Document:

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                                                                    Exhibit 10.1

                                                 DEVELOPMENT, LICENCE AND
                                                  COLLABORATION AGREEMENT

                                                          between

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

                                                             and

                                    (2)      VIRAGEN INC. a Delaware corporation
                                             having a principal place of
                                             business at 865 South West 78th
                                             Avenue, Plantation, Florida 33324,
                                             United States of America
                                             ("Viragen")

WHEREAS

(A)      The Institute has expertise and knowledge of, INTER ALIA, nuclear
         transfer, DNA injection and avian reproduction technologies and Viragen
         wishes to collaborate with the Institute in the further development of
         these technologies, with particular focus on avian transgenics and the
         Institute has agreed to undertake such development work, in order to
         further its objectives in a manner consistent with its status as a
         research and educational institute and its recognition as a Scottish
         charity (number SCO23592);

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(B)      The parties entered into Heads of Agreement dated 19th and 20th October
         both 2000 setting out their intentions, among other things in relation
         to the research collaboration to be undertaken by them;

(C)      In consideration for the Institute undertaking collaborative
         development work with Viragen, Viragen shall fund the Project (as
         defined below) in addition to issuing 100,000 shares of Viragen common
         stock, granting the Institute various stock warrants in respect of
         Viragen's shares of common stock, in addition to funding the initial
         plans for the construction of a new biopharmaceutical facility for cGMP
         poultry production at the Institute's premises; and

(D)      In order for the development work to be undertaken, the Institute has
         agreed to grant to Viragen a licence of certain patents and certain of
         its know-how in respect of novel methods for the use of avian
         transgenic technology and methods for production of transgenic chickens
         on the terms contained in this Agreement.

NOW IT IS HEREBY Agreed as follows:-

1        DEFINITIONS AND INTERPRETATION

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

         AGREEMENT                  means this agreement together with the
                                    schedule hereto;

         ASSOCIATED                 COMPANY means a subsidiary or holding
                                    company of Viragen, or any subsidiary of any
                                    such holding company from time to time

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                                    (the terms "holding company" and
                                    "subsidiary" having the meanings set out in
                                    sections 736 and 736A of the Companies Act
                                    1985);

         BACKGROUND                 INTELLECTUAL PROPERTY means all and any
                                    Intellectual Property belonging to or used
                                    by either party and which either party is
                                    free to licence other than Foreground
                                    Intellectual Property;

         COMMERCIAL                 EXPLOITATION means that Viragen, in relation
                                    to any Foreground Intellectual Property, has
                                    made reasonable efforts to: (i) licence the
                                    same to a third party, for the purposes of
                                    commercial exploitation and/or further
                                    development; and/or (ii) attract or
                                    otherwise obtain additional finance or
                                    funding for the commercialisation or further
                                    development of the same; and/or (iii) apply
                                    for regulatory approval of the same in a
                                    major market, including the preparation of
                                    any relevant documentation; and/or (iv)
                                    apply for patent protection of the same,
                                    including seeking the advice of patent
                                    agents; and/or (v) either itself or through
                                    subcontractor(s), develop or further develop
                                    Products and/or Services.

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         CONFIDENTIALITY AGREEMENT  means the agreement between the Institute
                                    and Viragen, dated 16th October 2000;

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

         EFFECTIVE                  DATE means subject to clause 2, 4 December
                                    2000 (or such later date as may be agreed in
                                    writing between the parties pursuant to
                                    clause 2.3);

         FIELD                      means therapeutic and diagnostic protein
                                    production in avian species;

         FIRST                      SALE DATE shall mean the date on which
                                    Viragen or a sub-licensee of Viragen first
                                    puts a Product or Service on the market in
                                    the EEA;

         FOREGROUNDINTELLECTUAL     means all and any Intellectual Property
         PROPERTY                   which is conceived, first reduced to
                                    practice or writing or developed in the
                                    course of the Project;

         HEADS OF AGREEMENT         means the document executed by the parties
                                    and dated 19 and 20 October both 2000,
                                    setting out the understanding between the
                                    parties in relation to the collaboration

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                                    between them, a copy of which is annexed to
                                    this Agreement as Part 4 of the Schedule;

         INSTITUTE'S PATENTS        means those granted patent(s) and
                                    applications for patents in the Territory
                                    short particulars of which are set out in
                                    Part 1 of the Schedule together with any
                                    patents granted pursuant to such
                                    applications and including any re-issues,
                                    extensions, substitutions, continuation in
                                    part applications and supplementary
                                    protection certificates of the same and all
                                    other rights of a like nature;

         INTELLECTUAL PROPERTY      means all inventions, discoveries, Know-how
                                    or other know-how, processes, copyright,
                                    design rights, rights to apply for patents,
                                    patents, (including any re-issues,
                                    extensions, substitutions, continuation in
                                    part applications and supplementary
                                    protection certificates and all other rights
                                    of a like nature), applications for patents
                                    and any other intellectual property rights
                                    of a similar nature arising in any part of
                                    the world;

         KNOW-HOW                   means technical or other information which
                                    is not in the public domain including ideas,
                                    concepts, inventions, discoveries, data,
                                    formulae, specifications, drawings, manuals,

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                                    information, chemical compounds and
                                    derivatives, analogues and precursors,
                                    methods and processes of synthesis,
                                    procedures for experiments and tests and
                                    results of experimenting and testing,
                                    results of research and development
                                    including laboratory records and data
                                    analyses relating to the Technologies which
                                    is secret, substantial and identified;

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

                                    (a)      rented, leased, let out or hired or
                                             otherwise disposed of to a customer
                                             by Viragen; or

                                    (b)      used by Viragen for its own
                                             commercial purposes; or

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                                    (c)      sold to any Associated Company of
                                             Viragen; or

                                    (d)      incorporated in any larger
                                             equipment or apparatus or other
                                             service and supplied by Viragen at
                                             a price which is included in the
                                             price for the larger equipment or
                                             apparatus or other service;

                                    the Net Invoice Price of each such Product,
                                    and/or Service shall be deemed to be
                                    equivalent to the Net Invoice Price which
                                    would have been applicable under this
                                    Agreement had such Product and/or Service
                                    been transferred to an independent arm's
                                    length customer;

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

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

         PROJECT                    COST means the sum set out in Part 5 of the
                                    Schedule or such greater amount as may be
                                    agreed in accordance with clause 5.2 or as
                                    the parties may otherwise agree in writing;

         PROJECT DIRECTOR           means Dr. Helen Sang or such other person
                                    as the parties may agree in writing in
                                    accordance with clause 4.2;

         PROJECT PERIOD             means the period of three (3) years
                                    commencing on the Effective Date and
                                    terminating on 30th November 2003 (provided
                                    the Project is not terminated earlier in
                                    accordance with clauses 4.2 or 20); or such
                                    longer period as may arise in accordance
                                    with clause 5.2;

         PROJECT SCIENTIFIC         means an advisory board consisting of
         ADVISORY BOARD             representatives of the Institute and
                                    representatives of Viragen whose duties are
                                    as set out in Clauses 4.3 and 5.2

         PROJECT WORKPLAN           means the workplan for the Project dated of
                                    even date herewith and which forms part of
                                    this Agreement, as the same may be amended

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                                    from time to time in accordance with
                                    clause 3.1;

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

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

         SHARES                     means 100,000 shares of Viragen common
                                    stock;

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

         TECHNOLOGIES               means nuclear transfer, DNA injection and
                                    avian reproduction technologies ;

         TERRITORY                  means the world;

         WARRANT                    means the warrant for the purchase of shares
                                    of Viragen common stock and the

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                                    investment letter both dated of even date
                                    herewith ;and

         WARRANTS                   means warrants to purchase a total of
                                    900,000 shares of Viragen's common stock.
                                    1.2 In this Agreement: -

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

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

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

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

2        COMMENCEMENT AND DURATION

2.1      Subject to clause 2.4, this Agreement is subject to and conditional
         upon:-

         2.1.1    the Institute being satisfied, at its entire discretion that:

                  (a)      Viragen has the necessary powers to enter into this
                           Agreement, the Project Workplan, the letter dated of
                           even date with this Agreement from the Institute to
                           Viragen regarding the construction of a new
                           biopharmaceutical facility for cGMP poultry
                           production ("the Poultry Facility Letter") and the
                           Warrant;

                  (b)      Viragen has the necessary powers to issue and allot
                           the Shares, fully paid and non-assessable and to the
                           issue the Warrants pursuant to the terms of the
                           Warrant;

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                  (c)      that the Board of Viragen has approved the terms of
                           the Agreement, the Workplan, the Warrant and the
                           Poultry Facility Letter and the issue of the Shares;

                  (d)      that the Board of Viragen has duly authorised Mr
                           Gerald Smith to execute on its behalf this Agreement,
                           the Workplan, the Warrant, Poultry Facility Letter
                           and other ancillary documentation, and that Mr Gerald
                           Smith is on the date of execution a duly appointed
                           officer of Viragen; and

                  (e)      and that the resolutions referred to above were
                           validly passed at a properly convened meeting of the
                           Board of Viragen and are in full force and effect;
                           and

         2.1.2    Viragen delivering a share certificate for the Shares, fully
                  paid and non- assessable, in terms entirely satisfactory to
                  the Institute.

2.2      Notwithstanding the terms of clause 2.1, the Institute shall be
         entitled by notice in writing given to Viragen to waive (to such extent
         as the Institute may think fit) compliance with the any or all of the
         conditions stated in clauses 2.1.

2.3      Viragen shall use its best endeavours to procure that the conditions
         stated in -clause 2.1 are fulfilled as soon as practicable and in any
         event on or before the Effective Date but if the conditions in clause
         2.1 have not been fulfilled or waived by that date (or by such later
         date as may be agreed in writing between the parties), then save for
         this clause 2.3 and the accrued rights arising in respect of the
         operative provisions specified in clause 2.4;

         2.3.1    the whole of this Agreement (other than clause 2.3 and those
                  referred to in clause 2.4);

         2.3.2    the Project Workplan and the Warrant; and

         2.3.3    the letter dated of even date herewith from the Institute to
                  Viragen regarding the construction of a new biopharmaceutical
                  facility for cGMP poultry production shall each thereupon
                  become null and void ab initio.

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2.4      Notwithstanding clause 2.1 the following clauses of this Agreement
         shall come into force on 15 November 2000 and the remainder of this
         Agreement shall come into force on the fulfilment and/or waiver of all
         conditions stated in clause 2.1: -

                      CLAUSES TO COME INTO IMMEDIATE EFFECT

   Clause Number                                Heading
   -------------                                -------

         1                           Definitions and Interpretation
         2                             Commencement and Duration
  7.1,7.2 and 7.3          Confidentiality and Publication in relation to the
                                                Project

        18                                     Warranties
        23                                      Notices
        24                                     Variations
        25                                      Waivers
        26                                    Assignation
        27                                  Entire Agreement
        28                                    Severability
        30                                     Enticement
        31                                 Further Assurances
        32                                   Announcements
        33                                     Publicity
        34                                       Costs
        35                                   Governing Law

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2.5      This Agreement shall commence as provided in this clause 2 and shall,
         subject to clauses 20 (Termination) and 22 (Force Majeure) continue in
         force during the Project Period and thereafter, on a country by country
         basis in the Territory, as appropriate, until the later of:-

         2.5.1    the last to expire in the relevant country in the Territory of
                  the Institute's patents or the patents derived from the
                  Foreground Intellectual Property; or

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

3        PROJECT SCIENTIFIC ADVISORY BOARD

3.1      The parties shall, immediately following the Effective Date, establish
         a Project Scientific Advisory Board, to oversee and manage the Project.
         In particular, the Project Scientific Advisory Board shall:

         3.1.1    set the objectives and timetable of the Project Workplan;

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

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

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

         3.1.5    consider opportunities for patent filings and publications;

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

         3.1.7    subject to Clause 5.2, propose amendments to the Project and
                  the Project Workplan as may be necessary or desirable to give
                  effect to this Agreement.

3.2      The Project Scientific Advisory Board shall comprise such number of
         members as are agreed between the Institute and Viragen, but shall
         always comprise an equal representation from the Institute and Viragen.
         For so long as he or she remains an employee of BBSRC working at the
         Institute, the Project Director shall be one of the

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         Institute's appointees. The Chairperson of the Project Scientific
         Advisory Board shall be the Project Director.

3.3      All members of the Project Scientific Advisory Board shall be given
         reasonable notice of meetings unless such requirement is unanimously
         waived by such members. The quorum for meetings of the Project
         Scientific Advisory Board shall be as agreed between the Institute and
         Viragen but as a minimum must comprise of at least one appointee of the
         Institute and at least one appointee of Viragen.

3.4      All decisions of the Project Scientific Advisory Board regarding the
         Project shall be by simple majority. In the case of an equality of
         votes the Chairperson shall have a casting vote.

3.5      Except as otherwise provided in this clause 3, the procedures of the
         Project Scientific Advisory Board, the way in which it is conducted and
         subject to clause 5.2 the frequency of its meetings shall be determined
         by the Project Scientific Advisory Board itself.

3.6      All formal communications between the parties relating to the conduct
         of the Project pursuant to this Agreement shall be made through the
         Project Scientific Advisory Board.

4        PROJECT WORK

4.1      The Institute shall start work on the Project on the Effective Date and
         shall perform the Project in accordance with the terms of this
         Agreement and the Project Workplan and shall allocate such Researchers,
         resources and equipment as are in the Institute's view necessary for
         the proper running of the Project. The Institute and Viragen may at any
         time amend the Project Workplan in accordance with clause 5.2.

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4.2    The Project shall be carried out under the personal direction of the
       Project Director, who shall have responsibility for the day-to-day
       running, control and management of the Project and whose duties shall
       include, but shall not be limited to, the allocation of work to be
       undertaken under the Project Workplan (having regard for the relevant
       skill and experience of the Researchers) and the promotion of the
       performance of the Project Workplan. In the event that the Project
       Director becomes unable or unwilling to continue the Project, and a
       mutually acceptable substitute is not identified within a period of two
       hundred and forty (240) days, either the Institute or Viragen shall have
       the option to terminate the Project by serving a further sixty (60) days
       written notice to that effect on the other party.

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

4.4      To the extent related to the Project, the parties shall no later than
         the Effective Date provide to each other their respective Background
         Intellectual Property as is in or can be rendered into material form
         and, during the continuance of this Agreement, the parties shall
         promptly disclose to each other any Background Intellectual Property
         which they are at liberty to disclose and, Viragen shall, at its own
         expense, give such help and assistance to the Institute during the
         Project Period as is reasonably required and requested by the Institute
         and, further, Viragen shall use its reasonable endeavours, with the
         assistance of the Institute and the Project Director, to secure within
         one hundred and eighty (180) days of the Effective Date the appointment
         by Viragen of a scientist of appropriate scientific standing as
         determined by the Project Director to work on the Project with, and in
         addition to, the Project Director.

4.5      In the performance of services in relation to the Project the Institute
         shall be deemed to be and shall be an independent contractor. Neither
         party is authorised to act as agent for the other for any purpose and
         shall not on behalf of the other enter into any contract, warranty

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         or representation as to any matter. Save as provided for by the terms
         of this Agreement, neither party shall be bound by the acts or conduct
         of the other.

4.6      Subject to Clause 4.1, whilst the Institute will use all reasonable
         endeavours to ensure the accuracy of the work performed and any
         information given in connection with the Project, the Institute makes
         no warranty, express or implied, as to the success of the Project and
         will not be held responsible for any consequence arising out of any
         inaccuracies or omissions unless such inaccuracies or omissions are the
         result of any negligent act or wilful default on the part of the
         Institute.

5        PROJECT REPORTING

5.1      Written Project reports shall be provided by the Institute to Viragen
         every three (3) months, and a final report shall be submitted by the
         Institute within six (6) months of the completion of the Project or, if
         earlier, termination of the Project.

5.2.      At the outset of the Project and during the Project Period, the
          Project Scientific Advisory Board will meet at times and places
          mutually agreed and in any event at least once in every three (3)
          months (with the first such meeting to take place within three (3)
          months of the Effective Date) to discuss the progress and results, as
          well as the ongoing plans, or changes therein, of the Project Workplan
          (including, but without limitation, extension of the Project Period
          and increases/decreases to the Project Costs). Viragen shall pay any
          travelling, accommodation or other costs reasonably incurred by the
          Institute under this clause 5.2. for such meetings during the Project
          Period.

5.3.      Subject to the terms of clause 4.6, in the event that the Project
          Scientific Advisory Board should consider that an aspect of the
          research work performed under the Project does not meet the level of
          accuracy anticipated by the parties or unnecessary errors have been

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          produced, such work shall be repeated by the Institute at no extra
          cost to Viragen, together with any corresponding and necessary
          alteration to the Project Period.

5.4      The parties agree that the obligations of the Institute in relation to
         the Project shall cease upon delivery of the final report pursuant to
         clause 5.1 and that no liability whatsoever, save in the event of
         negligence or wilful default by the Institute, shall rest upon the
         Institute for the effects of any Products and/or Services or any other
         product or process that may be produced or adopted by Viragen or any
         other party notwithstanding that the formulation of such products or
         process may be based upon the findings of the Project.

6        PROJECT COST

6.1      To enable the Institute to undertake the Project and to provide the
         necessary facilities in connection therewith, Viragen shall pay to the
         Institute the Project Cost in the manner set out in Part 5 of the
         Schedule to an account notified in writing by the Institute to Viragen.

6.2      In the event of termination of the Project before the end of the
         Project Period, Viragen shall pay all costs reasonably incurred prior
         to the date of said termination and falling due for payment in relation
         to the Project up to the date of termination and all expenditure
         falling due for payment after the date of termination which arises from
         commitments reasonably and necessarily incurred by the Institute, and
         which the Institute can reasonably demonstrate that it is unable to
         cancel, for the performance of the Project prior to the date of
         termination, provided always that in no event shall Viragen be liable
         to the Institute in aggregate for payments made under Part 5 of the
         Schedule and 6.3 totalling more than the Project Cost.

7        CONFIDENTIALITY AND PUBLICATION IN RELATION TO THE PROJECT

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7.1      The parties undertake that they shall at all times observe their
         respective obligations under the Confidentiality Agreement the terms of
         which are incorporated into this Agreement but in the event of any
         conflict between the Confidentiality Agreement and this Agreement, this
         Agreement shall prevail.. The Institute agrees that it shall, at all
         times during and after the term of this Agreement maintain
         confidentially in relation to Project except to extent that the
         Institute shall be entitled to enter into any licence or sub-licence
         pursuant to clause 8.4, subject always to the provisions of this Clause
         7.

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

7.3       The obligations of confidentiality contained in clauses 7.1 and 7.2
          shall not extend to Background Intellectual Property of the Institute
          or to publication or presentations permitted in accordance with the
          provisions of clause 7.4, nor to any information which:-

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

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

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

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

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

7.4      Viragen acknowledges that it is Institute policy that the results of
         the Project be published, and any proposals for publications (including
         public presentations) containing any details of work or results
         generated from the Project shall be considered for such publication or
         presentation by the Project Scientific Advisory Board, who agrees that
         the Project Director and/or any Researchers engaged in the Project may
         present at seminars, symposia, national or regional professional
         meetings, and to publish in journals, theses or dissertations, or
         otherwise, methods and results of the Project, provided however that
         the Project Scientific Advisory Board shall have been furnished with
         copies of any proposed publication and presentation at least two (2)
         months in advance of the submission of such proposed publication or
         presentation to a journal, editor, or other third party. The Project

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         Scientific Advisory Board shall have one month after receipt of said
         copies, to object to such proposed presentation or proposed publication
         if in the Project Scientific Advisory Board's reasonable opinion a
         delay of publication is necessary in order to protect its commercial
         interests, or the commercial use to Viragen of information derived from
         the Project or because there is patentable or commercially sensitive
         subject matter which needs protection. In the event that the Project
         Scientific Advisory Board makes such objection the Project Director or
         the Researchers shall refrain from making such publication or
         presentation until Viragen has obtained satisfactory protection of such
         work or results. In the event that the Project Scientific Advisory
         Board in making such objection can reasonably demonstrate that certain
         information contained in such proposed presentation or publication if
         disclosed would have a detrimental effect on Viragen's commercial
         interest, such information shall be removed from the proposed
         presentation or publication such that said information may not be
         discerned therefrom and be delayed from further publication for a
         period of two (2) years from the end of the Project. Every publication
         published in accordance with the terms of this clause 7.4 shall
         acknowledge the contribution of Viragen to the Project, the text of
         such acknowledgments shall be agreed by the Project Scientific Advisory
         Board prior to publication.

8        INTELLECTUAL PROPERTY

8.1      Subject to clause 8.2, for the avoidance of doubt, all Background
         Intellectual Property used in connection with the Project shall remain
         the property of the party introducing the same.

8.2      Viragen grants to the Institute a royalty-free, non-exclusive right and
         licence to use the Viragen Background Intellectual Property disclosed
         by Viragen to the Institute under clause 4.4 to such extent as is
         necessary to enable the Institute to undertake the Project.

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8.3      As between the Institute and Viragen the Foreground Intellectual
         Property shall belong to Viragen, subject to the licence granted to the
         Institute in accordance with clause 8.4 and the re-assignation of the
         Foreground Intellectual Property in favour of the Institute pursuant to
         clause 9.3

8.4      Subject to provisions of confidentiality contained in Clause 7 of this
         Agreement and the Confidentiality Agreement, Viragen hereby grants the
         Institute a world wide royalty free licence (with the right to
         sub-licence) of the Foreground Intellectual Property academic research
         and teaching purposes and for the purpose of non commercial
         collaboration with other academic parties, charitable, research and
         other not for profit organisations, provided always that Viragen shall
         have the opportunity to review, the terms of any such sub-licence. In
         addition the Institute undertakes that it shall obtain from any such
         third party an undertaking of confidentiality on terms no less onerous
         than those contained in this Agreement and the Confidentiality
         Agreement, and that the Institute shall obtain such undertaking prior
         to entering into any discussions or negotiations with such third party.

9          PROTECTION AND EXPLOITATION OF FOREGROUND INTELLECTUAL PROPERTY

9.1      Pursuant to the terms of clause 8.3, the Institute shall promptly
         notify Viragen of any Foreground Intellectual Property conceived and/or
         made during the Project Period under the Project and Viragen will, if,
         in its sole discretion, it should deem it appropriate and with the
         assistance in all material respects of the Institute, but at Viragen's
         own cost, use all reasonable endeavours to promptly prepare, file and
         prosecute any patent application, or application for other intellectual
         property protection, in respect of the Foreground Intellectual Property
         in those countries where Viragen, in its sole discretion, believes
         there is a reasonable prospect of a commercial return. While Viragen
         shall be responsible for making decisions regarding the scope and
         content of application(s) to be filed and the prosecution thereof, the
         Institute shall be given an opportunity to review and provide input

                                       21
<PAGE>   22

         thereto. Viragen shall keep the Institute advised as to all
         developments with respect to such applications(s) and shall promptly
         supply to the Institute copies of all papers received and filed in
         connection with the prosecution thereof in sufficient time for the
         Institute to comment thereon. Thereafter, Viragen shall, at its own
         cost, use all reasonable endeavours to prosecute and maintain such
         applications(s) and the resultant patents.

9.2      Provided always that the Institute has made all relevant disclosure to
         Viragen and Viragen has not decided to maintain the relevant Foreground
         Intellectual Property as Know-how, if Viragen elects not to exercise
         its rights to apply for protection of Foreground Intellectual Property
         or decides to discontinue the prosecution or maintenance of such
         protection, Viragen shall notify the Institute accordingly and the
         Institute may require an assignation, free from encumbrances, of the
         full right, title and interest in such Foreground Intellectual Property
         and in and to any application(s) in respect thereof and the Institute
         shall be free to file or continue to prosecute or maintain any such
         application(s) and to maintain any protection issuing therefrom at the
         Institute's sole expense and for its exclusive benefit.

9.3      Viragen shall have a period of two (2) years or such other period as
         may be agreed between the parties in writing from the end of the
         Project (whether at the end of the Project Period or earlier if this
         Agreement is terminated pursuant to clauses 4.2 and 20 or later if the
         Project Period is extended in accordance with clause 5.2) in which to
         commence Commercial Exploitation of any Foreground Intellectual
         Property. If the Institute does not receive written evidence of such
         Commercial Exploitation within that period, the Institute shall be
         entitled at any time thereafter, by written notice to Viragen, to
         require the assignation free from encumbrances, of the full right,
         title and interest in such Foreground Intellectual Property and to any
         application(s) in respect thereof. In the event of any dispute arising
         between the parties as to whether Commercial Exploitation of the
         Foreground Intellectual Property has been achieved by Viragen ,which
         dispute is not resolved by the parties within a period of thirty days
         (30) from the date of receipt by the Institute of notification by
         Viragen , the matter shall be referred to the President from time

                                       22
<PAGE>   23

         to time of the Law Society of Scotland, whose decision shall be final.
         The costs of such referral shall be borne by the party designated to do
         so by the President of the Law Society of Scotland.

10         GRANT OF LICENCE OF THE INSTITUTE'S PATENTS

10.1     The Institute grants to Viragen, subject as provided below, the
         exclusive right and licence, with a right to sub-licence, under the
         Institute's Patents to research, develop, manufacture, and/or Supply
         the Products and/or Services and to commercialise, exploit, market,
         import and export and sell the Products and/or Services in the Field
         anywhere in the Territory.

10.2     If Viragen requires for the purpose of using or exploiting the
         Foreground Intellectual Property or the Institute's Patents access to
         Background Intellectual Property owned by the Institute, the Institute
         will grant a royalty-free, non-exclusive licence to Viragen to any such
         Background Intellectual Property that the Institute is free to licence
         for this specific purpose.

10.3     The licence and rights granted to Viragen in clauses 10.1 and 10.2
         shall not in any manner prevent the Institute licensing or using in any
         way whatsoever its Background Intellectual Property and the Institute's
         Patents for its own academic research and teaching purposes and for
         non-commercial collaborations or from licensing or using as aforesaid
         its Background Intellectual Property and the Institute's Patents
         outside the Field. Viragen undertakes not to use the rights granted to
         it under clauses 10.1 and 10.2 outside the Field.

10.4     The Institute shall simultaneously upon the execution of this Agreement
         grant and enter with Viragen into a licence agreement in respect of the
         Institute's Patents in the form or substantially the form set out in
         Part 2 of the Schedule which licence shall be registered by

                                       23
<PAGE>   24

         Viragen with such Patent Offices in the Territory as it considers
         appropriate or as the Institute shall require, all at the expense of
         Viragen.

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

11       SUB-LICENSING

11.1     Viragen shall have the right to grant a sub-licence under the rights
         and licences granted under clause 10.1 of this Agreement to any person
         with respect to the rights and licences granted under this Agreement
         PROVIDED THAT:

         11.1.1   Viragen shall ensure that there are included in the terms of
                  any sub-licence the applicable like obligations and
                  undertakings on the part of the sub-licensee as are contained
                  in this Agreement (except this clause and the financial terms
                  set forth in this Agreement) and shall further ensure that all
                  sub-licensees duly observe and perform the same; and

         11.1.2   Viragen shall at all times indemnify and keep indemnified the
                  Institute against all or any costs, claims, damages or
                  expenses incurred by the Institute or for which the Institute
                  may become liable as a result of the default or negligence of
                  any sub-licensee.

12       VIRAGEN'S OBLIGATIONS UNDER THE LICENCES

                                       24
<PAGE>   25

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

12.2     Viragen shall comply in all material respects with the legal
         requirements applicable to the manufacture and Supply of the Products
         and/or Services.

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

12.4     Save in the event of any negligent act or wilful default on behalf of
         the Institute, Viragen shall at all times indemnify and keep
         indemnified the Institute against all or any costs or claims damages or
         expenses incurred by the Institute or for which the Institute may
         become liable with respect to any product liability claim with respect
         to all Products and/or Services Supplied or put into use by Viragen or
         any of its sub-licensees pursuant to this Agreement.

12.5     Viragen shall, prior to any Products being produced , or any Products
         and/or Services being Supplied or put into use by Viragen obtain and
         maintain adequate product liability insurance to meet its obligations
         to the Institute pursuant to clause 12.4 and shall supply the Institute
         with a copy of such insurance policy on request.

13       PATENT INFRINGEMENT AND MISUSE OF CONFIDENTIAL INFORMATION

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

                                       25
<PAGE>   26

13.2     The Institute or Viragen shall take all steps as may be agreed by them
         in pursuance of clause 13.1 including the institution of legal
         proceedings where necessary in the name of one of the parties in order
         to protect Viragen's rights in the Institute's Patents in the Field.

13.3     If the Institute fails within a reasonable period in the circumstances
         to take such steps as may be considered necessary or appropriate by
         Viragen (unless agreement shall have been reached in pursuance of
         clause 13.1) Viragen shall have the right and is hereby authorized by
         the Institute to take those steps independently, provided always that
         the Institute shall use its reasonable endeavours to ensure that any
         other licensees of the Institute's Patents are conjoined in any such
         proceedings, under conditions of confidentiality no less onerous than
         those contained in this Agreement. In so doing Viragen shall not be
         taken to be acting as the agent or in any way on behalf of the
         Institute but may file any proceedings in the name of the Institute, as
         necessary or in its own name, and the Institute shall give all
         reasonable assistance at Viragen's expense to facilitate any
         proceedings by Viragen. Viragen shall bear all costs but shall be
         entitled to retain for its own absolute benefit any damages, costs or
         other expenses awarded or recovered in any such proceedings.

14       MAINTENANCE OF THE INSTITUTE'S PATENTS

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

14.2     If the Institute in its absolute discretion decides not to prosecute,
         maintain or defend any of the Institute's Patents, Viragen shall be
         entitled to require the Institute to do so subject to Viragen and any
         other sub-licensee of the Institute's Patents jointly indemnifying the

                                       26
<PAGE>   27

         Institute and keeping it indemnified to its satisfaction against all
         costs and expenses thereby incurred by the Institute.

15       ROYALTIES

15.1     In consideration of the rights granted under clause 9.1,  Viragen shall

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

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

         15.1.3   immediately issue to the Institute the Shares which will be
                  validly issued, fully paid and non- assessable and the
                  Warrants. The form of the Warrant is annexed to this Agreement
                  as Part 4 of the Schedule. Viragen agrees to register the
                  shares and the shares of common stock underlying the Warrants
                  under the Securities Act of 1933 at Viragen's cost and
                  expense. For that purpose, Viragen agrees to use its best
                  efforts to file a Registration Statement with the Securities
                  and Exchange Commission relating to the aforementioned
                  securities within forty five (45) days of the Effective Date.

                                       27
<PAGE>   28

15.2     For the avoidance of doubt, royalties shall become payable by Viragen
         under clause 15.1 of this Agreement in respect of each Product and/or
         Service:

         15.2.1   sold - when Viragen has received payment;

         15.2.2   lent, leased, let or hire or sold on hire purchase - when
                  delivered to the borrower, lessor, lessee or hirer, whichever
                  first occurs;

         15.2.3   disposed of by Viragen to any person otherwise than in
                  accordance with sub-clauses 15.3.1 or 15.3.2, when delivered
                  to such person; and

         15.2.4   put into use by Viragen or an Associated Company on behalf of
                  a third party for value - immediately.

                                       28
<PAGE>   29

16       TAXATION

16.1     All sums due under this Agreement:

         16.1.1   are exclusive of any value added tax (or similar sales tax)
                  which shall be payable in addition by Viragen on the rendering
                  by the Institute of any appropriate value added tax or other
                  invoice and Viragen shall pay any costs, interest and
                  penalties due by reason of late payment of any such value
                  added tax (or similar sales tax);

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

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

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

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

                                       29
<PAGE>   30

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

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

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

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

17       OTHER PROVISIONS RELATING TO PAYMENT

                                       30
<PAGE>   31

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

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

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

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

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

         17.3.3   the gross income received by Viragen from any sub-licences
                  granted in accordance with clause 10; and

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

17.4.    Viragen shall keep proper records and books of account showing the
         description and price of Products and/or Services Supplied under this
         Agreement and of the amounts received

                                       31
<PAGE>   32

         from any sub-licensees appointed in accordance with this Agreement and
         such records shall, upon receipt by Viragen of reasonable notice from
         the Institute, be open to inspection by the Institute or its duly
         authorised agent or representative who shall be entitled to take copies
         of or extracts from the same. In the event that such inspection or
         audit should reveal a discrepancy in the royalties paid from those
         payable under this Agreement, Viragen shall immediately make up any
         shortfall and reimburse the Institute in respect of any professional
         charges incurred for such audit or inspection. In the event the
         examination determines a discrepancy of 3% or more relative to payments
         due the Institute, then all costs of the examination shall be paid by
         Viragen. In the event of any dispute arising in relation to such audit,
         the matter shall be referred to an independent auditor, chosen by
         agreement between the parties or ,failing such agreement within twenty
         one (21) days at the request of either party, nominated by the
         President from time to time of the Institute of Chartered Accountants
         in Scotland, whose decision shall be final. The costs of such
         independent audit shall be borne by the party designated to do so by
         the independent auditor.

17.5     The provisions of this clause 17 shall continue to apply
         notwithstanding termination or expiry of this Agreement until the
         settlement of all subsisting claims of the Institute.

17.6     A certificate signed by an independent auditor shall be sufficient to
         fix and ascertain any sums due by Viragen under this Agreement and
         shall be conclusive of the amount due.

18      WARRANTIES

18.1     Each party represents and warrants to the other party that as at 15
         November 2000:-

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

                                       32
<PAGE>   33

         18.1.2   this Agreement does not and will not:-

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

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

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

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

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

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

                                       33
<PAGE>   34

         18.1.6   it is not in breach of or in default under any agreement or
                  obligation relating to (or analogous to) financial
                  indebtedness.

18.2     Viragen undertakes to the Institute that:-

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

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

18.3     The Institute warrants to Viragen that as at 15 November 2000 that
         there is no actual or, to the best of its knowledge or belief,
         threatened infringement of, or other proceedings relating to, the
         Institute's Patents.

19        LIMITATION OF LIABILITY

                                       34
<PAGE>   35

19.1     Each party shall indemnify and hold the other party harmless from and
         against any and all claims, actions, damages, losses and expenses
         resulting from personal injury to or death of any employee, agent or
         representative of the other party engaged in the Project except where
         such injury or death is due to the negligent act or omission of the
         other party, its employees, agents or representatives.

20       TERMINATION

20.1     This Agreement may be terminated immediately by the Institute by
         serving written notice upon Viragen in the event of:-

         20.1.1   a failure by Viragen to meet its payment obligations in
                  respect of the Project and /or any royalties arising under
                  clause 14 and/or a failure by Viragen to observe or perform
                  any terms or conditions on its part under this Agreement which
                  failure is not remedied ninety (90) days after receipt of
                  written notice specifying the alleged failure and the action
                  required to remedy it; or

         20.1.2   Viragen challenging the validity or contesting the ownership
                  of the Institute's Patents or the Institute's Background
                  Intellectual Property.

20.2     This Agreement may be terminated immediately by either party without
         notice in the event of:-

         20.2.1   the liquidation or bankruptcy of the other party or a similar
                  officer being appointed over the other party's assets or the
                  other party ceasing or threatening to cease to carry on
                  business or the equivalent of any of the foregoing occurring
                  in respect of the other party in any jurisdiction; or

                                       35
<PAGE>   36

         20.2.2   both parties, acting reasonably and in good faith, agreeing
                  that the Project is unviable due to an insurmountable
                  technical obstacle.

21       CONSEQUENCES OF TERMINATION

21.1     In the event of expiry or termination of this Agreement howsoever
         arising, and subject to any express provisions set out elsewhere in
         this Agreement: -

         21.1.1   Viragen shall be entitled to Supply any stock of the Products
                  manufactured prior to the date of termination, but shall not
                  be entitled to manufacture any further Products;

         21.1.2   all outstanding sums payable by Viragen to the Institute shall
                  immediately become due and payable and Viragen shall remain
                  due to pay to the Institute any sums which subsequently accrue
                  as a consequence of clause 21.1.1;

         21.1.3   each party shall return to the other any technical
                  documentation or information received from the other party in
                  the course of this Agreement and all copies of such material
                  to the extent such remains confidential ;

         21.1.4   any sub-licences of the Institute's Patents granted by Viragen
                  pursuant to clause 10.1 shall automatically terminate; and

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

21.2     In the event of termination of this Agreement pursuant to clause 4.2,
         the Foreground Intellectual Property shall belong to Viragen.

                                       36
<PAGE>   37

21.3     In the event of termination of this Agreement by the Institute pursuant
         to clause 20.1 or 20.2.1, the Foreground Intellectual Property shall
         belong to the Institute and any sub-licences of the Foreground
         Intellectual Property granted by Viragen shall automatically terminate.

21.4     Upon termination or expiry of this Agreement howsoever arising all
         rights and licences granted in favour of the Institute or Viragen under
         this Agreement shall cease except and to the extent expressly provided
         otherwise under the terms of this Agreement.

21.5     Clauses 7, 9.2,12.4, 13, 16.3, and this clause 21 shall survive the
         termination of this Agreement howsoever arising.

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

22.      FORCE MAJEURE

22.1     Neither party shall be liable for any delay in performing or for
         failure to perform its obligations hereunder if the delay or failure
         results from any cause or circumstance whatsoever beyond its reasonable
         control ("an event of force majeure"), provided the same arises without
         fault or negligence of such party. If in the event force majeure
         occurs, the date(s) for performance of the obligation affected shall be
         postponed for as long as is made necessary by the event of force
         majeure, provided that if any event of force majeure continues for a
         period of or exceeding six (6) months, the aggrieved party shall have
         the right to terminate this Agreement forthwith by written notice to
         the other party. Each party shall use its reasonable endeavours to
         minimise the effects of an event of force majeure.

                                       37
<PAGE>   38

23.      NOTICES

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

         In the case of Institute:

         Roslin Institute (Edinburgh)
         Roslin
         Edinburgh
         Midlothian EH25 9PS

         For the attention of:       Assistant Director (Company Secretary)

         In the case of Viragen:

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

         For the attention of:       Dr Magnus Nicolson

                                       38
<PAGE>   39

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

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

24       VARIATIONS

24.1     No variation of or amendment to this Agreement shall bind either party
         unless made in writing and signed by both parties hereto. Both parties
         shall at all times remain willing to discuss possible contractual
         variations that have been prompted by technical or other factors
         although neither party shall have any obligation to agree to any such
         variation proposed.

25       WAIVERS

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

26       ASSIGNATION

26.1     Neither party may assign, transfer, sub-contract or otherwise dispose
         of the benefit or burden of this Agreement to a third party without the
         prior consent of the other party such consent not to be unreasonably
         withheld or delayed save that:-

                                       39
<PAGE>   40

26.2     the Institute may assign the benefit and burden of this Agreement to
         any wholly owned subsidiary of the Institute; and

26.3     Viragen may assign the benefit and burden of this Agreement in
         connection with the disposal of all its assets whether by way of sale,
         merger or other corporate re-organisation provided in so doing Viragen
         shall impose at the date of such disposal and provide to the Institute
         a binding and effective continuing contractual obligation on the
         assignee in favour of Viragen and the Institute to prohibit the
         assignee from using the Background Intellectual Property, the
         Foreground Intellectual Property and/or the Institute's Patents to
         provide any Products and/or Services or carry out experiments or
         research using the same in any country within the Territory which are
         illegal under the laws of the United States of America and/or the
         United Kingdom of Great Britain and Northern Ireland as at the date on
         which the Products and/or Services are provided or which the
         experiments are carried out or the research is conducted. Receipt by
         the Institute from Viragen of confirmation in terms satisfactory to the
         Institute pursuant to this clause 26.2 shall discharge Viragen from any
         further obligation in respect of this clause.

27       ENTIRE AGREEMENT

27.1     This Agreement together with the Work Plan, the Confidentiality
         Agreement, the Heads of Agreement the Poultry Facility Letter (as
         defined in clause 2) and the Warrant constitutes the entire Agreement
         and understanding between the parties with respect to the subject
         matter hereof and supersedes any prior agreement, understanding or
         arrangement between the parties, whether oral or in writing. No
         representation, undertaking or promise shall be taken to have been
         given or be implied from anything said or written in negotiations
         between the parties prior to this Agreement except as expressly stated
         in this Agreement. Neither party shall have any remedy in respect of
         any untrue statement made to it upon which it has relied in entering
         into this Agreement (unless such untrue statement was made

                                       40
<PAGE>   41

         fraudulently) and that party's only remedy shall be for breach of
         contract as provided in this Agreement.

28       SEVERABILITY

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

29       SURVIVAL

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

30       ENTICEMENT

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

                                       41
<PAGE>   42

31       FURTHER ASSURANCES

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

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

32       ANNOUNCEMENTS

32.1     The parties agree that upon entering this Agreement they shall issue a
         joint press release concerning this Agreement the timing , content,
         wording and distribution of which shall be agreed in writing by the
         parties. Viragen shall in advance of any disclosure of any document or
         the like falling with the exceptions of clause 7.3.4, and in
         particular, before filing any document or the like in connection with
         this Agreement with the Securities and Exchange Commission, provide a
         copy thereof to the Institute and take into account the Institute's
         reasonable comments thereon.

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

                                       42
<PAGE>   43

33       PUBLICITY

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

34       COSTS

34.1     Viragen shall meet all of the Institute's reasonable costs (including
         legal fees and expenses) associated with the parties entering into this
         Agreement and the Warrant and any ancillary documentation relating
         thereto.

                                       43
<PAGE>   44

35       GOVERNING LAW

35.1     This Agreement shall be governed by and construed in accordance with
         the law of Scotland and the parties hereby submit to the non exclusive
         jurisdiction of the Scottish courts: IN WITNESS WHEREOF these presents
         consisting of this and preceding thirty eight pages together with the
         Schedule in five parts are executed as follows:-

         Subscribed for and on behalf of
         ROSLIN INSTITUTE (EDINBURGH)
         at Edinburgh
         on 15 November 2000
         by Grahame Bulfield, Director
                                                --------------------------------
                                                Director

         before the following witness:-
         ------------------------------------
         Witness
         ------------------------------------
         Full Name
         ------------------------------------
         Address
         ------------------------------------
         Occupation
         ------------------------------------
         Subscribed for and on behalf of
         VIRAGEN INC
         at Edinburgh
         on 15 November 2000
         by Gerald Smith, Chairman and CEO
                                                --------------------------------
                                                Chairman and CEO

         and Magnus Nicolson, COO               --------------------------------
                                                COO

                                       44
<PAGE>   45

                                    SCHEDULE

This is the schedule referred to in the foregoing Development, Licence and
Collaboration Agreement between (1) Roslin Institute (Edinburgh) and (2) Viragen
Inc dated 15th November 2000.

                                     PART 1

                                     PATENTS

1.       MARINER (USE OF MARINER IN THE PRODUCTION OF TRANSGENIC ANIMALS)

         Date                   Country                  Application Number
                                International            PCT/GB98/02517

2.       PERRY (IN VITRO EMBRYO CULTURE TECHNIQUE)

         Date                   Country                  Application Number
         30 April 1991          US                       5,011,780
         15 December 1993       European                 0295964

Perry Patent has also been granted in the following Countries:- Canada, Ireland,
Finland, Israel, Japan, New Zealand, Portugal and South Africa

                                       45
<PAGE>   46

                                     PART 2

                            SHORT FORM PATENT LICENCE

                                               CONFIRMATORY PATENT LICENCE
                                                        AGREEMENT

                                                         between

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

                                                           and

                                    (2)      VIRAGEN INC. a Delaware corporation
                                             having principal place of business
                                             at 865 South West 78th Avenue,
                                             Plantation, Florida, United States
                                             of America ("Viragen")

WHEREAS

(A)      The Institute and Viragen entered into an agreement dated 15th November
         2000 ("the Main Agreement") in terms of which the Institute agreed to
         grant Viragen a licence under [insert patent details] ("the Institute's
         Patents").

(B)      Accordingly, the parties have now agreed to enter into this Agreement.

                                       46
<PAGE>   47

NOW IT IS HEREBY AGREED as follows:-

1.       Pursuant to clause 10.1 of the Main Agreement, the Institute hereby
         grants to Viragen the exclusive right and licence under the Institute's
         Patents to manufacture and provide the Products and/ or Services and to
         commercialise, exploit, market, import and export and sell the Products
         and /or Services in the Field anywhere in the Territory (as those terms
         are defined in the Main Agreement for the life of the Institute's
         Patents (unless this Agreement is terminated earlier) and subject
         always to the provisions of the Main Agreement.

2.       This Agreement shall terminate without notice in the event of
         termination of the Main Agreement for any reason.

3.       For the avoidance of doubt this Agreement is granted pursuant to the
         Main Agreement and not in substitution therefor and nothing contained
         in this Agreement shall in any way derogate from the Main Agreement
         which shall remain in full force and effect.

4.       This Agreement shall be governed by and construed in accordance with
         the laws of Scotland and the parties hereby submit to the non-exclusive
         jurisdiction of the Scottish Courts:

         IN WITNESS WHEREOF

                                       47
<PAGE>   48
                                     PART 3

                               HEADS OF AGREEMENT

                                       48
<PAGE>   49
                                     PART 4

                                     WARRANT

         THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND MAY NOT BE SOLD, OFFERED FOR SALE, ASSIGNED, TRANSFERRED
OR OTHERWISE DISPOSED OF, UNLESS REGISTERED PURSUANT TO THE PROVISIONS OF THE
SECURITIES ACT OR AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY IS OBTAINED
STATING THAT SUCH DISPOSITION IS IN COMPLIANCE WITH AN AVAILABLE EXEMPTION FROM
SUCH REGISTRATION.

                                                               November 15, 2000

                                  VIRAGEN, INC.
             (INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE)

               WARRANT FOR THE PURCHASE OF SHARES OF COMMON STOCK

         FOR VALUE RECEIVED, VIRAGEN, INC. (the "Company"), a Delaware
corporation, having its principal offices at 865 S.W. 78th Avenue, Suite 100,
Plantation, Florida 33324, Fax No. 00 1 954 233 1414 grants to ROSLIN INSTITUTE
(EDINBURGH) a company incorporated in Scotland under the U.K. Companies Act 1985
with registered number 157100 and having its registered office at Roslin,
Midlothian, EH 25 9PS, Fax No. 0131 527 4439 (the "Holder"), the right to
purchase from the Company up to 900,000 fully paid and non-assessable shares of
Common Stock at a price per share (the "Exercise Price"), term and vesting
schedule and conditions hereinafter set forth.

         This Warrant is issued pursuant to that certain Development, Licence
and Collaboration Agreement made and entered into as of the date hereof by and
between the Holder and the Company (the "Agreement").

         The term "Common Stock" means the Common Stock, par value $.01 per
share, of the Company. The number of shares of Common Stock to be received upon
the exercise of this Warrant may be adjusted from time to time as hereinafter
set forth. The shares of Common Stock deliverable upon such exercise, and as
adjusted from time to time, are hereinafter referred to as "Warrant Stock." The
term "Other Securities" means any other equity or debt securities that may be
issued by the Company in addition thereto or in substitution for the Warrant
Stock. The term "Company" means and includes the corporation named above as well
as (i) any immediate or more

                                       49
<PAGE>   50

remote successor corporation resulting from the merger or consolidation of such
corporation (or any immediate or more remote successor corporation of such
corporation) with another corporation, or (ii) any corporation to which such
corporation (or any immediate or more remote successor corporation of such
corporation) has transferred its property or assets as an entirety or
substantially as an entirety.

         The Holder agrees with the Company that this Warrant is issued, and all
the rights hereunder shall be held subject to, all of the conditions,
limitations and provisions of the Agreement to which this Warrant is attached
and as set forth herein.

1. EXERCISE PRICE AND WARRANT VESTING.

Subject to adjustment as hereinafter provided, the Exercise Price of this
Warrant is $1.463 per share (representing the average closing price of the
Company's Common Stock, as published by the American Stock Exchange, over the
thirty (30) trading days prior to the date hereof.

                  This Warrant is immediately exercisable as to 150,000 shares
of Common Stock and shall vest in equal amounts (150,000 shares) up to the
remaining 750,000 shares of Common Stock (subject to adjustment as described in
Section 8) every six (6) months commencing six months after the date of this
Warrant, provided the Agreement shall be in full force and effect as of the date
of vesting of each subsequent increment.

2. EXERCISE OF WARRANT.

Following vesting, this Warrant may be exercised as to the specified amount of
Warrant Stock, in whole or in part, but if in part, in minimum increments of
50,000 shares at any time, or from time to time during the period commencing on
the vesting date and expiring 5:00 p.m. Eastern Time three (3) years from the
date on which the final increment of shares vests in the Holder (the "Expiration
Date") or, if such day is a day on which banking institutions in New York are
authorized by law to close, then on the next succeeding day that shall not be
such a day, by presentation and surrender of this Warrant to the Company at its
principal office with the Warrant Exercise Form attached hereto duly executed
and accompanied by payment (either in cash or by certified or official bank
check, payable to the order of the Company) of the Exercise Price for the number
of shares specified in such form and instruments of transfer, if appropriate,
duly executed by the Holder or its duly authorized attorney. If this Warrant
should be exercised in part only, the Company shall, upon surrender of this
Warrant for cancellation, execute and deliver a new Warrant evidencing the
rights of the Holder thereof to purchase the balance of the shares purchasable
hereunder. Upon receipt by the Company of this Warrant, together with the
payment of the Exercise Price at its office in proper form for exercise, the
Holder shall be deemed to be the holder of record of the shares of Common Stock
issuable upon such exercise, notwithstanding that the stock transfer books of
the Company shall then be closed or that certificates representing such shares
of Common Stock shall not then be actually delivered to the Holder. The Company

                                       50
<PAGE>   51

shall pay any and all documentary stamp or similar issue or transfer taxes
payable in respect of the issue or delivery of shares of Common Stock on
exercise of this Warrant.

3. CONVERSION OF WARRANT ON A CASHLESS BASIS.

                  (a) The Holder shall also have the right (the "Conversion
         Right") at any time when this Warrant may be exercised to convert all
         or any portion of this Warrant into such number of shares (rounded to
         the nearest whole share) of Company Common Stock equal to the quotient
         obtained by dividing (i) the "Aggregate Warrant Spread" as of the date
         the Conversion Right is exercised, by (ii) the "Market Price of the
         Common Stock" as of the date the Conversion Right is exercised. The
         Conversion Right shall be exercisable, at any time that this Warrant is
         exercisable pursuant to Section 1 above, by surrendering this Warrant
         with the Conversion Form attached hereto filled in and duly executed by
         such Holder or by such Holder's duly authorized attorney to the Company
         at its principal office.

                  (b) For purposes of this Section 3, the "Aggregate Warrant
         Spread" of all or a portion of this Warrant as of a particular date
         shall equal (i) the Market Price of the Common Stock multiplied by the
         number of shares of Common Stock purchasable upon exercise of all or
         such portion of this Warrant on such date, minus (ii) the Exercise
         Price multiplied by the number of shares of Common Stock purchasable
         upon exercise of all or such portion of this Warrant on such date. For
         purposes of this Warrant, the "Market Price of the Common Stock" as of
         a particular date shall equal: (i) if the Common Stock is traded on an
         exchange or is quoted on either the Nasdaq National Market or Small-Cap
         Market, then the average of the closing or last sale prices,
         respectively, reported for the 10 trading days immediately preceding
         such date, or (ii) if the Common Stock is not traded on an exchange,
         the Nasdaq National Market, or the Nasdaq Small-Cap Market but is
         traded in the local over-the-counter market, then the average of the
         mid-points between the highest bid and lowest asked quotations for each
         of the 10 trading days immediately preceding such date.

4. REGISTRATION RIGHTS.

                  (a) Registration. The Company agrees to (i) promptly after the
         date hereof and in any event within forty five (45) days after the date
         hereof file a registration statement to register under the Securities
         Act the Warrant Stock and the 100,000 shares of Common Stock of Viragen
         owned by the Holder as issued pursuant to the Development, Licence and
         Collaboration Agreement ("the Existing Shares") for resale, (ii)
         respond promptly and appropriately to any comments received from the
         Securities and Exchange Commission (the "SEC") with respect to the
         registration statement and (iii) file such amendments to the
         registration statement as the Company deems appropriate in order

                                       51
<PAGE>   52

         to have the SEC declare such registration statement effective. The
         Company agrees that upon 10 business days' notice prior to any period
         in which the Holder intends to engage in offers or sales of the Warrant
         Stock or the Existing Shares, the Company shall file such amendments or
         supplements to the registration statement and/or prospectus as the
         Company considers necessary to keep such registration statement and/or
         prospectus current for a period of 30 days. The Holder by its
         acceptance hereof agrees (i) to provide the Company in writing with any
         information the Company has requested for use in connection with
         preparing or filing such registration statement or prospectus, (ii) to
         indemnify the Company as provided below, and (iii) not to engage in any
         public offering or sale of the Warrant Stock or the Existing Shares
         during any period in which such registration statement and/or
         prospectus is not current. The Company's obligation under this Section
         4 shall expire after the period specified in Rule 144 has elapsed
         following the date hereof.

                  (b) Expenses. With respect to the registration pursuant to
         this Section 4, the Company shall bear the following fees, costs, and
         expenses: all registration, filing and NASD fees, printing expenses,
         fees and disbursements of counsel and accountants for the Company, fees
         and disbursements of counsel for the underwriter or underwriters of
         such securities, all internal expenses, the premiums and other costs of
         policies of insurance against liability arising out of the public
         offering, and legal fees and disbursements and other expenses of
         complying with state securities laws of any jurisdictions in which the
         securities to be offered are to be registered or qualified. Fees and
         disbursements of special counsel and accountants for the selling
         Holder, underwriting discounts and commissions, and transfer taxes for
         selling Holder shall be borne by the selling Holder.

                  (c) Indemnification. The Company hereby indemnifies the Holder
         of this Warrant and of any Warrant Stock and the Existing Shares and
         the officers and directors, if any, who control such Holder, within the
         meaning of Section 15 of the Securities Act, against all losses,
         claims, damages, and liabilities caused by any untrue statement or
         alleged untrue statement of a material fact contained in any
         Registration Statement or Prospectus (and as amended or supplemented if
         the Company shall have furnished any amendments thereof or supplements
         thereto), any Preliminary Prospectus or any state securities law
         filings or any omission or alleged omission to state therein a material
         fact required to be stated therein or necessary to make the statements
         therein not misleading, except insofar as such losses, claims, damages
         or liabilities are caused by any untrue statement or omission contained
         in information furnished in writing to the Company by the Holder
         expressly for use therein; and the Holder by its acceptance hereof
         severally agrees that it will indemnify and hold harmless the Company,
         each of its officers who signs such Registration Statement, and each
         person, if any, who controls the Company, within the meaning of Section
         15 of the Securities Act, with respect to losses, claims, damages or

                                       52
<PAGE>   53

         liabilities which are caused by any untrue statement or omission
         contained in information furnished in writing to the Company by the
         Holder expressly for use therein.

5. RESERVATION OF SHARES.

The Company will at all times reserve for issuance and delivery upon exercise of
this Warrant all shares of Common Stock or other shares of capital stock of the
Company (and Other Securities) from time to time receivable upon exercise of
this Warrant. All such shares (and Other Securities) shall be duly authorized
and, when issued upon such exercise, shall be validly issued, fully paid and
non-assessable and free of all preemptive rights.

6. FRACTIONAL SHARES.

No fractional shares or scrip representing fractional shares shall be issued
upon the exercise of this Warrant, but the Company shall pay the holder an
amount equal to the fair market value of such fractional share of Common Stock
in lieu of each fraction of a share otherwise called for upon any exercise of
this Warrant. For purposes of this Section 6, the fair market value of a share
of Common Stock shall be determined as follows:

                  (a) If the Common Stock is listed on a national securities
         exchange or admitted to unlisted trading privileges on such exchange or
         listed for trading on the NASDAQ system, the current market value shall
         be the last reported sale price of the Common Stock on such exchange or
         system on the last business day prior to the date of exercise of this
         Warrant or, if no such sale is made on such day, the average of the
         closing bid and asked prices for such day on such exchange or system;
         or

                  (b) if the Common Stock is not so listed or admitted to
         unlisted trading privileges, the current market value shall be the mean
         of the last reported bid and asked prices reported by the National
         Quotation Bureau, Inc. on the last business day prior to the date of
         the exercise of this Warrant; or

                  (c) If the Common Stock is not so listed or admitted to
         unlisted trading privileges and bid and asked prices are not so
         reported, the current market value shall be an amount, not less than
         book value thereof as at the end of the most recent fiscal year of the
         Company ending prior to the date of the exercise of the Warrant,
         determined in such reasonable manner as may be prescribed by the Board
         of Directors of the Company.

7. RIGHTS OF THE HOLDER.

Prior to the exercise of this Warrant, the Holder shall not, by virtue hereof,
be entitled to any rights of a stockholder in the Company, either at law or in
equity, and the rights of the Holder are limited to those expressed in this
Warrant.

                                       53
<PAGE>   54

8. ANTI-DILUTION PROVISIONS.

                  8.1 ADJUSTMENT FOR RECAPITALIZATION. If the Company shall at
any time subdivide its outstanding shares of Common Stock (or Other Securities
at the time receivable upon the exercise of the Warrant) by recapitalization,
reclassification or split-up thereof, or if the Company shall declare a stock
dividend or similar distribution of shares of Common Stock to its stockholders,
the number of shares of Common Stock subject to this Warrant immediately prior
to such subdivision shall be proportionately increased, and the Exercise Price
shall be proportionately decreased, and if the Company shall at any time combine
the outstanding shares of Common Stock by recapitalization, reclassification or
combination thereof, the number of shares of Common Stock subject to this
Warrant immediately prior to such combination shall be proportionately
decreased, and the Exercise Price shall be proportionately increased. Any such
adjustments pursuant to this Section 8.1 shall be effective at the close of
business on the effective date of such subdivision or combination, or if any
adjustment is the result of a stock dividend or distribution, then the effective
date for such adjustment based thereof shall be the record date therefor.

                  8.2 ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER, ETC.
In case of any reorganization of the Company (or any other corporation, the
securities of which are at the time receivable on the exercise of this Warrant),
or in case after such date the Company (or any such other corporation) shall
consolidate with or merge into another corporation or convey all or
substantially all of its assets to another corporation, then, and in each such
case, the Holder of this Warrant upon the exercise thereof as provided in
Section 1 at any time after the consummation of such reorganization,
consolidation, merger or conveyance shall be entitled to receive, in lieu of the
securities and property receivable upon the exercise of this Warrant prior to
such consummation, the securities or property to which such Holder would have
been entitled upon such consummation if such Holder had exercised this Warrant
immediately prior thereto; in each such case, the terms of this Warrant shall be
applicable to the securities or property receivable upon the exercise of this
Warrant after such consummation.

                  8.3 NOTIFICATION AS TO ADJUSTMENTS. In each case of an
adjustment in the number of shares of Common Stock receivable on the exercise of
the Warrant, the Company at its expense will promptly compute such adjustment in
accordance with the terms of the Warrant and will notify the Holder in writing
of such adjustment within 30 days of the effective date of such adjustment. When
appropriate, notice may be given in advance as part of notices required to be
mailed to the Holder pursuant to Section 8.5 hereof.

                  8.4 OTHER ISSUANCES. Except as otherwise expressly provided
herein, the issuance by the Company of shares of its capital stock of any class,
or securities convertible into shares of capital stock of any class, either in
connection with a direct sale or upon the exercise of rights or warrants to
subscribe therefor, or upon conversions of shares or obligations of the Company
convertible into such shares or other securities, or as compensation or
otherwise, shall

                                       54
<PAGE>   55

not affect, and no adjustment by reason thereof shall be made with respect to,
the number of or the exercise price of the Shares that remain unexercised under
the Warrant.

Without limiting the generality of the foregoing, the existence of unexercised
Shares under the Warrant shall not affect in any manner the right or power of
the Company to make, authorize or consummate (i) any issuances as described
above, (ii) any or all adjustments, recapitalizations, reorganizations or other
changes in the Company's capital structure or its business; (iii) any merger or
consolidation of the Company; (iv) any issue by the Company of debt securities,
or preferred or preference stock that would rank above the Shares issuable upon
exercise of the Warrant; (v) the dissolution or liquidation of the Company; (vi)
any sale, transfer or assignment of all or any part of the assets or business of
the Company; or (vii) any other corporate act or proceeding, whether of a
similar character or otherwise.

                  8.5 NOTICES OF RECORD DATE, ETC. In case:

                  (a) the Company shall take a record of the holders of its
         Common Stock (or Other Securities at the time receivable upon the
         exercise of the Warrant) for the purpose of entitling them to receive
         any dividend (other than a cash dividend at the same rate as the rate
         of the last cash dividend theretofore paid) or other distribution, or
         any right to subscribe for, purchase or otherwise acquire any shares of
         stock of any class or any other securities, or to receive any other
         right; or

                  (b) of any capital reorganization of the Company, any
         reclassification of the capital stock of the Company, any consolidation
         or merger of the Company with or into another corporation, or any
         conveyance of all or substantially all of the assets of the Company to
         another corporation; or

                  (c) of any voluntary or involuntary dissolution, liquidation
         or winding up of the Company, then, and in each such case, the Company
         shall mail or cause to be mailed to each Holder of the Warrant at the
         time outstanding a notice specifying, as the case may be, (i) the date
         on which a record is to be taken for the purpose of such dividend,
         distribution or right, and stating the amount and character of such
         dividend, distribution or right, or (ii) the date on which such
         reorganization, reclassification, consolidation, merger, conveyance,
         dissolution, liquidation or winding up is to take place, and the time,
         if any, is to be fixed, as to which the holders of record of Common
         Stock (or such Other Securities at the time receivable upon the
         exercise of the Warrant) shall be entitled to exchange their shares of
         Common Stock (or such Other Securities) for securities or other
         property deliverable upon such reorganization, reclassification,
         consolidation, merger, conveyance, dissolution, liquidation or winding
         up. Such notice shall be mailed at least 20 days prior to the date
         therein specified, and the Warrant may be exercised prior to said date
         during the term of the Warrant.

9. TRANSFER TO COMPLY WITH THE SECURITIES ACT.

                                       55
<PAGE>   56

The Warrant Stock or Other Securities may not be sold, transferred, pledged,
hypothecated or otherwise disposed of except as follows: (a) to a person who, in
the opinion of counsel to the Company, is a person to whom this Warrant or the
Warrant Stock or Other Securities may legally be transferred without
registration and then only against receipt of an agreement of such person to
comply with the provisions of this Warrant with respect to any resale or other
disposition of such securities; or (b) to any person upon delivery of a
prospectus then meeting the requirements of the Securities Act relating to such
securities and the offering thereof for such sale or disposition.

10. RULE 144 REQUIREMENTS.

The Company agrees to: (a) make and keep public information available, as those
terms are understood and defined in Rule 144 under the Securities Act; (b) use
its best efforts to file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Securities
Exchange Act of 1934; and (c) furnish to the Holder upon request a written
statement by the Company as to its compliance with the reporting requirements of
said Rule 144, and of the Securities Act and the Securities Exchange Act of
1934, a copy of the most recent annual or quarterly report of the Company and
such other reports and documents of the Company as the Holder may reasonably
request to avail itself of any similar rule or regulation of the SEC allowing it
to sell Warrant Stock, the Existing Shares or Other Securities without
registration.

         11. LEGEND. Unless the shares of Warrant Stock or Other Securities have
been registered under the Securities Act, upon exercise of any of the Warrants
and the issuance of any of the shares of Warrant Stock, all certificates
representing shares will bear on the face thereof substantially the following
legend:

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
         UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
         OFFERED FOR SALE, ASSIGNED, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS
         REGISTERED PURSUANT TO THE PROVISIONS OF THAT ACT OR UNLESS AN OPINION
         OF COUNSEL ACCEPTABLE TO THE COMPANY IS OBTAINED STATING THAT SUCH
         DISPOSITION IS IN COMPLIANCE WITH AN AVAILABLE EXEMPTION FROM SUCH
         REGISTRATION.

At such time as the Holder is able to sell the Warrant Stock, the Existing
Shares or Other Securities without restriction under Rule 144(k), the Company
agrees to remove any such legend.

12. NOTICES.

                                       56
<PAGE>   57

All notices required hereunder shall be in writing and shall be deemed given
when faxed, delivered personally or within five days after mailing when mailed
by recognized international overnight courier to the Company or the Holder, as
the case may be, for whom such notice is intended at the address of such party
as set forth on the first page, or at such other address of which the Company or
the Holder has been advised by notice hereunder.

         13. APPLICABLE LAW. The Warrant is issued under and shall for all
purposes be governed by and construed in accordance with the laws of the State
of Delaware.

         IN WITNESS WHEREOF, the Company has caused this Warrant to be signed on
its behalf, in its corporate name, by its duly authorized officer, all as of the
day and year first above written.

                                          VIRAGEN, INC.

                                          By:
                                             -----------------------------------
                                          Name:
                                               ---------------------------------
                                          Its:
                                              ----------------------------------

                                       57
<PAGE>   58

                              WARRANT EXERCISE FORM

         The undersigned hereby irrevocably elects to exercise the within
Warrant to the extent of purchasing _________ shares of Common Stock at an
exercise price of $________ per share of Common Stock of Viragen, Inc., a
Delaware corporation, and hereby makes payment of $__________ in payment
therefor.

                                           -------------------------------------
                                           Signature

                                           -------------------------------------
                                           Date

                       INSTRUCTIONS FOR ISSUANCE OF STOCK
    (If in a name other than to the registered holder of the within Warrant)

Name

--------------------------------------------------------------------------------
                  (Please typewrite or print in block letters)

Address:
--------------------------------------------------------------------------------

         -----------------------------------------------------------------------<PAGE>   1

                                                                    EXHIBIT 10.5

                          RAD SOURCE TECHNOLOGIES, INC.

                             2000 STOCK OPTION PLAN

         1. GRANT OF OPTIONS; GENERALLY. In accordance with the provisions
hereinafter set forth in this stock option plan, the name of which is the Rad
Source Technologies, Inc. 2000 Stock Option Plan (the "Plan"), the Board of
Directors (the "Board") or, the Compensation Committee (the "Stock Option
Committee") of Rad Source Technologies, Inc. (the "Corporation") is hereby
authorized to issue from time to time on the Corporation's behalf to any one or
more Eligible Persons, as hereinafter defined, options to acquire shares of the
Corporation's $.001 par value common stock (the "Stock").

         2. TYPE OF OPTIONS. The Board or the Stock Option Committee is
authorized to issue Incentive Stock Options ("ISOs") which meet the requirements
of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"),
which options are hereinafter referred to collectively as ISOs, or singularly as
an ISO. The Board or the Stock Option Committee is also, in its discretion,
authorized to issue options which are not ISOs, which options are hereinafter
referred to collectively as Non Statutory Options ("NSOs"), or singularly as an
NSO. The Board or the Stock Option Committee is also authorized to issue "Reload
Options" in accordance with Paragraph 9 herein, which options are hereinafter
referred to collectively as Reload Options, or singularly as a Reload Option.
Except where the context indicates to the contrary, the term "Option" or
"Options" means ISOs, NSOs and Reload Options.

         3. AMOUNT OF STOCK. The aggregate number of shares of Stock which may
be purchased pursuant to the exercise of Options shall be 800,000 shares. Of
this amount, the Board or the Stock Option Committee shall have the power and
authority to designate whether any Options so issued shall be ISOs or NSOs,
subject to the restrictions on ISOs contained elsewhere herein. If an Option
ceases to be exercisable, in whole or in part, the shares of Stock underlying
such Option shall continue to be available under this Plan. Further, if shares
of Stock are delivered to the Corporation as payment for shares of Stock
purchased by the exercise of an Option granted under this Plan, such shares of
Stock shall also be available under this Plan. If there is any change in the
number of shares of Stock due to of the declaration of stock dividends,
recapitalization resulting in stock split-ups, or combinations or exchanges of
shares of Stock, or otherwise, the number of shares of Stock available for
purchase upon the exercise of Options, the shares of Stock subject to any Option
and the exercise price of any outstanding Option shall be appropriately adjusted
by the Board or the Stock Option Committee. The Board or the Stock Option
Committee shall give notice of any adjustments to each Eligible Person granted
an Option under this Plan, and such adjustments shall be effective and binding
on all Eligible Persons. If because of one or more recapitalizations,
reorganizations or other corporate events, the holders of outstanding Stock
receive something other than shares of Stock then, upon exercise of an Option,
the Eligible Person will receive what the holder would have owned if the holder
had exercised the Option immediately before the first such corporate event and
not disposed of anything the holder received as a result of the corporate event.

         4. ELIGIBLE PERSONS.

                  (a) With respect to ISOs, an Eligible Person means any
individual who has been employed by the Corporation or by any subsidiary of the
Corporation, for a continuous period of at least sixty (60) days.

                  (b) With respect to NSOs, an Eligible Person means (i) any
individual who has been employed by the Corporation or by any subsidiary of the
Corporation, for a continuous period of at least sixty (60) days, (ii) any
director of the Corporation or any subsidiary of the Corporation or (iii) any
consultant of the Corporation or any subsidiary of the Corporation.

         5. GRANT OF OPTIONS. The Board or the Stock Option Committee has the
right to issue the Options established by this Plan to Eligible Persons. The
Board or the Stock Option Committee shall follow the procedures prescribed for
it elsewhere in this Plan. A grant of Options shall be set forth in a writing
signed on behalf of the Corporation or by a majority of the members of the Stock
Option Committee. The writing shall identify whether the

<PAGE>   2

Option being granted is an ISO or an NSO and shall set forth the terms which
govern the Option. The terms shall be determined by the Board or the Stock
Option Committee, and may include, among other terms, the number of shares of
Stock that may be acquired pursuant to the exercise of the Options, when the
Options may be exercised, the period for which the Option is granted and
including the expiration date, the effect on the Options if the Eligible Person
terminates employment and whether the Eligible Person may deliver shares of
Stock to pay for the shares of Stock to be purchased by the exercise of the
Option. However, no term shall be set forth in the writing which is inconsistent
with any of the terms of this Plan. The terms of an Option granted to an
Eligible Person may differ from the terms of an Option granted to another
Eligible Person, and may differ from the terms of an earlier Option granted to
the same Eligible Person.

         6. OPTION PRICE. The option price per share shall be determined by the
Board or the Stock Option Committee at the time any Option is granted, and shall
be not less than (i) in the case of an ISO, the fair market value, (ii) in the
case of an ISO granted to a ten percent or greater stockholder, 110 percent of
the fair market value, or (iii) in the case of an NSO, not less than 55% of the
fair market value (but in no event less than the par value) of one share of
Stock on the date the Option is granted, as determined by the Board or the Stock
Option Committee. Fair market value as used herein shall be:

         7. (a) If shares of Stock shall be traded on an exchange or
over-the-counter market, the mean between the high and low sales prices of Stock
on such exchange or over-the-counter market on which such shares shall be traded
on that date, or if such exchange or over-the-counter market is closed or if no
shares shall have traded on such date, on the last preceding date on which such
shares shall have traded.

                  (b) If shares of Stock shall not be traded on an exchange or
over-the-counter market, the value as determined by a recognized appraiser as
selected by the Board or the Stock Option Committee.

         8. PURCHASE OF SHARES. An Option shall be exercised by the tender to
the Corporation of the full purchase price of the Stock with respect to which
the Option is exercised and written notice of the exercise. The purchase price
of the Stock shall be in United States dollars, payable in cash, check,
Promissory Note secured by the Shares issued through exercise of the related
Options, or in property or Corporation stock, if so permitted by the Board or
the Stock Option Committee in accordance with the discretion granted in
Paragraph 5 hereof, having a value equal to such purchase price. The Corporation
shall not be required to issue or deliver any certificates for shares of Stock
purchased upon the exercise of an Option prior to (i) if requested by the
Corporation, the filing with the Corporation by the Eligible Person of a
representation in writing that it is the Eligible Person's then present
intention to acquire the Stock being purchased for investment and not for
resale, and/or (ii) the completion of any registration or other qualification of
such shares under any government regulatory body, which the Corporation shall
determine to be necessary or advisable.

         9. GRANT OF RELOAD OPTIONS. In granting an Option under this Plan, the
Board or the Stock Option Committee may, in its discretion, include a Reload
Option provision therein, subject to the provisions set forth in Paragraphs 21
and 22 herein. A Reload Option provision provides that if the Eligible Person
pays the exercise price of shares of Stock to be purchased by the exercise of an
ISO, NSO or another Reload Option (the "Original Option") by delivering to the
Corporation shares of Stock already owned by the Eligible Person (the "Tendered
Shares"), the Eligible Person shall receive a Reload Option which shall be a new
Option to purchase shares of Stock equal in number to the tendered shares. The
terms of any Reload Option shall be determined by the Board or the Stock Option
Committee consistent with the provisions of this Plan.

         10. STOCK OPTION COMMITTEE. The Stock Option Committee may be appointed
from time to time by the Corporation's Board of Directors. The Board may from
time to time remove members from or add members to the Stock Option Committee.
The Stock Option Committee shall be constituted so as to permit the Plan to
comply in all respects with the provisions set forth in Paragraph 21 herein. The
members of the Stock Option Committee may elect one of its members as its
chairman. The Stock Option Committee shall hold its meetings at such times and
places as its chairman shall determine. A majority of the Stock Option
Committee's members present in person shall constitute a quorum for the
transaction of business. All determinations of the Stock Option Committee will
be made by the majority vote of the members constituting the quorum. The members
may participate in a meeting of the Stock Option

                                       2
<PAGE>   3

Committee by conference telephone or similar communications equipment by means
of which all members participating in the meeting can hear each other.
Participation in a meeting in that manner will constitute presence in person at
the meeting. Any decision or determination reduced to writing and signed by all
members of the Stock Option Committee will be effective as if it had been made
by a majority vote of all members of the Stock Option Committee at a meeting
which is duly called and held.

         11. ADMINISTRATION OF PLAN. In addition to granting Options and to
exercising the authority granted to it elsewhere in this Plan, the Board or the
Stock Option Committee is granted the full right and authority to interpret and
construe the provisions of this Plan, promulgate, amend and rescind rules and
procedures relating to the implementation of the Plan and to make all other
determinations necessary or advisable for the administration of the Plan,
consistent, however, with the intent of the Corporation that Options granted or
awarded pursuant to the Plan comply with the provisions of Paragraph 21 and 22
herein. All determinations made by the Board or the Stock Option Committee shall
be final, binding and conclusive on all persons including the Eligible Person,
the Corporation and its stockholders, employees, officers and directors and
consultants. No member of the Board or the Stock Option Committee will be liable
for any act or omission in connection with the administration of this Plan
unless it is attributable to that member's willful misconduct.

         12. PROVISIONS APPLICABLE TO ISOS. The following provisions shall apply
to all ISOs granted by the Board or the Stock Option Committee and are
incorporated by reference into any writing granting an ISO:

                  (a) An ISO may only be granted within ten (10) years from
November 6, 2000, the date that this Plan was originally adopted by the
Corporation's Board of Directors.

                  (b) An ISO may not be exercised after the expiration of ten
(10) years from the date the ISO is granted.

                  (c) The option price may not be less than the fair market
value of the Stock at the time the ISO is granted.

                  (d) An ISO is not transferrable by the Eligible Person to whom
it is granted except by will, or the laws of descent and distribution, and is
exercisable during his or her lifetime only by the Eligible Person.

                  (e) If the Eligible Person receiving the ISO owns at the time
of the grant stock possessing more than ten (10%) percent of the total combined
voting power of all classes of stock of the employer corporation or of its
parent or subsidiary corporation (as those terms are defined in the Code), then
the option price shall be at least 110% of the fair market value of the Stock,
and the ISO shall not be exercisable after the expiration of five (5) years from
the date the ISO is granted.

                  (f) The aggregate fair market value (determined at the time
the ISO is granted) of the Stock with respect to which the ISO is first
exercisable by the Eligible Person during any calendar year (under this Plan and
any other incentive stock option plan of the Corporation) shall not exceed
$100,000.

                  (g) Even if the shares of Stock which are issued upon exercise
of an ISO are sold within one year following the exercise of such ISO so that
the sale constitutes a disqualifying disposition for ISO treatment under the
Code, no provision of this Plan shall be construed as prohibiting such a sale.

                  (h) This Plan was adopted by the Corporation on November 6,
2000, by virtue of its approval by the Corporation's Board of Directors and a
majority of the vote of the shareholders of the Company holding 50% or more of
the outstanding capital stock of the Company.

         13. DETERMINATION OF FAIR MARKET VALUE. In granting ISOs under this
Plan, the Board or the Stock Option Committee shall make a good faith
determination as to the fair market value of the Stock at the time of granting
the ISO.

                                       3
<PAGE>   4

         14. RESTRICTIONS ON ISSUANCE OF STOCK. The Corporation shall not be
obligated to sell or issue any shares of Stock pursuant to the exercise of an
Option unless the Stock with respect to which the Option is being exercised is
at that time effectively registered or exempt from registration under the
Securities Act of 1933, as amended, and any other applicable laws, rules and
regulations. The Corporation may condition the exercise of an Option granted in
accordance herewith upon receipt from the Eligible Person, or any other
purchaser thereof, of a written representation that at the time of such exercise
it is his or her then present intention to acquire the shares of Stock for
investment and not with a view to, or for sale in connection with, any
distribution thereof; except that, in the case of a legal representative of an
Eligible Person, "distribution" shall be defined to exclude distribution by will
or under the laws of descent and distribution. Prior to issuing any shares of
Stock pursuant to the exercise of an Option, the Corporation shall take such
steps as it deems necessary to satisfy any withholding tax obligations imposed
upon it by any level of government.

         15. EXERCISE IN THE EVENT OF DEATH OF TERMINATION OR EMPLOYMENT.

                  (a) If an optionee shall die (i) while an employee of the
Corporation or a Subsidiary or (ii) within three months after termination of his
employment with the Corporation or a Subsidiary because of his disability, or
retirement or otherwise, his Options may be exercised, to the extent that the
optionee shall have been entitled to do so on the date of his death or such
termination of employment, by the person or persons to whom the optionee's right
under the Option pass by will or applicable law, or if no such person has such
right, by his executors or administrators, at any time, or from time to time. In
the event of termination of employment because of his death while an employee or
because of disability, his Options may be exercised not later than the
expiration date specified in Paragraph 5 or one year after the optionee's death,
whichever date is earlier, or in the event of termination of employment because
of retirement or otherwise, not later than the expiration date specified in
Paragraph 5 hereof or one year after the optionee's death, whichever date is
earlier.

                  (b) If an optionee's employment by the Corporation or a
Subsidiary shall terminate because of his disability and such optionee has not
died within the following three months, he may exercise his Options, to the
extent that he shall have been entitled to do so at the date of the termination
of his employment, at any time, or from time to time, but not later than the
expiration date specified in Paragraph 5 hereof or one year after termination of
employment, whichever date is earlier.

                  (c) If an optionee's employment shall terminate by reason of
his retirement in accordance with the terms of the Corporation's tax-qualified
retirement plans if any, or with the consent of the Board or the Stock Option
Committee or involuntarily other than by termination for cause, and such
optionee has not died within the following three months, he may exercise his
Option to the extent he shall have been entitled to do so at the date of the
termination of his employment, at any time and from to time, but not later than
the expiration date specified in Paragraph 5 hereof or thirty (30) days after
termination of employment, whichever date is earlier. For purposes of this
Paragraph 14, termination for cause shall mean; (i) termination of employment
for cause as defined in the optionee's Employment Agreement or (ii) in the
absence of an Employment Agreement for the optionee, termination of employment
by reason of the optionee's commission of a felony, fraud or willful misconduct
which has resulted, or is likely to result, in substantial and material damage
to the Corporation or a Subsidiary, all as the Board or the Stock Option
Committee in its sole discretion may determine.

                  (d) If an optionee's employment shall terminate for any reason
other than death, disability, retirement or otherwise, all right to exercise his
Option shall terminate at the date of such termination of employment absent
specific provisions in the optionee's Option Agreement.

         16. CORPORATE EVENTS. In the event of the proposed dissolution or
liquidation of the Corporation, a proposed sale of all or substantially all of
the assets of the Corporation, a merger or tender for the Corporation's shares
of Common Stock the Board of Directors may declare that each Option granted
under this Plan shall terminate as of a date to be fixed by the Board of
Directors; provided that not less than thirty (30) days written notice of the
date so fixed shall be given to each Eligible Person holding an Option, and each
such Eligible Person shall have the right, during the period of thirty (30) days
preceding such termination, to exercise his Option as to all or any part of the
shares of Stock covered

                                       4
<PAGE>   5

thereby, including shares of Stock as to which such Option would not otherwise
be exercisable. Nothing set forth herein shall extend the term set for
purchasing the shares of Stock set forth in the Option.

         17. NO GUARANTEE OF EMPLOYMENT. Nothing in this Plan or in any writing
granting an Option will confer upon any Eligible Person the right to continue in
the employ of the Eligible Person's employer, or will interfere with or restrict
in any way the right of the Eligible Person's employer to discharge such
Eligible Person at any time for any reason whatsoever, with or without cause.

         18. NONTRANSFERABILITY. No Option granted under the Plan shall be
transferable other than by will or by the laws of descent and distribution.
During the lifetime of the optionee, an Option shall be exercisable only by him.

         19. NO RIGHTS AS STOCKHOLDER. No optionee shall have any rights as a
stockholder with respect to any shares subject to his Option prior to the date
of issuance to him of a certificate or certificates for such shares.

         20. AMENDMENT AND DISCONTINUANCE OF PLAN. The Corporation's Board of
Directors may amend, suspend or discontinue this Plan at any time. However, no
such action may prejudice the rights of any Eligible Person who has prior
thereto been granted Options under this Plan. Further, if required in order to
grant additional ISOs under this Plan, no amendment to this Plan which has the
effect of (a) increasing the aggregate number of shares of Stock subject to this
Plan (except for adjustments pursuant to Paragraph 3 herein), or (b) changing
the definition of Eligible Person under this Plan, may be effective unless and
until approval of the stockholders of the Corporation is obtained in the same
manner as approval of this Plan is required. The Corporation's Board of
Directors is authorized to seek the approval of the Corporation's stockholders
for any other changes it proposes to make to this Plan which require such
approval, however, the Board of Directors may modify the Plan, as necessary, to
effectuate the intent of the Plan as a result of any changes in the tax,
accounting or securities laws treatment of Eligible Persons and the Plan,
subject to the provisions set forth in this Paragraph 20, and Paragraphs 21 and
22.

         21. COMPLIANCE WITH RULE 16B-3. This Plan is intended to comply in all
respects with Rule 16b-3 ("Rule 16b-3") promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), with respect to participants who are subject to Section 16 of
the Exchange Act, and any provision(s) herein that is/are contrary to Rule 16b-3
shall be deemed null and void to the extent appropriate by either the Stock
Option Committee or the Corporation's Board of Directors.

         22. COMPLIANCE WITH CODE. The aspects of this Plan on ISOs is intended
to comply in every respect with Section 422 of the Code and the regulations
promulgated thereunder. In the event any future statute or regulation shall
modify the existing statute, the aspects of this Plan on ISOs shall be deemed to
incorporate by reference such modification. Any stock option agreement relating
to any Option granted pursuant to this Plan outstanding and unexercised at the
time any modifying statute or regulation becomes effective shall also be deemed
to incorporate by reference such modification and no notice of such modification
need be given to optionee.

         If any provision of the aspects of this Plan on ISOs is determined to
disqualify the shares purchasable pursuant to the Options granted under this
Plan from the special tax treatment provided by Code Section 422, such provision
shall be deemed null and void and to incorporate by reference the modification
required to qualify the shares for said tax treatment.

                                       5
<PAGE>   6

         23. COMPLIANCE WITH OTHER LAWS AND REGULATIONS. The Plan, the grant and
exercise of Options thereunder, and the obligation of the Corporation to sell
and deliver Stock under such options, shall be subject to all applicable federal
and state laws, rules, and regulations and to such approvals by any government
or regulatory agency as may be required. The Corporation shall not be required
to issue or deliver any certificates for shares of Stock prior to (a) the
listing of such shares on any stock exchange or over-the-counter market on which
the Stock may then be listed and (b) the completion of any registration or
qualification of such shares under any federal or state law, or any ruling or
regulation of any government body which the Corporation shall, in its sole
discretion, determine to be necessary or advisable. Moreover, no Option may be
exercised if its exercise or the receipt of Stock pursuant thereto would be
contrary to applicable laws.

         24. DISPOSITION OF SHARES. In the event any share of Stock acquired by
an exercise of an Option granted under the Plan shall be transferable other than
by will or by the laws of descent and distribution within two years of the date
such Option was granted or within one year after the transfer of such Stock
pursuant to such exercise, the optionee shall give prompt written notice thereof
to the Corporation or the Stock Option Committee.

         25. NAME. The Plan shall be known as the "Rad Source Technologies, Inc.
2000 Stock Option Plan."

         26. NOTICES. Any notice hereunder shall be in writing and sent by
certified mail, return receipt requested or by facsimile transmission (with
electronic or written confirmation of receipt) and when addressed to the
Corporation shall be sent to it at its office, 475 Ramblewood Drive, Coral
Springs, Florida 33071, and when addressed to the Committee shall be sent to it
at 475 Ramblewood Drive, Coral Springs, Florida 33071, subject to the right of
either party to designate at any time hereafter in writing some other address,
facsimile number or person to whose attention such notice shall be sent.

         27. HEADINGS. The headings preceding the text of Sections and
subparagraphs hereof are inserted solely for convenience of reference, and shall
not constitute a part of this Plan nor shall they affect its meaning,
construction or effect.

         28. EFFECTIVE DATE. This Plan, the Rad Source Technologies, Inc. 2000
Stock Option Plan, was adopted by the Board of Directors of the Corporation on
November 6, 2000. The effective date of the Plan shall be the same date.

         Dated as of November 6, 2000.

                                           RAD SOURCE TECHNOLOGIES, INC.

                                           By: /s/ Randol Kirk
                                               ---------------------------------
                                           Name: Randol Kirk
                                           Its:  President

                                       6

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