OPTION AGREEMENT
                                ----------------

         This  AGREEMENT  is made this 8th day of  August,  2000,  between  Duke
University  (hereinafter  referred to as  "University"),  a university having an
office at Durham, North Carolina, and Celsion Corporation  (hereinafter referred
to as "Celsion"), a company having an office at Columbia, MD.

                                   WITNESSETH:

         WHEREAS, University is the owner of certain Patent Rights and Technical
Data hereinafter defined, relating to compounds, assays, cell lines, and methods
useful in  development  of agents  useful in gene  therapy  of cancer  and other
diseases  referred  to  collectively  as  ("Invention")  and  defined  in detail
hereinafter; and

         WHEREAS,  Celsion  wishes to obtain an option  for a license  under the
Patent  Rights  and  Technical  Data,  and  University  is  willing to make such
disclosure  and to grant such option and license  upon the terms and  conditions
hereinafter set forth:

         NOW, THEREFORE,  in consideration of the mutual agreements  hereinafter
set forth, the parties hereto do hereby mutually agree as follows:

1.                Definitions:  As used in this  Agreement,  the following terms
                  shall have the following meanings:

(a)               "Patent Rights" shall mean any and all patents and any and all
                  rights,   title  and  interest  in  applications  for  patents
                  relating to Invention owned, licensed or otherwise acquired by
                  University  during the term of this  Agreement  throughout the
                  world,  including all patents and reissue  patents  issuing on
                  said  patent  applications  and  any  extensions,   divisions,
                  continuations or continuations-in-part thereof.

(b)               "Technical  Data"  shall mean all  information,  know-how  and
                  inventions   (including,    but   not   limited   to,   patent
                  applications)  disclosed by University to Celsion  pursuant to
                  this Agreement and relating to the Invention.

(c)               "Invention" shall include all Patent Rights and Technical Data
                  disclosed  to  University  in  connection  with the  Office of
                  Science &  Technology  Invention  Disclosures  File [OST File]
                  1519, "Selective express of genes in cancer cells".  Invention
                  shall include  additional  Patent  Rights and  Technical  Data
                  related to these OST Files that are  developed  by  University
                  during the term of this Agreement.

(d)               "Effective Date" shall mean 8 August, 2000.

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(e)              "Option Period" shall mean a six (6) month period beginning on
                  the Effective Date.

2.                Disclosure and Evaluation:
                   ---------------------------

(a)               During the Option  Period,  University  shall provide  Celsion
                  with a copy of each U.S.  or foreign  Patent and each U.S.  or
                  foreign  Patent  Application  filed  on  the  Invention  and a
                  written  disclosure of such  Technical  Data then possessed by
                  University   relating  to  or   relevant  to  the   Invention.
                  University shall also disclose all relevant  experimental data
                  to Celsion and disclose any  relationships  it, or to the best
                  of its knowledge,  the  researchers  involved in the Invention
                  have with any other  persons  relating to the Invention or any
                  related   technologies.   Celsion   shall,   based  upon  such
                  disclosure,  evaluate the  technical,  economic and commercial
                  advantages, in Celsion's option, of said Technical Data during
                  the Option Period.

(b)               University   shall  also   furnish   to   Celsion   reasonable
                  opportunity to confer with University's  research personnel on
                  the   Invention   and   Technical   Data.   Celsion  will  pay
                  consultation  fees and expenses to the  inventors in the event
                  that travel to Celsion facilities is required.

(c)               From time to time during the Option Period,  University  shall
                  augment its written  disclosure with any additional  Technical
                  Data to assure that Celsion has the most current information.

3.                Option:  University  hereby  grants to  Celsion,  and  Celsion
                  hereby  accepts,  a  non-assignable  Option to negotiate  with
                  University to obtain a worldwide,  exclusive license under the
                  Patent   Rights  and  Technical   Data,   said  Option  to  be
                  exercisable  by Celsion at any time  during the Option  Period
                  upon written notice to  University.  In the event that Celsion
                  shall exercise said Option,  the parties agree to negotiate in
                  good faith towards license terms.

4.                Consideration:
                  -------------

(a)               As  consideration  for the Option granted Celsion in Article 2
                  hereof,  Celsion  hereby  agrees  to  reimburse  all  expenses
                  incurred by University during the Option Period in the pursuit
                  of a legal opinion regarding patent  protection  available for
                  the  Invention.  Celsion  shall not be  obligated to reimburse
                  University  for such  expenses in excess of two thousand  five
                  hundred dollars [$2,500] during the Option Period.  University
                  shall provide Celsion with a copy of said legal opinion.

(b)               Celsion shall  reimburse  University for said patent  expenses
                  relating to a legal opinion  concerning  patentability  of the
                  invention  within  thirty  (30)  days  of  being  invoiced  by
                  University for such expenses.

(c)               Any amount paid under this  Article 3 shall not be  refundable
                  under any circumstances.

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5.                Termination:
                  -----------

(a)               If the Option  granted  by  University  pursuant  to Article 4
                  hereof is not  exercised  by  Celsion,  this  Agreement  shall
                  terminate upon the expiration of the Option Period.

(b)               Celsion  may  terminate  the  Option  Period  at any  time  by
                  notifying  University  of its  decision  not to exercise  said
                  Option.

(c)               In the event this  Agreement is terminated in accordance  with
                  the immediately preceding  paragraphs,  Celsion shall promptly
                  return to University any and all Technical Data.

6.                Default:
                  -------

(a)               If the Option  granted  by  University  pursuant  to Article 4
                  hereof is not  exercised  by  Celsion,  this  Agreement  shall
                  terminate upon the expiration of the Option Period.

(b)               Celsion  may  terminate  the  Option  Period  at any  time  by
                  notifying  University  of its  decision  not to exercise  said
                  Option.

(c)               In the event this  Agreement is terminated in accordance  with
                  the immediately preceding  paragraphs,  Celsion shall promptly
                  return to University any and all Technical Data.

7.                Default:  If  Celsion  shall fail to perform or fulfill at the
                  time and in the  manner  herein  provided  any  obligation  or
                  condition  required to be  performed  or  fulfilled by Celsion
                  hereunder,  and if Celsion  shall fail to remedy such  default
                  within  thirty (30) days after  written  notice  thereof  from
                  University,  University shall have the right to terminate this
                  Agreement by written notice of termination to Celsion given at
                  any time within thirty (30) days  thereafter.  Any termination
                  of  this  Agreement  pursuant  to  this  Article  shall  be in
                  addition to, and shall not be exclusive of or prejudicial  to,
                  any  other  rights  or  remedies  at  law  or in  equity  that
                  University may have on account of the default of Celsion.

8.                Governing  Law:  This  Agreement  shall be construed as having
                  been entered into in the State of North Carolina.

9.                Non-Assignability: Any assignment by Celsion of this Agreement
                  or of any of the rights or licenses  granted to it  hereunder,
                  without  the  written  consent of  University,  shall be void;
                  provided,   however,   that  nothing  contained  herein  shall
                  restrict the transfer of this  Agreement as a part of a merger
                  or corporate acquisition to which Celsion may be a party.

10.               Notices:  It  shall  be a  sufficient  giving  of any  notice,
                  request, report, statement,  disclosure or other communication
                  hereunder,  if the party giving the same shall  deposit a copy
                  thereof in the Post Office in certified mail, postage prepaid,
                  addressed  to the other part at its  address  hereinafter  set
                  forth or at such other  address as the other  party shall have
                  theretofore in writing designated:

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    Duke University                            Celsion
    ------------------------                   ------------------------------
    University Administrator                   Dr. Augustine Cheung, Chairman
    Duke University                            Celsion Corporation
    Office of Science and Technology           10220-1 Old Columbia Road
    Box 90083/Room 234 North Building          Columbia, MD  21046-1705
    Durham, NC  27708

         The  date of  giving  any  such  notice,  request,  report,  statement,
         disclosure or other  communication,  and the date of making any payment
         hereunder  required  (provided such payment is received),  shall be the
         U.S.  postmark of such  envelope if marked or actual date of receipt if
         delivered otherwise.

11.      Indemnification:  Celsion agrees to indemnify University, its employees
         and officers and to hold such parties harmless from any action,  claim,
         or  liability,   including  without  limitation  liability  for  death,
         personal  injury,  or property  damage,  arising directly or indirectly
         from Celsion's possession,  testing,  screening,  distribution or other
         use of Patent  Rights and/or  Technical  Data or  distribution  of test
         reports,  data, and other information relating to said items; provided,
         however,  this indemnification shall not apply if such action, claim or
         liability  is  directly  and  principally  caused  by or the  result of
         negligence or the intentional acts of University. It is understood that
         indemnification  of  University  by  licensee  will be  included in any
         subsequent license agreements.

12.      Non-Commercial  Use:  Celsion  promises to allow use of  Invention  and
         Technical   Data   only  by  its   authorized   personnel   (including,
         consultants, advisors, experts, attorneys and accountants) and only for
         the  purpose  of  ascertaining  its  interest  in  pursuing   licensing
         negotiations with University, and will not employ the Invention for any
         gain prior to exercising its Option hereunder. Should Celsion market or
         in any way make or use  Invention in a way other than to ascertain  its
         interest in pursuing licensing negotiations, Celsion shall be liable to
         University in damages.

13.      Confidentiality:  Celsion agrees to accept samples of the Invention and
         Technical  Data  and/or   information   concerning  the  Invention  and
         Technical Data on a confidentiality  of the Invention and any data that
         is generated  concerning it as it uses to protect its own  confidential
         information,  and shall limit  exposure of Invention and Technical Data
         to   those  of  its   personnel,   consultants,   experts,   attorneys,
         accountants,  potential  investors  and  personnel  of  its  affiliated
         companies who have an actual need to know and who have an obligation to
         protect the  confidentiality  of such information,  Celsion agrees that

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         Invention and all confidential information about Invention received and
         generated  under this  Agreement  shall be maintained in confidence for
         the  duration  of this  Agreement  and for three  (3) years  thereafter
         regardless of the manner of termination,  and further agrees not to use
         such confidential  information for any purpose other than to assess its
         interest  in  obtaining  a  license   hereunder.   The   disclosure  of
         confidential  information  hereunder  shall not  result in any right or
         license  under any patent or know-how  being  granted to  Celsion.  All
         written documents containing  confidential  information,  together with
         copies of excerpts thereof, shall promptly be returned to University by
         Celsion upon request.  Notwithstanding anything to the contrary herein,
         any  information,  including  information  that may be considered to be
         Technical Data or part of the Invention,  that is or becomes  generally
         known to the public  through no wrongful  acts of Celsion  shall not be
         deemed to be  confidential  or proprietary  and shall not be subject to
         the  confidentiality,  use or other restrictions or obligations imposed
         under this Agreement,  including,  but not limited to those obligations
         set  forth  in this  paragraph  "Confidentiality"  and  the  proceeding
         paragraph "Non-Commercial Use".

14.      Transfer:  It is expressly  agreed that neither  Celsion nor University
         transfers by operation of this  Agreement  any rights  either party now
         has or hereafter acquires in the Invention.

15.      Use of  University  Name: It is agreed that in no  circumstances  shall
         Celsion  use  the  name  of   University   or  its   employees  in  any
         advertisement,  press  release,  or  publicity  with  reference to this
         Agreement,   without  prior  written  approval  of  University.  It  is
         anticipated  and  agreed  to  that  Celsion  may  use  the  name of the
         University  in  discussions  with  potential   investors  and  partners
         interested in the Invention.

         IN WITNESS WHEREOF,  the parties hereto have executed this Agreement as
of the date and year firs written above.

DUKE UNIVERSITY:       By:
                       Robert Taber, Director, Office of Science & Technology

CELSION:               By:
                       Augustine Cheung, Chairman

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Source: OneCLE Business Contracts.