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                                                                   EXHIBIT 10.60

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES

                             STOCK PURCHASE WARRANT

                To Purchase __________ Shares of Common Stock of

                                  VIRAGEN, INC.

         THIS CERTIFIES that, for value received, __________ (the "Holder"), is
entitled, upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, at any time on or after January __, 2003 (the
"Initial Exercise Date") and on or prior to the close of business on the third
anniversary of the Initial Exercise Date (the "Termination Date") but not
thereafter, to subscribe for and purchase from Viragen, Inc., a corporation
incorporated in the State of Delaware (the "Company"), up to ________ shares
(the "Warrant Shares") of Common Stock, par value $0.01 per share, of the
Company (the "Common Stock"). The purchase price of one share of Common Stock
(the "Exercise Price") under this Warrant shall be $0.0625, subject to
adjustment hereunder. The Exercise Price and the number of Warrant Shares for
which the Warrant is exercisable shall be subject to adjustment as provided
herein. CAPITALIZED TERMS USED AND NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE
MEANINGS SET FORTH IN THAT CERTAIN SECURITIES PURCHASE AGREEMENT (THE "PURCHASE
AGREEMENT"), DATED JANUARY 23, 2003, BETWEEN THE COMPANY AND THE INVESTORS
SIGNATORY THERETO.

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                  1.       Title to Warrant. Prior to the Termination Date and
subject to compliance with applicable laws, this Warrant and all rights
hereunder are transferable, in whole or in part, at the office or agency of the
Company by the Holder in person or by duly authorized attorney, upon surrender
of this Warrant together with the Assignment Form annexed hereto properly
endorsed.

                  2.       Authorization of Shares. The Company covenants that
all Warrant Shares which may be issued upon the exercise of the purchase rights
represented by this Warrant will, upon exercise of the purchase rights
represented by this Warrant, be duly authorized, validly issued, fully paid and
nonassessable and free from all taxes, liens and charges in respect of the issue
thereof (other than taxes in respect of any transfer occurring contemporaneously
with such issue).

                  3.       Exercise of Warrant.

                                    (a)      Exercise of the purchase rights
         represented by this Warrant may be made at any time or times on or
         after the Initial Exercise Date and on or before the Termination Date
         by delivery to the Company of a duly executed facsimile copy of the
         Notice of Exercise Form annexed hereto (or such other office or agency
         of the Company as it may designate by notice in writing to the
         registered Holder at the address of such Holder appearing on the books
         of the Company); provided, however, within 5 Trading Days of the date
         said Notice of Exercise is delivered to the Company, the Holder shall
         have surrendered this Warrant to the Company and the Company shall have
         received payment of the aggregate Exercise Price of the shares thereby
         purchased by wire transfer or cashier's check drawn on a United States
         bank. Certificates for shares purchased hereunder shall be delivered to
         the Holder within the earlier of (i) 5 Trading Days after the date on
         which the Notice of Exercise shall have been delivered by facsimile
         copy or (ii) 3 Trading Days from the delivery to the Company of the
         Notice of Exercise Form by facsimile copy, surrender of this Warrant
         and payment of the aggregate Exercise Price as set forth above
         ("Warrant Share Delivery Date"); provided, however, in the event the
         Warrant is not surrendered or the aggregate Exercise Price is not
         received by the Company within 5 Trading Days after the date on which
         the Notice of Exercise shall be delivered by facsimile copy, the
         Warrant Share Delivery Date shall be extended to the extent such 5
         Trading Day period is exceeded. This Warrant shall be deemed to have
         been exercised on the date the Notice of Exercise is delivered to the
         Company by facsimile copy. The Warrant Shares shall be deemed to have
         been issued, and Holder or any other person so designated to be named
         therein shall be deemed to have become a holder of record of such
         shares for all purposes, as of the date the Warrant has been exercised
         by payment to the Company of the Exercise Price and all taxes required
         to be paid by the Holder, if any, pursuant to Section 5 prior to the
         issuance of such shares, have been paid. If the Company fails to
         deliver to the Holder a certificate or certificates representing the
         Warrant Shares pursuant to this Section 3(a) by the Warrant Share
         Delivery Date, then the Holder will have the right to rescind such
         exercise. In addition to any other rights available to the Holder, if
         the Company fails to deliver to the Holder a certificate or
         certificates representing the Warrant Shares pursuant to an exercise by
         the

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         second Trading Day after the Warrant Share Delivery Date, and if after
         such Trading Day the Holder purchases (in an open market transaction or
         otherwise) shares of Common Stock to deliver in satisfaction of a sale
         by the Holder of the Warrant Shares which the Holder anticipated
         receiving upon such exercise (a "Buy-In"), then the Company shall (1)
         pay in cash to the Holder the amount by which (x) the Holder's total
         purchase price (including brokerage commissions, if any) for the shares
         of Common Stock so purchased exceeds (y) the amount obtained by
         multiplying (A) the number of Warrant Shares that the Company was
         required to deliver to the Holder in connection with the exercise at
         issue times (B) the closing bid price of the Common Stock at the time
         of the obligation giving rise to such purchase obligation, and (2) at
         the option of the Holder, either reinstate the portion of the Warrant
         and equivalent number of Warrant Shares for which such exercise was not
         honored or deliver to the Holder the number of shares of Common Stock
         that would have been issued had the Company timely complied with its
         exercise and delivery obligations hereunder. For example, if the Holder
         purchases Common Stock having a total purchase price of $11,000 to
         cover a Buy-In with respect to an attempted exercise of shares of
         Common Stock with a market price on the date of exercise totaled
         $10,000, under clause (1) of the immediately preceding sentence the
         Company shall be required to pay the Holder $1,000. The Holder shall
         provide the Company written notice indicating the amounts payable to
         the Holder in respect of the Buy-In. Nothing herein shall limit a
         Holder's right to pursue any other remedies available to it hereunder,
         at law or in equity including, without limitation, a decree of specific
         performance and/or injunctive relief with respect to the Company's
         failure to timely deliver certificates representing shares of Common
         Stock upon exercise of the Warrant as required pursuant to the terms
         hereof.

                                    (b)      If this Warrant shall have been
         exercised in part, the Company shall, at the time of delivery of the
         certificate or certificates representing Warrant Shares, deliver to
         Holder a new Warrant evidencing the rights of Holder to purchase the
         unpurchased Warrant Shares called for by this Warrant, which new
         Warrant shall in all other respects be identical with this Warrant.

                                    (c)      Notwithstanding anything herein to
         the contrary, in no event shall the Holder be permitted to exercise
         this Warrant for Warrant Shares to the extent that (i) the number of
         shares of Common Stock owned by such Holder (other than Warrant Shares
         issuable upon exercise of this Warrant) plus (ii) the number of Warrant
         Shares issuable upon exercise of this Warrant, would be equal to or
         exceed 4.9999% of the number of shares of Common Stock then issued and
         outstanding, including shares issuable upon exercise of this Warrant
         held by such Holder after application of this Section 3(c). As used
         herein, beneficial ownership shall be determined in accordance with
         Section 13(d) of the Exchange Act. To the extent that the limitation
         contained in this Section 3(c) applies, the determination of whether
         this Warrant is exercisable (in relation to other securities owned by
         the Holder) and of which a portion of this Warrant is exercisable shall
         be in the sole discretion of such Holder, and the submission of a
         Notice of Exercise shall be deemed to be such Holder's determination of
         whether this Warrant is exercisable (in relation to other securities
         owned by such Holder) and of which portion of this Warrant is
         exercisable, in each case subject to such aggregate percentage
         limitation, and the Company shall have no obligation to verify or
         confirm the accuracy of such

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         determination. Nothing contained herein shall be deemed to restrict the
         right of a Holder to exercise this Warrant into Warrant Shares at such
         time as such exercise will not violate the provisions of this Section
         3(c). The provisions of this Section 3(c) may be waived by the Holder
         upon, at the election of the Holder, not less than 61 days' prior
         notice to the Company, and the provisions of this Section 3(c) shall
         continue to apply until such 61st day (or such later date, as
         determined by the Holder, as may be specified in such notice of
         waiver). No exercise of this Warrant in violation of this Section 3(c)
         but otherwise in accordance with this Warrant shall affect the status
         of the Warrant Shares as validly issued, fully-paid and nonassessable.

                                    (d)      If after one year if there is no
         effective Registration Statement registering the Warrant Shares, this
         Warrant may also be exercised by means of a "cashless exercise" in
         which the Holder shall be entitled to receive a certificate for the
         number of Warrant Shares equal to the quotient obtained by dividing
         [(A-B) (X)] by (A), where:

                           (A)      = the average of the high and low trading
                                    prices per share of Common Stock on the
                                    Trading Day preceding the date of such
                                    election;

                           (B)      = the Exercise Price of the Warrants; and

                           (X)      = the number of Warrant Shares issuable upon
                                    exercise of the Warrants in accordance with
                                    the terms of this Warrant.

                                    (e)      Until the Company obtains
         Shareholder Approval (as defined in Section 4.16 of the Purchase
         Agreement), the Holder's right to exercise this Warrant shall be
         limited to the extent such exercise causes the issuance to exceed such
         Holder's (or its predecessor's) pro-rata portion of the Issuable
         Maximum (as defined in Section 4(a)(iii) of the Debenture). The
         Termination Date shall be extended for a number of Trading Days equal
         to the number of days the exercise of this Warrant is prohibited
         hereunder.

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                  4.       No Fractional Shares or Scrip. No fractional shares
or scrip representing fractional shares shall be issued upon the exercise of
this Warrant. As to any fraction of a share which Holder would otherwise be
entitled to purchase upon such exercise, the Company shall pay a cash adjustment
in respect of such final fraction in an amount equal to such fraction multiplied
by the Exercise Price.

                  5.       Charges, Taxes and Expenses. Issuance of certificates
for Warrant Shares shall be made without charge to the Holder for any issue or
transfer tax or other incidental expense in respect of the issuance of such
certificate, all of which taxes and expenses shall be paid by the Company, and
such certificates shall be issued in the name of the Holder or in such name or
names as may be directed by the Holder; provided, however, that in the event
certificates for Warrant Shares are to be issued in a name other than the name
of the Holder, this Warrant when surrendered for exercise shall be accompanied
by the Assignment Form attached hereto duly executed by the Holder; and the
Company may require, as a condition thereto, the payment of a sum sufficient to
reimburse it for any transfer tax incidental thereto.

                  6.       Closing of Books. The Company will not close its
stockholder books or records in any manner which prevents the timely exercise of
this Warrant.

                  7.       Transfer, Division and Combination.

                           (a)      Subject to compliance with any applicable
         securities laws, transfer of this Warrant and all rights hereunder, in
         whole or in part, shall be registered on the books of the Company to be
         maintained for such purpose, upon surrender of this Warrant at the
         principal office of the Company, together with a written assignment of
         this Warrant substantially in the form attached hereto duly executed by
         the Holder or its agent or attorney and funds sufficient to pay any
         transfer taxes payable upon the making of such transfer. Upon such
         surrender and, if required, such payment, the Company shall execute and
         deliver a new Warrant or Warrants in the name of the assignee or
         assignees and in the denomination or denominations specified in such
         instrument of assignment, and shall issue to the assignor a new Warrant
         evidencing the portion of this Warrant not so assigned, and this
         Warrant shall promptly be cancelled. A Warrant, if properly assigned,
         may be exercised by a new holder for the purchase of Warrant Shares
         without having a new Warrant issued.

                           (b)      This Warrant may be divided or combined with
         other Warrants upon presentation hereof at the aforesaid office of the
         Company, together with a written notice specifying the names and
         denominations in which new Warrants are to be issued, signed by the
         Holder or its agent or attorney. Subject to compliance with Section
         7(a), as to any transfer which may be involved in such division or
         combination, the Company shall execute and deliver a new Warrant or
         Warrants in exchange for the Warrant or Warrants to be divided or
         combined in accordance with such notice.

                           (c)      The Company shall prepare, issue and deliver
         at its own expense (other than transfer taxes) the new Warrant or
         Warrants under this Section 7.

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                           (d)      The Company agrees to maintain, at its
         aforesaid office, books for the registration and the registration of
         transfer of the Warrants.

                  8.       No Rights as Shareholder until Exercise. Upon the
surrender of this Warrant and the payment of the aggregate Exercise Price (or by
means of a cashless exercise), the Warrant Shares so purchased shall be and be
deemed to be issued to such Holder as the record owner of such shares as of the
close of business on the later of the date of such surrender or payment. This
Warrant does not entitle the Holder to any voting rights or other rights as a
shareholder of the Company prior to such date.

                  9.       Loss, Theft, Destruction or Mutilation of Warrant.
The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant
or any stock certificate relating to the Warrant Shares, and in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to it
(which shall not include the posting of any bond), and upon surrender and
cancellation of such Warrant or stock certificate, if mutilated, the Company
will make and deliver a new Warrant or stock certificate of like tenor and dated
as of such cancellation, in lieu of such Warrant or stock certificate.

                  10.      Saturdays, Sundays, Holidays, etc. If the last or
appointed day for the taking of any action or the expiration of any right
required or granted herein shall be a Saturday, Sunday or a legal holiday, then
such action may be taken or such right may be exercised on the next succeeding
day not a Saturday, Sunday or legal holiday.

                  11.      Adjustments of Exercise Price and Number of Warrant
Shares.

                           (a)      Stock Splits, etc. The number and kind of
         securities purchasable upon the exercise of this Warrant and the
         Exercise Price shall be subject to adjustment from time to time upon
         the happening of any of the following. In case the Company shall (i)
         pay a dividend in shares of Common Stock or make a distribution in
         shares of Common Stock to holders of its outstanding Common Stock, (ii)
         subdivide its outstanding shares of Common Stock into a greater number
         of shares, (iii) combine its outstanding shares of Common Stock into a
         smaller number of shares of Common Stock, or (iv) issue any shares of
         its capital stock in a reclassification of the Common Stock, then the
         number of Warrant Shares purchasable upon exercise of this Warrant
         immediately prior thereto shall be adjusted so that the Holder shall be
         entitled to receive the kind and number of Warrant Shares or other
         securities of the Company which it would have owned or have been
         entitled to receive had such Warrant been exercised in advance thereof.
         Upon each such adjustment of the kind and number of Warrant Shares or
         other securities of the Company which are purchasable hereunder, the
         Holder shall thereafter be entitled to purchase the number of Warrant
         Shares or other securities resulting from such adjustment at an
         Exercise Price per Warrant Share or other security obtained by
         multiplying the Exercise Price in effect immediately prior to such
         adjustment by the number of Warrant Shares purchasable pursuant hereto
         immediately prior to such adjustment and dividing by the number of
         Warrant Shares or other securities of the Company resulting from such
         adjustment. An adjustment made pursuant to this paragraph shall become
         effective immediately after the effective date of such event
         retroactive to the record date, if any, for such event.

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                           (b)      Anti-Dilution Provisions. During the
         Exercise Period, the Exercise Price and the number of Warrant Shares
         issuable hereunder and for which this Warrant is then exercisable
         pursuant to Section 1 hereof shall be subject to adjustment from time
         to time as provided in this Section 11(b). In the event that any
         adjustment of the Exercise Price as required herein results in a
         fraction of a cent, such Exercise Price shall be rounded up or down to
         the nearest cent.

                           (i)      Adjustment of Exercise Price. If and
                  whenever the Company issues or sells, or in accordance with
                  Section 8(b) hereof is deemed to have issued or sold, any
                  shares of Common Stock for a consideration per share of less
                  than the then the Exercise Price or for no consideration (such
                  lower price, the "Base Share Price" and such issuances
                  collectively, a "Dilutive Issuance"), then, the Exercise Price
                  shall be reduced to equal the Base Share Price, provided, that
                  for purposes hereof, all shares of Common Stock that are
                  issuable upon conversion, exercise or exchange of Capital
                  Share Equivalents shall be deemed outstanding immediately
                  after the issuance of such Common Stock. Such adjustment shall
                  be made whenever such shares of Common Stock or Capital Share
                  Equivalents are issued.

                           (ii)     Effect on Exercise Price of Certain Events.
                  For purposes of determining the adjusted Exercise Price under
                  Section 11(b) hereof, the following will be applicable:

                                    (A)      Issuance of Rights or Options. If
                           the Company in any manner issues or grants any
                           warrants, rights or options, whether or not
                           immediately exercisable, to subscribe for or to
                           purchase Common Stock or other securities
                           exercisable, convertible into or exchangeable for
                           Common Stock ("Convertible Securities") (such
                           warrants, rights and options to purchase Common Stock
                           or Convertible Securities are hereinafter referred to
                           as "Options") and the price per share for which
                           Common Stock is issuable upon the exercise of such
                           Options is less than the Exercise Price ("Below Base
                           Price Options"), then the maximum total number of
                           shares of Common Stock issuable upon the exercise of
                           all such Below Base Price Options (assuming full
                           exercise, conversion or exchange of Convertible
                           Securities, if applicable) will, as of the date of
                           the issuance or grant of such Below Base Price
                           Options, be deemed to be outstanding and to have been
                           issued and sold by the Company for such price per
                           share. For purposes of the preceding sentence, the
                           "price per share for which Common Stock is issuable
                           upon the exercise of such Below Base Price Options"
                           is determined by dividing (i) the total amount, if
                           any, received or receivable by the Company as
                           consideration for the issuance or granting of all
                           such Below Base Price Options, plus the minimum
                           aggregate amount of additional consideration, if any,
                           payable to the Company upon the exercise of all such
                           Below Base Price Options, plus, in the case of
                           Convertible Securities issuable upon the exercise of
                           such Below Base Price Options, the minimum aggregate
                           amount of additional consideration payable upon the
                           exercise, conversion or exchange thereof at the time
                           such Convertible Securities first become exercisable,
                           convertible or

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                           exchangeable, by (ii) the maximum total number of
                           shares of Common Stock issuable upon the exercise of
                           all such Below Base Price Options (assuming full
                           conversion of Convertible Securities, if applicable).
                           No further adjustment to the Exercise Price will be
                           made upon the actual issuance of such Common Stock
                           upon the exercise of such Below Base Price Options or
                           upon the exercise, conversion or exchange of
                           Convertible Securities issuable upon exercise of such
                           Below Base Price Options.

                                    (B)      Issuance of Convertible Securities.
                           If the Company in any manner issues or sells any
                           Convertible Securities, whether or not immediately
                           convertible (other than where the same are issuable
                           upon the exercise of Options) and the price per share
                           for which Common Stock is issuable upon such
                           exercise, conversion or exchange is less than the
                           Exercise Price, then the maximum total number of
                           shares of Common Stock issuable upon the exercise,
                           conversion or exchange of all such Convertible
                           Securities will, as of the date of the issuance of
                           such Convertible Securities, be deemed to be
                           outstanding and to have been issued and sold by the
                           Company for such price per share. For the purposes of
                           the preceding sentence, the "price per share for
                           which Common Stock is issuable upon such exercise,
                           conversion or exchange" is determined by dividing (i)
                           the total amount, if any, received or receivable by
                           the Company as consideration for the issuance or sale
                           of all such Convertible Securities, plus the minimum
                           aggregate amount of additional consideration, if any,
                           payable to the Company upon the exercise, conversion
                           or exchange thereof at the time such Convertible
                           Securities first become exercisable, convertible or
                           exchangeable, by (ii) the maximum total number of
                           shares of Common Stock issuable upon the exercise,
                           conversion or exchange of all such Convertible
                           Securities. No further adjustment to the Exercise
                           Price will be made upon the actual issuance of such
                           Common Stock upon exercise, conversion or exchange of
                           such Convertible Securities.

                                    (C)      Change in Option Price or
                           Conversion Rate. If there is a change at any time in
                           (i) the amount of additional consideration payable to
                           the Company upon the exercise of any Options; (ii)
                           the amount of additional consideration, if any,
                           payable to the Company upon the exercise, conversion
                           or exchange of any Convertible Securities; or (iii)
                           the rate at which any Convertible Securities are
                           convertible into or exchangeable for Common Stock (in
                           each such case, other than under or by reason of
                           provisions designed to protect against dilution), the
                           Exercise Price in effect at the time of such change
                           will be readjusted to the Exercise Price which would
                           have been in effect at such time had such Options or
                           Convertible Securities still outstanding provided for
                           such changed additional consideration or changed
                           conversion rate, as the case may be, at the time
                           initially granted, issued or sold.

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                                    (D)      Calculation of Consideration
                           Received. If any Common Stock, Options or Convertible
                           Securities are issued, granted or sold for cash, the
                           consideration received therefor for purposes of this
                           Warrant will be the amount received by the Company
                           therefor, before deduction of reasonable commissions,
                           underwriting discounts or allowances or other
                           reasonable expenses paid or incurred by the Company
                           in connection with such issuance, grant or sale. In
                           case any Common Stock, Options or Convertible
                           Securities are issued or sold for a consideration
                           part or all of which shall be other than cash, the
                           amount of the consideration other than cash received
                           by the Company will be the fair market value of such
                           consideration, except where such consideration
                           consists of securities, in which case the amount of
                           consideration received by the Company will be the
                           Market Price thereof as of the date of receipt. In
                           case any Common Stock, Options or Convertible
                           Securities are issued in connection with any merger
                           or consolidation in which the Company is the
                           surviving corporation, the amount of consideration
                           therefor will be deemed to be the fair market value
                           of such portion of the net assets and business of the
                           non-surviving corporation as is attributable to such
                           Common Stock, Options or Convertible Securities, as
                           the case may be. The fair market value of any
                           consideration other than cash or securities will be
                           determined in good faith by an investment banker or
                           other appropriate expert of national reputation
                           selected by the Company and reasonably acceptable to
                           the holder hereof, with the costs of such appraisal
                           to be borne by the Company.

                                    (E)      Exceptions to Adjustment of
                           Exercise Price. No adjustment to the Exercise Price
                           will be made upon the grant or exercise of any
                           Convertible Securities which may hereafter be granted
                           or exercised under any employee benefit plan of the
                           Company now existing or to be implemented in the
                           future, so long as the issuance of such Convertible
                           Securities is approved by a majority of the
                           non-employee members of the Board of Directors of the
                           Company or a majority of the members of a committee
                           of non-employee directors established for such
                           purpose.

                           (iii)    Minimum Adjustment of Exercise Price. No
                  adjustment of the Exercise Price shall be made in an amount of
                  less than 1% of the Exercise Price in effect at the time such
                  adjustment is otherwise required to be made, but any such
                  lesser adjustment shall be carried forward and shall be made
                  at the time and together with the next subsequent adjustment
                  which, together with any adjustments so carried forward, shall
                  amount to not less than 1% of such Exercise Price.

                  12.      Reorganization, Reclassification, Merger,
Consolidation or Disposition of Assets. In case the Company shall reorganize its
capital, reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where there
is a change in or distribution with respect to the Common Stock of the Company),

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or sell, transfer or otherwise dispose of all or substantially all its property,
assets or business to another corporation and, pursuant to the terms of such
reorganization, reclassification, merger, consolidation or disposition of
assets, shares of common stock of the successor or acquiring corporation, or any
cash, shares of stock or other securities or property of any nature whatsoever
(including warrants or other subscription or purchase rights) in addition to or
in lieu of common stock of the successor or acquiring corporation ("Other
Property"), are to be received by or distributed to the holders of Common Stock
of the Company, then the Holder shall have the right thereafter to receive, at
their option, (a) upon exercise of this Warrant, the number of shares of Common
Stock of the successor or acquiring corporation or of the Company, if it is the
surviving corporation, and Other Property receivable upon or as a result of such
reorganization, reclassification, merger, consolidation or disposition of assets
by a Holder of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such event, or (b) only if the Company is not
the surviving corporation and the Closing Bid Price immediately prior to such
event is less than 110% of the Exercise Price, cash equal to the value of this
Warrant as determined in accordance with the Black-Sholes option pricing formula
which amount shall in no event exceed 150% of the product of the Exercise Price
and the number of Warrant Shares issuable hereunder. In case of any such
reorganization, reclassification, merger, consolidation or disposition of
assets, the successor or acquiring corporation (if other than the Company) shall
expressly assume the due and punctual observance and performance of each and
every covenant and condition of this Warrant to be performed and observed by the
Company and all the obligations and liabilities hereunder, subject to such
modifications as may be deemed appropriate (as determined in good faith by
resolution of the Board of Directors of the Company) in order to provide for
adjustments of Warrant Shares for which this Warrant is exercisable which shall
be as nearly equivalent as practicable to the adjustments provided for in this
Section 12. For purposes of this Section 12, "common stock of the successor or
acquiring corporation" shall include stock of such corporation of any class
which is not preferred as to dividends or assets over any other class of stock
of such corporation and which is not subject to redemption and shall also
include any evidences of indebtedness, shares of stock or other securities which
are convertible into or exchangeable for any such stock, either immediately or
upon the arrival of a specified date or the happening of a specified event and
any warrants or other rights to subscribe for or purchase any such stock. The
foregoing provisions of this Section 12 shall similarly apply to successive
reorganizations, reclassifications, mergers, consolidations or disposition of
assets.

                  13.      Voluntary Adjustment by the Company. The Company may
at any time during the term of this Warrant reduce the then current Exercise
Price to any amount and for any period of time deemed appropriate by the Board
of Directors of the Company.

                  14.      Notice of Adjustment. Whenever the number of Warrant
Shares or number or kind of securities or other property purchasable upon the
exercise of this Warrant or the Exercise Price is adjusted, as herein provided,
the Company shall promptly mail by registered or certified mail, return receipt
requested, to the Holder notice of such adjustment or adjustments setting forth
the number of Warrant Shares (and other securities or property) purchasable upon
the exercise of this Warrant and the Exercise Price of such Warrant Shares (and
other securities or property) after such adjustment, setting forth a brief
statement of the facts requiring such adjustment and setting forth the
computation by which such adjustment was made. Such notice,

                                       10
<PAGE>

in the absence of manifest error, shall be conclusive evidence of the
correctness of such adjustment.

                  15.      Notice of Corporate Action. If at any time:

                           (a)      the Company shall take a record of the
         holders of its Common Stock for the purpose of entitling them to
         receive a dividend or other distribution, or any right to subscribe for
         or purchase any evidences of its indebtedness, any shares of stock of
         any class or any other securities or property, or to receive any other
         right, or

                           (b)      there shall be any capital reorganization of
         the Company, any reclassification or recapitalization of the capital
         stock of the Company or any consolidation or merger of the Company
         with, or any sale, transfer or other disposition of all or
         substantially all the property, assets or business of the Company to,
         another corporation or,

                           (c)      there shall be a voluntary or involuntary
         dissolution, liquidation or winding up of the Company;

then, in any one or more of such cases, the Company shall give to Holder (i) at
least 20 days' prior written notice of the date on which a record date shall be
selected for such dividend, distribution or right or for determining rights to
vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, liquidation or winding up, and (ii)
in the case of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, dissolution, liquidation or winding up, at least 20
days' prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause also shall specify (i) the date
on which any such record is to be taken for the purpose of such dividend,
distribution or right, the date on which the holders of Common Stock shall be
entitled to any such dividend, distribution or right, and the amount and
character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their Warrant Shares for securities or other property
deliverable upon such disposition, dissolution, liquidation or winding up. Each
such written notice shall be sufficiently given if addressed to Holder at the
last address of Holder appearing on the books of the Company and delivered in
accordance with Section 17(d).

                  16.      Authorized Shares. The Company covenants that during
the period the Warrant is outstanding, it will reserve from its authorized and
unissued Common Stock a sufficient number of shares to provide for the issuance
of the Warrant Shares upon the exercise of any purchase rights under this
Warrant. The Company further covenants that its issuance of this Warrant shall
constitute full authority to its officers who are charged with the duty of
executing stock certificates to execute and issue the necessary certificates for
the Warrant Shares upon the exercise of the purchase rights under this Warrant.
The Company will take all such reasonable action as may be necessary to assure
that such Warrant Shares may be issued as provided herein without violation of
any applicable law or regulation, or of any requirements of the Principal Market
upon which the Common Stock may be listed.

                                       11
<PAGE>

         The Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of all
such actions as may be necessary or appropriate to protect the rights of Holder
against impairment. Without limiting the generality of the foregoing, the
Company will (a) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to such increase in
par value, (b) take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable
Warrant Shares upon the exercise of this Warrant, and (c) use commercially
reasonable efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof as may be necessary
to enable the Company to perform its obligations under this Warrant.

         Before taking any action which would result in an adjustment in the
number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions
thereof, or consents thereto, as may be necessary from any public regulatory
body or bodies having jurisdiction thereof.

                  17.      Miscellaneous.

                           (a)      Jurisdiction. This Warrant shall constitute
         a contract under the laws of New York, without regard to its conflict
         of law, principles or rules.

                           (b)      Restrictions. The Holder acknowledges that
         the Warrant Shares acquired upon the exercise of this Warrant, if not
         registered, will have restrictions upon resale imposed by state and
         federal securities laws.

                           (c)      Nonwaiver and Expenses. No course of dealing
         or any delay or failure to exercise any right hereunder on the part of
         Holder shall operate as a waiver of such right or otherwise prejudice
         Holder's rights, powers or remedies, notwithstanding all rights
         hereunder terminate on the Termination Date. If the Company willfully
         and knowingly fails to comply with any provision of this Warrant, which
         results in any material damages to the Holder, the Company shall pay to
         Holder such amounts as shall be sufficient to cover any costs and
         expenses including, but not limited to, reasonable attorneys' fees,
         including those of appellate proceedings, incurred by Holder in
         collecting any amounts due pursuant hereto or in otherwise enforcing
         any of its rights, powers or remedies hereunder.

                           (d)      Notices. Any notice, request or other
         document required or permitted to be given or delivered to the Holder
         by the Company shall be delivered in accordance with the notice
         provisions of the Purchase Agreement.

                           (e)      Limitation of Liability. No provision
         hereof, in the absence of affirmative action by Holder to purchase
         Warrant Shares, and no enumeration herein of the rights or privileges
         of Holder, shall give rise to any liability of Holder for the

                                       12
<PAGE>

         purchase price of any Common Stock or as a stockholder of the Company,
         whether such liability is asserted by the Company or by creditors of
         the Company.

                           (f)      Remedies. Holder, in addition to being
         entitled to exercise all rights granted by law, including recovery of
         damages, will be entitled to specific performance of its rights under
         this Warrant. The Company agrees that monetary damages would not be
         adequate compensation for any loss incurred by reason of a breach by it
         of the provisions of this Warrant and hereby agrees to waive the
         defense in any action for specific performance that a remedy at law
         would be adequate.

                           (g)      Successors and Assigns. Subject to
         applicable securities laws, this Warrant and the rights and obligations
         evidenced hereby shall inure to the benefit of and be binding upon the
         successors of the Company and the successors and permitted assigns of
         Holder. The provisions of this Warrant are intended to be for the
         benefit of all Holders from time to time of this Warrant and shall be
         enforceable by any such Holder or holder of Warrant Shares.

                           (h)      Amendment. This Warrant may be modified or
         amended or the provisions hereof waived with the written consent of the
         Company and the Holder.

                           (i)      Severability. Wherever possible, each
         provision of this Warrant shall be interpreted in such manner as to be
         effective and valid under applicable law, but if any provision of this
         Warrant shall be prohibited by or invalid under applicable law, such
         provision shall be ineffective to the extent of such prohibition or
         invalidity, without invalidating the remainder of such provisions or
         the remaining provisions of this Warrant.

                           (j)      Headings. The headings used in this Warrant
         are for the convenience of reference only and shall not, for any
         purpose, be deemed a part of this Warrant.

                              ********************

                                       13
<PAGE>

         IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officer thereunto duly authorized.

Dated:  January __, 2003
                                          VIRAGEN, INC.

                                          By:
                                             -------------------------
                                             Name:
                                             Title:

                                       14
<PAGE>

                               NOTICE OF EXERCISE

To:      Viragen, Inc.

         (1)     The undersigned hereby elects to purchase ________ Warrant
Shares (the "Common Stock"), of Viragen, Inc., pursuant to the terms of the
attached Warrant, and tenders herewith payment of the exercise price in full,
together with all applicable transfer taxes, if any.

         (2)     Please issue a certificate or certificates representing said
Warrant Shares in the name of the undersigned or in such other name as is
specified below:

                  ------------------------------------

The Warrant Shares shall be delivered to the following:

                  -------------------------------------

                  -------------------------------------

                  -------------------------------------

                                          [PURCHASER]

                                          By:
                                             --------------------------
                                             Name:
                                             Title:

                                          Dated:
                                                -----------------------

<PAGE>

                                 ASSIGNMENT FORM

                    (To assign the foregoing warrant, execute
                   this form and supply required information.
                 Do not use this form to exercise the warrant.)

         FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to

_______________________________________________ whose address is

________________________________________________________________

________________________________________________________________

                                    Dated:  ______________, _______

                           Holder's Signature:
                                              ------------------------

                           Holder's Address:  ------------------------

                                              ------------------------

Signature Guaranteed:
                     -----------------------------------------

NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.

<PAGE>

                   NOTICE OF EXERCISE OF COMMON STOCK WARRANT
                    PURSUANT TO CASHLESS EXERCISE PROVISIONS

To: Viragen, Inc.

Aggregate Price of Warrant Before Exercise: $_______
Aggregate Price Being Exercised: $______
Exercise Price: $______ per share
Number of Shares of Common Stock to be Issued Under this Notice: ________
Remaining Aggregate Price (if any) After Issuance: $_______

Gentlemen:

         The undersigned, registered Holder of the Warrant delivered herewith,
hereby irrevocably exercises such Warrant for, and purchases thereunder, shares
of the Common Stock of Viragen, Inc., as provided below. Capitalized terms used
herein, unless otherwise defined herein, shall have the meanings given in the
Warrant. The portion of the Exercise Price (as defined in the Warrant) to be
applied toward the purchase of Common Stock pursuant to this Notice of Exercise
is $_______, thereby leaving a remaining Exercise Price (if any) equal to
$________. Such exercise shall be pursuant to the cashless exercise provisions
of Section 3 of the Warrant; therefore, Holder makes no payment with this Notice
of Exercise. The number of shares to be issued pursuant to this exercise shall
be determined by reference to the formula in Section 3 of the Warrant which, by
reference to Section 3, requires the use of the high and low trading price of
the Company's Common Stock on the Trading Day preceding the date of such
election. The high and low trading price of the Company's Common Stock has been
determined by Holder to be $______ and $_________, respectively, which figure is
acceptable to Holder for calculations of the number of shares of Common Stock
issuable pursuant to this Notice of Exercise. Holder requests that the
certificates for the purchased shares of Common Stock be issued in the name of
_________________________ and delivered to ____________________________________.
To the extent the foregoing exercise is for less than the full Aggregate Price
of the Warrant, a replacement Warrant representing the remainder of the
Aggregate Price (and otherwise of like form, tenor and effect) shall be
delivered to Holder along with the share certificate evidencing the Common Stock
issued in response to this Notice of Exercise.

                                    [Purchaser]

                                    By:
                                       ----------------------------------
                                       Name:
                                       Title:

                                    Date:

                                    NOTE

         The execution to the foregoing Notice of Exercise must exactly
correspond to the name of the Holder on the Warrant.<PAGE>
                                                                   EXHIBIT 10.61

                          REGISTRATION RIGHTS AGREEMENT

         This Registration Rights Agreement (this "Agreement") is made and
entered into as of January 31, 2003, among Viragen, Inc., a Delaware corporation
(the "Company"), and the purchasers signatory hereto (each such purchaser is a
"Purchaser" and all such purchasers are, collectively, the "Purchasers").

         This Agreement is made pursuant to the Securities Purchase Agreement,
dated as of the date hereof among the Company and the Purchasers (the "Purchase
Agreement").

         The Company and the Purchasers hereby agree as follows:

         1.       Definitions

         CAPITALIZED TERMS USED AND NOT OTHERWISE DEFINED HEREIN THAT ARE
DEFINED IN THE PURCHASE AGREEMENT SHALL HAVE THE MEANINGS GIVEN SUCH TERMS IN
THE PURCHASE AGREEMENT. As used in this Agreement, the following terms shall
have the following meanings:

                  "Business Day" means any day except Saturday, Sunday and any
         day which shall be a legal holiday or a day on which banking
         institutions in the State of New York or the State of California are
         authorized or required by law or other government actions to close.

                  "Effectiveness Date" means, with respect to the initial
         Registration Statement required to be filed hereunder, the earlier of
         (i) the 90th day following the Closing Date and (ii) the fifth day
         following the date on which the Company is notified by the Commission
         that such Registration Statement will not be reviewed or is no longer
         subject to further review and comments.

                  "Effectiveness Period" shall have the meaning set forth in
         Section 2(a).

                  "Filing  Date" means, with respect to the initial Registration
         Statement required to be filed hereunder, the 30th day following the
         Closing Date.

                  "Holder" or "Holders" means the holder or holders, as the case
         may be, from time to time of Registrable Securities.

                  "Indemnified Party" shall have the meaning set forth in
         Section 5(c).

                  "Indemnifying Party" shall have the meaning set forth in
         Section 5(c).

                                        1
<PAGE>

                  "Prospectus" means the prospectus included in a Registration
         Statement (including, without limitation, a prospectus that includes
         any information previously omitted from a prospectus filed as part of
         an effective registration statement in reliance upon Rule 430A
         promulgated under the Securities Act), as amended or supplemented by
         any prospectus supplement, with respect to the terms of the offering of
         any portion of the Registrable Securities covered by a Registration
         Statement, and all other amendments and supplements to the Prospectus,
         including post-effective amendments, and all material incorporated by
         reference or deemed to be incorporated by reference in such Prospectus.

                  "Registrable Securities" means all of the shares of Common
         Stock issuable upon conversion in full of the Debentures, assuming the
         lowest possible conversion price that occurred since the Closing Date
         (notwithstanding any limitations on conversion or resets in the
         Debentures), exercise in full of the Warrants, all of the shares of
         Common Stock issued to the Purchasers at the Closing, the shares
         issuable in lieu of the payment of liquidated damages, together with
         any securities issued or issuable upon any stock split, dividend or
         other distribution recapitalization or similar event with respect to
         the foregoing or pursuant to any anti-dilution provisions contained in
         the Debentures or the Warrants.

                  "Registration Statement" means the registration statements
         required to be filed hereunder and any additional registration
         statements contemplated by Section 3(c), including (in each case) the
         Prospectus, amendments and supplements to such registration statement
         or Prospectus, including pre- and post-effective amendments, all
         exhibits thereto, and all material incorporated by reference or deemed
         to be incorporated by reference in such registration statement.

                  "Rule 415" means Rule 415 promulgated by the Commission
         pursuant to the Securities Act, as such Rule may be amended from time
         to time, or any similar rule or regulation hereafter adopted by the
         Commission having substantially the same effect as such Rule.

                  "Rule 424" means Rule 424 promulgated by the Commission
         pursuant to the Securities Act, as such Rule may be amended from time
         to time, or any similar rule or regulation hereafter adopted by the
         Commission having substantially the same effect as such Rule.

                  "Special Counsel" means one special counsel to the Holders,
         for which the Holders will be reimbursed by the Company pursuant to
         Section 4.

                  "Warrants" shall mean the Common Stock purchase warrants
         issued to the Purchasers pursuant to the Purchase Agreement.

         2.       Shelf Registration

                                        2
<PAGE>

                  (a)      On or prior to each Filing Date, the Company shall
         prepare and file with the Commission a "Shelf" Registration Statement
         covering the resale of all Registrable Securities applicable to such
         Filing Date for an offering to be made on a continuous basis pursuant
         to Rule 415. The Registration Statement shall be on Form S-3 and shall
         contain (except if otherwise directed by the Holders) substantially the
         "Plan of Distribution" attached hereto as Annex A. The Company shall
         use its best efforts to cause the Registration Statement to be declared
         effective under the Securities Act as promptly as possible after the
         filing thereof, but in any event prior to the applicable Effectiveness
         Date, and shall use its best efforts to keep such Registration
         Statement continuously effective under the Securities Act until the
         date which is two years after the date that such Registration Statement
         is declared effective by the Commission or such earlier date when all
         Registrable Securities covered by such Registration Statement have been
         sold or may be sold without volume restrictions pursuant to Rule 144(k)
         as determined by the counsel to the Company pursuant to a written
         opinion letter to such effect, addressed and acceptable to the
         Company's transfer agent and the affected Holders (the "Effectiveness
         Period"). The Company shall immediately notify the Holders via
         facsimile of the effectiveness of the Registration Statement on the
         same day that the Company receives notification of the effectiveness
         from the SEC.

                  (b)      The Registration Statements to be filed hereunder
         shall include 175% of the Registrable Securities.

                  (c)      If: (i) a Registration Statement is not filed on or
         prior to its Filing Date (if the Company files a Registration Statement
         without affording the Holder the opportunity to review and comment on
         the same as required by Section 3(a), the Company shall not be deemed
         to have satisfied clause (i)), or (ii) the Company fails to file with
         the Commission a request for acceleration in accordance with Rule 461
         promulgated under the Securities Act, within five Trading Days of the
         date that the Company is notified (orally or in writing, whichever is
         earlier) by the Commission that a Registration Statement will not be
         "reviewed," or not subject to further review, or (iii) prior to its
         Effective Date, the Company fails to file a pre-effective amendment and
         otherwise respond in writing to comments made by the Commission in
         respect of such Registration Statement within fifteen Trading Days
         after the receipt of comments by or notice from the Commission that
         such amendment is required in order for a Registration Statement to be
         declared effective, or (iv) a Registration Statement filed or required
         to be filed hereunder is not declared effective by the Commission by
         its Effectiveness Date, or (v) after the Effective Date, a Registration
         Statement ceases for any reason to remain continuously effective as to
         all Registrable Securities for which it is required to be effective, or
         the Holders are not permitted to utilize the Prospectus therein to
         resell such Registrable Securities for 5 consecutive Trading Days or in
         any individual case an aggregate of 10 Trading Days during any 12 month
         period (which need not be consecutive Trading Days) (any such failure
         or breach being referred to as an "Event", and for purposes of clause
         (i) or (iv) the date on which such Event occurs, or for purposes of
         clause (ii) the date on which such five Trading Day period is exceeded,
         or for purposes of clause (iii) the date which such 15 Trading Day
         period is exceeded, or for purposes of

                                        3
<PAGE>

         clause (v) the date on which such 5 or 10 Trading Day period, as
         applicable, is exceeded being referred to as "Event Date"), then, on
         each such Event Date and every monthly anniversary thereof until the
         applicable Event is cured, the Company shall pay to each Holder an
         amount in cash, as liquidated damages and not as a penalty, equal to
         2.0% of (i) the purchase price paid by such Holder pursuant to the
         Purchase Agreement, and (ii) if the Warrants are "in the money", the
         value of any outstanding Warrants (valued at the difference between the
         average Closing Bid Price during the applicable month and the Exercise
         Price multiplied by the number of shares of Common Stock the Warrants
         are exercisable into) for the first month following such Event Date and
         2.0% per month thereafter. If the Company fails to pay any liquidated
         damages pursuant to this Section in full within seven days after the
         date payable, the Company will pay interest thereon at a rate of 18%
         per annum (or such lesser maximum amount that is permitted to be paid
         by applicable law) to the Holder, accruing daily from the date such
         liquidated damages are due until such amounts, plus all such interest
         thereon, are paid in full and at the option of the Holder, such
         liquidated damages be paid in shares of Common Stock under the Warrant.
         The liquidated damages pursuant to the terms hereof shall apply on a
         pro-rata basis for any portion of a month prior to the cure of an
         Event.

         3.       Registration Procedures

                  In connection with the Company's registration obligations
         hereunder, the Company shall:

                  (a)      Not less than five Business Days prior to the filing
         of each Registration Statement or any related Prospectus or any
         amendment or supplement thereto (including any document that would be
         incorporated or deemed to be incorporated therein by reference), the
         Company shall, (i) furnish to the Holders and their Special Counsel
         copies of all such documents proposed to be filed, which documents
         (other than those incorporated or deemed to be incorporated by
         reference) will be subject to the review of such Holders and their
         Special Counsel, and (ii) cause its officers and directors, counsel and
         independent certified public accountants to respond to such inquiries
         as shall be necessary, in the reasonable opinion of respective counsel
         to conduct a reasonable investigation within the meaning of the
         Securities Act. The Company shall not file the Registration Statement
         or any such Prospectus or any amendments or supplements thereto to
         which the Holders of a majority of the Registrable Securities and their
         Special Counsel shall reasonably object, provided, the Company is
         notified of such objection no later than 5 Business Days after the
         Holders have been so furnished copies of such documents.

                  (b)      (i) Prepare and file with the Commission such
         amendments, including post-effective amendments, to a Registration
         Statement and the Prospectus used in connection therewith as may be
         necessary to keep a Registration Statement continuously effective as to
         the applicable Registrable Securities for the Effectiveness Period and
         prepare and file with the Commission such additional Registration
         Statements in order to register for resale under the Securities Act all
         of the Registrable Securities; (ii) cause the related Prospectus to be
         amended or supplemented by any required Prospectus supplement, and

                                        4
<PAGE>

         as so supplemented or amended to be filed pursuant to Rule 424; (iii)
         respond as promptly as reasonably possible, and in any event within ten
         days, to any comments received from the Commission with respect to a
         Registration Statement or any amendment thereto and as promptly as
         reasonably possible provide the Holders true and complete copies of all
         correspondence from and to the Commission relating to a Registration
         Statement; and (iv) comply in all material respects with the provisions
         of the Securities Act and the Exchange Act with respect to the
         disposition of all Registrable Securities covered by a Registration
         Statement during the applicable period in accordance with the intended
         methods of disposition by the Holders thereof set forth in such
         Registration Statement as so amended or in such Prospectus as so
         supplemented.

                  (c)      If the number of Registrable Securities issuable at
         any time exceeds 85% of the number of shares of Common Stock then
         registered in a Registration Statement, then the Company shall file an
         additional Registration Statement covering the resale of the
         Registrable Securities by the Holders of not less than 150% of the
         number of Registrable Securities required in order that all Underlying
         Shares and all Warrant Shares issuable upon exercise of the Warrants
         would then be registered in accordance with this Agreement.

                  (d)      Notify the Holders of Registrable Securities to be
         sold and their Special Counsel as promptly as reasonably possible (and,
         in the case of (i)(A) below, not less than five Business Days prior to
         such filing) and (if requested by any such Person) confirm such notice
         in writing no later than one Business Day following the day (i)(A) when
         a Prospectus or any Prospectus supplement or post-effective amendment
         to a Registration Statement is proposed to be filed; (B) when the
         Commission notifies the Company whether there will be a "review" of
         such Registration Statement and whenever the Commission comments in
         writing on such Registration Statement (the Company shall provide true
         and complete copies thereof and all written responses thereto to each
         of the Holders); and (C) with respect to a Registration Statement or
         any post-effective amendment, when the same has become effective; (ii)
         of any request by the Commission or any other Federal or state
         governmental authority for amendments or supplements to a Registration
         Statement or Prospectus or for additional information; (iii) of the
         issuance by the Commission of any stop order suspending the
         effectiveness of a Registration Statement covering any or all of the
         Registrable Securities or the initiation of any Proceedings for that
         purpose; (iv) if at any time any of the representations and warranties
         of the Company contained in any agreement contemplated hereby ceases to
         be true and correct in all material respects; (v) of the receipt by the
         Company of any notification with respect to the suspension of the
         qualification or exemption from qualification of any of the Registrable
         Securities for sale in any jurisdiction, or the initiation or
         threatening of any Proceeding for such purpose; and (vi) of the
         occurrence of any event or passage of time that makes the financial
         statements included in a Registration Statement ineligible for
         inclusion therein or any statement made in a Registration Statement or
         Prospectus or any document incorporated or deemed to be incorporated
         therein by reference untrue in any material respect or that requires
         any revisions to a Registration Statement, Prospectus or other
         documents so that, in the case of a Registration Statement or the
         Prospectus, as the case may be, it will not contain any untrue
         statement of a material fact or omit to state

                                        5
<PAGE>

         any material fact required to be stated therein or necessary to make
         the statements therein, in light of the circumstances under which they
         were made, not misleading.

                  (e)      Promptly deliver to each Holder and their Special
         Counsel, without charge, as many copies of the Prospectus or
         Prospectuses (including each form of prospectus) and each amendment or
         supplement thereto as such Persons may reasonably request. The Company
         hereby consents to the use of such Prospectus and each amendment or
         supplement thereto by each of the selling Holders in connection with
         the offering and sale of the Registrable Securities covered by such
         Prospectus and any amendment or supplement thereto.

                  (f)      Prior to any public offering of Registrable
         Securities, use its best efforts to register or qualify or cooperate
         with the selling Holders and their Special Counsel in connection with
         the registration or qualification (or exemption from such registration
         or qualification) of such Registrable Securities for offer and sale
         under the securities or Blue Sky laws of such jurisdictions within the
         United States as any Holder requests in writing, to keep each such
         registration or qualification (or exemption therefrom) effective during
         the Effectiveness Period and to do any and all other acts or things
         necessary or advisable to enable the disposition in such jurisdictions
         of the Registrable Securities covered by a Registration Statement;
         provided, that the Company shall not be required to qualify generally
         to do business in any jurisdiction where it is not then so qualified or
         subject the Company to any material tax in any such jurisdiction where
         it is not then so subject.

                  (g)      Cooperate with the Holders to facilitate the timely
         preparation and delivery of certificates representing Registrable
         Securities to be delivered to a transferee pursuant to a Registration
         Statement, which certificates shall be free, to the extent permitted by
         the Purchase Agreement, of all restrictive legends, and to enable such
         Registrable Securities to be in such denominations and registered in
         such names as any such Holders may request.

                  (h)      Upon the occurrence of any event contemplated this
         Section 3, as promptly as reasonably possible, prepare a supplement or
         amendment, including a post-effective amendment, to a Registration
         Statement or a supplement to the related Prospectus or any document
         incorporated or deemed to be incorporated therein by reference, and
         file any other required document so that, as thereafter delivered,
         neither a Registration Statement nor such Prospectus will contain an
         untrue statement of a material fact or omit to state a material fact
         required to be stated therein or necessary to make the statements
         therein, in light of the circumstances under which they were made, not
         misleading.

                  (i)      Comply with all applicable rules and regulations of
         the Commission.

                                        6
<PAGE>

                  (j)      Use its best efforts to avoid the issuance of, or, if
         issued, obtain the withdrawal of (i) any order suspending the
         effectiveness of a Registration Statement, or (ii) any suspension of
         the qualification (or exemption from qualification) of any of the
         Registrable Securities for sale in any jurisdiction, at the earliest
         practicable moment.

                  (k)      Furnish to each Holder and their Special Counsel,
         without charge, at least one conformed copy of each Registration
         Statement and each amendment thereto, including financial statements
         and schedules, all documents incorporated or deemed to be incorporated
         therein by reference, and all exhibits to the extent requested by such
         Person (including those previously furnished or incorporated by
         reference) promptly after the filing of such documents with the
         Commission.

         4.       Registration Expenses. All fees and expenses incident to the
performance of or compliance with this Agreement by the Company shall be borne
by the Company whether or not any Registrable Securities are sold pursuant to
the Registration Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including, without limitation, fees and expenses (A) with respect to filings
required to be made with the Principal Market on which the Common Stock is then
listed for trading, and (B) in compliance with applicable state securities or
Blue Sky laws (including, without limitation, fees and disbursements of counsel
for the Company in connection with Blue Sky qualifications or exemptions of the
Registrable Securities and determination of the eligibility of the Registrable
Securities for investment under the laws of such jurisdictions as requested by
the Holders )), (ii) printing expenses (including, without limitation, expenses
of printing certificates for Registrable Securities and of printing prospectuses
requested by the Holders), (iii) messenger, telephone and delivery expenses,
(iv) fees and disbursements of counsel for the Company and Special Counsel for
the Holders (fees and expenses to Special Counsel limited to, in the aggregate,
$5,000) and (v) fees and expenses of all other Persons retained by the Company
in connection with the consummation of the transactions contemplated by this
Agreement. In addition, the Company shall be responsible for all of its internal
expenses incurred in connection with the consummation of the transactions
contemplated by this Agreement (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
the expense of any annual audit and the fees and expenses incurred in connection
with the listing of the Registrable Securities on any securities exchange as
required hereunder.

         5.       Indemnification

                  (a)      Indemnification by the Company. The Company shall,
         notwithstanding any termination of this Agreement, indemnify and hold
         harmless each Holder, the officers, directors, agents, brokers
         (including brokers who offer and sell Registrable Securities as
         principal as a result of a pledge or any failure to perform under a
         margin call of Common Stock), investment advisors and employees of each
         of them, each Person who controls any such Holder (within the meaning
         of Section 15 of the Securities Act or Section 20 of the Exchange Act)
         and the officers, directors, agents and employees of each such

                                        7
<PAGE>

         controlling Person, to the fullest extent permitted by applicable law,
         from and against any and all losses, claims, damages, liabilities,
         costs (including, without limitation, costs of preparation and
         attorneys' fees) and expenses (collectively, "Losses"), as incurred,
         arising out of or relating to any untrue or alleged untrue statement of
         a material fact contained in a Registration Statement, any Prospectus
         or any form of prospectus or in any amendment or supplement thereto or
         in any preliminary prospectus, or arising out of or relating to any
         omission or alleged omission of a material fact required to be stated
         therein or necessary to make the statements therein (in the case of any
         Prospectus or form of prospectus or supplement thereto, in light of the
         circumstances under which they were made) not misleading, except to the
         extent, but only to the extent, that (1) such untrue statements or
         omissions are based solely upon information regarding such Holder
         furnished in writing to the Company by such Holder expressly for use
         therein, or to the extent that such information relates to such Holder
         or such Holder's proposed method of distribution of Registrable
         Securities and was reviewed and expressly approved in writing by such
         Holder expressly for use in a Registration Statement, such Prospectus
         or such form of Prospectus or in any amendment or supplement thereto or
         (2) in the case of an occurrence of an event of the type specified in
         Section 3(d)(ii)-(vi), the use by such Holder of an outdated or
         defective Prospectus after the Company has notified such Holder in
         writing that the Prospectus is outdated or defective and prior to the
         receipt by such Holder of the Advice contemplated in Section 6(e). The
         Company shall notify the Holders promptly of the institution, threat or
         assertion of any Proceeding of which the Company is aware in connection
         with the transactions contemplated by this Agreement.

                  (b)      Indemnification by Holders. Each Holder shall,
         severally and not jointly, indemnify and hold harmless the Company, its
         directors, officers, agents and employees, each Person who controls the
         Company (within the meaning of Section 15 of the Securities Act and
         Section 20 of the Exchange Act), and the directors, officers, agents or
         employees of such controlling Persons, to the fullest extent permitted
         by applicable law, from and against all Losses (as determined by a
         court of competent jurisdiction in a final judgment not subject to
         appeal or review) arising solely out of or based solely upon any untrue
         statement of a material fact contained in any Registration Statement,
         any Prospectus, or any form of prospectus, or in any amendment or
         supplement thereto, or arising solely out of or based solely upon any
         omission of a material fact required to be stated therein or necessary
         to make the statements therein not misleading to the extent, but only
         to the extent, that such untrue statement or omission is contained in
         any information so furnished in writing by such Holder to the Company
         specifically for inclusion in such Registration Statement or such
         Prospectus or to the extent that (1) such untrue statements or
         omissions are based solely upon information regarding such Holder
         furnished in writing to the Company by such Holder expressly for use
         therein, or to the extent that such information relates to such Holder
         or such Holder's proposed method of distribution of Registrable
         Securities and was reviewed and expressly approved in writing by such
         Holder expressly for use in the Registration Statement, such Prospectus
         or such form of Prospectus or in any amendment or supplement thereto or
         (2) in the case of an occurrence of an event of the type specified in
         Section 3(d)(ii)-(vi), the use by such Holder of an outdated or
         defective Prospectus after the Company has notified such Holder in
         writing that the Prospectus is outdated or defective and prior to the
         receipt by

                                        8
<PAGE>

         such Holder of the Advice contemplated in Section 6(e). In no event
         shall the liability of any selling Holder hereunder be greater in
         amount than the dollar amount of the net proceeds received by such
         Holder upon the sale of the Registrable Securities giving rise to such
         indemnification obligation.

                  (c)      Conduct of Indemnification Proceedings. If any
         Proceeding shall be brought or asserted against any Person entitled to
         indemnity hereunder (an "Indemnified Party"), such Indemnified Party
         shall promptly notify the Person from whom indemnity is sought (the
         "Indemnifying Party") in writing, and the Indemnifying Party shall
         assume the defense thereof, including the employment of counsel
         reasonably satisfactory to the Indemnified Party and the payment of all
         fees and expenses incurred in connection with defense thereof;
         provided, that the failure of any Indemnified Party to give such notice
         shall not relieve the Indemnifying Party of its obligations or
         liabilities pursuant to this Agreement, except (and only) to the extent
         that it shall be finally determined by a court of competent
         jurisdiction (which determination is not subject to appeal or further
         review) that such failure shall have proximately and materially
         adversely prejudiced the Indemnifying Party.

         An Indemnified Party shall have the right to employ separate counsel in
any such Proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Party or
Parties unless: (1) the Indemnifying Party has agreed in writing to pay such
fees and expenses; or (2) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding; or (3) the named
parties to any such Proceeding (including any impleaded parties) include both
such Indemnified Party and the Indemnifying Party, and such Indemnified Party
shall have been advised by counsel that a conflict of interest is likely to
exist if the same counsel were to represent such Indemnified Party and the
Indemnifying Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and such counsel shall be at the expense of
the Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such Proceeding.

         All fees and expenses of the Indemnified Party (including reasonable
fees and expenses to the extent incurred in connection with investigating or
preparing to defend such Proceeding in a manner not inconsistent with this
Section) shall be paid to the Indemnified Party, as incurred, within ten
Business Days of written notice thereof to the Indemnifying Party (regardless of
whether it is ultimately determined that an Indemnified Party is not entitled to
indemnification hereunder; provided, that the Indemnifying Party

                                        9
<PAGE>

may require such Indemnified Party to undertake to reimburse all such fees and
expenses to the extent it is finally judicially determined that such Indemnified
Party is not entitled to indemnification hereunder).

                  (d)      Contribution. If a claim for indemnification under
Section 5(a) or 5(b) is unavailable to an Indemnified Party (by reason of public
policy or otherwise), then each Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Section 5(c), any reasonable attorneys' or other
reasonable fees or expenses incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such fees or
expenses if the indemnification provided for in this Section was available to
such party in accordance with its terms.

         The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Holder shall be required
to contribute, in the aggregate, any amount in excess of the amount by which the
proceeds actually received by such Holder from the sale of the Registrable
Securities subject to the Proceeding exceeds the amount of any damages that such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission.

         The indemnity and contribution agreements contained in this Section are
in addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.

         6.       Miscellaneous

                  (a)      Amendments and Waivers. The provisions of this
         Agreement, including the provisions of this sentence, may not be
         amended, modified or supplemented, and waivers or consents to
         departures from the provisions hereof may not be given, unless the same
         shall be in writing and signed by the Company and the Holders of at
         least two-thirds of the then outstanding Registrable Securities.
         Notwithstanding the foregoing, a waiver or consent to depart from the
         provisions hereof with respect to a matter that relates exclusively to
         the rights of Holders and that does not directly or indirectly affect
         the

                                       10
<PAGE>

         rights of other Holders may be given by Holders of at least a majority
         of the Registrable Securities to which such waiver or consent relates;
         provided, however, that the provisions of this sentence may not be
         amended, modified, or supplemented except in accordance with the
         provisions of the immediately preceding sentence.

                  (b)      No Inconsistent Agreements. Neither the Company nor
         any of its subsidiaries has entered, as of the date hereof, nor shall
         the Company or any of its subsidiaries, on or after the date of this
         Agreement, enter into any agreement with respect to its securities,
         that would have the effect of impairing the rights granted to the
         Holders in this Agreement or otherwise conflicts with the provisions
         hereof. Except as and to the extent specified in Schedule 6(b) hereto,
         neither the Company nor any of its subsidiaries has previously entered
         into any agreement granting any registration rights with respect to any
         of its securities to any Person that have not been satisfied in full.

                  (c)      No Piggyback on Registrations. Except as and to the
         extent specified in Schedule 6(c) hereto, neither the Company nor any
         of its security holders (other than the Holders in such capacity
         pursuant hereto) may include securities of the Company in the
         Registration Statement other than the Registrable Securities, and the
         Company shall not after the date hereof enter into any agreement
         providing any such right to any of its security holders.

                  (d)      Compliance. Each Holder covenants and agrees that it
         will comply with the prospectus delivery requirements of the Securities
         Act as applicable to it in connection with sales of Registrable
         Securities pursuant to the Registration Statement.

                  (e)      Discontinued Disposition. Each Holder agrees by its
         acquisition of such Registrable Securities that, upon receipt of a
         notice from the Company of the occurrence of any event of the kind
         described in Sections 3(d)(ii), (iii) or (vi), such Holder will
         forthwith discontinue disposition of such Registrable Securities under
         a Registration Statement until such Holder's receipt of the copies of
         the supplemented Prospectus and/or amended Registration Statement
         contemplated by Section 3(h), or until it is advised in writing (the
         "Advice") by the Company that the use of the applicable Prospectus may
         be resumed, and, in either case, has received copies of any additional
         or supplemental filings that are incorporated or deemed to be
         incorporated by reference in such Prospectus or Registration Statement.
         The Company may provide appropriate stop orders to enforce the
         provisions of this paragraph. The Company agrees and Acknowledges that
         any periods during which the Holder is required to discontinue the
         disposition of the Registrable Securities hereunder shall be subject to
         the provisions of Section 2(c).

                  (f)      Piggy-Back Registrations. If at any time during the
         Effectiveness Period there is not an effective Registration Statement
         covering all of the Registrable Securities and the Company shall
         determine to prepare and file with the Commission a registration
         statement relating to an offering for its own account or the account of
         others under the Securities Act of any of its equity securities, other
         than on Form S-4 or Form S-8 (each as promulgated under the Securities
         Act) or their then equivalents relating to equity securities to be
         issued solely in connection with any acquisition of any entity or
         business

                                       11
<PAGE>

         or equity securities issuable in connection with stock option or other
         employee benefit plans, then the Company shall send to each Holder
         written notice of such determination and, if within fifteen days after
         receipt of such notice, any such Holder shall so request in writing,
         the Company shall include in such registration statement all or any
         part of such Registrable Securities such holder requests to be
         registered; provided, that, the Company shall not be required to
         register any Registrable Securities pursuant to this Section 6(f) that
         are eligible for resale pursuant to Rule 144(k) promulgated under the
         Securities Act.

                  (g)      Notices. Any and all notices or other communications
         or deliveries required or permitted to be provided hereunder shall be
         delivered as set forth in the Purchase Agreement.

                  (h)      Successors and Assigns. This Agreement shall inure to
         the benefit of and be binding upon the successors and permitted assigns
         of each of the parties and shall inure to the benefit of each Holder.
         The Company may not assign its rights or obligations hereunder without
         the prior written consent of each Holder. Each Holder may assign their
         respective rights hereunder in the manner and to the Persons as
         permitted under the Purchase Agreement.

                  (i)      Counterparts. This Agreement may be executed in any
         number of counterparts, each of which when so executed shall be deemed
         to be an original and, all of which taken together shall constitute one
         and the same Agreement. In the event that any signature is delivered by
         facsimile transmission, such signature shall create a valid binding
         obligation of the party executing (or on whose behalf such signature is
         executed) the same with the same force and effect as if such facsimile
         signature were the original thereof.

                  (j)      Governing Law. All questions concerning the
         construction, validity, enforcement and interpretation of this
         Agreement shall be governed by and construed and enforced in accordance
         with the internal laws of the State of New York, without regard to the
         principles of conflicts of law thereof. Each party hereby irrevocably
         submits to the exclusive jurisdiction of the state and federal courts
         sitting in the City of New York, borough of Manhattan, for the
         adjudication of any dispute hereunder or in connection herewith or with
         any transaction contemplated hereby or discussed herein, and hereby
         irrevocably waives, and agrees not to assert in any suit, action or
         proceeding, any claim that it is not personally subject to the
         jurisdiction of any such court, that such suit, action or proceeding is
         improper. Each party hereby irrevocably waives personal service of
         process and consents to process being served in any such suit, action
         or proceeding by mailing a copy thereof to such party at the address in
         effect for notices to it under this Agreement and agrees that such
         service shall constitute good and sufficient service of process and
         notice thereof. Nothing contained herein shall be deemed to limit in
         any way any right to serve process in any manner permitted by law. Each
         party hereto hereby irrevocably waives, to the fullest extent permitted
         by applicable law, any and all right to trial by jury in any legal
         proceeding arising out of or relating to this Agreement or the
         transactions contemplated hereby. If either party shall commence a
         Proceeding to enforce any provisions of this Agreement, then the
         prevailing party in such Proceeding shall be

                                       12
<PAGE>

         reimbursed by the other party for its attorneys fees and other costs
         and expenses incurred with the investigation, preparation and
         prosecution of such Proceeding.

                  (k)      Cumulative Remedies. The remedies provided herein are
         cumulative and not exclusive of any remedies provided by law.

                  (l)      Severability. If any term, provision, covenant or
         restriction of this Agreement is held by a court of competent
         jurisdiction to be invalid, illegal, void or unenforceable, the
         remainder of the terms, provisions, covenants and restrictions set
         forth herein shall remain in full force and effect and shall in no way
         be affected, impaired or invalidated, and the parties hereto shall use
         their reasonable efforts to find and employ an alternative means to
         achieve the same or substantially the same result as that contemplated
         by such term, provision, covenant or restriction. It is hereby
         stipulated and declared to be the intention of the parties that they
         would have executed the remaining terms, provisions, covenants and
         restrictions without including any of such that may be hereafter
         declared invalid, illegal, void or unenforceable.

                  (m)      Headings. The headings in this Agreement are for
         convenience of reference only and shall not limit or otherwise affect
         the meaning hereof.

                  (n)      Independent Nature of Purchasers' Obligations and
         Rights. The obligations of each Purchaser hereunder is several and not
         joint with the obligations of any other Purchaser hereunder, and no
         Purchaser shall be responsible in any way for the performance of the
         obligations of any other Purchaser hereunder. Nothing contained herein
         or in any other agreement or document delivered at any closing, and no
         action taken by any Purchaser pursuant hereto or thereto, shall be
         deemed to constitute the Purchasers as a partnership, an association, a
         joint venture or any other kind of entity, or create a presumption that
         the Purchasers are in any way acting in concert with respect to such
         obligations or the transactions contemplated by this Agreement. Each
         Purchaser shall be entitled to protect and enforce its rights,
         including without limitation the rights arising out of this Agreement,
         and it shall not be necessary for any other Purchaser to be joined as
         an additional party in any proceeding for such purpose.

                              ********************

                                       13
<PAGE>

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

                                          VIRAGEN, INC.

                                          By: /s/ Dennis W. Healey
                                             ---------------------------
                                             Name: Dennis W. Healey
                                             Title: Exec. VP/CFO

                      [PURCHASERS' SIGNATURE PAGE FOLLOWS]

                                       14
<PAGE>

                          [PURCHASERS' SIGNATURE PAGE]

                                 PALISADES EQUITY FUND L.P.

                                    By: /s/ Paul T. Mannion Jr.
                                       -----------------------------
                                    Name: Paul T. Mannion Jr.
                                    Title: General Partner

                                 CRESCENT INTERNATIONAL LTD

                                 By: /s/ Mel Craw / Maxi Brezzi
                                    -----------------------------
                                    Name: Mel Craw / Maxi Brezzi
                                    Title: Authorized Signatories

                                 ALPHA CAPITAL AG

                                 By: /s/ Konrad Ackermann
                                    -----------------------------
                                    Name: Konrad Ackermann
                                    Title: Director

                                 BRIVIS INVESTMENTS, LTD.

                                 By: /s/ Rima Salam
                                    -----------------------------
                                    Name: Rima Salam
                                    Title: Director

                                 CASTLERIGG MASTER INVESTMENTS LTD.

                                 By: /s/ Thomas E. Sandell
                                    -----------------------------
                                    Name: Thomas E. Sandell
                                    Title: Principal of Sandell Asset Mgmt. Corp
                                            Advisor to Castlerigg Master
                                            Investments Ltd.

                                       15
<PAGE>

                              Plan of Distribution

         The Selling Stockholders and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of Common Stock on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. The Selling Stockholders may use any one or more of the
following methods when selling shares:

         -        ordinary brokerage transactions and transactions in which the
                  broker-dealer solicits purchasers;

         -        block trades in which the broker-dealer will attempt to sell
                  the shares as agent but may position and resell a portion of
                  the block as principal to facilitate the transaction;

         -        purchases by a broker-dealer as principal and resale by the
                  broker-dealer for its account;

         -        an exchange distribution in accordance with the rules of the
                  applicable exchange;

         -        privately negotiated transactions;

         -        settlement of short sales

         -        broker-dealers may agree with the Selling Stockholders to sell
                  a specified number of such shares at a stipulated price per
                  share;

         -        a combination of any such methods of sale; and

         -        any other method permitted pursuant to applicable law.

         The Selling Stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus. Broker-dealers
engaged by the Selling Stockholders may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from
the Selling Stockholders (or, if any broker-dealer acts as agent for the
purchaser of shares, from the purchaser) in amounts to be negotiated. The
Selling Stockholders do not expect these commissions and discounts to exceed
what is customary in the types of transactions involved.

         The selling stockholder may from time to time pledge or grant a
security interest in some or all of the Shares or common stock or Warrant owned
by them and, if they default in the performance of their secured obligations,
the pledgees or secured parties may offer and sell the shares of common stock
from time to time under this prospectus, or under an amendment to this
prospectus under Rule 424(b)(3) or other applicable provision of the Securities
Act of 1933 amending the list of selling stockholders to

                                       16
<PAGE>

include the pledgee, transferee or other successors in interest as selling
stockholders under this prospectus.

         The selling stockholders also may transfer the shares of common stock
in other circumstances, in which case the transferees, pledgees or other
successors in interest will be the selling beneficial owners for purposes of
this prospectus.

         The Selling Stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. The Selling Stockholders have
informed the Company that it does not have any agreement or understanding,
directly or indirectly, with any person to distribute the Common Stock.

         The Company is required to pay all fees and expenses incident to the
registration of the shares. The Company has agreed to indemnify the Selling
Stockholders against certain losses, claims, damages and liabilities, including
liabilities under the Securities Act.

                                      17

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