Amended andRestated Employment Agreement with Dr. William A. Carter dated July 152010 AMENDEDEMPLOYMENT AGREEMENT

Amended and Restated Employment Agreement with
Dr. William A. Carter dated July 15 2010

1.        Duties of Employee.  The Employee shall, during the Employment Period (as defined below), be designated as the Chief Executive Officer and Chairman of the Board of the Company.  In the Employee's capacity as such, he shall perform such duties and functions for the Company as are customarily performed in corporations of a similar size in the medical research field. Company acknowledges that Carter has other business interests which may, from time to time, require his time and attention.  Carter may continue such business interests not inconsistent with his Chief Executive Officer and Chairman of the Board duties.

2.        Term.  This Agreement shall commence on, June 15, 2010 and shall terminate on December 31, 2015 (the "Initial Termination Date") unless sooner terminated in accordance with Section 5 hereof or unless renewed as hereinafter provided (such period of employment together with any extension thereto hereinafter being called the "Employment Period”).  This Agreement shall be automatically renewed for successive three (3) year periods after the initial Termination Date unless written notice of refusal to renew is given by one party to the other at least 180 days prior to the Initial Termination Date or the expiration date of any renewal period.  In the event of a change in control as defined in the Company’s 10-K/A filing of April 30, 2010, the term of this agreement shall automatically be extended for three additional years.

(b)         The Salary shall consist of the Base Salary, increased  as provided in this subsection.  On January 1, 2011, and on January 1 of each succeeding calendar year during the Employment Period, the Base Rate shall be increased by a percentage equal to the greater of the percentage average increase in the Bureau of Labor Statistics "Consumer Price Index — U.S. City Average — All Items" from the December 31st of the preceding year to January 1st of the preceding year or a universal, non-discriminatory Cost Of Living salary adjustment as approved by the Compensation Committee.

(ii)        an incentive bonus in an amount equal to Two and One Half ( 2.5%) percent of the Gross Proceeds paid to the Company to the Company as a result of sales of  Alferon N Injection®, Alferon® LDO, Ampligen or other Company products,  or from any   joint ventures or corporate partnering arrangements .  For purposes herein, Gross Proceeds shall mean those cash amounts paid to the Company by the other parties to the joint -venture or corporate partnering arrangement, but shall not include (i) any amounts paid to the Company as reimbursement of expenses incurred; and (iii) any amounts paid to the Company in consideration for the Company's assets (i.e, plant, property, equipment, investments, etc), equity or other securities.  After the termination of this Agreement, for any reason, the Employee shall be entitled to receive     the incentive bonus provided for in this subsection 3(c)(ii) based upon Gross Proceeds received by the Company during the 3 year period commencing on the termination of this Agreement with respect to any joint ventures or corporate partnering arrangements entered into by the Company during the term of this Agreement. Furthermore, Employee shall be entitled to a 5% bonus related to any sale of the Company, or any sale of a substantial portion of Company assets not in the ordinary course of its business. The aggregate incentive bonus hereunder as set forth above shall be capped not to exceed $5,000,000 annually.

(d)        The Employee is  hereby granted non-qualified stock options as additional compensation for the services to be performed hereunder, the Company shall issue to the Employee,  non-qualified annual options valid for a ten year period to purchase 500,000 shares of the Company common stock with an exercise price equal to 110% of the closing price of the Company stock on the NYSE/ Amex on June 10, 2010, the effective trading date  immediately preceding the date this agreement was effectively approved by the Board of Directors.  For future years of this agreement, a similar option shall be awarded on July 15th of each year thereafter based upon an exercise price equal to 110% of the closing price of the Company stock on the NYSE Amex on the effective trading date immediately preceding the date of the grant,  for each respective year for which Dr. Carter remains an active employee at that date. .

4.         Fringe Benefits.  During the Employment Period, the Employee shall be entitled to receive such fringe benefits as shall be applicable from time to time to the Company's executives generally, including but not limited to such 401(k), vacation, group life and health insurance, and disability benefit plans as may be maintained by the Company from time to time.  Additionally, during the Employment Period, the Company shall pay, for the benefit of the Employee, the premiums for a disability insurance policy in the face amount of $500,000 and the premiums for term life insurance policies in the aggregate face amount of $6,000,000 insuring the life of the Employee, with the Employee having the right to designate the beneficiary or beneficiaries thereof.

5.         Termination. (a) The Company may discharge the Employee for cause at any time as provided herein, for purposes hereof, “cause” shall mean the willful engaging by Employee in illegal conduct or gross misconduct or gross violation of the Company’s Code of Ethics And Business Conduct for Officers which is demonstrably and materially injurious to the Company. For purposes of this Agreement, no act, or failure to act, on Employee's part shall be deemed "willful" unless done intentionally by Employee  and not in good faith and without reasonable belief that Employee's action or omission was in the best interest of the Company.  Notwithstanding the foregoing, Employee shall not be deemed to have been terminated for Cause unless and until the Company delivers to Employee a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the directors of the Board at a meeting of the Board called and held for such purpose (after reasonable notice to Employee and an opportunity for Employee, together with counsel, to be heard before the Board) finding that, in the good faith opinion of the Board, Employee was guilty of conduct set forth above and specifying the particulars thereof in detail.

6.         Effect of Termination. (a)       In the event that the Employees employment is terminated for "cause" pursuant to subsection 5(a) , the Company shall pay to the Employee, at the time of such termination, only the compensation and benefits otherwise due and payable to him under Sections 3 and 4 through the last day of his actual employment by the Company.

7.         Employee's Representations and Warranties.  The Employee hereby represents and warrants to the Company that he has the right to enter into this Agreement, and his execution, delivery and performance of this Agreement (a) will not violate any contract to which the Employee is a party or any applicable law or regulation nor give rise to any rights in any other person or entity and (b) are not subject to the consent of any other person or entity.

8.         Confidentiality, Invention and Non-Compete Agreement.  The Employee confirms his obligation to be bound by the terms of the Confidentiality, Invention and Non-Compete Agreement attached hereto as Exhibit B, executed as of July 1, 1993.

9.        Offices.        Dr. Carter  may conduct the business of the Company from  a variety of locations, including but not limited to those offices of the Chairman and CEO in Philadelphia, his home office,  and from the Retreat House in Tavernier. The Company shall supply that equipment necessary for full telephone, telefax and internet access at all these locations and supply a portable computer capable of remote access while employee travels domestically and internationally on Company business.

10.      Expenses.   The Company shall be responsible for all travel and business entertainment expenses of Dr. Carter. The expenditures shall be as prescribed or limited by the Company’s Travel & Expense policies and procedures. The Company shall provide Dr. Carter with an unrestricted American Express Platinum card and a Visa Platinum card to use for all travel, entertainment and business related expenses of the company contemplated by this agreement.

11.       Notices.  Any notice or other communication pursuant to this Agreement shall be in writing and shall be sent by telecopy or by certified or registered mail addressed to the respective parties as follows:

12.       Survival.  Notwithstanding anything in section 2 hereof to the contrary, the Confidentiality, Invention and Non-Compete Agreement shall survive any termination of this Agreement or any termination of the Employee's services.

13.       Modification.  No modification or waiver of this Agreement or any provision hereof shall be binding upon the party against whom enforcement of such modification or waiver is sought unless it is made in writing and signed by or on behalf of both parties hereto.

14.       Miscellaneous. (a) This Agreement shall be subject to and construed in accordance with the laws of the State of Florida. Furthermore, the parties acknowledge that the Company has had independent counsel representing it in this matter.

(f) This Agreement is intended to comply with Section 409A of the Internal Revenue Code and accompanying Treasury Regulations and guidance and any ambiguous provision shall be construed and administered in a manner that is compliant with or exempt from the application of Code section 409A. If any provision of this Agreement would cause the Employee to incur any additional tax or interest under Code section 409A, the Company shall, to the extent permitted under 409A and after consulting with the Employee, reform such provision to comply with 409A.  The Agreement shall be administered in compliance with Section 409A of the Internal Revenue Code and regulations issued there under to the extent they are applicable.

IN WITNESS WHEREOF, this Agreement has been signed by the parties hereto as of the date of July 15, 2010.