DISTRIBUTION AGREEMENT

This DISTRIBUTION AGREEMENT (the Agreement) is made and entered into this 1st day of January, 2005 (the Effective Date), by and between DIVERSA CORPORATION, a Delaware corporation with a place of business at 4955 Directors Place, San Diego, California 92121 USA (hereinafter referred to as Diversa), and VALLEY RESEARCH, a corporation with a place of business at 3502 North Olive Road, South Bend, Indiana 46628 USA (hereinafter referred to as VRi). Diversa and VRi shall be referred to individually as a Party and collectively as Parties.

RECITALS

WHEREAS, Diversa is a biotechnology company engaged in the production, manufacture, and sale of, among other things, enzymes that have applications in agricultural, chemical, pharmaceutical, and a wide range of specialty and industrial processes.

WHEREAS, VRi is a company engaged in the business of marketing, selling and supplying, among other things, enzymes and other specialty compounds, for use in various commercial applications.

WHEREAS, Diversa desires to license and appoint VRi as a distributor of certain of Diversas enzyme products and VRi desires to accept such appointment on the terms and conditions set forth in this Agreement.

NOW THEREFORE, in consideration of the mutual covenants, representations and warranties hereinafter set forth, Diversa and VRi agree as follows:

ARTICLE 1 DEFINITIONS

1.1 Additional Distributor has the meaning set forth in Section 4.2.

1.2 Additional Term means any extension of the term of this Agreement beyond the end of the Initial Term.

1.3 Affiliate means any corporation, firm, partnership or other entity that directly or indirectly owns or is owned by, or is under common ownership with a Party to this Agreement or a Third Party, as applicable. For purposes of the preceding definition, owns, owned and ownership shall mean beneficial ownership of more than fifty percent (50%) of the outstanding voting shares or securities or the ability otherwise to elect a majority of the board of directors or other managing authority.

Page 1

1.4 Approved Customer means a customer or segment of customers for a Diversa Enzyme in the applicable Field within the applicable Territory, as set forth in the Minimum Sales Requirement, as amended from time to time during the term of this Agreement.

1.5 Certificate of Analysis has the meaning set forth in Section 11.1.

1.6 Confidential Information means all information disclosed by a Party to the other pursuant to this Agreement, including, without limitation, manufacturing, marketing, financial, personnel, scientific and other business information and plans, and the material terms of this Agreement, whether in oral, written, graphic or electronic form.

1.7 Current VRi Technology has the meaning set forth in Section 14.3.

1.8 Disclosing Party has the meaning set forth in Section 13.1.

1.9 VRi Profit has the meaning set forth in Section 16.3.3.

1.10 Diversa Enzyme Related Technology has the meaning set forth in Section 14.3.

1.11 Diversa Enzyme means each enzyme more particularly described on Addendum A attached hereto, under whatever name, mark, or description Diversa shall hereafter elect to manufacture and sell such enzyme, as amended from time to time pursuant to Article 3.

1.12 Diversa Patent Rights means any patent or patent application in the Territory owned by or licensed to Diversa (with the right to further license or sublicense) during the term of this Agreement claiming the use, sale, offer for sale or import of the Diversa Enzymes, either generally or in the applicable Field.

1.13 Diversa Trademarks means the trademarks set forth on Addendum E and any worldwide counterpart registered, applied for or in use, as such Addendum E may be amended from time to time by Diversa.

1.14 Exclusive Approved Customer means each Approved Customer identified as exclusive in the Minimum Sales Requirement.

1.15 Field means the application area of the applicable Diversa Enzyme described in Addendum B.

1.16 Initial Term has the meaning set forth in Section 16.1.

1.17 Losses has the meaning set forth in Section 12.1.

1.18 Minimum Purchase Requirement means the amount of each Diversa Enzyme set forth in Addendum C that VRi agrees to purchase from Diversa during the specified time period.

1.19 Minimum Sales Requirement means the rolling 4-calendar-quarter minimum requirement for sales of Diversa Enzyme to each Approved Customer, as set forth in Addendum B, as amended each calendar quarter during the term of this Agreement.

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