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                                                                   EXHIBIT 10.11

                        SEPARATION AGREEMENT AND RELEASE

This Separation Agreement and Release ("Agreement and Release") is made as of
November 26, 2003 (the "Execution Date"), by and among Helix BioMedix, Inc., and
Kerry Palmer ("Palmer"). Helix and Palmer are sometimes referred to collectively
as the "Parties."

                                    RECITALS

     I.   Effective January 1, 2003, Helix and Palmer entered into an Employment
          Agreement ("Employment Agreement") pursuant to which Helix agreed to
          employ Palmer, and Palmer accepted employment, as Chief Financial
          Officer of Helix.

     II.  On November 26, 2003, Palmer desires to voluntarily resign from his
          position as the Chief Financial Officer and Helix is willing to accept
          Palmer's resignation and to terminate the Employment Agreement
          pursuant to the terms and conditions of this Agreement and Release.

     III. The Parties also desire to settle and resolve any and all possible
          disputes growing out of or related to Palmer's employment relationship
          with Helix, including but not limited to any possible claims Palmer
          could assert against Helix and any affiliates, subsidiaries,
          directors, officers, shareholders, employees, agents or anyone else
          against whom Palmer could assert a claim due to his employment with
          Helix or its termination.

                              AGREEMENT AND RELEASE

Therefore, Helix on the one hand and Palmer on the other hand, intending to be
legally bound, agree as follows:

     1.   NON-ADMISSION; CONFIDENTIALITY OF AGREEMENT AND RELEASE

          Palmer agrees that this Agreement and Release is not an admission by
          Helix that it (or any of its directors, officers, shareholders,
          employees or agents) has violated any law or failed to fulfill any
          duty to Palmer. Palmer and Helix both agree to keep this Agreement and
          Release confidential, except insofar as disclosure may be required for
          legal or business reasons.

     2.   TERMINATION OF EMPLOYMENT

          Helix and Palmer agree to discontinue Palmer's employment relationship
          and terminate the Employment Agreement, effective November 26, 2003
          ("Resignation Date").

Helix - Palmer - Agreement and Release                              ____________
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     3.   SEPARATION PAYMENT

          As consideration for this Agreement and Release, Helix agrees to pay
          Palmer six (6) months of base pay, subject to lawful deductions,
          payable in six (6) equal monthly installments. Helix further agrees to
          pay Palmer an additional sum of Three Thousand Dollars ($3,000.00),
          subject to lawful deductions, payable in three (3) equal monthly
          installments along with the last three (3) monthly installments
          identified above in this paragraph 3. The first payment under this
          paragraph 3 will be made after the seventh day after this Agreement
          and Release is signed by Palmer and delivered to Helix (the "Effective
          Date") as set forth below in paragraph 9.

     4.   ACCELERATE VESTING OF STOCK OPTION GRANT

          As additional consideration for entering into this Agreement and
          Release, Helix agrees to amend the terms of the stock option grant
          referenced in the Employment Agreement Helix agrees that 25,000 of the
          option shares will automatically vest and become exercisable on the
          Effective Date. These 25,000 shares of common stock shall remain
          exercisable for a period of eighteen (18) months after the Resignation
          Date. Nothing in this paragraph is intended to or does create any
          other rights or obligations of any kind on the part of Helix with
          regard to Palmer's stock option benefits, except those specifically
          required by law or the Plan.

     5.   HEALTH BENEFIT PAYMENT

          As additional consideration for entering into this Agreement and
          Release, Helix agrees that it will pay Palmer's continued health
          benefit coverage payment under Helix's health care plan, the Premera
          Blue Cross Plan (the "Blue Cross Plan"), for a period of up to three
          (3) months, to the extent allowed by the Blue Cross Plan. Palmer
          understands and agrees that in order for him to be eligible for this
          continued coverage under the Blue Cross Plan, he is solely responsible
          for completing the Blue Cross Plan's application for such coverage.
          The continued coverage amounts described in this paragraph 5 will be
          paid directly to Helix's insurance carrier, and Helix agrees to pay
          the first monthly installment on December 1, 2003. No other payments
          under this paragraph 5 will be paid until after the Effective Date of
          this Agreement and Release. If any additional payments are due prior
          to the Effective Date for Palmer's continued health benefit coverage
          Palmer is solely responsible for making such payment, subject to
          reimbursement as set forth in this paragraph 5.

          If, at any time during the three (3) month period described above,
          Palmer secures equivalent benefits through another position, Helix's
          payment of Palmer's continued coverage (should any exist) will
          automatically cease. Palmer agrees that he will promptly notify Helix
          in the event he obtains equivalent benefits through another position.
          In addition, in the event Helix discontinues health care coverage for
          its employees, any payments by Helix of Palmer's medical coverage will
          automatically cease. Nothing in this paragraph is intended to or does
          create any other rights or obligations of any kind on

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          the part of Helix with regard to Palmer's health benefit or medical
          coverage, except those specifically required by law.

     6.   ACKNOWLEDGEMENT OF PAYMENT

          Palmer specifically acknowledges and agrees that the consideration
          identified in paragraphs 3, 4 and 5 above exceeds the amount Palmer
          would otherwise be entitled to receive upon termination of Palmer's
          employment with Helix, and that the payments and benefits set forth
          above are in exchange for entering into this Agreement and Release.
          Palmer further agrees that he will not at any time in the future seek
          consideration from Helix other than as set forth in this Agreement and
          Release. Palmer specifically acknowledges and agrees that Helix has
          not made any representations to Palmer regarding the tax or legal
          consequences of any consideration due to Palmer or for his benefit
          pursuant to this Agreement and Release.

     7.   NON-DISPARAGEMENT

          Helix agrees that neither it, nor anyone acting on its behalf, will
          make any negative, derogatory, or disparaging statements, whether oral
          or written, regarding Palmer. Palmer agrees that neither he, nor
          anyone acting on his behalf, will make any negative, derogatory, or
          disparaging statements, whether oral or written, regarding Helix, or
          any of its directors, officers, or employees.

     8.   RELEASE

          Palmer accepts the undertakings of Helix in this Agreement and Release
          as full settlement of any and all claims, known or unknown, arising
          out of or related to Palmer's association with Helix, including his
          employment or its termination. This release by Palmer includes, but is
          not limited to, any claims for damages or attorney's fees, breach of
          contract, lost equity-based compensation or lost salary or other
          benefits, and specifically includes, but is not limited to claims
          under the Age Discrimination in Employment Act ("ADEA"), Title VII of
          the Civil Rights Act of 1964, the Americans with Disabilities Act, the
          Older Workers' Benefit Protection Act, the Fair Labor Standards Act,
          the Family and Medical Leave Act, the Employee Retirement Income
          Security Act of 1974 (other than claims for vested benefits), the
          Washington Law Against Discrimination in Employment, RCW Ch. 49.60.010
          et. seq., Washington's wage and hour laws, all as amended, and the
          civil rights, employment and labor laws of any city, locality, state
          and the United States. These claims are examples, not a complete list,
          of the released claims, as it is the Parties' intent that Palmer
          release any and all claims, of whatever kind or nature, in exchange
          for the undertakings in this Agreement and Release by Helix. Palmer
          realizes that this constitutes a full and final settlement of any and
          all claims, and except for obligations arising under this Agreement
          and Release, this releases Helix (and its directors, officers,
          shareholders and employees of Helix, and anyone else against whom
          Palmer could assert any of the released claims) from any further
          liability to Palmer (or to anyone else he has power to bind in this
          Agreement and Release) in connection with such claims.

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     9.   RELEASE OF CLAIMS UNDER THE ADEA

          Palmer acknowledges that he is waiving and releasing any rights he may
          have under the ADEA and that this waiver and release is knowing and
          voluntary. The Parties agree that this waiver and release does not
          apply to any rights or claims that may arise under the ADEA after the
          execution of this Agreement and Release. Palmer acknowledges and
          agrees that he has been advised by this writing that (a) this waiver
          and release does not apply to any rights or claims that may arise
          after the Execution Date of this Agreement and Release; (b) he should
          consult with an attorney prior to executing this Agreement and
          Release; (c) he has twenty-one (21) days within which to consider this
          Agreement and Release (although he may choose to voluntarily execute
          this Agreement and Release earlier and waive such period of
          consideration); (d) he has seven (7) days following the execution of
          this Agreement and Release to revoke this Agreement and Release; (e)
          this Agreement and Release shall not be effective until the revocation
          period has expired (as set forth above, the Effective Date); and (f)
          nothing in this Agreement prevents or precludes Palmer from
          challenging or seeking a determination in good faith of the validity
          of this waiver and release under the ADEA, nor does it impose any
          condition precedent, penalties or costs for doing so, unless
          specifically authorized by federal law. To cancel this Agreement and
          Release, Palmer understands that he must give a written revocation
          which must be received by Helix by 5:00 p.m. on the seventh day after
          this Agreement and Release is signed by Palmer, addressed to the
          following individual at the following location:

                  Steve Beatty, President
                  Helix BioMedix, Inc.
                  22122 20th Avenue SE
                  Bothell, WA 98021

          Palmer understands that if Palmer revokes this Agreement and Release
          pursuant to this paragraph 9, the Agreement and Release will not
          become effective or enforceable and Palmer will not be entitled to any
          of the benefits set forth in this Agreement and Release.

     10.  RETURN OF HELIX PROPERTY

          Palmer acknowledges and agrees that he has returned to Helix all
          personal property and equipment furnished to or prepared by Palmer in
          the course of or incident to his employment by Helix, including,
          without limitation, computers, cell phones, keys, all books, manuals,
          memoranda, records, reports, notes, contracts, lists, blueprints, and
          other documents, or materials, or copies thereof (including computer
          files), and all other proprietary information belonging or relating to
          the business of Helix or any affiliate. Palmer also acknowledges and
          agrees that he has not retained any written or other tangible
          materials containing any proprietary information of Helix or any
          affiliate.

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     11.  RESTRICTIVE COVENANTS

         (a)   Confidentiality of Information.

          i.   Definition. Palmer and Helix agree that "Confidential
               Information" shall mean any and all trade secrets, ideas,
               suggestions, innovations, conceptions, discoveries, strategies,
               improvements, technological developments, methods, processes,
               specifications, formulae, compositions, techniques, systems,
               computer software and programs, notes, memoranda, work sheets,
               lists of actual or potential customers and suppliers, pricing
               information and policies, works of authorship, products, data,
               and information in any form, which concern or relate to any
               aspect of the actual or contemplated business of Helix and which
               may be stamped "confidential" or are otherwise treated as
               confidential by Helix, except for such items as Palmer can prove
               through clear and convincing evidence were in the public domain,
               being publicly and openly known, prior to the date of
               commencement of Palmer's employment by Helix or, subsequent to
               such date, became a part of the public domain, being publicly and
               openly known, through lawful and proper means.

          ii.  Scope. Palmer agrees that he shall not at any time take or use,
               or otherwise disclose to anyone, any Confidential Information,
               except as required by any court or governmental agency after
               receipt by Palmer of a lawful subpoena or court order. Palmer
               further agrees that in the event he is served with a subpoena of
               court order, he will immediately notify Helix, in the manner set
               forth in paragraph 9 above, of his receipt of the subpoena or
               court order.

          iii. Restrictions. Palmer agrees that the restrictions set forth in
               this paragraph are reasonable and necessary to protect Helix.

          iv.  Common Law Obligations. This paragraph is not intended to, and
               does not, limit in any way Palmer's duties and obligations to
               Helix under statutory and common law not to disclose or make
               personal use of any Confidential Information of Helix.

         (b)   Assignment of Inventions.

          i.   Definition of Inventions. "Inventions" means discoveries, works
               of authorship, mask works, developments, concepts, ideas and
               information made or conceived or reduced to practice, methods,
               designs, improvements, inventions, formulas, processes,
               techniques, programs, know-how and data, whether or not
               patentable or registerable under copyright or similar statutes,
               except any of the foregoing that (a) is not related to the
               business of Helix, or Helix's actual or demonstrable research or
               development; (b) did not involve the use of any equipment,
               supplies, facility or Confidential Information of Helix; (c) was
               developed entirely on Palmer's own time; and (d) did not result
               from any work performed by Palmer

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               for Helix. To the extent allowed by law, Inventions will also
               include all "moral rights" "artist's rights" or the like.

          ii.  Assignment. Palmer agrees to and hereby does assign to Helix,
               without further consideration, all of his right, title and
               interest in any and all Inventions he may have made during his
               association with Helix. To the extent that Palmer retains any
               moral or artist's rights, he ratifies and consents to any action
               that may be taken with respect to such rights by or authorized by
               Helix and agrees not to assert any such rights with respect
               thereto.

          iii. Duty to Assist. Palmer agrees to provide all assistance
               reasonably requested by Helix in the preservation of Helix's
               interests in the Inventions including obtaining patents in any
               country throughout the world. Such services will be for
               reasonable compensation and subject to Palmer's reasonable
               availability. If Helix cannot, after reasonable effort, secure
               Palmer's signature on any document or documents needed to apply
               for or prosecute any patent, copyright, or other right or
               protection relating to an Invention, whether because of his
               physical or mental incapacity or for any other reason whatsoever,
               Palmer hereby irrevocably designates and appoints Helix and its
               duly authorized officers and agents as his agent and
               attorney-in-fact, to act for and in his behalf and in his name
               and stead for the purpose of executing and filing any such
               application or applications and taking all other lawfully
               permitted actions to further the prosecution and issuance of
               patents, copyrights, or similar protections thereon, with the
               same legal force and effect as if executed by him.

          iv.  Ownership of Copyrights. Palmer agrees that any work prepared for
               Helix, which is eligible for copyright protection under the laws
               of the United States or any other country, is work made for hire
               and ownership of all copyrights (including all renewals and
               extensions) therein vests in Helix. If any such work is deemed
               not to be a work made for hire for any reason, Palmer hereby
               grants, transfers and assigns all right, title and interest in
               such work and all copyrights in such work and all renewals and
               extensions thereof to the establishment, preservation and
               enforcement of Helix's copyright in such work, such assistance to
               be provided at Helix's expense. Palmer agrees and does hereby
               waive the enforcement of all moral rights with respect to the
               work developed or produced as set forth in this Agreement and
               Release, including without limitation any and all rights of
               identification of authorship and any and all rights of approval,
               restriction or limitation on use or subsequent modifications.

          v.   Litigation. Palmer agrees to render assistance and cooperation to
               Helix at its request regarding any matter, dispute or controversy
               with which Helix may become involved and of which Palmer has or
               may have reason to have knowledge, information or expertise. Such
               services will be for reasonable compensation and subject to his
               reasonable availability.

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         (c)   Covenants Not to Compete.

          i.   Noncompetition and Nonsolicitation. Palmer acknowledges and
               agrees for a period of two (2) years after the Effective Date of
               this Agreement and Release, Palmer will not, directly or
               indirectly, as principal, agent, employee, officer, shareholder,
               consultant or otherwise, engage in any business that competes
               directly with Helix, and will not solicit or aid in soliciting,
               endeavor to obtain as a customer or client, accept sales,
               marketing, financial, or consulting business from, or perform
               sales, marketing, consulting or related business for any person,
               firm, corporation, association or other entity: (i) that is or
               was a Helix customer for whom Palmer performed any services for
               or with whom Palmer maintained substantial business contacts with
               at any time during the term of his employment with Helix; or (ii)
               whose business Palmer solicited, either alone or in conjunction
               with others, on behalf of Helix or any of its subsidiaries,
               during the term of his employment with Helix.

          ii.  Nonsolicitation of Employees. Palmer agrees that Helix has
               invested substantial time and effort in assembling its workforce.
               Accordingly, Palmer agrees that for a period of two (2) years
               after the Resignation Date of this Agreement and Release, Palmer
               will not, directly or indirectly, employ, solicit or induce or
               attempt to influence any employee of Helix or any affiliate, to
               terminate his or her employment with Helix or any affiliate, or
               to work for Palmer or any other person or entity.

          iii. Severability and Modification of Any Unenforceable Covenant. It
               is the Parties' intent that each of the covenants set forth in
               this Agreement and Release be read and interpreted with every
               reasonable inference given to its enforceability. However, it is
               also the Parties' intent that if any term, provision or condition
               of such covenants is held by an arbitrator or court of competent
               jurisdiction to be invalid, void or unenforceable, the remainder
               of the provisions will remain in full force and effect and will
               in no way be affected, impaired or invalidated. Finally, it is
               also the Parties' intent that if an arbitrator or court should
               determine any of the covenants set forth herein are unenforceable
               because of over breadth, then the arbitrator or court will modify
               said covenant so as to make it as broad as is reasonable and
               enforceable under the prevailing circumstances.

12.  AUTHORITY TO ENTER AGREEMENT

     Palmer represents and warrants that he is the true party in interest, that
     he is fully authorized to execute this Agreement and Release, and that he
     has not sold, assigned, transferred, conveyed, or otherwise disposed of any
     rights surrendered by virtue of this Agreement and Release.

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13.  BINDING EFFECT

     This Agreement and Release shall be binding upon and inure to the benefit
     of any heirs, legal representatives, successors and assigns of Palmer and
     Helix.

14.  DISPUTE RESOLUTION

          (a)  With respect to disputes under this Agreement and Release that
               are not resolved by the Parties pursuant upon written request by
               one party to the other party, the Parties shall promptly
               negotiate in good faith to appoint a mutually acceptable
               disinterested, conflict-free individual not affiliated with any
               party, with relevant contract experience necessary to resolve
               such dispute (an "Arbitrator"). If the Parties are not able to
               agree within three (3) days after the receipt by a party of the
               written request in the immediately preceding sentence, the
               American Arbitration Association ("AAA") shall be responsible for
               selecting an Arbitrator within seven (7) days of being approached
               by a party. The fees and costs of the Arbitrator and the AAA
               shall be shared equally by the Parties.

          (b)  Within fifteen (15) days after the designation of the Arbitrator,
               the Parties shall each simultaneously submit to the Arbitrator
               and one another a written statement of their respective positions
               on such disagreement. The Parties shall have two (2) days from
               receipt of the filing party's submission to submit a written
               response thereto. The Arbitrator shall have the right to meet
               with the Parties, either alone or together, as necessary to make
               a determination.

          (c)  No later than fifteen (15) days after the designation of the
               Arbitrator, the Arbitrator shall make a determination by
               selecting the resolution proposed by one of the Parties that as a
               whole is the most fair and reasonable to the Parties in light of
               the totality of the circumstances and shall provide the Parties
               with a written statement setting forth the basis of the
               determination in connection therewith. The decision of the
               Arbitrator shall be final and conclusive, absent manifest error.

          (d)  Notwithstanding other provisions of this paragraph 14, Palmer
               acknowledges and agrees that any violation, breach, or threatened
               breach by Palmer of paragraph 11 of this Agreement and Release,
               would cause Helix irreparable harm which would not be adequately
               compensated by monetary damages and that a temporary restraining
               order, permanent restraining order or injunction may be granted
               by any court or courts having jurisdiction, restraining Palmer
               from violation, breach or threatened breach of paragraph 11 of
               this Agreement and Release. This paragraph 14(d) shall not be
               construed to limit Helix from any other relief or damages to
               which it may be entitled as a result of Palmer's breach of
               paragraph 11 of this Agreement and Release. Palmer also agrees
               that a violation of paragraph 11 of this Agreement and Release
               would entitle Helix, in addition to all other remedies available
               at law or equity, to recover from

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               Palmer all funds remaining to be paid out under paragraphs 3 and
               4 of this Agreement and Release, and will be held in trust by
               Helix.

15.  WASHINGTON LAW TO APPLY

     This Agreement and Release shall in all respects be governed by the laws of
     the State of Washington. Venue for any action to enforce any provision of
     this Agreement shall be exclusively in King County with an arbitrator from
     King County, Washington. The Parties, by their signatures below, agree to
     submit to said arbitrator's jurisdiction and to waive all defenses related
     to jurisdiction and venue. Except as prohibited by law, the prevailing
     party in any arbitration or litigation brought to enforce this Agreement
     and Release shall be entitled to recover its costs including reasonable
     attorneys' fees.

16.  GENERAL

     This Agreement and Release: (i) represents the entire understanding of the
     Parties with respect to the subject matter covered; (ii) supersedes all
     prior and contemporaneous oral understandings with respect to such subject
     matter; (iii) may only be amended in a writing signed by the Parties; and
     (iv) shall be executed in two or more counterparts so that each party may
     retain a fully executed original.

17.  KNOWING AND VOLUNTARY WAIVER

     Palmer acknowledges that he has been advised to consult with an attorney,
     and has had the opportunity to do so before signing this Agreement and
     Release, which Palmer has been given a reasonable period of time to
     consider and which Palmer may revoke within seven (7) days after signing.

     Executed as of the Execution Date written above.

HELIX, INC.                                 PALMER:

By  /s/ R. Stephen Beatty
Its Pres. and CEO                           /s/ Kerry Palmer (11-26-03)
                                            ------------------------------------
                                            Kerry Palmer

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                                                                   EXHIBIT 10.12

                        AMENDMENT TO EMPLOYMENT AGREEMENT

         This AMENDMENT TO EMPLOYMENT AGREEMENT (this "Amendment"), is made and
entered into as of December 10, 2003 by and among HELIX BIOMEDIX, INC., a
Delaware corporation ("Helix"), and TIMOTHY FALLA, PH.D. ("Employee").

                                    RECITALS

         WHEREAS, Helix and Employee entered into an Employment Agreement
effective July 1, 2003 (the "Agreement"); and

         WHEREAS, Helix and Employee wish to amend the Agreement to delete
Section 3(b)(2)(iii) in its entirety.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the premises, the mutual covenants
of the parties hereinafter set forth and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

         1.       Section 3(b)(2)(iii) of the Agreement is hereby deleted in its
entirety.

         2.       The parties hereto hereby acknowledge the continuing effect of
the Agreement except as specifically modified by this Amendment.

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

HELIX BIOMEDIX, INC.                       EXECUTIVE:

/s/ R. Stephen Beatty                      /s/ Timothy Falla
---------------------------------------    -------------------------------------
R. Stephen Beatty                          Timothy Falla, Ph.D.
President and CEO

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