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                                                                   Exhibit 10.28
                                  CONFIDENTIAL

***PORTIONS OF THE EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
THE COMPLETE EXHIBIT, INCLUDING THE PORTIONS FOR WHICH CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED, HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

                     FUNDED RESEARCH COLLABORATION AGREEMENT

THIS AGREEMENT is made December 22, 1998, ("Effective Date") by and between
ProdiGene, Inc., a Delaware company having a principal place of business at 1500
Research Parkway, Suite 220, College Station, Texas 77845 (hereinafter
"ProdiGene") and Genencor International, Inc., a Delaware company having a
principal place of business at 4 Cambridge Place, 1870 South Winton Road,
Rochester, New York 14618 (hereinafter "GCI")(collectively the "Parties").

WHEREAS, the Parties have entered into a Confidentiality Agreement
("Confidentiality Agreement" incorporated herein and attached hereto as APPENDIX
A) dated March 25, 1997, including the addendum dated August 4, 1997, an
Agreement for the Provision of Samples ("Samples Agreement" incorporated herein
and attached hereto as APPENDIX B) dated April 30, 1997, and an Agreement
Related to Plant Expression of Enzymes dated October 10, 1997, ("Enzymes
Agreement");

WHEREAS, the Parties wish to expand the scope of their collaboration and have
entered into negotiations related thereto;

WHEREAS, as a result of these discussions, the Parties desire to enter into a
relationship as set forth herein to further the development of an expression
system for the commercial exploitation of certain enzymes for industrial use;

NOW THEREFORE, the Parties agree as follows:

                                 I. DEFINITIONS

        1.1 "Elected Research Program" shall mean a field of research elected or
specified hereunder by the Parties for the allocation of FTEs during the Term of
this Agreement.

        1.2 "Target Compound" shall mean a compound designated in an Elected
Research Program for transgenic expression in plants. Such Target Compounds may
comprise proteins, including microbial, plant or animal enzymes, or other
compounds determined as suitable for expression in plants.

        1.3 The "Exclusive Collaboration Field" shall mean ***, and technology
related to their production, manufacture, purification, application and/or use.

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        1.4 "Affiliate" shall mean any corporation or business entity directly
or indirectly owned or controlled by a Party by virtue of ownership of at least
fifty percent (50%) of the stock and having the right to vote for directors
thereof or otherwise control the management of the corporation or business
entity.

        1.5 "Exclusivity Period" shall mean a *** period commencing at the
Effective Date. In the event that GCI exercises its Exclusivity Option under
this Agreement, the Exclusivity Period shall be a *** period commencing at the
Effective Date.

        1.6 "FTE" shall mean a one-year allocation to an Elected Research
Program of a scientist having a doctorate, masters or equivalent experience
applicable to the expression of heterologous proteins in plants, or persons with
technical expertise appropriate to conduct or participate in an Elected Research
Program who are under the guidance of such scientist.

        1.7 "Project Form" shall mean (i) when executed by one Party, that
Party's proposal to initiate an Elected Research Program, and (ii) when executed
by both Parties, the Parties mutual agreement to engage in an Elected Research
Program. A Project Form shall include identification of the Target Compounds,
Elected Research Program Field, the duration of the Elected Research Program,
resource and FTE allocation, timelines, milestones, success criteria and market
opportunities. The Project Form shall be in the form provided in APPENDIX C.

        1.8 "Elected Research Program Field" shall mean the field of research
proposed for an Elected Research Program to which research exclusivity of
Section 2.9 applies.

        1.9 "Steering Committee" shall mean a committee made up of two (2)
representatives from each of ProdiGene and GCI who shall be designated by
ProdiGene and GCI, respectively.

        1.10 "Background Technology" shall mean any technology, data, results,
biological materials, processes, reports, or other information owned or
controlled by either Party as of the Effective Date.

        1.11 "Background Patent Rights" shall mean any patent or patent
application, both foreign and domestic, including any and all divisions,
continuations, continuations-in-part, reissues, re-examination applications,
extensions, supplementary protection certificates, certificates of addition,
inventor's certificates, including international counterparts thereof owned
and/or controlled as of the Effective Date by either Party.

        1.12 "Invention(s)" shall mean any technology, data, discoveries,
results, biological materials, processes, reports, or other information
conceived and/or reduced to practice which result from an Elected Research
Program pursuant to this Agreement.

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        1.13 "Net Sales" shall mean the gross amount invoiced with respect to a
product to a Party or Affiliate thereof, less:

               ***

                        II. ELECTION OF RESEARCH PROGRAMS

               2.1 Initiation and Administration of Elected Research Programs.
The Steering Committee shall meet promptly after the execution of this Agreement
and at least quarterly thereafter to discuss the initiation of Elected Research
Program(s). The initiation of Elected Research Program(s) shall be pursuant to
agreement of the Parties as memorialized in a Project Form according to the
procedure provided below.

               (a) A Party may propose an Elected Research Program by
        completing, signing and forwarding to the other Party a Project Form
        which describes the proposed Elected Research Program.

               (b) The Party receiving a completed Project Form shall consider
        in good faith the proposed research as described in the Project Form and
        respond in writing to the proposing Party within 30 days of receipt of
        the executed Project Form in accordance with the following:

                      (i) If the receiving Party agrees to participate in the
               proposed Elected Research Program, it shall give notice by
               returning a duly executed copy of the Project Form to the
               proposing Party. The fully executed Project Form shall be
               sufficient memorialization of the mutual agreement of the Parties
               to perform the research described therein and shall be the basis
               for an Elected Research Program to which the terms of this
               Agreement apply; or

                      (ii) If the receiving Party does not agree to participate
               in the proposed Elected Research Program, it may decline to
               execute the Project Form or, alternatively, may notify the
               proposing Party that the receiving Party agrees to pursue the
               proposed Elected Research Program only under modified conditions.

               (c) Elected Research Program(s) which are initiated as provided
        in subsection (b) above shall commence immediately upon mutual execution
        of the applicable Project Form and shall be performed essentially as
        provided in the Project Form. The terms of this Agreement, including
        those provided in sections 2.4 through 2.9, shall govern all Elected
        Research Program(s), except as provided in Section 2.2 herein.

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        2.2 The Parties may mutually agree to the allocation of FTEs funded as
provided herein to the research program described in the Enzymes Agreement. In
such event, the terms of the Enzymes Agreement shall continue to control such
research program despite funding under this Agreement. Notwithstanding the
above, FTEs allocated hereunder to the Enzymes Agreement research program shall
be funded at the rates provided in this Agreement.

        2.3 Elected Research Programs may pertain to the following subject
matter:

               (a) Elected Research Program(s) Pursuant to Mutual Agreement. The
        Parties may agree to initiate an Elected Research Program(s) related to
        any plan of research within the Exclusive Collaboration Field, or such
        other research field as the Parties may mutually agree upon, provided
        that at least *** Elected Research Programs shall be initiated during
        the Term.

               (b) GCI Elected Research Programs. GCI may elect to initiate an
        Elected Research Program comprising a Target Compound from within the
        Elected Research Program Fields listed in Sections 2.3(b)(i) through
        2.3(b)(v). For the avoidance of ambiguity, the programs provided in this
        subsection with respect to Target Compound(s) are not intended to be
        limiting in any way with respect to potential programs which may be
        elected under Section 2.3(a):

               ***

               (c) Exploratory Programs. The Parties may mutually agree to
        initiate a program intended to analyze, on an exploratory basis, the
        commercial and/or technical feasibility or desirability of plant
        expression of certain genes. Exploratory programs shall not exceed the
        transgenic expression and/or analysis of *** genes. Allocation to such
        programs shall not exceed *** of the total funding provided pursuant to
        Section 5.1(a) or 5.5.

        2.4 ProdiGene and GCI agree to submit quarterly reports to the Steering
Committee detailing progress relating to their responsibilities pursuant to an
Elected Research Program and any pertinent findings, results, conclusions or
other information resulting from an Elected Research Program.

        2.5 With respect to the conduct of an Elected Research Program, the
Steering Committee will make decisions including:

               (a) reviewing the general direction and course of the research;

               (b) determining appropriate allocation of funding to Elected
        Research Program(s) provided hereunder and communicating the agreement
        of the Parties related to such allocation;


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               (c) approving changes in the direction of the research;

               (d) reviewing and approving achievement of any milestones;

               (e) reviewing and advising with regard to patents and patent
        strategy;

               (f) making recommendations to respective management of the
        Parties or making decisions, if appropriate, on all decision points
        throughout the course of the research; and

               (g) review of the progress and/or desirability of Elected
        Research Programs.

        2.6 Termination of Elected Research Programs. Elected Research Programs
may be terminated as follows:

               (a) Upon completion of the Elected Research Program as described
        in the Project Form;

               (b) Upon mutual agreement of the Parties that technology, market,
        regulatory or other considerations suggest that continued investment of
        time, resources or money related to an Elected Research Program to
        develop and commercialize a Target Compound may be unsuitable or
        undesirable. Pursuant to this sub-section, the Parties may elect to hold
        discussions toward a mutually acceptable resolution, including
        alternative target proteins, the transfer or modification between the
        Parties of rights to commercialize products, or termination of the
        Elected Research Program, as appropriate.

               (c) Upon *** days notification to ProdiGene, GCI may elect to
        cancel an Elected Research Program. In the event that GCI elects to
        cancel an Elected Research Program under this subsection, ProdiGene may
        continue such program, provided that such continuance is not
        inconsistent with the terms of this Agreement, including Article 3
        hereof. GCI agrees to negotiate in good faith with ProdiGene for a
        license to intellectual property exclusively licensed to GCI under
        Section 2.3(c) in the event that such license is necessary for the
        continuance or commercialization of the results of such canceled program
        by ProdiGene.

        2.7 Intellectual Property Rights and Commercialization in Elected
Research Programs. Intellectual property rights developed during or related to
Elected Research Programs shall be treated as follows:

               (a) To the extent that either Party owns or controls Background
        Technology or Background Patent Rights, such Background Technology and
        Background Patent Rights shall remain the sole property of that Party to
        exploit in

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        any manner it chooses at its sole discretion, except to the extent
        provided for herein.

               (b) Each Party agrees to promptly, but no later than 30 days
        after the submission of an invention disclosure to a Party's legal
        department or counsel, advise the other Party in writing of any
        Invention(s) made pursuant to this Agreement.

               (c) Invention(s) made as a result of an Elected Research Program
        and any patents, copyrights or other intellectual property based on such
        Invention(s) shall be owned jointly by the Parties. Subject to Section
        2.7(d) hereof, rights to commercialize such Invention(s) shall be as
        follows:

                      (i) To the extent that Invention(s) are specific to ***,
               GCI grants to ProdiGene *** license to make, use, sell, offer to
               sell, have made, import and export, with the right to sublicense,
               products and processes specific to *** embodying such
               Invention(s), subject to the payment of a royalty or other
               mutually agreed upon compensation to GCI and to the rights of GCI
               pursuant to part (ii) hereof. Notwithstanding the above, GCI
               shall retain the right to use Inventions under this subsection
               for internal research purposes only.

                      (ii) To the extent that Invention(s) relate to the
               Exclusive Collaboration Field, ProdiGene hereby grants to GCI ***
               license to make, use, sell, offer to sell, have made, import and
               export, with the right to sublicense, products or processes
               embodying such Invention(s), subject to the payment of a royalty
               or other mutually agreed upon compensation to ProdiGene, which
               royalty or other compensation will be the greater of *** of Net
               Sales of a product embodying such Invention(s) or *** of the
               gross margin received by GCI *** calculated in accordance with
               U.S. Generally Accepted Accounting Principles. Notwithstanding
               the above, ProdiGene shall retain the right to use Inventions
               under this subsection for internal research purposes only.

                      (iii) To the extent that Invention(s) are not encompassed
               within subsections (i) or (ii) of this Section, the Parties shall
               each have the right to make, use, sell, offer to sell, have made,
               import and export, with the right to sublicense, such
               Invention(s), subject to further agreement between the Parties.

                      (iv) In the event that ProdiGene is subject to a sale of
               substantially all of its business assets or equity to a third
               party, GCI shall be granted *** license to make, use, sell,
               offer to sell, have


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               made, import and export, with the right to sublicense, products
               or processes embodying such Invention(s) for any Inventions
               described in subsection 2.7(c)(i).

               (d) Royalty or compensation due to a Party pursuant to Section
        2.7(c) shall be the subject of a written agreement between the Parties
        and shall take into consideration the existence of, or filing of
        applications for, intellectual property, the nature of the Invention(s)
        and its relative contribution to the product sold. In addition, or
        alternatively, to the royalty or compensation provided for in Section
        2.7(c), the Parties may elect to enter into a separate supply agreement
        pursuant to which ProdiGene supplies raw materials and/or other goods
        useful for the production of protein products to GCI for processing and
        eventual sale. Any controversy arising between the Parties which is
        related to royalty or other compensation to which a Party may be
        entitled under Sections 2.7(c) may, upon request of a Party (the
        Requesting Party), be subject to arbitration in accordance with the
        Licensing Agreement Arbitration Rules of the American Arbitration
        Association with the following modifications:

                        (i)     ***

                        (ii)    Because prompt disposal of the dispute is
                                important to both Parties, judgment shall be
                                provided within *** of the request for
                                arbitration. The judgment shall be supported by
                                findings of fact and conclusions of law.
                                Judgment by the arbitration panel may be entered
                                in any court having competent jurisdiction
                                thereof. In the event that judgment is not
                                entered by the arbitration panel within *** of
                                the request, no obligation shall remain to
                                continue the arbitration; and

                        (iii)   If judgment rendered by the arbitration panel is
                                equivalent to a standing offer previously
                                rejected by the Requesting Party, the Requesting
                                Party shall pay all expenses incurred by the
                                other Party during the arbitration.

               (e) Preparation, filing, prosecution, maintenance and taking such
        other actions as are reasonably necessary or appropriate with respect to
        the development of intellectual property protection arising from an
        Elected Research Program as well as the costs thereof shall be
        undertaken by the Party having the right to commercialize the
        Invention(s) pertaining to such filed patents pursuant to Section
        2.7(c). The Parties shall cooperate in the preparation and filing of any
        patent application relating to the Invention(s) including having any of
        their employees who are named as inventors review and comment on such
        patent applications and the prosecution related thereto, as well as
        having such employees execute necessary documents for the filing of such
        patent applications worldwide.

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        Each Party shall endeavor in good faith to coordinate its efforts with
        those of the other Party to minimize or avoid interference with the
        prosecution of the other Party's patent applications. Each Party shall
        provide the other with a copy of any patent application which relates to
        the Research, at least 20 days prior to filing the first of such
        applications in any jurisdiction, for review and comment by the other
        Party. In the event that Invention(s) are made as contemplated in
        Section 2.7(c)(iii) for which it is appropriate to file a patent
        application(s), the Parties, through the Steering Committee, will agree
        which Party is most appropriate to prepare, file and prosecute that
        patent application(s) based on the nature of the Invention(s) and the
        relative expertise of the Parties.

               (f) Either Party may discontinue its obligation to prepare, file,
        prosecute and maintain (including the costs related thereto) a
        particular patent or patent application filed by it pursuant to this
        Agreement by providing the other with thirty (30) days advance written
        notice (the "Discontinuance Election") of any decision to cease
        preparation, filing, prosecution and maintenance of that patent or
        patent application (a "Discontinued Patent"). In such case, the other
        Party may, at its sole discretion, continue preparation, filing and
        prosecution or maintenance of the Discontinued Patent at its sole
        expense. In such case, the acquiring Party shall own exclusively any
        such patent or patent application and patents maturing therefrom and the
        commercialization rights provided in Section 2.7(c); and the other shall
        execute such documents and perform such acts as may be reasonably
        necessary for the other Party to file or to continue prosecution or
        maintenance, including assigning ownership of such patent or patent
        application and maintaining such patents until such assignment of
        ownership is completed. The Discontinuance Election may be on a
        country-by-country basis or for a patent application or patent series in
        total.

               (g) ProdiGene represents and warrants to the best of its
        knowledge with respect to its Background Patent Rights that ProdiGene
        has title or right to the Background Patent Rights, and the grant of any
        license to GCI contemplated in this Agreement under such rights does not
        require the consent of a third party and is not encumbered by any
        agreement, assignment or other encumbrance that is inconsistent with the
        provisions of this Agreement and does not create any obligation on the
        part of GCI to any third party. Further, ProdiGene represents and
        warrants to the best of its knowledge with respect to the Background
        Technology, that it has ownership or license under such technology owned
        or controlled by ProdiGene and such ownership or licensure is not
        encumbered by any agreement, assignment or other encumbrance that
        prohibits ProdiGene from fulfilling its obligations under this Agreement
        or creates any obligation on the part of GCI to any third party.
        ProdiGene makes no representation or warranty regarding the freedom to
        operate, including with respect to any results of any Elected Research
        Program, under third party issued patents not encompassed within the
        Background Patent Rights and/or the Background Technology.

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        2.8 Confidentiality, Treatment of Samples and Publications.
Confidentiality, samples and publications pursuant to this Agreement or any
Elected Research Program shall be treated as follows:

               (a) The Parties agree that confidential information owned or
        developed by either Party and disclosed pursuant to this Agreement shall
        be considered within the terms of the Confidentiality Agreement;
        provided that the period of permissible disclosure thereunder shall be
        the term of this Agreement and the period of confidentiality provided in
        said Confidentiality Agreement will extend for five (5) years from the
        expiration of this Agreement.

               (b) The Parties agree that the terms of the Samples Agreement,
        except as specifically modified herein, will control with respect to any
        samples or materials provided from GCI to ProdiGene under this
        Agreement; provided that the Parties' obligations thereunder will extend
        for five (5) years from the expiration of this Agreement.

               (c) In the event that the terms of either of said Confidentiality
        Agreement or said Samples Agreement are inconsistent with the terms
        provided expressly herein, the terms of this Agreement shall control.

               (d) Neither Party will publish any material arising from any
        Elected Research Program without prior written approval of the other
        Party. Such approval shall not be unreasonably withheld but may be
        subject to a delay of up to (3) months total for assessment of the
        proposed publication and to enable preparation and filing of appropriate
        patent application(s). Both Parties will procure that any person
        involved or interested in an Elected Research Program will not publish
        or communicate material arising therefrom without first complying with
        the provisions of this Section.

        2.9 Research Exclusivity. ProdiGene agrees that it will not perform
research and/or development or enter into any commercial agreement in or related
to an Elected Research Program with any third party during the term of such
Elected Research Program, after which ProdiGene, subject to its obligations of
confidentiality, exclusivity and to proprietary rights granted to GCI hereunder,
may continue such research without regard to GCI.

                        III. EXCLUSIVITY OF COLLABORATION

        3.1 In consideration of payment pursuant to Section 5.4, ProdiGene
agrees that it will not perform research and/or development or enter into any
commercial agreement in the Exclusive Collaboration Field with any third party
during the Exclusivity Period. ProdiGene further agrees that it will not engage
in discussions with any third party regarding the Exclusive Collaboration Field
during the Exclusivity Period.

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        3.2 ProdiGene hereby grants to GCI an option to extend the Exclusivity
Period for an additional *** (Exclusivity Option). GCI shall exercise the
Exclusivity Option, at its sole discretion, by notifying ProdiGene in writing
prior to the expiration of the Exclusivity Period of its intent to exercise the
Exclusivity Option. Upon exercise of the Exclusivity Option and in consideration
of the extended Exclusivity Period conferred thereby, GCI shall pay to ProdiGene
the amount provided in Section 5.5.

        3.3 The exclusivity provided in this Article applies to any
collaboration between ProdiGene and any third party, but shall not apply to ***

                          IV. PRECEDENCE OF AGREEMENTS

        In the event of any conflict between the terms of the Enzymes Agreement
or any other agreement between the Parties and this Agreement, this Agreement
shall be controlling.

                                  V. PAYMENTS

        5.1 Payments for Elected Research Program(s):

               (a) GCI shall pay to ProdiGene *** during the *** period
        immediately following the Effective Date as funding for Elected Research
        Programs. Funding provided in this Section shall be pursuant to the
        agreement of the Parties, and shall include payment for FTEs required to
        adequately staff Elected Research Program(s) and technical milestones,
        if any, which are appropriate to Elected Research Program(s). The
        funding provided in this Section shall constitute a total of at least
        *** FTEs and no more than *** FTEs over the Term.

               (b) Allocation of FTEs shall be not less than *** per annum and
        not more than *** per annum during the Term. The funding rate for FTEs
        allocated during the Term shall be as follows:

                      (i) FTEs allocated during 1999 shall be at a rate of ***
               per FTE;

                      (ii) FTEs allocated during 2000 shall be at a rate of ***
               per FTE;

                      (iii) FTEs allocated during 2001 or thereafter shall be at
               a rate of *** per FTE.

               (c) Payment under Section 5.1(a) shall comprise two payments per
        year, the first payment being on the Effective Date or annual
        anniversary thereof (First Payment Date) and the second payment being
        six months after the Effective Date or annual anniversary thereof
        (Second


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        Payment Date) during the Term. The amount of each payment shall be as
        follows:

                      (i) Within 30 days of the First Payment Date, GCI shall
               pay to ProdiGene the prorated amount of the projected FTE
               allocation for the *** period immediately following the First
               Payment Date.

                      (ii) Within 30 days of the Second Payment Date, GCI shall
               pay to ProdiGene the prorated amount of the projected FTE
               allocation for the *** period immediately following the Second
               Payment Date, adjusted for the actual allocation of FTEs made in
               the previous *** period.

               (d) Agreed upon payments for technical milestones met during the
        Term with respect to Elected Research Program(s) shall be paid within 30
        days of confirmation that such technical milestone has been met.

        5.2 At quarterly intervals, ProdiGene will provide to GCI a statement
detailing the resource and time expenditures which correspond to the payments
made to ProdiGene by GCI under Section 5.1 or 5.5.

        5.3 Any work performed by GCI shall be at GCI's sole expense.

        5.4 In consideration of the Exclusivity Period as provided in Section
3.1, GCI shall pay to ProdiGene *** within 30 days of the execution of this
Agreement.

        5.5 In the event that GCI exercises its Exclusivity Period Option under
Section 3.2, GCI shall pay to ProdiGene a total of *** during the extended
Exclusivity Period as funding for Elected Research Program(s) during the
extended Exclusivity Period. Funding provided in this Section shall be pursuant
to the agreement of the Parties, and shall include payment for FTEs required to
adequately staff Elected Research Program(s) and technical milestones, if any,
which are appropriate to Elected Research Program(s). The funding provided in
this Section 5.1(a) shall constitute a total of at least *** FTEs during the
extended Exclusivity Period. Payment to ProdiGene pursuant to this Section 5.5
shall be in accordance with Section 5.1(c).

                            VI. TERM AND TERMINATION

        6.1 The Term of this Agreement shall be for three (3) years from the
Effective Date, such term to be automatically renewable for a period of *** upon
exercise of the Exclusivity Option provided in Section 3.2.

        6.2 The Term of any Elected Research Program shall be the Term of this
Agreement or the period of time for which FTEs are allocated, whichever is
greater.


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Accordingly, the Parties may agree in writing that the term of an Elected
Research Program shall extend beyond the term of this Agreement.

        6.3 Termination of the Agreement may occur upon the following:

               (a) Upon a material breach of the Agreement by the other Party.
        In the event that a Party wishes to terminate this Agreement due to a
        material breach, the terminating Party shall serve a written notice on
        the other Party thereby allowing the other Party sixty (60) days to
        remedy such breach. In the event that such breach has not been remedied
        within the prescribed sixty (60) days, the Agreement shall terminate
        automatically;

               (b) In the event that either Party becomes subject to Bankruptcy,
        insolvency, liquidation or similar proceedings, the other Party shall be
        entitled to terminate this Agreement forthwith;

               (c) Upon one-hundred eighty (180) days notice by GCI to
        ProdiGene; or

               (d) Upon failure of the Parties to reach and successfully
        consummate the sale of an equity interest in ProdiGene to GCI within
        one-hundred eighty (180) days of the Effective Date, GCI shall have the
        right, but not the obligation, to terminate immediately, provided that
        GCI must provide notice to ProdiGene of such termination within two
        hundred and ten (210) days of the Effective Date. In the event that GCI
        terminates under this subsection 6.3(d) and the failure of the Parties
        to reach and successfully consummate the sale of an equity interest is
        due to: (i) a failure of ProdiGene to obtain the necessary consents of
        its shareholders and/or Board of Directors to effectuate such sale to
        GCI or (ii) the terms of such issuance not being substantially similar
        to the Class B Convertible Preferred Shares rights, privileges and
        preferences as provided in ProdiGene's Certificate of Incorporation as
        filed with the Delaware Secretary of State and authenticated on August
        28, 1998, ProdiGene shall refund, in its entirety, any payments made
        under Section 5.4 hereof.

        6.4 Expiration of Term or termination of this Agreement pursuant to this
Article shall not effect the vested rights of either Party under Articles 2, 4
and 7.

                               VII. MISCELLANEOUS

        7.1 Hold Harmless. With respect to GCI's rights under Section 2.7(c),
ProdiGene shall hold GCI harmless for any activities thereunder which would
otherwise infringe ProdiGene's Background Technology or Background Patent
Rights.

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        7.2 Indemnification. Except as specifically provided herein, GCI agrees
to indemnify and to hold ProdiGene, its officers, directors, and employees
harmless from liabilities assessed to GCI or its affiliates which arise solely
as a result of GCI's conduct under this Agreement or GCI's use of the results of
this Agreement, except for liabilities caused by the negligence of ProdiGene.
Furthermore, ProdiGene agrees to indemnify and to hold GCI, its officers,
directors, and employees harmless from liabilities of any kind assessed to
ProdiGene or its affiliates which arise solely as a result of ProdiGene's
conduct under this Agreement or ProdiGene's use of the results of this
Agreement, except for liabilities caused by the negligence of GCI.
Indemnification hereunder is limited to research activities conducted under this
Agreement.

        7.3 Force Majeure. Each of the Parties hereto shall be excused from
performance of its obligations and shall not be liable for damages to the other
to the extent that such performance is prevented by circumstances beyond its
effective control. Such excuse from performance shall continue so long as the
condition responsible for such excuse continues and for a thirty (30) day period
thereafter.

        For purposes of this Agreement, circumstances beyond the effective
control of a Party which excuse that Party from performance shall include but
shall not be limited to, act of God, regulations or laws of any government,
injunction or judgment of any court, war, civil commotion, destruction of
facility or materials by fire, earthquake, storm or other casualty, labor
disturbance, epidemic and failure of public utilities or common carrier.

        7.4 Relationship. ProdiGene and GCI are independent contractors. Nothing
in this Agreement or the course of dealing of the Parties shall be construed to
constitute the Parties hereto as partners, joint ventures or as agents or
distributors for one another, or as authorizing any Party to obligate the other
in any manner.

        7.5 Non-Assignment. This Agreement shall not be assignable by any Party
without the other Parties' prior written consent. In the event that such consent
is given, this Agreement and the covenants herein contained shall be binding and
inure to the benefit of ProdiGene and GCI and their heirs, assigns, successors
and legal representatives. In the event that either Party hereto undergoes a
divestiture or sale of assets or equity to a third party, the acquiring party
takes such assets or equity subject to the rights and obligations provided in
this Agreement and shall agree in writing to the terms hereof.

        7.6 Entire Agreement/Amendment. This Agreement and the attachments
hereto constitute and contain the entire agreement of the Parties respecting the
subject matter hereof. This Agreement may only be amended by mutual written
agreement of the Parties.

        7.7 Warranty of Right and Authority. Each of the Parties represents and
warrants to the other that it has the full right and authority to enter into
this Agreement, and that it is


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<PAGE>   14

not aware of any impediment which would inhibit its ability to perform the terms
and conditions imposed on it by this Agreement. Nothing contained herein shall
be interpreted as a warranty, express or implied as to the patentability,
enforceability or validity of any patent application or patent owned or
controlled by either Party.

        7.8 Further Acts and Instruments. Each Party agrees to execute,
acknowledge and deliver such further instruments and do all such other acts as
may be necessary or appropriate to effect the purpose and intent of this
Agreement.

        7.9 Severability. In the event any one or more of the provisions of this
Agreement should for any reason be held by any court or authority having
jurisdiction over this Agreement or either of the Parties hereto to be invalid,
illegal or unenforceable, such provision shall be reformed within the
jurisdiction of such court or authority to as nearly approximate the intent of
the parties as possible, and if the provision is unreformable the Parties shall
meet to discuss what steps should be taken to remedy the situation; otherwise
and elsewhere this Agreement shall not be affected.

        7.10 Captions. The captions to this Agreement are for convenience only
and are to be of no force or effect in construing or interpreting the provisions
of this Agreement.

        7.11 Counterparts. This Agreement may be executed in two counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

        7.12 Limitation of Liability. No Party shall be liable to another for
indirect, incidental, consequential or special damages, including but not
limited to lost profits, arising from or relating to any breach of this
Agreement, regardless of any notice of the possibility of such damages. In no
event shall either Party be liable for damages relating to lost profits or
reasonable royalties or special damages due and payable to a third party on the
basis of the other's sale of a product developed hereunder.

        7.13 Publicity. Either Party's use of the other Party's name or
disclosure of the existence or nature of this Agreement or the relationship
created thereby to any third party shall be only with the prior written consent
of the other Party, which consent will not be unreasonably withheld.

        7.14 Interpretation. This Agreement has been jointly prepared by the
Parties and their respective legal counsel and shall not be strictly construed
against either Party.

        7.15 Notices. Representatives for the receipt of payments, notices,
records, reports and other information pursuant to this agreement shall be as
follows:


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<PAGE>   15
        For GCI:

        Attn: Legal Department
        Genencor International, Inc.
        1870 S. Winton Rd.
        4 Cambridge Place
        Rochester, NY  14618

        For ProdiGene:

        Attn:
        ProdiGene, Inc.
        1500 Research Parkway
        Suite 220
        College Station TX  77845

        7.16 Controlling Law. This Agreement shall be governed and construed in
accordance with the Laws of the State of Delaware, excluding any choice of law
rules which may direct the application of the law of any other jurisdiction.
Questions effecting the construction and effect of any patent rights arising
hereunder shall be determined by the laws of the country in which such patent
rights have been applied for and/or granted.

        IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives.


GENENCOR INTERNATIONAL, INC.               PRODIGENE

By:     /s/ Stuart L. Melton               By:    /s/ John A. Howard
   --------------------------------           -----------------------------

Name:    Stuart L. Melton                  Name:    John A. Howard
     ------------------------------             ---------------------------

Title:    Senior Vice President            Title:     President and CEO
      -----------------------------              --------------------------

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