<PAGE>
                                                                   EXHIBIT 10.19

CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

                DELTASELECT-TM- COLLABORATIVE SERVICES AGREEMENT

         This DeltaSelect-TM- Collaborative Services Agreement, including all
attachments hereto, (this "Agreement") is entered into as of December 16, 1999
(the "Agreement Date"), by and between DELTAGEN, INC., a Delaware corporation
having a place of business at 1003 Hamilton Avenue, California 94025
("DELTAGEN") and SCHERING-PLOUGH RESEARCH Institute, a Delaware corporation
having an address at 2015 Galloping Hill Road, Kenilworth, New Jersey 07033-1300
("SCHERING-PLOUGH").

         WHEREAS, DELTAGEN possesses knowledge and experience in the research,
creation, design and generation of Knockout Mice (defined below); and

         WHEREAS, SCHERING-PLOUGH desires to engage DELTAGEN to generate
Knockout Mice for SCHERING-PLOUGH and DELTAGEN desires to undertake the
generation of such Knockout Mice for SCHERING PLOUGH on a *** basis under the
terms and conditions set forth in this agreement.

         NOW THEREFORE, in consideration of the mutual covenants set forth
below, DELTAGEN and SCHERING-PLOUGH (individually "Party" and collectively
"Parties") agree as follows:

1.       DEFINITIONS.

         1.1       "Affiliate" shall mean any individual or entity directly
or indirectly controlling, controlled by or under common control with,
SCHERING-PLOUGH or DELTAGEN, as the case may be. For purposes of this
Agreement, the direct or indirect ownership of over fifty percent (50%) of
the outstanding voting securities of an entity, or the right to receive over
fifty percent (50%) of the profits or earnings of an entity shall be deemed
to constitute control. Such other relationship as in fact results in actual
control over the management, business and affairs of an entity shall also be
deemed to constitute control.

         1.2       "Budget" means the pricing and payment terms for a
Knockout Mice Project set forth in Attachment I attached hereto.

         1.3       "Confidential Information" means with respect to a Party
hereto (the "Disclosing Party"), collectively, all technical, financial and
business information of any kind whatsoever, and all tangible and intangible
embodiments thereof of any kind whatsoever, disclosed by the Disclosing Party
to the other Party hereto (the "Receiving Party") or obtained by the
Receiving Party through observation or examination of the foregoing, but only
to the extent such information or embodiment is maintained as confidential by
the Disclosing Party and is marked or otherwise identified as confidential
when disclosed to the Receiving Party or, in the case of information given
verbally, is identified as confidential in a written document provided to the
Receiving Party within thirty (30) days after verbal disclosure to the
Receiving Party.

*** Confidential material redacted and separately filed with the Commission.

                                                                -1-
<PAGE>

         1.4       "Data" means all data or information generated under a
Knockout Mice Project under this Agreement, including but not limited to all
information, records, reports and other material(s) required to be generated,
collected or analyzed by DELTAGEN under a Knockout Mouse Project.

         1.5       "Deltagen Technology" means all Inventions owned by or
licensed to DELTAGEN related to the design, creation, development,
generation, production or analysis of Knockout Mice.

         1.6       "Effective Commencement Date" shall have the meaning set
forth in Section 2.3 below.

         1.7       "Inventions" means technology, information, data,
know-how, inventions, improvements and all patent or other intellectual
property rights therein and thereto.

         1.8       "Knockout Mice" means mice generated under a Knockout Mice
Project pursuant to this Agreement having a Standard Mutation wherein such
mice transmit the Standard Mutation, in the form of ***, through the germ
line.

         1.9       "Knockout Mice Project" means a specific project to create
and generate Knockout Mice in accordance with the terms of a specific Scope
of Work under this Agreement.

         1.10      "Milestone" shall mean the milestones set forth on the
Scope of Work attached hereto.

         1.11      "Schering-Plough Representative" means the representative
identified in writing by SCHERING-PLOUGH to DELTAGEN on a Scope of Work, as
such representative may be changed from time to time in writing by
SCHERING-PLOUGH.

         1.12      "Schering-Plough Technology" means all Inventions and
Study Materials owned by or licensed to SCHERING-PLOUGH and provided by
SCHERING-PLOUGH to DELTAGEN under this Agreement.

         1.13      "Scope of Work" means the work plan for a Knockout Mice
Project substantially in the form attached hereto as Attachment I.

         1.14      "Standard Mutation" means the interruption, disruption or
deletion in a portion of a specified gene.

         1.15      "Study Materials" means any samples or materials
(including chemical or biological) provided by SCHERING-PLOUGH to DELTAGEN
for purposes of a Knockout Mice Project under this Agreement.

2.       KNOCKOUT MICE PROJECTS

         2.1       INDIVIDUAL KNOCKOUT MICE PROJECTS. If SCHERING-PLOUGH
wishes to have DELTAGEN perform a Knockout Mice Project under this Agreement,
SCHERING-PLOUGH shall initiate such request for a Scope of Work by notifying
DELTAGEN in writing in the form set forth in Attachment II and providing a
description of the particular Knockout Mice Project requested as well as the
information set forth in Section 2.2 and the Scope of Work. DELTAGEN shall
evaluate each such request to determine whether such Knockout Mice Project

*** Confidential material redacted and separately filed with the Commission.

                                                                -2-
<PAGE>

is feasible, if DELTAGEN requires technical or scientific modifications or if
DELTAGEN requires additional information to undertake such evaluation. If
such Knockout Mice Project in DELTAGEN's commercially reasonable discretion
is not feasible, DELTAGEN shall have the right (without penalty) to decline
to undertake such Knockout Mice Project. The terms of this Agreement, the
Scope of Work and the Budget shall form the entire agreement of the Parties
with respect to each Knockout Mice Project.

         2.2      INITIATION OF KNOCKOUT MICE PROJECTS. Prior to DELTAGEN's
initiation of each Knockout Mice Project, SCHERING-PLOUGH shall:

                  2.2.1 Identify to DELTAGEN in writing each Knockout Mice
Project to be initiated and agree in writing with DELTAGEN upon the Scope of
Work for such Knockout Mice Project;

                  2.2.2 Consult with and agree in writing with DELTAGEN
regarding the specific gene sequence SCHERING-PLOUGH desires to have deleted
for such Knockout Mice Project and any proposed modifications to the Scope of
Work for such Knockout Mice Project. SCHERING-PLOUGH shall be solely
responsible for providing to DELTAGEN the data and information with respect
to the specific gene sequence for such Knockout Mice Project; and

                  2.2.3 Provide in writing to DELTAGEN all *** reasonably
required by DELTAGEN to undertake such Knockout Mice Project (including
information *** to under Milestones 1 and 2).

                  2.2.4 Transfer to DELTAGEN, to the extent possible, ***
licensed, owned by or otherwise available (without restriction) to
SCHERING-PLOUGH that may be suitable for DELTAGEN's ***.

         2.3       COMMENCEMENT OF KNOCKOUT MICE PROJECT. Each Knockout Mice
Project conducted hereunder shall commence fifteen (15) days after written
agreement by both parties on a Scope of Work and DELTAGEN's receipt from
SCHERING-PLOUGH of all information and materials set forth in Section 2.2
above relating to such Knockout Mice project (such date the "Effective
Commencement Date").

         2.4       PERFORMANCE. DELTAGEN shall use commercially reasonable
efforts to perform its obligations under this Agreement, provided that,
SCHERING-PLOUGH acknowledges and agrees that the performance of the Knockout
Mice Projects involves a number of technologically complex steps and that any
time periods for performance and the Scope of Work may be subject to change
due to potential technological difficulties encountered. DELTAGEN shall
notify SCHERING-PLOUGH of technical difficulties as soon as reasonably
practicable after such difficulties are encountered and the parties shall
discuss and agree in good faith upon methods to resolve such technical
difficulties in a reasonable manner.

         2.5       COMPLETION OF KNOCKOUT MICE PROJECT. Each Knockout Mice
Project shall be deemed complete upon SCHERING-PLOUGH's receipt of the Data
for such Knockout Mice Project under Section 9 below and DELTAGEN's
completion of the Milestones on the Scope of Work for such Knockout Mice
Project.

*** Confidential material redacted and separately filed with the Commission.

                                                                -3-
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         2.6       ADHERENCE TO SCOPE OF WORK. DELTAGEN shall perform those
activities described in the Scope of Work for each Knockout Mice Project.
Neither Party shall change or deviate from a Scope of Work without the prior
written consent of the other Party.

         2.7       CHANGES TO A KNOCKOUT MICE PROJECT. SCHERING-PLOUGH shall
have the right, from time to time, to propose modifications to the Scope of
Work of a Knockout Mice Project. If SCHERING-PLOUGH proposes to change any
terms of a Knockout Mice Project, including but not limited to the estimated
time schedule for such Knockout Mice Project, SCHERING-PLOUGH shall submit
such modification(s) in writing to DELTAGEN (the "Proposed Modification").
Such Proposed Modification shall be implemented by the parties upon the
written agreement of both parties to such Proposed Modification (which
agreement shall not be unreasonably withheld) and a revised Budget for such
Proposed Modification. DELTAGEN shall have the right, in its commercially
reasonable discretion, to accept or reject such Proposed Modification based
upon DELTAGEN's good faith reasonable belief as to whether such proposed
modifications would alter DELTAGEN's technical, performance or financial
obligations under a Scope of Work.

         2.8       STANDARDS OF WORK AND ANIMAL CARE. With respect to each
Knockout Mice Project, DELTAGEN shall comply with all applicable ***
standards and good industry standards regarding the maintenance and care of
the Knockout Mice. ***. DELTAGEN shall replace any Knockout Mice that arrive
at SCHERING-PLOUGH diseased or dead (except for disease or death resulting
from the actions of SCHERING-PLOUGH's designated carrier). Upon the request
of SCHERING-PLOUGH, DELTAGEN shall promptly provide a written report to
SCHERING-PLOUGH concerning DELTAGEN's maintenance and care of the Knockout
Mice.

3.       PAYMENTS AND BUDGET.

         3.1       BUDGET. SCHERING-PLOUGH shall pay to DELTAGEN the payments
set forth in the Budget for each Knockout Mice Project. Except as set forth
in a revised Budget under Section 3.2 below, such payments shall constitute
full payment for such Knockout Mice Project, including all labor, materials
and overhead and SCHERING-PLOUGH shall have no other payment obligations
hereunder.

         3.2       PAYMENTS. For each Knockout Mice Project, DELTAGEN shall
submit invoices to SCHERING-PLOUGH for the payments set forth in the Scope of
Work and Budget upon DELTAGEN's completion of each Milestone set forth in the
Scope of Work and Budget (except for Milestone I - Construct Generation).
SCHERING-PLOUGH shall pay such invoices within thirty (30) days after
receipt. DELTAGEN shall include with each invoice a written representation of
DELTAGEN's completion of such Milestones and, where applicable, documentation
showing such completion.

         3.3       MILESTONE 1 - CONSTRUCT GENERATION. SCHERING-PLOUGH shall
pay to Deltagen within ten (10) days of the Agreement Date an initiation fee
of Five Hundred Thousand Dollars ($500,000) (the "Initiation Fee") which
shall consist of the *** for each of the *** Knockout Mice Projects
contemplated under this Agreement. The Initiation Fee shall be nonrefundable,
PROVIDED THAT, in the event that this Agreement is terminated by
SCHERING-PLOUGH pursuant to Section 11.4.1 due to a material breach of this
Agreement by Deltagen, Deltagen shall refund

*** Confidential material redacted and separately filed with the Commission.

                                                                -4-
<PAGE>

to SCHERING-PLOUGH the Milestone I payments for each Knockout Mice Project
that was not commenced by Deltagen prior to the date of such termination.

4.       RIGHTS TO INVENTIONS.

         4.1       DELTAGEN'S INVENTIONS. DELTAGEN shall own all (a) Deltagen
Technology and (b) all Inventions arising under this Agreement relating to
the design, creation, development, generation or production of Knockout Mice
(excluding any Schering-Plough Technology).

         4.2       SCHERING-PLOUGH'S INVENTIONS. SCHERING-PLOUGH shall own
all Schering Plough Technology (excluding any Deltagen Technology).

         4.3       KNOCKOUT MICE OWNERSHIP. With respect to each Knockout
Mice Project under this Agreement, after SCHERING-PLOUGH has made all
applicable Milestone payments or other payments under this Agreement to
DELTAGEN for such Knockout Mice Project, SCHERING-PLOUGH shall own (a) the
Knockout Mice generated under such Knockout Mice Project and (b) all Data,
phenotypic data and characteristics of such Knockout Mice generated under
such Knockout Mice Project, as set forth below. Unless expressly requested in
writing by SCHERING-PLOUGH, DELTAGEN shall not transfer to a third party the
Knockout Mice generated by DELTAGEN for SCHERING-PLOUGH under this Agreement.
SCHERING-PLOUGH acknowledges and agrees that (x) DELTAGEN may at any time,
independently (or with others) be researching, developing or commercializing
the same or homologous gene sequences provided by SCHERING-PLOUGH to DELTAGEN
under this Agreement, (y) DELTAGEN may at any time, independently (or with
others) be researching, developing or commercializing the Knockout Mice that
are the subject of a Knockout Mice Project under this Agreement either for
DELTAGEN's own products and programs or for a third party, and (z) DELTAGEN
or a third party may at any time, independently (or with others) have
secured, own or be seeking patent or other intellectual property rights with
respect to such Knockout Mice. Notwithstanding anything to the contrary in
this Agreement, SCHERING-PLOUGH shall not use the Knockout Mice or any Data,
results or other information provided by DELTAGEN to SCHERING-PLOUGH to
reverse-engineer or practice (and SCHERING-PLOUGH shall not directly or
indirectly acquire rights to) any of DELTAGEN's or its licensor's methods,
processes, techniques, inventions, know-how or intellectual property rights
relating directly or indirectly to the design, creation, development,
generation or production of knockout mice or transgenic animals.

         4.4       DELTAGEN'S USE OF *** ON ***. DELTAGEN shall perform all
Knockout Mice Projects under this Agreement on a ***, meaning that DELTAGEN
*** provided by Schering-Plough to DELTAGEN to *** of DELTAGEN or a third
party or to generate knockout mice for

*** Confidential material redacted and separately filed with the Commission.

                                                                -5-
<PAGE>

DELTAGEN or a third party. Such *** provided by Schering-Plough shall be used
by DELTAGEN solely for the purpose of undertaking the Knockout Mice Projects
for SCHERING-PLOUGH under this Agreement and DELTAGEN shall not use, transfer
or disclose such *** to any third party other than to perform its obligations
pursuant to this Agreement. In addition to any other remedies available to
SCHERING-PLOUGH at law, equity or under this Agreement, any breach of this
Section 4.4 by DELTAGEN shall constitute a basis for immediate termination of
this Agreement by SCHERING-PLOUGH.

         4.5       NO OTHER TECHNOLOGY RIGHTS OR LICENSES. No Party shall, as
a result of this Agreement, obtain any ownership interest, license or other
right (whether express or implied, including without limitation licenses or
other rights with respect to any patent or other intellectual property rights
owned by or licensed to DELTAGEN or a third party (whether to knockout mice
or otherwise)) in any technology, information, know-how, patents, pending
patent applications, products, materials or intellectual property rights of
the other Party, including items owned, controlled or developed by such other
Party or transferred by such other Party pursuant to this Agreement.

5.       CONFIDENTIALITY.

         5.1       CONFIDENTIAL INFORMATION. Except as otherwise expressly
provided in this Agreement, each Party shall maintain in confidence the
Confidential Information of the other Party for a period of five (5) years.
Neither Party shall use, disclose or grant the use of the other's
Confidential Information except on a need-to-know basis to those directors,
officers, employees, and agents, to the extent such disclosure is reasonably
necessary in connection with its activities as expressly authorized by this
Agreement. To the extent that disclosure is authorized by this Agreement,
prior to such disclosure, the Party wishing to disclose the other Party's
Confidential Information shall obtain the written agreement of any such
person who is not otherwise bound by confidentiality obligations at least as
restrictive as the obligations set forth in this Agreement, to hold in
confidence and not make use of the Confidential Information for any purpose
other than those permitted by this Agreement.

         5.2       PERMITTED DISCLOSURES. The nonuse and nondisclosure
obligations contained in this Article 5 shall not apply to the extent that
(a) the Receiving Party is required to disclose information by law, order,
rule, regulation or act of a governmental authority or agency or a court of
competent jurisdiction, PROVIDED THAT, the Receiving Party (i) shall
reasonably notify the Disclosing Party prior to any such disclosure to permit
the Disclosing Party to oppose such disclosure or to seek confidential
treatment of such information and (ii) if such disclosure is required,
disclose only the minimum information required to be disclosed in order to
comply (as determined by counsel), whether or not a protective order or other
similar order is obtained by such Disclosing Party; or (b) the Receiving
Party can demonstrate that (i) the information was public knowledge at the
time of such disclosure by the Disclosing Party, or thereafter became public
knowledge, other than as a result of acts attributable to Receiving Party in
violation of this Agreement; or (ii) the information was known by the
Receiving Party (as shown by its written records) prior to the date of
disclosure to it by the Disclosing Party; or (iii) the information was
disclosed to the Receiving Party on an unrestricted basis from a third party
not under a duty of

                                                                -6-
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confidentiality of the Disclosing Party; or (iv) the information was
independently developed by employees or agents of the Receiving Party without
access to the Confidential Information of the Disclosing Party.

         5.3       TERMS OF THIS AGREEMENT. Neither Party shall disclose any
terms or conditions of this Agreement (including without limitation the
Budget) to any third party without the prior consent of the other Party,
except as required by applicable law; PROVIDED HOWEVER, that either Party may
disclose the terms or conditions of this Agreement to a third party under an
obligation of confidentiality to such Party in connection with a proposed
sale or in the event of a proposed merger, change in control, consolidation,
an equity investment by such third party in such Party or other similar
transaction. Notwithstanding the foregoing, SCHERING-PLOUGH and DELTAGEN
shall agree upon the substance of information that can be used to describe
the existence and/or terms of this transaction in a press release and
SCHERING-PLOUGH and DELTAGEN shall have the right to disclose such
information, as such information may be modified by mutual agreement of the
parties from time to time.

         5.4       NO LICENSE. Except as expressly provided in this
Agreement, nothing herein shall be construed as giving either Party any
license, right, title or interest in or ownership, whether express or
implied, of the other Party's Confidential Information. Upon termination of
this Agreement or a particular Knockout Mice Project as provided in Article
11, or upon either Party's request, each Party shall return all Confidential
Information of the other Party and/or destroy any portion of any documents,
computer records, notes and other material retained by such Party containing
the Confidential Information of the other Party. However, each Party may
retain one copy of such Confidential Information in its legal files to be
used only for interpretation of and compliance with this Agreement.

6.       REPRESENTATIONS AND WARRANTIES.

         6.1       Each Party hereby represents and warrants to the other
Party as follows:

                  6.1.1 CORPORATE EXISTENCE. Such Party is a corporation duly
organized, validly existing and in good standing under the laws of the state
in which it is incorporated.

                  6.1.2 AUTHORIZATION AND ENFORCEMENT OF OBLIGATIONS. Such
Party (a) has the corporate power and authority and the legal right to enter
into this Agreement and to perform its obligations hereunder, and (b) has
taken all necessary corporate action on its part to authorize the execution
and delivery of this Agreement and the performance of its obligations
hereunder. This Agreement has been duly executed and delivered on behalf of
such Party, and constitutes a legal, valid, binding obligation, enforceable
against such Party in accordance with its terms.

                  6.1.3 NO CONSENTS. All necessary consents, approvals and
authorizations of all governmental authorities and other persons required to
be obtained by such Party in connection with this Agreement have been
obtained.

                  6.1.4 NO CONFLICT. The execution and delivery of this
Agreement and the performance of such Party's obligations hereunder (a) do not
conflict with or violate any requirement of applicable laws or regulations, and
(b) do not conflict with, result in a breach of

                                                                -7-
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any of the terms and provisions of, or constitute a default under, any
contractual obligation of it, and (c) do not conflict with or result in a
breach of any of the terms and provisions of its charter or operative
documents or bylaws.

                  6.1.5 COMPLIANCE WITH LAWS. Such Party shall comply with
all applicable material laws and regulations related to its activities
contemplated under this Agreement.

         6.2       DELTAGEN TECHNOLOGY. DELTAGEN represents and warrants
*** that DELTAGEN (a) is the owner or licensee of the DELTAGEN Technology and
(b) has the right to use the Deltagen Technology to generate knockout mice.

         6.3       SCHERING-PLOUGH TECHNOLOGY. SCHERING-PLOUGH represents and
warrants *** that (a) it is the owner or licensee of the Schering-Plough
Technology and (b) it has the right to provide the gene sequences and
information relating thereto to DELTAGEN and to have made the Knockout Mice
under this Agreement.

         6.4       LIMITATION OF WARRANTY AND LIABILITY. EXCEPT AS OTHERWISE
EXPRESSLY SET FORTH IN THIS AGREEMENT, DELTAGEN MAKES NO WARRANTIES, EXPRESS
OR IMPLIED, WITH RESPECT TO THE KNOCKOUT MICE OR DATA GENERATED UNDER THIS
AGREEMENT OR THE KNOCKOUT MICE PROJECTS AND DELTAGEN DISCLAIMS ALL
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION IMPLIED
WARRANTIES OF NONINFRINGEMENT, MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE. IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR LOSS OF PROFITS OR
INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES DIRECTLY OR INDIRECTLY ARISING
OUT OF THIS AGREEMENT OR THE RESEARCH, DEVELOPMENT, GENERATION OR USE OF THE
KNOCKOUT MICE OR DATA GENERATED UNDER THIS AGREEMENT.

         6.5       RESPONSIBILITY FOR SELECTION OF GENE SEQUENCE AND
RESULTING KNOCKOUT MICE. Notwithstanding anything to the contrary in this
Agreement, SCHERING-PLOUGH acknowledges and agrees that (a) each gene
sequence (or portion thereof) that is the subject of a Knockout Mice Project
is solely selected by SCHERING-PLOUGH and SCHERING-PLOUGH shall be solely
responsible for providing DELTAGEN with such specific gene sequences for each
Knockout Mice Project, and consequently, SCHERING-PLOUGH shall solely bear
the risk for any Claims (defined below) relating to the use, disruption or
deletion of such gene sequences or Knockout Mice generated and (b) DELTAGEN's
representation and warranty under this Article 6 shall not apply or relate to
the identification, selection or use of the specific gene sequences for each
Knockout Mice Project under this Agreement or any Knockout Mice or Data
arising from the deletion, interruption or disruption of such gene sequences.

*** Confidential material redacted and separately filed with the Commission.

                                                                -8-
<PAGE>

7.       REPORTING.

         DELTAGEN shall deliver via overnight delivery service (or other
reasonable means agreed to by the parties) to the SCHERING-PLOUGH
Representative all reports required to be delivered in connection with a
Knockout Mice Project.

8.       RECORD RETENTION, INSPECTIONS AND COOPERATION.

         8.1       At SCHERING-PLOUGH'S request, DELTAGEN shall maintain all
written Data and reports from each Knockout Mice Project for a period of one
(1) year from the date of completion of such Knockout Mice Project. At the
expiration of such one (1) year period, SCHERING-PLOUGH, at SCHERING-PLOUGH's
cost and expense, shall arrange with DELTAGEN for delivery of such Data to
SCHERING-PLOUGH or DELTAGEN may dispose of such written Data sixty (60) days
after providing written notice of the same to SCHERING-PLOUGH.

         8.2       If a federal, state or local government authority conducts
or gives notice of its intent to conduct an inspection or takes regulatory
action with respect to a Knockout Mice Project conducted under this
Agreement, the Party learning thereof shall reasonably notify in writing the
other Party thereof and each Party shall provide the other with any
information reasonably required in connection therewith.

9.       DATA.

         Notwithstanding the provisions of Section 8, for each Knockout Mice
Project, DELTAGEN shall prepare and submit to SCHERING-PLOUGH or its designee
the Data set forth under the applicable Scope of Work with respect to a
particular Knockout Mice Project within forty-five (45) days after (i) the
date of termination or completion of the Milestones on the Scope of Work for
such Knockout Mice Project or (ii) the date that SCHERING-PLOUGH requests
delivery of such Data.

10.      SUBCONTRACTING AND INDEPENDENT CONTRACTOR.

         10.1      SUBCONTRACTING. SCHERING-PLOUGH is aware that certain
Knockout Mice Projects may require DELTAGEN to subcontract to third parties
portions of the work required under a Scope of Work. SCHERING-PLOUGH shall be
deemed to have approved such subcontracting on the following terms and
conditions: (i) DELTAGEN shall not be allowed or authorized to make any
representations relating to SCHERING-PLOUGH without the prior written consent
of SCHERING-PLOUGH; and (ii) such third party subcontractor shall be subject
to the terms and conditions of this Agreement. Prior to subcontracting any
work contemplated by a Knockout Mice Project, DELTAGEN shall notify
SCHERING-PLOUGH of the intended third party subcontractor and SCHERING-PLOUGH
shall be provided with fourteen (14) days in which to object to the use of a
particular subcontractor. If SCHERING-PLOUGH does not object to the use of a
particular subcontractor within such fourteen (14) day period, DELTAGEN may
subcontract such work under the Scope of Work to such third party
subcontractor. If SCHERING-PLOUGH does object to the use of a particular
subcontractor, in its sole discretion, DELTAGEN shall be prohibited from
using such subcontractor to perform work under this

                                                                -9-
<PAGE>

Agreement.

         10.2      INDEPENDENT CONTRACTOR. DELTAGEN shall perform its
obligations under this Agreement as an independent contractor and nothing
contained herein shall be construed to be inconsistent with that relationship
or status. Neither Party, nor their officers, directors, employees or agents
shall be considered employees or agents of the other Party and shall not be
entitled to participate in any of the other Party's benefit plans, programs,
employment policies, or workers' compensation insurance. This Agreement shall
not constitute, create, or in any way be interpreted as a joint venture,
partnership or business organization of any kind. Neither Party shall have
the authority to bind the other Party to any agreement whatsoever.

11.      TERM AND TERMINATION.

         11.1      TERM. This Agreement shall commence on the Agreement
Date and remain in fall force and effect until the later of (a) two (2) years
after the Agreement Date, or (b) the completion by DELTAGEN of all Milestones
under any Knockout Mice Projects commenced under this Agreement, unless
earlier terminated as provided below in this Article 11.

         11.2      TERMINATION BY SCHERING-PLOUGH. SCHERING-PLOUGH shall
have the right to terminate this Agreement or a Knockout Mice Project at any
time without cause, upon *** days prior written notice.

         11.3      TERMINATION BY DELTAGEN. DELTAGEN shall have the
right to terminate a Knockout Mice Project upon DELTAGEN's identification of
an item or circumstance under Section 2.4 that would prevent DELTAGEN from
completing such Knockout Mice Project using commercially reasonable efforts
by providing thirty (30) days written notice to SCHERING-PLOUGH, which notice
shall contain the basis for such termination.

         11.4     TERMINATION BY EITHER PARTY.

                  11.4.1 MATERIAL DEFAULT. Except as otherwise provide in
Article 14 below, this Agreement or a Knockout Mice Project may be terminated
by either Party upon any material breach of this Agreement by the other
Party, provided that any breaching Party shall be given not less than sixty
(60) days prior written notice of such breach and the opportunity to cure
such breach during such period.

                  11.4.2 BANKRUPTCY. This Agreement or a Knockout Mice
Project may be immediately terminated by either Party if the other Party is
dissolved or liquidated, files or has filed against it a petition in
bankruptcy or has a receiver appointed for a substantial part of its assets.

         11.5     RIGHTS AND OBLIGATIONS AFTER NOTICE OF TERMINATION.

                  11.5.1 TERMINATION BY SCHERING-PLOUGH WITHOUT CAUSE, BREACH OR
BANKRUPTCY. If this Agreement or a Knockout Mice Project is terminated by
SCHERING-PLOUGH pursuant to Section 11.2 or terminated by DELTAGEN pursuant to
Section 11.4, DELTAGEN shall have the right to cease further work on applicable
Knockout Mice Projects and to cancel, if permitted under the terms of applicable
agreements, any third party obligations.

                                                                -10-
<PAGE>

Within thirty (30) days after DELTAGEN's cessation of work on such Knockout
Mice Project(s), DELTAGEN shall provide SCHERING-PLOUGH with a written
statement of all work performed by it through termination, including any
non-cancelable costs or expenses incurred by DELTAGEN prior to termination.
DELTAGEN shall invoice SCHERING-PLOUGH for all Milestones completed by
DELTAGEN and for all reasonable non-cancelable costs or expenses and if such
notice is received by DELTAGEN after work has commenced but prior to
DELTAGEN's completion of work under a Milestone, DELTAGEN shall invoice
SCHERING-PLOUGH for payment of such uncompleted Milestone as if DELTAGEN had
completed such Milestone and SCHERING-PLOUGH shall pay DELTAGEN for such
uncompleted Milestone. DELTAGEN shall deliver to SCHERING-PLOUGH all
deliverables prepared or completed by DELTAGEN at the time of such cessation
of work and all unused Study Materials and Data within sixty (60) days of
DELTAGEN's notice of termination or receipt by DELTAGEN of SCHERING-PLOUGH's
notice of termination.

                  11.5.2 TERMINATION BY SCHERING-PLOUGH FOR BANKRUPTCY OF
DELTAGEN OR BY DELTAGEN FOR DELTAGEN'S INABILITY TO COMPLETE MILESTONE. If
this Agreement or a Knockout Mice Project is terminated by DELTAGEN pursuant
to Section 11.3 or by SCHERING-PLOUGH pursuant to Section 11.4.2 above,
DELTAGEN shall deliver all deliverables prepared or completed by DELTAGEN at
the time of such termination, all unused Study Materials and all Data to
SCHERING-PLOUGH within sixty (60) days of DELTAGEN'S notice of termination or
receipt by DELTAGEN of SCHERING-PLOUGH's notice of termination. DELTAGEN
shall provide SCHERING-PLOUGH with a written itemized statement of all work
performed by DELTAGEN through the date of termination (including any
Milestones actually completed by DELTAGEN) and SCHERING-PLOUGH shall pay such
invoiced amount within thirty (30) days of receipt of such statement.

                  11.5.3 TERMINATION BY SCHERING-PLOUGH FOR BREACH BY
DELTAGEN. If this Agreement or a Knockout Mice Project is terminated by
SCHERING-PLOUGH pursuant to Section 11.4.1 above, DELTAGEN shall deliver all
deliverables prepared or completed by DELTAGEN at the time of such
termination, all unused Study Materials and all Data to SCHERING-PLOUGH
within sixty (60) days of receipt by DELTAGEN of notice of termination.
DELTAGEN shall provide SCHERING-PLOUGH with a written itemized statement of
all work performed by DELTAGEN through the date of termination (including any
Milestones actually completed by DELTAGEN) and SCHERING-PLOUGH shall pay such
invoiced amount (or portion thereof that is not reasonably the subject of
such breach) within thirty (30) days of receipt of such statement.

         11.6      EFFECT OF EXPIRATION OR TERMINATION. Expiration or
termination of this Agreement shall not relieve the parties of any obligation
accruing prior to such expiration or termination. The provisions of Sections
6.4, 6.5 and Articles 4, 5 and 12 shall survive any expiration or termination
of this Agreement.

12.      INDEMNIFICATION.

         12.1      SCHERING-PLOUGH'S INDEMNIFICATION. SCHERING-PLOUGH shall
defend, indemnify and hold harmless DELTAGEN and its directors, officers,
employees and agents from and against any and all losses, liabilities,
damages or expenses (collectively, "Liabilities") that

                                                                -11-
<PAGE>

they may suffer as a result of any claims, demands, actions or other
proceedings (collectively, "Claims") made or instituted by any third party
and arising out of or relating to (a) a breach of any representation,
warranty or covenant of SCHERING-PLOUGH under this Agreement or (b)
SCHERING-PLOUGH's gross negligence or willful misconduct, except in each case
to the extent such Liabilities resulted from the gross negligence or willful
misconduct of DELTAGEN.

         12.2      DELTAGEN'S INDEMNIFICATION. DELTAGEN shall defend,
indemnify and hold harmless SCHERING-PLOUGH and its directors, officers,
employees and agents from and against any and all Liabilities that they may
suffer as a result of any Claims made or instituted by any third party and
arising out of or relating to (a) a breach of any representation, warranty or
covenant of DELTAGEN under this Agreement or (b) DELTAGEN's gross negligence
or willful misconduct, except in each case to the extent such Liabilities
resulted from the gross negligence or willful misconduct of SCHERING-PLOUGH.

         12.3     PROCEDURE. A Party (the "Indemnified Party") which intends
                  to claim indemnification under this Article 12, shall
                  promptly notify the other Party (the "Indemnifying Party")
                  of any Claim with respect to which the Indemnified Party
                  intends to claim such indemnification. The Indemnifying
                  Party shall have the right to assume the defense of such
                  Claim with counsel selected by the Indemnifying Party;
                  PROVIDED, HOWEVER, that the Indemnified Party shall have
                  the right to retain its own counsel and the fees and
                  expenses shall be paid by the Indemnifying Party only if
                  representation of the Indemnified Party by the counsel
                  retained by the Indemnifying Party would be inappropriate
                  due to actual or potential differing interests between the
                  Indemnified Party and any other party represented by such
                  counsel in such proceedings. The indemnity obligations
                  under this Article 12 shall not apply to amounts paid in
                  settlement of any Liability if such settlement is effected
                  without the consent of the Indemnifying Party, which
                  consent shall not be withheld unreasonably. The failure of
                  the Indemnified Party to promptly notify the Indemnifying
                  Party of a potential Claim shall not constitute a waiver
                  of, or result in the loss of, such Party's right to
                  indemnification under this Section 12.3, except to the
                  extent that the Indemnifying Party's rights and/or its
                  ability to defend such Claim is prejudiced by the
                  Indemnified Party's failure to notify the Indemnifying
                  Party of such Claim within a reasonable time after the
                  commencement of any action. The Indemnifying Party may not
                  settle the action or otherwise consent to an adverse
                  judgment in such action that diminishes the rights or
                  interests of the Indemnified Party without the express
                  written consent of the Indemnified Party, which consent
                  shall not be withheld unreasonably. The Indemnified Party,
                  its employees and agents, shall cooperate fully with the
                  Indemnified Party and its legal representatives in the
                  investigation of any Claim covered by this indemnification.

13.      TRADEMARKS AND PUBLICITY.

         Except as set forth in Section 5.3 above, each Party agrees not to
identify the other Party or any Affiliate of the other Party in any promotion
advertising or other promotion materials to be disseminated to the public, or to
use any trademark, service mark, trade name or symbol of the other Party or any
Affiliate of the other Party without the express written consent of the other
Party.

                                                                -12-
<PAGE>

14.      DELAYS OR FORCE MAJEURE.

         14.1      FORCE MAJEURE. Neither Party shall be liable for the
failure or delay to perform its obligations under this Agreement or a
Knockout Mice Project if such failure or delay is caused by or results from
causes beyond such Party's reasonable control, including but not limited to
strikes or other labor disturbances, embargoes, acts of God, omissions or
delays in acting by any governmental authority or the other party, lockouts,
riots, wars, fires, floods, earthquakes or storms. A Party claiming a right
to excused performance under this Section 14.1 shall immediately notify the
other Party in writing of the extent of its inability to perform, which
notice shall specify the occurrence beyond its reasonable control that
prevents such performance, and such Party shall exert reasonable efforts to
eliminate, cure and overcome any such causes and to promptly resume
performance of its obligations under this Agreement.

         14.2      DELAY. If SCHERING-PLOUGH delays in performing its
obligations under a Knockout Mice Project for any reason, the estimated date
that DELTAGEN is targeted to complete its duties and obligations as described
in the applicable Scope of Work shall be extended by the period of time
corresponding to the delay.

15.      NOTICES.

         Any notice required or permitted to be given hereunder by one of the
parties hereto to the other party shall be in writing and delivered by any
lawful means to the address of the other party set forth below or at such
other address as either Party hereto may designate in writing. If sent by
facsimile letter, notice shall be deemed given when the transmission is
completed if the sender has a confirmed transmission report. Any notice sent
by facsimile must also be sent by mail or overnight courier or delivered by
hand.

IF TO DELTAGEN:
Deltagen, Inc.
1003 Hamilton Avenue
Menlo Park, CA 94025

Fax: (650) 752-0202
Attn: President

With a copy to the above address,
Attn: General Counsel
Fax: (____) ___________________

                                                                -13-
<PAGE>

IF TO SCHERING-PLOUGH:

Schering-Plough Research Institute
2015 Galloping Hill Road
Kenilworth, New Jersey, CA 07033-1300

Fax: (____) ___________________
Attn: ________________________

With a copy to the above address,
Attn: ________________________

Fax: (____) ___________________

16.      MISCELLANEOUS

         16.1      ASSIGNMENT. Neither Party may assign this Agreement to any
third party without the prior written consent of the other Party, PROVIDED
HOWEVER, that either Party may, without such consent, assign this Agreement
and its rights and obligations hereunder to an Affiliate, or in connection
with the transfer or sale of all or substantially all of its business, or in
the event of its merger, consolidation, change in control or similar
transaction. Any permitted assignee shall assume all obligations of its
assignor under this Agreement.

         16.2      AMENDMENTS, WAIVER. No provision of this Agreement, the
Budget or the Scope of Work may be amended, modified, revoked, or waived
except in writing signed and delivered by an authorized officer of each
Party. Either Party's failure to require the other Party to comply with the
provisions of this Agreement shall not be deemed a waiver of such provision
or any other provision of this Agreement.

         16.3      VALIDITY. If any clause, section or paragraph of this
Agreement is determined by a court of competent jurisdiction to be illegal,
invalid or unenforceable, it will be deemed severed from the remainder of
this Agreement and will have no effect on the legality, validity or
enforceability of the remaining provisions.

         16.4      HEADINGS. The paragraph headings of this Agreement are
merely for the convenience of the parties and are not to be construed as
modifying or changing the obligations or conditions expressed in this
Agreement.

         16.5      ENTIRETY. This Agreement (including the Attachments
hereto) represents the entire understanding as of the Agreement Date hereof
between the parties with respect to the matter hereof and supersedes all
prior agreements, negotiations, understandings, representations, statements
and writings between the parties relating thereto.

         16.6      CONFLICT WITH SCOPE OF WORK OR BUDGET. If any terms of
this Agreement are in conflict with any terms of any Scope of Work or Budget,
the terms of this Agreement shall govern.

                                                                -14-
<PAGE>

         16.7      COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed an original but all of which
shall constitute one and the same instrument.

         16.8      GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California, without
regard to its conflicts of law principles.

         16.9      FURTHER ACTIONS. Each Party agrees to execute, acknowledge
and deliver such further instruments, and to do all other acts, as may be
necessary or appropriate in order to carry out their obligations under this
Agreement.

         IN WITNESS WHEREOF, the Parties hereto through each of their
respective duly authorized representatives have caused this Agreement to be
executed as of the Agreement Date.

SCHERING-PLOUGH RESEARCH INSTITUTE            DELTAGEN, INC.

By: /s/ Jonathan Spicehandler, M.D.           By: /s/ William Matthews

Name: Jonathan Spicehandler, M.D.             Name: William Matthews

Title:   President                            Title:   Chief Executive Officer

        12/16/99

                                                                -15-
<PAGE>

                                  ATTACHMENT I

                            SCOPE OF WORK AND BUDGET

         Scientific Milestones and Payment Schedule for *** Knockout Mice
Projects

         Within ten (10) days of the Agreement Date, SCHERING-PLOUGH shall
pay to DELTAGEN an initiation fee of $500,000 ((50%) of the total value of
the contract for *** Knockout Mice Projects *** at $ *** per Knockout Mice
Project)).

         Subsequent payments to DELTAGEN will be based on the achievement of
the specific Milestones for each Knockout Mice Project as outlined below.
SCHERING-PLOUGH understands and acknowledges that each Knockout Mouse Project
involves a number of technologically complex steps and that any time periods
for performance are reasonable estimates only and subject to change due to
technological difficulties encountered. DELTAGEN shall be obligated to notify
SCHERING-PLOUGH of any such technical difficulties as soon as reasonably
possible after they arise and the parties will commence good faith
discussions to resolve such technical difficulties in a reasonable manner.

<TABLE>
<S>                                                                  <C>
Total cost for each Knockout Mice Project:                             ***

Payment by SCHERING-PLOUGH for initiation of contract:                 $500,000.00

The following payments are per Knockout Mouse Project:

Milestone 1 - ***                                                      ***

Milestone 2 - ***                                                      ***

Milestone 3 - ***                                                      ***

Milestone 4 - ***                                                      ***

Milestone 5 - ***                                                      ***

MILESTONE 1: ***
</TABLE>

         DELTAGEN will *** based on * * *. The cost of *** is included in the
initiation payment paid by SCHERING-PLOUGH. SCHERING-PLOUGH will receive ***
information in order to ***. In the event of unforeseen technical
difficulties encountered after initiation of *** relating to ***, either (a)
Deltagen would, upon consultation with SCHERING-PLOUGH, *** to
SCHERING-PLOUGH *** (b) SCHERING-PLOUGH could terminate the particular
knockout project or (c) SCHERING-PLOUGH could request that *** discussed
above (i.e., after Deltagen's initial *** and the one time *** as set forth
above). Construction of such *** would be provided at costs to be agreed upon
by the parties (***).

MILESTONE 2: ***

*** Confidential material redacted and separately filed with the Commission.

                                                                -16-
<PAGE>

                DELTAGEN will *** and *** and ***. DELTAGEN will *** a
                maximum of ***. DELTAGEN will receive *** upon the
                identification of a *** or DELTAGEN's *** of *** clones. If
                *** in the ***, DELTAGEN at the request of SCHERING-PLOUGH
                will ***. The cost for *** will be *** per ***.
                Alternatively, after consultation with, and written agreement
                by, SCHERING-PLOUGH, Deltagen will *** and ***. The cost of a
                *** and *** of *** colonies will not exceed ***. Confirmation
                of a *** will be obtained ***.

MILESTONE 3: ***

                DELTAGEN will transfer up to *** mice. Upon the *** of ***
                mice from each ***, DELTAGEN will receive a payment of ***
                per ***. DELTAGEN will confirm the *** by *** analysis ***.

MILESTONE 4: ***

                DELTAGEN will *** animals for ***. For production of *** with
                the desired ***, DELTAGEN will receive *** per ***. The ***
                of the *** will be confirmed ***.

MILESTONE 5: ***

                DELTAGEN will perform the following analysis on *** gene
                Knockout Mice that are generated from the ***. *** mice will
                be ***. In cases where the gene knockout produces a ***.
                DELTAGEN will make reasonable efforts to determine ***. Each
                *** will be inspected for ***,. *** will be monitored ***. At
                *** mice *** will be *** analysis with that will include the
                following *** and DELTAGEN will prepare a written report of
                all findings. DELTAGEN will also make *** to SCHERING-PLOUGH
                upon request. In addition to the above analysis, DELTAGEN
                will provide analysis of ***. This readout will include ***.
                DELTAGEN will, where practical, incorporate a *** into each
                *** to allow for the determination of ***. Adult mice will be
                *** and the *** will ***. All findings will be reported as
                above.

                Upon completion of *** for each Knockout Mouse Project,
                DELTAGEN will receive *** per Knockout Mouse Project.

                All mice in the DELTAGEN animal facility will be tested
                routinely for ***. Results will be provided to
                SCHERING-PLOUGH on a *** basis.

                The SCHERING-PLOUGH Representative shall be

                        ***

*** Confidential material redacted and separately filed with the Commission.

                                                                -17-
<PAGE>

                                  ATTACHMENT 11

     FORM NOTIFICATION LETTER FOR INITIATION OF A NEW KNOCKOUT MOUSE PROJECT

                               (Template follows)





                                                                -18-
<PAGE>

                          (SCHERING-PLOUGH letterhead)

_________, __, ____



William Matthews, Ph.D.
President
Deltagen, Inc.
1003 Hamilton Avenue
Menlo Park, CA 94025

Dear Bill,

This letter is to provide notice to Deltagen of Schering-Plough's request to
Deltagen to initiate work on a Knockout Mouse Project under the terms and
conditions of the DeltaSelect-TM- Collaborative Services Agreement between
Deltagen, Inc. and Schering-Plough, dated ____________ (the "Agreement"),
including but not limited to, the confidentiality obligations of the
Agreement.

The Knockout Mice Project to be initiated is described as follows:

The Schering-Plough contact scientist for technical information regarding the
project will be:

Schering-Plough requests that Deltagen begin to work to develop the above
described Knockout Mice on the terms and conditions of the above-referenced
Agreement.

Sincerely,



SCHERING-PLOUGH RESEARCH INSTITUTE'S Signatory


Agreed,

-------------------
Deltagen, Inc.

                                                                -19-