the  appointment  of a trustee,  receiver or
liquidator of its assets or seek relief under any law for the aid of debtors.

     Bioheal shall inform C B Wood of its intention to file a voluntary petition
in  bankruptcy  or of  another's  intention to file an  involuntary  petition in
bankruptcy  to be  received  at least  thirty  (30) days prior to filing  such a
petition.

     Notwithstanding  anything  else  in this  Agreement  to the  contrary,  the
parties  agree that  Bioheal's  obligation to pay C B Wood any payments or other
consideration  accrued  but  unpaid  prior  to  termination  shall  survive  the
termination of this Agreement.

19. CONFIDENTIALITY; PUBLICATION; PUBLICITY

     In fulfilling their obligations  under this Agreement,  it may be desirable
or  necessary  for the  parties  to  disclose  to one  another  certain of their
Confidential  Information.   In  the  event  of  receipt  of  such  Confidential
Information,  the  receiving  party  agrees  to  preserve  such  information  as
confidential  and not to  disclose  it to third  parties  or to use it except in
connection  with this  Agreement  during  the term of this  Agreement  and for a
period of five (5) years following its  termination.  The foregoing  obligations
shall not apply to any information that:

     1. is now in the public domain or becomes generally available to the public
through no fault of the receiving party;

     2. is already known to, or in the possession of, the receiving party as can
be demonstrated by documentary evidence;


<PAGE>



     3. is disclosed to the  receiving  party on a  non-confidential  basis by a
third party having the right to make such disclosure; or

     4. is independently developed by the receiving party as can be demonstrated
by documentary evidence.

     In addition,  to the extent reasonably  necessary to fulfil its obligations
or  exercise  its  rights  under  this   Agreement  (i)  a  party  may  disclose
Confidential Information to its Affiliates, Sub-licensees,  consultants, outside
contractors,   research   investigators   and  clinical   investigators,   on  a
need-to-know  basis on condition that such persons or entities agree to be bound
by the  provisions  of  this  Agreement,  (ii) a  party  or  its  Affiliates  or
Sub-licensees  may disclose  Confidential  Information to  governmental or other
regulatory  authorities  to  the  extent  that  such  disclosure  is  reasonably
necessary  to  obtain  patents  or  regulatory   authorizations,   provided  the
disclosing party shall request confidential treatment thereof, and (iii) a party
may disclose Confidential  Information as required by applicable law, regulation
or  judicial  process,  provided  that such party shall give the other party (x)
prior written  notice  thereof,  (y) adequate  opportunity to object to any such
disclosure or to request confidential  treatment thereof, and (z) shall take all
steps  reasonably  possible to minimize the disclosure to that level mandated by
law.

B. (i) If either  party  desires  to  publish  or  present  the  results  of the
Co-Development  Program,  the  publishing/presenting  party  shall  provide  the
non-publishing/non-presenting  party a copy of the  manuscript  of any  proposed
publication or presentation. The non-publishing/non-presenting  party shall then
have thirty (30) days to review and comment on the  manuscript or  presentation,
and the publishing/presenting  party agrees to delete any information identified
by the non-publishing/non-presenting  party as its Trade Secrets or Confidential
Information.

     (ii) In the event the non-publishing/non-presenting party determines that a
Patent application covering information contained in the proposed publication or
presentation   should  be  filed,   the  party   proposing  the  publication  or
presentation  shall delay such  publication or presentation for up to sixty (60)
days after the  thirty  (30) days  outlined  in clause B (i) above to allow such
filing to be made.

     Each party  shall  provide the other  party with the prior  opportunity  to
review and approve any press releases or similar public announcements concerning
this Agreement or clinical,  regulatory and commercial  developments  related to
Products as soon as  practicable,  but in no event later than 24 hours before an
announcement  is made.  Bioheal  shall not use the name of C B Wood or otherwise
refer to any organization  related to C B Wood, except with the written approval
of C B Wood, such approval not to be unreasonably withheld.

20.  DISPUTE RESOLUTION



<PAGE>


A. The parties  shall  attempt to resolve  through  good faith  discussions  any
dispute which arises under this  Agreement.  Any dispute may, at the election of
either party, be referred to the chief executive officers, or the equivalent, of
each party.  If they are unable to resolve the dispute,  within thirty (30) days
after  delivery of written  notice of the  dispute  from one party to the other,
either  party may seek to resolve it by referring  the matter to an  appropriate
arbitration  service  with  experience  in the field  relevant  to the  dispute.
ASSIGNABILITY

     C B Wood or Bioheal  shall not assign any rights under this  Agreement  not
specifically  transferable  by its terms without  prior  written  consent of the
other party

22. REFORM

     The parties agree that if any part,  form,  or provision of this  Agreement
shall be found  illegal  or in  conflict  with any valid  controlling  law,  the
validity of the remaining provisions shall not be affected thereby.

     In the event the  legality of any  provision  of this  Agreement is brought
into question because of a decision by a court of competent  jurisdiction of any
country in which this Agreement applies, Bioheal, by written notice to C B Wood,
may revise the  provision  in question or may delete it entirely so as to comply
with the decision of the said court.

23. WAIVER AND ALTERATION

     The failure of either party to insist,  in any one or more instances,  upon
the  performance of any of the terms,  covenants or conditions of this Agreement
and to  exercise  any right  hereunder,  shall not be  construed  as a waiver or
relinquishment of the future performance of any such term, covenant or condition
or the future  exercise of such right,  but the  obligations  of the other party
with respect to such future performance shall continue in full force and effect.

A provision of this  Agreement  may be altered only by a writing  signed by both
parties.

24.   MARKING

A.  Bioheal  shall  place  in a  conspicuous  location  on  any  product  or its
packaging,  which is made or sold under any Patent coming within this Agreement,
a patent notice in accordance  with the laws  concerning the marking of patented
articles.

B. Bioheal  shall  include a marking  provision  similar to Paragraph A above in
every sublicense granted pursuant to Article 7 above.

25.  IMPLEMENTATION









<PAGE>




Each party shall execute any instruments  reasonably believed by the other party
to be necessary to implement the provisions of this Agreement.

26.   GOVERNING LAW

This  Agreement  shall be deemed to have been entered into and shall be governed
by, construed and enforced in accordance with laws of England and in the English
language,  and any  action  brought  to  enforce  any  provision  or  obligation
hereunder  shall be brought in a court of competent  jurisdiction  in the United
Kingdom.

27. HEADINGS

The headings of the articles, sections and paragraphs used in this Agreement are
included  for  convenience  only  and  are  not  to be  used  in  construing  or
interpreting this Agreement.

28. PARTIES INDEPENDENT

In making and performing  this  Agreement,  the parties act and shall act at all
times as independent  entities and nothing  contained in this Agreement shall be
construed or implied to create an agency,  partnership  or employer and employee
relationship  between  Bioheal  and C B Wood.  Except as  specifically  provided
herein,  at no time shall either party make  commitments or incur any charges or
expenses for or in the name of the other party.

29. COUNTERPARTS

This Agreement  shall become binding when any one or more  counterparts  hereof,
individually or taken together, shall bear the signatures of each of the parties
hereto.  This Agreement may be executed in any number of  counterparts,  each of
which shall be an  original as against  either  party  whose  signature  appears
thereon,  but all of  which  together  shall  constitute  but  one and the  same
instrument.

30. FORCE MAJEURE

The  parties  shall  not  be  responsible  for  failure  to  perform  any of the
obligations  imposed by this  Agreement  (except an  obligation  to pay  money),
provided  the failure is not due to  negligence  and  provided  such  failure is
caused by fire, storms,  floods,  strikes,  lockouts,  accidents,  war, riots or
civil commotions, inability to obtain railroad cars or raw materials, embargoes,
any State or Federal regulation, law, or restriction,  seizure or acquisition of
the  Technology or the Product(s) by the Government of the United Kingdom or the
United States of America or of any state,  or of any agency thereof or by reason
of any compliance  with a demand or request for such Product for any purpose for
national  defense,  or any other  cause or  contingency  beyond  the  reasonable
control of said party (whether or not of the


<PAGE>



same kind or nature as the causes or contingencies  above  enumerated) shall not
subject the party so failing to any liability to the other.

31. EXECUTION

     IN WITNESS WHEREOF the parties have caused this Agreement to be executed by
their duly  authorized  officers on the  respective  dates and at the respective
places hereinafter set forth.



BIOHEAL:                             C B WOOD:

By:  /s/ [ILLEGIBLE]                 By:  /s/ [ILLEGIBLE]
     --------------------------           ----------------------------

Position:   Director                 Position: Director

Date:    9/05/98                     Date:   9/5/98