Document:

<PAGE>
                                                                   Exhibit 10.18

                              TERMINATION AGREEMENT

         THIS TERMINATION AGREEMENT ("Agreement") is made and entered as of this
28th day of September, 2001 (the "Effective Date"), between Viragen Technology,
Inc., a Delaware corporation ("VTI"), and Viragen (Scotland) Ltd., a Scottish
Private Limited Company ("VSL").

                                    RECITALS

         WHEREAS, VTI and VSL are parties to that certain license agreement
dated July 12, 1995 ("License Agreement"), a copy of which is attached hereto as
Exhibit A, through which VTI granted to VSL certain exclusive and nonexclusive
licenses to use certain technology to manufacture and distribute natural alpha
interferon derived from human leukocytes ("Omniferon").

         WHEREAS, VTI is a wholly-owned subsidiary of Viragen, Inc., a Delaware
corporation ("VI").

         WHEREAS, VSL is a wholly owned subsidiary of Viragen (Europe) Ltd., a
Delaware corporation ("VE"), which is a majority owned subsidiary of VI.

         WHEREAS, pursuant to an agreement dated September 28, 2001, VE has
acquired all of the issued and outstanding shares of stock of BioNative AB, a
Swedish company ("BN").

         WHEREAS, BN manufactures and distributes a human leukocyte derived
interferon product ("Alfanative").

         WHEREAS, Alfanative has a targeted market similar to that of OMNIFEREON
but does not utilize the technology transferred through the License Agreement,
and is a competing product of Omniferon.

         WHEREAS, in that both BN and VSL are wholly owned subsidiaries of VE,
and BN owns the rights to manufacture and distribute Alfanative, the parties to
the License Agreement have agreed that there is no longer any business purpose
for VSL to maintain its rights under the License Agreement to manufacture and
distribute Omniferon, and both parties would benefit from the elimination of the
rights and obligations provided under the License Agreement.

         WHEREAS, the parties to the License Agreement have agreed to terminate
the License Agreement pursuant to the terms and conditions of this Agreement.

                                       1
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         Now therefore, in consideration of the premises, mutual promises,
covenants, terms and conditions contained herein, and, other good and valuable
consideration, the receipt and sufficiency of which are acknowledged, the
parties hereto agree as follows:

         1. RECITALS. The above recitals are true, correct, and are herein
incorporated by reference.

         2. DEFINED TERMS. All terms not otherwise defined herein shall have the
same meaning as in the License Agreement.

         3. TERMINATION OF LICENSE AGREEMENT. VTI and VSL agree that the License
Agreement shall be terminated as of the date hereof. As a result of such
voluntary termination, the License Agreements shall no longer be binding on
either party, and VSL shall immediately cease its use of the Licensed Property
and the Licensed Products.

         4. PAYMENT OF ROYALTIES. VTI and VSL agree that as of the date of the
termination of the License Agreement VSL owes VTI a royalty pursuant to Section
8 of the License Agreement in the amount of five hundred thousand dollars
($500,000) (the "Royalty"). The parties agree that VSL or VE shall pay VTI the
Royalty in cash or common stock of VE, valued at fair market value on the date
of payment, within 12 months of the date of this Termination Agreement. Until
such time as the Royalty or any unpaid portion thereof remains outstanding, VSL
or VE shall pay VTI interest on the unpaid balance at 6% per annum. The parties
agree that, with the exception of the foregoing Royalty, neither party is
entitled to any additional compensation or other remuneration under the terms of
the License Agreement, and neither party shall be entitled to any compensation
or other remuneration as a result of the termination of the License Agreement.

         5. CONFIDENTIALITY. Each party acknowledges that during the term of the
License Agreement it was made privy to the other party's trade secrets,
processes, methods, ideas, customer lists, product information, services,
training methods, technical information, marketing activities and procedures,
credit data, financial data, and other information considered to be confidential
by the other party (the "Proprietary Information"). Each party acknowledges that
the other party's Proprietary Information is valuable, special and a unique
asset of the other party. In light of the highly competitive nature of the
industry in which the parties conduct business, each party agrees that all
Proprietary Information of the other party, heretofore obtained by the party,
shall be considered confidential. In recognition of this fact, each party agrees
that it will not use or disclose any of such Proprietary Information of the
other party for its own purposes or for the benefit of any person or other
entity or organization under any circumstances unless such Proprietary
Information has been publicly disclosed generally or, unless upon written advice
of legal counsel reasonably satisfactory to the other party, it is legally
required to disclose such Proprietary Information.

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         6. FURTHER ASSURANCES. Each party agrees to use all reasonable efforts
to take, or cause to be taken, all action and to do, or cause to be done, all
things necessary, proper, or advisable under applicable laws and regulations to
consummate and make effective the termination of the License Agreement and all
other provisions of this Agreement. In case at any time after the date hereof
any further action is necessary or desirable to carry out the purposes of this
Agreement, the proper officers and/or directors of the parties shall take all
such necessary action.

         7. GOVERNING LAW. This Agreement shall be construed and interpreted and
enforced in accordance with and shall be governed by the laws of the State of
Florida, without giving effect to any choice or conflict of law provision or
rule (whether of the State of Florida or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the State of
Florida.

         8. ENTIRE AGREEMENT AND MODIFICATION. This Agreement supersedes all
prior agreements between the parties with respect to its subject matter and
constitutes a complete and exclusive statement of the terms of the agreement
between the parties with respect to its subject matter. This Agreement may not
be amended except by a written agreement executed by the party to be charged
with the amendment.

         9. SEVERABILITY. If any provisions of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.

         10. COUNTERPARTS. This Agreement may be executed in two or more
original or facsimile counterparts, each of which shall be deemed an original
and all of which together shall constitute but one and the same instrument.

         IN WITNESS WHEREOF, the parties have executed and entered into this
Agreement effective as of the date first set forth above.

                                             Viragen Technology, Inc.

                                             By:  /s/ Gerald Smith
                                                  --------------------------
                                             Its: Chairman & CEO
                                                  --------------------------

                                             Viragen (Scotland) Ltd.

                                             By:  /s/ Dennis W. Healey
                                                  --------------------------
                                             Its:     Director
                                                  --------------------------

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                                    Exhibit A

                                LICENSE AGREEMENT

                                       4<PAGE>
                                                                   Exhibit 10.19

--------------------------------------------------------------------------------
                        SUPPLY AND DISTRIBUTION AGREEMENT
--------------------------------------------------------------------------------

1.            PARTIES

                  This Agreement is made between

                  VIRAGEN (EUROPE) LTD. having its principal address at 865 SW
                  78th Avenue, Suite 100, Plantation, FL 33324 and VIRAGEN
                  (SCOTLAND) LTD. having its principal address at Pentland
                  Science Park, Bush Loan, Peniculk, Midlothian EH260 PPZ,
                  UNITED KINGDOM,

                  hereinafter referred to as "the Company" and

                  TRADEWAY INCORPORATED, 187 W. Orangethorpe, Suite 1,
                  Placentia, CA 92870 and with offices in Taipei, Taiwan at 13
                  Lane 199, Section 6, YenPing North Road, Taipei, Taiwan 111.

                  hereinafter referred to as "the Distributor".

2.            PURPOSE

                  The purpose of this Agreement is to grant the Distributor the
                  exclusive right to market, sell and distribute the Product
                  within the Territory as defined in Exhibit A and in accordance
                  with the terms and conditions expressed herein.

3.            DEFINITIONS

                  In this Agreement, each time the following terms are used with
                  initial capitals, their meanings shall be as specified
                  hereunder.

                  -   "Affiliated Companies" shall mean, in relation to a given
                      company, any company which, directly or indirectly,
                      controls, is controlled by or is under common control with
                      such company.

                  -   "Batch" and "Lot" shall mean a defined quantity of the
                      Product which has been produced during a defined cycle of
                      manufacture, and which is identified by a unique
                      production number.

                  -   "Contract Year" shall mean any period of l2 (twelve)
                      consecutive calendar months following the Effective Date,
                      as defined hereunder, or anniversary thereof.

                  -   "Distribution Record" shall mean the record sheet
                      detailing every shipment of the Product made by the
                      Distributor to any of its customers including, but not
                      limited to, the customer's name, address, batch number,
                      number of bottles and date of shipment.

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                  -   "Effective Date" shall mean the first day of the month
                      following the month during which the Distributor is
                      granted the "Product License", hereinafter "PL", as
                      here-under defined.

                  -   "Parties" shall mean the Company and the Distributor.

                  -   "Party" shall mean either the Company or the Distributor.

                  -   "PL" shall mean the Product License (or authorization
                      under a physician prescription/named patient program)
                      granted by the competent medical authorities of Taiwan for
                      allowing the sale and distribution of the Product in the
                      Territory.

                  -   "Price" shall mean the price of the Product as described
                      in Exhibit B.

                  -   "Product" shall mean Interferon Alfanative(R) as
                      chemically described and with the specification given in
                      Exhibit C as modified from time to time according to the
                      provisions of Exhibit B.

                  -   "Recall Operation" shall mean the operation for recalling
                      the Product if it is suspected or known to be defective.

4.            APPOINTMENTS

                  The Company hereby appoints the Distributor as its exclusive
                  Distributor for the Product in the Territory (as defined in
                  Exhibit A) and Distributor hereby accepts such appointment in
                  accordance with the terms and conditions herein expressed.

5.            PRODUCT PURCHASE AND SUPPLY COMMITMENTS

5.1               Distributor  and Company agree to the purchase and supply of
                  the following U.S. Dollar purchase and sales of Product over
                  the initial term of this Agreement per the following
                  Performance Schedule, subject to the terms and conditions
                  herein expressed:
<TABLE>
<CAPTION>

                  ------------------------------------------------------------------------------------------
                                                    PERFORMANCE SCHEDULE
                  ------------------------------------------------------------------------------------------
                                                                                        ESTIMATED PURCHASE
                                                                                        AND SALES IN U.S.
                          PERIOD                            DURATION                         DOLLARS
                  ----------------------- -------------------------------------------- ---------------------
                  <S>                     <C>                                          <C>

                  Initial Period          First Consecutive 12 to 18 Months                  $5 Million
                  ----------------------- -------------------------------------------- ---------------------
                  First Period            Second Consecutive 12 to 18 Months                $50 Million
                  ----------------------- -------------------------------------------- ---------------------
                  Second Period           Third Consecutive 12 Months                       $50 Million
                  ----------------------- -------------------------------------------- ---------------------
                  Third Period            Fourth Consecutive 12 Months                      $50 Million
                  ----------------------- -------------------------------------------- ---------------------
                  Fourth Period           Fifth Consecutive 12 Months                       $50 Million
                  ----------------------- -------------------------------------------- ---------------------
                  Fifth Period            Sixth Consecutive 12 Months                       $50 Million
                  -------------------------------------------------------------------- ---------------------
                                                                                Total      $255 Million
                                                                                           ============
                  ------------------------------------------------------------------------------------------
</TABLE>

                  *  Fifth Period (and any portion thereof) is operative if less
                     than 18 months is achieved in either the First and/or
                     Second Periods.

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5.2               Distributor will initiate a 200 patient hepatitis C clinical
                  evaluation immediately after receipt of initial shipment of
                  Product. Distributor will pay for all materials (including
                  Product), costs and expenses incurred for clinical
                  evaluations. The Company agrees to provide Distributor with a
                  ten percent (10%) discount on the agreed pricing of the
                  Product up until the equivalent cost of the 200 patients'
                  material (Product) has been absorbed after which the full
                  price shall be paid by the Distributor.

6.            MEDICAL REGISTRATION

6.1               The Distributor shall take any and all necessary measures in
                  order to obtain and maintain appropriate approvals from the
                  Taiwanese regulatory authorities which shall include, but not
                  be limited to, a PL and authorization to distribute the
                  Product within Taiwan. All costs and expenses associated with
                  obtaining regulatory approval and the necessary permits to
                  sell the Product in the Territory shall be borne by the
                  Distributor (as described in Exhibit A).

6.2               If the PL is not obtained within eighteen (18) months from the
                  date of the last signature to this Agreement, Viragen shall
                  have the right to terminate the Agreement according to the
                  conditions contained in Article 11 below.

6.3               The Distributor shall pay all regulatory and governmental
                  registration fees, all the annual registration maintenance
                  fees and other fees required for the sale of the Product as
                  promulgated by any local, regional or national governmental
                  authority.

6.4               In the event the Company is not free to disclose to the
                  Distributor any information required by the responsible
                  regulatory or other authorities, the Company shall be obliged
                  to make such secret information available to the authorities
                  on the Distributor's behalf at its own cost and expense.

6.5               The Company shall receive two (2) copies of all registration
                  certificates, documentation for reimbursement and any other
                  data or documentation forthwith upon their issuance. The
                  Distributor specifically agrees to provide the Company with
                  copies of all correspondence with the registration authorities
                  as well as any and all government agencies. Each party shall
                  furnish the other with information on any observed unexpected
                  side effects, injury, toxicity or sensitivity reaction
                  associated with the clinical use, studies, investigations or
                  tests of the Product in accordance with Exhibit D, which
                  contains a sub-agreement.

6.6               Distributor will at its own cost register the Product in
                  Taiwan and the Company will be the owner of the Registration
                  in accordance with the existing rules of the Taiwanese law.
                  Tradeway will complete the Registration of the Product in
                  Taiwan within six (6) months or earlier from the date of the
                  last signature to this Agreement.

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7.            COMPETITION, REPORTS, FORECASTS, INFORMATION AND INVENTORY

7.1           Obligation Not to Compete

                  The Company shall refrain from selling the Product in the
                  Territory and shall not grant nor appoint any other person or
                  entity as Distributor of the Product in the Territory.

                  The Distributor shall not manufacture, sell or distribute any
                  interferon or other products which compete with the Product.
                  The Distributor may, however, continue its business activities
                  with respect to such products as it sells or distributes on
                  the date of signing this agreement as reflected in Exhibit E.
                  The Distributor may nominate a Sub-Distributor upon submission
                  of a request for approval and a copy of the draft
                  Sub-Distributor Agreement which shall be submitted to the
                  Company for its approval. No Sub-Distributor agreement shall
                  be valid without the written approval of the Company.

                  From the date of this agreement, Distributor shall not
                  distribute, directly or indirectly, any products containing
                  the same active ingredients as the Product.

                  The Distributor hereby warrants that it shall not seek
                  customers for the Product outside the Territory, sell the
                  Product outside the Territory, or establish any branch or
                  maintain any distribution depot outside the Territory. The
                  Sub-Distributor Agreement shall require the Sub-Distributor to
                  so warrant and the Distributor shall be accountable to the
                  Company for enforcing this provision.

                  The Distributor shall not have the right to produce the active
                  ingredient of the Product.

7.2           Reports and Agreements

                  The Distributor agrees to furnish the Company each calendar
                  quarter, or at such intervals as agreed upon by the Company
                  and the Distributor, with a true and accurate report on all
                  sales of the Product in the Territory, as specified herein.
                  The Distributor agrees to also furnish the Company with copies
                  of all agreements, brochures, pamphlets and documents which
                  may relate to the Product including those developed, produced
                  or used by the Distributor in connection with the sale of the
                  Product. The Distributor agrees not to use any such material
                  without the Company's prior written approval. Upon submission,
                  the Company agrees to respond promptly without any unnecessary
                  delay and consent shall not be unreasonably withheld.

                  At any time upon reasonable request of the Company,
                  Distributor agrees provide the Company with information,
                  including but limited to, selling prices, market trends,
                  competitive environment and competitor's prices, technical or
                  commercial information useful for the adaptation of the
                  Product to market requirements. Distributor agrees to send to
                  the Company a quarterly report on market developments in the
                  Territory and Distributor's sales progress relating to the
                  Product.

                  At any time and upon reasonable request of the Company,
                  Distributor shall permit the Company's representative(s) to
                  accompany Distributor's representative(s) on visits made to
                  customers in order to have the Company better acquainted with
                  the specificity of the market for the Product in the
                  Territory. The Company agrees not to circumvent the
                  Distributor during the term hereof and any renewal.

                                       4
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7.3           Forecasts

                  Following PL approval, the Distributor shall submit to the
                  Company each calendar quarter during each calendar year a
                  rolling forecast for the following 4 (four) quarters showing
                  the planned purchase quantities of the Product. The
                  Distributor shall place its firm orders for the Product for
                  the following quarter with the rolling forecast. Before
                  approval by the Company, the Distributor shall submit each
                  month a rolling forecast for the following twelve months
                  connected to firm orders for the Product for the following
                  quarter.

7.4           Information

                  The Company shall provide the Distributor with all presently
                  available data, information and documents necessary for the
                  carrying out of this Agreement, including technical documents
                  and advertising material.

7.5           Inventory

                  The Distributor shall buy and maintain, at his own cost, an
                  inventory of the Product equaling no less than the amount
                  forecasted for the following quarter and see to it that the
                  Product is kept in good condition and that all reasonable
                  precautions are taken to prevent its deterioration at its own
                  cost, expense and liability.

8.            THE DISTRIBUTOR

8.1           Independency

8.1.1         For Its Own Account

                  The Distributor shall buy and sell the Product in its own name
                  and for its own account and act in all respects as an
                  independent contractor. The Distributor shall organize the
                  distribution of the Product in such a manner as to most
                  effectively promote the sale of the Product and maintain a
                  level of product support necessary for the proper selling,
                  marketing and distribution of the Product.

8.1.2         Independent Contractor

                  This Agreement does not designate the Distributor to be the
                  agent, partner or legal representative of the Company for any
                  purpose whatsoever, and the business con-ducted by the
                  Distributor pursuant to this Agreement with third parties
                  shall be wholly at the Distributor's own risk and account as
                  an independent contractor.

                  The Distributor is not granted any right or authority to
                  assume or create any obligation or responsibility, express or
                  implied, on behalf of or in the name of the Company or to bind
                  the Company in any manner whatsoever.

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8.2           Unfair Competition and Infringement of Rights

                  The Distributor shall inform the Company of all acts of unfair
                  competition and of all infringement of patents, trade mark,
                  trade names, or similar rights of the Company which have come
                  to its attention to the extent that the rights of the Company
                  have been violated. If requested by the Company, the
                  Distributor shall assist the Company at the Company's expense
                  in any action or litigation involving such acts or
                  infringements.

8.3           Distribution Records

                  In order to enable the Company to comply with the requirements
                  of the European Code of Good Manufacturing Practice (Volume IV
                  of the Rules Governing Medical Products in the European
                  Community), the Distributor shall keep Distribution Records
                  for each Batch of the Product sold to the customers. This
                  information shall be made available to the Company in case of
                  Recall Operation or upon request, within two working days, by
                  sending a fax, confirmed by a letter, to:

                  BioNative AB                        Viragen (Scotland) LTD.
                  Tvistevagen 48                      Pentland Science Park
                  S-907 36 Umea                       Bush Loan, Peniculk
                  Sweden                              Midlothian EH260 PPZ
                                                      United Kingdom

                  Tel no:   46-90-172250              Tel no:   44-131-445-6268
                  Fax no:   46-90-193736              Fax no:   44-131-445-6269

9.            CONDITIONS OF SALE

9.1           Purchase Orders

                  The Distributor shall present all orders for the Product to be
                  purchased under this Agreement to the Company together with
                  adequate delivery instructions and pre-payment. Orders
                  presented by the Distributor shall bind the Company only after
                  written confirmation of acceptance thereof by the Company.

9.2           Price Guidelines

9.2.1         Price and Conditions

                  The Distributor shall purchase the Product at prices and on
                  conditions set forth by the Company from time to time in
                  Exhibit B. Notwithstanding the above, the Company shall be
                  entitled to change any Product Price at any time subject to
                  giving Distributor six (6) months prior written notice.

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9.2.2         Payment Terms

                  The Distributor shall pay the Company for the Product supplied
                  according to payment terms as set forth in Exhibit B.

9.3           Advertising and Promotion

9.3.1         Best Efforts

                  The Distributor shall use its best efforts and diligence in
                  promoting and initiating effectively the sales of the Product
                  throughout the whole of its Territory.

9.3.2         Advertising and Promotional Activities

                  The Distributor shall ensure the advertising and the promotion
                  of the Product and, to a reasonable extent, the participation
                  in conventions, trade shows and exhibitions held in the
                  Territory. The costs of advertising and promotion are to be
                  borne by the Distributor. All advertising and promotional copy
                  shall be submitted to the Company for its written approval
                  prior to release.

9.3.3         Conformity with Applicable Laws

9.3.4.        The Distributor shall be responsible for any advertising and
              promotional material for the Product and for their conformity with
              applicable laws and regulations.

9.3.5         Thirty (30) days before the first delivery takes place,
              Distributor shall provide the Company with the art works of:

                  -   the carton
                  -   the labels for the Product and the cardboard box per the
                      models communicated by the Company to the Distributor, and
                      the leaflets to be packed with the Product

              all of which shall be approved by the Company.

9.3.6         Before approval, the Company will deliver the Product in ampoules
              of 3 and 6 MIU, labeled with English text indicating batch numbers
              and expiration date, packed in plastic trays, each containing five
              ampoules.

9.3.7         Distributor shall be responsible for delivering copy of any text
              in Chinese that may be required under law, rule or regulation.

10.           GENERAL PROVISIONS

10.1          Trade Secrets

                  The Distributor shall not, even after the expiration of this
                  Agreement, use or communicate to any third party any trade
                  secrets which the Distributor has come to know in one way or
                  another through its work for the Company. The obligation shall

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<PAGE>

                  cease at the end of a period of (five) 5 years from the date
                  of the termination or expiration of this Agreement; however,
                  the obligation shall not cease for any reason prior to the end
                  of the first (ten) 10 years after the signing of the
                  Agreement.

                  The Distributor assumes the responsibility, liability and
                  obligations that its employees and any Sub-Distributor and its
                  employees shall preserve the secrecy of trade secrets with
                  respect to third parties.

10.2          Trademarks

                  Trademarks, Tradenames and Copyrights used by the Distributor
                  for the Product shall be the property of the Company, and the
                  Distributor agrees to use only such Trademarks, Tradenames and
                  Copyrights as indicated and approved in writing by the
                  Company. It is agreed that the Company's registered trademark
                  of the Product, Interferon Alfanative(R), Omniferon(TM) or
                  Multiferon(TM) may be used in Taiwan, provided a registration
                  of these trademarks will be obtainable and maintained.

                  The Distributor shall not, without the Company's prior written
                  consent, use the Company's corporate name, telegraphic
                  address, graphic or other trademarks, whether during the
                  maintenance of or after the termination of this Agreement.

                  The Distributor shall not register or attempt to register for
                  any purpose any trade-mark, tradename, copyright, name, title
                  or expression of the Company as used on the Product or any
                  other trademark or any tradename which is similar thereto.

                  Electronic emails may be considered adequate consent if
                  originated at the Company's premises.

                  The Company shall not be liable to compensate the Distributor
                  for any claims, expenses, costs, losses or damages the
                  Distributor may suffer as a result of the infringement of any
                  third party intellectual property rights in connection with
                  the transactions contemplated hereunder.

10.3          Assignment

                  The Company shall have the right to assign this Agreement,
                  upon written notice to Distributor but without the prior
                  consent of Distributor, to:

                  a)  any of its Affiliated Companies; or

                  b)  its successors in interest as a result of a statutory
                      merger or consolidation; or

                  c)  a company acquiring all or substantially all of the
                      Company's  business and assets  including the part
                      concerned by this Agreement.

                  The Company reserves the right to terminate this Agreement
                  whenever the control of the Distributor's company passes over
                  to another party than the party controlling it at the time of
                  signature of this present Agreement. Exhibit F lists the
                  current stockholders of the Distributor and its affiliates.

10.4          Force Majeure

                  If due performance of this Agreement by either party is
                  affected in whole or in part by reason of any event, omission,

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<PAGE>

                  accident, general shortage of commodities, legal circumstances
                  or other matter beyond the reasonable control of such party,
                  it shall give prompt notice thereof to the other party and
                  shall be under no liability for any loss, damage, injury or
                  expense suffered by the other party for this reason. Both
                  parties shall use all reasonable efforts to avoid or overcome
                  the causes affecting performance and the party whose
                  performance is affected by such force majeure shall fulfill
                  all outstanding obligations as soon as possible.

10.5          Warranties and Liability

10.5.1        The Company warrants to the Distributor that the Product delivered
              hereunder shall comply with the specification set forth in the
              Product License and consistent with Exhibit C.

                  a)  If the parties agree that a certain lot of the Product
                      supplied hereunder fails to meet said specification or is
                      otherwise defective or if such lot is recognized as
                      defective by an independent laboratory as provided for
                      hereafter in this section, and unless otherwise mutually
                      agreed upon, the Distributor shall send such lot back to
                      the Company and the Company shall replace it at its own
                      expense, including the freight back, with a new lot of the
                      Product conforming with said specification. The
                      Distributor shall have no other remedies against the
                      Company for defects in the Product.

                  b)  If the parties fail to agree that a certain lot of the
                      Product supplied hereunder meets said specification,
                      Distributor may request an expert appraisal by an
                      independent laboratory, not associated with any of the
                      parties hereto, to determine whether the Product complies
                      with said specification. Should the Company disagree with
                      regard to the choice of laboratory, the Company has the
                      right to request that the laboratory is appointed by the
                      International Chamber of Commerce provided that the
                      Company informs the Distributor within two weeks after
                      having been informed by the Distributor about its choice
                      of laboratory, that the Company requests that the
                      appraisal shall be carried out by a laboratory appointed
                      by the Chamber. The report of the laboratory shall be
                      conclusive and binding on the parties hereto. All expenses
                      related to such appraisal shall be borne by the party,
                      whose opinion of which has been found not to be correct.

                      No other warranties, expressed or implied, including,
                      without limitation, merchantability or fitness for a
                      particular purpose, are made or will be deemed to have
                      been made by the Company regarding the Products, except to
                      the extent expressly stated herein. Neither the
                      Distributor, nor any of its employees, agents or
                      representatives is authorized to give any warranties or
                      make any representations on behalf of the Company. In no
                      event shall the Company be held liable for any lost
                      profits or any other incidental or consequential damages
                      in connection with any claims arising out of or related to
                      any products supplied by the Company to the Distributor.

10.5.2            The Distributor shall indemnify and hold the Company harmless
                  from and against any and all liability, damage, loss, cost or
                  expense arising out of or resulting from any claims made or
                  suits brought against the Company or the Distributor, which
                  arise out of or result from the Distributor's negligent act or
                  omission in the marketing, selling or distribution of the
                  Product.

                                       9
<PAGE>

10.5.3            The Distributor has, and shall at all times during the term of
                  this Agreement and for a period of two years thereafter, have
                  full insurance coverage with reputable and sound insurance
                  covering all and any risks, including (without limitation) any
                  liabilities to third parties and the public (including without
                  limitation product liability). The Company will have the right
                  to review the insurance policies in order to make sure the
                  Distributor's insurance coverage is sufficient.

10.5.4            The Company represents that it will add the Distributor as a
                  Named Insured on its current International Liability Insurance
                  Policy held with MedMarc Casualty and Insurance Company under
                  Policy Number 00FL020010 within 30 days from the date of
                  execution of this agreement.

10.5.5        Compliance with Applicable Laws

                  The Distributor agrees that it will, on its own comply with
                  all laws, statutes and ordinance in the Territory relating to
                  the import and sale of the Product and agrees to indemnify and
                  hold the Company harmless in the event that any claim is made
                  against it by reason of the Distributor's failure to so
                  comply. In particular, the Distributor agrees to comply with
                  all safety laws and regulations in the Territory relating to
                  the Product and the Company agrees to provide all necessary
                  information and assistance to the Distributor to enable it to
                  so comply.

10.6          Taxes

                  The Distributor shall pay all excise or sales taxes that may
                  be required to be paid by the Company or the Distributor by
                  any statute, ordinance or regulation of any taxation
                  authority. In the event that the Company is required to or
                  does pay any of such taxes, the Distributor, upon being
                  informed of such payment, shall at once repay the amount
                  thereof to the Company. The Distributor, unless prohibited by
                  any such statute, ordinance or regulation, shall have the
                  right to require any dealer or Sub-Distributor handling such
                  goods to pay any such excise or sales taxes on the goods so
                  handled by him.

11.           DURATION AND TERMINATION

11.1          Duration

                  This Agreement shall have immediate force and effect and shall
                  remain in effect until the completion of the Fifth Period
                  described in Paragraph 5.1 of this Agreement and shall
                  continue thereafter for an additional three (3) year term and
                  continue thereafter for two automatic three (3) year terms
                  unless and until terminated by either party giving to the
                  other six (6) months notice in writing prior to the end of the
                  Initial Term or any Subsequent Term.

                                       10
<PAGE>

11.2          Termination

11.2.1        Failure to Fulfill Obligations or to Obtain or Maintain PL

                  This Agreement may be terminated with three (3) months written
                  notice forthwith by either party if the other party fails to
                  fulfill any of its obligations under this Agreement and such
                  default is not remedied within thirty (30) days of the date on
                  which a written notice thereof has been dispatched to the
                  defaulting party or if the Distributor fails to obtain or
                  maintain the PL as set forth in Article 6, Medical
                  Registration.

11.2.2        Termination for Bankruptcy or Insolvency

                  This Agreement may be terminated immediately in the event that
                  either party is declared insolvent, is adjudged bankrupt or
                  files a petition for bankruptcy or re-organization under any
                  bankruptcy law, is expropriated or sequestrated or submits or
                  has to submit to any other administrative or judicial measures
                  of control.

                  Insolvency is defined to mean the inability to pay debts, as
                  they become due and the excess of liabilities over assets.

11.2.3        Termination for Loss of License to Sell Product

                  The Company shall have a right to terminate this Agreement
                  with immediate effect should the Company's license to sell the
                  Product be withdrawn.

11.3          Effect of Termination

                  On the termination of this agreement, the Distributor shall
                  return, without delay, all registration and permission
                  documents to the Company together with all formulas,
                  manufacturing procedures and other confidential documentation
                  which the Distributor has obtained from the Company. The
                  Distributor agrees that it shall not make any further use of
                  this documentation. The Company shall have the option to
                  repurchase any paid unsold Product at prices paid by the
                  Distributor to the Company.

11.4          Notice of Termination

                  Provided that notice of termination has been dispatched by
                  registered letter, the notice shall be considered to have been
                  received by the addressee four days after the letter was so
                  dispatched.

11.5     Exclusive and Non-Exclusive Distribution Rights

                  In the event Distributor fails to achieve one-half (50%) of
                  the sales figures set forth under "Performance Standards" in
                  paragraph 5.1, then the exclusive distribution rights as set
                  forth herein may be cancelled in the Company's sole
                  discretion. If the exclusive rights are so cancelled, then
                  Distributor shall have non-exclusive distribution rights
                  within the Territory. Distributor shall remain the exclusive
                  distributor within the Territory during the term of this

                                       11
<PAGE>

                  agreement and any renewal thereof in the event Distributor has
                  generated one-half or more of the sales figures set forth
                  under Performance Standards in paragraph 5.1. This provision
                  shall not apply during the first 18 months of the term of this
                  Agreement and sales shall be calculated on a 12-month basis
                  thereafter.

11.6          Termination Compensation

                  Neither party hereto shall be liable to the other for any
                  termination compensation whether based on goodwill, loss of
                  income or otherwise.

12.           FINAL PROVISIONS

12.1          Governing Law

                  This Agreement shall be governed by the laws of the U.K..

12.2          Language

                  The English text of this Agreement shall prevail.

12.3          Arbitration

                  Any dispute in connection with this agreement shall be finally
                  settled by arbitration in accordance with the Rules of the
                  Arbitration Act of the International Chamber of Commerce and
                  the settlement will take place in Edinburgh, Scotland and be
                  conducted in the English language.

12.4          Modifications

                  All modifications and amendments to this Agreement shall be in
writing.

12.5.         Notices and Communications

                  All notices in connection with this Agreement shall be in
                  writing and be in the English language, as shall all other
                  written communications and correspondence, and may be given by
                  personal delivery, prepaid registered airmail letter,
                  telecopier, or telegram addressed to the Party required or
                  entitled to receive the same at its address or telefax number
                  set out below, or to such other address or telefax number as
                  such Party shall have designated by like notice to the other
                  Party. Notice of termination of this Agreement if given by
                  telecopier or telegram shall be confirmed by prepaid
                  registered airmail letter dated and posted within 24 hours.
                  The effective date of any notice if served by personal
                  delivery, telecopier, or telegram shall be deemed the first
                  business day in the city of destination following the dispatch
                  and if given by prepaid registered airmail letter only, it
                  shall be deemed served seven days after the date of posting.

12.6          Exhibits

                  All Exhibits attached hereto shall be made a part of this
                  Agreement.

                                       12
<PAGE>

12.7          No Waiver

                  The omission by either Party to exercise any right hereunder
                  shall not constitute a waiver thereof and shall not prevent
                  the subsequent enforcement of that right and shall not be
                  deemed to be a waiver of any subsequent right.

  12.8        Survival of Provisions

                  The provisions of this Agreement shall survive its termination
                  for so long as may be necessary to give efficacy thereto.

  12.9        Entire Agreement

                  This Agreement, which includes the Exhibits attached hereto,
                  contains the entire understanding and supersedes all prior
                  agreements of the parties with respect to the transactions
                  contemplated hereby. There are no agreements, promises,
                  warranties, covenants or understandings other than those
                  expressly set forth herein.

  12.10       Invalidity

                  Any provision of this Agreement that is invalid or
                  unenforceable in any jurisdiction shall, as to such
                  jurisdiction, be ineffective to the extent of such invalidity
                  or unenforceability without invalidating the remaining
                  provisions hereof or affecting the validity or enforceability
                  of such provision in any other jurisdiction.

IN WITNESS WHEREOF the parties hereto have hereunto set their hands the day and
year indicated below.

VIRAGEN (EUROPE) LTD.                            TRADEWAY INCORPORATED

By: /s/ Gerald Smith, Chairman                   By: /s/ Ian Huang, Coo
    --------------------------                       ------------------
(Name and Title)                                     (Name and Title)

Print: Gerald Smith                              Print: Ian Huang
Date: October 25, 2001                           Date: October 30, 2001

VIRAGEN (SCOTLAND) LTD.

By: /s/ Gerald Smith, Chairman
    ------------------------------------
(Name and Title)

Print: Gerald Smith    Date: October 25, 2001

                                       13

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