Operating Agreement

Contract

by Empyrean Bioscience Inc
August 17th, 2000
                              IBC-EMPYREAN, L.L.C.

                               OPERATING AGREEMENT

                                TABLE OF CONTENTS

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1. Definitions                                                                 1

2. Formation and Name: Office; Purpose; Term                                   7

3. Members; Capital; Capital Accounts                                          8

4. Profit, Loss, and Distributions                                             9

5. Management: Rights, Powers, and Duties                                     12

6. Transfer of Interests and Withdrawals of Members                           18

7. Dissolution, Liquidation, and Termination of the Company                   20

8. Books, Records, Accounting, and Tax Elections                              21

9. General Provisions                                                         23

                                        i

                                INDEX OF EXHIBITS

Exhibit A      Schedule of Capital Contributions

Exhibit B      Trademark License Agreement from Empyrean to IBC-Empyrean

Exhibit C      License Agreement from IBC to IBC-Empyrean

Exhibit D      Trademark License Agreement from IBC to IBC-Empyrean

Exhibit E      GEDA LOGO

Exhibit F      Put Agreement

                                       ii

                              IBC-EMPYREAN, L.L.C.

                               OPERATING AGREEMENT

     This  Operating  Agreement  is entered  into as of August 9,  2000,  by the
signatories hereto, who agree as follows.

1. DEFINITIONS

     For purposes of this Agreement:

     (a) ACT means the Delaware Limited Liability Company Act, as may be amended
from time to time.

     (b)  AFFILIATE  of a  party  shall  mean  any  entity  which  controls,  is
controlled  by or under common  control with such party,  and any joint  venture
(whether a corporation, partnership or other form of entity) in which such party
has at least a one-third interest.

     (c) AGREEMENT means this Operating  Agreement,  as amended or modified from
time to time.

     (d) ATTORNEY-IN-FACT has the meaning contained in Section 5(i)(i).

     (e) BOARD means the board of managers of the Company.

     (f) BUG TRADEMARK shall mean the "GEDA LOGO", used by IBC, Empyrean and the
Company on all products based on the  Formulation in the form attached hereto as
EXHIBIT E.

     (g) BUSINESS PLAN means the annual  business  plan for the Company  jointly
developed and unanimously  approved by the Board,  setting forth the objectives,
major business actions, marketing plan and strategies of the Company.

     (h) CAPITAL  ACCOUNT  means the account  maintained by the Company for each
Interest Holder in accordance with the following provisions:

          (i) an Interest  Holder's  Capital  Account will be credited  with the
Interest Holder's Capital  Contributions,  the amount of any Company liabilities
assumed  by the  Interest  Holder  (or which are  secured  by  Company  property
distributed to the Interest Holder), the Interest Holder's distributive share of
Profit and any item in the nature of income or gain  specially  allocated to the
Interest Holder in accordance with the provisions of Section 4; and

          (ii) an Interest  Holder's  Capital  Account  will be debited with the
amount of money and the fair market value of any Company property distributed to
the  Interest  Holder,  the amount of any  liabilities  of the  Interest  Holder
assumed by the  Company (or which are  secured by  property  contributed  by the
Interest Holder to the Company),  the Interest  Holder's  distributive  share of

Loss (as  defined  herein)  and any item in the  nature  of  expenses  or losses
specially  allocated to the Interest Holder in accordance with the provisions of
Section 4.

          (iii) In the event  the Gross  Asset  Value of the  Company  assets is
adjusted,  the Capital  Accounts of the Members shall be adjusted to reflect the
aggregate net adjustment as if the Company  recognized  Profit and Loss equal to
the  amount of such  aggregate  net  adjustment  and such  Profit  and Loss were
allocated to the Members pursuant to Section 4 of this Agreement.

          (iv) If any Interest is transferred under the terms of this Agreement,
the  Transferee  will succeed to the Capital  Account of the  Transferor  to the
extent the Capital Account is attributable  to the transferred  Interest.  It is
intended that the Capital Accounts of all Interest Holders will be maintained in
compliance  with  the  provisions  of  Regulation  Section  1.704-l(b),  and all
provisions of this Agreement  relating to the  maintenance  of Capital  Accounts
will be interpreted and applied in a manner consistent with that Regulation.

     (i)  CAPITAL  CONTRIBUTION  means the total  amount of cash and Gross Asset
Value of any other assets  contributed (or deemed  contributed  under Regulation
Section  1.704-l(b)(2)(iv)(d))  to the Company by a Member,  net of  liabilities
assumed or to which the assets are subject.

     (j) CAPITAL COMMITMENT has the meaning contained in Section 3(a).

     (k) CARRIED  INTEREST means any equity or profit  interest  received by the
Company in any investments made by any Funds managed by the Company.

     (l) CODE  means the  Internal  Revenue  Code of 1986,  as  amended,  or any
corresponding provision of any succeeding law.

     (m)  CAPITAL  CONTRIBUTION  means  the  Capital  Contributions  made by the
Members to the Company under  Section 3(a) and as set forth on attached  EXHIBIT
A.

     (n) COMPANY means the limited  liability  company formed in accordance with
this Agreement.

     (o) CONDITIONS OF TRANSFER has the meaning contained in Section 6(b).

     (p)  DEPRECIATION  means,  for each fiscal year or other period,  an amount
equal to the  depreciation,  amortization,  or  other  cost  recovery  deduction
allowable with respect to an asset for such year or other period, except that if
the Gross Asset Value of an asset  differs from its  adjusted  basis for federal
income tax purposes at the beginning of such year or other period,  Depreciation
shall be an amount  which  bears the same ratio to such  beginning  Gross  Asset
Value as the  Federal  income  tax  depreciation,  amortization,  or other  cost
recovery  deduction  for such  year or  other  period  bears  to such  beginning
adjusted tax basis.

     (q) EMPYREAN means Empyrean Biosciences, Inc., a Wyoming corporation.

                                        2

     (r) ENTITY means any general partnership, limited partnership, corporation,
limited  liability  company,  joint  venture,  trust,  estate,  business  trust,
association, or other entity.

     (s) EXECUTIVE STEERING COMMITTEE has the meaning contained in 5(b)(i).

     (t) FISCAL  QUARTER  means each three (3) month period  ending on March 31,
June 30, September 30 and December 31 of each calendar year.

     (u) FORMULATION shall have the meaning assigned to such term in the License
Agreement from IBC to IBC-Empyrean.

     (v) GROSS ASSET VALUE means, with respect to any asset of the Company,  the
Company's  adjusted  basis for federal income tax purposes;  provided,  however,
that (a) the Gross Asset Value of any Company asset  contributed  by a Member to
the Company as a Capital  Contribution or distributed to a Member by the Company
shall be the gross fair market value of such  Company  asset  (computed  without
taking into account Code Section 7701 (g)) as reasonably determined by the Board
as of the date of  contribution  or  distribution,  as the case may be;  (b) the
Gross  Asset  Value of all  Company  assets  shall be  adjusted  to equal  their
respective gross fair market values, as reasonably determined by the Board, upon
the  liquidation  of the Company for federal  income tax  purposes  (including a
deemed liquidation) pursuant to Code Section  708(b)(1)(B);  (c) the Gross Asset
Value of all Company  assets shall be adjusted to equal their  respective  gross
fair market  values  (taking into account Code Section  7701(g)),  as reasonably
determined by the Board,  as of (i) the date of the acquisition of an additional
interest in the Company by any new or existing  Member in exchange for more than
a DE MINIMUS Capital  Contribution to the Company, or (ii) upon the distribution
by the  Company to a  retiring  or  continuing  Member of more than a de minimus
amount of Company  property or money. At all times, the Gross Asset Values shall
be adjusted by  Depreciation  taken into account  with respect to the  Company's
assets for the purposes of computing Profit and Loss.

     (w) INTEREST  means a Person's  share of the Profits and Losses of, and the
right to receive distributions from, the Company.

     (x) INTEREST HOLDER means any Person who holds an Interest.

     (Y) IBC means International Bioscience Corporation, a Florida corporation.

     (z) IBC-EMPYREAN means  IBC-Empyrean,  L.L.C., a Delaware limited liability
company.

     (aa)  INVOLUNTARY  WITHDRAWAL  means,  with  respect  to  any  Member,  the
occurrence of any of the following events:

          (i) the Member makes an assignment for the benefit of creditors;

          (ii) the Member files a voluntary petition of bankruptcy;

                                        3

          (iii) the Member is adjudged bankrupt or insolvent or there is entered
against  the  Member  an  order  for  relief  in any  bankruptcy  or  insolvency
proceeding;

          (iv) the Member files a petition or answer seeking the reorganization,
arrangement,  composition,  readjustment,  liquidation,  dissolution, or similar
relief for the Member under any statute, law, or regulation;

          (v) the Member seeks, consents to, or acquiesces in the appointment of
a trustee  for,  receiver  for,  or  liquidation  of the Member or of all or any
substantial part of the Member's properties or assets;

          (vi) the Member files an answer or other pleading admitting or failing
to contest the material  allegations  of a petition  filed against the Member in
any proceeding described in Subsections (i) through (v);

          (vii)  any  proceeding  against  the  Member  seeking  reorganization,
arrangement,  composition,  readjustment,  liquidation,  dissolution, or similar
relief under any statute, law, or regulation, continues for ninety (90) calendar
days after the commencement thereof, or the appointment of a trustee,  receiver,
or  liquidator  for the Member or all or any  substantial  part of the  Member's
properties without the Member's agreement or acquiescence,  which appointment is
not vacated or stayed for ninety (90)  calendar days or, if the  appointment  is
stayed,  for ninety (90) calendar  days after the  expiration of the stay during
which period the appointment is not vacated;

          (viii)  if  the  Member  is  an  individual,  the  Member's  death  or
adjudication  by a court of competent  jurisdiction as incompetent to manage the
Member's person or property;

          (ix) if the  Member is acting as a Member by virtue of being a trustee
of a trust, the termination of the trust;

          (x) if the  Member  is a  partnership  or  another  limited  liability
company,  the dissolution  and  commencement of winding up of the partnership or
limited liability company; or

          (xi) if the Member is a corporation, the dissolution or liquidation of
the corporation or the revocation of its charter.

     (bb) LICENSE AGREEMENT FROM IBC TO EMPYREAN shall mean that certain license
agreement  dated as of August 9,  2000  between  IBC and  Empyrean  relating  to
commercialization of the Licensed Products.

     (cc) LICENSE  AGREEMENT  FROM IBC TO  IBC-EMPYREAN  shall mean that certain
license agreement between IBC and IBC-Empyrean relating to the commercialization
of the  Licensed  Products in the  Territory,  in the form of EXHIBIT C attached
hereto.

     (dd) LICENSED  PRODUCTS shall have the meaning assigned to such term in the
License Agreement from IBC to IBC-Empyrean.

                                        4

     (ee) MANAGER is a Person designated as such in Section 5(a).

     (ff) MEMBER  means each Person who  acquires  Membership  Rights under this
Agreement  and who signs this  Agreement  and each  Person who  subsequently  is
admitted as a Member of the Company and signs a counterpart hereto.

     (gg) MEMBERSHIP  RIGHTS means all of the rights of a Member in the Company,
including a Member's:  (i) Interest;  (ii) right to inspect the Company's  books
and records during normal business hours; and (iii) right to vote on any matters
on which Members have such right hereunder.

     (hh) NEGATIVE  CAPITAL  ACCOUNT  means a Capital  Account with a balance of
less than zero.

     (ii) NET CASH FLOW means all cash funds  derived  by the  Company  from any
source,  including any additional Capital Contributions made by any Member under
Section 3(h),  without reduction for any non-cash  charges,  but less cash funds
used to pay  current  expenses  and  liabilities  of the  Company  and to pay or
establish  reasonable  reserves  for future  expenses,  debt  payments,  capital
improvements, and replacements as determined by the Board. Net Cash Flow will be
increased by the reduction of any reserve previously established.

     (jj) NEW PRODUCT DEVELOPMENT BOARD has the meaning contained in 5(c)(i).

     (kk) OFFICERS has the meaning contained in Section 5(d).

     (ll)  PERCENTAGE  means,  as to a Member,  the percentage that the Member's
Units  bears to the total  number of Units  outstanding,  and as to an  Interest
Holder who is not a Member, the Percentage of the Member whose Interest has been
acquired by the Interest Holder, to the extent the Interest Holder has succeeded
to that Member's Interest.

     (mm) PERSON means and includes any individual or Entity.

     (nn) PROFIT AND LOSS means,  for each taxable year of the Company (or other
period for which Profit or Loss must be computed),  the Company's taxable income
or loss, including the receipt of dividends,  distributions or proceeds from the
sale,  exchange  or  other  disposition  of  Carried  Interests,  determined  in
accordance with Code Section 703(a), with the following adjustments:

          (i) all items of income, gain, loss, deduction,  or credit required to
be stated  separately  pursuant to Code  Section  703(a)(l)  will be included in
computing such taxable income or loss;

          (ii) any tax-exempt  income of the Company,  not otherwise  taken into
account in  computing  Profit or Loss,  will be  included in  computing  taxable
income or loss;

                                        5

          (iii)  any  expenditures  of the  Company  described  in Code  Section
705(a)(2)(B)   (or   treated   as   such   pursuant   to   Regulation    Section
1.704-l(b)(2)(iv)(i))  and not otherwise taken into account in computing  Profit
or Loss, will be subtracted from taxable income or loss;

          (iv) gain or loss  resulting  from any taxable  disposition of Company
property  will be computed by reference to the Gross Asset Value of the property
disposed of,  notwithstanding  the fact that the Gross Asset Value  differs from
the adjusted basis of the property for federal income tax purposes; and

          (v) in  lieu  of the  depreciation,  amortization,  or  cost  recovery
deductions  allowable in computing  taxable income or loss,  there will be taken
into account Depreciation; and

          (vi) in the event that an Additional Member is admitted, or there is a
redemption  of the Units or Unit of any person (or interest  therein),  but more
than a de minimis  amount in either case, the Board may determine to restate the
Gross Asset Value of the assets of the Company to equal their fair market value,
and the gain or loss resulting from this  restatement will be taken into account
in determining Profit and Loss.

     (oo) PUT AGREEMENT shall mean that certain Put Agreement dated as of August
9, 2000, between IBC and Empyrean, relating to the rights and obligations of IBC
or  Empyrean  in the  event of a Change  of  Control  (as such  term is  defined
therein) of the parties thereto, in the form attached hereto as EXHIBIT F.

     (pp) REGULATION means the income tax  regulations,  including any temporary
regulations, from time to time promulgated under the Code.

     (qq)  REQUIREMENTS FOR  SUBSTITUTION  has the meaning  contained in Section
6(d).

     (rr) SECRETARY means the Secretary of State of Delaware.

     (ss) TAX MATTERS PERSON has the meaning contained in Section 8(e).

     (tt) TERRITORY  means all the countries of the world,  excluding the United
States and Brazil.

     (uu)  TRADEMARK  AGREEMENT  FROM EMPYREAN TO  IBC-EMPYREAN  shall mean that
certain trademark  license agreement between Empyrean and IBC-Empyrean  relating
to use of the  Prevent-X  trademark in the  Territory,  in the form of EXHIBIT B
attached hereto.

     (vv) TRADEMARK  AGREEMENT FROM IBC TO IBC-EMPYREAN  shall mean that certain
trademark license agreement between IBC and IBC-Empyrean  relating to the use of
the Bug trademark in the Territory, in the form of EXHIBIT D attached hereto.

     (ww)  TRANSFER   means,   when  used  as  a  noun,   any  voluntary   sale,
hypothecation,  pledge,  assignment,  attachment,  conveyance or other transfer,
and,  when used as a verb,  means,  voluntarily  to sell,  hypothecate,  pledge,
assign, convey or otherwise transfer.

                                        6

     (xx) TRANSFEREE has the meaning contained in Section 6(b).

     (yy) TRANSFEROR has the meaning contained in Section 6(b).

     (zz) UNIT means an interest in the Profit and Loss of the Company.

     (aaa) UNPAID CONTRIBUTION has the meaning contained in Section 3(b)(ii).

     (bbb) VALUATION  GUIDELINES  means in valuing the assets of the Company the
following guidelines will be used:

          (i)  Publicly  traded  securities  that  are  listed  on one  or  more
recognized  securities exchanges will be valued at last sales prices on the date
of  valuation  or,  if no sales  occurred  on such day,  at the last bid  prices
thereon;

          (ii)  Publicly   traded   securities  that  are  traded  only  in  the
over-the-counter market will be valued at the average of the last bid prices (or
in the case of securities listed on the NASDAQ National Market List, at the last
sales prices) on the date of valuation;

          (iii) Publicly traded  securities with  restrictions on  marketability
will be valued at an appropriate  discount from its otherwise  applicable market
price; and

          (iv) All other  investments  will be valued  initially  at cost,  with
subsequent adjustments to values which reflect,  among other things,  meaningful
third-party  transactions  in the private  market,  or to fair  market  value as
determined by the Board.

     (ccc) VOLUNTARY WITHDRAWAL means a Member's disassociation with the Company
by means other than by a Transfer or an Involuntary Withdrawal.

2. FORMATION AND NAME: OFFICE; PURPOSE; TERM

     (a) ORGANIZATION.  On August 3, 2000, Kashif Rashid, acting for the benefit
of and at the request of the Board, executed the certificate of formation of the
Company and  delivered it to the  Secretary  of State of Delaware in  accordance
with and under the Act. The effective date of the filing is August 3, 2000.

     (b) NAME OF THE  COMPANY.  The name of the Company  will be  "IBC-Empyrean,
L.L.C."

     (c)  PURPOSES.  The purpose of the  Company  will be to  commercialize  the
Licensed  Products  and sell,  market and  distribute  Licensed  Products in the
Territory.  In that  regard,  the Company may license  third party  distributors
throughout the Territory to sell, market and distribute  Licensed  Products.  In
order  to be  able  to  undertake  the  Company's  primary  contemplated  market
activities,  on the date  hereof,  the Company  shall enter into (i) the License
Agreement from IBC to IBC-Empyrean,  (ii) the Trademark  License  Agreement from
IBC to  IBC-Empyrean,  (ii) the  Trademark  License  Agreement  from Empyrean to
IBC-Empyrean,   and  (iv)  such  other  agreements  as  the  signatories  hereto

                                        7

unanimously  determine to be necessary or useful.  In addition,  the Company may
transact any and all other lawful business for which a limited liability company
may be  organized  under  Delaware  law.  The  Company  will have  powers as are
necessary to or reasonably  connected with the  accomplishment  of the foregoing
purposes.

     (d)  TERM.  The term of the  Company  will  begin  upon the  filing  of the
certificate  of formation of the Company in the Office of the Secretary and will
continue  in  existence  until  December  31,  2020,  unless  its  existence  is
terminated earlier under Section 7 of this Agreement.

     (e)  PRINCIPAL  PLACE OF BUSINESS.  The  principal  place of the  Company's
business shall be determined by the Board of Managers.

     (f) REGISTERED AGENT AND OFFICE.  The Company's  initial  registered office
will be at the office of its registered agent at 1209 Orange Street, Wilmington,
Delaware  19801,  and the name of its initial  registered  agent at this address
will be The  Corporation  Trust  Company.  The Board may change  the  registered
office and  registered  agent from time to time by filing the address of the new
registered office and the name of the new registered agent with the Secretary of
State of Delaware under the Act.

     (g) MEMBERS.  The name,  present mailing address,  taxpayer  identification
number, and each Member's  Percentage are set forth on attached EXHIBIT A, which
is part of this Agreement.

3. MEMBERS; CAPITAL; CAPITAL ACCOUNTS

     (a) CAPITAL  COMMITMENTS.  Each  Member's  capital  commitment is set forth
after  its  name  on  EXHIBIT  A at the  end of  this  Agreement  (the  "Capital
Commitment").  Each Member  will make  capital  contributions  in respect of its
Capital  Commitment  upon ninety (90)  business  days'  written  notice from the
Board.  No Member is entitled to interest on its  contribution of capital to the
Company.

     (b) NO ADDITIONAL CAPITAL CONTRIBUTIONS; NO PERSONAL LIABILITY.

          (i) No Member is required to contribute  any capital to the Company in
excess of the  amount  set forth in  attached  EXHIBIT A for the  Member  and no
Member has any other  personal  liability for any obligation or liability of the
Company.

          (ii) If a Member  fails to pay when  called all or any  portion of any
Capital Contribution,  subject to the approval of the Board to take such action,
the Board will request the  non-defaulting  Members to pay the unpaid  amount of
the defaulting Member's Capital Contribution (the "Unpaid Contribution"). If the
Unpaid  Contribution is contributed by any other Member, the defaulting Member's
Units will be reduced by fifty percent (50%) and these  forfeited  Units will be
allocated to each Member who makes up the Unpaid  Contribution  in proportion to
the  Member's  contribution  of  Unpaid  Contribution  to the  total  amount  of
contributions  of Unpaid  Contribution by all Interest  Holders.  The Board will
amend EXHIBIT A  accordingly.  This remedy is in addition to any other  remedies
allowed by law, in equity or by this Agreement.

                                        8

     (c) NO INTEREST ON CAPITAL CONTRIBUTIONS.  Interest Holders may not be paid
interest on their Capital Contributions.

     (d)  RETURN OF  CAPITAL  CONTRIBUTIONS.  Except as  otherwise  specifically
provided  in this  Agreement,  no  Interest  Holder has the right to receive the
return of any Capital Contribution.

     (e) CAPITAL  ACCOUNTS.  A separate  Capital  Account will be maintained for
each Interest Holder.

     (f) LOANS.  Upon the approval of the Board,  any Member may make or cause a
loan to be made to the Company in any amount on terms agreed to by the Board and
the Member.

     (g) ADDITIONAL  MEMBERS.  Additional Persons may be admitted to the Company
as Members  and  Membership  Rights and Units may be created and issued to those
Persons and to  existing  Members  upon the prior  approval of the Board and the
prior approval of at least eighty percent (80%) of the  outstanding  Units.  The
Board will determine the terms and conditions at the time of admission and these
terms and  conditions  will be approved by the vote of at least  eighty  percent
(80%) of the outstanding  Units. The terms of admission or issuance must specify
the applicable Percentages and may provide for the creation of different classes
or groups of Members having different rights, powers, and duties.

     (h)  REPRESENTATIONS  AND  WARRANTIES.  Each Member,  and in the case of an
Entity, the person(s)  executing this Agreement on behalf of the Entity,  hereby
represents   and  warrants  to  the  Company  and  each  other   Member   (which
representations  and warranties  will survive the execution and delivery of this
Agreement)  that:  (a) if the  Member is an Entity,  that it is duly  organized,
validly  existing,  and  in  good  standing  under  the  laws  of its  state  of
organization and that it has full organizational  power to execute,  deliver and
agree to this Agreement and to perform its  obligations  hereunder in accordance
with its terms;  (b) that the Member is acquiring its  Membership  Rights in the
Company for the Member's own account as an  investment  and without an intent to
distribute  the  Membership  Rights;  and (c) the Member  acknowledges  that the
Membership  Rights have not been registered  under the Securities Act of 1933 or
any state  securities  laws,  and may not be resold or transferred by the Member
without  appropriate  registration or the availability of an exemption from such
requirements.

4. PROFIT, LOSS, AND DISTRIBUTIONS

     (a) DISTRIBUTIONS.

          (i)  The  Company  will  distribute  to the  Interest  Holders  within
forty-five (45) days after the end of each Fiscal Quarter such percentage of the
Company's  Net Cash Flow for each such Fiscal  Quarter as shall be determined by
the Company's Board of Managers.

                                        9

          (ii) The Company is authorized to withhold any amounts with respect to
any income,  gain or profits allocated to any Member as required under the Code,
Regulations  or any provision of applicable  state and local income tax law. Any
amounts withheld shall be treated as amounts distributed to the Members pursuant
to this Section 4. To the extent any  distributions  under this Section 4(a)(ii)
exceed the amounts distributable to the Members under Section 4(a)(ii), any such
excess  shall be deemed to be an advance to the  Members  receiving  such excess
distributions.

     (b) ALLOCATION OF PROFIT OR LOSS.

          (i) PROFIT. Profit will be allocated as follows:

               (1)  first,   to  those   Interest   Holders  who  have  received
allocations of Loss in prior periods,  which have not been previously  offset by
Profit  Allocations,  among  them in  accordance  with the  ratios in which they
shared such Losses,  until the effect of such prior period Loss  allocations has
been  eliminated  (beginning with the most recent Loss  allocations)  from their
Capital Account; and

               (2)  second,  to the  Interest  Holders  in  proportion  to their
Percentage.

          (ii) LOSS. Loss will be allocated as follows:

               (1)  first,   to  those   Interest   Holders  who  have  received
allocations of Profits in prior periods in excess of the amount of distributions
received by such Interest  Holders and which have not previously  been offset by
Loss allocations  ("Undistributed  Profits"),  among them in accordance with the
ratios in which they shared these Undistributed Profits, until the effect of the
prior period  Undistributed  Profits allocations has been eliminated  (beginning
with the most recent Profits allocations) from their Capital Accounts; and

               (2) the balance of any Loss will be allocated  among the Interest
Holders in proportion to their Percentage.

          (iii) EXPENSE  REIMBURSEMENT.  For purposes of determining  Profit and
Loss as herein  provided,  each Member and each  Manager  shall be entitled to a
reimbursement of all out-of-pocket expenses incurred by it or them respectively,
PROVIDED, HOWEVER, that any out-of-pocket expense in excess of $5,000 shall have
been  approved  prior to  incurrence  thereof  by the  unanimous  consent of the
Managers,  and that any such request for  reimbursement  shall be accompanied by
reasonable supporting documentation.

     (c) REGULATORY ALLOCATIONS.

          (i) Notwithstanding anything herein to the contrary, the provisions of
the applicable Regulations under Code Section 704 dealing with "qualified income
offsets,"  "nonrecourse  deductions," "partner nonrecourse debt," "minimum gain"
and "partner  nonrecourse  debt minimum  gain" as those terms are defined in the
Regulations,  are incorporated into this Agreement,  and allocations of items of
income, gain, loss and deduction shall be made in accordance with the applicable
provisions of the Regulations

                                       10

          (ii)  The  provisions  of  this  Section  4(c)(i)  (collectively,  the
"Regulatory Provisions") are intended to comply with certain requirements of the
Regulations.  It is the intent of the Members that, to the extent possible,  all
allocations  pursuant to the Regulatory  Provisions  shall be offset either with
other allocations pursuant to the Regulatory  Provisions or, if necessary,  with
curative  allocations of other items of income, gain, loss or deduction pursuant
to this Section 4(c)(ii). Therefore, notwithstanding any other provision of this
Agreement,  other than the Regulatory  Provisions,  allocations  pursuant to the
Regulatory  Provisions  shall be taken into account in allocating other items of
income, gain, expense or loss among the Members so that, to the extent possible,
the net amount of such  allocations of other items and the allocations  pursuant
to the  Regulatory  Provisions  to each  Member are equal to the net amount that
would have been allocated to such Member is the Regulatory  Provisions  were not
part of this Agreement

     (d) LIQUIDATION AND DISSOLUTION.

          (i) If the Company is liquidated,  the remaining assets of the Company
will be  distributed  to the Interest  Holders in  accordance  with the positive
balances in their  respective  Capital  Accounts,  after taking into account the
allocations of Profit or Loss under this Section 4.

          (ii) No Interest  Holder is  obligated  to restore a Negative  Capital
Account.

     (e) GENERAL.

          (i) Except as otherwise  specifically provided in this Agreement,  the
timing and amount of all distributions will be determined by the Board.

          (ii) If any  assets  of the  Company  are  distributed  in kind to the
Interest  Holders,  those assets will be valued by the Board in accordance  with
the Valuation  Guidelines,  and any Interest  Holder entitled to any interest in
those  assets will receive that  interest as a  tenant-in-common  with all other
entitled Interest  Holders.  Unless the Members otherwise agree, the fair market
value of the assets will be determined by an  independent  appraiser who will be
selected  by the  Board.  The  Profit  or Loss for  each  unsold  asset  will be
determined  as if the  asset  had been sold at its fair  market  value,  and the
Profit or Loss  will be  allocated  as  provided  in this  Section 4 and will be
properly  credited or charged to the Capital  Accounts of the  Interest  Holders
prior to the distribution of the assets in liquidation under Section 4(d).

          (iii) All Profit  and Loss will be  allocated,  and all  distributions
will be made to the  Persons  shown on the  records of the  Company to have been
Interest Holders as of the last day of the taxable year for which the allocation
or  distribution  is to be made.  Notwithstanding  the foregoing,  if there is a
Transfer or an  Involuntary  Withdrawal  during the taxable year, the Profit and
Loss will be allocated between the original Interest Holder and the successor on
the basis of the number of days each was an Interest  Holder  during the taxable
year; provided,  however, the Company's taxable year will be segregated into two
or more segments in order to account for Profit, Loss, or proceeds  attributable
to any  extraordinary,  nonrecurring  items  of the  Company,  or  otherwise  as
required by Code Section 706 and the regulations thereunder.

                                       11

          (iv) The Board is hereby authorized,  upon the advice of the Company's
tax counsel, to amend this Section 4 to comply with the Code and the Regulations
promulgated under Code Section 704(b); provided, however, that no amendment will
materially  affect  distributions  to an Interest  Holder  without the  Interest
Holder's prior written consent.

     (f) SECTION 704(C) ALLOCATION.

          (i) Any item of income,  gain,  loss and deduction with respect to any
property (other than cash) that has been  contributed by a Member to the capital
of the Company and which is required or permitted to be allocated to such Member
for income tax purposes under Code Section 704(c) so as to take into account the
variation  between the tax basis of such  property  and its Gross Asset Value at
the time of its contribution shall be allocated to such Member solely for income
tax purposes in the manner so required to permitted.

          (ii)  If,  under  Regulations  Section  1.704-1(b)(2)(iv)(f),  Company
property  that has been revalued is properly  reflected in the Capital  Accounts
and on the books of the  Company at a Gross Asset  Value that  differs  from the
adjusted tax basis of such property, then depreciation,  depletion, amortization
and gain or loss with respect to such property shall be shared among the Members
in a manner that takes account of the  variation  between the adjusted tax basis
and Gross  Asset  Value of  property  contributed  to the Company are taken into
account (as provided in the  preceding  paragraph) in  determining  the Member's
share of tax items under Code Section 704(c).

          (iii)  Allocations  pursuant to this  Section  4(f) are solely for the
purposes of federal, state and local taxes. As such, they shall not affect or in
any way be taken into account in computing a Member's  Capital  Account or share
of profits,  losses or other items of distributions pursuant to any provision of
this Agreement.

     (g)  DIVISION  AMONG  MEMBERS AND  INTEREST  HOLDERS.  Except as  otherwise
provided  herein,  all Profits,  Losses and  distributions  to the Member(s) and
Interest Holder(s) will be divided among them in proportion to their Units.

5. MANAGEMENT: RIGHTS, POWERS, AND DUTIES

     (a) MANAGEMENT.

          (i) BOARD OF MANAGERS.  The Company will be managed by the Board.  The
Board will consist of six (6)  Managers;  three  Managers to be appointed by IBC
and three  Managers to be appointed by Empyrean.  The Managers will serve at the
request of IBC and Empyrean and IBC and Empyrean  will have the right to replace
each of the three Managers they were entitled to appoint without the approval of
the Board;  provided,  however,  that any  successor to the original  appointees
shall be either  the  Chairman  of the Board,  Chief  Executive  Officer,  Chief
Operating Officer or Chief Financial Officer of Empyrean or IBC, as the case may
be. Initially,  the Board will consist of Lawrence D. Bain,  Richard C. Adamany,
Bennett  S.  Rubin,  Sara  Gomez de Ferro,  David  Thornburgh,  M.D.  and Andrea
Ferrari. A quorum of the Board shall be composed of all six Managers.

                                       12

               (1) The Board will have full, exclusive, and complete discretion,
power,  and  authority,  subject  in all cases to the other  provisions  of this
Agreement  and  the   requirements  of  applicable  law,  to  manage,   control,
administer, and operate the business and affairs of the Company for the purposes
herein  stated,  and to make all decisions  affecting such business and affairs,
whether or not in the  ordinary  course of such  business  and  affairs,  and to
perform  any and all other  acts or  activities  customary  or  incident  to the
management of the Company's business,  including, without limitation, the making
of any distributions to the Members.

               (2) The Board may meet at the principal offices of the Company or
at any other  place as may be agreed  upon from time to time by the Board at any
time as may be determined by the Board or upon the request of any Manager or the
President  upon ten (10) days' notice to all the Managers.  Meetings may be held
by telephone. The Board will cause written minutes to be prepared of all actions
taken by the Board and will cause a copy thereof to be delivered to each Manager
within fifteen (15) days after the meeting.

               (3) No  action  may be taken at a meeting  of the Board  unless a
majority of the Managers is present at such meeting.

               (4) Each Manager is entitled to cast one vote with respect to any
decision  made by the Board,  except  with  respect to a  determination  to seek
indemnification   under  Section   5(h),  in  which  event  a  Manager   seeking
indemnification  may not vote with  respect to his or her  indemnification.  Any
action to be taken by the Board  requires an  affirmative  vote of a majority of
the Managers.  Approval or action by the Board constitutes approval or action by
the Company and is binding on the Members.

               (5) The Board will  first  attempt to settle and vote on each and
every matter  presented to it  respecting  the  management of the affairs of the
Company in good faith.  In the event the business of the Company is suffering or
is threatened with irreparable injury because the Board is so divided respecting
the  management  of the affairs of the Company that the required vote for action
by the Board cannot be obtained  within thirty (30) days from the date such vote
is first  presented  to the Board,  the  Members and the Board  hereby  agree to
submit  and have such  divided  vote  decided by final and  binding  arbitration
conducted in a mutually agreed location by one neutral arbitrator, in accordance
with the then current Commercial  Arbitration Rules of the American  Arbitration
Association  ("AAA").  A judgment may be entered in any court  having  competent
jurisdiction.  The arbitrator will not have the power to award any consequential
or punitive damages. The arbitrator will not have the power to order pre-hearing
discovery of documents or the taking of depositions,  but may compel  attendance
of witnesses and the  production of documents at the hearing.  This Section will
be governed and enforced under the Federal Arbitration Act, 9 U.S.C.  Sections 1
to 16.

               (6) Any  action to be taken by the  Board may be taken  without a
meeting if consents in writing  setting  forth the action so taken are signed by
all Managers.

                                       13

          (ii) LIMITATION ON AUTHORITY OF MEMBERS.

               (1) No  Member  is an agent of the  Company  solely  by virtue of
being a Member,  and no Member has  authority  to act for the Company  solely by
virtue of being a Member.

               (2) This Section 5(a)(ii)(2)  supersedes any authority granted to
the Members  under the Act. Any Member who takes any action or binds the Company
in violation of this Section will be solely  responsible for any loss, cost, and
expense  incurred  by the Company  (including,  without  limitation,  reasonable
attorneys'  fees) as a result of the  unauthorized  action and that  Member will
indemnify  and hold the Company and its  officers  harmless  with respect to all
loss, cost, or expense.

     (b) EXECUTIVE STEERING COMMITTEE.

          (i) Subject to the approval of a Business Plan by the Board, the Board
may appoint an executive steering committee (the "Executive Steering Committee")
to manage, control, administer and operate the following business and affairs of
the Company: (1) all sales,  marketing and distribution of the Licensed Products
in the Territory; (2) licensing of all third-party distributors;  (3) production
scheduling;  and (4) financial and administrative functions as delineated in the
Business  Plan.  In  addition,   the  Executive   Steering  Committee  shall  be
responsible for the following  business and activities,  if any, of the Company:
(1) all research and development;  (2) product  improvement;  (3)  manufacturing
facility  approvals;  (4)  clinical  trials;  (5) product  testing;  (6) quality
control;  (7) lot  tracking  of the  products;  (8) label  claims;  (9)  product
registration; and (10) regulatory approvals.

     (c) NEW PRODUCT DEVELOPMENT BOARD.

          (i)  Development  of all new  products  shall be managed,  controlled,
administered and operated by the new product development board (the "New Product
Development  Board") to be appointed by the Board.  The New Product  Development
Board shall  consist of four (4)  members to include two (2)  medical/scientific
personnel of IBC and two (2) marketing personnel of Empyrean, in accordance with
mutually  agreed upon criteria which will take into account both  scientific and
marketing  issues.  In the event the Company does not desire to  distribute  and
market a product developed by IBC, IBC may  independently  market and distribute
such product at its own expense.

     (d) OFFICERS.

          (i) APPOINTMENT OF OFFICERS BY THE BOARD. The Board may appoint one or
more officers of the Company ("Officers") and may delegate to these Officers the
day-to-day  ordinary and usual  business and affairs of the Company,  consistent
with the terms hereof. The terms of employment of these Officers may be governed
by employment contracts or similar documents with the Officers. In addition, the
Officers will have the responsibility of implementing the decisions of the Board
and  Members  and  making  all of those  decisions  specially  delegated  to the
Officers  by  the  Board.  Notwithstanding  anything  contained  herein  to  the

                                       14

contrary,  unless specifically delegated to the Officers under this Agreement or
in accordance with an instruction from the Board from time to time, all decision
making  authority is reserved for the Board.  The acts of the Officers will bind
the  Members  and the  Company  when  these  acts are  within  the  scope of the
Officers'  authority as provided in this Agreement.  The Officers are subject to
the direction of the Board at all times and will keep the Board  informed  about
all material matters relating to the Company.

          (ii)  TENURE.   Each  Officer  will  hold  office  from  the  date  of
appointment until removed by the Board or until such Officer will resign.

          (iii)  RESIGNATION AND REMOVAL.  Any Officer may resign at any time by
giving written notice to the Board, and, unless otherwise specified therein, the
acceptance of such resignation  will not be necessary to make it effective.  Any
Officer may be removed at any time by the Board, with or without cause.

          (iv) SALARIES. The salaries of the Officers will be fixed from time to
time by the Board.

          (v) INDEMNIFICATION OF OFFICERS. To the maximum extent permitted under
the Act and any other  applicable  law, the Company will  indemnify the Officers
and make advances for reasonable expenses.

          (vi)  REMOVAL.  Any one or more of the  Officers may be removed at any
time,  with  or  without  cause,  by the  Board,  subject  to the  terms  of any
employment  agreements that the Officers may have with the Company.  The removal
of an Officer  who is also a Member will not affect  such  person's  rights as a
Member and will not constitute a termination of a Member.

          (vii) OFFICERS.

               (1) CO-CHAIRMEN.  The Co-Chairmen will preside at all meetings of
the Board and the  Members,  and will  exercise  and perform any other duties as
assigned by the Board.  Lawrence D. Bain and Sara Gomez de Ferro  initially will
be the Co-Chairmen of the Board.

               (2) OTHER  OFFICERS.  The Company may, at the  discretion  of the
Board, appoint additional Officers including, without limitation, a President, a
Chief Financial Officer, one or more Vice-Presidents,  a Secretary,  one or more
Assistant  Secretaries,  a Treasurer and one or more Assistant  Treasurers.  One
person may hold two or more  offices.  When the incumbent of an office is unable
to perform its  duties,  or where there is not an  incumbent  of an office,  the
duties of the Officer will be performed by the person specified by the Board.

     (e) VOTE OF THE  MEMBERS.  The  Company  may not take any of the  following
actions  without the approval of one hundred  percent (100%) of the  outstanding
Units:

          (i) sell,  convey, or otherwise dispose of all or substantially all of
its property or business or merge into or  consolidate  with any other entity or
effect  any  transaction  or series of related  transactions  in which more than
fifty percent (50%) of the voting power of the Company is disposed of;

                                       15

          (ii) dissolve, liquidate or wind up the activities of the Company;

          (iii) acquire any other business;

          (iv) change the nature of the Company's business;

          (v) alter or change  the  rights,  preferences  or  privileges  of the
Units;

          (vi) increase or decrease the total number of Units outstanding;

          (vii) authorize or issue, or obligate itself to issue,  any additional
security;

          (viii) amend this Agreement;

          (ix) change the number of managers or composition of the Board.

     (f) PERSONAL  SERVICES.  No Member is required to perform  services for the
Company  solely by virtue of being a Member.  Unless  approved by the Board,  no
Member may perform  services for the Company or be entitled to compensation  for
services performed for the Company.

     (g) DUTIES OF PARTIES.

          (i) The Board will  devote  time to the  business  and  affairs of the
Company necessary to carry out the Board's duties set forth in this Agreement.

          (ii) Except as otherwise  expressly  provided in Section 5(e), nothing
in this Agreement may be deemed to restrict in any way the rights of any Member,
or of any  Affiliate  of any Member,  to conduct any other  business or activity
whatsoever,  and no Member is  accountable  to the Company or to any Member with
respect to that business or activity  even if the business or activity  competes
with the  Company's  business,  so long as such  business  or  activity is not a
microbicide product that is the same as a Licensed Product.  The organization of
the Company will be without prejudice to any Member's  respective rights (or the
rights of any Member's respective Affiliates) to maintain,  expand, or diversify
other  interests  and  activities  and to  receive  and enjoy  these  profits or
compensation.  Each Member  waives any rights the Member may  otherwise  have to
share or  participate  in other  interests or  activities of any other Member or
that Member's Affiliates.

          (iii) Each Member understands and acknowledges that the conduct of the
Company's  business may involve business  dealings and undertakings with Members
and their  Affiliates.  In any of those cases,  those dealings and  undertakings
will be at arm's length and on commercially reasonable terms.

                                       16

     (h) LIABILITY AND INDEMNIFICATION.

          (i) The Board, the members of the Advisory Board, and the Officers are
not liable,  responsible, or accountable, in damages or otherwise, to any Member
or to the Company for any act  performed by such Person  within the scope of the
authority  conferred on such Person by this Agreement,  except for fraud,  gross
negligence, or an intentional breach of this Agreement.

          (ii) The Company will  indemnify  the Board (and each of its managers,
officers,  shareholders,  employees  and  agents),  the members of the  Advisory
Board,  the  Officers  and  each  Member  for any and all  losses,  liabilities,
damages, judgments,  amounts paid in settlement,  costs and expenses (including,
without  limitation,  attorneys' fees) to which any Person may actually incur or
become subject in connection with any threatened,  pending or completed  action,
suit, or proceeding to which any of them was or is made a party or threatened to
be made a party by reason of the direct or indirect association by them with the
Company or in connection with any involvement with any portfolio company (to the
extent not  indemnified by such portfolio  company) as and to the fullest extent
permitted  by  the  Act  and  applicable   law,   provided  the  Person  seeking
indemnification  was not grossly negligent or engaged in willful  malfeasance or
in intentional breach of this Agreement.  Whenever any  indemnification has been
paid to or  expenses  advanced  to any  such  Person,  this  occurrence  will be
reported  to the  Members  prior to or with  the next  notice  of a  meeting  of
Members.

          (iii) The Company  shall obtain  liability  insurance for all Managers
and Officers. All Members shall bear the costs of such insurance equally.

     (i) POWER OF ATTORNEY.

          (i) GRANT OF POWER.  Each Member hereby  constitutes and appoints each
member  of  the  Board  as  the  Member's   true  and  lawful   attorney-in-fact
("Attorney-in-Fact"),  and in the  Member's  name,  place  and  stead,  to make,
execute, sign, acknowledge, deliver, and file:

               (1) the Certificate of Formation of the Company;

               (2) all documents  (including  amendments to the  Certificate  of
Formation) that the Attorney-in-Fact deems appropriate to reflect any amendment,
change, or modification of this Agreement;

               (3) any and all other certificates or other instruments  required
to be filed by the  Company  under the laws of the State of  Delaware  or of any
other state or jurisdiction,  including,  without limitation, any certificate or
other instruments necessary in order for the Company to continue to qualify as a
limited liability company under the laws of the State of Delaware;

               (4) one or more applications to use an assumed name; and

               (5) all documents  that may be required to dissolve and terminate
the Company and to cancel its Certificate of Formation.

                                       17

          (ii)  IRREVOCABILITY.  The foregoing  power of attorney is irrevocable
     and is coupled with an interest,  and, to the fullest  extent  permitted by
     applicable  law, will survive the death or disability of a Member.  It will
     also survive the Transfer of an Interest,  except that if the Transferee is
     approved for admission as a Member, this power of attorney will survive the
     delivery  of  the   assignment   for  the  sole  purpose  of  enabling  the
     Attorney-in-Fact  to execute,  acknowledge and file any documents needed to
     effectuate   the   substitution.   Each   Member   will  be  bound  by  any
     representations made by the Attorney-in-Fact  acting in good faith pursuant
     to this  power of  attorney,  and each  Member  hereby  waives  any and all
     defenses which may be available to contest,  negate or disaffirm the action
     of the Attorney-in-Fact taken in good faith under this power of attorney.

6. TRANSFER OF INTERESTS AND WITHDRAWALS OF MEMBERS

     (a)  RESTRICTIONS  ON  TRANSFER.  The  Members  have  agreed that it is not
desirable  that any  Person  Transfer  any of its  Units,  Membership  Rights or
Interest  to  non-Member  Persons  because  of the  Members'  desire  to  ensure
continuity  of  ownership  of the  Company.  No Person  shall sell or  otherwise
Transfer all or any portion of or any interest or rights in such Person's Units,
Membership  Rights or Interest  without the majority  approval of the  remaining
non-transferring   Members.  The  Members  agree  that  the  foregoing  Transfer
restriction  is  necessary  for the  operation  of the  Company's  business,  is
reasonable in view of the Company's purpose and the relationship of the Members,
and may be specifically enforced by the Company or any of its Members.

     (b)  CONDITIONS OF TRANSFERS.  Subject to Section 6(a) above and subject to
any  restrictions on  transferability  required by law (including the Securities
Act of 1933,  as amended,  any state  securities or "Blue Sky" law and the rules
promulgated  thereunder)  if any Person  ("Transferor")  Transfers  to any other
Person  ("Transferee")  all or any portion of or any  interest or rights in such
Person's Membership Rights or Interest, the following conditions ("Conditions of
Transfer") must be satisfied:

          (i)  The  Transfer  may  not  require  registration  of  Interests  or
Membership Rights under any federal or state securities laws;

          (ii) The Transferee shall deliver to the Board an unqualified  opinion
of counsel in form and  substance  satisfactory  to  counsel  designated  by the
Board,  that  neither the  Transfer  nor any  offering in  connection  therewith
violates any provision of any federal or state securities law;

          (iii) The  Transferee  shall execute a statement  that the  Membership
Rights or Interest  are being  acquired for  investment  purposes and not with a
view to distribution, fractionalization or resale;

          (iv) The Transferee shall deliver to the Company a written  instrument
agreeing to be bound by the terms of this Agreement;

                                       18

          (v) The Board shall receive a favorable opinion of counsel in form and
substance satisfactory to counsel designated by the Board that the Transfer will
not result in the termination of the Company under the Act;

          (vi) The Transfer  will not result in the Company being subject to the
Investment Company Act of 1940, as amended; and

          (vii) The  Transferor  or the  Transferee  shall deliver the following
information to the Company: (1) the Transferee's taxpayer identification number;
and (2) the Transferee's initial tax basis in the Transferred Interest.

     (c) STATUS OF TRANSFEREE.  Subject to Section 6(a) above, if the Conditions
of Transfer are satisfied,  then a Member or Interest Holder may Transfer all or
any portion of that Person's  Interest.  Unless the  Transferee is admitted as a
substitute  Member under Section 6(d), the Transfer of an Interest under Section
6(b) may not result,  however,  in the Transfer of any of the Transferor's other
Membership  Rights,  if any, and the Transferee of the Interest has no right to:
(i)  become a Member;  (ii)  exercise  any  Membership  Rights  other than those
specifically  pertaining to the ownership of an Interest;  (iii) act as an agent
of the Company;  (iv) inspect the  Company's  books and records;  (v) receive an
accounting of Company  financial  affairs;  or (vi)  otherwise  take part in the
Company's  business or exercise the rights of a Member under this Agreement.  If
the Transfer is of all Membership Rights and the conditions set forth in Section
6(d) are satisfied,  the Transferee  will succeed to all Membership  Rights of a
Member who Transfers such Membership Rights.

     (d) REQUIREMENTS FOR  SUBSTITUTION.  Subject to Section 6(a), no Transferee
of a Member's Membership Rights under Section 6(c) will have the right to become
a Member unless and until all of the  following  conditions  ("Requirements  for
Substitution") are satisfied:

          (i) The admission is approved by the Board;

          (ii) A duly executed and acknowledged  written  instrument of transfer
approved  by the Board has been filed  with the  Company  setting  forth (1) the
intention of the  Transferee to be admitted as a Member;  (2) the notice address
of the Transferee and the Transferee's taxpayer  identification  number; and (3)
the number of Units transferred to the Transferee;

          (iii) Each of the opinions of counsel specified in Section 6(b);

          (iv)  Written  acceptance  and  adoption  by  the  Transferee  of  the
provisions of this Agreement;

          (v)  The   Transferee's   completion  of  a  purchaser   qualification
questionnaire  or similar  document which will enable counsel for the Company to
determine whether such proposed substitution is consistent with the requirements
of a private placement  exemption from registration  under the Securities Act of
1933 and relevant state law; and

                                       19

          (vi) A transfer fee has been paid to the Company  sufficient  to cover
all costs and expenses in connection with the transfer and admission, including,
but not limited to,  reasonable  attorneys' fees incurred in connection with the
legal opinions referred to in Section 6(b).

     (e)  TRANSFERS  IN  VIOLATION.  The  Transfer of any  Membership  Rights or
Interests in violation of the  prohibitions  contained in this Section 6 will be
deemed  invalid,  null and void,  and of no force or effect.  Any Person to whom
Membership Rights are attempted to be transferred in violation of this Section 6
will not be entitled to exercise  any rights or powers of a Member,  but will be
entitled,  to the maximum  extent  permitted by the Act, to share in the Profits
and Losses and to receive  distributions from the Company to the extent that the
Transferor was entitled to share in such items.

     (f) VOLUNTARY WITHDRAWAL. Without the Board's prior consent, no Member will
have the right or power to make a Voluntary  Withdrawal from the Company and any
Member who makes a Voluntary  Withdrawal  will be in intentional  breach of this
Agreement.  No Member who will Voluntary Withdrawal will be entitled to receive,
in liquidation of such Member's Interest,  under the Act or otherwise,  the fair
value of the Member's Interest on the date of Voluntary  Withdrawal or any other
distribution whatsoever.

     (g)  INVOLUNTARY   WITHDRAWAL.   Immediately  upon  the  occurrence  of  an
Involuntary  Withdrawal,  the successor of the withdrawn  Member will  thereupon
become an Interest Holder but will not become a Member,  unless the Requirements
for Substitution are satisfied.  The successor Interest Holder will have all the
rights of an  Interest  Holder but  neither the  predecessor  nor the  successor
Interest  Holder  will be entitled to receive in  liquidation  of the  Interest,
pursuant the Act, the fair market value of the Member's  Interest as of the date
the Member involuntarily withdrew from the Company.

     (h) CHANGE OF CONTROL.  In the event of any Change of Control (as such term
is defined in the Put Agreement  attached  hereto as EXHIBIT F) of either IBC or
Empyrean,  the party not subject to such Change of Control,  being either IBC or
Empyrean,  as the case may be, shall have the right, subject to the terms of the
Put  Agreement,  to sell their  shares to the party  subject  to such  Change of
Control or to a third party upon the terms and conditions as described therein.

7. DISSOLUTION, LIQUIDATION, AND TERMINATION OF THE COMPANY

     (a) EVENTS OF DISSOLUTION. The Company will be dissolved upon the happening
of any of the following events:

          (i) When  the  period  fixed  for its  duration  in  Section  2(d) has
expired;

          (ii) Upon the sale of all or  substantially  all of the  assets of the
Company and the distribution of the Net Cash Flow under Section 4(a);

          (iii)  Upon  written  notice  of the  Board;  provided,  however,  the
Involuntary  Withdrawal  or Voluntary  Withdrawal of a Member will not cause the
dissolution  of the Company  under the Act and the  business of the Company will
continue  until the Company is dissolved  upon the happening of one of the above
events; or

                                       20

          (iv) Upon the approval of the Members under Section 5(e)(ii).

     (b) PROCEDURE FOR WINDING UP AND DISSOLUTION.  If the Company is dissolved,
the Board will wind up its affairs. On winding up of the Company, (i) the assets
of the Company will, to the maximum extent practicable,  be reduced to cash, and
such cash shall be  distributed,  first, to pay the expenses and fees of winding
up the  business  of the  Company  incurred  by the  Board  (including,  without
limitation,  reasonable  attorneys'  fees),  then to  creditors  of the Company,
including Interest Holders who are creditors, in satisfaction of the liabilities
of the Company,  and then to the  Interest  Holders in  accordance  with Section
4(d).  In the event the Company  has assets  that are not  reduced to cash,  the
Interest  Holders will initially  attempt to agree between  themselves as to how
any such assets shall be distributed.  In the event the Interest Holders are not
able to come to agreement with respect to such distributions, the issue shall be
submitted to  arbitration  in  accordance  with the  provisions  of Section 9(m)
hereof.

     (c) FILING OF CERTIFICATE OF DISSOLUTION.  If the Company is dissolved, the
Board will promptly file a Certificate of Dissolution (the  "Certificate")  with
the Secretary.  If there is no Board,  then the Certificate will be filed by the
remaining Members;  if there are no remaining  Members,  the Certificate will be
filed by the last Person to be a Member; if there is neither a Board,  remaining
Members, or a Person who last was a Member, the Certificate will be filed by the
legal or personal representatives of the Person who last was a Member.

8. BOOKS, RECORDS, ACCOUNTING, AND TAX ELECTIONS

     (a) BANK  ACCOUNTS.  All funds of the Company  will be  deposited in a bank
account or accounts  maintained in the Company's  name. The Board will determine
the  institution  or  institutions  at which the  accounts  will be  opened  and
maintained,  the types of accounts, and the Persons who will have authority with
respect to the accounts and the funds therein.

     (b) BOOKS AND RECORDS.

          (i) The Board  will  keep or cause to be kept  complete  and  accurate
books  and  records  of  the  Company  and  supporting   documentation   of  the
transactions with respect to the conduct of the Company's business.  The records
will include, but not be limited to, complete and accurate information regarding
the state of the business and financial  condition of the Company, a copy of the
Certificate   of  Formation  and  this  Agreement  and  all  amendments  to  the
Certificate of Formation and this  Agreement;  a current list of the names,  the
last known business, residence, or mailing addresses, the Capital Contributions,
and the dates of initial  membership of all Members;  and the Company's federal,
state or local tax returns.

          (ii) The books and records will be maintained in accordance with sound
accounting practices and will be available at the Company's principal office for
examination by any Member or the Member's duly authorized  representative at any
and all reasonable times during normal business hours.

                                       21

          (iii) Each Member will  promptly  reimburse  the Company for all costs
and expenses incurred by the Company in connection with the Member's  inspection
and copying of the Company's books and records.

     (c) ANNUAL ACCOUNTING  PERIOD.  The annual accounting period of the Company
will be its taxable  year.  The  Company's  taxable year will be selected by the
Board, subject to the requirements and limitations of the Code.

     (d) REPORTS.  Within ninety (90) days after the end of each taxable year of
the Company,  the Board will cause to be sent to each Person who was a Member at
any time during the accounting  year then ended:  (i) audited  annual  financial
statements  of the  Company,  to be prepared by the  accountant  then  currently
retained by the Board to conduct the Company's annual audits, in accordance with
standards issued by the American Institute of Certified Public Accountants;  and
(ii) a report  summarizing  the  investments  and operations of the Company.  In
addition,  within  ninety  (90) days after the end of each  taxable  year of the
Company,  the Board  will cause to be sent to each  Person  who was an  Interest
Holder at any time during the  taxable  year then  ended,  that tax  information
concerning  the Company which is necessary  for preparing the Interest  Holder's
income tax returns for that year.  Within  forty-five (45) days after the end of
each Fiscal  Quarter,  the Board will cause to be sent to each Person who was an
Interest  Holder at any time during the Fiscal Quarter,  an unaudited  quarterly
Company  financial report showing each Interest Holder's Capital Account and any
additions thereto or subtractions  therefrom.  Within twenty (20) days after the
end of each  month,  the Board  will  cause to be sent to each  Person who was a
Member at the end of such month unaudited  monthly  operating  statements of the
Company.

     (e)  TAX  MATTERS  PERSON.  A  Member  selected  by the  Board  will be the
Company's  "tax matters  person" ("Tax Matters  Person") for purposes of Section
6221 et seq.  of the Code.  The Tax  Matters  Person  will have all  powers  and
responsibilities provided in Code Section 6221, et seq. or such other provisions
as may become applicable to limited liability companies.  The Tax Matters Person
will keep all Members reasonably  informed of all notices from government taxing
authorities  which may come to the  attention  of the Tax  Matters  Person.  The
Company will pay and be  responsible  for all reasonable  third-party  costs and
expenses incurred by the Tax Matters Person in performing those duties. A Member
will be  responsible  for any and all costs and expenses  incurred by the Member
with  respect  to any  tax  audit  or  tax-related  administrative  or  judicial
proceeding  against any Member,  even though it relates to the Company.  The Tax
Matters Person may not compromise any dispute with the Internal  Revenue Service
without the approval of a majority of the Units.  Initially,  Empyrean  shall be
the Tax Matters Person.

     (f) TAX  ELECTIONS.  The Board will have the  authority to make all Company
elections permitted under the Code, including, without limitation,  elections of
methods of  depreciation  and elections  under Code Section 754. The decision to
make  or  not  make  an  election  will  be at the  Board's  sole  and  absolute
discretion.

                                       22

     (g) TITLE TO COMPANY PROPERTY.

          (i) Except as  provided  in  Section  8(g)(ii)  all real and  personal
property  and assets  acquired by the Company  will be acquired  and held by the
Company in its name until  distributed  to the  Members in  accordance  with the
terms hereof.

          (ii) The Board may direct  that legal  title to all or any  portion of
the  Company's  property and assets be acquired or held in a name other than the
Company's name. Without limiting the foregoing,  the Board may cause title to be
acquired  and held in its name or in the names of trustees,  nominees,  or straw
parties for the Company.  It is expressly  understood and agreed that the manner
of holding title to the  Company's  property (or any part thereof) is solely for
the  convenience  of the Company,  and all of that  property  will be treated as
Company property.

9. GENERAL PROVISIONS

     (a)  ASSURANCES.  Each  Member  will  execute  all  certificates  and other
documents and will do all filing,  recording,  publishing  and other acts as the
Board  reasonably  deems  appropriate to comply with the requirements of law for
the formation  and operation of the Company and to comply with any laws,  rules,
and  regulations  relating  to the  acquisition,  operation,  or  holding of the
property and assets of the Company.

     (b) NOTIFICATIONS.  Any notice, demand, consent, election, offer, approval,
request, or other communication (collectively, a "notice") required or permitted
under this Agreement must be in writing and (i) delivered personally,  (ii) sent
by certified or registered U.S. mail, postage prepaid, return receipt requested,
(iii) sent by recognized  overnight delivery service,  or (iv) sent by facsimile
transmittal.  A notice must be addressed  to an Interest  Holder at the Interest
Holder's  last known  address on the  records  of the  Company.  A notice to the
Company must be addressed to the Company's  principal office. A notice delivered
personally will be deemed given only when  acknowledged in writing by the person
to whom it is delivered. A notice that is sent by mail will be deemed given five
(5)  business  days after it is mailed.  A notice sent by  recognized  overnight
delivery service will be deemed given when received or refused. A notice sent by
facsimile will be deemed given when sent,  provided notice by personal  delivery
or overnight  delivery  service is effective  the day following  such  facsimile
transmission.  Any  party  may  designate,  by  notice  to all  of  the  others,
substitute addresses or addressees for notices; and, thereafter,  notices are to
be directed to those substitute addresses or addressees.  All notices to IBC and
Empyrean shall be sent to:

                                       23

          As to IBC:

          Ms. Sara Gomez de Ferro
          International Bioscience Corporation
          777 South Flagler Drive
          Phillips Point Building
          East Tower, Suite 909
          West Palm Beach, Florida 33401

          With a copy to:

          Mr. Joseph L. Raia, Esq.
          Holtzman, Krinzman, Equels & Furia
          2601 South Bayshore Drive, Suite 600
          Miami, Florida 33133

          As to Empyrean:

          Mr. Richard C. Adamany
          Empyrean Bioscience, Inc.
          23800 Commerce Park Road, Suite A
          Cleveland, Ohio 44122

          With a copy to:

          Mr. Richard H. Kronthal, Esq.
          Kaye, Scholer, Fierman, Hays & Handler, LLP
          425 Park Avenue
          New York, NY  10022

     (c) SPECIFIC  PERFORMANCE.  The parties  recognize that irreparable  injury
will  result from a breach of any  provision  of this  Agreement  and that money
damages will be inadequate to fully remedy the injury. Accordingly, in the event
of a  breach  or  threatened  breach  of one or more of the  provisions  of this
Agreement, any party who may be injured (in addition to any other remedies which
may be  available  to that  party) is  entitled  to one or more  preliminary  or
permanent  orders (i) restraining and enjoining any act that would  constitute a
breach or (ii)  compelling  the  performance  of any  obligation  which,  if not
performed, would constitute a breach.

     (d) COMPLETE  AGREEMENT.  This Agreement is the sole and complete statement
of the  Members of their  rights and  obligations  with  respect to the  subject
matter  hereof.  This  Agreement  is an  integrated  agreement  and replaces and
supersedes any and all previous  obligations and agreements between the Members.
The Members  hereto  recognize and agree that no  representations  or warranties
have been made except as set forth in this Agreement. Except as may otherwise be
expressly  provided  herein,  by signing this  Agreement  the Members  expressly
release  each other from any and all existing  obligations  that  pre-date  this
Agreement as if such obligations have been fully performed and satisfied.

                                       24

     (e) APPLICABLE LAW. All questions  concerning the  construction,  validity,
and  interpretation  of this Agreement and the  performance  of the  obligations
imposed by this Agreement will be governed and enforced by the internal law, not
the law of conflicts, of the State of Delaware.

     (f) SECTION TITLES.  This Agreement's  headings are inserted as a matter of
convenience  only,  and do not  define,  limit,  or  describe  the scope of this
Agreement or the intent of its provisions.

     (g) BINDING  PROVISIONS.  This Agreement is binding upon, and inures to the
benefit  of,  the  parties  hereto  and  their  respective   heirs,   executors,
administrators,  personal and legal representatives,  successors,  and permitted
assigns.

     (h) JURISDICTION AND VENUE.  Subject to subsection (m) below, any action or
proceeding  in any way,  manner or  respect  arising  out of this  agreement  or
arising  from any  dispute  or  controversy  arising  in  connection  with  this
Agreement,  will be litigated only in the courts having situs within  Miami-Dade
County or Palm Beach  County in the State of Florida,  and each member  consents
and submits to the  jurisdiction  of any state or federal court  located  within
such county and state with  respect to any such  proceeding.  Each maker  hereby
waives  any right  such  maker may have to  transfer  or change the venue of any
action or litigation brought in accordance with this section.

     (i)  TERMS.  Common  nouns  and  pronouns  will be  deemed  to refer to the
masculine,  feminine, neuter, singular and plural, as the identity of the Person
may in the context require.

     (j)  SEPARABILITY  OF  PROVISIONS.  Each  provision  of this  Agreement  is
considered separable; and if, for any reason, any provision or provisions herein
are  determined  to be invalid and contrary to any existing or future law,  this
invalidity  will not impair the  operation of or affect  those  portions of this
Agreement which are valid.

     (k)   COUNTERPARTS.   This  Agreement  may  be  executed  in  two  or  more
counterparts,  each of which will be deemed an original  and all of which,  when
taken together, constitute one and the same document. The signature of any party
to any  counterpart  will be deemed a signature  to, and may be appended to, any
other counterpart.

     (l)  PARTITION.  To the  furthest  extent  permitted  by law,  each  Member
irrevocably waives any right that the Member may have to maintain any action for
partition with respect to Company property or assets.

     (m) ARBITRATION.

          (i) The parties will first  attempt to settle each and every  dispute,
controversy  or  claim,  whether  based  in  contract,   tort,  statute,  fraud,
misrepresentation, or any other legal theory, arising out of or relating to this
Agreement  ("Dispute(s)"),  through  good  faith  negotiations.  Except  for any

                                       25

actions  brought  for  wrongful  termination  or to  seek  termination  of  this
Agreement,  any Dispute not resolved  within 30 days or such other period as the
parties  mutually  agree in writing,  will be then  settled by final and binding
arbitration  conducted in a mutually agreed location by one neutral  arbitrator,
in  accordance  with  this  Section  9(m) and with the then  current  Commercial
Arbitration  Rules of the AAA. Any dispute  arbitrated  in  accordance  with the
terms of this  agreement  shall be conducted in Miami-Dade  County or Palm Beach
County, Florida by one neutral arbitrator. Each party will bear its own expenses
and the parties will equally share the filing and other  administrative  fees of
the AAA and the  expenses  of the  arbitrator.  An award  may be  confirmed  and
judgment entered in any court having competent jurisdiction. The arbitrator will
not have  the  power  to  award  any  consequential  or  punitive  damages.  The
arbitrability of any Dispute,  including those as to the  enforceability of this
Section,  the  applicability  of statutes of limitations  and questions of issue
preclusion,  will be determined  solely by the arbitrator.  This Section will be
governed and enforced under the Federal Arbitration Act, 9 U.S.C.  Sections 1 to
16. The local law of the State of Delaware,  except its laws or arbitration  and
choice  of  laws,  will  apply to all  substantive  matters  pertaining  to this
Agreement.  Any party may seek a temporary  injunction  in a court of  competent
jurisdiction  to the limited extent  necessary to preserve the status quo during
the pendency of final  resolution of a Dispute in accordance  with this Section.
The  statute(s)  of  limitation  applicable  to any Dispute  will be tolled upon
initiation  of the Dispute  resolution  procedures  under this  Section and will
remain tolled until the Dispute is resolved under this Section.

                                       26

     IN WITNESS  WHEREOF,  the  parties  hereto do hereby  sign,  enter into and
acknowledge this Agreement on the date first written above.


                                        MEMBERS

                                        INTERNATIONAL BIOSCIENCE
                                        CORPORATION


                                        By:
                                           -------------------------------------

                                        Title:
                                              ----------------------------------


                                        EMPYREAN BIOSCIENCE, INC.


                                        By:
                                           -------------------------------------

                                        Title:
                                              ----------------------------------


                                        COMPANY

                                        IBC-EMPREAN LLC


         FOR IBC                        By:
                                           -------------------------------------

                                        Title:
                                              ----------------------------------

         FOR EMPYREAN                   By:
                                           -------------------------------------

                                        Title:
                                              ----------------------------------

                                       27

                              IBC-EMPYREAN, L.L.C.

                               OPERATING AGREEMENT

                                    EXHIBIT A

            LIST OF MEMBERS, CAPITAL, NUMBER OF UNITS AND PERCENTAGES

COMMON MEMBERS:

                                                                      PERCENTAGE
                                                                       INTEREST
NAME, ADDRESS AND TAXPAYER             CAPITAL               NUMBER     (FULLY
IDENTIFICATION                         COMMITMENT           OF UNITS    DILUTED)
- --------------------------             ----------           --------    --------
Empyrean Bioscience, Inc.              The execution and        50         50%
23800 Commerce Park Road, Suite A      delivery of the
Cleveland, Ohio  44122                 Trademark License
                                       Agreement from
                                       Empyrean to
                                       IBC-Empyrean

International Bioscience Corporation   The execution and        50         50%
777 South Flagler Drive                delivery of the
Phillips Point Building                (i) License
East Tower, Suite 909                  Agreement from IBC
West Palm Beach, Florida  33401        to IBC-Empyrean,
                                       and (ii) the
                                       Trademark License
                                       Agreement from IBC
                                       to IBC-Empyrean

TOTAL                                                          100        100%

                                       28