Document:

EX-10.30

       [***Confidential Treatment Requested. Confidential portions of this
      agreement have been redacted and have been separately filed with the
                                   Commission]

                       LIMITED LIABILITY COMPANY AGREEMENT
                                       OF
                  WILLMAR/METAMORPHIX TURKEY JOINT VENTURE, LLC

     WILLMAR POULTRY COMPANY, INC., a corporation duly incorporated pursuant to
the laws of Minnesota with principal place of business at Box 753, Willmar,
Minnesota 56201-0753 USA (Hereinafter referred to as "WILLMAR")

                                       and

         METAMORPHIX, INC., a corporation duly incorporated pursuant to the laws
of  Delaware,  having a  principal  place of business  at 8510A  Corridor  Road,
Savage, Maryland 20763, USA (Hereinafter referred to as "MMI"), has entered into
this Limited Liability Company Agreement as of this 4th day of September, 2002.

                                    RECITALS

         WHEREAS  Willmar is a major  producer  of, and  supplier  of the turkey
industry  in  North  America  and  maintains  facilities  necessary  to test and
evaluate products related to such industry under commercial conditions;

         AND WHEREAS  MMI is  developing  products  based upon  diminishing  the
biological  activity of Myostatin(TM)  (GDF-8) to improve  livestock  production
efficiency, enhance meat quality, or both;

         AND 'WHEREAS Willmar,  by its December 1, 1998 Research  Agreement with
University  of  Minnesota,  has an  option to  license  from the  University  of
Minnesota certain  technology  relating to the immunizing of turkeys to diminish
the biological activity of Myostatin(TM) (GDF-8);

         AND WHEREAS  Willmar has filed a U.S.  patent  application  relating to
Myostatin(TM);

         AND WHEREAS MMI is the owner of U.S.  patent  applications  relating to
Myostatin(TM);

         AND WHEREAS MMI and Willmar  have agreed to  establish a joint  venture
(in the form of a limited liability company duly organized  pursuant to the laws
of Delaware) for the purposes of developing,  manufacturing,  marketing, and the
sale of a  Myostatin(TM)  product or products,  based upon the most  appropriate
method  available  through  ownership  or license to Willmar  and MMI,  with the
intention that the future  development costs of such products be minimized while
expediting delivery and marketing of the product to the turkey industry in North
America;

                                    AGREEMENT

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         Willmar and MMI hereby  covenant,  agree,  represent,  and warrant,  as
follows:

INTERPRETATION AND DEFINITIONS

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INTERPRETATION AND DEFINITIONS

1.01 DEFINITIONS

                  For the purposes of this Agreement,  unless there is something
         in the subject matter or context inconsistent therewith,  all words and
         phrases  used herein which are denoted  with  initial  capital  letters
         shall have the meanings  assigned to them as set out in this  Agreement
         and,  in  addition,  the  following  words and  phrases  shall have the
         following meanings:

         (a)      "Affiliate"  shall mean,  during the period the same pertains,
                  any corporation,  person, firm, partnership,  or other entity,
                  whether  de jure or de facto,  which  directly  or  indirectly
                  owns, is owned by, or is under common  ownership  with a Party
                  to this Limited  Liability  Company Agreement to the extent of
                  not less than fifty  (50%)  percent  of the equity  having the
                  power to vote on or direct the affairs of the entity,  and any
                  corporation,   person,  firm,  partnership,  or  other  entity
                  actually  controlled  by,  controlling or under common control
                  with a Party  to this  Limited  Liability  Company  Agreement.
                  Notwithstanding  the  definition of Affiliate,  Affiliate does
                  not  include  the  University  of  Minnesota  or  any  of  its
                  departments, divisions or wholly owned subsidiaries.

         (b)      "Existing   Confidentiality   Agreement"   shall   mean   that
                  Confidentiality  and  Non-Disclosure  Agreement  dated May 11,
                  2002 and executed by and between MMI and Willmar.

         (c)      "MMI" means MetaMorphix, Inc.

         (d)      "Willmar" means Willmar Poultry Company, Inc.

         (e)      "Myostatin(TM)  Technology" means those Myostatin(TM)  (GDF-8)
                  immunizing  agents  (to be  delivered  via  active or  passive
                  transfer),  antagonists,  transgenic  breeds  that  delete  or
                  diminish  the  biological  activity of  Myostatin(TM),  and or
                  Myostatin(TM)  related  Turkey-specific  diagnostic  kits  and
                  services as the case may be now or in the future in respect of
                  which MMI has a right to grant licenses.

         (f)      "Licensed  Field of Use" means the use in the Turkey market of
                  the  MMI  and/or  Willmar  Technology  in  the  Territory  for
                  purposes   of   developing,   making,   using,   and   selling
                  Myostatin(TM)  related  Products and  Services  that delete or
                  diminish the biological activity of Myostatin(TM) (GDF-8).

         (g)      "MMI Technology"  means  inventions and know-how  comprised of
                  the use  and  delivery  of  Myostatin(TM)  (GDF-8)  immunizing
                  agents and  antagonists  as described in the MMI Patents,  and
                  further   includes  all  technical  data,   information,   and
                  biological  materials and reagents  useful in working with the
                  subject  matter  of the MMI  Patents  which  is now  owned  or
                  subsequently   acquired   by  MMI  during  the  term  of  this
                  Agreement.

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         (h)      "Willmar  Technology" means inventions and know-how  comprised
                  of the use of the delivery of Myostatin(TM)  immunizing agents
                  by passive transfer as described in the Willmar  Patents,  and
                  further   includes  all  technical   data,   information   and
                  biological  materials and reagents  useful in working with the
                  subject  matter of the Willmar  Patents  which is now owned or
                  subsequently  acquired  by  Willmar  during  the  term of this
                  Agreement.

         (i)      "MMI Patents" means any patents granted  pursuant to such U.S.
                  Patent  Applications as are set forth in Schedule 1.01(i),  or
                  granted pursuant to any patent applications subsequently filed
                  that  is  based  on any  such  MMI  Patent  and  includes  any
                  continuations,  continuations-in-part,  divisions,  patents of
                  additions re-issues,  renewals, and extensions of such patents
                  and patent  applications  listing  attached hereto in Schedule
                  1.01(i),  and all foreign patents  corresponding to any of the
                  foregoing.

         (j)      "Party" shall mean either MMI or Willmar.

         (k)      "Territory" shall mean North America (and any additional areas
                  included in accordance with Section 9.02d).

         (l)      "Revenue" shall mean any and all gross revenues  payable to or
                  received  by  Willmar  at any time or in any  form,  for or on
                  account of (i) the making,  use, imports, or other transfer of
                  a Product and  Service;  (ii) the grant to any other person or
                  entity  of a  sub-license  or any other  rights to the  rights
                  granted  under  this  agreement;   or  (iii)  any  other  use,
                  practice,  or exploitation for use in the Field and Territory,
                  of the MMI  Technology  and the  Willmar  Technology.  Revenue
                  shall include,  without  limitation,  up-front  fees,  equity,
                  milestone payments,  development  payments,  maintenance fees,
                  success  fees,   service  revenues,   shares  of  profits  and
                  royalties.

         (m)      "Willmar  Patents" means any patents granted  pursuant to such
                  U.S. Patent  Application  09/754,826  (University of Minnesota
                  File  Number  Z00173),  or  granted  pursuant  to  any  patent
                  applications  subsequently  filed that is based on the Willmar
                  Technology      and      includes      any      continuations,
                  continuations-in-part,   divisions,   patents  of   additions,
                  re-issues,  renewals,  and  extensions of such patents and all
                  foreign patents corresponding to any of the foregoing.

         (n)      "Registration"  means the  issuance  of  approvals  from or by
                  regulatory   agencies   or  other   governmental   authorities
                  necessary  to  authorize  sale of a  Product  in a  particular
                  country or jurisdiction.

         (o)      "Product and Service" means any product, composition, process,
                  service,  or method of use of any part thereof that deletes or
                  diminishes the  biological  activity of  Myostatin(TM)  in the
                  licensed   field   of   use   and/or   Myostatin(TM)   related
                  Turkey-specific  diagnostic  kits  and  services  and is made,
                  directly with, from or contains Willmar and/or MMI Technology.

         (p)      "Target  Turkey  Companies"  means with the  following but not
                  limited  to:  Cargill,  Inc.  and  its  subsidiaries  and  its
                  contractual   growing/processing   partners;  Jennie-O  Turkey
                  Store, Inc.;  Butterball Turkey Company;  Pilgrim's Pride; and
                  Willmar    Poultry    Company   and   its    Affiliates    and
                  growing/processing partners.

         In  addition,  certain  capital,  profit,  and loss  related  terms are
defined in Section 15.01.

1.02 DIVISION AND HEADING

                  The division of this  Agreement into Articles and Sections and
         the insertion of headings  herein are for the  convenience of reference
         only and shall not affect and shall not be construed  as affecting  the
         interpretation hereof.

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1.03 GENDER

                  In the Agreement, where the context requires or permits, words
         importing  the  masculine  gender shall include the feminine and neuter
         genders,  and words importing the plural shall include the singular and
         vice  versa,  and  the  words  "person"  and  "persons"  shall  include
         corporations, partnerships, and all other entities of whatsoever nature
         and kind.

1.04 SEVERABILITY

                In the event any term or  condition,  covenant,  or agreement or
         other provision  contained herein is invalid,  illegal, or incapable of
         being enforced by reason of any rule of law or public policy, such term
         or  condition,  covenant  or  agreement,  or  other  provision,  shall,
         nonetheless, continue to be enforceable to the fullest extent permitted
         by law against any person(s) and/or in any  circumstance(s)  other than
         those to whom  and/or  to  which  such  term,  condition,  covenant  or
         agreement,  or other  provision,  has been  rendered  or held  invalid,
         illegal, or incapable of being enforced.

ESTABLISHMENT AND STRUCTURE OF THE JOINT VENTURE AS A LIMITED LIABILITY COMPANY

2.01              Willmar and MMI hereby form a limited liability company with a
         calendar  fiscal year in the United States of America under the laws of
         the State of Delaware  which  company will be  considered a partnership
         for  United   States   income  tax  purposes  and  shall  be  known  as
         "Willmar/MetaMorphix Turkey Joint Venture, LLC" (herein such company is
         referred to as the "LLC").

2.02              Willmar  and MMI shall  execute  and file the  Certificate  of
         Formation  which is attached to this Agreement as, Exhibit 2.02 for the
         formation  of the  LLC.  Willmar  and MMI  agree  that the LLC has been
         established  in accordance  with the approved  Certificate of Formation
         and this Limited Liability Company Agreement.

2.03              All  costs of  formation,  regulatory  fees,  taxes  and other
         associated costs shall be borne by the LLC.

ESTABLISHMENT OF BOARD OF GOVERNORS

 3.01             MMI and Willmar hereby establish a Board of Governors  ("BOG")
         which (a) shall determine  pricing of Products and Services,  (b) shall
         review and approve plans and budgets for (i) testing and  evaluation of
         Products and Services,  (ii) research and  development  of Products and
         Services,  (iii)  manufacturing  (subject  to Section  10.1),  and (iv)
         patent  maintenance  pertaining to new inventions derived from the LLC,
         (i.e.,  collectively,  "Development Costs"), (c) shall decide according
         to Section 9.01 the marketing and  distribution  channel(s) of Products
         and Services,  and (d) shall oversee the business of the LLC (including
         the operation of the Operating Group).

 3.02             The Board of Governors  shall  consist of five (5)  governors.
         Each Party shall appoint two (2) governors and the fifth governor shall
         be mutually appointed by the Parties.  An interim person may be elected
         as the fifth governor until a mutually agreed upon permanent fifth

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         governor is elected.  The  Chairman of the BOG shall be the CEO of MMI.
         On the invitation of the BOG,  other persons and parties  including the
         LLC  accountant  may  participate  in  all  or  those  portions  of the
         deliberations of BOG as may be appropriate.  From the effective date of
         this agreement, this initial appointments of the Parties to the BOG are
         as follows:

                      MMI                          WILLMAR

         Edwin C. Quattlebaum, Ph.D.              Richard Husinga

         Linda Yaswen-Corkery, Ph.D.              Lee Byberg

                      Mutually Appointed Governor:______________________________

                  Notwithstanding  anything in this  Agreement to the  contrary,
         the BOG may not broaden  the  purpose  for which the joint  venture was
         established   or   pursue    opportunities   other   than   developing,
         manufacturing,  marketing,  and the sale of a Myostatin(TM)  product or
         products in Turkey,  may not admit an  additional  Party (except as set
         forth in Section 12.01),  may not obligate any member of the LLC beyond
         that member's share of an agreed budget,  and may not authorize the LLC
         to file for  bankruptcy  without  the consent of all of the Parties (in
         their sole  discretion)  and on such terms and  conditions  as shall be
         agreed upon by all the Parties.

 3.03             All  meetings of the BOG shall be  conducted on an as required
         basis upon the call of any representative of the BOG with not less than
         one week's  notice.  Meetings  of the BOG shall  alternate  between the
         offices of the Parties  (or be  conducted  telephonically).  Each Party
         shall be responsible  for their own  respective  costs in attending and
         participating  in BOG meetings and that of their  representatives  (and
         the LLC (a) shall  reimburse  the mutually  appointed  governor for his
         reasonable  expenses and (b) shall  compensate  him in a manner decided
         upon by the  BOG).  As much as  practical,  communication  between  the
         Parties of the BOG shall be effected regularly by phone, fax, and other
         similar  communication,  so as to foster the regular  open  exchange of
         information and collaboration  between BOG and the Parties'  respective
         personnel.  The Parties  acknowledge  and agree that  either  Party and
         their  representatives may upon reasonable notice and a non-disturbance
         basis  visit  the  facilities  of the other to view and  inspect  those
         activities carried on for the LLC in such facilities.

3.04     At its earliest opportunity, the BOG shall evaluate the MMI and Willmar
                  Myostatin(TM)  technology  for purposes of  determining  their
                  respective ability to improve production  efficiency,  enhance
                  meat quality, or both. As a result of such evaluation, the BOG
                  shall  determine the programs,  studies,  and activities to be
                  pursued  in respect to such  Myostatin(TM)  technologies,  and
                  which  are from time to time to be  discontinued.  It shall be
                  the responsibility of the BOG to agree

3.05     Budgets.
     3.05(a)      After   formation  of  the  LLC,  no  expenditure  or  in-kind
                  contribution shall be made by the LLC and/or the Parties until
                  a budget for the current  calendar  year has been  approved by
                  the BOG.  This  budget  shall  itemize  and set  limits on all
                  foreseen  expenditures or in-kind contributions by the LLC and
                  the  Parties  individually  on behalf of the LLC.  The  budget
                  shall establish  pro-forma cash  requirements of the LLC and a
                  pro-forma projection of the estimated capital contributions to
                  be made  by the  respective  Parties  to the  LLC.  Successive
                  annual  budgets  shall be approved by the BOG at least  thirty
                  (30) days prior to the end of the preceding  calendar year. No
                  expenditure  by the LLC  shall be  permitted,  and no  in-kind

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                  contribution  by a party  shall be  recognized  as  admissible
                  unless in accordance  with an approved  budget or subsequently
                  approved by the BOG.

     3.05(b)      The approved budget shall be funded by cash  contributions  on
                  behalf of the Parties as provided in this Sections 3.05(b) and
                  Sections  3.05(c)  3.06,  or by revenues  from  Target  Turkey
                  Companies.  The Parties  hereby commit each year to provide an
                  annual  minimum  capital  contribution  to the  LLC (as may be
                  required  and  agreed by the BOG on the  basis of that  year's
                  budget) and as initially  provided in Sections 3.06 and 13.03.
                  Such annual  minimum cash  contributions  by the Parties shall
                  jointly not exceed the aggregate of 1) the actual  expenditure
                  of the LLC for the year and its  current  liabilities  at year
                  end,  2) the total  in-kind  contribution  of the  Parties  as
                  invoiced to the LLC during the year,  and unpaid,  and 3) such
                  reasonable level of working capital as the BOG may agree.

     3.05(c)      All   approved   out-of-pocket    expenditures   and   in-kind
                  contributions by the Parties shall be invoiced monthly by each
                  contributing  party to the LLC and  recognized  as an  advance
                  capital  contribution  of  the  respective  parties  to  their
                  Capital   Account  as   contemplated   by  Section   15.  Cash
                  contributions  as may be  required  of any Party  may,  at the
                  election  of that Party,  be  contributed  net of  outstanding
                  invoices  due to such Party from the LLC.  Cash  contributions
                  received  by the LLC shall be  immediately  used to  reimburse
                  invoiced  payables to the Parties to the extent such  payables
                  are not offset net in that Party's cash contribution.

     3.05(d)      At  the   request   of  a  Party   contributing   a   non-cash
                  contribution, approved non-cash contributions incurred by such
                  Party and invoiced by such Party to the LLC, shall be credited
                  by the LLC as one-half of such approved  in-kind  contribution
                  to the contributing Party's capital account, and shall invoice
                  the  other   Party  for  the  other   half  of  such   in-kind
                  contribution,  (whereupon  such  other  Party  shall  pay such
                  amount to the LLC within thirty (30) days), and shall pay such
                  contributing  Party  the  other  half  in  reimbursement  from
                  current  cash  resources or from the receipt of the funds from
                  the other  Party.  The  remittance  of such funds by the other
                  Party to the LLC shall be  credited  to that  Party's  Capital
                  Account.

     3.06         No  contribution  of either  Party  shall be  recognized  as a
                  contribution to the LLC if (a) incurred prior to the formation
                  and  establishment  of the LLC or (b) not approved by the BOG.
                  The Parties  hereby  commit to  provide,  jointly and in equal
                  shares, an initial capital  contribution of up to Five Hundred
                  Thousand Dollars ($500,000) for expenses as may be approved by
                  the BOG on an  as-required  basis.  Upon the execution of this
                  Agreement,  the Parties  will each  contribute  Five  Thousand
                  Dollars  ($5,000)  to  the  LLC  to be  deposited  into a bank
                  account held by the LLC and  subsequently,  the remaining Four
                  Hundred Ninety Thousand  Dollars  ($490,000) shall be provided
                  as  required  within  thirty  (30)  days of the LLC  incurring
                  approved   expenditures   or  being   invoiced   for  approved
                  expenditures or contributions by the Parties.

ESTABLISHMENT OF LLC OPERATING GROUP

4.01              MMI  and  Willmar  shall  forthwith  upon  execution  of  this
         Agreement  establish a three person Operating Group (OP) which shall be
         overseen  and  directed by the BOG.  The Manager of the LLC OP shall be
         the MMI Vice  President  of Business  Development  (or,  upon and after
         launch of product marketing and selling,  such other governor as may be
         selected by the BOG). The Manager is responsible for  facilitating  day
         to day operations  within the LLC. The Manager shall also be a governor
         on the BOG. Each Party shall appoint one technical person to the OP.

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                  And from the  effective  date of this  agreement  the  initial
         appointments of the Parties to the OP are as follows:

                      MMI                                           WILLMAR

         Linda Yaswen, Ph.D.             Manager

         Ronald L. Stotish, Ph.D.        Technical                  Daryl Emery

 4.02             All meetings of the OP shall be conducted, as required,  based
         upon the call of the Manager or Willmar's technical representative with
         not less than one week's  notice.  Meetings  of the OP shall  alternate
         between the offices of the  Parties (or be  conducted  telephonically).
         Each  Party  shall be  responsible  for their own  respective  costs in
         attending  and  participating  in  OP.meetings.  As much as  practical,
         communication between the Parties of the OP shall be effected regularly
         by phone,  fax, and other  similar  communication,  so as to foster the
         regular open exchange of information and  collaboration  between OP and
         the Parties  respective  personnel.  The Parties  acknowledge and agree
         that either Party and their  representatives may upon reasonable notice
         and a  non-disturbance  basis visit the facilities of the other to view
         and inspect those activities carried on for the LLC in such facilities.

 4.03             At its earliest opportunity, the OP shall evaluate the MMI and
         Willmar  Myostatin(TM)  technology  for purposes of  determining  their
         respective  ability  to improve  production  efficiency,  enhance  meat
         quality,  or both. The evaluation shall lead to a recommendation to the
         BOG with a preferred course of action.

 4.04             The OP shall  evaluate  the various  product  development  and
         Registration  steps and establish  responsibilities  of the  respective
         Parties as to conduct of the work and the appropriate budget allocation
         for each step of product  development and  Registration as provided for
         in Section 3.05(a). Such budget allocation shall reflect the reasonable
         costs  expected  to  be  incurred  by a  Party  or  its  affiliates  in
         performing its obligations hereunder including overhead,  but excluding
         profit. The evaluation shall lead to a recommendation to the BOG with a
         preferred course of action and proposed budget.

LICENSES OF TECHNOLOGY TO THE LLC

 5.01             Willmar  hereby  licenses  to the LLC all  Willmar  Technology
         together    with    any    and   all    improvements,    continuations,
         continuations-in-part,  reissuances,  and related foreign filings which
         may come into Willmar's  possession in respect to the Licensed Field of
         Use such that the LLC shall be  exclusively  entitled to practice  such
         Willmar  Technology in the Licensed Field of Use in the  Territory.  In
         respect to any of the Willmar  Technology which is subject of a license
         from a third party, Willmar shall sublicense such subject matter to the
         LLC in a separate sublicense  agreement.  In such sublicense the LLC is
         solely  responsible  for  all  third  party  payments,   benefits,   or
         consideration  which shall become payable  pursuant to such licenses to
         any third party.  Willmar agrees that it shall in respect of any patent
         applications,  patent filing or  prosecutions  diligently  maintain and
         prosecute such patent applications,  patent filings, or prosecutions at
         its  own  expense  except  as  otherwise  permitted  by  the  OP.  Such
         maintenance,  application,  or  prosecution  costs and any third  party
         payments  or  benefits  incurred  by  Willmar  in  connection  with the
         sublicenses   hereinbefore  referred  to  shall  not  constitute  costs
         constituting contribution to the LLC by Willmar.

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5.02
                  MMI hereby  licenses  to the LLC all MMI  Technology  together
         with any and all  improvements,  continuations,  continuations-in-part,
         reissuances,  and  related  foreign  filings  which may come into MMI's
         possession  in respect to the  Licensed  Field of Use such that the LLC
         shall be  exclusively  entitled to practice such MMI  Technology in the
         Licensed  Field of Use in the  Territory.  In respect to any of the MMI
         Technology  which is subject of a license from a third party, MMI shall
         sublicense  such  subject  matter to the LLC in a  separate  sublicense
         agreement.  In such  sublicense the LLC is solely  responsible  for all
         third party  payments,  benefits or  consideration  which shall  become
         payable  pursuant to such licenses to any third party.  MMI agrees that
         it shall in  respect of any patent  filing or  prosecutions  diligently
         maintain and prosecute such patent  applications,  patent  filings,  or
         prosecutions  at its own expense  except as otherwise  permitted by the
         OP. Such maintenance,  application,  or prosecution costs and any third
         party  payments or  benefits  incurred  by MMI in  connection  with the
         sublicenses   hereinbefore  referred  to  shall  not  constitute  costs
         constituting contribution to the LLC by MMI.

5.03.             The LLC shall pay any and all  royalties  due to the licensors
         of any Willmar  Technology and any MMI Technology,  respectively,  from
         sales of the LLC.  Willmar and MMI shall each be  responsible  to their
         respective  licensors for any and all  non-species  specific  milestone
         payments,    non-species    specific   license   fees,    patent   cost
         reimbursements, and the like.

SHARING INFORMATION

6.01

                  MMI and Willmar shall freely exchange all relevant information
         (except as the disclosure of such information may be restricted by such
         Party's confidentiality  agreements with other entities),  i.e. between
         MMI and LLC and between  Willmar and LLC. Such  information may benefit
         MMI for  instance  if the LLC had turkey  MyoVax(TM)  information  that
         would assist MMI in the  development of MyoVax(TM)  for  chicken/swine.
         Conversely,  information  on  Chicken  MyoXtra(TM)  might  help  Turkey
         MyoXtra(TM)  development.  Willmar,  for example,  might have  breeding
         information that it has developed that might help the LLC and may learn
         from  the  LLC  experience   breeding  approaches  helpful  to  Willmar
         generally.  However,  other  than for  research  and  development,  and
         ultimately  commercialization  purposes  for LLC Product and  Services,
         this  sharing  of  information  shall  not give MMI any  rights  to use
         Willmar's  proprietary  breeding  technology  and patents and shall not
         give Willmar any rights to use MMI's proprietary  Myostatin(TM) (GDF-8)
         or other technology or patents Any commercial exploitation performed by
         the LLC and/or MMI of Willmar's breeding technology must be approved by
         Willmar.

6.02              The  Parties  acknowledge  that the  Existing  Confidentiality
         Agreement shall control all  disclosures  from its effective date up to
         and until the Effective Date of this Agreement.  The Parties agree that
         the Existing  Confidentiality  Agreement is hereby superseded as of the
         Effective  Date of this Agreement by the terms and conditions set forth
         in this Section 6.02 and the other  applicable terms and conditions set
         forth in this Agreement, as follows:

                  (a)      The  Parties  acknowledge  that  during the course of
                           this  Agreement  they may  each  receive  (and  hence
                           become  a  "Receiving  Party")  from the  other  (the
                           "Disclosing  Party") information  electronically,  in
                           writing,   or  orally,  that  is  proprietary  and/or
                           confidential   and  of   commercial   value   to  the
                           Disclosing  Party.  The Parties agree that they shall
                           take all  reasonable  measures to protect the secrecy
                           of and avoid  disclosure and  unauthorized use of the
                           Confidential   Information.   Without   limiting  the
                           foregoing,  the  Parties  shall  take at least  those
                           measures   that  each  takes  to   protect   its  own
                           confidential  information of a similar nature, but in
                           no event less than a reasonable  degree of care. Both
                           Parties  shall  immediately  notify  the other in the
                           event either Party has knowledge of any  unauthorized
                           use or

                                       9
<PAGE>

                           disclosure of the  Confidential Information.

                  (b)      Except to the extent expressly authorized by this
                           Agreement, the Parties agree that the Receiving Party
                           shall keep confidential and shall not publish or
                           otherwise disclose, and shall not use for any
                           purpose, any Confidential Information furnished to it
                           by the Disclosing Party pursuant to this Agreement,
                           regardless of the medium on which it is provided,
                           including know-how, except to the extent that it can
                           be established by the Receiving Party by competent
                           proof that such information:

                           (i)      was already  known to the  Receiving  Party,
                                    other   than   under   an    obligation   of
                                    confidentiality,  at the time of  disclosure
                                    by the Disclosing Party;

                           (ii)     was   generally   known  to  the  public  or
                                    otherwise  part of the public  domain at the
                                    time  of its  disclosure  to  the  Receiving
                                    Party;

                           (iii)    became generally  available to the public or
                                    otherwise  part of the public  domain  after
                                    its  disclosure  through  no  fault  of  the
                                    Receiving Party, or its Affiliates.

                           (iv)     was subsequently  lawfully  disclosed to the
                                    Receiving Party by a Third Party who did not
                                    require  the  Receiving  Party to hold it in
                                    confidence or limit its use, provided it was
                                    not  obtained  by such Third  Party under an
                                    obligation  of  confidentiality  directly or
                                    indirectly from the Disclosing Party; or

                           (v)      was independently discovered or developed by
                                    the  Receiving  Party without the use of the
                                    Disclosing Party's Confidential Information,
                                    as  can be  documented  by  written  records
                                    created  at the  time  of  such  independent
                                    discovery or development.

6.03     PERMITTED DISCLOSURES.

                  (a)      Subject  to Section  6.02,  the  Receiving  Party may
                           disclose   the   Disclosing   Party's    Confidential
                           Information to the extent such disclosure is required
                           for  complying  with  applicable  laws,  regulations,
                           and/or  court  or  administrative  orders;   provided
                           however,  that in each case described in this Section
                           6.03,  the  Receiving  Party shall (i) promptly  give
                           advance  notice  to  the  Disclosing  Party  of  such
                           disclosure requirement;  (ii) promptly provide a copy
                           of   the   proposed   disclosure;   and   (iii)   use
                           commercially  reasonable  efforts  in  assisting  the
                           Disclosing  Party to secure  confidential  treatment,
                           including a protective  order, for such  Confidential
                           Information required to be disclosed.

                  (b)      The  Receiving  Party  may  disclose  the  Disclosing
                           Party's  Confidential  Information  to the  Receiving
                           Party's  employees,  contractors,  or consultants who
                           (i) have a  need-to-know,  and  (ii)  are  party to a
                           confidentiality and non-disclosure agreement with the
                           Receiving    Party    prohibiting    such   employee,
                           contractor,  or consultant  from  disclosing or using
                           Confidential  Information  in the manner and with the
                           same  degree  of care as set  forth  in this  Section
                           6.02.  Each such  disclosure  shall be limited in the
                           scope of information provided if such recipient has a
                           need to know only specific information.

                                       10
<PAGE>

                  (c)      Either   Party,   as  is  customary  or  required  in
                           accordance with securities law and practice, but only
                           to  the  extent  so   necessary,   may  disclose  the
                           existence  or terms of this  Agreement.  In the event
                           either Party so desires to make such a disclosure  to
                           an investor or in a public  filing,  such Party shall
                           (a)   include   only   such   information   that   is
                           specifically required or requested.

                  (d)      The  Receiving  Party,  to  the  extent  required  or
                           useful, may disclose Confidential  Information in any
                           patent  filing  made  under  or  envisioned  by  this
                           Agreement.

                  (e)      Any confidentiality agreement under this Section 6.03
                           with any Third  Party  shall  have at last such terms
                           and be as strict as Sections 6.02 - 6.07.

6.04     COPIES

                  A Receiving  Party shall not make any copies of the Disclosing
         Party's Confidential  Information without the prior written approval of
         the Disclosing Party or in strict  accordance with Section 6.03, except
         that the Parties may make copies that are reasonably  necessary for its
         internal planning for the commercialization,  marketing,  sale, and use
         of  products  for  the  conduct  of  any   regulatory   approval,   and
         manufacturing.  Notwithstanding the foregoing,  the Receiving Party may
         retain  one (1)  sealed  copy of the  Disclosing  Party's  Confidential
         Information solely for legal archival purposes.

6.05     PUBLICATION

                  Any  Publications  shall  not  include  any of the  Disclosing
         Party's  Confidential  Information without the Disclosing Party's prior
         written consent and shall include appropriate  recognition of the other
         Party's  contributions  in  accordance  with the standard  practice for
         assigning    scientific   credit,    either   through   authorship   or
         acknowledgement as may be appropriate.

                  (a)      JOINT  PUBLICATION.  In the  event  that the  Parties
                           agree to jointly prepare a Publication of the results
                           of any  turkey-related  research and development in a
                           mutually  acceptable  scientific  journal the Parties
                           shall (i) jointly draft such Publication  through the
                           research    representatives;    (ii)   prepare   such
                           Publication  within a mutually  agreed upon time; and
                           (iii)  have  such  joint  Publication   reviewed  and
                           approved  by  the  duly  authorized  officers  of the
                           Parties  prior to  submission  of the  article to the
                           agreed  upon  scientific  journal.  Except  by mutual
                           consent,  neither  Party shall  release or  otherwise
                           transfer  any of the results  from any  research  and
                           development to any Third Party or the public prior to
                           the  date on which  such  joint  Publication  will be
                           released.

6.06     PUBLIC ANNOUNCEMENTS

                  (a)      Except  as  may  otherwise  be  required  by  law  or
                           regulation,  neither  Party  shall  make  any  public
                           announcement,  directly or indirectly, concerning the
                           existence or terms of this  Agreement (or the subject
                           matter hereof) without obtaining the prior consent of
                           the  other  Party  under  Section  6.06(b);  it being
                           envisioned,  however,  that there shall be an initial
                           public   announcement   of  the   existence  of  this
                           Agreement.

                  (b)      Unless  otherwise  agreed  upon by the  Parties,  the
                           reviewing  Party shall have ten (10) business days to
                           consent (or decline to consent) to an initial  public
                           announcement  concerning  the  existence  or terms of
                           this Agreement (or the subject matter  hereof),  such
                           consent not to be unreasonably withheld or delayed.

                                       11
<PAGE>

                           The aforegoing "reasonable" standard of consent shall
                           not  apply  to  a  proposed   public   disclosure  of
                           Confidential Information,  which may be prohibited by
                           the  Disclosing   Party  in  its  sole  and  absolute
                           discretion.

                  (c)      If either Party shall be required by law or
                           regulation to make a public announcement concerning
                           the existence or terms of this Agreement, such Party
                           shall (a) include only such information in the public
                           announcement that is specifically required, and (b)
                           give at least forty-eight (48) hours prior advance
                           notice to the other Party and obtain the other
                           Party's comments.

6.07     EQUITABLE RELIEF

                  MMI and Willmar, in their role as Receiving Parties under this
         Agreement, hereby acknowledge and agree that with respect to the nature
         of the Confidential Information, there may be no adequate remedy at law
         for any  breach  of their  obligations  as  Receiving  Party  under the
         confidentiality  provisions of this Agreement, that any such breach may
         result in  irreparable  harm to the  Disclosing  Party,  and therefore,
         notwithstanding Section 17.10, that upon any such breach the Disclosing
         Party  shall be  entitled  to seek  equitable  relief,  in  addition to
         whatever remedies it might have at law,  including  injunctive  relief,
         specific performance,  or such other relief as the Disclosing Party may
         request to enjoin or otherwise  restrain any act prohibited  hereby, as
         well as the recovery of all  reasonable  costs and expenses,  including
         attorneys' fees incurred.

OWNERSHIP OF INTELLECTUAL PROPERTY

7.01              In any  event,  (1)  MMI  shall  exclusively  own  any  patent
         improvements to its Myostatin(TM)  (GDF-8) technology and/or additional
         or improved  know-how  relating to such  technology and MMI may use any
         data produced by the Research in the prosecution of its existing patent
         applications   and  (2)  Willmar  shall   exclusively  own  any  patent
         improvements  to  its  hatching,   breeding,   and  commercial  growing
         technology  and/or  additional  or improved  know-how  relating to such
         technology  (and  not  related  to  passive  immunization  to  diminish
         Myostatin(TM)   activity).  In  addition,  any  joint  inventions  (not
         relating to  Myostatin(TM)  (GDF-8) or  hatching,  breeding and growing
         technologies  and not  constituting  an  improvement  upon any  Party's
         patent  estate)  shall  be  owned  by the LLC  but  shall  be  licensed
         royalty-free to MMI if useful to its Myostatin(TM) (GDF-8) products and
         services  and/or  licensed  royalty-free  to  Willmar  if useful to its
         production or to turkey-related products and services.

NON-COMPETITION

8.01              Subject to Section 9 below,  the  Parties  covenant  and agree
         that  during  the  continuance  of this  Agreement  and the  conduct of
         business by the LLC that neither of them in the Territory  shall alone,
         or in  conjunction  with any  other  person,  whether  as  shareholder,
         advisor,  employee or in any other capacity  develop or market biologic
         products in the Licensed Field of Use in the Territory if such products
         would be  competitive  with the Products and Services for which the LLC
         has  obtained   Registration  in  any  such  jurisdiction   within  the
         Territory.  The LLC shall obtain similar agreements in favor of the LLC
         from their respective affiliates.

MARKETING ENTITLEMENTS--

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<PAGE>

9.01              The BOG shall  appoint  individuals  from MMI and  Willmar  to
         jointly   pursue   and   offer   "Combined    Funding   and   Licensing
         Agreements(s)",  similar in nature to the agreements achieved by MMI in
         the chicken industry, with the "Target Turkey Companies," as follows:

                  a)       The LLC shall  have  exclusive  rights to offer  such
                           Combined  Funding  and  Licensing   Agreement(s)  for
                           Products and Services  covered in the Licensed  Field
                           of Use within  the  Territory  to the  Target  Turkey
                           Companies.  It is the  intent of the LLC to capture a
                           minimum of 30% of the value added by the Technology.

                  b)       The LLC shall  offer to the Target  Turkey  Companies
                           two Funding and  Licensing  alternatives:  (1) Direct
                           Cash Contribution for Licensing  Agreement and/or (2)
                           Funding  method  that  allows   licensing  rights  by
                           funding the LLC through a "Premium" paid per poult by
                           the Target Turkey Companies for poults purchased from
                           Willmar  and/or  Ag Forte,  LLC,  and/or  for  poults
                           placed  and/or  sold by Willmar  and its  Affiliates.
                           Such Premium per poult and any  associated  up front,
                           milestone,  equity or other  development or incentive
                           payments  shall be collected by Willmar and Ag Forte,
                           LLC on behalf of the LLC and  forwarded to the LLC on
                           a monthly basis.

                  c)       The BOG shall  approve  and the LLC shall pay for the
                           cost of marketing  and  distribution  of Products and
                           Services  as it  relates  to sales to  Target  Turkey
                           companies  holding a Combined  Funding and  Licensing
                           Agreement,  funding  the LLC either  with direct cash
                           contributions  and/or  through  a  Premium  paid  per
                           poult.

                  d)       MMI shall provide Products and Services to the LLC on
                           an "at cost" basis (which shall  include a reasonable
                           allocation,  in accordance  with GAAP, of the cost of
                           facilities and other overhead).

 9.02             While it is the intent of the LLC to market in accordance with
         Section 9.01, to the extent that the LLC does not enter into Agreements
         with  customers  as defined in Section  9.01 (a) and Section  9.01 (b),
         Willmar will at its option, after twelve months following  Registration
         of a Product  in the  United  States,  have the  right to enter  into a
         marketing and distribution agreement with the MMI and/or the LLC (which
         agreement  shall be  acceptable to each Party) for the  Product(s)  and
         Services  covered in the Licensed Field of Use for North America (i.e.,
         The United States,  Canada, and Mexico). This marketing agreement shall
         aim to  capture a minimum of 30% of the value  added by the  Technology
         and provide among other matters  normally  subject of such an agreement
         as follows:

                  a)       Willmar will make all diligent efforts to develop the
                           market for and market the Product  and/or  Service in
                           North  America in  consideration  for a marketing fee
                           approved by the BOG which shall  include a reasonable
                           allocation,  in accordance  with GAAP, of the cost of
                           facilities and other  overhead.  All Revenue  arising
                           from such  marketing  and  distribution  effort shall
                           accrue to the benefit of the LLC.

                  b)       The Marketing  and  Distribution  Agreement  shall be
                           exclusive  in respect to Willmar  for North  America,
                           with exception of any marketing performed directly by
                           the LLC to target  turkey  customers  as described in
                           Section 9.01(a) and Section 9.01 (b).

                  c)       MMI will not license and/or agree to any other party,
                           including MMI itself,  to import the product(s)  from
                           other  countries  and/or to market from within  North
                           America in competition with the LLC and/or as long as
                           Willmar  is  maintaining   exclusive   Marketing  and
                           Agreement  as  specified in Section 9.02 (b) and 9.02
                           (d).

                                       13
<PAGE>
                           cannot be reached,  the LLC thereafter (for up to one
                           year) shall be entitled to negotiate a Marketing  and
                           Distribution  Agreement on same terms or better terms
                           (i.e.,  more  favorable  to  the  LLC)  with  another
                           entity.  However,  if the LLC desires to enter into a
                           Marketing  and  Distribution  Agreement on terms less
                           favorable to the LLC,  the LLC first must  reinitiate
                           the "first offer" process of this Section 9.02(d).

9.03              MMI retains the exclusive right to market, distribute, license
         such rights,  or otherwise  exploit any and all MMI  Technology  and/or
         Willmar Technology  royalty-free outside of the field. MMI will pay any
         royalty fee to the University of Minnesota for Willmar  Technology used
         outside of the field.  MMI shall be granted a  royalty-free  license to
         any LLC information and know-how for non-field purposes.

MANUFACTURING ENTITLEMENTS

10.01             MMI shall have a right to manufacture or have manufactured the
         Product(s)  and/or Services on behalf of the LLC on commercially  usual
         terms and conditions and at a cost to the LLC equal to that which would
         be  available  to the LLC through  alternative  manufacturers.  If such
         right is  exercised  by MMI,  the term of the  manufacturing  agreement
         between LLC and MMI shall be for an initial five year period  following
         release for sale of the first batch of Product  manufactured  by, or on
         behalf of, MMI. At the expiration of any MMI manufacturing agreement or
         any third party agreement, provided that MMI has given at least six (6)
         months  notice to the LLC and  Willmar,  MMI shall again have the first
         right to manufacture the Product(s).

SPECIFIC RESPONSIBILITIES OF EACH PARTY

11.01             MMI, subject to BOG approval and budgetary requirements, shall
         be  responsible  for providing the LLC with the_  necessary  advice and
         information with respect to Registration requirements for North America
         in respect to Products.

11.02             MMI, subject to BOG approval and budgetary requirements, shall
         be responsible upon  identification of a Product or Products by the LLC
         to prosecute arid diligently pursue Registration of Product at the cost
         of the LLC.

11.03             MMI, subject to BOG approval and budgetary requirements, shall
         be  responsible  for  research  and  Development  of the  Products  and
         Services.

11.04             MMI, subject to BOG approval and budgetary requirements, shall
         be  responsible  for  patent  application  and  maintenance  for  joint
         inventions on behalf of the LLC, at the LLC's cost.

11.05             Willmar,  subject to BOG approval and budgetary  requirements,
         shall be responsible for  supervision  and conduct of pre-clinical  and
         clinical  trials  necessary  and  desirable  for  the  development  and
         Registration  of a Product at the cost of the LLC.  Clinical trials may
         or may not be held at Willmar facilities given regulatory  requirements
         and other regulated trial design requirements.

                                       14
<PAGE>

         be held at Willmar  facilities given regulatory  requirements and other
         regulated trial design requirements.

PARTIES AND PERCENTAGE INTEREST

12.01             The names,  and addresses of the Parties of the LLC are as set
         forth on Schedule 12.01 attached to and made a part of this  Agreement.
         Each Party shall have a percentage interest  ("Interest" or "Percentage
         of  Interest")  in the LLC as set forth  opposite  his name on Schedule
         12.01.  Additional  persons may be admitted to the LLC upon the consent
         of all of the Parties (in their sole  discretion) and on such terms and
         conditions  as  shall be  agreed  upon by all the  Parties  and any new
         Parties.  Unless  otherwise  agreed (or as may occur in accordance with
         Section 13.03), the percentage  interest of each Party in the LLC shall
         be 50%, and all capital contributions to the LLC shall be funded 50% by
         each Party.

CAPITAL AND LOANS

13.01             The  Parties,  in  accordance  with  Section  3.06,  have made
         initial  capital  contributions  in  cash to the  LLC as set  forth  on
         Schedule 13.01.

 13.02            No  additional  Capital  Contributions  have been agreed to be
         made by any Party  (except  as set forth in  Section  3.06 and  Section
         13.03). The Parties shall make additional contributions and/or loans to
         the LLC at such time or times, and upon such conditions, as the Parties
         may determine or in accordance with Section 3.06 and in Section 13.03.

 13.03            If, as, and when the Board of Governors  approves budgets,  in
         accordance with Sections 3.01 and 3.05(a),  each Party shall provide up
         to $500,000 per  calendar  year (or such  alternative  amount as may be
         agreed under section 3.05(a)) to support and fund such budgets (whether
         in the form of in-kind  effort and/or cash, as may be determined by the
         BOG) for at least five (5) years  (with the  contribution  mandated  by
         Section  3.06 being deemed to be the  contribution  for the year 2002).
         The minimum  $2,500,000 per Party commitment shall continue beyond five
         (5) years (but not beyond 2011 unless Parties  mutually agree to extend
         this commitment) if the full, cumulative contribution of $2,500,000 per
         Party is not drawn  down  during  the five  year  period.  The  Parties
         acknowledge and agree that this aggregate capital contribution of up to
         Five Million Dollars ($5,000,000) is a presently reasonable estimate of
         the research  and  development,  Registration,  testing  evaluation  of
         Products and Services,  preliminary manufacturing,  and "new invention"
         patent  maintenance  costs for such  period.  In the event that a Party
         fails to contribute an amount mandated by the BOG within the parameters
         established by this Section 13.03 (and paid within the time provided in
         Section  3.06),  the LLC shall (and any  non-defaulting  Party awaiting
         reimbursement  for in-kind  contributions,  on behalf of the LLC,  may)
         provide  notice of default of payment to the defaulting  Party.  In the
         event that the defaulting  Party fails to make a required  contribution
         of additional capital in accordance with this Section 13.03 and Section
         3.05 within thirty (30) days of the notice of default and payment being
         given, the non-defaulting  Party may elect one or more of the following
         courses of action:

                  (a)      To  loan  money  to the  LLC in  such  amount  as the
                           defaulting Party's required contribution, such monies
                           loaned  to bear  interest  at the  rate  of  eighteen
                           percent  (18%)  per  annum  on the  unpaid  principal
                           amount,  until  fully  repaid.  All such  loans  (and
                           interest)  by any  non-defaulting  Party  to the  LLC
                           shall  be  repaid  out  of  the  Available  Cash  (in
                           accordance  with  Section  15) of the LLC  before any
                           defaulting Party shall receive any distribution; or

                                       15
<PAGE>

                  (b)      To  direct  the  LLC  to  withhold  distributions  of
                           Available  Cash to the  defaulting  Party  until  the
                           amount  withheld  equals the amount of capital  which
                           the defaulting Party is required to contribute to the
                           LLC in  accordance  with  this  Section  13.03,  plus
                           interest  at the rate of eighteen  percent  (18%) per
                           annum; or

                  (c)      To  direct  the  LLC  to  treat  the  amount  of  any
                           reimbursement  for  in-kind  effort  not  paid to the
                           non-defaulting  Party as an item to be entered on the
                           books of the LLC as an additional contribution of the
                           non-defaulting  Party,  which  shall be  treated as a
                           preferred  loan and interest in the LLC with interest
                           accruing  at the rate of eighteen  percent  (18%) per
                           annum on the amount of such  additional  contribution
                           per Section 13.03(a) above; or

                  (d)      To direct that the LLC be dissolved (and its business
                           affairs  wound  down) with all MMI  Technology  being
                           returned  to  MMI,  all  Willmar   Technology   being
                           returned to  Willmar,  and the  non-defaulting  Party
                           shall  have  exclusive  license  and right to use any
                           joint inventions.

         If after contributing  $2,500,000,  one Party decides not to contribute
         any  additional  funds,  then the  other  Party  may  elect  one of the
         following courses of action:

                  (a)      To  loan  money  to the  LLC in  such  amount  as the
                           non-paying Party's required contribution, such monies
                           loaned  to bear  interest  at the  rate  of  eighteen
                           percent  (18%)  per  annum  on the  unpaid  principal
                           amount,  until  fully  repaid.  All such  loans  (and
                           interest)  by any  paying  Party to the LLC  shall be
                           repaid out of the Available Cash (in accordance  with
                           Section 15) of the LLC before any Party shall receive
                           any distribution; or

                  (b)      To  direct  the  LLC  to  withhold  distributions  of
                           Available  Cash to the  non-paying  Party  until  the
                           amount  withheld  equals the amount of capital  which
                           the non-paying Party is required to contribute to the
                           LLC in  accordance  with  this  Section  13.03,  plus
                           interest  at the rate of eighteen  percent  (18%) per
                           annum; or

                  (c)      To  direct  the  LLC  to  treat  the  amount  of  any
                           reimbursement  for  in-kind  effort  not  paid to the
                           paying Party as an item to be entered on the books of
                           the LLC as an additional  contribution  of the paying
                           Party, which shall be treated as a preferred loan and
                           interest  in the LLC with  interest  accruing  at the
                           rate of  eighteen  percent  (18%)  per  annum  on the
                           amount of such additional  contribution,  per Section
                           13.03(a) above.

13.04             The Provisions for additional  contributions  are for internal
                  LLC  purposes  and may not be relied on or  exercised by third
                  parties or creditors of the LLC.

CAPITAL ACCOUNTS

14.01             An individual  Capital  Account  shall be maintained  for each
                  Party.  Each Party's  Capital  Account  shall be maintained as
                  provided in Section 15.  Except as otherwise  provided in this
                  Agreement,  no Party  shall be paid  interest  on any  Capital
                  Contribution,  and,  no Party shall have the right to withdraw
                  or  receive  any  return of his  Capital  Contribution.  Under
                  circumstances  requiring a return of any Capital Contribution,
                  no Party shall have the right to receive  property  other than
                  cash, except as provided in Sections 15.01(a) and 15.01(c).

                                       16
<PAGE>

                  Increases or decreases to a Party's  Capital Account shall not
                  affect a Party's Percentage of Interest.

PROFITS, LOSSES, AND DISTRIBUTIONS

15.01             DEFINED TERMS.

                  For purposes of this Agreement, the following terms shall have
         the meaning specified unless the context otherwise requires:

         a)       ADJUSTED   CAPITAL    CONTRIBUTIONS   --   "Adjusted   Capital
                  Contributions"  means,  for each Party,  such Party's  Capital
                  Contributions  to the LLC, reduced (but not below zero) by the
                  amount  of cash and the net  fair  market  value of any  other
                  asset  distributed to such Party pursuant to Section  15.03(c)
                  and Section 15.04 hereof.
                  AVAILABLE CASH -- "Available Cash" means,  with respect to any
                  taxable  year of the LLC,  at the time of  determination,  the
                  LLC's  remaining  cash after the payment of costs and expenses
                  and  payments  on LLC's debts  reduced by such  amounts as the
                  Parties  by the  affirmative  vote of all the  Parties  and as
                  approved by the BOG, shall deem  reasonably  necessary to meet
                  reasonably anticipated expenditures or liabilities of the LLC,
                  including,  but not limited  to,  reasonable  future  budgeted
                  expenditure, debts to Parties who are creditors of the LLC and
                  reserves for replacements  and capital  improvements for which
                  adequate   provision  has  not  otherwise  been  made  in  the
                  reasonable  judgment of the Parties.  Available Cash shall not
                  include  proceeds from Capital  Transactions  or the amount of
                  Parties' Capital Contributions.
                  CAPITAL ACCOUNT -- "Capital Account" means, as in the books of
                  the LLC for any Party, the Capital Contribution  actually made
                  by that Party,  less all Profit  allocated to that Party,  and
                  plus the sum of (I) all Loss allocated to that Party, (ii) the
                  amount of cash and the fair  market  value of any other  asset
                  distributed  to that  Party  (net of  liabilities,  assumed or
                  taken  subject  to by such  Party),  and  (iii)  such  Party's
                  distributive  share of all other  expenditures  of the LLC not
                  deductible  in computing  its taxable  income and not properly
                  chargeable  as  additions to the basis of LLC  property.  Each
                  Party's  Capital Account shall be determined and maintained in
                  accordance with the Treasury Regulations adopted under Section
                  704(b) of the Code. Any questions concerning a Party's Capital
                  Account  shall be resolved by applying  principles  consistent
                  with this Agreement and the Treasury Regulations adopted under
                  Section   704  of  the  Code  in  order  to  ensure  that  all
                  allocations  to the  Parties  will have  substantial  economic
                  effect or will  otherwise be respected for federal  income tax
                  purposes.
         d)       CAPITAL CONTRIBUTION -- "Capital Contribution" means the total
                  amount of cash and the fair market  value (net of  liabilities
                  assumed or taken  subject to by the LLC),  as  approved by the
                  BOG, of any other assets  contributed  (or deemed  contributed
                  under Treasury  Regulations Section  1.704-1(b)(2)(iv)(d))  to
                  the LLC by a Party.
         e)       CAPITAL  PROCEEDS  --  "Capital   Proceeds"  means  the  gross
                  receipts  received by the LLC from a Capital  Transaction  and
                  the amount of the Parties' Capital Contributions.
         f)       CAPITAL  TRANSACTION -- "Capital  Transaction" means the sale,
                  exchange, financing,  refinancing,  condemnation,  casualty or
                  other disposition of all, or substantially  all, of the assets
                  of the LLC.
         g)       CODE-  "Code"  means the  Internal  Revenue  Code of 1986,  as
                  amended or any corresponding Section of any succeeding law.
         h)       MINIMUM  GAIN --  "Minimum  Gain" has the meaning set forth in
                  Treasury Regulations Section 1.704-2(d). Minimum Gain shall be
                  computed  separately  for  each  Party,   applying  principles
                  consistent with both the foregoing definition and the Treasury
                  Regulations promulgated under Section 704 of the Code.
         i)       NEGATIVE CAPITAL ACCOUNT -- "Negative Capital Account" means a
                  Capital Account with a balance less than zero.
         j)       POSITIVE CAPITAL ACCOUNT -- "Positive Capital Account" means a
                  Capital Account with a balance greater than zero.

                                       17
<PAGE>

         k)       PROFIT AND LOSS --  "Profit  and Loss"  means for each  fiscal
                  year (which  shall be the same as the LLC's  taxable  year) or
                  other period,  an amount equal to the LLC's taxable  income or
                  loss for such year or period,  determined in  accordance  with
                  Code Section  703(a) (for this  purpose,  all items of income,
                  gain,  loss,  or  deduction  required to be stated  separately
                  pursuant  to Code  Sections  703(a)(1)  shall be  included  in
                  taxable  income or loss and  inclusive of interest  expense on
                  loans arising under Section 13); [provided,  however,  that in
                  the event the Treasury  Regulations  promulgated under Section
                  704 of the Code  require  book  value of  assets to be used in
                  determining  profit or loss, then, for purposes of maintaining
                  Capital Accounts in accordance with such Treasury Regulations,
                  the taxable  income or loss shall be  computed  using the book
                  value of the assets.]
         1)       RESTORATION AMOUNT -- "Restoration Amount" means, with respect
                  to each Party,  (a) the Party's share of Minimum Gain, and (b)
                  the  amount,  if  any,  which  the  Party  is  unconditionally
                  required  under this  Agreement or by law to contribute to the
                  LLC (including the Party's share of debts of the LLC which the
                  Party has guaranteed and the outstanding  amount of loans made
                  by the Party to the LLC,  in each case only to the extent that
                  the Party does not have a right of  contribution  from another
                  Party).

15.02             ALLOCATION OF PROFIT OR LOSS FROM OPERATIONS AND DISTRIBUTIONS
                  OF AVAILABLE CASH.

         a)       AVAILABLE  CASH.  For any taxable  year of the LLC,  Available
                  Cash shall be  distributed  to the  Parties in  proportion  to
                  their respective Percentages of Interest.

         b)       TAXABLE  INCOME OR TAXABLE  LOSS.  For any taxable year of the
                  LLC,  Profit or Loss (other than Profit or Loss resulting from
                  a Capital Transaction, which Profit or Loss shall be allocated
                  in accordance  with the  provisions  of Sections  15.03(a) and
                  15.03(b))  shall  be  allocated  equally  to  the  Parties  in
                  proportion  to  their  respective   Percentages  of  Interest;
                  provided,  however,  that an  amount  of  Profit  equal to the
                  aggregate amount of Losses previously allocated to the Parties
                  shall first be allocated in proportion to the amount of Losses
                  previously allocated to the Parties until the aggregate Profit
                  allocated  pursuant to this proviso is equal to the  aggregate
                  Losses previously allocated to the Parties.

         c)       SPECIAL  ALLOCATIONS.  Notwithstanding  any other provision to
                  the contrary in this Agreement, the following provisions shall
                  apply:

                           (1)  QUALIFIED  INCOME  OFFSET.  No  Party  shall  be
                  allocated  Losses or  deductions if such  allocation  causes a
                  Party's  Negative Capital Account to increase in excess of the
                  Party's Restoration Amount (any such Loss shall be reallocated
                  to those Parties whose Capital Accounts are not Negative in an
                  amount  in excess of their  Restoration  Amount in  accordance
                  with  their  respective  share of Loss as set forth in Section
                  15.02(b)).  If a Party  receives (1) an  allocation of Loss or
                  deduction (or item thereof) or (2) any LLC distribution, which
                  causes such Party to have a Negative Capital Account in excess
                  of its  Restoration  Amount or  increase  a  Party's  Negative
                  Capital  Account at the end of any LLC taxable  year in excess
                  of its Restoration  Amount,  then all items of income and gain
                  of the LLC  (consisting  of a pro rata portion of each item of
                  LLC income,  including gross income and gain) for such taxable
                  year  shall be  allocated  to such  Party,  before  any  other
                  allocation  is made of LLC items for such taxable year, in the
                  amount and in proportions required to eliminate such excess as
                  quickly as possible.  This Section  15.02(c)(1) is intended to
                  comply with, and shall be interpreted  consistently  with, the
                  "qualified   income   offset"   provisions   of  the  Treasury
                  Regulations promulgated under Section 704(b) of the Code:

                           (2)  MINIMUM  GAIN  CHARGEBACK.  If  there  is a  net
                  decrease in the Minimum  Gain  during any taxable  year,  then
                  each Party shall first be allocated  all items of gross income

                                       18
<PAGE>

                  and gain of the LLC for such taxable year (and,  if necessary,
                  for subsequent  taxable years) in an amount equal to the total
                  net  decrease in the LLC's  Minimum  Gain  multiplied  by that
                  Party's  percentage of the LLC's  Minimum Gain (as  determined
                  pursuant to Treasury Regulations Section 1.704-2(g) at the end
                  of the  immediately  preceding  taxable  year).  This  Section
                  15.02(c)(2)   is  intended  to  comply  with,   and  shall  be
                  interpreted  consistently  with, the "minimum gain chargeback"
                  provisions  of  the  Treasury  Regulations  promulgated  under
                  Section 704(b) of the Code.

15.03    ALLOCATION   OF  PROFIT  OR  LOSS  FROM  A  CAPITAL   TRANSACTION   AND
         DISTRIBUTION OF CAPITAL PROCEEDS.

         a)       TAXABLE  INCOME.  Profit from a Capital  Transaction  shall be
                  allocated as follows:

                  (1)      If  one  or  more  Parties  has  a  Negative  Capital
                           Account,  Profit from a Capital  Transaction shall be
                           allocated  first to those  Parties,  in proportion to
                           their Negative Capital  Accounts,  until all Negative
                           Capital Accounts have been increased to zero; then

                  (2)      Any  remaining  Profit  not  allocated   pursuant  to
                           Section  15.03(a)(1) shall be allocated to the extent
                           necessary so that the Capital Account balances of the
                           Parties  are equal to the  amounts  distributable  to
                           them pursuant to Section  15.03(c) (this  calculation
                           shall  assume that the Capital  Transaction  does not
                           result  in the  dissolution  of the  LLC  even if the
                           Capital Transaction does result in the dissolution of
                           the LLC).

         b)       TAXABLE  LOSS.  Loss  from  a  Capital  Transaction  shall  be
                  allocated as follows:

                           (1) If one or more  Parties  has a  Positive  Capital
                  Account,  Loss from a Capital  Transaction  shall be allocated
                  first to  those  Parties,  in  proportion  to  their  Positive
                  Capital  Accounts,  until-all  Positive  Capital Accounts have
                  been reduced to zero; then

                           (2)  Any  remaining  Loss  not  allocated  to  reduce
                  Positive   Capital   Accounts  to  zero  pursuant  to  Section
                  15.03(b)(1) shall be allocated to the Parties in proportion to
                  their respective Percentages of Interest.

         c)       CAPITAL PROCEEDS. Distributions of net Capital Proceeds (after
                  repayment of all debts and  liabilities of the LLC,  including
                  loans from Parties, and the establishment of any reserves that
                  all the Parties deem necessary) shall be made in the following
                  order of priorities:

                           (1) First,  to each  Party,  in  'proportion  to each
                  Party's Adjusted Capital Contributions, an amount equal to the
                  amount   of   that   Party's   respective   Adjusted   Capital
                  Contributions; then

                           (2) If one or more  Parties  has a  Positive  Capital
                  Account  before any further  allocation of Profit  pursuant to
                  Section 15.03(a)(2), to those Parties, in proportion to and to
                  the  extent  of  their  respective  Positive  Capital  Account
                  balances; and then

                           (3) The balance to the Parties in proportion to their
                  respective Percentages of Interest.

15.04    LIQUIDATION OR DISSOLUTION.

         In the event the LLC is liquidated or dissolved,  the assets of the LLC
shall be  distributed,  after taking into account the  allocations  of Profit or
Loss pursuant to Sections  15.02 or 15.03,  if any, and prior  distributions  of
cash or property  pursuant to Sections 15.02 or 15.03, if any, to the Parties to
the extent of and in  proportion  to the balances in their  respective  Positive
Capital Accounts.

                                       19
<PAGE>

15.05    GENERAL.

         a)       The  timing  and  amount  of  all  distributions  shall  be as
                  determined  by all of the Parties.  It is the intention of the
                  Parties  that any monies  available  for  distribution  to the
                  Parties be distributed promptly.

         b)       If any  assets of the LLC are  distributed  to the  Parties in
                  kind,  those assets shall be valued on the basis of their fair
                  market value,  and any Party entitled to any interest in those
                  assets shall receive that interest as a tenant-in-common  with
                  all other  Parties so  entitled.  The fair market value of the
                  assets  distributed  in kind shall be determined by the BOG or
                  in the  event  of any  dispute  by a Party  by an  independent
                  appraiser  selected  by all the  Parties  and  paid for by the
                  Party not  accepting  the BOG  valuation.  Based upon the fair
                  market  value,  the Profit or Loss for each unsold asset shall
                  be  determined  as if that  asset  had  been  sold at its fair
                  market  value,  and the Profit or Loss shall be  allocated  as
                  provided in Section  15.03 and shall be  properly  credited or
                  charged to the Capital  Accounts  of the Parties  prior to the
                  dissolution of the assets in  liquidation  pursuant to Section
                  15.04.

         c)       For each taxable year, all Profit and Loss of the LLC shall be
                  allocated  at and as of the  end of  that  taxable  year.  The
                  allocations   of  Profit  and  Loss   shall  be  made   within
                  seventy-five (75) days after the end of such taxable year.

         d)       Except as otherwise  provided ill this Section  15.05(d),  all
                  Profit and Loss shall be allocated,  and all  distributions of
                  cash shall be distributed,  as the case may be, to the persons
                  shown on the records of the LLC to have been Parties as of the
                  last day of the  taxable  year for which  that  allocation  or
                  distribution  is to be made.  Unless all the Parties  agree to
                  separate  the LLC's  taxable  year into  segments,  if the LLC
                  admits a new Party to the LLC or if a Party  sells,  exchanges
                  or otherwise disposes of all or any portion of his Interest to
                  any person  who,  during that  taxable  year is admitted as an
                  additional  or  substitute  Party,  the Profit and Loss shall,
                  except as otherwise provided in the Code, be allocated between
                  the  transferor  and the transferee on the basis of the number
                  of days  of the  taxable  year  in  which  each  was a  Party;
                  provided,  however, that in the event of a Capital Transaction
                  or any  other  extraordinary  nonrecurring  items  of the LLC,
                  Profit,  Loss and  distributions  from  such  events  shall be
                  allocated to the Persons shown on the records of the LLC as of
                  the date of such event.

         e)       The  methods  set  forth  above by  which  Profit,  Loss,  and
                  distributions are allocated,  apportioned, and paid are hereby
                  expressly  consented to by each Party as an express  condition
                  to   becoming  a  Party.   Upon  the  advice  of  the  outside
                  accountants  or of legal  counsel to the LLC,  this Section 15
                  may be  amended  to comply  with the Code and the  regulations
                  promulgated under Section 704 of the Code; provided,  however,
                  that no such  amendment  shall  become  effective  without the
                  consent of those  Parties who would be materially or adversely
                  affected thereby. The Parties agree that the LLC shall use the
                  traditional method for purposes of Section 704(c) of the Code.

BOOKS AND RECORDS

16.01    Adequate accounting records of all LLC business shall be kept and these
         shall be open to inspection by either of the Parties at all  reasonable
         times. Audit of all books and accounting records shall be undertaken by
         a professional "Big Five" auditing company at the request of the BOG at
         the LLC's  expense.Within  seventy-five (75) days after the end of each
         taxable  year and at the expense of the LLC,  the LLC shall cause to be
         prepared a complete accounting of the affairs of the LLC, together with
         whatever appropriate information is required by each Party for the

                                       20
<PAGE>

         purpose  of  preparing  such  Party's  income tax return for that year,
         which accounting and information shall be furnished to each Party

16.02    The LLC shall deliver (and shall cause any  sublicensees to deliver) to
         each Party within thirty (30) days of the end of each calendar quarter,
         a written  report  showing  all sales and other  revenues  during  such
         calendar quarter.

16.03    Until  such time as the LLC  employs a  suitably  qualified  accountant
         independent of the Parties,  MMI will provide, or cause to be provided,
         bookkeeping  and  accounting  services  to  the  LLC.  Such  accounting
         services  shall include all  necessary  returns,  financial  regulatory
         requirements,  LLC tax returns,  quarterly and annual  accounts,  which
         costs thereof,  including reasonable overheads of MMI shall be borne by
         the LLC.

GENERAL PROVISIONS AND TERMINATION

17.01             TERMINATION

                  This Agreement  shall cease and terminate on the occurrence of
         any of the following events, namely:

         (a)      the bankruptcy, receivership, insolvency or dissolution of the
                  LLC; or

         (b)      the execution of an agreement of  termination in writing which
                  has the effect of  terminating  this  Agreement  by all of the
                  Parties to this Agreement,

         providing such termination shall not affect any  entitlements,  rights,
         or obligations which accrued prior to termination.

17.02             NOTICES

               All notices, requests,  demands, payments or other communications
         by the terms of this Agreement required or permitted to be given by one
         Party  to the  other  shall be given in  writing  by  registered  mail,
         postage prepaid or by nationally recognized overnight delivery service;
         addressed or delivered to such other;  in the event that postal service
         is interrupted or substantially delayed,  delivery in person (against a
         signed receipt) only:

         (a)      in the case of Willmar:

                        Willmar Poultry Company, Inc.
                        3735 County Road 5, SW
                        P.O. Box 753
                        Willmar, Minnesota 56201-0753
                        Attention: President

         (b)      in the case of MMI:

                        MetaMorphix, Inc.
                        8510A Corridor Road
                        Savage, Maryland 20763

                                       21
<PAGE>

                        Attention: President

         and  shall be deemed to have  been  effectively  received  on the third
         business day next following the posting thereof,  if mailed, and on the
         day of delivery, if delivered.

17.03             SUCCESSORS AND ASSIGNS

                  This  Agreement  shall  inure to the benefit of and be binding
         upon  the  Parties  and  their  respective  heirs,  successors,   legal
         representatives and assigns, subject to subsection 17.04 hereof.

17.04             PROHIBITION ON ASSIGNMENT

                  This  Agreement may not be assigned,  nor shall the benefit or
         the  burden  thereof  be  assigned,  in whole or in part,  by any Party
         hereto  without the  unanimous  consent of the other Party hereto first
         had and  obtained.  Notwithstanding  anything in the  foregoing  to the
         contrary, either Party may assign its interest and right in the Company
         and this Agreement to any purchaser of all or substantially all of such
         Party's  assets  (or,  in the  case of MMI,  all of  MMI's  turkey  and
         poultry-related  assets).  In the event that  Willmar  sells all of its
         assets  (including  its  interest and rights in this  Agreement)  to an
         entity also involved in bovine,  poultry,  swine,  aquaculture,  and/or
         other livestock  production and/or  processing,  such assignment may be
         conditioned  by  MMI  upon  appropriate  "fire  wall"   confidentiality
         protections,  operational  standards,  and  agreements  being  put into
         place.

17.05             FURTHER AGREEMENT AND INSTRUMENTS

               The Parties  hereto  covenant and agree to execute any instrument
         or  certificate  that may be necessary or  appropriate to carry out the
         purpose and intent of this Agreement.  The Parties further covenant and
         agree  that  they  will do all  things  necessary  and  attend  all BOG
         meetings of the LLC or any other  corporation  and vote thereat in such
         manner  to  give  effect  to this  Agreement.  The  further  agreements
         contemplated in this Agreement shall reflect the provisions' of and the
         intent of this Agreement to the extent applicable.

17.06             NO COUNTERPARTS

                  This Agreement may not be signed in one or more counterparts.

17.07             WAIVER

                  The Parties  covenant  and agree that if either  Party  hereto
         fails or  neglects,  for any reason,  to take  advantage  of any of the
         terms herein  provided for its benefit,  any such failure or neglect by
         such Party  shall not be, nor be deemed to be,  construed  as waiver of
         any of the terms,  covenants,  or conditions  of this  Agreement or the
         performance thereof.

                                       22
<PAGE>

17.08             GOVERNING LAW

         This  Agreement  shall be governed by and construed in accordance  with
         the laws of the State of Delaware.

17.09             FORCE MAIEURE

                  Neither Party of this  Agreement  shall be liable to the other
         for failure or delay in the performance of their obligations under this
         Agreement, by Acts of God, regulations, or laws of any government, war,
         civic  commotion,   strike,   terrorist  attack,   lock-out,  or  labor
         disturbances, destruction of facilities and any materials and equipment
         by fire,  earthquake,  storm,  failure  of public  utilities  or common
         carriers, and any cause beyond the control of that Party for the period
         of  time  that  the  foregoing   prevents   performance.   The  Parties
         acknowledge  and agree  that the  foregoing  does not  operate so as to
         excuse  any Party  from  prompt  payment  of any and all sums due by it
         pursuant to the terms and conditions of this Agreement.

17.10             ARBITRATION

                  The Parties  expressly  acknowledge and agree that it is their
         respective  intention that,  except as otherwise  provided herein,  any
         disputes  arising  between  them  in  the  first  instance  be  settled
         amicably.

                  All disputes and  differences  of any kind arising  under this
         Agreement,  or arising  between the Parties  including the existence or
         continued  existence  of  this  Agreement  and the  arbitrability  of a
         particular issue which cannot be settled amicably by the Parties may be
         referred by either Party to arbitration. The Party desiring to initiate
         arbitration shall serve a written request on the other Party. The Party
         receiving such written request shall designate the locale, being either
         Maryland or Minneapolis, within which arbitration is to take place.

                  The arbitration if conducted in Maryland or Minneapolis  shall
         be finally  settled in accordance  with the Rules of Arbitration of the
         American Arbitration  Association by one or more arbitrators  appointed
         in accordance with the above-mentioned Rules.

                  The decision of the  arbitration  tribunal  shall be final and
         binding  upon the Parties and may be enforced in any court of competent
         jurisdiction,  and no Party shall seek redress against the other in any
         court or tribunal except solely for the purpose of obtaining  execution
         of the  arbitration  award or of obtaining a judgement  consistent with
         the reward.

                  During  any  adjudication  pursuant  to  this  paragraph,  the
         Parties shall continue to fulfill their  respective  obligations  under
         this  Agreement,  unless the subject matter of the dispute is of such a
         nature  that this is by no means  possible  until the  dispute has been
         finally settled.

                  Notwithstanding  the  provision of this  article,  neither (a)
         issues relating to validity or infringement of Patents licensed herein,
         nor (b).disputes involving a third party necessary to be

                                       23
<PAGE>

         included  for  the  complete  resolution  of such  dispute,  nor (c) an
         allegation of a failure of a Party to comply with its obligations under
         8.01 shall be a subject for arbitration.

17.11             ENTIRE AGREEMENT

         This Limited Liability Company Agreement, together with the Certificate
of Formation, constitutes the complete and entire agreement between the Parties,
and  there  are no prior or  contemporaneous  oral or  written  representations,
promises or agreements not expressly referred to herein.  This Limited Liability
Company Agreement may not be altered,  amended, modified or otherwise changed in
any  respect  whatsoever  except by a writing  dated and  signed by the  Parties
hereto.

IN WITNESS WHEREOF,  Willmar has hereunto affixed its corporate seal attested to
by the hands of its duly  authorized  officer  in that  behalf on the 4th day of
September, 2002.

                           WILLMAR POULTRY COMPANY, INC.

                            /s/ Richard Hoisinga
                           -----------------------------------------------
                                    By: Richard Hoisinga
                                    Its: COO

IN WITNESS WHEREOF,  MMI has hereunto executed this agreement attested to by the
hands  of its  duly -  authorized  officer  in  that  behalf  on the  4th day of
September, 2002.

                           METAMORPHIX, INC.

                            /s/ Edwin C. Quattlebaum
                           -----------------------------------------------
                           Edwin C. Quattlebaum, Ph.D., President and CEO

                                       24
<PAGE>

SCHEDULE 1.01(I)

--------------------------------------------------------------------------------
                             SCHEDULE OF MMI PATENTS

--------------------------------------------------------------------------------
    PATENT / APP #            TITLE                 COUNTRY           STATUS

--------------------------------------------------------------------------------
         ***                   ***                     US             Issued
--------------------------------------------------------------------------------
         ***                   ***                 Argentina         Pending
--------------------------------------------------------------------------------
         ***                   ***                   Brazil          Pending
--------------------------------------------------------------------------------
         ***                   ***                   Canada          Pending
--------------------------------------------------------------------------------
         ***                   ***                   Europe          Pending
--------------------------------------------------------------------------------
         ***                   ***                   Japan           Pending
--------------------------------------------------------------------------------
         ***                   ***                   Mexico          Pending
--------------------------------------------------------------------------------
         ***                   ***                New Zealand        Pending
--------------------------------------------------------------------------------
         ***                   ***                South Africa        Issued
--------------------------------------------------------------------------------
         ***                   ***                     US            Pending
--------------------------------------------------------------------------------
         ***                   ***                   World          Published
--------------------------------------------------------------------------------
         ***                   ***                     US            Pending
--------------------------------------------------------------------------------
         ***                   ***                   Canada          Pending
--------------------------------------------------------------------------------
         ***                   ***                   Europe          Pending
--------------------------------------------------------------------------------
         ***                   ***                   Japan           Pending
--------------------------------------------------------------------------------
         ***                   ***                     US            Pending
--------------------------------------------------------------------------------
         ***                   ***                   World           Pending
--------------------------------------------------------------------------------
         ***                   ***                     US            Pending
--------------------------------------------------------------------------------
         ***                   ***                 Australia         National
                                                                      Phase
--------------------------------------------------------------------------------
         ***                   ***                   Brazil          Pending
--------------------------------------------------------------------------------
         ***                   ***                   Canada          Pending
--------------------------------------------------------------------------------
         ***                   ***                   China           Pending
--------------------------------------------------------------------------------
         ***                   ***                   Europe         Published
--------------------------------------------------------------------------------
         ***                   ***                   Japan           National
                                                                      Phase
--------------------------------------------------------------------------------
         ***                   ***                   Mexico          Pending
--------------------------------------------------------------------------------
         ***                   ***                New Zealand        National
                                                                      Phase
--------------------------------------------------------------------------------
         ***                   ***                   World           Pending
--------------------------------------------------------------------------------
         ***                   ***                   Canada          Pending
--------------------------------------------------------------------------------
         ***                   ***                   Canada          Pending
--------------------------------------------------------------------------------
         ***                   ***                   Canada          Pending
--------------------------------------------------------------------------------

<PAGE>

--------------------------------------------------------------------------------
         ***                   ***                   Europe          Pending
--------------------------------------------------------------------------------
         ***                   ***                   Japan           Pending
--------------------------------------------------------------------------------
         ***                   ***                     US            Allowed
--------------------------------------------------------------------------------
         ***                   ***                     US            Pending
--------------------------------------------------------------------------------
         ***                   ***                     US            Pending
--------------------------------------------------------------------------------
         ***                   ***                     US            Pending
--------------------------------------------------------------------------------
         ***                   ***                   World          Published
--------------------------------------------------------------------------------
         ***                   ***                   World          Published
--------------------------------------------------------------------------------
         ***                   ***                     US             Issued
--------------------------------------------------------------------------------
         ***                   ***                     US            Allowed
--------------------------------------------------------------------------------
         ***                   ***                     US             Issued
--------------------------------------------------------------------------------
         ***                   ***                     US            Pending
--------------------------------------------------------------------------------
         ***                   ***                 Argentina         Pending
--------------------------------------------------------------------------------
         ***                   ***                   World          Published
--------------------------------------------------------------------------------
         ***                   ***                     US            Pending
--------------------------------------------------------------------------------
         ***                   ***                     US            Pending
--------------------------------------------------------------------------------
         ***                   ***                   World           Pending
--------------------------------------------------------------------------------

<PAGE>

                                 SCHEDULE 12.01

                             SCHEDULE OF LLC PARTIES

                           Willmar Poultry Company, Inc.                50%
                           3735 County Road 5, SW
                           P.O. Box 753
                           Willmar, Minnesota 56201-0753

                           MetaMorphix, Inc.                            50%
                           8510A Corridor Road
                           Savage, Maryland 20763

                                       25
<PAGE>

                                 SCHEDULE 13.01

                        SCHEDULE OF CAPITAL CONTRIBUTIONS

                         None as of Agreement Execution

                                       26
<PAGE>

                                  EXHIBIT 2.02

                            CERTIFICATE OF FORMATION

                            CERTIFICATE OF FORMATION

                                       OF

                  WILLMAR/METAMORPHIX TURKEY JOINT VENTURE LLC

         The  undersigned,  being  duly  authorized  to  execute  and file  this
Certificate of Formation for the purpose of forming a limited  liability company
pursuant to the Delaware Limited  Liability Company Act (6 Del.C. ss. 18-101, ET
SEQ.), does hereby certify as follows:

         FIRST: The name of the limited liability company is Willmar/MetaMorphix
Turkey Joint Venture LLC (the "Company").

         SECOND:  The  Company's  registered  office in the State of Delaware is
located at 30 Old Rudnick Lane,  Suite 100, Dover,  Kent County,  Delaware.  The
registered  agent of the Company for service of process at such address is LEXIS
Document Services Inc.

         THIRD:  The  operation  of the  Company  shall be governed by a Limited
Liability Company Agreement entered into among the members of the Company.

         IN WITNESS WHEREOF,  the undersigned has duly executed this Certificate
of Formation as of the 4th day of September, 2002.

                            /s/ Edwin C. Quattlebaum
                           -----------------------------------------------
                           Edwin C. Quattlebaum, Ph. D., Authorized PersonEX-10.31

         [***Confidential Treatment Requested. Confidential portions of
           this agreement have been redacted and have been separately
                           filed with the Commission]

                                 VIDO TECHNOLOGY

THIS AGREEMENT dated as and from the Effective Date
BETWEEN:

                  THE UNIVERSITY OF SASKATCHEWAN,  a corporation  pursuant to an
                  Act of the Government of  Saskatchewan,  as represented by the
                  Veterinary Infectious Disease organization;  a division of the
                  University of  Saskatchewan  which has its  principal  offices
                  located  at  120  Veterinary   Road,  on  the  campus  of  the
                  University of Saskatchewan,  (hereinafter  referred to as "the
                  Licensor")

                                                               OF THE FIRST PART
                                     -and -

                  METAMORPHIX  INTERNATIONAL,  INC., a corporation  incorporated
                  pursuant  to the  laws  of the  State  of  Delaware  with  its
                  registered   office   located  at  1450  South  Rolling  Road,
                  Baltimore,   Maryland,   United  States  of  America,   21227,
                  (hereinafter referred to as "the Licensee")

                                                              OF THE SECOND PART

                  WITNESSETH WHEREAS:

A.                Biostar  Inc.  ("Biostar")  and the  Licensor  entered  into a
series  of  license  agreements   culminating  in  a  consolidated  and  amended
Pasteurella  haemolytica  Vaccine and  Technology , a Bovine Herpes  Virus-1 and
Adjuvant   Technology  licence   agreements,   all  dated  February  29th,  2000
(collectively referred to as the "Original Licenses");

B.                The Original Licenses were partially assigned with the consent
of the Licensor in accordance  with and as  contemplated  by the asset  purchase
agreement  between  Biostar and related  parties  and the  Licensee  and related
parties dated for reference June 1, 2000 (herein the "Asset Purchase Agreement")
pursuant to the terms of which Asset Purchase  Agreement the Licensor  agreed to
grant the within  license to the Licensee which license  effects  certain agreed
upon amendments to the Original Licenses partially assigned to the Licensee;

                  NOW THEREFORE, in consideration of the premises and other good
and valuable  consideration,  the receipt and sufficiency of which consideration
is hereby acknowledged, the parties agree as follows:

<PAGE>

                           ARTICLE I - INTERPRETATION

1.01              As  hereinafter  used  in  this  Agreement,   terms  have  the
                  following meanings:

         (a)      "Adjuvant Technology" means the adjuvant technology subject of
                  issued  U.S.   patent  #  5,951,988   or  any   continuations,
                  continuations in part,  provisional  applications,  divisions,
                  patents of additions,  re-issues,  renewals and  extensions of
                  such patents and patent applications and all non United States
                  of America patents corresponding to any of the foregoing;

         (b)      "Bovine   Technology"   means  the  bovine   herpes  virus  -1
                  technology subject of those patents related thereto and listed
                  on attached Exhibit "A" or any continuations, continuations in
                  part,   provisional   applications,   divisions,   patents  of
                  additions,  reissues,  renewals and extensions of such patents
                  and patent  applications  and all non United States of America
                  patents corresponding to any of the foregoing;

         (c)      "Confidential  Information" has the meaning given that term by
                  clause 13.01;

         (d)      "Effective  Date" means the closing date of the Asset Purchase
                  Agreement;

         (e)      "External  Disclosure"  has the  meaning  given  that  term by
                  clause 13.03;

         (f)      "Improvements"  means all discoveries and inventions  owned by
                  the  Licensor,  whether  patentable or not, that consist of an
                  improvement, addition, extension or enhancement to the subject
                  matter of the Licensed  Patents or to the Licensed  Technology
                  and relating to the within grant of License;

                  "License" has the meaning given that term by clause 2.01;

                  "Licensee"  includes for the purpose of calculating  Net Sales
                  and Other Consideration any affiliates of the Licensee and any
                  persons  or  entities  not  dealing at arm's  length  with the
                  Licensee as that term is employed  pursuant to the  provisions
                  of the Income Tax Act (Canada) as of the date hereof  provided
                  that the  term  "Licensee"  does not  extend  to  Minority  or
                  Majority Joint Ventures . For greater particularity, Net Sales
                  and Other Consideration does not comprise payments and amounts
                  paid by an entity  comprising  the Licensee to another  entity
                  comprising the Licensee;

         (i)      "Licensed   Technology"  means  the  Adjuvant  Technology  and
                  proteins,  peptides,  nucleic acids,  antibodies and adjuvants
                  and methods of production  and uses  described in the Licensed
                  Patents   referenced   in  Exhibit  A  including  the  use  of
                  Pasteurella  haemolytica or Bovine Herpes Virus-1  antigens as
                  immunological   carriers,   including   products   based  upon
                  leukotoxin carrier, GnRh or vasoactive intestinal peptide, and
                  further  includes  all  provisional  applications,   know-how,
                  proprietary technical data, information,  biological materials
                  and reagents useful in

                                  Page 2 of 31

<PAGE>

                  working with the subject  matter of the  Licensed  Patents and
                  relating to the within grant of license  which is in existence
                  as of the Effective Date;

         (j)      "Licensed Patents" means any patents that are granted pursuant
                  to the  applications  referenced in Exhibit "A" or are granted
                  pursuant to any patent application  subsequently filed that is
                  based   on  the   Licensed   Technology   and   includes   any
                  continuations,  continuations in part,  divisions,  patents of
                  additions,  re-issues, renewals and extensions of such patents
                  and patent  applications  and all non United States of America
                  patents corresponding to any of the foregoing;

         (k)      "Majority  Joint  Venture"  means  other  than a  Value  Added
                  Arrangement a partnership or joint venture arrangement between
                  the Licensee and a third party or parties  whose  arrangements
                  with  the  Licensee  permits  the use and  application  of the
                  Licensed  Technology  and  Licensed  Patents  for  any  of the
                  following species: poultry, swine or cattle, where relative to
                  such  other  parties  the  Licensee  has not  less  than a 50%
                  interest   in  the   business,   assets  and  profits  of  the
                  partnership  or joint  venture  and in  respect  of which  the
                  Licensee has provided  written notice to the Licensor within a
                  reasonable  time after entering into the  partnership or joint
                  venture  arrangement.   For  greater  particularity,   if  the
                  interest  of the  Licensee  falls  below 50% in the  business,
                  assets or profits for two  consecutive  fiscal periods then as
                  and from the 1st day of the first of such  fiscal  periods the
                  entity shall cease to be a Majority Joint Venture.

         (1)      "Minority  Joint Venture" means a partnership or joint venture
                  arrangement  between the Licensee and a third party or parties
                  whose  arrangements  with  the  Licensee  permits  the use and
                  application of the Licensed  Technology  and Licensed  Patents
                  for any of the following  species:  poultry,  swine or cattle,
                  but which does not  constitute a Majority  Joint  Venture or a
                  Value Added Arrangement hereunder.

         (m)      "Major Species Sublicensee" means a person, partnership, joint
                  venture  or  other  entity  (other  than  a  sublicensee  that
                  constitutes  a Majority  Joint  Venture  or a  Minority  Joint
                  Venture or a Value Added  Arrangement)  whose  sublicense with
                  the Licensee  permits the use and  application of the Licensed
                  Technology for any of the following species: poultry, swine or
                  cattle.

         (n)      "Minor Species Sublicensee" means a person, partnership, joint
                  venture  or  other  entity   (other  than   sublicensee   that
                  constitutes  a Majority  Joint  Venture  or a  Minority  Joint
                  Venture or a Value Added  Arrangement)  whose  sublicense with
                  the Licensee does not extend to the use and application of the
                  Licensed Technology for poultry, swine or cattle.

         (o)      "Myostatin  Product" means a Product that comprises  myostatin
                  also known as growth differentiating factor 8 (GDF-8) protein,
                  peptide or nucleic acid.

                                  Page 3 of 31
<PAGE>

         (P)      "Net Sales"  means  during any  particular  period of time the
                  total  revenues or receipts  from the sale or  disposition  of
                  Products by the Licensee  subject to the following  inclusions
                  or exclusions  (the intent of the parties in  connection  with
                  this 1.01(i) is  described  in the attached  Exhibit "B" which
                  Exhibit is to be employed as an aid to  interpretation of this
                  provision):

                  (I)      Net Sales  revenues or receipts  include  revenues of
                           the  Licensee  from  invoiced  sales  of  Product  to
                           distributors,   wholesalers  or  other  persons,  but
                           specifically   not  including  Value  Added  Receipts
                           (Herein the  foregoing  referred to as  "Conventional
                           Sales");

                           Net Sales  revenues or receipts  include  revenues of
                           the  Licensee  which are  calculated  on the basis of
                           value  added  benefits  realized in  connection  with
                           third  party  commercialization   including  that  by
                           animal producers, breeders and processors,  including
                           those  subject  of a  sublicense,  provided  that the
                           Licensee's   revenues   from  such   sublicense   are
                           calculated and  periodically  payable on the basis of
                           Licensee's  share of the  value-added  benefits  (the
                           "Value Added  Receipts").  During the  application of
                           the  applicable  Threshold  and  subject to  1.01(w),
                           Value Added  Receipts  include  payments  and amounts
                           that are paid to the Licensee in connection  with the
                           arrangements  giving rise to the Value Added Receipts
                           but which are not directly calculated on the basis of
                           value   added   benefits  .  Other  than  during  the
                           application of the applicable Threshold,  Value Added
                           Receipts do not include payments and amounts that are
                           paid  to  the   Licensee  in   connection   with  the
                           arrangements  giving rise to the Value Added Receipts
                           but are not directly calculated on the basis of value
                           added benefits,  which payments and amounts are to be
                           included in Other  Consideration.  To the extent that
                           revenues  and receipts are included by virtue of them
                           comprising  Value Added  Receipts,  such revenues and
                           receipts and such value added  benefits on which they
                           were  calculated  are not  otherwise  included in the
                           calculation  of  Net  Sales  or  Other  Consideration
                           hereunder;

                  (III)    Other than during the  application  of the applicable
                           Threshold, in respect of Majority Joint Ventures that
                           percentage  of the net  sales of the  Majority  Joint
                           Venture  (calculated  as  if  it  were  the  Licensee
                           hereunder)  that the  Licensee  has in the profits of
                           such Majority Joint Venture, shall be included in Net
                           Sales  hereunder  and the remainder of such net sales
                           of the Majority  Joint  Venture  shall be excluded in
                           the calculation of Net Sales or otherwise hereunder;

                  (IV)     During the  application of the applicable  Threshold,
                           in  respect  of   Majority   Joint   Ventures,   that
                           percentage  of the  net  sales  of a  Majority  Joint
                           Venture  that the Licensee has in the profits of such
                           applicable joint venture,  shall be excluded from the
                           calculation of Net Sales or otherwise hereunder;

                                  Page 4 of 31
<PAGE>

                  (V)      Net Sales do not  include  any net  sales  made by or
                           royalties paid by Minor Species Sublicensees, whether
                           or not part of a joint  venture  arrangement,  (which
                           royalties for greater  particularity shall constitute
                           Other   Consideration  for  the  purposes  of  clause
                           4.06(iii) herein);

                  (VI)     Other than during the  application  of the applicable
                           Threshold,   Net   Sales   include   the  net   sales
                           (calculated as if it were the Licensee  hereunder) of
                           Minority    Joint    Ventures   and   Major   Species
                           Sublicensees (other than those constituting  Majority
                           Joint  Ventures),  but not including  sales  revenues
                           that were  included  for purposes of  calculation  of
                           Value Added  Receipts which Value Added Receipts were
                           included in Net Sales;

                  (VII)    During the  application of the applicable  Threshold,
                           Net Sales  exclude  the net sales of  Minority  Joint
                           Ventures and Major Species Sublicensees;

                  (VIII)   If  Licensee   shall  have   received   separate  and
                           identifiable reimbursement or payment for delivery of
                           Product,  including  delivery of Product for purposes
                           of  being  given  away  for  promotional  or  similar
                           purposes,  from a Majority or Minority  Joint Venture
                           or a sublicensee  or, during the  application  of the
                           applicable   Threshold,   paid  to  the  Licensee  in
                           connection with the  arrangements  giving rise to the
                           Value  Added  Receipts  but  which  are not  directly
                           calculated on the basis of value added benefits, then
                           to the extent that such  reimbursement or payment has
                           been  included  in the  calculation  of Net Sales the
                           Licensee  shall be  entitled to deduct from Net Sales
                           the cost to the Licensee for such Product  calculated
                           on the basis of the  aggregate  of: third party costs
                           of  manufacture  incurred by the  Licensee,  plus the
                           Licensee's  direct  labor cost,  plus the  Licensee's
                           direct  materials cost plus 40% percent of the direct
                           labor and materials cost excluding third party costs.
                           Manufacturing for the purposes of determining  direct
                           material  or  direct  labor or third  party  costs of
                           manufacturing   under  this  Agreement  includes  the
                           packaging   of   Product   but   excludes   shipping,
                           warehousing and distribution.

                  (IX)     Net Sales in  respect  of  included  revenues  do not
                           include the  following  items to the extent that such
                           items are  separately  identified  on the  applicable
                           invoice:

                           (i)      sales,  import,   export,  value  added  and
                                    similar   taxes   including,   but   without
                                    limitation,  the federal  goods and services
                                    tax  imposed  by Part VII of the  EXCISE TAX
                                    ACT,  R.S.C.,  1985,  C. E-1, as amended and
                                    similar US or international taxes;

                           (ii)     extraordinary  packaging  and packing  costs
                                    that   relate  to  sales  to  a   particular
                                    customer  and which are  reimbursed  by such
                                    customer;

                                  Page 5 of 31
<PAGE>

                           (iii)    shipping and  delivery  costs that relate to
                                    sales to a particular customer and which are
                                    reimbursed by such customer;

                           (iv)     credits  on  returns,  allowances  or trades
                                    actually allowed and taken; and

                           (v)      freight and insurance charges.

                  For greater  particularity,  where Value  Added  Receipts  are
                  calculated  on the  basis of  value  added  benefits  realized
                  during the production or growth of products  subsequent  sales
                  of the processed  Products do not comprise Net Sales hereunder
                  whether or not the seller is a partner or joint  venturer with
                  the  Licensee  if the  Licensee  has no interest in or payment
                  arising from such sales.

                  "Other  Consideration"  shall mean the aggregate of all option
                  fees,  license fees, or other cash  payments,  equity or other
                  consideration  of any  kind  that  the  Licensee  receives  in
                  respect of sublicenses, which general definition is more fully
                  described in clause 4.06 hereof.

         (r)      "Pasteurella  Technology"  means the  Pasteurella  haemolytica
                  technology subject of those patents related thereto and listed
                  on attached Exhibit "A" or any continuations, continuations in
                  part, divisions, patents of additions, re-issues, renewals and
                  extensions of such patents and patent applications and all non
                  United States of America patents  corresponding  to any of the
                  foregoing;

         (s)      "Products" means all compositions,  processes, methods of use,
                  or any part or  combination  thereof,  that:  (i) infringe any
                  claim of a Licensed  Patent;  or (ii) which  incorporate,  are
                  made or designed from or with the aid of Licensed  Technology;
                  or both,  and "Product" is a singular  reference to any one of
                  the Products;

         (t)      "Royalty" and "Royalties" has the meaning given those terms by
                  clauses 4.01, 4.02 and 4.03;

         (u)      "Term"  means the period of time during  which the Licensee is
                  obligated  to pay  Royalties  on  Products  pursuant to clause
                  2.03;

         (v)      "Threshold" means, net of any applicable credits permitted the
                  Licensee  hereunder,  the total average  cumulative  amount of
                  $1,000,000  US per  year  for  each  calendar  year  from  the
                  commencement of this Agreement  received by Licensor (provided
                  that with  respect  to 2000 the  addition  to  establish  this
                  amount shall be prorated to reflect  such  partial  year) with
                  respect to Myostatin Products (the "Myostatin Threshold"); and
                  the total average  cumulative amount of $4,000,000 US per year
                  for each calendar year from the commencement of this Agreement
                  received by Licensor

                                  Page 6 of 31
<PAGE>

                  (provided  that with respect to 2000 the addition to establish
                  this amount shall be prorated to reflect such partial year) in
                  respect to all Products (the Overall Threshold"). "Application
                  of the applicable  Threshold" means the Myostatin Threshold or
                  the Overall  Threshold,  as the case may be, has been achieved
                  and maintained with respect to a particular  calendar year and
                  "during the  application  of the applicable  Threshold"  means
                  during the period and with respect to the  calendar  year that
                  the  application  of the  applicable  Threshold  continues and
                  "other  than  during  the   application   of  the   applicable
                  Threshold' means any other time.

         (w)      "Value Added  Arrangement"  means an  arrangement  between the
                  Licensee  and one or more third  parties  which may  include a
                  sublicense, where substantially all of the continuing intended
                  compensation to the Licensee comprise  payments  calculated on
                  the basis of value  added  benefits.  In  relation  to a Value
                  Added  Arrangement,  during the  application of the applicable
                  Threshold,  initial license fees or similar up-front  payments
                  and  payments  made on the basis of  achievement  of non-sales
                  related  milestones or a singular sales related  milestone are
                  considered  payments and amounts that are paid to the Licensee
                  in  connection  with  the  arrangement  for  the  purposes  of
                  1.01(p)(II)  and are subject of this Agreement  respecting Net
                  Sales  including the provisions of 4.04.  However,  during the
                  application  of  the  applicable  Threshold,  payments  to the
                  Licensee received in connection with a Value Added Arrangement
                  other than initial license fees or similar  up-front  payments
                  and payments  made on the  achievement  of  non-sales  related
                  milestones or a singular sales related  milestone and payments
                  calculated  on the  basis of  value  added  benefits  shall be
                  included as Other Consideration under this Agreement.

         (x)      "VIDO  and/or the  Licensor"  means for all  purposes  of this
                  Agreement, other than the enforcement of this Agreement by the
                  University  of   Saskatchewan   and  the   agreements  of  the
                  University of  Saskatchewan  under section 3.02, that separate
                  and unique division of the University of Saskatchewan known as
                  the Veterinary Infectious Disease Organization which currently
                  has its principal offices, facilities and equipment located at
                  120  Veterinary  Road  on  the  campus  of the  University  of
                  Saskatchewan,  has aboard of directors  primarily  composed of
                  persons not  employed  by the  Veterinary  Infectious  Disease
                  Organization  or the University of  Saskatchewan  and which is
                  engaged in research and development.

                     ARTICLE II - GRANT AND TERM OF LICENSE

2.01 In accordance  with the provisions of this  agreement,  the Licensor grants
and  the  Licensee   accepts  an  exclusive   license  (the  "License")  in  all
jurisdictions  of the  world  to the  Licensed  Technology  for the  purpose  of
developing,  producing,  exploiting,  using,  selling or otherwise  commercially
exploiting, or having developed,  produced, used, sold or otherwise commercially
exploited,  the  Licensed  Technology  for  use in  non-humans,  and  for use in
technology  relating  to the GDF-8  protein in both  humans and  non-humans  BUT
SPECIFICALLY  EXCLUDING  use of the Licensed  Technology  in vaccines to prevent
infectious diseases.

                                  Page 7 of 31
<PAGE>

2.02              Subject to the  provisions  of this  Agreement,  the  Licensor
                  acknowledges that:

         (a)      the License is irrevocable during the Term; and

         (b)      except as herein  provided,  the License is  exclusive  to the
                  extent of the above grant of license in all  jurisdictions  of
                  the world during the Term and the Licensor  shall not produce,
                  use, sell, lease or otherwise  commercially exploit within the
                  scope of the above  grant of license  Products  other than for
                  its own research  purposes,  nor within the scope of the above
                  grant license shall the Licensor  provide any third party with
                  Products or the Licensed  Patents and Licensed  Technology  to
                  any third  party,  other  than for  research  and  educational
                  purposes.  For greater  particularity and  notwithstanding the
                  foregoing,  this  license is  non-exclusive  as to its use for
                  diagnostic  applications for Pasteurella haemolytica or Bovine
                  Herpes Virus-1 antibodies.

If within  the scope of the  above  grant of  license,  the  Licensor  wishes to
provide a third party with Products for research and educational purposes, or to
license to a third  party the  Licensed  Patents  and  Licensed  Technology  for
research  and  educational  purposes,   the  Licensor  shall  first  obtain  the
Licensee's written consent. The granting or withholding of such consent shall be
in the  Licensee's  sole and  absolute  discretion  and any such consent will be
conditional, at the Licensee's option, upon the beneficiary of such research and
educational  license agreeing that the Licensee shall have the right to make use
of any improvements  conceived or developed by such beneficiary at no additional
cost to the Licensee.

2.03              Royalty  obligations on Products and other  payments  required
pursuant  to Article IV in each  jurisdiction  of the world shall come to an end
upon the later of:

         (a)      the expiration or invalidation of the last remaining  Licensed
                  Patents  covering  the  manufacture,  use and/or  sale of such
                  Product in such jurisdiction; or

         (b)      ten (10) years from the date of first  marketing  such Product
                  in such jurisdiction.

Following the expiration of the Licensee's royalty obligations in a jurisdiction
pursuant to this clause,  the Licensee  shall be entitled to continue  marketing
Products and using  Licensed  Technology in such  jurisdiction  without  further
royalty or other payments of any  description.  This Agreement shall cease to be
exclusive to the Licensee with respect to any  jurisdiction  upon the expiration
of the Royalty  obligations under this Agreement in such jurisdiction.  Provided
that prior to such  expiration  the  Licensee  may elect by notice in writing to
extend its Royalty  obligations  at the rate(s)  applicable to the  circumstance
where a Licensed  Patent is not infringed and its other payment  obligations for
such  period of time as may be  specified  in such notice and in which event the
Royalty and other payment provisions herein shall be so extended and the license
shall continue for such period to be exclusive to the Licensee.

                                  Page 8 of 31
<PAGE>

2.04 The Licensor shall, upon the request of and at the expense of the Licensee,
execute  all  further  documents  which may be  necessary  to give  effect to or
register this Agreement and the Licenses  granted  hereunder in any jurisdiction
of the world.

                           ARTICLE III - IMPROVEMENTS

3.01 During the Term,  the Licensor  shall  disclose  and make  available to the
Licensee all  Improvements  which shall be dealt with in accordance with all the
terms and conditions of this  Agreement.  If an  Improvement  is patentable,  it
shall be treated as one of the Licensed Patents, and if non-patentable,  as part
of the Licensed Technology.

3.02 The  Licensee  acknowledges  that the  Licensor's  obligations  pursuant to
clause 3.01 are conditional upon VIDO's continued  existence and operation.  For
greater  particularity,  Improvements  made by  employees of the  University  of
Saskatchewan  who are not  employees of VIDO (the  "University  Employees")  are
exempt from the operation of clause 3.01.

                  The University of  Saskatchewan  agrees that in the event that
University  Employees  effect  discoveries and inventions which are owned by the
University  of  Saskatchewan,  whether  patentable  or not,  that  consist of an
improvement,  addition,  extension or  enhancement  to the subject matter of the
Licensed  Patents  or, to the  extent  the same  relate to the  within  grant of
License, the Licensed  Technology,  the University of Saskatchewan shall provide
the Licensee with the opportunity to obtain entitlements to such discoveries and
inventions  for the same purposes as  contemplated  by this License on terms and
conditions that the University  would accept from a third party. If the Licensee
declines to participate in such  opportunity (and the License shall be deemed to
have  declined  in the event that it has not elected to do so within such period
of time as the University may reasonably determine and advise the Licensee), the
University  may  thereafter  without  reference  to the  Licensee  provide  such
entitlements  to third parties on terms no more favorable than those offered the
Licensee.  The Licensee expressly  acknowledges and agrees that no obligation of
the  University  to the  Licensee  arises  under this  provision  where any such
discovery or invention is subject of rights or  entitlements in favor of a third
party. The Licensee further acknowledges that any invention or discovery arising
in the course of third party funded research gives rise to an expectation  (that
the University  views as and the Licensee  agrees is an entitlement for purposes
of this  provision)  to  provide  such  third  party  with  the  opportunity  to
commercially  exploit  the  discovery  or  invention.  This  obligation  of  the
University  shall  extend  for five (5) years  from the  Effective  Date of this
Agreement.

3.03 The Licensor acknowledges that Licensee may make discoveries or inventions,
whether patentable or not, without the use of the Licensed  Technology and which
do not infringe upon the Licensed  Patents,  which  discoveries  and  inventions
shall be owned by the Licensee  and shall be known as  "Licensee  Improvements,"
for purposes of this Agreement.  Licensor also  acknowledges  that no payment of
royalties  shall be due under  this  Agreement  with  respect  to such  Licensee
Improvements.

                                  Page 9 of 31
<PAGE>

                              ARTICLE IV- ROYALTIES

4.01 Subject to 4.02,  the  Licensee  shall pay to the Licensor a royalty on Net
Sales (the  "Royalty"  or  Royalties")  during the Term in  accordance  with the
following subject only to those exclusions provided for in this Agreement and as
such rates may be modified by clause 4.04:

         (a)      if a Product  infringes a claim or claims of a Licensed Patent
                  related to the Adjuvant Technology,  the Royalty shall be ***;
                  and

         (b)      if a Product  infringes a claim or claims of a Licensed Patent
                  related to the Bovine Technology, the Royalty shall be *** and

         (c)      if a Product  infringes a claim or claims of a Licensed Patent
                  related to the  Pasteurella  Technology,  the Royalty shall be
                  *** and

         (d)      if 4.01(a) is not applicable  and a Product  utilizes any part
                  of the Licensed Technology related to the Adjuvant Technology,
                  the Royalty shall be *** and

         (e)      if 4.01(b) is not applicable  and a Product  utilizes any part
                  of the Licensed  Technology  related to the Bovine Technology,
                  the Royalty shall be *** and

         (f)      if 4.01(c) is not applicable  and a Product  utilizes any part
                  of  the  Licensed   Technology   related  to  the  Pasteurella
                  Technology, the Royalty shall be ***

4.02  Notwithstanding  4.01, other than during the application of the applicable
Threshold,  with respect to Net Sales made by a Major Species  Sublicensee where
the  Licensee is entitled  to the receipt of  royalties  based upon Net Sales of
Products  made by such  sublicensees  (other  than Value  Added  Receipts),  the
Licensee  shall pay to the  Licensor  in respect of such Net Sales  (other  than
Value Added Receipts) the lesser of :

         (a)      *** of the  royalties  payable  by  such  sublicensees  to the
                  Licensee in respect of its Net Sales; or

         (b)      the amount otherwise  determined pursuant to 4.01 on the basis
                  of the Net Sales of the sublicensee.

For greater particularity, this provision 4.02 has no application to Value
Added Receipts.

4.03              Notwithstanding  the  foregoing,  a minimum  royalty  shall be
                  payable as follows:

         4.03.1 in respect of calender year 2000, *** prorated for such calendar
         year as and from the Effective Date;

                                 Page 10 of 31
<PAGE>

         4.03.2 in respect of calender year 2001 and 2002, *** and

         4.03.3 in respect of calendar years 2003, 2004 and 2005, *** and

         4.03.4 in respect of each calendar year thereafter,  *** (collectively,
         the amounts  referred to in 4.03.1  through  4.03.4 are  referred to as
         "Minimum Annual Royalty").

The Licensee shall be responsible to make the Minimum Annual Royalty payments as
outlined in section 4.03 in four equal quarterly installments within thirty (30)
days of the end of each  calendar  quarter  (other  than in respect of the first
year of this Agreement in respect of which the Minimum  Royalties  shall be made
in two  equal  installments  after  the  third  and  fourth  calendar  quarter).
Notwithstanding  any credits against Royalties permitted the Licensee under this
Agreement,  no such  credits  shall apply to reduce  Minimum  Royalties  payable
pursuant to this clause 4.03.

4.04              If the  Royalties  payable  to the  Licensor  and/or the other
royalties payable for other Product components or associated delivery systems by
the Licensee  would  exceed  seven (7%) percent for a Product,  then the Royalty
rates  provided  for in clause  4.01  shall be reduced to a point that the total
royalties  payable by the Licensee to the Licensor  and/or such third parties do
not exceed ***. The  Licensee  shall use  reasonable  efforts to ensure that any
royalty reduction  necessary under this clause is allocated between the Licensor
and such third party in an equitable manner.

                  With respect to the Net Sales of a Minority  Joint  Venture or
Major  Species  Sublicensee,  the  foregoing  reference  to  Licensee  shall  be
construed  as a  reference  to the  Minority  Joint  Venture  or  Major  Species
Sublicensee, as the case maybe, and not a reference to the Licensee.

                  With respect to the Net Sales of a Majority Joint Venture, the
Licensee may elect to have the  foregoing  reference to Licensee with respect to
the  particular  Majority  Joint  Venture be  construed  as a  reference  to the
Majority Joint Venture in lieu of the application of this Agreement without such
substitution.

                  For  greater   particularity,   during   application   of  the
applicable  threshold but subject to the  provisions of 1.01(w),  this provision
4.04  shall  apply  to  payments   received  by  Licensee  in  connection   with
arrangements  giving rise to the Value Added Receipts in the manner contemplated
by 1.01 (w).

                  However,  under  no  circumstances  shall  the  Royalty  rates
provided  for under clause 4.01 be reduced to less than  one-third  (1/3) of the
amount  otherwise  determinable  under  such  clause in  respect to Net Sales of
Myostatin Products or one-half (1/2) of the amount otherwise  determinable under
such clause in respect of Net Sales of Products other than Myostatin Products.

                                 Page 11 of 31
<PAGE>

 4.05    If a third  party  initiates  any  legal or  administrative  proceeding
challenging the validity,  scope or  enforceability  of a Licensed Patent in any
country  then the  Licensee's  royalty  obligations  pursuant to this Article IV
shall be adjusted as if that  particular  Product did not  infringe the claim or
claims of a Licensed Patent relating to such country.  If the  enforceability of
the claim in dispute in such  proceedings is upheld by a court or other legal or
administrative  tribunal  from  which no  appeal  is or can be  taken,  then the
balance of the payment that should have been made during the period of reduction
shall be promptly paid by the Licensee to the Licensor with interest  calculated
in accordance  with clause 5.05. If the claims of a Licensed  Patent which cover
that  Product are held to be invalid or  otherwise  unenforceable  by a court or
other legal or administrative  tribunal from which no appeal is or can be taken,
then no such payment shall be made. The Licensee acknowledges that the foregoing
constitutes  the full extent of the Licensor's  liability to the Licensee in the
event of any such suit and is a bar to any proceedings for recovery of any other
damages of any description.

 4.06    In addition to the amounts  payable  under 4.01 or 4.02,  the  Licensee
shall remit to the Licensor *** (which rate is applicable  other than during the
application  of the  applicable  threshold) of Other  Consideration  and for the
purposes  hereof the term "Other  Consideration"  shall  include  the  following
specific  inclusions or exclusions (the intent of the parties in connection with
this 4.06 is  described  in the  attached  Exhibit  "B" which  Exhibit  is to be
employed as an aid to interpretation of this provision):

         (i)      INCLUDE other than during the  application  of the  applicable
                  Threshold,  payments and amounts that are paid to the Licensee
                  in connection with the arrangements giving rise to Value Added
                  Receipts  which are not  directly  calculated  on the basis of
                  value  added  benefits  and  during  the  application  of  the
                  applicable  Threshold the payments and amounts contemplated by
                  1.01 (w) to be included in Other  Consideration  PROVIDED that
                  if  other  than  during  the  application  of  the  applicable
                  Threshold,   License   shall  have   received   separate   and
                  identifiable reimbursement or payment for delivery of Product,
                  including delivery of Product for purposes of being given away
                  for  promotional  or similar  purposes,  which are paid to the
                  Licensee in connection  with the  arrangements  giving rise to
                  the Value Added Receipts but which are not directly calculated
                  on the basis of value added benefits,  then to the extent that
                  such  reimbursement  or  payment  has  been  included  in  the
                  calculation  of  Other  Consideration  the  Licensee  shall be
                  entitled  to deduct from Other  Consideration  the cost to the
                  Licensee  for  such  Product  calculated  on the  basis of the
                  aggregate of: third party costs of manufacture incurred by the
                  Licensee,  plus the  Licensee's  direct  labor cost,  plus the
                  Licensee's  direct  materials  cost  plus 40%  percent  of the
                  direct labor and materials cost  excluding  third party costs.
                  Manufacturing for the purposes of determining  direct material
                  or direct  labor or third party costs of  manufacturing  under
                  this Agreement  includes the packaging of Product but excludes
                  shipping, warehousing and distribution.

         (ii)     EXCLUDE Conventional Sales and Value Added Receipts;

                                 Page 12 of 31
<PAGE>

                  INCLUDE other than receipts that constitute Conventional Sales
                  or Value Added  Receipts  all  payments of any nature and kind
                  including  royalties  on  net  sales  made  by  Minor  Species
                  Sublicensees;

         (iv)     In respect of Major Species Sublicensees,  Other Consideration
                  shall:

                  (A)      EXCLUDE,  other than  during the  application  of the
                           applicable  Threshold,  payments of  royalties on net
                           sales made by Major Species Sublicensees;

                  (B)      INCLUDE  during  the  application  of the  applicable
                           Threshold, payments of royalties on net sales made by
                           Major Species Sublicensees;

         (v)      In respect of Majority  Joint  Ventures,  Other  Consideration
                  shall:

                  (A)      INCLUDE  during  the  application  of the  applicable
                           Threshold,   the  Licensee's   share  of  profits  of
                           Majority  Joint  Ventures as of the  relevant  fiscal
                           year end of the Majority Joint Venture,

                  (B)      EXCLUDE  during  the  application  of the  applicable
                           Threshold,  distributions  to  the  Licensee  of  its
                           proportionate  share of the net operating  profits of
                           Majority  Joint  Ventures  to the  extent  previously
                           included in Other  Consideration and reflected in the
                           statements of such  Majority  Joint Venture as such a
                           distribution.

                  (C)      EXCLUDE  other  than  during the  application  of the
                           applicable  Threshold,  distributions to the Licensee
                           of  its  proportionate  share  of the  net  operating
                           profits  of  Majority  Joint  Ventures  to the extent
                           reflected in the  statements of such  Majority  Joint
                           Venture as such a distribution.

         (vi)     In respect of Minority  Joint  Ventures,  Other  Consideration
                  shall:

                  (A)      INCLUDE  during  the  application  of the  applicable
                           Threshold,  the  Licensee's  share of the  profits of
                           Minority  Joint  Ventures as of the  relevant  fiscal
                           year end of the Minority Joint Venture

                  (B)      EXCLUDE  during  the  application  of the  applicable
                           Threshold,  distributions  to  the  Licensee  of  its
                           proportionate  share  of  net  operating  profits  of
                           Minority  Joint  Venturers  to the extent  previously
                           included as Other  Consideration and reflected in the
                           statements of such  Minority  Joint Venture as such a
                           distribution.

                  (C)      EXCLUDE  other  than  during the  application  of the
                           applicable  Threshold,  distributions to the Licensee
                           of  its  proportionate  share  of the  net  operating
                           profits  of  Minority  Joint  Ventures  to the extent
                           reflected in the  statements of such  Minority  Joint
                           Venture as such a distribution.

                                 Page 13 of 31
<PAGE>

         (vii)    Other Consideration shall:

                  (1)      EXCLUDE   payments  made  to  the  Licensee  to  fund
                           research or  development,  or both,  of Product(s) to
                           the  extent  that  such  payments  are  used for such
                           purposes; and

                  (2)      EXCLUDE  payments made for the purpose of reimbursing
                           the Licensee for payments made to the Licensor  under
                           this   Agreement  or  for  purposes  of   reimbursing
                           Licensed Patent related expenses actually incurred by
                           the Licensee.

The Licensee shall be responsible for  demonstrating to the Licensor whether any
payments  made to the  Licensee  falls  within an  exclusion/deduction  to Other
Consideration.

4.07.1   Notwithstanding  any other  provision to the contrary  hereunder,  with
respect to any particular  calendar year if the Licensee's  required payments in
either  Royalties  or  remittances  respecting  Other  Consideration  whether in
respect of Myostatin Products or sublicenses or otherwise together with all such
payments  in prior years are equal to or in excess of the  Myostatin  Threshold,
then with respect to such calendar year the  applicable  percentage for purposes
of  calculating  the payment  under 4.06 for Other  Consideration  in respect of
Myostatin  Sublicenses  shall be those applicable  percentages under clause 4.01
but not to exceed in aggregate  ***,  provided that such  calculation  shall not
permit the payment to the  Licensor to fall below the  Myostatin  Threshold  for
such calendar year. For the purposes of this provision,  a Myostatin  Sublicense
means  a  sublicense,   Majority  or  Minority  Joint  Venture  or  Value  Added
Arrangement to the extent that the same is related to Myostatin Products and not
other Products.

4.07.2   Notwithstanding any other provision to the contrary hereunder,  if with
respect to any particular  calendar year if the Licensee's  required payments in
either Royalties or remittances respecting Other Consideration together with all
such payments in prior years are equal to or in excess of the Overall Threshold,
then with respect to such calendar year the  applicable  percentage for purposes
of calculating the payment under 4.06 for Other  Consideration in respect of all
sublicenses  shall be those applicable  percentages under clause 4.01 but not to
exceed in aggregate  ***,  provided that such  calculation  shall not permit the
payment to the Licensor to fall below the Overall  Threshold  for such  calendar
year.

4.08     The  Licensee  shall  pay to the  Licensor  all  applicable  goods  and
services or value added or similar taxes on its payments hereunder.

                    ARTICLE V - REPORTS, PAYMENTS AND ACCOUNT

  5.01 The  Licensee  shall make  written  reports  and  payments  on account of
  Royalties to the Licensor  within ninety (90) days of the end of each calendar
  quarter  commencing with the first calendar  quarter in which sale of Products
  are made in any  jurisdiction by the Licensee or its sub licensees.  Given the
  variable  nature of sales  revenue,  it is difficult  to precisely  define the
  content  of written  reports to be  provided  to  Licensor.  The intent of the
  parties  is for  Licensees  to  provide  Licensor  with  meaningful  data that
  accurately summarizes the Net Sales made during the applicable

                                  Page 14 of 31

<PAGE>

calendar  quarter  and  the  calculation  of the  payments  due to the  Licensor
pursuant to Article IV less any credits provided for in this Agreement. All such
written reports shall be certified by a financial  officer of the Licensee.  The
Licensor  acknowledges  that the  Licensee  may  integrate  its written  reports
provided  pursuant to this clause  5.01 into and with the written  reports  that
must be  provided  to the  Licensor  pursuant  to any other  license  or similar
agreements in force between the Licensee and the Licensor from time to time. The
Licensee  acknowledges  that the credits  against  Royalties  otherwise  payable
provided by clause 7.03 or otherwise  under this Agreement shall not entitle the
Licensee to reduce any payment on account of  Royalties to less than fifty (50%)
percent of the amount  otherwise  due absent any credits  and that all  payments
previously   made  on  account  of  Royalties  are   non-refundable   under  any
circumstances  except as permitted by clause 5.03.  In addition to the foregoing
financial  reports  within  ninety days of the end of each  calendar  year,  the
Licensee  shall provide the Licensor with an annual report as to the  activities
of the Licensee with respect to the development  activities and  registration of
the Products  activities  carried on by the Licensee in such twelve month period
and an updated  estimate by the Licensee of the date of commencement of sales of
Product.

5.02     The  Licensee  shall make a final  written  report and  payment  within
ninety (90) days of the  termination of this Agreement  whether by expiration of
time or otherwise.

5.03     The  Licensee  shall keep at its head office  full,  clear and accurate
records of the production, sale and disposition of Products in detail sufficient
to allow an audit of payments due under this Agreement for a period of three (3)
years after the delivery of each  written  report  pursuant to clause  5.01.  In
addition,  the Licensee shall similarly  maintain all records  provided to it by
its  sublicensees  and  documentation  required to establish Net Sales and Other
Consideration  hereunder  including  the nature,  status and quantum of sales or
receipts for the relevant period (including the  documentation  establishing the
relationship of the Licensee with any payor which would constitute a Majority or
Minority Joint Venture or sublicensee or a person with whom  arrangements  give.
rise to Value Added Receipts).  The Licensee shall permit such books and records
to  be  examined  from  time  to  time  by an  independent  accountant  from  an
international  affiliated  accounting  firm  designated  by  the  Licensor,  and
reasonably acceptable to the Licensee, for the purpose of conducting an audit of
such written  reports.  The Licensor shall not conduct more than one (1) audit a
year except as hereinafter set forth.  Audits shall be conducted by the Licensor
at its  expense  unless an audit  reveals a  discrepancy  between  the amount of
payments that should have been made, and the amount of payments actually made of
three (3%)  percent or greater for any  quarterly  period.  In such  event,  the
Licensee shall pay the Licensor's  audit  expenses.  The Licensor may thereafter
conduct  more  than one (1)  audit  per  year,  which  remedy  shall be  without
prejudice  to any other rights and remedies the Licensor may have as a result of
such breach. In addition, the difference between the amount of Royalties due and
the amount of Royalties  actually paid shall be immediately paid to the Licensee
by the Licensor,  or to the Licensor by the  Licensee,  as the case may be, with
interest thereon calculated in accordance with clause 5.05.

5.04     All  amounts  payable  by the  Licensee  to  the  Licensor  under  this
Agreement  shall be paid in Canadian  dollars.  If Products  are sold outside of
Canada for a currency  other than  Canadian  dollars,  Net Sales  shall first be
determined  in  accordance  with the currency in which such Net Sales take place
and then  converted  into  the  Canadian  dollar  equivalent  using  the rate of
exchange  published in the WALL STREET  JOURNAL on the last  business day of the
applicable calendar quarter. For the purpose of calculating the Thresholds in US
dollars, where revenues are derived in, or financial

                                 Page 15 of 31
<PAGE>

data is maintained  in, a currency  other than US dollars,  then the  conversion
method used in the prior sentence shall be applied.

5.05     All payments of whatever  description owed to either party by the other
under this Agreement shall bear interest at the prime rate published in the WALL
STREET  JOURNAL  from time to time plus two (2%)  percent  per annum  compounded
monthly,  not in advance  from and after the due date for payment to the date of
actual payment.

5.06     With  respect  to the  application  of  clauses  5.04 to the  sales  of
Products made by sublicensees where the applicable sublicense agreement contains
provisions  respecting  conversion of funds to Canadian dollars for the purposes
of  determining  royalties  payable  to  the  Licensee,  such  provisions  shall
supersede the provisions of clause 5.04 as regards to calculation and conversion
of Net Sales.

                         ARTICLE VI - PATENT PROSECUTION

6.01     The Parties acknowledge that Licensor has granted a separate license in
respect of the Licensed  Technology and the Licensed Patents for use in vaccines
to prevent infectious  disease in non-humans but as more particularly  described
in such license dated for  reference  the 29th day of February,  2000, a copy of
which has been provided to Licensee (herein the "Novartis License"). Pursuant to
the  provisions  of Article VI and  Article  VII of the  Novartis  License,  the
licensee thereunder (such license, its successors and assigns herein referred to
as  "Novartis")  has  several  entitlements,   obligations  or  responsibilities
including the following:

         (a)      to file  applications,  to prosecute and maintain the Licensed
                  Patents including additions, continuations,  divisions and the
                  like thereto;

         (a)      to discontinue prosecutions and applications and to
                         advise and provide  Licensor with the option to proceed
                         with filings, applications and prosecutions;

         (a)      to regularly apprise Licensor and at Licensor's direction on a
                  confidential  basis Licensor's other licensees of the Licensed
                  Patents of the status of patent  applications  and of approved
                  patents;

         (a)      to  make  to  Licensor  and  at  Licensor's   direction  on  a
                  confidential  basis to other licensees of the Licensed Patents
                  who  have  an  interest  in  an  application  or  registration
                  respecting a Licensed Patent complete  disclosure other than a
                  disclosure which  specifically  relates to the license granted
                  under the  Novartis  License  and which does not  affect  such
                  other licensee's interest in the Licensed Patent(s);

         (a)      to consult  with  Licensor  and at  Licensor's  direction on a
                  confidential basis its other licensees of the Licensed Patents
                  respecting  any  actions or  prosecutions  affecting  Licensed
                  Patents  and to insure  that any  actions of  Novartis  do not
                  adversely  affect  such  other  licensees  without  the  prior
                  written consent of Licensor; and

                                  Page 16 of 31

<PAGE>

         (a)      to cooperate  with Licensor and at  Licensor's  direction on a
                  confidential  basis Licensor's other licensees of the Licensed
                  Patents  in the  application,  prosecution  and  filing of any
                  continuations,  continuations-inpart,  divisions,  patents  of
                  additions,   re-issues,   renewals  and  extensions,   further
                  applications  or defense of the  Licensed  Patents  desired by
                  Licensor or affecting such other  licensees  provided that the
                  same is not  adverse  to the  rights  of  Novartis  under  the
                  Licensed  Patents.  Novartis is entitled to  reimbursement  by
                  Licensor  of  its  out  of  pocket  expenditures  incurred  in
                  providing  such  cooperation  which  is  to be  reimbursed  to
                  Licensor by the Licensee hereunder.

         (g)      Within 60 days of execution of this  Agreement,  Licensor will
                  direct  Novartis to supply  Licensee with a copy of all patent
                  applications  and the  prosecution  histories  of the Licensed
                  Patents or Licensed  Technology,  as applicable.  In addition,
                  Licensor  will direct  Novartis to apprise the Licensee of the
                  status of all patent  applications  included  in the  Licensed
                  Patents or Licensed Technology, as applicable.

6.02 Licensor agrees with Licensee with respect to the scope of the within grant
of license to:

         (1)      make all  directions  in favour of  Licensee,  to  Novartis as
                  directions are  contemplated by the provisions of the Novartis
                  License,  and to maintain  and not  withdraw  such  directions
                  without Licensee's consent; and

         (2)      forthwith  apprise  Licensee of  information in its possession
                  relating  to  the  status  of  patent  applications,  approved
                  patents,  and infringements or suspected  infringements except
                  as restricted by the terms of the Novartis License; and

         (3)      obtain  Licensee's  written  consent  prior to  providing  any
                  consent  or  approval   affecting  the  Licensed   Patents  as
                  contemplated  or requested  pursuant to the Novartis  License;
                  and

         (4)      to cooperate with Licensee in the application, prosecution and
                  filing of any continuations, continuations-in-part, divisions,
                  patents of  additions,  re-issues,  renewals  and  extensions,
                  further  applications  or  defense  of  the  Licensed  Patents
                  desired by Licensee (and effecting the  applicable  directions
                  contemplated  under the  Novartis  License) and to insure that
                  Novartis  does likewise to the extent to do so pursuant to the
                  Novartis  License,  all subject to  Licensee's  obligation  to
                  reimburse  Licensor and Novartis for their  respective  out of
                  pocket  expenditures  incurred in providing such  cooperation;
                  and

         (5)      to provide  Licensee the  opportunity  to commence or continue
                  the  prosecution  and maintenance of patents that Novartis may
                  determine  under  its  license  not  to  make  or  pursue  for
                  inclusion under this License; and

                                 Page 17 of 31
<PAGE>

         (6)      not to  amend  Novartis  License  in a manner  adverse  to the
                  rights and  entitlements  of Licensee  contemplated  hereunder
                  without the Licensee's written consent.

6.03     Intentionally Left Blank

6.04     All  patent   applications  on  Licensed   Technology  or  Improvements
undertaken by Licensee in accordance  with this Agreement shall be undertaken in
the name and on behalf of the  University  of  Saskatchewan.  Licensee  shall be
responsible  for  all  costs  and  expenses   associated  with  the  filing  and
prosecution of such  applications and the maintenance  fees, if any, required to
maintain the Licensed  Patents in full force and effect except to the extent the
responsibility  resides with  Novartis,  pursuant to the Novartis  License.  The
selection  of  the  patent  agents  chosen  to  prosecute  applications  pursued
independently  by Licensee  shall be in the sole  discretion of Licensee.  Other
than as  contemplated  by the provisions of 6.05,  Licensor shall cooperate with
Licensee in  prosecuting  such  application at no expense to Licensee other than
reimbursement for  out-of-pocket  expenses that Licensee approves prior to their
being incurred.

6.05     At the request of the Licensee,  Licensor  shall provide such personnel
as may be available to it for purposes of consultation with and presentations to
governmental  authorities in respect of the Licensed  Patents and Licensor shall
be entitled to be compensated  for such  participation  of such personnel on the
basis of a commercially reasonable consultation fee.

6.06     With  respect  to the  Licensed  Patents  which are not  subject of the
Novartis License, the following provisions will apply:

         (a)      All patent applications on Licensed Technology or Improvements
                  undertaken by the Licensee in accordance  with this  Agreement
                  shall  be  undertaken  in  the  name  and  on  behalf  of  the
                  University of Saskatchewan.  The Licensee shall be responsible
                  for all costs and  expenses  associated  with the  filing  and
                  prosecution of such  applications and the maintenance fees, if
                  any,  required to maintain such applications in fall force and
                  effect. The selection of the patent agents chosen to prosecute
                  such  applications  shall  be in the  sole  discretion  of the
                  Licensee.  Other than as  contemplated  by the  provisions  of
                  6.05,   Licensor   shall   cooperate   with  the  Licensee  in
                  prosecuting  such  applications  at no expense to the Licensee
                  other than  reimbursement for out-of-pocket  expenses that the
                  Licensee   approves  prior  to  their  being   incurred.   The
                  Licensee's  obligations under this Article VI do not extend to
                  prosecuting  appeals from  decisions  of the patent  office of
                  various  jurisdictions  throughout  the world nor  engaging in
                  litigation  with third parties.  The Licensee shall  regularly
                  apprize Licensor and at Licensor's direction on a confidential
                  basis  Licensor's  other  licensees  of the  status  of patent
                  applications  and of approved  patents.  The Licensee shall be
                  entitled to  reimbursement  of its out of pocket  expenditures
                  incurred in providing such cooperation to other licensees.

         (b)      Applications  for  Licensed  Patents  filed  after the date of
                  execution of this Agreement shall first be filed in the United
                  States of America and the selection of other  jurisdictions of
                  the world in which any particular application is to be

                                 Page 18 of 31
<PAGE>

                  filed shall be in the sole  discretion  of the  Licensee.  The
                  Licensee  shall  advise the  Licensor of its  decision in this
                  regard  within  nine  (9)  months  of the  filing  date of any
                  particular  application in the United States of America.  With
                  respect to applications  for Licensed Patents in jurisdictions
                  where the Licensee  chooses not to file, the Licensor may file
                  and prosecute an application at its own expense.  With respect
                  to any  jurisdiction in which the Licensor obtains a patent as
                  contemplated  by this clause,  the Licensee shall not have any
                  rights under this Agreement(.)  unless and until it reimburses
                  the  Licensor  for the  cost of  obtaining  such  patent  with
                  interest  as provided  for in clause  5.05.  Furthermore,  the
                  Licensor  may grant a license to any third  party for a patent
                  it obtains under this clause subject to the following right of
                  first refusal in the Licensee's favour. The Licensor shall not
                  enter into any such  license  agreement  with any third  party
                  within  the scope of the  within  License  without  giving the
                  Licensee at least sixty (60) days written notice which written
                  notice shall identify the proposed  licensee(s)  and set forth
                  the costs  incurred by the Licensor in obtaining  such patent.
                  From and after receipt of any such written notice the Licensee
                  may advise the Licensor in writing that it wishes to have such
                  patent  added  to  the  Licensed  Patents.  Accompanying  such
                  written  notice shall be a cheque in the amount  stipulated in
                  the written notice from the Licensor.

         (c)      If the Licensee complies with the foregoing, such patent shall
                  become one of the Licensed  Patents and the Licensee  shall be
                  entitled  to  exercise  all of its  rights  hereunder  in such
                  jurisdiction.  If the  Licensee  fails to deliver such written
                  notice,  or advises  the  Licensor  that it does not intend to
                  exercise this right of first  refusal,  the Licensor may enter
                  into the license agreement  described in the written notice to
                  the  Licensee.  However,  if the Licensor  does not enter into
                  such  license  agreement  for any  reason  with such  proposed
                  licensee(s),  the  Licensor  shall  not  enter  into any other
                  license agreements for such patent in such jurisdiction within
                  the scope of the within License  without first again complying
                  with this right of first refusal in favour of the Licensee.

         (d)      The  Licensee  shall  have the  option  of  discontinuing  the
                  prosecution  of an  application  for a Licensed  Patent or not
                  filing an application based on the Licensed  Technology or any
                  Improvement  in  accordance  with  this  clause  6.06.  If the
                  Licensee's  patent  agents  provide a written  opinion  to the
                  effect  that an  application  for a Licensed  Patent  does not
                  warrant the expense of further prosecution,  or that an aspect
                  of the  Licensed  Technology  or any  Improvement  (which  the
                  Licensor considers patentable) does not warrant the expense of
                  an  application  the  Licensee  may,  in its sole  discretion,
                  refuse to proceed with such prosecution or application. If the
                  Licensee  exercises  such  option,  it  shall  so  advise  the
                  Licensor in writing and  provide the  Licensor  with a copy of
                  the  opinion of the patent  agents on which such  decision  is
                  based.  The  Licensor  may, in its sole  discretion,  file and
                  prosecute,  or continue the  prosecution,  as the case may, of
                  such  an  application.   If  the  Licensor  is  successful  in
                  obtaining such patent or patents,  the Licensee must reimburse
                  the Licensor for the Licensor's costs of obtaining such patent
                  with  interest as provided  for in clause 5.05 if the Licensee
                  desires rights thereunder. Upon payment to the Licensor of its
                  expenses,  such patent or patents,  as the case may be,  shall
                  become one of the Licensed Patents.

                                  Page 19 of 31

<PAGE>

         (e)      With respect to any jurisdiction in which the Licensor obtains
                  a patent  as  contemplated  by this  clause  and the  Licensee
                  chooses not to reimburse the Licensor for its costs thereof as
                  set forth above, the Licensor may grant a license to any third
                  party for such patent  within the scope of the within  License
                  subject  to  the  following  right  of  first  refusal  in the
                  Licensee's  favour. The Licensor shall not enter into any such
                  license agreement with any third party within the scope of the
                  within License without giving the Licensee at least sixty (60)
                  days written  notice which written  notice shall  identify the
                  proposed  licensee(s)  and set forth the costs incurred by the
                  Licensor in obtaining  such patent.  From and after receipt of
                  any such written notice,  the Licensee may advise the Licensor
                  in  writing  that it wishes to have such  patent  added to the
                  Licensed Patents.  Accompanying such written notice shall be a
                  cheque in the amount stipulated in the written notice from the
                  Licensor.

         (f)      If the  Licensee  complies  with the  foregoing,  such patents
                  shall  become one of the  Licensed  Patents  and the  Licensee
                  shall be entitled to exercise  all of its rights  hereunder in
                  such  jurisdiction.  If the  Licensee  fails to  deliver  such
                  written  notice,  or  advises  the  Licensor  that it does not
                  intend to exercise this right of first  refusal,  the Licensor
                  may enter into the license agreement  described in the written
                  notice  to,the  Licensee.  However,  if the Licensor  does not
                  enter into such  license  agreement  for any  reason  with the
                  proposed  licensee(s),  the Licensor  shall not enter into any
                  other license  agreement for such patent in such  jurisdiction
                  within the scope of the within  License  without  first  again
                  complying  with this  right of first  refusal  in favor of the
                  Licensee.

         (g)      Licensee's  patent  expenditures for  applications  covered by
                  this  Section  6.06  shall be  credited  against  payments  on
                  account of  Royalties  to a maximum of fifty (50%)  percent of
                  any payment  otherwise due until Licensee has been  reimbursed
                  in full  provided  that such  credits  may not be  applied  to
                  reduce  Royalties  below  those  amounts of Minimum  Royalties
                  payable pursuant to 4.03.

                ARTICLE VII - PATENT PROTECTION AND INFRINGEMENT

7.01     The Licensee and the Licensor shall  promptly  advise each other of any
infringement or suspected infringement of the Licensed Patents by a third party.
Subject to any subsequent agreement as to the conduct of any such action:

         (a)      the Licensee,  or its  sublicensees,  or both, may institute a
                  suit and,  subject to the  provisions  hereinafter  appearing,
                  join the  Licensor as a plaintiff  in which case the  Licensee
                  and its  sublicensees,  as the  case  may be,  shall  bear the
                  entire cost of such litigation and shall be entitled to retain
                  the entire amount of any recovery whether by way of judgement,
                  award, decree or settlement; or

         (b)      if the Licensee and its sublicensees choose not to institute a
                  suit as provided for in subclause (a) above,  the Licensor may
                  institute  a suit in which  case the  Licensor  shall bear the
                  entire cost of such litigation and shall be entitled to retain
                  the entire amount of any recovery  whether by way of judgment,
                  award, decree or settlement.

                                  Page 20 of 31

<PAGE>

If the Licensee and its  sublicensees  exercise  their right to commence a suit,
the  Licensor  need not  consent to being nor shall it be added as a party until
provided  with an indemnity  agreement  from the  Licensee and its  sublicensees
against all costs, expenses and damages which the Licensor may incur as a result
of such cooperation. Such indemnity agreement shall be in a form satisfactory to
the  Licensor's  solicitors  and be supported by such  reasonable  assurances in
support  of  such  indemnity  as  the  Licensor  considers  appropriate  in  the
circumstances.

7.02     Should the  Licensor or the  Licensee  (which  includes for purposes of
this clause the  Licensee's  sublicensees)  commence a suit in  accordance  with
clause 7.01 and  subsequently  elect to abandon  such suit,  the Licensor or the
Licensee,  as the case may be, shall first give timely notice to the other,  who
may,  if it so  desires,  continue  prosecution  of such suit  provided  that an
agreement as to the sharing of expenses and any recoveries is first arrived at.

7.03     If the Licensee institutes a suit in accordance with clause 7.01 it may
deduct fifty (50%) percent of its  out-of-pocket  expenditures,  including legal
fees and  disbursements,  that are  incurred in bringing  and  prosecuting  such
infringement  action from Royalties not yet paid to a maximum amount of one-half
of each payment on account of Royalties  otherwise due, until such  expenditures
are paid in full. If the Licensee recovers profits or damages, or both, from the
alleged  infringer,  the  Licensee  shall  after  reimbursing  itself  for  such
expenditures that it has had to bear, repay the Licensor all Royalties that have
been deducted in  accordance  with this clause 7.03 and interest as provided for
herein, up to, but not exceeding,  the amount of the damages so recovered by the
Licensee.  However, if any such infringement suit results in an adverse judgment
and all or some of the  Licensed  Patents are wholly or  partially  invalidated,
Royalties shall be adjusted in accordance with clause 4.01.

7.04     Each party shall  promptly  notify the other in writing of any claim or
action for  infringement  of the patent  rights of any third  party based on the
production, use or sale of Products by the Licensee or its sublicensees.

7.05     The  entitlements of the Licensee under this Article VII are limited to
third party infringements of the applications subject of this Agreement.

                  ARTICLE VIII - REPRESENTATIONS AND WARRANTIES

8.01     Subject to Article IX, the Licensor represents and warrants that it:

         (a)      has  obtained  and  holds  title  to all  such  rights  in the
                  Licensed  Patents and Licensed  Technology as may be necessary
                  to grant the licenses  contemplated by this Agreement  subject
                  to the rights of governmental  and other agencies  pursuant to
                  funding  agreements  that the Licensor has with such agencies;
                  and

         (b)      and has full power and authority to enter into this Agreement.
                  (a)

                                 Page 21 of 31
<PAGE>

                      ARTICLE IX - DISCLAIMER OF WARRANTIES

9.01     The parties  acknowledge and agree that nothing in this Agreement is or
shall be construed as being:

         (a)      a warranty or representation by the Licensor as to whether any
                  patents  based on the  Licensed  Technology  will issue or the
                  validity or scope of the Licensed Patents once issued; or

         (b)      a warranty or representation by the Licensor that Products
                     made,  used, sold or otherwise  disposed of by the Licensee
                     are  and  will  be  free  from   infringement  of  patents,
                     copyrights,  trademarks or other  proprietary  interests of
                     any third party; or

         (c)      an obligation on the Licensor to bring or prosecute actions or
                  suits against third parties for  infringement  of the Licensed
                  Patents or other proprietary  rights under any  circumstances;
                  or

         (d)      the conferring of any rights to use in advertising,  publicity
                  or otherwise  any trademark or the name of either the Licensor
                  or the University of  Saskatchewan  or any employee,  agent or
                  person otherwise associated with either of those institutions;
                  or

         (e)      a grant by  implication,  estoppel or otherwise of any license
                  to any patents or other confidential  proprietary  information
                  of the Licensor  other than the Licensed  Patents and Licensed
                  Technology; or

         (f)      A REPRESENTATION OR WARRANTY,  WHETHER EXPRESS OR IMPLIED,  BY
                  THE  LICENSOR OF  MERCHANTABILITY  OR FITNESS FOR A PARTICULAR
                  PURPOSE, NOR A REPRESENTATION OR WARRANTY BY THE LICENSOR THAT
                  IT SHALL BEAR ANY  LIABILITY  TO THE  LICENSEE  WHATSOEVER  BY
                  REASON OF ANY LOSS OR DAMAGE  SUSTAINED BY THE  LICENSEE,  ITS
                  EMPLOYEES,  OR ANY THIRD PARTY ARISING OUT OF THE  PRODUCTION,
                  USE, SALE OR OTHER DISPOSAL OF PRODUCTS OR ARISING DIRECTLY OR
                  INDIRECTLY  OUT OF THE  USE BY THE  LICENSEE  OF THE  LICENSED
                  PATENTS AND LICENSED  TECHNOLOGY  OR OTHERWISE  ARISING OUT OF
                  THE GRANT OF ANY  RIGHTS  UNDER THIS  AGREEMENT  OR OUT OF THE
                  PROVISION  OF  ANY   INFORMATION   IN  CONNECTION   WITH  THIS
                  AGREEMENT.

                              ARTICLE X - INDEMNITY

10.01    The Licensee shall indemnify, hold harmless and defend the Licensor and
its officers, employees and agents against any and all claims arising out of the
exercise by the Licensee of any of the rights granted to it under this Agreement
including,  without  limitation,  against  any  damages,  losses or  liabilities
whatsoever  with respect to death or other personal injury to a person or damage
to property  arising from or out of the use of the Licensed Patents and Licensed
Technology  by the  Licensee,  it  sublicensees  or its  customers in any manner
whatsoever or the  production,  use, sale, or lease of Products by the Licensee,
its sublicensees or its customers in any

                                 Page 22 of 31
<PAGE>

manner  whatsoever;  with the exception of any damage or loss directly resulting
from acts or  omissions  constituting  bad  faith,  willful  misfeasance,  gross
negligence or reckless  disregard of duties under this Agreement by the Licensor
or its  officers,  employees or agents  acting in such capacity on the behalf of
the Licensor.

                            ARTICLE XI - SUBLICENSING

11.01    This  Agreement  has  been  entered  into  so  that  the  Licensee  may
commercialize  the Licensed Patents and Licensed  Technology by the development,
production, use and marketing of Products.  Accordingly,  the Licensee may grant
sublicenses  of its rights under this Agreement and enter into contracts to have
Products  developed,  produced,  used or sold provided that all such sublicenses
shall provide,  amongst other things,  that they come to an end immediately upon
the termination of this Agreement for whatever reason.

                            ARTICLE XII - TERMINATION

12.01    This Agreement shall terminate at the Licensor's option if the Licensee
is in breach of any  material  provision  hereof and fails to remedy such breach
within  ninety (90) days of receipt of written  notice from the Licensor of such
breach.

12.02    This Agreement shall further terminate,  at the option of the Licensor,
if:

         (a)      the Licensee  files an Assignment in Bankruptcy or is adjudged
                  a bankrupt or insolvent corporation; or

         (b)      the Licensee is adjudged a bankrupt or  insolvent  corporation
                  as a result of  taking  advantage  of any law or  governmental
                  regulation relating to bankruptcy or insolvency; or

         (c)      a receiver or receiver-manager for all or substantially all of
                  the property and assets of the Licensee is appointed; or

         (d)      the Licensee  makes an assignment or attempted  assignment for
                  the benefit of its creditors; or

         (e)      the Licensee  institutes any proceedings for the winding up of
                  its business; or

         (f)      a  governmental  authority  exercises its powers in such a way
                  that the expropriation or confiscation of all or a substantial
                  part of the property and assets of the Licensee occurs.

12.03    If the  Licensor  decides  to  exercise  its option to  terminate  this
Agreement  pursuant to either clauses 12.01 or 12.02,  it shall so exercise such
option by delivering written notice to the Licensee,  which written notice shall
specify the effective date of  termination.  Termination of this Agreement shall
not  prejudice any other rights or remedies,  whether in law or in equity,  that
the Licensor may have as a result of any actions by the Licensee.

                                  Page 23 of 31

<PAGE>

12.04    The  Licensee  shall be  entitled,  at its option,  to  terminate  this
Agreement  at any time by giving  the  Licensor  a minimum  of ninety  (90) days
written notice of its intention.

12.05    Upon termination of this Agreement,  whether pursuant to clauses 12.01,
12.02 or  12.04,  the  parties  shall  return  to each  other  all  Confidential
Information with the exception of one (1) copy of each such disclosure which may
be retained for record purposes. The Licensee acknowledges that upon termination
of this  Agreement by the Licensor for any reason other than the  expiration  of
the Term,  it shall no longer have any rights to use the Licensed  Technology or
infringe the Licensed Patents.  Accordingly, the Licensee shall cease production
of Products upon the effective  date of  termination  and return all cell lines,
reagents  and  other  biological  material  obtained  from the  Licensor  to the
Licensor. With respect to the remaining stock of Products then in the Licensee's
possession,  the Licensor  shall have the option of  purchasing  such  remaining
stock from the  Licensee at and for a price equal to the price that the Licensee
offers such Products to its third party customers less ten (10%) percent,  or by
having the Licensee  destroy such  remaining  stock of Products,  and  providing
proof of such destruction to the Licensor.

12.06    Surviving  the  termination  of this  Agreement,  whether  pursuant  to
clauses  12.01 and 12.02 of this Article XII or due to the  expiration  of time,
are  the   appropriate   provisions  of  Article  II  (Licenses),   Article  III
(Improvements),  Article  IV  (Royalties),  Article  V  (Reports,  Payments  and
Accounting),  Article IX  (Disclaimer  of  Warranties),  Article X  (Indemnity),
Article XII (Termination) and Article XIII (Confidentiality and Disclosures).

                 ARTICLE XIII - CONFIDENTIALITY AND DISCLOSURES

13.01    The  parties  acknowledge  that  both of  them  may  from  time to time
disclose  to the other  (respectively  referred  to as the  "Discloser"  and the
"Recipient",   as  the  case  may  be)  information  that  is  confidential  and
proprietary,  or both,  to the  Discloser.  Such  information  may be  disclosed
orally,  graphically,  by way of sample or  specimen  or  otherwise  printed  or
recorded by any means.  Accordingly,  all information disclosed pursuant to this
Agreement  including,  without  limitation,  all  information  pertaining to the
Licensed  Patents and Licensed  Technology,  shall be deemed to be  confidential
information  (hereinafter referred to as "Confidential  Information") unless the
Discloser  expressly  indicates that it is not confidential or it falls into one
of the following categories.:

         (a)      it is required to be  disclosed  by reason of judicial  action
                  after  all   reasonable   legal   remedies  to  maintain   the
                  confidentiality of such information have been exhausted; or

         (b)      it is or becomes part of the public domain through no fault of
                  the Recipient; or

         (c)      it is known to the  Recipient,  or its permitted  sublicensees
                  prior to disclosure by the Discloser; or

         (d)      it is  subsequently  legally  obtained by the Recipient or its
                  sublicensees from a third party under  circumstances  which do
                  not constitute a breach of this Article XIII; or

                                 Page 24 of 31
<PAGE>

         (e)      it is independently developed by the Recipient outside of this
                  Agreement and without in any way breaching this Agreement; or

         (f)      it is approved for public release by the Discloser.

13.02    Each of the parties shall use its  reasonable  best efforts to preserve
the secrecy of Confidential Information and shall only disclose it to:

         (a)      employees,  or  employees of  permitted  sublicensees  who are
                  required to know the same for  performance of their duties and
                  who have entered into appropriate  confidentiality agreements;
                  and

         (b)      such  Government  officials as are required for the purpose of
                  obtaining all necessary  regulatory  approvals for the purpose
                  of commercializing any Product or for the filing of any patent
                  in any  jurisdiction,  provided  that the parties  shall avail
                  themselves of all available  provisions for ensuring that such
                  disclosures do not become public.

Neither the Licensor nor the Licensee shall submit any manuscript,  abstract, or
like  document  for written or oral  publication  if it  includes  data or other
information  generated and provided by the other party  without first  obtaining
the prior written consent of the other,  which consent shall not be unreasonably
withheld.  The  contribution of each party shall be noted in all publications or
presentations by acknowledgment or co-authorship, whichever is appropriate.

13.03    The Licensee  recognizes that the Licensor has an obligation to publish
and disseminate  scientific  knowledge.  The Licensor recognizes that the public
release  of  material  pertaining  to  Licensed  Technology  may  prejudice  the
possibility of obtaining letters patent for such Licensed Technology,  or result
in  Commercially  Significant  Confidential  Information  being  disclosed  to a
competitor of the Licensee's, or both. Therefore,  during the Term, the Licensor
shall make all theses, articles and similar publications of any description, and
the  contents of all  abstracts  and poster  presentations  which  relate to the
Licensed  Patents  or  Licensed  Technology,   or  both  and  Improvements  (all
hereinafter referred to as "External  Disclosures")  available for review by the
Licensee within a reasonable  period of time prior to submission for publication
or release, as the case may be, but in any event at least thirty (30) days prior
to such date.  The Licensee  shall review all External  Disclosures to ascertain
whether  patentable  subject  matter or  Commercially  Significant  Confidential
Information  is  disclosed.  The  Licensor  shall only  proceed with an External
Disclosure upon receiving the Licensee's consent,  which consent shall be deemed
to have been given if the  Licensee  does not respond  within a period of thirty
(30) days from the date of submission to the Licensee of any particular External
Disclosure. If requested by the Licensee in writing, the Licensor shall:

         (a)      delay  submission for publication or release,  as the case may
                  be, of any  particular  External  Disclosure for the period of
                  time  required  for a patent  application  to be filed,  which
                  period of time shall not exceed  six (6)  months  without  the
                  Licensor's written consent; or

         (b)      amend such External  Disclosure so as to delete those portions
                  which   constitute   Commercially   Significant   Confidential
                  Information; or both.

                                 Page 25 of 31
<PAGE>

         As used in  clauses  13.03,  13.04 and  13.05,  the term  "Commercially
Significant  Confidential  Information" means Confidential Information which, if
disclosed  to a  commercial  competitor  of the  Licensee's,  could  allow  such
competitor to develop or enhance its position in the market place, or to price a
new  product  in a more  competitive  fashion,  or to  improve  the  price of an
existing  product  so as to compete or improve  its  competitive  position  with
respect to existing or potential the Licensee Products. Commercially Significant
Confidential  Information may include, by way of example and without limitation,
information as to the  formulation  or  composition of a Product,  the method of
formulating  or  combining  ingredients  for a  Product,  detailed  chemical  or
biological  structural  information for a Product and its  ingredients,  and the
method or application of a Product.

13.04    The Licensor shall use reasonable efforts to ensure that all scientific
oral  presentations  which are made by its staff and  graduate  students  do not
contain Commercially Significant Confidential Information.

13.05    The  Licensee  acknowledges  and agrees  that  clause  13.03  shall not
prohibit  the  Licensor's  personnel  from  disseminating   general  information
concerning the Licensed Patents and Licensed Technology to government  agencies,
associations of livestock  producers,  other organizations or groups of whatever
description  who provide  funding to the Licensor or who derive a direct benefit
from the  Licensor's  research  activities as long as  Commercially  Significant
Confidential Information is not disclosed.

13.06    The Licensor  recognizes  that,  pursuant to United  States  laws,  the
Licensee may have an  obligation,  under certain  circumstances,  to make public
announcements  relating  to  this  Agreement  or  the  development,  production,
exploitation,  use, or sale of Products in connection with this  Agreement.  The
parties hereby agree to abide by the applicable notice and consent provisions of
Section 13.03 above with respect to proposed disclosures to be made by Licensee.
Licensor  acknowledges  and agrees that nothing in this Agreement  shall prevent
Licensee from making any disclosure to the extent  required by law provided that
prior notice of such disclosure is given to Licensor.

                     ARTICLE XIV - COMMERCIAL DUE DILIGENCE

14.01    The  Licensor by written  notice to the  Licensee may make this License
non- exclusive with respect to a particular Major Jurisdiction if:

         (i)      the Licensee is not by the  expiration  of calendar  year 2007
                  selling a Product into such Major Jurisdiction, or

                  a New Animal Drug  Application  (NADA or its equivalent) for a
                  Product has not been  submitted  to  appropriate  governmental
                  authorities  prior  to the  end of  calendar  year  2004 or if
                  submitted  has not been  maintained  in effect and  diligently
                  pursued from the end of calendar year 2004, or

         (iii)    amounts  paid  hereunder  by  Licensee  to Licensor in each of
                  calendar years 2005 and 2006 have not exceeded $250,000 US.

                                 Page 26 of 31
<PAGE>

For purposes of this Section 14.01, Major Jurisdictions are the United States of
America (which jurisdiction includes other than for registration purposes Canada
and Mexico) and Europe (which is defined as one of the EU member countries).

         The  Licensor by written  notice to the  Licensee may make this License
nonexclusive with respect to a particular  jurisdiction not constituting a Major
Jurisdiction if:

         (iv)     the   Licensor   has  the   right  to  render   this   License
                  non-exclusive in respect of both Major Jurisdictions, or

         (v)      amounts  paid  hereunder by Licensee to Licensor in respect of
                  2007 or any subsequent calendar year is less than $500,000 and
                  the Licensor is not selling Product into such jurisdiction.

14.02    In  respect  of the  requirements  of 14.01 (ii) to submit a New Animal
Drug  Application  (NADA  or  its  equivalent)  for  a  Product  to  appropriate
governmental  authorities  prior to the end of calendar  year 2004, in the event
that  such  submission  has not been so  effected  the  Licensee  may  obtain an
extension  of such date for the purposes of 14.01 of up to 12 months (to the end
of 2005) provided that the Licensee can establish that:

         (i)      it has  substantially  made  such  application  and  that  the
                  completion  of such  application  within  the  period  of such
                  extension is probable, and

         (ii)     the  Licensee  has used all due  diligence  in its  efforts to
                  effect the submission within the original time limits but that
                  circumstances  reasonably beyond its control prevented it from
                  doing  so,  and  that  with due  diligence  on the part of the
                  Licensee such circumstances will not in all likelihood prevent
                  the  completion  of the  submission  within  the period of the
                  extension.

         The  Licensee  shall be entitled to one further  extension  of up to 12
months on the time limits pertaining to 14.01 (ii) provided that on such further
extension the Licensee can establish the conditions  referred to in (i) and (ii)
above at such  time.  If the  Licensor  does not  agree  that the  Licensee  has
established the foregoing such determination may be referred to arbitration.

14.03    Wherever  commercially  feasible to do so, the Licensee  shall publicly
acknowledge and shall ensure that its  sublicensees  publicly  acknowledge,  the
role  of the  Licensor  or the  University  of  Saskatchewan,  or  both,  in the
development of Products. Prior to providing any such public acknowledgment,  the
Licensee  shall  obtain  the  approval  of the  Licensor  or the  University  of
Saskatchewan, as the case maybe. With respect to the University of Saskatchewan,
the Licensee acknowledges that any such approval must be obtained from the Board
of Governors in the manner  stipulated by THE  UNIVERSITY OF  SASKATCHEWAN  ACT,
1995, Statutes of Saskatchewan.

                                 Page 27 of 31
<PAGE>

                           ARTICLE XV - MISCELLANEOUS

15.01    ASSIGNMENT

         This  Agreement  shall not be assigned  by the  Licensee in whole or in
part  without the prior  written  consent of the Licensor  which  consent may be
unreasonably  withheld  provided,   however,  that  the  Licensee  may,  without
obtaining  such  consent,  assign,  transfer,  or part  with any of its  rights,
duties,  or  obligations  under  this  Agreement  to any  parent  or  subsidiary
corporation  of the  Licensee or an affiliate of the Licensee as those terms are
defined in THE BUSINESS  CORPORATIONS  Act (Canada),  if such proposed  assignee
promptly  executes and delivers an agreement in favour of the Licensor  pursuant
to which the  assignee  agrees  to be bound by all of the  terms and  conditions
contained in this Agreement.  Furthermore, such assignee must covenant to remain
during the continuance of this Agreement,  a parent,  subsidiary or affiliate of
the  Licensee,  as the  case  may be.  The  Licensee  acknowledges  that no such
assignment  shall in any way affect its liabilities and  responsibilities  under
this Agreement.

15.02    GOVERNING LAW

         This  Agreement   shall  be  construed,   interpreted  and  applied  in
accordance  with the laws of the Province of  Saskatchewan  and Canada,  and the
parties  hereby  attorn to the  jurisdiction  of the Courts of the  Province  of
Saskatchewan.

15.03    NOTICES

         All  notices,  demands or other  writings  required or  permitted to be
given hereunder by either party hereto to the other, may be effectively given by
letter, mailed by registered mail, postage prepared, addressed to:

         (a)      to the Licensor:
                  VIDO
                  120 Veterinary Road
                  University of Saskatchewan
                  Saskatoon, Saskatchewan
                  S7N OWO
                  Attention: Director

         With a copy to:
                  McKercher, McKercher and Whitmore,
                  374 3rd Avenue South, Saskatoon, Saskatchewan
                  S7K 1M5
                  Attention: L.J. Dick Batten

         (b)      to the Licensee:
                  MetaMorphix-International , Inc.
                  1450 South Rolling Road, Baltimore,
                  Maryland, United States of America, 21227
                  Attention: President

                                  Page 28 of 31
<PAGE>

         With a copy to:
                  Shapiro and Olander,
                  Twentieth Floor, 36 Charles Street,
                  Baltimore, Maryland, 21201-3147
                  Attention: William E. Carlson

or hand delivered to the above addresses or sent by electronic  means. If mailed
as aforesaid,  any such notice shall be deemed to have been given by the seventh
(7th) business day following the date of posting, and if delivered personally or
by  electronic  means,  on the date or  delivery,  provided  that such date is a
business day.  Either party to this Agreement may change its address for service
from time to time by giving notice in writing in accordance with the foregoing.

15.04    WAIVER

         The parties  covenant  and agree that if either  party  hereto fails or
neglects,  for any reason, to take advantage of any of the terms herein provided
for its benefit,  any such failure or neglect by such party shall not be, nor be
deemed to be construed as waiver of any of the terms, covenants or conditions of
this Agreement or the performance thereof.

15.05    NO AGENCY OR JOINT VENTURE

         This is a contract between separate legal entities and neither party is
the  agent  of the  other  for any  purposes  whatsoever,  and  nothing  in this
Agreement does or shall directly or indirectly constitute either party to be the
agent of the other.

15.06    SUCCESSORS AND PERMITTED ASSIGNS

         This  Agreement  shall enure to the benefit of and be binding  upon the
parties hereto and their respective successors and any permitted assigns.

15.07    FORCE MAJEURE

         Neither  party to this  Agreement  shall be  liable  to the  other  for
failure or delay in the performance of their  obligations  under this Agreement,
by Acts of God,  regulations,  or laws of any government,  war, civic commotion,
strike,  lock-out,  or labour  disturbances,  destruction  of facilities and any
materials and equipment by fire, earthquake,  storm, failure of public utilities
or common  carriers,  and any cause  beyond  the  control  of that party for the
period  of  time  that  the  foregoing   prevents   performance.   The  Licensee
acknowledges  and agrees that the foregoing  does not operate so as to excuse it
from prompt  payment of any and all sums due by it to the  Licensor  pursuant to
the terms and conditions of this Agreement.

15.08    ARBITRATION

         With the exception of:

         (a)      a dispute  arising  from any breach or  alleged  breach of the
                  party's obligations with respect to confidentiality; or

                                 Page 29 of 31
<PAGE>

         (b)      a failure by the Licensee to make any payments when due; or

         (c)      the exercise by the  Licensor of its right to  terminate  this
                  Agreement pursuant to Article XII,

the  parties  shall  submit  all  disputes   arising  under  this  Agreement  to
arbitration.  The party desiring to initiate  arbitration  shall serve a written
request on the other party.

         The party  receiving  such written  request shall  designate the locale
within which arbitration is to take place. Within thirty (30) days of receipt of
such written request,  each party shall appoint an umpire. The arbitration shall
take place in  accordance  with the  provisions  of THE  ARBITRATION  ACT,  1992
Statutes of  Saskatchewan,  or its successor  legislation-in  force from time to
time.

15.09    This Agreement  constitutes  the entire  agreement  between the parties
pertaining  to the subject  matter.  No  representative  of the  Licensee or the
Licensor has been authorized to make any representation, warranty or promise not
contained  herein.  This  Agreement may not be amended or modified in any manner
except by written agreement executed by both of the parties.

                                 Page 30 of 31
<PAGE>

15.10    The headings  contained in this  Agreement are for  reference  purposes
only and shall in no way affect the meaning or  interpretation of any section of
this Agreement.

         IN WITNESS  WHEREOF VIDO has  hereunto  affixed its  corporate  seal as
evidence of its approval of this  Agreement by the hands of its duly  authorized
officers in that behalf on the day and year first above written.

                                    THE VETERINARY INFECTIOUS DISEASE
                                    ORGANIZATION

                                    PER: /s/ Lorne Babiuk

                                    PER: /s/ Martel

         IN WITNESS  WHEREOF the Board of Governors  University of  Saskatchewan
has hereunto affixed its corporate by the hands of its duly authorized  officers
in that behalf day and year first above written.

                                    BOARD OF GOVERNORS OF THE
                                    UNIVERSITY OF SASKATCHEWAN

                                    PER: /s/ K.Wharton

                                    PER: /s/ J.Finwirth

         IN WITNESS WHEREOF MetaMorphix International, Inc. has hereunto affixed
its corporate seal by the hands of its duly  authorized  officers in that behalf
on the day and year first above written.

                                    METAMORPHIX INTERNATIONAL , INC.

                                    PER: /s/ Edwin Quattlebaum

                                    PER: /s/ Mike Thomas

                                 Page 31 of 31
<PAGE>

                                  EXHIBIT "A"
           ATTACHED TO AND FORMING PART OF THE VIDO TECHNOLOGY LICENSE

                                  MADE BETWEEN

                         THE UNIVERSITY OF SASKATCHEWAN

                                     - AND -

                         METAMORPHIX-INTERNATIONAL INC.

PLEASE SEE ATTACHED

<PAGE>

                                  SCHEDULE "A"
                                 VIDO TECHNOLOGY

Includes  all  patents  and  patent  applications  arising  from  U.S.A.  patent
application  numbers  07/779/171  and  07/335,018,   as  listed  in  Robins  and
Associates  patent series 9001-0006 and 90010016.  The symbol (alpha)  indicates
patents for which Novartis is charged with the maintenance and prosecution under
the  provisions of the EXCLUSIVE  LICENSE - - NOVARTIS TO BIOSTAR DATED FEBRUARY
29, 2000, and the symbol (beta) indicates patents for which MIMI is charged with
the maintenance and prosecution under the provisions of this License.

A.       ROBINS AND ASSOCIATES PATENT SERIES 9001-0006

         "COMPOSITIONS AND TREATMENTS FOR PNEUMONIA IN ANIMALS"

                  o        Issued U.S. Patent No. 5,849,531 (alpha)

         "LEUKOTOXIN VACCINE COMPOSITIONS AND USES THEREOF"

                  o        Issued U.S. Patent No. 5,871,750 (alpha)

         "PASTEURELLA HAEMOLYTICA LEUKOTOXIN COMPOSITIONS AND USES THEREOF"

                  o        Issued U.S. Patent No. 5,476,657 (alpha)

B.       ROBINS AND ASSOCIATES PATENT SERIES 9001-0016

         "ENHANCED IMMUNOGENICITY USING LEUKOTOXIN CHIMERAS"

                  o        U.S. Application 08/976,566 (alpha)
                  o        U.S. Patent 5,708,155 (alpha)
                  o        U.S. Patent 5,422,110 (alpha)

         "GNRH LEUKOTOXIN CHIMERAS"

                  o        U.S. Application 09/383,912 (alpha)
                  o        U.S. Patent 5,969,126
                  o        U.S. Patent 5,723,129
                  o        U.S. Patent 5,837,268 (alpha)
                  o        U.S. Patent 6,022,960 (alpha)

<PAGE>

                                      VIDO
                                     BIOSTAR

Patent Report by Invention                                   Printed: 01/06/2000
Reference Number: 9001-0006

COMPOSITIONS AND TREATMENTS FOR PNEUMONIA IN ANIMALS

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
COUNTRY                      REFERENCE          TYPE       FILED        SERIAL #       ISSUED       PATENT#        STATUS

                             #                                                               -
<S>                          <C>                <C>        <C>          <C>            <C>          <C>            <C>
----------------------------------------------------------------------------------------------------------------------------
AUSTRALIA                    9001-0006.43       CEQ        05/25/1990   5662190        03/07/1994   642650         ISSUED
----------------------------------------------------------------------------------------------------------------------------
BELGIUM                      9001-0006.48       DCA        05/25/1990   909068314      08/27/1997   0527724        PENDING
----------------------------------------------------------------------------------------------------------------------------
CANADA                       9001-0006.40       CEQ        04/06/1990   2014033        02/09/1993   2014033        ISSUED
----------------------------------------------------------------------------------------------------------------------------
SWITZERLAND                  9001-0006.49       DCA        05/25/1990   909068314      08/27/1997   0527724        PENDING
----------------------------------------------------------------------------------------------------------------------------
GERMANY                      9001-0006.50       DCA        05/25/1990   909068314                   0527724        ISSUED
----------------------------------------------------------------------------------------------------------------------------
EUROPEAN PATENT CO           9001-0006.44       CEQ        05/25/1990   909068314      08/27/1997   0527724        ISSUED
----------------------------------------------------------------------------------------------------------------------------
SPAIN                        9001-0006.51       DCA        05/25/1990   909068314      08/27/1997   0527724        PENDING
----------------------------------------------------------------------------------------------------------------------------
FINLAND                      9001-0006.45       CEQ        05/25/1990   924457                                     ABANDONED
----------------------------------------------------------------------------------------------------------------------------
FRANCE                       9001-0006.52       DCA        05/25/1990   909068314      08/27/1997   0527724        PENDING
----------------------------------------------------------------------------------------------------------------------------
UNITED KINGDOM               9001-0006.53       DCA        05/25/1990   909068314      08/27/1997   0527724        PENDING
----------------------------------------------------------------------------------------------------------------------------
ITALY                        9001-0006.54       DCA        05/25/1990   909068314      08/27/1997   0527724        PENDING
----------------------------------------------------------------------------------------------------------------------------
JAPAN                        9001-0006.46       CEQ        05/25/1990   2507689                                    ABANDONED
----------------------------------------------------------------------------------------------------------------------------
NETHERLANDS                  9001-0006.55       DCA        05/25/1990   909068314      08/27/1997   0527724        PENDING
----------------------------------------------------------------------------------------------------------------------------
NORWAY                       9001-0006.47       CEQ        05/25/1990   P923827                                    ABANDONED
----------------------------------------------------------------------------------------------------------------------------
UNITED STATES                9001-0006          NEW        04/07/1989   07/335,0 18                                ABANDONED
----------------------------------------------------------------------------------------------------------------------------
UNITED STATES                9001-0006.20       CIP        04/05/1990   07/504,850                                 ABANDONED
----------------------------------------------------------------------------------------------------------------------------
UNITED STATES                9001-0006.01       CON        02/09/1993   08/015,537     12/19/1995   5,476,657      ISSUED
----------------------------------------------------------------------------------------------------------------------------
UNITED STATES                9001-0006.02       CON        12/14/1994   08/355,919     02/16/1999   5,871,750      ISSUED
----------------------------------------------------------------------------------------------------------------------------
UNITED STATES                9001-0006.10       DIV        05/31/1995   08/455,510     12/15/1998   5,849,531      ISSUED
----------------------------------------------------------------------------------------------------------------------------
WIPO                         9001-0006.41       CEQ        04/06/1990   PCT/US9O                                   ABANDONED
                                                                        /01884
----------------------------------------------------------------------------------------------------------------------------
WIPO                         900 1-0006.42      CEQ       05/25/1990    PCT/CA9O /00                               NAT PHASE
                                                                        170
----------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

Patent Report by Invention
Reference Number: 9001-0016

GnRH-LEUKOTOXIN CHIMERAS
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
COUNTRY                      REFERENCE          TYPE       FILED        SERIAL #       ISSUED       PATENT  #      STATUS
                             #
----------------------------------------------------------------------------------------------------------------------------
<S>                          <C>                <C>        <C>          <C>            <C>          <C>            <C>
AUSTRALIA                    9001-0016.64       DCA        01/24/1996   4477796                                    PENDING
----------------------------------------------------------------------------------------------------------------------------
AUSTRALIA                    9001-0016.84       DCA        08/08/1997   3843797                                    PENDING
----------------------------------------------------------------------------------------------------------------------------
AUSTRALIA                    9001-0016.52       DIV                                                                PROPOSED
----------------------------------------------------------------------------------------------------------------------------
BRAZIL                       9001-0016.65       DCA        01/24/1996   P196075260                                 PENDING
----------------------------------------------------------------------------------------------------------------------------
BRAZIL                       9001-0016.85       DCA        08/08/1997   P197111236                                 PENDING
----------------------------------------------------------------------------------------------------------------------------
CANADA                       9001-0016.66       DCA        01/24/1996   2212054                                    PENDING
----------------------------------------------------------------------------------------------------------------------------
CANADA                       9001-0016.86       DCA        08/08/1997   2262524                                    PENDING
----------------------------------------------------------------------------------------------------------------------------
CHINA                        9001-0016.67       DCA        01/24/1996   961926805                                  PUBLISHED
----------------------------------------------------------------------------------------------------------------------------
CHINA                        9001-0016.87       DCA        08/08/1997   97197617                                   PENDING
----------------------------------------------------------------------------------------------------------------------------
EUROPEAN PATENT CO           9001-0016.75       DCA        01/24/1996   969007962                                  PUBLISHED
----------------------------------------------------------------------------------------------------------------------------
EUROPEAN PATENT CO           9001-0016.5 1      DCA        08/08/1997   979353950                                  PENDING
----------------------------------------------------------------------------------------------------------------------------
HUNGARY                      9001-0016.68       DCA        01/24/1996   2544797                                    PENDING
----------------------------------------------------------------------------------------------------------------------------
HUNGARY                      9001-0016.88       DCA        08/08/1997   519499                                     PENDING
----------------------------------------------------------------------------------------------------------------------------
ISRAEL                       9001-0016.89       DCA        08/08/1997   128123                                     PENDING
----------------------------------------------------------------------------------------------------------------------------
IINDIA                       9001-0016.81       CEQ        08/07/1997   2204DEL97                                  PENDING
----------------------------------------------------------------------------------------------------------------------------
JAPAN                        9001-0016.69       DCA        01/24/1996   8523847                                    PENDING
----------------------------------------------------------------------------------------------------------------------------
JAPAN                        9001-0016.90       DCA        08/08/1997   10509192                                   PENDING
----------------------------------------------------------------------------------------------------------------------------
NORTH KORLA                  9001-0016.91       DCA        08/08/1997   PCT/CA97/
                                                                        00559                                      PENDING
----------------------------------------------------------------------------------------------------------------------------
SOUTH KOREA                  9001-0016.70       DCA        01/24/1996   70551397                                   PENDING
----------------------------------------------------------------------------------------------------------------------------
SOUTH KOREA                  9001-0016.92       DCA        08/08/1997   700109799                                  PENDING
----------------------------------------------------------------------------------------------------------------------------
MEXICO                       9001-0016.71       DCA        01/24/1996   976009                                     PENDING
----------------------------------------------------------------------------------------------------------------------------
MEXICO                       9001-0016.93       DCA        08/08i'1997  PCT/CA97/
                                                                        00559                                      PENDING
----------------------------------------------------------------------------------------------------------------------------
NORWAY                       9001-0016.94       DCA        08/08/1997   19990533                                   PENDING
----------------------------------------------------------------------------------------------------------------------------
NEW ZEALAND                  9001-0016.72       DCA        01/24/1996   300125         04/29/1999   300125         ISSUED
----------------------------------------------------------------------------------------------------------------------------
NEW ZEALAND                  9001-0016.95       DCA        08/08/1997   333999                                     PENDING
----------------------------------------------------------------------------------------------------------------------------
PHILIPPINES                  9001-0016.61       CEQ        02/09/1996   52321                                      PENDING
----------------------------------------------------------------------------------------------------------------------------
PHILIPPINES                  9001.0016.82       CEQ        08/08/1997   57547                                      PENDING
----------------------------------------------------------------------------------------------------------------------------
POLAND                       9001-0016.73       DCA        01/24/1996   P321704                                    PENDING
----------------------------------------------------------------------------------------------------------------------------
POLAND                       9001-0016.96       DCA        08/08/1997   P331537                                    PENDING
----------------------------------------------------------------------------------------------------------------------------
FEDERATION OF RUSSIA         9001-0016.74       DCA        01/24/1996   97115447                                   PENDING
----------------------------------------------------------------------------------------------------------------------------
FEDERATION OF RUSSIA         9001-0016.97       DCA        08/08/1997   99104772                                   PENDING
----------------------------------------------------------------------------------------------------------------------------
SINGAPORE                    9001-0016.98       DCA        08/08/1997   99004533                                   PENDING
----------------------------------------------------------------------------------------------------------------------------
THAILAND                     9001-0016.63       CEQ        02/08/1996   029979                                     PUBLISHED
----------------------------------------------------------------------------------------------------------------------------
TURKEY                       9001-0016.99       DCA        08/08/1997   199900267                                  PENDING
----------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

<TABLE>
<S>                          <C>                <C>        <C>          <C>            <C>          <C>            <C>
----------------------------------------------------------------------------------------------------------------------------
TAIWAN                       9001-0016.41       NEW        11/24/1992   81109431                                   ABANDONED
----------------------------------------------------------------------------------------------------------------------------
TAIWAN                       9001-0016.62       CEQ                                                                ABANDONED
----------------------------------------------------------------------------------------------------------------------------
TAIWAN                       9001-0016.83       CEQ                                                                ABANDONED
----------------------------------------------------------------------------------------------------------------------------
UKRAINE                      9001-0016.50       DCA        08/08/1997   99031259                                   PENDING
----------------------------------------------------------------------------------------------------------------------------
UNITED STATES                9001-0016          NEW        10/16/1991   07/779,171                                 ABANDONED
----------------------------------------------------------------------------------------------------------------------------
UNITED STATES                9001-0016.20       CIP        10/14/1992   07/960,932     06/06/1995   5,422,110      ISSUED
----------------------------------------------------------------------------------------------------------------------------
UNITED STATES                9001-0016.21       CIP        02/10/1995   08/387,156     03/03/1998   5,723,129      ISSUED
----------------------------------------------------------------------------------------------------------------------------
UNITED STATES                9001-0016.10       DIV        05/31/1995   08/455,970     01/13/1998   5,708,155      ISSUED
----------------------------------------------------------------------------------------------------------------------------
UNITED STATES                9001-0016.22       CIP        08/09/1996   08/694,865     11/17/1998   5,837,268      ISSUED
----------------------------------------------------------------------------------------------------------------------------
UNITED STATES                9001-0016.11       DIV        06/19/1997   08/878,748     10/19/1999   5,969,126      ISSUED
----------------------------------------------------------------------------------------------------------------------------
UNITED STATES                9001-0016.01       CON        11/24/1997   08/976,566                                 PENDING
----------------------------------------------------------------------------------------------------------------------------
UNITED STATES                9001-0016.12       DIV        07/29/1998   09/124,49 1                                PENDING
----------------------------------------------------------------------------------------------------------------------------
UNITED STATES                9001-0016.02       CON        08/26/1999   09/383,912                                 PENDING
----------------------------------------------------------------------------------------------------------------------------
WIPO                         9001-0016.40       CEQ        10/15/1992   PCT/CA92/                                  ABANDONED
                                                                        00449
----------------------------------------------------------------------------------------------------------------------------
WIPO                         9001-0016.60       CEQ        01/24/1996   PCT/CA96/                                  NAT PHASE
                                                                        00049
----------------------------------------------------------------------------------------------------------------------------
WIPO                         9001-0016.80       CEQ        08/08/1997   PCT/CA97/                                  NAT PHASE
                                                                        00559
----------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

                        BOVINE HERPES VIRUS-I TECHNOLOGY

"BOVINE HERPESVIRUS TYPE 1 POLYPEPTIDES AND VACCINES"

         o        Issued U.S. Patent No. 5,151,267

"NUCLEOTIDE  SEQUENCES ENCODING RECOMBINANT BOVINE HERPESVIRUS TYPE 1, GI, GILL,
GIV POLYPEPTIDES

         o        Issued U.S. Patent No. 5,585,264

Non-U.S.A. counterparts to the above are listed on the attached page.

<PAGE>

--------------------------------------------------------------------------------
               BOVINE HERPESVIRUS TYPE 1 POLYPEPTIDES AND VACCINES
--------------------------------------------------------------------------------
REF NO.(1)  COUNTRY      PATENT/APPI. NO.  STATUS
--------------------------------------------------------------------------------
5.40        Canada       1,338,069         Granted (expires 2/20/13)
--------------------------------------------------------------------------------
5.41        Canada       2,057,387         Pending (awaiting examination)
--------------------------------------------------------------------------------
5.42        PCT          PCT/CA92/00537    National Phase
--------------------------------------------------------------------------------
5.43        EP           0618814           Granted
--------------------------------------------------------------------------------
5.44        EP           98108774.5        Pending: div. of 5.43 (awaiting exam)
--------------------------------------------------------------------------------
5.45        Belgium      0618 814          Granted (expires 12/11/12)
--------------------------------------------------------------------------------
5.46        France       0618 814          Granted (expires 12/11/12)
--------------------------------------------------------------------------------
5.47        Germany      P69228944.5-08    Granted (expires 12/11/12)
--------------------------------------------------------------------------------
5.48        Ireland      0618814           Granted (expires 12/11/12)
--------------------------------------------------------------------------------
5.49        Italy        0618 814          Granted (expires 12/11/12)
--------------------------------------------------------------------------------
5.50        Netherlands  0618 814          Granted (expires 12/11/12)
--------------------------------------------------------------------------------
5.51        Spain        2,130,184         Granted (expires 12/11/12)
--------------------------------------------------------------------------------
5.52        Gr. Britain  0618 814          Granted (expires 12/11/12)
--------------------------------------------------------------------------------
5.53        Switzerland  0618 814          Granted (expires 12/11/12)
--------------------------------------------------------------------------------

--------------------------------

         Morrison and Foerster reference number in patent series 9310-0005.

<PAGE>

                               ADJUVANT TECHNOLOGY

"ADJUVANT   FORMULATION  WITH  ENHANCED   IMMUNOGENIC   ACTIVITY,   AND  RELATED
COMPOSITIONS AND METHODS"

         o        Issued U.S. Patent No. 5,951,988

<PAGE>

Patent Report by Invention                                   Printed: 02/17/2000
Reference Number: 9001-0023

      ADJUVANT FORMULATION WITH ENHANCED IMMUNOGENIC ACTIVITY, AND RELATED
                            COMPOSITIONS AND METHODS
<TABLE>
----------------------------------------------------------------------------------------------------------------------------
COUNTRY                      REFERENCE#         TYPE       FILED        SERIAL #       ISSUED       PATENT#        STATUS
TABLE>
----------------------------------------------------------------------------------------------------------------------------
<S>                          <C>                <C>        <C>          <C>            <C>          <C>            <C>
UNITED STATES                9001-0023          NEW        03/30/1983   08/039,990                                 ABANDONED
----------------------------------------------------------------------------------------------------------------------------
UNITED STATES                9001-0023.01       R82        03/04/1986   08/610,694                                 ABANDONED
----------------------------------------------------------------------------------------------------------------------------
UNITED STATES                9001-0023.02       CON        05/03/1995   08/463,837     09/14/1999   5,951,988      ISSUED
----------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

                                   EXHIBIT "B"
           ATTACHED TO AND FORMING PART OF THE VIDO TECHNOLOGY LICENSE

                                  MADE BETWEEN

                         THE UNIVERSITY OF SASKATCHEWAN

                                     - and -

                         METAMORPHIX-INTERNATIONAL INC.

Please see attached

<PAGE>
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
<S>                                 <C>                                    <C>
           EXHIBIT B                PRE-THRESHOLD
     MANNER OF EXPLOITATION
        OF TECHNOLOGY BY
            LICENSEE                ---------------------------------------------------------------------

                                    DEFINITION OF "NET SALES"              DEFINITION OF "OTHER
        August 15, 2000             1.01(I)                                CONSIDERATION" ***
                                                                           4.06
---------------------------------
"Conventional Sales"                Stacked Royalty applies.               Not Applicable
 Conventional Sales Include
Defined 1.01(p) (I)                 Product delivery to Majority
                                    JVs, Minority JVs and
                                    sublicensees by Licensee
                                    butr qualify for cost of
                                    manufacturing deduction.

                                    1.01 (p)(I)(VIII); 4.04                4.06 (ii)

---------------------------------------------------------------------------------------------------------

"VALUE ADDED RECEIPTS"              Stacked Royalty applies                Other Consideration
and "Value Added                                                           includes all payments
Arrangements"                       Payments based on sharing              in connection with
                                    of 'valued added benefits'             arrangements giving
                                    included, however, payments            rise to Value Added
                                    not caluclated on the basis of         Receipts not
                                    value added benefits                   calculated on basis
                                    excluded                               of valude added
                                                                           benefits, however in
                                                                           respect of Product
                                                                           delivery qualify for cost
                                                                           of manufacturing
                                                                           deduction

                                                                           4.06 (I); 1.01(p)(II)
---------------------------------------------------------------------------------------------------------
</TABLE>

-------------------------------------------------------------------------------
POST-THRESHOLD

-------------------------------------------------------------------------------

DEFINITION OF "NET SALES"                DEFINITION OF "OTHER
1.01(i)                                  CONSIDERATION" MAXIMUM
Stacked Royalty applies.                 OF *** 4.07
Conventional Sales                       Not Applicable
include Product delivery
to Majority JVs,
Minority JVs and
sublicensees by Licensee
but qualify for cost of
manufacturing deduction

1.01(p) (I)((VIII); 4.04                 4.06(i)

-------------------------------------------------------------------------------

Stacked Royalty applies                  Not Applicable

Payments based on sharing                Certain payments
of value added benefits                  (payments other than
included.  Certain payments              initial license fees or
(initial license fees or                 similar upfronnt payments
similar upfront payments and             and pyaments made on
made on the basis of                     the achievement of non-
achievement of non-sales                 sales related milestone
related milestones and a                 or a singular sales related
singular sales related mile-             milestone) not calculated
stone) not calculated on                 on basis of sharing of
basis of value added benefits            "value added benefits' are
are also included.                       included, however, in
                                         respect of Product
                                         delivery qualify for cost of
                                         manufacturing deduction.
-------------------------------------------------------------------------------

<PAGE>

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
           EXHIBIT B                PRE-THRESHOLD
     MANNER OF EXPLOITATION
        OF TECHNOLOGY BY
            LICENSEE

        August 15, 2000
---------------------------------------------------------------------------------------------------------
<S>                                 <C>                                    <C>
Defined 1.01 (p) (II);              1.01 (p) (II); 4.04
1.01 (w)

---------------------------------

"MAJORITY JOINT                     Inclusion in Net Sales of              Licensee receipt of
VENTURE" (50%+)                     Licensee % share of                    Other Consideration
Has to extend by                    Majority JV Net Sales                  applies, however Other
arrangement (whether                                                       Consideration does not
or not sublicense) to               Royalty is the lower of Stated         include distributions of
Major Species - specifi-            royalty or Stacked Royalty             Licensee's share of
cally excludes Value                by reference to Joint Venture          accounting income
Added Arrangements                  royalty load

Defined 1.01(k); 1.01(w)            1.01(p)(III); 4.04                     4.06(v)C

---------------------------------

A majority interest in a            Same as Other Sublicense               Same as Other
JV (50%+) in a Minor                Minor Species                          Sublicnse - Minor
Species is not accorded                                                    Species
special consideration
and falls into Minor
Species Sublicense
category

---------------------------------

"MINORITY JOINT VENTURE"            Stacked Royalty to be paid             Other Consideration
(-50%)                              on Minority JV Net Sales               applies: however,
Has to extend by                                                           Other Consideration
arrangement (whether                                                       does not include
or not sublicense) to                                                      Licensee share of
Major Species -                                                            profit as earned from
specifically excludes                                                      JV or distributions of
Value Added                                                                Licensee shares of
Arrangements                                                               accounting income.
Defined 1.01(1)                     1.01(p)(VI); 4.04                      4.06 (vi) C

</TABLE>

-------------------------------------------------------------------------------
POST-THRESHOLD

-------------------------------------------------------------------------------
1.01(w); 4.04;                           1.01(w); 4.06 (I)
1.01(p)(II), (VIII)

-----------------------------------------

Joint Venture Net Sales                  Stated Royalty applies
attract no payment obligation -
Applies only Pre-Threshold               Other Consideration receipt
                                         includes Licensee share of
                                         profit as earned from
                                         Majority JV, and that income
                                         when distributed is
                                         excluded

                                         4.06(v)(A); 4.06 (v) (B).

Sames as Other Sublicense -              Same as Other Sublicense -
Minor Species                            Minor Species

Joint Venture Net Sales                  Stated Royalty applies
attract no payment obligation -
Applies only Pre-threshold

                                         only Pre-Threshold Other
                                         Consideration receipt
                                         includes Licensee share of
                                         profit as earned from
                                         Majority JV, and that income
                                         when distributed is excluded

                                         4.06 (vi)(A); 4.06(vi)(B)

<PAGE>

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
           EXHIBIT B                PRE-THRESHOLD
     MANNER OF EXPLOITATION
        OF TECHNOLOGY BY
            LICENSEE

        August 15, 2000
---------------------------------------------------------------------------------------------------------
<S>                                 <C>                                    <C>
A minority JV (-50%) in             Sames as Other Sublicense-             Same as Other
Minor Species is not                Minor Species                          Sublicense - Minor
accorded special                                                           Species
consideration and falls
into Minor Species
Sublicense category

---------------------------------

"MAJOR SPECIES                      Required payment is the                Other Consideration
SUBLICENSE" -                       LESSER OF:                             applies: provided
specifically excludes               *** of Licensee's                      royalty payments made
Majority and Minority JV            entitlements, or, (ii) Stacked         by Major Species
and Value Added                     Royalty, on Major Species              Sublicense are
Arrangements                        Sublicensee's Net Sales                EXCLUDED from
                                                                           other Consideration

Defined 1.01 (m)                    4.02; 4.04                             4.06 (iv) (A)

---------------------------------

"MINOR SPECIES                      No payment obligation                  All receipts are Other
SUBLICENSE"                                                                Consideration and
 - not a Majority or                                                       include royalties paid
Minority Joint venture or                                                  by Minor Species
Major Species                                                              Sublicensee.
Sublicensee or Value
Added Arrangements

1.01 (n)                                                                   4.06 (iii)
---------------------------------------------------------------------------------------------------------
</TABLE>

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POST-THRESHOLD

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Same as Other Sublicense -               Same as Other Sublicense -
Minor Species                            Minor Species

Sublicensee Net Sales attract            Stated Royalty applies
no payment obligation -
Applies only Pre-Threshold               Other Consideration receipt
                                         includes royalty payments
                                         made by Major Species

1.01(p)(VII)                             4.06 (iv) (B)

No payment obligation                    All receipts re Other
                                         Consideration and include
                                         royalties paid by Minor
                                         Species Sublicensee

1.01 (p) (V)                             4.06 (iii)
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COMMENTS:

Stated Royalty      =  aggregate of individual Technology royalties set out in
                       4.01, SUBJECT TO 4.07

Stacked Royalty     =  Stated Royalties as affected by the provisions of 4.04

Other Consideration =  as defined 1.01 (w) (option fees, license fees, other
                       cash payments, equity or other consideration of any kind,
                       if received from sublicensee) as modified by the specific
                       provisions of 4.06; 1.01(p)(II); 1.01(w)

Agreement references noted

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00110-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00110-of-00352.parquet"}]]