June 18, 2001



Robert E.W. Hancock, Ph.D.
Director, Center for Microbial Diseases
  and Host Defense Research
University of British Columbia
#300 6174 University Boulevard
Vancouver, B.C.
Canada V6T 1Z3

Re:      Consulting Agreement

Dear Dr. Hancock:

We are pleased that you are willing to engage in a consulting  relationship with
Helix  BioMedix,  Inc.  ("Helix") as a member of our  Scientific  Advisory Board
("SAB").  We believe  that your  expertise  will help us meet our  research  and
development goals.

Your consultantship with us shall be on the following terms:

     1. This  agreement  shall be  effective  as of the date of your  acceptance
hereof and shall terminate three years thereafter.  However,  this agreement may
be  terminated  at any time by you or by Helix  upon  thirty  (30) days  advance
written notice to the other.

     2. Your  position  shall be that of an  independent  contractor  and not an
employee or agent of Helix.  During the term of this agreement,  you agree to be
available  to Helix on an "as  requested"  basis,  which  we both  expect  to be
several times during each month.

     3. In consideration  of your SAB related  consulting  services  rendered to
Helix (as specified in paragraph 4 below),  Helix will,  upon your  execution of
this Agreement, compensate you as follows:

     o    Helix will grant to you a warrant to purchase 10,000 shares of Helix's
          common  stock  with a purchase  price of $1.50 per share and  ten-year
          term. Then, on each annual  anniversary of the date of your acceptance
          of this  agreement,  Helix will grant to you an additional  warrant to
          acquire up to 10,000  shares of Helix's  common  stock with a purchase
          price equal to the then fair  market  value as  determined  by Helix's
          Board of  Directors.  Specifically,  if you  attend  all SAB  meetings
          during the 12 months  prior to the contract  anniversary,  the Company
          will  grant you a warrant to  purchase  10,000  shares.  If you attend

<PAGE>


Robert E.W. Hancock, Ph.D.
June 18, 2001
Page 2


          fewer than all of the scheduled meetings during that year, the Company
          will grant you a warrant to  purchase  2,500  shares for each  meeting
          attended, up to a maximum of 10,000 shares.

     o    Helix  will pay you $2,000  (U.S.)  for each  month  that you  provide
          services hereunder.


     o    Helix  will  reimburse  you for  the  reasonable  out-of-pocket  costs
          attributable to your attendance of SAB meetings.

     4. Your services as a SAB member will primarily be as follows:

     o    attend periodic SAB meetings as requested by Helix management;

     o    provide your  expertise as a member of SAB  subgroups,  established to
          address specific issues or concerns identified from time to time;

     o    assist  in  identifying  and  evaluating  third  party   opportunities
          (including research and development) in related technologies,  subject
          to paragraph 6 below;

     o    critically evaluate Helix's research and development programs;

     o    advise Helix scientists in research strategy and direction;

     o    assist  Helix   scientists  with   investigating   and   understanding
          mechanisms of action; and

     o    review  progress  of  Helix's  specific   projects  and  research  and
          development efforts with management.

Helix  employees  or agents may consult with you  individually,  by telephone or
facsimile or provide documents for your review and analysis. You will be engaged
by Helix as a consultant  for the exchange of ideas only and shall not direct or
conduct research for or on behalf of Helix.

     5. In  addition,  you have agreed to assist Helix in its efforts to license
certain  intellectual  property  from the  University  of British  Columbia.  In
consideration  of your assistance to Helix in this matter,  Helix will, upon the
execution of a license  agreement upon  substantially the terms contained in the
term sheet  attached  hereto as Schedule A grant to you a warrant to purchase up
to 250,000 shares of Helix's common stock at a purchase price of $1.50 per share
with a ten-year term. The right to purchase  shares upon exercise of the warrant
will vest ratably over six (6) six-month  intervals  commencing on the date that
is six months after the later of (i) the date of the License Agreement,  or (ii)

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Robert E.W. Hancock, Ph.D.
June 18, 2001
Page 3


the date upon which all of the patents referred to in the License Agreement have
been  issued so that you will be entitled  to  purchase  41,667  shares for each
six-month period following the relevant trigger date of the License Agreement.

     6. You shall not  disclose  to others  or  utilize  for your own  research,
without Helix's written consent, any unpublished  information concerning Helix's
scientific or business interests with which you become familiar in your contacts
with us.  Similarly,  you shall not:  (1)  disclose to others the results of any
specific nature of your consulting work for Helix; or (2) use any unpublished or
proprietary  information  provided  to you by  Helix  for  purposes  other  than
providing  consulting  services to Helix.  Your obligations under this paragraph
shall continue  beyond  termination of this agreement  insofar as they relate to
your activities under this agreement prior to its termination.

     7. If in connection with your consultantship, you contribute as an inventor
(as determined by applicable laws regarding  inventorship)  to any invention for
Helix,  you shall  assign  your  right,  title and  interest  in the  invention,
domestic or foreign,  to Helix,  signing all papers,  executing  all oaths,  and
doing  everything  necessary and proper to assign to Helix  domestic and foreign
rights to said inventions.

Helix will  compensate  you for any expense you incur in  assigning,  obtaining,
maintaining, and enforcing any patent covering any invention for which you are a
named  inventor,  as set forth  above.  Helix  will also  reasonably  and fairly
compensate  you for time which you may spend  subsequent to the  termination  of
this agreement in securing or enforcing  Helix's rights in the invention.  These
obligations shall continue beyond the term of this agreement.

It is our  understanding  that you have no  preexisting  obligations  which  are
inconsistent with your acceptance of the foregoing terms or which would preclude
your complete performance under the above terms. If our understanding is correct
and if you accept the


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Robert E.W. Hancock, Ph.D.
June 18, 2001
Page 4



foregoing terms, please so indicate by signing,  dating, and returning to us the
enclosed  duplicate  counterpart  original of this letter,  along with the stock
purchase agreement.

We look forward to your continued association with us.

Sincerely,

HELIX BIOMEDIX, INC.


/s/ R. Stephen Beatty
----------------------------
R. Stephen Beatty, President


Accepted and Agreed to this     day of              , 2001.
                           ----        -------------

/s/ Robert E.W. Hancock
-------------------------------     ------------------
Robert E.W. Hancock, Ph.D.          Social Security No.

RSB:bre
Enclosure