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                                                                   EXHIBIT 10.98

                                            DEVELOPMENT, LICENCE AND
                                            COLLABORATION AGREEMENT

                                            BETWEEN

                                   (1)      ROSLIN INSTITUTE (EDINBURGH), a
                                            company incorporated in Scotland
                                            under the Companies Acts with
                                            registered number 157100 and having
                                            its registered office at Roslin
                                            BioCentre, Roslin, Midlothian EH25
                                            9PS ("Institute");

                                   (2)      VIRAGENICS, INC., a company
                                            incorporated under the laws of the
                                            State of Delaware and having its
                                            principal place of business at Suite
                                            100, 865 South West 78th Avenue,
                                            Plantation, Florida 33324, United
                                            States of America ("ViraGenics");

                                            and

                                   (3)      VIRAGEN INC., a company incorporated
                                            under the laws of the State of
                                            Delaware and having its principal
                                            place of business at Suite 100,865
                                            South West 78th Avenue, Plantation,
                                            Florida 33324, United States of
                                            America ("Viragen")

WHEREAS

(A)      The Institute and Viragen entered into a development, licence and
         collaboration agreement dated 15th November 2000 to collaborate in a
         research and development project in the field of therapeutic and
         diagnostic protein production in avian species;
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(B)      By an agreement between the Institute, Viragen and ViraGenics dated
         18th March 2002 ("the Transfer Agreement"), ViraGenics took over the
         rights, obligations and liabilities of Viragen under the Old DLCA
         (subject to Viragen guaranteeing ViraGenics performance);

(C)      ViraGenics wishes to fund further development of the research carried
         out under the Old DLCA, and the Institute has agreed to undertake such
         further development work in order to further its objectives in a manner
         consistent with its status as a research and educational institute and
         its recognition as a Scottish charity (number SC023592); and

(D)      It has therefore been agreed that, as from the Effective Date, the Old
         DLCA and the Transfer Agreement will be terminated and a new
         development, licence and collaboration agreement be entered into on the
         terms and conditions set out herein.

NOW IT IS HEREBY Agreed as follows:-

1.                DEFINITIONS AND INTERPRETATION

1.1               In this Agreement, including the Recitals, unless the context
                  otherwise requires, the following defined terms shall have the
                  meanings set out opposite them: -


         AGREEMENT                          means this development, licence and
                                            collaboration agreement together
                                            with the Schedule hereto as the same
                                            may be amended, altered, varied or
                                            otherwise modified in accordance
                                            with its terms;

         ASSOCIATED                         COMPANY means a subsidiary or
                                            holding company of ViraGenics, or
                                            any subsidiary of any such holding
                                            company from time to time (the terms
                                            "holding company" and "subsidiary"
                                            having the meanings set out in
                                            sections 736 and 736A of the
                                            Companies Act 1985);

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         EEA                                shall mean the European Economic
                                            Area as constituted from time to
                                            time;

         EFFECTIVE DATE                     means 1st December 2003
                                            notwithstanding the date or dates of
                                            signing of this Agreement;

         FIELD                              means therapeutic and diagnostic
                                            protein production in avian species;

         FINAL REPORT                       means the final written report
                                            summarising the Results generated
                                            during the Project Period provided
                                            by the Institute to ViraGenics;

         FIRST SALE DATE                    shall mean the date on which
                                            ViraGenics, an Associated Company,
                                            or any sub-licensees first puts a
                                            Product or Service on the market in
                                            the EEA;

         FOREGROUND INTELLECTUAL            means all and any Intellectual
         PROPERTY                           Property which is conceived, first
                                            reduced to practice or writing or
                                            developed (1) in the course of the
                                            Project (including for the avoidance
                                            of doubt the Results and all
                                            Intellectual Property in the
                                            Results) with the exclusion of the
                                            Previous Results; and (2) under the
                                            Spur Agreement;

         INSTITUTE'S BACKGROUND             means all and any Intellectual
         INTELLECTUAL PROPERTY              Property (other than Foreground
                                            Intellectual Property) in the Field
                                            belonging to or used by the
                                            Institute, other than the Previous
                                            Results, and which is necessary in

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                                            order for ViraGenics or any
                                            Associated Company or any licensee
                                            of the same to sell Products and/or
                                            Services;

         INSTITUTE'S PATENT                 means the Patent, short particulars
                                            of which are set out in Part 1 of
                                            the Schedule;

         INTELLECTUAL PROPERTY              means all Patents, Know-how or other
                                            know-how, processes, copyright,
                                            design rights, including the right
                                            to apply for any of the same, and
                                            any other intellectual property
                                            rights of a similar nature arising
                                            in any part of the Territory;

         KNOW-HOW                           means technical or other information
                                            which is not in the public domain
                                            including ideas, concepts,
                                            inventions, discoveries, data,
                                            formulae, specifications, drawings,
                                            manuals, information, chemical
                                            compounds and derivatives, analogues
                                            and precursors, methods and
                                            processes of synthesis, procedures
                                            for experiments and tests and
                                            results of experimenting and
                                            testing, results of research and
                                            development including laboratory
                                            records and data analyses derived or
                                            otherwise generated from the Project
                                            by a Party which is secret,
                                            substantial and identified;

         LABORATORY BOOKS                   means the laboratory books
                                            containing any and all Results
                                            generated during the Project Period
                                            which shall be maintained by the

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                                            Institute in accordance with
                                            standards of current Good Laboratory
                                            Practice applicable from time to
                                            time;

         NET INVOICE PRICE                  means the total price received by
                                            ViraGenics or any Associated Company
                                            on sales of Products and/or Services
                                            invoiced by ViraGenics or any
                                            Associated Company less all
                                            discounts, allowances, and returns
                                            actually granted transportation
                                            costs, packaging costs, insurance
                                            costs, and taxes or duties based on
                                            directly sale (to the extent to
                                            which any of the foregoing are
                                            allowed for or included in the
                                            invoice) PROVIDED THAT in a case
                                            where the Products and/or Services
                                            are:

                                            (a)   rented, leased, let out or
                                                  hired or otherwise disposed of
                                                  to a customer by ViraGenics or
                                                  any Associated Company; or

                                            (b)   used by ViraGenics or any
                                                  Associated Company for its own
                                                  commercial purposes; or

                                            (c)   incorporated in any larger
                                                  equipment or apparatus or
                                                  other service and supplied by
                                                  ViraGenics or any Associated
                                                  Company at a price which is
                                                  included in the price for the
                                                  larger equipment or apparatus

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                                                  or other service the Net
                                                  Invoice Price of each such
                                                  Product and/or Service shall
                                                  be deemed to be equivalent (i)
                                                  in the case of (a) and (b)
                                                  above, to the Net Invoice
                                                  Price which would have been
                                                  applicable under this
                                                  Agreement had such Product
                                                  and/or Service been
                                                  transferred to an independent
                                                  arm's length customer and (ii)
                                                  in the case of (c) above, to
                                                  the relevant proportion of the
                                                  Net Invoice Price relating to
                                                  such larger equipment or
                                                  apparatus or other service;

         OLD DLCA                           means the research and development
                                            agreement between the Institute and
                                            ViraGenics, dated 15 November 2000
                                            which agreement shall terminate on
                                            the execution of this Agreement by
                                            the Parties;

         PATENT                             means any patent or patent
                                            application, author certificate,
                                            inventor certificate and all foreign
                                            counterparts of the same and
                                            including all divisions, renewals,
                                            continuations,
                                            continuations-in-part, extensions,
                                            reissues, substitutions,
                                            confirmations, registrations,
                                            revalidations and additions of or to
                                            any of the same, as well as any
                                            supplemental protection certificate
                                            or any like form of protection and
                                            including the right to apply for any
                                            of the same arising anywhere in the
                                            Territory;

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         PARTY                              means each of the Institute,
                                            ViraGenics and Viragen and the term
                                            "PARTIES" shall be construed
                                            accordingly;

         PMC                                means the project management
                                            committee consisting of
                                            representatives of the Institute and
                                            representatives of ViraGenics or an
                                            Associated Company established in
                                            accordance with clause 4.1;

         PMC CHAIRMAN                       the chairman of the PMC appointed in
                                            accordance with clause 4.3;

         PMC REPRESENTATIVES                has the meaning set out in clause
                                            4.2;

         PREVIOUS RESULTS                   means any and all Patents and/or
                                            Know-how and any and all findings,
                                            reports, results, data, formulae,
                                            processes and technical information
                                            generated or otherwise produced by
                                            the Institute during the term of the
                                            Old DLCA and which are owned by
                                            ViraGenics absolutely pursuant to
                                            clause 14.1;

         PRODUCTS AND/OR SERVICES           means any substance, chemical,
                                            elements, material, composition,
                                            invention, apparatus, method,
                                            service or product within the Field,
                                            the manufacture, use, sale or
                                            provision of which is obtained or
                                            derived directly from or utilising
                                            the ViraGenics' Background
                                            Intellectual Property and/or the
                                            Institute's Background Intellectual
                                            Property and/or ViraGenics' Existing

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                                            Intellectual Property and/or the
                                            Foreground Intellectual Property
                                            and/or the Institute's Patent;

         PROJECT                            means the research project to be
                                            carried out by the Institute in
                                            accordance with the Project Workplan
                                            during the Project Period;

         PROJECT COST                       means the sum of seven hundred and
                                            nineteen thousand, three hundred and
                                            thirty eight pounds sterling
                                            ((pound)719,338) as set out in Part
                                            3 of the Schedule or such greater
                                            amount as may be agreed in
                                            accordance with clause 4.4 or as the
                                            Parties may otherwise agree in
                                            writing;

         PROJECT DIRECTOR                   means Dr. Helen Sang or such other
                                            person as the Parties may agree in
                                            writing;

         PROJECT PERIOD                     means the period of two (2) years
                                            commencing on the Effective Date
                                            (provided the Project is not
                                            terminated earlier in accordance
                                            with either of clauses 5.2 or 7.3)
                                            or such longer period as may be
                                            agreed between the Parties in
                                            accordance with clause 4.4;

         PROJECT REPORTS                    means the quarterly reports provided
                                            to ViraGenics by the Institute
                                            summarising the Results generated
                                            during the preceding three month

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                                            period and in a format and to the
                                            degree of detail to be agreed by the
                                            PMC;

         PROJECT WORKPLAN                   means the workplan for the Project
                                            which forms Part 4 of the Schedule,
                                            as the same may be amended from time
                                            to time in accordance with clause
                                            4.4;

         RESEARCHERS                        means those employees of the
                                            Biotechnology and Biological
                                            Sciences Research Council ("BBSRC")
                                            based at the Institute, including
                                            the Project Director, who have been
                                            allocated to work on the Project;

         RESULTS                            mean the data and results arising
                                            from the research and development
                                            work generated by the Institute
                                            whilst undertaking the Project which
                                            data and results shall be kept in
                                            Laboratory Books and which shall
                                            include all findings, reports, data,
                                            formulae, processes and technical
                                            information but which shall not
                                            include the Previous Results;

         SCHEDULE                           means the Schedule in 5 parts which
                                            is annexed to and forms part of this
                                            Agreement;

         SPUR AGREEMENT                     means the agreement between Viragen
                                            and the Institute dated 14th
                                            November 2002 relating to the
                                            Institute's obligations to Viragen
                                            under the Spur Programme;

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         SPUR PROGRAMME                     means the Scottish Executive
                                            initiative under which ViraGenics
                                            has been provided with grant funding
                                            to undertake a research and
                                            technical development project;

         SUPPLY                             means to sell, provide, lend, let
                                            out on hire, lease or any other
                                            disposal or provision and Supplied
                                            shall be construed accordingly;

         TERRITORY                          means the world;

         VIRAGENICS' BACKGROUND
         INTELLECTUAL PROPERTY              means:

                                            (i)    ViraGenics' Existing
                                                   Intellectual Property;

                                            (ii)   all Intellectual Property
                                                   licensed to ViraGenics or
                                                   Viragen; and

                                            (iii)  any other Intellectual
                                                   Property (other than
                                                   Foreground Intellectual
                                                   Property) belonging to or
                                                   used by ViraGenics or
                                                   Viragen.;

                                            and which it is free to licence to
                                            the Institute;

         VIRAGENICS' EXISTING               means all Intellectual Property
         INTELLECTUAL PROPERTY              generated under the Old DLCA and
                                            owned by or licensed to ViraGenics,
                                            as is in existence at the Effective
                                            Date, including but without
                                            limitation to the generality of the
                                            foregoing, ViraGenics' Patents and
                                            the Previous Results; and

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         VIRAGENICS' PATENTS                means those Patents in the name of
                                            ViraGenics or an Associated Company
                                            short particulars of which are set
                                            out in Part 5 of the Schedule.

1.2               In this Agreement: -

1.2.1             references to clauses, sub-clauses, Parts and the Schedule are
                  to clauses, and sub-clauses, Parts and the Schedule to this
                  Agreement;

1.2.2             headings to Parts, clauses and in the Schedule are for
                  convenience only and do not affect the interpretation of this
                  Agreement;

1.2.3             words importing the singular shall include the plural and vice
                  versa; and

1.2.4             references to any statute or statutory provision includes a
                  reference to that statute or statutory provision as amended
                  extended or re-enacted from time to time.

1.3               The Schedule and the Recitals to this Agreement form part of
                  this Agreement and have the same full force and effect as if
                  expressly set out in their entirety in the operative part of
                  this Agreement.

2.                COMMENCEMENT AND DURATION

2.1               This Agreement shall commence on the Effective Date and shall,
                  subject to earlier termination under clauses 24 (Termination)
                  and 26 (Force Majeure) continue in force during the Project
                  Period and thereafter, on a country by country basis in the
                  Territory, as appropriate, until the later of:-

2.1.1             the last to expire in the relevant country in the Territory of
                  the Institute's Patent, or ViraGenics' Patents or the patents
                  derived from the Foreground Intellectual Property; or

2.1.2             Know-how, derived from the Foreground Intellectual Property
                  fifteen (15) years from the Effective Date or (in relation to
                  countries within the EEA) ten years from the First Sale Date,
                  whichever is the earlier.

2.2               For the avoidance of doubt, ViraGenics' obligation to pay
                  royalties to the Institute at the levels set out in clause
                  19.1 shall survive termination or expiry of this Agreement as
                  set out in clause 2.1.

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3.                TERMINATION OF OLD DLCA AND TRANSFER AGREEMENT

3.1               The Institute and ViraGenics hereby agree that the Old DLCA
                  will terminate with effect from the date of execution of this
                  Agreement. The Institute and ViraGenics each hereby waive,
                  renounce and discharge any and all claims either the Institute
                  or ViraGenics may have against the other arising out of or in
                  connection with the Old DLCA and neither the Institute nor
                  ViraGenics shall have any further obligation to the other
                  under the Old DLCA.

3.2               The Institute, ViraGenics and Viragen hereby agree that the
                  Transfer Agreement will terminate with effect from the date of
                  execution of this Agreement and each of the Institute and
                  ViraGenics hereby waives, renounces and discharges any and all
                  claims any Party may have against any other Party arising our
                  of or in connection with the Transfer Agreement and none of
                  the Parties shall have any further obligation to any other
                  Party under the Transfer Agreement.

4.                PROJECT MANAGEMENT COMMITTEE

4.1               The Parties shall, immediately following the Effective Date,
                  establish the PMC, to oversee and manage the Project. In
                  particular, the PMC shall:

4.1.1             set the objectives and timetable of the Project Workplan;

4.1.2             monitor progress against any agreed milestones and the
                  timetable of the Project Workplan;

4.1.3             advise and assist in the resolution of any scientific or
                  technical difficulties which are experienced by the
                  Researchers;

4.1.4             review the results of the Project with a view to identifying
                  patentable inventions;

4.1.5             consider opportunities for patent filings and publications;

4.1.6             consider issues relating to maintenance and prosecution of
                  patents; and

4.1.7             subject to clause 4.4, propose amendments to the Project and
                  the Project Workplan as may be necessary or desirable to give
                  effect to this Agreement.

4.2               The PMC shall comprise such number of members as are agreed
                  between the Institute and ViraGenics, but shall always
                  comprise an equal representation from the Institute and
                  ViraGenics (or an Associated Company). For so long as he or
                  she remains an employee of BBSRC working at the Institute, the
                  Project Director shall be one of the Institute's appointees.
                  The Institute and ViraGenics will each notify the PMC Chairman
                  in writing of their nominated representatives ("PMC
                  Representatives"). The Institute and ViraGenics may replace
                  its respective PMC Representatives by written notice to the

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                  PMC Chairman. (Provided that, notwithstanding the
                  aforementioned provision, a PMC Representative may attend a
                  meeting of the PMC by way of a nominee).

4.3               At the first meeting of the PMC, the PMC Chairman shall be
                  appointed by the PMC Representatives. The role of Chairperson
                  shall rotate between ViraGenics or an Associated Company and
                  the Institute on a 6 monthly basis.

4.4               At the outset of the Project and during the Project Period,
                  the PMC will meet at times and places mutually agreed and in
                  any event at least once in every three (3) months (with the
                  first such meeting to take place within three (3) months of
                  the Effective Date) to discuss the progress of the Project and
                  Results generated to date, as well as the ongoing plans, or
                  changes therein, of the Project Workplan (including, but
                  without limitation, extension of the Project Period and
                  increases/decreases to the Project Costs). ViraGenics shall
                  pay any travelling, accommodation or other costs reasonably
                  incurred by the Institute under this clause 4.4 for such
                  meetings during the Project Period upon production of relevant
                  invoices.

4.5               The PMC Representatives shall be given reasonable notice of
                  meetings by the PMC Chairman (which shall be a minimum of
                  thirty (30) days notice of the date, place and time of the
                  meeting) unless such notice requirement is unanimously waived
                  by the PMC Representatives. The quorum for meetings of the PMC
                  shall be as agreed between the Institute and ViraGenics but as
                  a minimum must comprise of at least one PMC Representative (or
                  nominee) of the Institute and at least one PMC Representative
                  (or nominee) of ViraGenics or an Associated Company.

4.6               Each PMC Representative attending a PMC meeting shall have one
                  vote and all decisions of the PMC regarding the Project shall
                  be by unanimous decision, failing which the provisions of
                  clause 5 shall apply.

4.7               Except as otherwise provided in this clause 4, the procedures
                  of the PMC, the way in which it is conducted and subject to
                  clause 4.4 the frequency of its meetings shall be determined
                  by the PMC.

4.8               All communications between the Parties relating to the conduct
                  of the Project pursuant to this Agreement shall be made
                  through the PMC save that the Project Director may continue to
                  communicate direct with the Chairman and CEO of ViraGenics in
                  accordance with existing practice.

5.                PMC DISPUTE RESOLUTION PROCEDURE

5.1               In the event that the PMC is unable to reach unanimous
                  decision on any matter in connection with the management of
                  the Project, including but without limitation those matters
                  detailed in clause 4.1, then the matter shall be referred by
                  the PMC Chairman in writing within three (3) days of the date
                  of the PMC meeting at which the dispute arose to the Institute
                  Director and the CEO and Chairman of ViraGenics for
                  resolution.

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5.2               The Institute Director and the CEO and Chairman of ViraGenics
                  shall co-operate in good faith and use all reasonable
                  endeavours to resolve the matter on an amicable basis within
                  sixty (60) days (or such longer period as may be mutually
                  agreed) of receipt of notice by the PMC Chairman. If the
                  Institute Director and the CEO and Chairman of ViraGenics fail
                  to resolve the dispute in the allotted time, then the dispute
                  resolution procedure shall be deemed exhausted and the Project
                  shall automatically terminate on expiry of the aforementioned
                  allotted time.

5.3               In the event of termination of the Project pursuant to clauses
                  5.2 and 7.3 the Institute's right to a share of royalties and
                  other income under clause 19 shall continue and accordingly
                  the provisions of clause 19 shall remain in full force and
                  effect. The Foreground Intellectual Property shall be dealt
                  with in accordance with clause 25.8.

6.                LICENCES FOR CARRYING OUT THE PROJECT

6.1               Nothing in this Agreement transfers ownership of ViraGenics'
                  Background Intellectual Property to the Institute and any
                  disclosures of ViraGenics' Background Intellectual Property to
                  the Institute shall be subject to clause 10 (Confidentiality)
                  and this clause 6.

6.2               ViraGenics shall no later than the Effective Date provide or
                  disclose to the Institute ViraGenics' Background Intellectual
                  Property, necessary for the performance of the Project, as is
                  in or can be rendered into material form and, during the
                  continuance of this Agreement, ViraGenics shall promptly
                  disclose to the Institute any further ViraGenics' Background
                  Intellectual Property necessary for the performance of the
                  Project.

6.3               ViraGenics hereby grants to the Institute a royalty free,
                  non-exclusive right and licence to use ViraGenics' Background
                  Intellectual Property to such extent as is necessary to enable
                  the Institute to undertake the Project but only insofar as
                  ViraGenics is free to grant any such licence.

7.                PROJECT WORK

7.1               The Institute shall start work on the Project on the Effective
                  Date and shall perform the Project in accordance with the
                  terms of this Agreement and the Project Workplan and shall
                  allocate such Researchers, resources and equipment as are in
                  the Institute's view necessary for the proper running of the
                  Project. The PMC may at any time amend the Project Workplan in
                  accordance with clause 4.4.

7.2               The Institute shall carry out the work on the Project with
                  reasonable skill and care, to the best of its ability and in
                  accordance with appropriate quality standards and current best
                  scientific practice. The Institute shall use all reasonable
                  endeavours to ensure the accuracy of the work performed, and
                  the Results generated, by it in connection with the Project.

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7.3               The Project shall be carried out under the personal direction
                  of the Project Director, who shall have responsibility for the
                  day-to-day running, control and management of the Project in
                  accordance with the Project Workplan which is subject to
                  review and approval by the PMC from time to time. The Project
                  Director's duties shall include, but shall not be limited to,
                  the allocation of work to be undertaken under the Project
                  Workplan (having regard for the relevant skill and experience
                  of the Researchers) and the promotion of the performance of
                  the Project Workplan. In the event that the Project Director
                  becomes unable to continue the Project, and a mutually
                  acceptable substitute is not identified within a period of two
                  hundred and forty (240) days, either the Institute or
                  ViraGenics shall have the option to terminate the Project by
                  serving a further sixty (60) days written notice to that
                  effect on the other Party.

7.4               The Institute and ViraGenics will co-operate with each other
                  to complete the Project and to cause it to run as smoothly as
                  possible.

7.5               ViraGenics shall, at its own expense, give such help and
                  assistance to the Institute during the Project Period as is
                  reasonably required and requested by the Institute.

7.6               In the performance of the Project the Institute shall be
                  deemed to be and shall be an independent contractor. None of
                  the Parties is authorised to act as agent for any other Party
                  for any purpose and shall not on behalf of any other Party
                  enter into any contract, warranty or representation as to any
                  matter. Save as provided for by the terms of this Agreement,
                  none of the Parties shall be bound by the acts or conduct of
                  any other Party.

7.7               Subject to clause 7.1, whilst the Institute will use all
                  reasonable endeavours to ensure the accuracy of the Results,
                  the Institute makes no warranty, express or implied, as to the
                  accuracy of the Results or as to the success of the Project.
                  The Institute shall not be held responsible for any
                  consequence arising out of any inaccuracies or omissions, in
                  the Results or otherwise, unless such inaccuracies or
                  omissions are the direct result of any negligent act,
                  deliberate omission or wilful default on the part of the
                  Institute and the Institute shall not have any liability for
                  any indirect or consequential loss or damage (including but
                  without limitation loss of profits or anticipated profits)
                  incurred by ViraGenics and/or Viragen and/or any third party.

7.8               Within three (3) months of the Effective Date, the Institute
                  shall produce a final written report which shall contain all
                  of the Previous Results. ViraGenics shall have a period of
                  three (3) months following delivery of said final report to
                  satisfy itself with the accuracy and content of the same and
                  shall be entitled to request reasonable modifications to the
                  final written report.

7.9               The Institute undertakes to keep safe and maintain on behalf
                  of ViraGenics all Previous Results and to allow such employees
                  or representative of ViraGenics or an Associated Company
                  reasonable access to said Previous Results on reasonable
                  notice and further the Institute undertakes not to disclose or
                  dispose of the Previous Results without first obtaining
                  ViraGenics' express written consent to do so.

7.10              During the Project Period the Institute:

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7.10.1            undertakes to keep the Results in separate Laboratory Books;

7.10.2            shall permit duly authorised employees or representatives of
                  ViraGenics or and Associated Company to confer from time to
                  time with the Project Director and to visit the Institute's
                  premises solely for the purpose of facilitating disclosure of
                  the Results to ViraGenics or an Associated Company, provided
                  that ViraGenics and their duly authorised employees or
                  representatives shall, while on the Institute's premises, be
                  bound by all the Institute's regulations and requirements
                  which are from time to time applicable to the Institute's
                  premises.

8.                PROJECT REPORTING

8.1               Written Project reports summarizing all of the Results
                  generated during the previous three (3) month period shall be
                  provided by the Institute to ViraGenics every three (3)
                  months, and a Final Report shall be submitted by the Institute
                  within six (6) months of the completion of the Project or, if
                  earlier, termination of the Project.

8.2               Subject to the terms of clause 7.1, in the event that the PMC
                  should consider that an aspect of the research work performed
                  under the Project does not meet the level of accuracy
                  anticipated by the Parties or unnecessary errors have been
                  produced, such work shall be repeated by the Institute at no
                  extra cost to ViraGenics, together with any corresponding and
                  necessary alteration to the Project Period.

8.3               The Final Report shall contain all of the Results generated
                  during the Project Period in a format to be agreed by the PMC.
                  ViraGenics shall have a period of three (3) months following
                  receipt of the Final Report to satisfy itself with the
                  accuracy and content of the Final Report and shall be entitled
                  to request reasonable modifications to the Final Report.

8.4               The Parties agree that the obligations of the Institute in
                  relation to the Project shall cease upon the expiry of the
                  three (3) month referred to in clause 8.3. The Parties further
                  agree that no liability whatsoever shall rest upon the
                  Institute for the effects of any Products and/or Services or
                  any other product or process that may be produced or adopted
                  by ViraGenics or any other party, unless such liability arises
                  as a direct consequence of any negligent act, deliberate
                  omission or wilful default on the part of the Institute in
                  relation to the generation of the Results notwithstanding that
                  the formulation of such Products and/or Services or any other
                  such products or process may be based upon the Results and the
                  Institute shall not have any liability for any indirect or
                  consequential loss or damage (including but without limitation
                  loss of profits or anticipated profits) incurred by ViraGenics
                  and/or Viragen and/or any third party .

9.                PROJECT COST

9.1               To enable the Institute to undertake the Project and to
                  provide the necessary facilities in connection therewith,
                  ViraGenics shall pay to the Institute the Project Cost in the
                  manner set out in clause 9.2 to an account notified in writing
                  by the Institute to ViraGenics.

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<PAGE>

9.2               Pursuant to clause 9.1 and notwithstanding the terms of Part 3
                  of the Schedule which is illustrative only, the Project Cost
                  shall be payable as follows: on signature of this Agreement,
                  ViraGenics shall pay to the Institute, the sum of five hundred
                  thousand pounds sterling ((pound)500,000) and thereafter the
                  balance of the Project Cost shall be payable by ViraGenics to
                  the Institute in advance in equal monthly instalments with the
                  first instalment being due six calendar months from the last
                  date of signature of this Agreement. In the event of any
                  alteration to the Project Costs, the amounts of the monthly
                  instalments shall be varied accordingly.

9.3               Within forty two (42) days of the end of each six (6) month
                  period during the Project Period, the Institute shall
                  reconcile the payments made by ViraGenics under clause 9.2
                  with the actual sums spent by the Institute in performance of
                  the Project during that preceding six month period and provide
                  ViraGenics with a copy of the reconciliation statement.

9.4               For the avoidance of doubt, ViraGenics' obligation to pay the
                  Project Cost is in addition to the payments due to the
                  Institute by ViraGenics under the Spur Agreement.

10.               CONFIDENTIALITY AND PUBLICATION IN RELATION TO THE PROJECT

10.1              The Institute agrees that it shall, at all times during and
                  after the term of this Agreement maintain confidentiality in
                  relation to Project except to extent that the Institute shall
                  be entitled to enter into any licence or sub-licence pursuant
                  to clause 11.2, subject always to the provisions of this
                  clause 10.

10.2              The Parties undertake and agree that they shall not (and they
                  shall procure that their respective employees, consultants,
                  representatives, sub-contractors and agents do not) disclose
                  or permit to be disclosed to any third party, nor make use of
                  or permit to be made use of, any trade secrets Know-how or
                  confidential information relating to the disclosing Party's
                  technical and proprietary information, business secrets or
                  business affairs or finances or any other information
                  designated as confidential by the disclosing Party whether
                  belonging to the disclosing Party or a third party ("the
                  Confidential Information") and the recipient Party shall at
                  all times during the continuance of this Agreement and
                  thereafter maintain confidentiality in relation to the
                  Confidential Information which is disclosed to the recipient
                  Party under this Agreement or any other agreement referred to
                  herein. The recipient Party shall ensure that its respective
                  employees, consultants, sub-contractors, agents,
                  representatives and other third parties with whom it may have
                  dealings relating to the Confidential Information are made
                  fully aware of the obligations of confidentiality under this
                  Agreement and each are bound by conditions of secrecy no less
                  strict than those set out in this Agreement, which conditions
                  the disclosing Party hereby agrees to enforce. The recipient
                  Party shall be responsible to the disclosing Party for
                  disclosure of any Confidential Information by any such third
                  party referred to in this clause 10.2.

10.3              The obligations of confidentiality contained in clauses 10.1
                  and 10.2 shall not extend to the Institute's Background
                  Intellectual Property or to publication or presentations
                  permitted in accordance with the provisions of clause 10.4,
                  nor to any information which:-

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<PAGE>

10.3.1            is, was or has become generally available to the public
                  otherwise than by reason of breach by the recipient Party of
                  the provisions of this Agreement; or

10.3.2            is or was known to the recipient Party and is or was at its
                  free disposal prior to its receipt from the disclosing Party
                  provided that such prior knowledge can be demonstrated by
                  written evidence; or

10.3.3            is subsequently disclosed to the recipient Party without
                  obligations of confidence by a third party owing no such
                  obligations in respect thereof to the disclosing Party; or

10.3.4            is required to be disclosed to any governmental or other
                  authority or other regulatory body including, without
                  limitation, the Ministry of Agriculture Fisheries and Food,
                  the Biotechnology and Biological Sciences Research Council or
                  by the rules of any stock exchange, including US securities
                  regulations, and as may be required under the National Audit
                  Act 1983 or otherwise legally required to be disclosed,
                  provided always that the recipient Party shall use its best
                  endeavours to limit any such disclosure to a minimum,

                  provided that in using such information the recipient Party
                  shall not take any action which would prevent protection of
                  any Intellectual Property, any ViraGenics' Existing
                  Intellectual Property or any Foreground Intellectual Property
                  contained in such information.

10.4              ViraGenics acknowledges that it is Institute policy that the
                  results of the Project be published, and any proposals for
                  publications (including public presentations) containing any
                  details of work or results generated from the Project shall be
                  considered for such publication or presentation by the PMC,
                  who agrees that the Project Director and/or any Researchers
                  engaged in the Project may present at seminars, symposia,
                  national or regional professional meetings, and to publish in
                  journals, theses or dissertations, or otherwise, methods and
                  results of the Project, provided however that the PMC shall
                  have been furnished with copies of any proposed publication
                  and presentation at least two (2) months in advance of the
                  submission of such proposed publication or presentation to a
                  journal, editor, or other third party. The PMC shall have one
                  month after receipt of said copies, to object to such proposed
                  presentation or proposed publication if in the PMC's
                  reasonable opinion a delay of publication is necessary in
                  order to protect its commercial interests, or the commercial
                  use to ViraGenics of information derived from the Project or
                  because there is patentable or commercially sensitive subject
                  matter which needs protection. In the event that the PMC makes
                  such objection the Project Director or the Researchers shall
                  refrain from making such publication or presentation unless or
                  until ViraGenics has obtained satisfactory protection of such
                  work or results. In the event that the PMC in making such
                  objection can reasonably demonstrate that certain information
                  contained in such proposed presentation or publication if
                  disclosed would have a detrimental effect on ViraGenics'
                  commercial interest, such information shall be removed from
                  the proposed presentation or publication such that said
                  information may not be discerned therefrom and be delayed from
                  further publication for a period of two (2) years from the end
                  of the Project. Every publication published in accordance with
                  the terms of this clause 10.4 shall acknowledge the
                  contribution of ViraGenics to the Project, the text of such
                  acknowledgments shall be agreed by the PMC prior to
                  publication.

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<PAGE>

11.               FOREGROUND INTELLECTUAL PROPERTY

11.1              Except as expressly provided elsewhere in this Agreement, as
                  between the Institute and ViraGenics the Foreground
                  Intellectual Property shall belong to ViraGenics.

11.2              Subject to provisions of confidentiality contained in clause
                  10 of this Agreement, ViraGenics hereby grants the Institute a
                  world wide royalty free licence (with the right to
                  sub-licence, but with no right to grant sub-sub-licences) of
                  ViraGenics' Existing Intellectual Property and the Foreground
                  Intellectual Property for the restricted purposes of academic
                  research and teaching and for collaboration with other
                  non-commercial academic parties and non-commercial charitable,
                  research and other not for profit organisations, provided
                  always that ViraGenics shall be notified of the collaboration
                  and/or any such sub-licence. In addition the Institute
                  undertakes that it shall obtain from any such third party
                  undertakings of confidentiality on terms no less onerous than
                  those contained in this Agreement, and that the Institute
                  shall obtain such undertakings prior to entering into any
                  discussions or negotiations with such third party.

12.               PROTECTION AND EXPLOITATION OF FOREGROUND INTELLECTUAL
                  PROPERTY

12.1              Pursuant to the terms of clause 11.1, the Institute shall
                  promptly notify ViraGenics of any and all Foreground
                  Intellectual Property conceived and/or made or otherwise
                  generated during the Project Period under the Project.

12.2              ViraGenics shall in its sole discretion, at its own cost and
                  with the assistance in all material respects of the Institute
                  use all reasonable endeavours to promptly prepare, file and
                  prosecute any patent application, or application for other
                  intellectual property protection, in respect of the
                  ViraGenics' Existing Intellectual Property and/or Foreground
                  Intellectual Property in those countries where Viragen
                  believes there is a reasonable prospect of a commercial
                  return. While ViraGenics shall be responsible for making
                  decisions regarding the scope and content of application(s) to
                  be filed and the prosecution thereof, the Institute shall be
                  given an opportunity to review and provide input thereto.
                  ViraGenics shall keep the Institute advised as to all
                  developments with respect to such applications(s) and shall
                  promptly supply to the Institute copies of all papers received
                  and filed in connection with the prosecution thereof in
                  sufficient time for the Institute to comment thereon.
                  Thereafter, ViraGenics shall, at its own cost, use all
                  reasonable endeavours to prosecute and maintain such
                  applications(s) and the resultant patents for as long as
                  ViraGenics, in its sole discretion, believes that the
                  maintenance of such patents is commercially advantageous.

13.               GRANT OF LICENCE OF THE INSTITUTE'S PATENT

13.1              The Institute hereby grants to ViraGenics, subject as provided
                  below, the exclusive right and licence, with a right to grant
                  such further licences as ViraGenics should deem necessary, of
                  the Institute's Patent to research, develop, manufacture, have
                  manufactured, make, market, distribute, sell, have sold and/or
                  otherwise Supply the Products and/or Services and to
                  commercialise, exploit, market, import and export and sell the
                  Products and/or Services in the Field anywhere in the
                  Territory.

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<PAGE>

13.2              The Institute hereby grants a royalty-free, non-exclusive
                  licence to ViraGenics (with a right to grant such further
                  licences as ViraGenics should deem necessary) in the Field
                  throughout the Territory to any and all Institute Background
                  Intellectual Property that the Institute is free to licence
                  for this specific purpose, which ViraGenics deems necessary
                  for commercialisation of Products and/or Services.

13.3              The licence and rights granted to ViraGenics in clauses 13.1
                  and 13.2 shall not in any manner prevent the Institute
                  licensing or using the Institute's Background Intellectual
                  Property and/or the Institute's Patent (i) for its own
                  academic research and teaching purposes, (ii) for
                  non-commercial collaborations with non-commercial third
                  parties or (iii) from licensing or using as aforesaid the
                  Institute's Background Intellectual Property and/or the
                  Institute's Patent outside the Field. ViraGenics undertakes
                  not to use the rights granted to it under clauses 13.1 and
                  13.2 outside the Field.

13.4              The Institute shall simultaneously upon the execution of this
                  Agreement grant and enter with ViraGenics into a licence
                  agreement in respect of the Institute's Patent in the form or
                  substantially the form set out in Part 2 of the Schedule which
                  licence shall be registered by ViraGenics with such Patent
                  Offices in the Territory as it considers appropriate or, as
                  the Institute shall require, all at the expense of ViraGenics.

13.5              Nothing in this Agreement shall constitute any representation
                  that the Institute's Patent (if patent applications) shall
                  proceed to grant or if granted shall be valid or that the
                  Products and/or Services do not fall within the scope of any
                  Intellectual Property other than the Institute's Background
                  Intellectual Property, the Institute's Patent, the ViraGenics
                  Existing Intellectual Property or the Foreground Intellectual
                  Property.

14.               ASSIGNATION OF PREVIOUS RESULTS

14.1              In consideration for the payments made by ViraGenics to the
                  Institute pursuant to the provisions of the Old DLCA, receipt
                  of which the Institute hereby acknowledges, the Institute
                  hereby assigns all previous and future right, title and
                  interest in and to the Previous Results to ViraGenics
                  absolutely.

15.               LICENSING AND SUB-LICENSING

15.1              ViraGenics shall have the right to grant the licences pursuant
                  to clause 13.1 PROVIDED THAT ViraGenics shall:

15.1.1            ensure that there are included in the terms of any such
                  licences the applicable like obligations and undertakings on
                  the part of the licensees as are contained in this Agreement
                  (except the financial terms set forth in this Agreement) and
                  shall further ensure that all licensees duly observe and
                  perform the same; and

15.1.2            at all times indemnify and keep indemnified the Institute
                  against all or any costs, claims, damages or expenses incurred
                  by the Institute or for which the Institute may become liable
                  as a direct result of the default or negligence of its
                  licensees.

                                       20
<PAGE>

15.2              The Institute shall have the right to grant sub-licences
                  pursuant to clause 11.2 PROVIDED THAT the Institute shall
                  ensure that there are included in the terms of any sub-licence
                  the applicable like obligations and undertakings on the part
                  of the sub-licensee as are contained in this Agreement (except
                  this clause and the financial terms set forth in this
                  Agreement) and shall further ensure that all sub-licensees
                  duly observe and perform the same.

16.               VIRAGENICS' OBLIGATIONS UNDER THE LICENCES

16.1              ViraGenics shall use its reasonable endeavours to promote and
                  expand the Supply of the Products and/or Services throughout
                  the Territory.

16.2              ViraGenics shall comply in all material respects with the
                  legal requirements applicable from time to time in relation to
                  the manufacture and Supply of the Products and/or Services.

16.3              ViraGenics shall in the normal course of reporting progress to
                  the Institute, advise the Institute of any material regulatory
                  matters related to the Project and/or the Products and/or
                  Services.

16.4              Save in the event of any negligent act, omission or wilful
                  default on behalf of the Institute, ViraGenics shall at all
                  times indemnify and keep indemnified the Institute against all
                  or any costs or claims damages or expenses incurred directly
                  by the Institute or for which the Institute may directly
                  become liable with respect to any product liability claim with
                  respect to all Products and/or Services Supplied or put into
                  use by ViraGenics or any Associated Company or any of its
                  licensees pursuant to this Agreement. ViraGenics shall not
                  have any liability for any indirect or consequential loss or
                  damage (including but without limitation loss of profits or
                  anticipated profits) incurred by the Institute. In any event,
                  but save in the event of any claim arising from death or
                  personal injury due directly to the negligent act, omission or
                  wilful misconduct of ViraGenics, the total cumulative
                  liability of ViraGenics arising under this Agreement for any
                  such product liability claim shall not exceed five million
                  United States dollars (US$5,000,000).

16.5              ViraGenics shall, prior to any Products being produced, or any
                  Products and/or Services being Supplied or put into use by
                  ViraGenics obtain and maintain product liability insurance of
                  five million United States dollars (US$5,000,000) to meet its
                  obligations to the Institute pursuant to clause 16.4 and shall
                  supply the Institute with a copy of such insurance policy on
                  request.

17.               PATENT INFRINGEMENT AND MISUSE OF CONFIDENTIAL INFORMATION

17.1              Upon the occurrence of any infringement or suspected or
                  threatened infringement of the Institute's Patent, the
                  Institute and ViraGenics shall immediately consult to decide
                  what steps shall be taken to prevent or terminate such
                  infringement in relation to the Field.

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<PAGE>

17.2              The Institute or ViraGenics shall take all steps as may be
                  agreed by them in pursuance of clause 17.1 including the
                  institution of legal proceedings where necessary in the name
                  of one of the parties in order to protect ViraGenics' rights
                  in the Institute's Patent in the Field.

17.3              If the Institute fails within a reasonable period in the
                  circumstances to take such steps as may be considered
                  necessary or appropriate by ViraGenics (unless agreement shall
                  have been reached in pursuance of clause 17.1) ViraGenics
                  shall have the right and is hereby authorised by the Institute
                  to take those steps independently, provided always that the
                  Institute shall use its reasonable endeavours to ensure that
                  any other licensees of the Institute's Patent are conjoined in
                  any such proceedings, under conditions of confidentiality no
                  less onerous than those contained in this Agreement. In so
                  doing ViraGenics shall not be taken to be acting as the agent
                  or in any way on behalf of the Institute but may file any
                  proceedings in the name of the Institute, as necessary or in
                  its own name, and the Institute shall give all reasonable
                  assistance at ViraGenics' expense to facilitate any
                  proceedings by ViraGenics. ViraGenics shall bear all costs and
                  ViraGenics shall retain control of any such legal actions
                  initiated. ViraGenics shall be entitled to retain for its own
                  absolute benefit any damages, costs or other expenses awarded
                  or recovered in any such proceedings.




18.               MAINTENANCE OF THE INSTITUTE'S PATENT

18.1              Provided always that the Institute shall notify ViraGenics of
                  all material issues regarding the maintenance, renewal or
                  otherwise of the Institute's Patent, the Institute shall be
                  under no obligation to prosecute or maintain in force the
                  Institute's Patent whether by the payment of any official fee
                  (including without limitation any renewal fee) or by defending
                  any action or proceeding in which a claim or counterclaim is
                  made for the revocation of the Institute's Patent.

18.2              If the Institute in its absolute discretion decides not to
                  prosecute, maintain or defend any of the Institute's Patent,
                  ViraGenics shall be entitled to initiate or defend proceedings
                  in the name of the Institute, as necessary, or in its own
                  name, and the Institute shall give all reasonable assistance
                  at ViraGenics' expense to facilitate any proceedings by
                  ViraGenics. ViraGenics shall retain control of any such legal
                  actions. ViraGenics shall, alternatively, be entitled to
                  require the Institute to do so subject to ViraGenics and any
                  other sub-licensee of the Institute's Patent jointly
                  indemnifying the Institute and keeping it indemnified to its
                  satisfaction against all costs and expenses thereby incurred
                  by the Institute, whether such liability of the Institute
                  should arise during the term of this Agreement or pursuant to
                  clause 14.2 of the Old DLCA.

18.3              The Institute will provide ViraGenics, upon request, evidence
                  of renewal of the Institute's Patent or other specific
                  documentation regarding the Institute's Patent as ViraGenics
                  may reasonably require from time to time.

18.4              The Institute hereby acknowledges and agrees that ViraGenics
                  shall have no further liability for any fees relating to the
                  filing, prosecution, renewal and maintenance of PCT/GB98/02517

                                       22
<PAGE>

                  ("Mariner", or any Patents claiming priority from the same)
                  nor for any actions or any other costs or expenses relating to
                  the same, howsoever incurred.

19.               ROYALTIES

19.1              In consideration of the rights granted under this Agreement,
                  ViraGenics shall during the term of this Agreement and
                  thereafter:

19.1.1            pay to the Institute a royalty with respect to each Product
                  and/or Services Supplied of three and one half percent (3.5%)
                  of the Net Invoice Price of each Product and/or Service
                  Supplied;

19.1.2            pay to the Institute a royalty of seventeen and one half
                  percent (17.5%) of the gross amounts received by ViraGenics or
                  any Associated Company at any time from any third party in
                  consideration of the grant of any licence (including for the
                  avoidance of doubt any sub-licences and any sub-sub-licences)
                  under all or any part of ViraGenics' rights under this
                  Agreement (including, without limitation, all royalties, any
                  up front licence fee and any other consideration (including
                  equity or other stock) received by ViraGenics or any
                  Associated Company from any third party which can reasonably
                  be regarded as being payable in relation to the grant of a
                  licence); and

19.1.3            pay to the Institute seventeen and one half percent (17.5%)
                  of:

19.1.3.1          the consideration received by ViraGenics or any Associated
                  Company from the assignation, transfer, sale or disposal of
                  all or any part of the Existing Intellectual Property and/or
                  Foreground Intellectual Property where the Existing
                  Intellectual Property and/or Foreground Intellectual Property
                  is being sold in isolation; or

19.1.3.2          the relevant proportion of the consideration received by
                  ViraGenics or any Associated Company from the assignation,
                  transfer, sale or disposal of all or any part of the Existing
                  Intellectual Property and/or Foreground Intellectual Property
                  where the disposal or sale of the Existing Intellectual
                  Property and/or Foreground Intellectual Property is part of a
                  larger commercial transaction and/or asset sale.

19.2              For the avoidance of doubt, royalties shall become payable by
                  ViraGenics under clause 19.1 of this Agreement in respect of
                  each Product and/or Service:

19.2.1            sold - when ViraGenics or any Associated Company has received
                  payment;

19.2.2            lent, leased, let or hired or sold on hire purchase - when
                  ViraGenics or any Associated Company has received payment from
                  the borrower, lessor, lessee or hirer, as the case may be;

19.2.3            disposed of by ViraGenics or any Associated Company to any
                  person otherwise than in accordance with sub-clauses 19.2.1
                  and 19.2.2, when ViraGenics or any Associated Company has
                  received payment from such person; and

                                       23
<PAGE>

19.2.4            put into use by ViraGenics or an Associated Company on behalf
                  of a third party for value - immediately on receipt of such
                  value.


19.3              In the event that ViraGenics should be in receipt of funds
                  pursuant to clause 19.1 but shall have failed to make payment
                  of the royalties referred to in clause 19.1 in accordance with
                  the provisions of clause 21.1 then, notwithstanding
                  ViraGenics' failure to pay, the Institute shall have the
                  rights described under clause 19.4 and 19.5 and elsewhere in
                  this Agreement (in addition to any other remedies available
                  under contract or in law) and the Agreement shall remain in
                  full force and effect.

19.4              At such time, if any, that ViraGenics defaults under clause
                  21.1 in the payment of its royalty obligations to the
                  Institute under clauses 19.1.1, 19.1.2 and/or 19.1.3 :-

19.4.1            ViraGenics shall deposit (i) 100% of the Net Invoice Price
                  received by ViraGenics or any Associated Company in connection
                  with which the Institute is entitled to a royalty payment
                  under clause 19.1.1 and (ii) the gross amount received by
                  ViraGenics or any Associated Company in connection with which
                  the Institute is entitled to a royalty payment under clause
                  19.1.2 and (iii) 100% of the consideration received by
                  ViraGenics or any Associated Company in connection with which
                  the Institute is entitled to a royalty payment under clause
                  19.1.3, into a bank account in the name of the Institute
                  notified by the Institute to Viragenics ("the Institute
                  Account") until such time as the amount of all royalty
                  payments due to the Institute under clause 19.1(together with
                  any interest due in terms of clause 20.3) has been paid in
                  full ; and

19.4.2            ViraGenics, or the Institute as authorised representative of
                  ViraGenics, shall contact customers and/or licensees of
                  ViraGenics or any Associated Company to ensure payments due to
                  ViraGenics or any Associated Company by such customers and/or
                  licensees are made into the Institute Account.


19.5              For the avoidance of doubt, the provisions of this clause 19.4
                  shall apply to any subsequent defaults by ViraGenics in the
                  payment of its royalty obligations to the Institute under
                  clauses 19.1.1, 19.1.2 and/or 19.1.3.


19.6              ViraGenics and the Institute agree to take any and all further
                  required actions, and enter into such further documents as may
                  be necessary in order to effectuate the intent of clause 19.4.

20.               TAXATION

20.1              All sums due under this Agreement:

20.1.1            are exclusive of any value added tax (or similar sales tax)
                  which shall be payable in addition by ViraGenics on the
                  rendering by the Institute of any appropriate value added tax
                  or other invoice and, provided always that the Institute has
                  promptly provided ViraGenics with all relevant invoices,
                  ViraGenics shall pay any costs, interest and penalties due by
                  reason of late payment of any such value added tax (or similar
                  sales tax);

                                       24
<PAGE>

20.1.2            shall be made in full without deduction of taxes charges and
                  other duties (including any withholding or other income taxes)
                  that may be imposed except where ViraGenics is required by law
                  to make such deduction or withholding, in which event
                  ViraGenics shall:

20.1.2.1          ensure that the deduction or withholding does not exceed the
                  minimum amount legally required;

20.1.2.2          forthwith pay to the Institute such additional amount as shall
                  result in the net amount received by the Institute being equal
                  to the amount which would have been received by the Institute
                  had no such deduction or withholding been made ;

20.1.2.3          pay to the applicable taxation or other authorities within the
                  period for payment permitted by law the full amount of the
                  deduction or withholding (including, but without prejudice to
                  the generality of the foregoing, the full amount of any
                  deduction or withholding from any additional amount paid
                  pursuant to this sub-clause);

20.1.2.4          furnish to the Institute, within the period for payment
                  permitted by law, either (a) an official receipt of the
                  applicable taxation or other authorities for all amounts
                  deducted or withheld as aforesaid or (b) if such receipts are
                  not issued by the taxation or other authorities concerned on
                  payment to them of amounts so deducted or withheld, a
                  certificate of deduction or equivalent evidence of the
                  relevant deduction or withholding; and

20.1.2.5          co-operate in all respects necessary to permit the Institute
                  to take advantage of such double taxation agreements as may be
                  available.

20.2              If any stamp taxes, registration taxes, turnover taxes, or
                  other taxes, duties or governmental charges are levied on this
                  Agreement by reason of its execution or performance, other
                  than those identified in clause 20.1 above, it shall be the
                  responsibility of ViraGenics to pay all such taxes when due,
                  provided always that the Institute shall provide ViraGenics
                  with all reasonable assistance in relation to the same. Such
                  taxes shall be in addition to other amounts payable by
                  ViraGenics and shall not be set off against any of the amounts
                  due to the Institute under this Agreement.

20.3              ViraGenics agrees to release and indemnify the Institute from
                  and against all liability of whatever nature arising directly
                  out of ViraGenics' failure duly and timeously to pay and
                  discharge any of the above-mentioned taxes. The Institute
                  shall notify ViraGenics of any such claim and ViraGenics shall
                  control any defence arising from any such claim, provided
                  always that the Institute has provided ViraGenics with
                  assistance in all material respects.

                                       25
<PAGE>

21.               OTHER PROVISIONS RELATING TO PAYMENT

21.1              Royalties arising under this Agreement shall be paid in
                  sterling within thirty (30) days of the end of each successive
                  quarterly period of three months commencing on 1 March, 1
                  June, 1 September, and 1 December in every year to the credit
                  of a bank account to be designated in writing by the
                  Institute.

21.2              In the event of any delay in effecting payments due under this
                  Agreement by the due date specified ViraGenics shall pay to
                  the Institute interest (calculated on a daily basis) on the
                  overdue payment from the date such payment was due to the date
                  of actual payment at a rate of three per cent (3%) above the
                  base lending rate of Bank of Scotland from time to time.

21.3              At the same time as payment of any royalties under this
                  Agreement falls due ViraGenics shall submit or cause to be
                  submitted to the Institute a statement in writing recording
                  the calculation of royalty payable under this Agreement; in
                  particular:

21.3.1            the number of Products and/or Services which have been
                  Supplied during the previous quarter;

21.3.2            the Net Invoice Price of each Product and/or Service Supplied
                  during the previous quarter;

21.3.3            the gross income received by ViraGenics from any licences
                  granted in accordance with clause 13; and

21.3.4            the amount of royalties due and payable and the amount of any
                  tax deductible or due to be deducted.

21.4              ViraGenics shall keep proper records and books of account
                  showing the description and price of Products and/or Services
                  Supplied under this Agreement and of the amounts received from
                  any licensees appointed in accordance with this Agreement and
                  such records shall, upon receipt by ViraGenics of reasonable
                  notice from the Institute, be open to inspection by the
                  Institute or its duly authorised agent or representative who
                  shall be entitled to take copies of or extracts from the same.
                  In the event that such inspection or audit should reveal an
                  underpayment in the royalties paid from those payable under
                  this Agreement, ViraGenics shall immediately make up any
                  shortfall and in the event the examination determines an
                  underpayment of 3% or more relative to payments due the
                  Institute, then all costs of the examination shall be paid by
                  ViraGenics otherwise the Institute shall bear its own costs.
                  In the event of any dispute arising in relation to such audit,
                  the matter shall be referred to an independent auditor, chosen
                  by agreement between the Parties or, failing such agreement
                  within twenty one (21) days at the request of either Party,
                  nominated by the President from time to time of the Institute
                  of Chartered Accountants in Scotland, whose decision shall be
                  final. If a dispute shall arise in relation to an audit, the
                  costs of the independent audit shall be borne by the Party who
                  falsely asserts that the royalty payments are
                  correct/incorrect. In any event, the number of audits shall be
                  restricted to one audit per annum.

                                       26
<PAGE>

21.5              The provisions of this clause 21 shall continue to apply
                  notwithstanding termination or expiry of this Agreement until
                  the settlement of all subsisting claims of the Institute.

21.6              A certificate signed by an independent auditor shall be
                  sufficient to fix and ascertain any sums due by ViraGenics
                  under this Agreement and shall be conclusive of the amount
                  due, subject to the dispute resolution mechanism in clause
                  21.4.

22.               WARRANTIES

22.1              Each Party represents and warrants to the other Party that as
                  at the Effective Date:-

22.1.1            it has the power and authority to enter into and perform its
                  obligations under this Agreement and that this Agreement
                  constitutes a legally valid, binding and enforceable
                  obligation (subject to remedies provided by law) of the
                  Parties;

22.1.2            this Agreement does not and will not:-


                  (a)      contravene any of its law or regulation, directive or
                           judgement; or


                  (b)      result in any actual or potential breach of or
                           default under any obligation, agreement or instrument
                           to which it is a Party or by which it is bound or
                           which it requires to carry on business; or


                  (c)      contravene any provision of its Party's memorandum
                           and articles of association and/or statutes and/or
                           constitutional documents.

22.1.3            there is no event which with the giving of notice or lapse of
                  time may constitute a breach of this Agreement;

22.1.4            no order has been made, petition presented or resolution
                  passed for the its winding up and no meeting has been convened
                  for the purpose of its winding up, no steps have been taken
                  for the appointment of an administrator or receiver (including
                  an administrative receiver) of all or any part of its assets;
                  it has not made or proposed any arrangement or composition
                  with its creditors or any class of its creditors; it is not
                  insolvent, unable to pay its debts within the meaning of the
                  insolvency legislation applicable it and it has not stopped
                  paying its debts as they fall due; no unsatisfied judgement is
                  outstanding against it and no event analogous to any of the
                  foregoing has occurred in any jurisdiction;

22.1.5            there are no pending, or to its knowledge (after due and
                  careful enquiry), threatened actions or legal proceedings
                  affecting either Party which may have a material adverse
                  effect on its business, assets or financial condition;

22.1.6            it is not in breach of or in default under any agreement or
                  obligation relating to financial indebtedness.

                                       27
<PAGE>

22.2              Viragen undertakes to the Institute that:-

22.2.1            so long as any sums or obligations are outstanding due to late
                  payment under this Agreement, Viragen will, subject always to
                  the confidentiality provisions set out in clause 10, provide
                  the Institute with such financial and other reasonable
                  information concerning Viragen's business, assets and affairs
                  as the Institute may reasonably require and not available to
                  the Institute as disclosed in Viragen's audited accounts
                  including, but without limitation, quarterly management
                  accounts which will be delivered to the Institute promptly and
                  in any event not later than 10 days after the date of filing
                  of reports with the Securities and Exchange Commission for
                  each financial quarter of Viragen and annual audited accounts
                  to be delivered to the Institute not later than sixty days
                  after the financial year end of Viragen; and

22.2.2            all current and future mortgages, charges, securities or other
                  encumbrances or security arrangements of Viragen are or shall
                  be contained in the annual audited accounts of Viragen.

22.3              The Institute warrants to ViraGenics that as at the Effective
                  Date:-

22.3.1            there is no actual or, to the best of its knowledge or belief,
                  threatened infringement of, or other proceedings relating to,
                  the Institute's Background Intellectual Property or the
                  Institute's Patent;

22.3.2            the Institute's Background Intellectual Property does not, to
                  the best of its knowledge and belief, infringe the rights of
                  any third party;

22.3.3            it has not made any disclosure of any Confidential Information
                  to any third party; and

22.3.4            no publications, other than those specifically agreed to by
                  ViraGenics prior to the Effective Date have been made.

22.4              ViraGenics warrants to the Institute that as at the Effective
                  Date:-

22.4.1            ViraGenics' Background Intellectual Property does not, to the
                  best of its knowledge and belief, infringe the rights of any
                  third party; and

22.4.2            there is no actual or, to the best of its knowledge or belief,
                  threatened infringement of, or other proceedings relating to,
                  ViraGenics' Background Intellectual Property.

22.5              Each Party warrants to the other Parties that it has the full
                  power and authority to grant the various licences to the
                  relevant Party or Parties as the case may be under this
                  Agreement.

                                       28
<PAGE>

23.               GUARANTEE

23.1              Viragen hereby:-

23.1.1            guarantees to the Institute the due and punctual performance
                  by ViraGenics of all its obligations contained in this
                  Agreement; and

23.1.2            undertakes to indemnify and keep the Institute indemnified
                  from and against any loss, damage, liability, losses, claims,
                  demands and expenses (including without limitation, all legal
                  and other professional fees and expenses), which may be
                  sustained or suffered by the Institute as a direct result of
                  any failure of ViraGenics to perform its obligations under
                  this Agreement.

23.2              The liability of Viragen hereunder shall be as principal
                  obligant and not merely as guarantor and shall not be
                  affected, impaired or discharged by reason of any act,
                  omission, matter or thing which but for this provision might
                  operate to release or otherwise exonerate Viragen from its
                  obligations under this Agreement, including without
                  limitation, any time, indulgence, waiver or concession granted
                  by the Institute to ViraGenics.

24.               TERMINATION

24.1              This Agreement may be terminated by the Institute, by serving
                  upon ViraGenics ninety (90) days prior written notice of its
                  intention so to terminate, in the event of a failure by
                  ViraGenics to meet its payment obligations in respect of the
                  Project Costs.

24.2              Subject to clause 25.3 and save in relation to clauses 0 and
                  24.1, this Agreement may be terminated by the Institute by
                  serving written notice on ViraGenics in the event that
                  ViraGenics fails to observe or perform any terms or conditions
                  on its part under this Agreement which failure is not remedied
                  within ninety (90) days.

24.3              If the Institute fails to observe or perform any terms or
                  conditions on its part under this Agreement ViraGenics may, if
                  such failure to observe or perform shall not be remedied
                  within ninety (90) days terminate the Project, in which event
                  ViraGenics shall own the Foreground Intellectual Property and
                  the Agreement shall remain in full force and effect.

24.4              This Agreement may be terminated immediately by the Institute
                  by serving written notice upon ViraGenics in the event that:-

24.4.1            an order is made or a resolution is passed for the winding-up
                  of Viragen except in the case of a voluntary winding-up for
                  the purposes of a scheme of reconstruction or amalgamation; or

24.4.2            an administration order is made, or a petition for such an
                  order is presented, in respect of Viragen; or

                                       29
<PAGE>

24.4.3            a receiver (or administrative receiver) is appointed in
                  respect of Viragen over all of its assets; or

24.4.4            Viragen ceases to carry on business; or

24.4.5            any voluntary arrangement is proposed under section 1 of the
                  Insolvency Act 1986 or US equivalent in respect of Viragen; or

24.4.6            ViraGenics challenges the validity or contests the ownership
                  of the Institute's Patents or the Institute's Background
                  Intellectual Property.

24.5              This Agreement may be terminated immediately by ViraGenics by
                  serving written notice upon the Institute in the event that:-

24.5.1            an order is made or a resolution is passed for the winding-up
                  of the Institute except in the case of a voluntary winding-up
                  for the purposes of a scheme of reconstruction or amalgamation
                  the terms of which have been previously approved in writing by
                  both Parties; or

24.5.2            an administration order is made, or a petition for such an
                  order is presented, in respect of the Institute; or

24.5.3            a receiver (or administrative receiver) is appointed in
                  respect of the Institute over all of its assets; or

24.5.4            the Institute ceases to carry on business; or

24.5.5            any voluntary arrangement is proposed under section 1 of the
                  Insolvency Act 1986 in respect of the Institute; or

24.5.6            the Institute challenging the validity or contesting the
                  ownership of ViraGenics' Background Intellectual Property or
                  the Foreground Intellectual Property.

24.6              This Agreement may be terminated immediately by the agreement
                  of all of the Parties to this Agreement in the event that such
                  Parties, acting reasonably and in good faith, agree that the
                  Project is unviable and subject to the Parties having reached
                  agreement as to the consequences of termination.

25.               CONSEQUENCES OF TERMINATION OF THE AGREEMENT

25.1              In the event of receipt by ViraGenics of the notice referred
                  to in clause 24.1, the Foreground Intellectual Property shall
                  be owned by ViraGenics and the licences of the Institute's
                  Patent and the Institute's Background Intellectual Property
                  granted by the Institute to ViraGenics pursuant to clauses
                  13.1 and 13.2 shall remain in full force and effect until
                  expiry of the ninety (90) day notice period.

                                       30
<PAGE>

25.2              If following expiry of the notice period referred to in clause
                  24.1, ViraGenics:

25.2.1            has failed to pay to the Institute the remainder of the
                  Project Costs outstanding at the date of service of said
                  notice then the Institute shall own the Foreground
                  Intellectual Property, the Agreement shall terminate and the
                  provisions of clause 25.7 shall apply; or

25.2.2            has made payment to the Institute of the remainder of the
                  Project Costs:


                  (a)      ViraGenics shall own the Foreground Intellectual
                           Property; and


                  (b)      the Agreement shall remain in full force and effect.

25.3              In the event of termination of the Agreement by the Institute
                  pursuant to clause 24.2:

25.3.1            during the Project Period, the Institute shall own the
                  Foreground Intellectual Property, and provided that ViraGenics
                  pays to the Institute the remainder of the Project Costs
                  outstanding at the date of such termination, the licences of
                  the Institute's Patent and the Institute's Background
                  Intellectual Property granted by the Institute to ViraGenics
                  pursuant to clauses 13.1 and 13.2 shall remain in full force
                  and effect and in addition clause 1 (Interpretation), clause
                  2.2 (Royalties), clause 7.7 (Project Work), clause 8.4
                  (Project Reporting), clause 10 (Confidentiality), clause 15
                  (Licensing and Sub-licensing), clause 16 (ViraGenics'
                  obligations under the licences), clause 17 (Patent
                  Infringement), clause 18 (Maintenance of Institute Patent),
                  clause 19 (Royalties, except that section of clause 0 which
                  provides that the Agreement shall continue in full force and
                  effect), clause 20 (Taxation), clause 21 (Other provisions
                  relating to payment), clause 23 (Guarantee), clause 27
                  (Notices), clause 36.1 (Further Assurances) and clause 41
                  (Governing Law) shall also remain in full force and effect; or

25.3.2            following expiry of the Project Period and subject to breach
                  by ViraGenics of clauses 30.1.2 and 31.1.2, the Foreground
                  Intellectual Property shall belong to ViraGenics but for the
                  avoidance of doubt the licences of the Institute's Patent and
                  the Institute's Background Intellectual Property granted by
                  the Institute to ViraGenics pursuant to clauses 13.1 and 13.2
                  shall remain in full force and effect and in addition clause 1
                  (Interpretation), clause 2.2 (Royalties), clause 7.7 (Project
                  Work), clause 8.4 (Project Reporting), clause 10
                  (Confidentiality), clause 15 (Licensing and Sub-licensing),
                  clause 16 (ViraGenics' obligations under the licences), clause
                  17 (Patent Infringement), clause 18 (Maintenance of Institute
                  Patent), clause (Royalties, except that section of clause 0
                  which provides that the Agreement shall continue in full force
                  and effect), clause 20 (Taxation), clause 21 (Other provisions
                  relating to payment), clause 23 (Guarantee), clause 27
                  (Notices), clause 36.1 (Further Assurances) and clause 41
                  (Governing Law) shall also remain in full force and effect.

25.4              In the event of termination of this Agreement by the
                  Institute, in the event of breach by ViraGenics of either of
                  clauses 30.1.2 or 31.1.2 referred to in clause 25.3.2, the
                  Foreground Intellectual Property shall belong to the Institute
                  but for the avoidance of doubt the licences of the Institute's
                  Patent and the Institute's Background Intellectual Property
                  granted by the Institute to ViraGenics pursuant to clauses

                                       31
<PAGE>

                  13.1 and 13.2 shall remain in full force and effect and in
                  addition clause 1 (Interpretation), clause 2.2 (Royalties),
                  clause 7.7 (Project Work), clause 8.4 (Project Reporting),
                  clause 10 (Confidentiality), clause 15 (Licensing and
                  Sub-licensing), clause 16 (ViraGenics' obligations under the
                  licences), clause 17 (Patent Infringement), clause 18
                  (Maintenance of Institute Patent), clause 19 (Royalties,
                  except that section of clause 0 which provides that the
                  Agreement shall continue in full force and effect), clause 20
                  (Taxation), clause 21 (Other provisions relating to payment),
                  clause 23 (Guarantee), clause 27 (Notices), clause 36.1
                  (Further Assurances) and clause 41 (Governing Law) shall also
                  remain in full force and effect.

25.5              In the event of termination of the Agreement by the Institute
                  pursuant to clause 24.4 :

25.5.1            if termination occurs during the Project Period, then provided
                  always that ViraGenics pays to the Institute the remainder of
                  the Project Costs outstanding at the date of such termination,
                  ViraGenics shall own the Foreground Intellectual Property; or

25.5.2            if termination occurs following expiry of the Project Period,
                  ViraGenics shall own the Foreground Intellectual Property;

25.5.3            clause 19 (Royalties, except that section of clause 19.3 which
                  provides the Agreement shall continue in full force and
                  effect) shall remain in full force and effect; and

25.5.4            the provisions of clause 25.7 shall apply.

25.6              In the event of termination of the Agreement by ViraGenics
                  pursuant to clause 24.5 both prior to or following expiry of
                  the Project Period:

25.6.1            the Foreground Intellectual Property shall belong to
                  ViraGenics; and

25.6.2            the licences of the Institute's Patent and the Institute's
                  Background Intellectual Property granted by the Institute to
                  ViraGenics pursuant to clauses 13.1 and 13.2 shall remain in
                  full force and effect and in addition clause 1
                  (Interpretation), clause 10 (Confidentiality), clause 15
                  (Licensing and Sub-licensing), clause 16 (ViraGenics'
                  obligations under the licences), clause 17 (Patent
                  Infringement), clause 18 (Maintenance of Institute Patent)
                  clause 19 (Royalties, except that section of clause 19.3 which
                  provides the Agreement shall continue in full force and
                  effect), clause 20 (Taxation) clause 21 (Other Provisions
                  relating to payment), clause 23 (Guarantee) , clause 27
                  (Notices), clause 36.1 (Further Assurances) and clause 41
                  (Governing Law) shall also remain in full force and effect.

25.7              In the event of termination of this Agreement whereby
                  ViraGenics no longer has a licence to the Institute's Patent
                  and the Institute's Background Intellectual Property:

25.7.1            ViraGenics shall be entitled to Supply any stock of the
                  Products manufactured, or provide any Services requested,
                  prior to the date of termination, but shall not be entitled to
                  manufacture any further Products utilising the Institute's
                  Background Intellectual Property and/or the Institute's
                  Patent;

                                       32
<PAGE>

25.7.2            Any outstanding sums due to the Institute shall immediately
                  become due and payable and ViraGenics shall also remain due to
                  pay to the Institute any sums which subsequently accrue as a
                  consequence of clause 25.7.1;

25.7.3            each Party shall return to the other Parties any Confidential
                  Information received from any other Party in the course of
                  this Agreement and all copies of such material to the extent
                  such remains confidential;

25.7.4            any sub-licences of the Foreground Intellectual Property
                  granted by the Institute pursuant to clause 11.2 shall
                  automatically terminate;

25.7.5            all rights and licences granted in favour of the Institute or
                  ViraGenics under this Agreement shall cease except and to the
                  extent expressly provided otherwise under the terms of this
                  Agreement;

25.7.6            ViraGenics shall co-operate with the Institute in the
                  cancellation of all or any licences registered with the
                  relevant Patent Offices pursuant to this Agreement, and shall
                  execute any and all such documents and do acts and things as
                  may be reasonably required in such connection; and

25.7.7            clause 1 (Interpretation), clause 10 (Confidentiality), clause
                  15.1.2, clause 16.4, clause 20 (Taxation), clause 21 (Other
                  provisions relating to payment), this clause 25.7 and clause
                  41 (Governing Law) shall remain in full force effect
                  notwithstanding termination of the Agreement.

25.8              In the event of termination of the Project pursuant to clauses
                  5.2 or 7.3 the Foreground Intellectual Property shall belong
                  to ViraGenics and the Agreement shall remain in full force and
                  effect.

25.9              Where the resultant effect of the provisions of clause 25 is
                  that the Institute is the owner of the Foreground Intellectual
                  Property, ViraGenics shall, at the Institute's reasonable
                  request, execute all such documents and do such acts as may be
                  necessary to prove, give effect to or confirm the title of the
                  Institute to the Foreground Intellectual Property.

25.10             Termination of this Agreement shall not affect any rights or
                  obligations of either Party which have accrued prior to the
                  date of termination and all provisions which are expressed to
                  or by implication survive the termination of this Agreement
                  shall remain in full force and effect.

26.               FORCE MAJEURE

26.1              No Party shall be liable for any delay in performing or for
                  failure to perform its obligations hereunder if the delay or
                  failure results from any cause or circumstance occasioned by
                  any act of God, fire, act of government or state, war, civil
                  commotion, insurrection, embargo or other cause beyond the
                  control of that Party ("an event of force majeure"), provided
                  the same arises without fault, omission or negligence of such
                  Party. If in the event force majeure occurs, the date(s) for
                  performance of the obligation affected shall be postponed for

                                       33
<PAGE>

                  as long as is made necessary by the event of force majeure,
                  provided that if any event of force majeure continues for a
                  period of or exceeding six (6) months, the aggrieved Party
                  shall have the right in its sole discretion to terminate this
                  Agreement forthwith by written notice to the other Party. Each
                  Party shall use its reasonable endeavours to minimise the
                  effects of an event of force majeure.

26.2              In the event that the aggrieved Party referred to in clause
                  26.1 is ViraGenics:

26.2.1            the licences of the Institute's Patent and the Institute's
                  Background Intellectual Property granted by the Institute to
                  ViraGenics pursuant to clauses 13.1 and 13.2 shall remain in
                  full force and effect;

26.2.2            all Foreground Intellectual Property generated to the date of
                  said termination shall belong to ViraGenics;

26.2.3            ViraGenics shall observe its payment obligations pursuant to
                  clause 19; and

26.2.4            clause 1 (Interpretation), clause 2.2, clause 7.7 (Project
                  work), clause 8.4 (Project Reporting), clause 10
                  (Confidentiality), clause 15 (Licensing and sub-licensing),
                  clause 16 (ViraGenics' Obligations under the licence), clause
                  17 (Patent Infringement), clause 18 (Maintenance of Institute
                  Patent), clause 20 (Taxation), clause 21 (Other Provisions
                  relating to Payment), clause 23 (Guarantee), clause 27
                  (Notices), clause 36.1 (Further Assurances) and clause 41
                  (Governing Law) shall also remain in full force and effect.

26.3              In the event that the aggrieved Party referred to in clause
                  26.1 is the Institute:

26.3.1            ViraGenics shall have a period of twelve (12) months from the
                  date the event of force majeure occurs in which to find a
                  commercial third party to fulfil its obligations to the
                  Institute pursuant to the provisions of this Agreement.

26.4              If ViraGenics should fail to find a commercial third party as
                  set out in clause 26.3.1, ViraGenics shall grant to the
                  Institute licences of the Foreground Intellectual Property and
                  the ViraGenics' Background Intellectual Property provided
                  always that should the Institute itself or through any
                  licensee receive income from any such licences, the Institute
                  undertakes to pay to ViraGenics royalties equivalent to those
                  as set out in Clause 19.

27.               NOTICES

27.1              Notice under this Agreement shall be given by delivery by hand
                  (upon verification of receipt), pre-paid air mail post,
                  courier or transmitted by facsimile and addressed as follows:-

                  In the case of Institute:

                                       34
<PAGE>

                  Roslin Institute (Edinburgh)
                  Roslin
                  Edinburgh
                  Midlothian EH25 9PS

                  For the attention of:   Assistant Director (Company Secretary)


                  In the case of ViraGenics:

                  ViraGenics, Inc.
                  C/o Viragen (Scotland) Limited
                  Pentlands Science Park
                  Bush Loan
                  Penicuik
                  Midlothian
                  EH26 0PZ

                  For the attention of:   Dr Karen Jervis


                  In the case of Viragen:

                  Viragen, Inc.
                  C/o Viragen (Scotland) Limited
                  Pentlands Science Park
                  Bush Loan
                  Penicuik
                  Midlothian
                  EH26 0PZ

                  For the attention of:   Dr Karen Jervis

27.2              If a Party changes its address for notification purposes, then
                  it shall give the other Parties prior written notice of the
                  new address and the date on which it shall become effective.

27.3              Any notice will be deemed to be delivered if sent by personal
                  delivery or courier upon delivery at the address of the
                  relevant Party if sent by pre-paid airmail post fourteen (14)
                  days after the date of posting and if sent by facsimile upon
                  confirmation of transmission.

28.               VARIATIONS

28.1              No variation of or amendment to this Agreement shall bind any
                  Party unless made in writing and signed by all the Parties
                  hereto. The Parties shall at all times remain willing to
                  discuss possible contractual variations that have been
                  prompted by technical or other factors although no Party shall
                  have any obligation to agree to any such variation proposed.

                                       35
<PAGE>

29.               WAIVERS

29.1              Failure by a Party to enforce or exercise, at any time or for
                  any period, any term of this Agreement, does not constitute,
                  and shall not be construed as, a waiver of such term and shall
                  not affect the right later to enforce such term or any other
                  term herein contained.

30.               ASSIGNATION

30.1              No Party may assign, transfer, sub-contract or otherwise
                  dispose of the benefit or burden of this Agreement to a third
                  party without the prior consent of the other Parties such
                  consent not to be unreasonably withheld or delayed save that:-

30.1.1            the Institute may assign the benefit and burden of this
                  Agreement to any wholly owned subsidiary of the Institute
                  provided always that the Institute undertakes to guarantee the
                  complete performance of the Institute's obligations pursuant
                  to this Agreement by any such wholly owned subsidiary of the
                  Institute; and

30.1.2            ViraGenics and/or Viragen may assign the benefit and burden of
                  this Agreement in connection with the disposal of all its
                  assets whether by way of sale, merger or other corporate
                  re-organisation provided in so doing ViraGenics or Viragen as
                  the case may be shall impose at the date of such disposal and
                  provide to the Institute a binding and effective continuing
                  contractual obligation on the assignee in favour of ViraGenics
                  or Viragen and the Institute to prohibit the assignee from
                  using the Institute's Background Intellectual Property,
                  ViraGenics' Existing Intellectual Property, the Foreground
                  Intellectual Property and/or the Institute's Patent to provide
                  any Products and/or Services or carry out experiments or
                  research using the same in any country within the Territory
                  which are illegal under the laws of the United States of
                  America and/or the United Kingdom of Great Britain and
                  Northern Ireland as at the date on which the Products and/or
                  Services are provided or which the experiments are carried out
                  or the research is conducted. Receipt by the Institute from
                  ViraGenics or Viragen as the case may be of confirmation in
                  terms satisfactory to the Institute pursuant to this clause
                  30.1.2 shall discharge ViraGenics or Viragen as the case may
                  be from any further obligation in respect of this clause.

31.               CHANGE OF CONTROL

31.1              If at any time control (as defined in Section 840 of the
                  Income and Corporation Taxes Act 1988) of ViraGenics is
                  acquired by any person or group of connected persons not
                  having control of ViraGenics at the date of this Agreement,
                  ViraGenics shall:

31.1.1            give immediate notice to the Institute identifying that person
                  or group of connected persons; and

31.1.2            following said change of control, undertake not to use the
                  Institute's Background Intellectual Property, ViraGenics'
                  Existing Intellectual Property, the Foreground Intellectual
                  Property and/or the Institute's Patent to provide any Products

                                       36
<PAGE>

                  and/or Services or carry out experiments or research using the
                  same in any country within the Territory which are illegal
                  under the laws of the United States and/or the United Kingdom
                  of Great Britain and Northern Ireland as at the date on which
                  the Products and/or Services are provided or which the
                  experiments are carried out or the research is conducted.
                  Receipt by the Institute from ViraGenics of such an
                  undertaking in terms satisfactory to the Institute pursuant to
                  this clause 31.1.2 shall discharge Viragen from any further
                  obligation in respect of this clause.

31.2              Notwithstanding termination of this Agreement pursuant to
                  clause 24.2, the licence, rights and obligations referred to
                  in clause 11.2 of this Agreement shall remain in full force
                  and effect.

31.3              If the Institute should:-

31.3.1            agree to the change of control referred to in clause 31.1; and

31.3.2            receive an undertaking referred to in clause 31.1.2,

                  the rights conferred on and the indemnity given to the
                  Institute by Viragen, and the obligations and liabilities of
                  Viragen, pursuant to clause 23 shall terminate with effect
                  from the date of change of control save for any loss suffered
                  by the Institute after the date of change of control but
                  relating to any failure of ViraGenics to perform its
                  obligations under this Agreement prior to the date of change
                  of control which shall continue to be guaranteed and
                  indemnified by Viragen under clause 23.

32.               ENTIRE AGREEMENT

32.1              This Agreement together with the Spur Agreement constitutes
                  the entire Agreement and understanding between the Parties
                  with respect to the subject matter hereof and supersedes the
                  Old DLCA, the Transfer Agreement and any other prior
                  agreement, understanding or arrangement between the Parties,
                  whether oral or in writing. No representation, undertaking or
                  promise shall be taken to have been given or be implied from
                  anything said or written in negotiations between the Parties
                  prior to this Agreement except as expressly stated in this
                  Agreement. No Party shall have any remedy in respect of any
                  untrue statement made to it upon which it has relied in
                  entering into this Agreement (unless such untrue statement was
                  made fraudulently) and that Party's only remedy shall be for
                  breach of contract as provided in this Agreement.

32.2              It is agreed by the Parties that :

32.2.1            the terms of this Agreement shall modify and supplement the
                  terms of the Spur Agreement and that the entire agreement
                  among the Parties for the purposes of clause 7 of the Spur
                  Agreement shall comprise this Agreement and the Spur
                  Agreement; and

32.2.2            the amendments to the Spur Agreement contained in this
                  Agreement are effective for the purposes of clause 6.3.1 of
                  the Spur Agreement, otherwise the Spur Agreement shall remain

                                       37
<PAGE>

                  in full force and effect in accordance with its terms. In the
                  event of any conflict between this Agreement and the Spur
                  Agreement, this Agreement shall prevail.

33.               SEVERABILITY

33.1              The invalidity or unenforceability of any term of or any right
                  arising pursuant to this Agreement shall not adversely affect
                  the validity or enforceability of the remaining terms and
                  rights.

34.               SURVIVAL

34.1              Provisions of this Agreement which either are expressed to
                  survive its termination or from their nature or context it is
                  contemplated that they are to survive such termination shall
                  remain in full force and effect notwithstanding such
                  termination. Any successor or assignee of a Party's interest
                  shall expressly assume in writing the performance of all the
                  terms and conditions of the Agreement to be performed by said
                  Party and such assignation shall not relieve the assignor of
                  any of its obligations under this Agreement.

35.               ENTICEMENT

35.1              The parties undertake that they shall not without the other
                  parties' prior written consent either during or after expiry
                  or termination of this Agreement for any reason engage, employ
                  or otherwise solicit for employment any person who during the
                  continuance of this Agreement was an employee or engaged by or
                  on behalf of the other Parties.

36.               FURTHER ASSURANCES

36.1              The Parties shall do and execute all such further acts and
                  things as are reasonably required to give full effect to the
                  rights given and the transactions contemplated by this
                  Agreement.

36.2              The Institute shall use its reasonable endeavours to cooperate
                  with ViraGenics to obtain any additional licences from Geron
                  Corporation required to exploit the Products and/or Services
                  in the Field.

37.               ANNOUNCEMENTS

37.1              The Parties agree that upon entering this Agreement they shall
                  issue a joint press release concerning this Agreement the
                  timing, content, wording and distribution of which shall be
                  agreed in writing by the Parties. ViraGenics shall in advance
                  of any disclosure of any document or the like falling with the
                  exceptions of clause 10.3.4, and in particular, before filing
                  any document or the like in connection with this Agreement
                  with the Securities and Exchange Commission, provide a copy
                  thereof to the Institute and take into account the Institute's
                  reasonable comments thereon.

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<PAGE>

37.2              The Institute shall, at ViraGenics' cost, provide all
                  reasonable assistance and co-operation to ViraGenics on
                  scientific issues relating to all investor and public
                  relations undertaken by ViraGenics in relation to the Project
                  including, but not limited to, interviews, press releases and
                  scientific meetings but subject always to the availability of
                  representatives of the Institute.

38.               PUBLICITY

38.1              ViraGenics will not use the name of the Institute, or any
                  member of the Institute's Project staff, including the Project
                  Director, in any publicity, advertising or news release
                  without the prior written approval of the Institute and for
                  such purposes, amongst others, the Project Director may give
                  such approval. The Institute will not use the name of
                  ViraGenics, or any employee of ViraGenics, in any publicity
                  without the prior written approval of ViraGenics. The Parties
                  shall agree the wording of any publicity, advertising or news
                  release.

39.               COSTS

39.1              ViraGenics shall meet the Institute's reasonable costs
                  (including legal fees and expenses) associated with the
                  Parties entering into this Agreement up to a limit of
                  (pound)1,400 plus VAT.

40.               POULTRY FACILITY

40.1              If ViraGenics or any Associated Company plans to construct a
                  new biopharmaceutical facility for CGMP poultry production ("a
                  Poultry Facility") then the Institute shall be notified
                  accordingly and the Institute shall be invited to tender for
                  the Poultry Facility to be located at the Institute's
                  premises. Alternatively, if ViraGenics or any Associated
                  Company becomes aware that a third party with whom it has
                  dealings is intending to construct a Poultry Facility then
                  ViraGenics shall use all reasonable endeavours to ensure that
                  the Institute is invited to tender for the Poultry Facility to
                  be located at the Institute's premises.

                                       39
<PAGE>

41.               GOVERNING LAW

41.1              This Agreement shall be governed by and construed in
                  accordance with the law of Scotland and the Parties hereby
                  submit to the non exclusive jurisdiction of the Scottish
                  courts provided that the grant of the security interest in
                  clause 19.4, and the perfection, performance, rights and
                  remedies thereunder shall be additionally governed by the
                  appropriate state and federal law of the United States:


IN WITNESS WHEREOF these presents consisting of this and preceding 39 pages
together with the Schedule in five parts are executed as follows:-


Subscribed for and on behalf of                 Subscribed for and on behalf of
ROSLIN INSTITUTE (EDINBURGH)                    VIRAGENICS INC
at Roslin                                       at 865 SW 78th Avenue, Suite 100
                                                Plantation, FL  333324

on   March 4, 2004                              on  March 2, 2004
     -------------                                  -------------

by   /s/ John Withers                           by /s/ Dennis W. Healey
     ------------------                            --------------------

Company Secretary                               DIRECTOR
-----------------                               --------
Title                                           Title

John Withers                                    Dennis W. Healey
---------------                                 ------------------
Full Name                                       Full Name

before the following witness:-                  before the following witness:-

/s/ Frances Burgess                             /s/ Margarida C. Parenti
----------------------                          ------------------------
Witness                                         Witness

Frances Burgess                                 Margarida C. Parenti
----------------------                          --------------------
Full Name                                       Full Name

                                       40
<PAGE>




Subscribed for and on behalf of

VIRAGEN INC
at 865 SW 78th Avenue, Suite 100
Plantation, FL 333324

on  March 2, 2004
    -------------

by /s/ Dennis W. Healey
   --------------------
Chief Financial Officer
-----------------------
Title

Dennis W. Healey
----------------
Full Name

before the following witness:-

/s/ Margarida C. Parenti
------------------------
Witness

Margarida C. Parenti
--------------------
Full Name

                                       41