<PAGE>
                                                                   EXHIBIT 10.20

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.


                              TECHNOLOGY AGREEMENT

                      GENERATION OF KNOCKOUT MOUSE STRAINS

                                     between

                                 DELTAGEN, INC.
                                1031 Bing Street
                              San Carlos, CA 94070

                                       and

                                MERCK & CO, INC.
                                 One Merck Drive
                                  P.O. Box 100
                    Whitehouse Station, New Jersey 08889-0100

WHEREAS,  Deltagen,  Inc.  ("Deltagen")  and Merck  ("Merck"),
(collectively,  "Parties")  seek to  collaborate in scientific research
related to generation of Knockout Mouse strains;

WHEREAS, Deltagen has knowledge and experience in research and generation of
Knockout Mice; and

WHEREAS, Merck wishes to obtain Knockout Mice generated by Deltagen according
to specifications agreed by the Parties.

1.       DEFINITIONS

As used in this.Agreement the following terms shall have the meanings as
specified:

1.1      "Merck Affiliate" shall mean (i) any corporation or business entity of
         which fifty percent (50%) or more of the securities or other ownership
         interest representing the equity, the voting stock or general
         partnership interest are owned, controlled or held, directly or
         indirectly, by Merck; or (ii) any corporation or business entity which,
         directly or indirectly, owns, controls, or holds 50 percent (50%) (or
         the maximum ownership permitted by law) or more of the securities or
         other ownership interest representing the equity, the voting stock or,
         if applicable, the general partnership interest, of Merck.

1.2      "Effective Date" shall mean the date of the signature of the
         representative of the last of the Parties to execute this
         Agreement.

1.3      "Joint Patents" shall mean all patent and patent applications,
         worldwide, for subject matter which is jointly developed during the
         course of this Agreement by both Deltagen and Merck and which is useful
         or necessary in the generation of the Knockout Mice under this
         Agreement.

1.4      "Joint Technology" shall mean all know-how and technology related to
         the generation of Knockout Mice as well as biological, molecular
         biological and genetic work and technology in each case, which is
         developed jointly hereunder by Deltagen and Merck and which is useful
         in the generation of the Knockout Mice under this Agreement.

<PAGE>


1.5      "Knockout Mice" shall mean a line of chimeric mice developed for and
         delivered to Merck as set forth in Article 2 below, having a Standard
         Mutation wherein such mice transmit the Standard Mutation, in the form
         of a mutant allele, through the germ line.

1.6      "Knockout Mouse Project" shall mean the creation, testing and
         generation, by Deltagen, of Knockout Mice.

1.7      "Deltagen Patents" shall mean any and all patents and patent
         applications, worldwide, owned by Deltagen with respect to Knockout
         Mice.

1.8      "Deltagen Technology" shall mean technology related to the generation
         of Knockout Mice or other animals, as well as biological, molecular
         biological and genetic work and technology developed solely by Deltagen
         with respect to Knockout Mice delivered to Merck under this Agreement.

1.9      "Merck Patents" shall mean any and all patents and patent applications,
         world-wide, owned by Merck, with respect to * * * .

1.10     "Merck Technology" shall mean technology related to * * *, as well
         as * * * work and technology developed solely by Merck * * *.

1.11     "Milestone Payments" shall mean those payments set forth at Appendix A
         attached hereto.

1.12     "Standard Mutation' `shall mean the interruption or deletion in a
         portion of a single, specified gene by * * *.

1.13     "Non-Standard Mutations" shall mean any mutation other than a "Standard
         Mutation." Examples of non-standard mutations include* * *.
         Non-standard mutations also includes * * *.

1.14     "Standard Procedure" shall mean the set of procedures described in
         Appendix A, with respect to "Milestone 1" through "Milestone 5."

2.       RESEARCH AND WORK TO BE CONDUCTED

2.1      Deltagen shall conduct one or more Knockout Mouse Projects at the
         request of Merck on the terms and conditions of this Agreement. Merck
         will request Deltagen in writing to begin work on each Knockout Mouse
         project to be conducted under this Agreement, such written notice to be
         provided to Deltagen by an authorized representative of Merck in the
         form set forth in Appendix B. Deltagen shall have the right to evaluate
         such request and the information provided to Deltagen by Merck under
         Section 2.3 below, to determine whether such requested Knockout Mouse
         project is feasible. If, after good faith discussion with Merck,
         Deltagen reasonably determines that such project is not technically
         feasible, within the parameters of Appendix A, Deltagen shall so advise
         Merck in writing and shall not be required to undertake such project.

2.2      For each Knockout Mouse Project, Deltagen will use reasonable efforts
         to complete each Milestone in a timely fashion, as defined in Appendix
         A.

2.3      Deltagen shall undertake up to * * * Knockout Mice Projects according
         to the terms and conditions set forth in this Agreement. To initiate
         each Knockout Mouse project the parties agree to undertake, Deltagen
         and Merck will establish a timetable for each project Milestone, and
         Merck shall:

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

                                         2

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         2.3.1    Identify to Deltagen in writing each Knockout Mouse Project
                  to be initiated;

         2.3.2    Disclose in writing to Deltagen * * * useful in completing
                  Milestone 1 with respect to each Knockout Mouse Project, as
                  defined at Appendix A;

         2.3.3    Consult with Deltagen to identify the specific region of the
                  gene Merck desires to have deleted for such Knockout Mouse
                  Project;

         2.3.4    Transfer to Deltagen * * * may be * * *; and

         2.3.5    Identify and notify Deltagen in writing of the specific gene
                  sequence for each Knockout Mouse Project for which Deltagen is
                  requested by Merck to produce a Knockout Mouse. Merck shall be
                  solely responsible for identifying and notifying Deltagen in
                  writing of the specific gene sequence for each Knockout Mouse
                  project.

2.4      For purposes of the schedule set forth in Appendix A, each Knockout
         Mouse Project conducted hereunder shall commence fifteen (15) days
         after Deltagen's receipt from Merck of all information and materials
         set forth in Section 2.3 relating to such Knockout Mouse Project.

2.5      Each Knockout Mouse Project shall be deemed complete upon Deltagen's
         completion of Milestone 5 (see Appendix A) and Deltagen's delivery
         after the birth of the first generation of Knockout Mice of at least
         * * *. Deltagen, for a period of six (6) months following the
         completion of each Milestone 5 for each Knockout Mouse Project, shall
         retain a small backup colony of * * * from such project consisting of
         * * * for each Knockout Mouse Project). With respect to such backup
         colonies of Knockout Mice, Merck shall for a period not to exceed six
         (6) months following completion of Milestone 5 pay to Deltagen* * *.
         At Merck's request, Deltagen will transfer the mice to Merck. All
         reasonable transportation and transfer costs shall be paid by Merck.
         If Merck does not request transfer within the six month period,
         Deltagen, following Deltagen's written notification to Merck, shall
         dispose of the mice in accordance with all applicable laws and
         regulations.

2.6      Deltagen shall use reasonable efforts to * * * and to generate Knockout
         Mice under each Knockout Mouse project according to the specification
         of Merck as set forth in Section 2.3 above.

2.7      Deltagen shall, at all times in its animal care and handling activities
         related to this Agreement, comply with all applicable Federal, State
         and local laws and regulations, and assure that Deltagen animal
         facilities meet or exceed minimum accreditation standards including,
         but not limited to those established by * * * and the * * * for the
         Care and Use of Laboratory Animals. Deltagen shall have sole liability
         for the care and handling of the Knockout Mice until they are delivered
         to Merck in accordance with Section 7.6 below.

3.       PAYMENTS

3.1      Within thirty (30)days afterthe Effective Date, Merck shall payto
         Deltagen * * * for the * * * calculated in accordance with Appendix
         A. Such payment shall be * * * Milestones as set forth in Appendix A.

3.2      Merck shall pay to Deltagen for each Milestone completed by Deltagen:

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

                                         3

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         3.2.1    The Milestone Payments set forth in Appendix A are for all
                  Knockout Mouse Projects wherein a * * * is requested by Merck
                  under Section 2.3 above, so long as the Project is initiated
                  during the term of this Agreement. The Milestone Payments for
                  all Knockout Mouse Projects wherein a * * * is requested,
                  shall be determined on a case-by-case basis, upon good faith
                  negotiations between the parties and shall be mutually agreed
                  to in writing by the parties.

3.3      Deltagen shall inform Merck, in writing, of its completion of each
         Milestone, as defined in Appendix A. In such written notice, Deltagen
         shall certify that the Knockout Mice delivered to Merck conform to the
         Knockout Mice specifications for each Knockout Mouse Project set forth
         in Appendix A, and Deltagen shall provide with each delivery of
         Knockout Mice to Merck all of the information and data described in
         Appendix A for each Knockout Mouse Project.

3.4      Subject to payment credit as provided in Section 3.1, Merck shall pay
         all Milestones to Deltagen within thirty (30) days after Merck's
         receipt of written representation from Deltagen of Deltagen's
         completion of Milestones in compliance with the terms of this
         Agreement.

4.       ON-SITE CONSULTATION

4.1      Merck may reasonably request on-site consultations by Deltagen
         personnel relating directly to projects under this Agreement. Merck
         will reimburse Deltagen for all reasonable and reasonably documented
         travel expenses associated with such onsite consultations by Deltagen
         personnel.

4.2      Upon reasonable notice to Deltagen and upon reasonable terms and
         conditions agreed upon by Deltagen and Merck, Merck shall be entitled
         to perform site visits to Deltagen facilities involved in the Knockout
         Mouse Projects to inspect the facilities for compliance with generally
         accepted scientific and animal care procedures including, but not
         limited to those set forth in Appendix A and Section 2.7 above.

5.       TERM AND TERMINATION

5.1      The term of this Agreement shall commence on the Effective Date and
         shall remain in effect until the earlier of either (a) termination of
         this Agreement pursuant to the completion by Deltagen of all Milestones
         under this Agreement or (b) two (2) years from the Effective Date;
         provided, however, that all applicable obligations of Deltagen and
         Merck under this Agreement shall remain in force with respect to any
         Knockout Mouse Project requested by Merck and initiated by Deltagen
         which remains ongoing prior to the date set forth in subsection (b) of
         this paragraph.

5.2      Merck may unilaterally terminate a Knockout Mouse Project for any
         reason. Should Merck at any time during the Knockout Mouse Project
         terminate the development and creation or completion of a specific
         Knockout Mouse Project, Merck shall make the next Milestone Payment
         corresponding to that work being conducted by Deltagen to complete such
         Milestone at the time of termination, as if Deltagen had completed the
         Milestone, regardless of whether such Milestone has been reached.

5.3      Deltagen may terminate a Knockout Mouse Project upon Deltagen's
         identification of technical difficulty beyond the reasonable control of
         Deltagen which would prevent Deltagen from completing the Project using
         commercially reasonable efforts, provided that Deltagen has

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

                                         4

<PAGE>

         informed Merck, in writing, of the details of such technical
         difficulty, and the parties have had an opportunity to discuss the
         circumstances to attempt to resolve the technical difficulty in a
         reasonable manner. Merck is not entitled to a refund of any past
         Milestone payments paid if a project is terminated as the result of
         technical difficulty beyond the control of Deltagen.

5.4      If either of the Parties is in breach of any obligation under this
         Agreement, the party complaining of said breach shall give written
         notice to the breaching party to remedy such breach. If the breach is
         not remedied within 60 days following the receipt of such notice, the
         party complaining of breach may terminate this Agreement upon written
         notice to the other party at any time and with immediate effect. Any
         such termination will be without prejudice to any other rights which
         the party complaining of breach may have as a result of any breach of
         this Agreement.

6.       CONFIDENTIALITY

6.1      Each party shall treat all information which has been received from the
         other party as strictly confidential ("Information"), and shall not to
         make such Information available to any third party without the express
         prior written consent of the other party and only to use such
         Information for the purposes expressly provided in this Agreement. For
         this purpose, employees and consultants of the parties shall be bound
         by obligations of confidentiality and secrecy no less strict than those
         set out herein and shall not be regarded as third parties.

6.2      The above obligations shall not apply or cease to apply to Information
         which the recipient can show:

         (a)      has become generally available to the public other than
                  through violation of this undertaking;

         (b)      was already in the recipient's rightful possession prior to
                  its acquisition from the disclosing party;

         (c)      was developed independently of information received from the
                  disclosing party;

         (d)      has been lawfully received from a third party, under no
                  obligation to maintain the Information as confidential; or

         (e)      is required to be disclosed by law or court order, provided
                  that notice is promptly delivered to the other party in order
                  to provide an opportunity to challenge or limit such
                  disclosure.

         A statutory obligation to disclose confidential information to
         governmental authorities in connection with the Food and Drug
         Administration product registration procedures is not subject to this
         secrecy obligation.

6.3      This obligation of confidentiality shall survive the expiration and/or
         termination of this Agreement for a period of five (5) years.

6.4      Upon expiration or termination of this Agreement, or at any time upon
         the disclosing party's written request, the receiving party shall
         destroy, or at the written request of the disclosing party, deliver to
         the disclosing party any and all Information (including copies)
         received or

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

                                         5

<PAGE>

         generated hereunder, except that the receiving party may,
         for archival purposes, maintain one copy of the Information in its
         confidential legal files.

7.       OWNERSHIP OF RIGHTS

7.1      Deltagen shall own all Deltagen patents and Deltagen technology.
         Additionally, any Deltagen patents or Deltagen technology arising out
         of the work performed pursuant to this Technology Agreement and which
         apply to the production of Knockout Mice shall be owned solely by
         Deltagen. Deltagen hereby grants to Merck a nonexclusive, * * * license
         to Deltagen Patents, Deltagen Technology and Deltagen inventions solely
         arising during the Knockout Mice Projects under this Agreement which
         are useful or necessary for Merck (a) to use, breed and perform further
         research and development using the Knockout Mice generated hereunder
         (and their progeny), and (b) to sublicense such rights to use, breed
         and perform further research and development using the Knockout Mice to
         agents, consultants and Affiliates of Merck; PROVIDED HOWEVER that
         Merck and its sublicencees shall not have a license to use (and shall
         not use) the Knockout Mice (or their progeny), Deltagen Patents,
         Deltagen Technology or Deltagen inventions, directly or indirectly to
         reverse-engineer the methods, processes, techniques or similar Deltagen
         know-how relating directly or indirectly to the design, creation,
         development, generation or production of such "Knockout Mice" or other
         transgenic mice or animals.

7.2      Merck will own all Merck patents and Merck technology. Merck will grant
         to Deltagen a non-exclusive, non-sublicensable license to all Merck
         patents necessary for Deltagen to make Knockout Mice solely for Merck
         according to this Agreement. Merck shall own all phenotypic data and
         characteristics of the Knockout Mice generated by Deltagen for Merck
         under this Agreement; provided however, that Deltagen shall have a
         nonexclusive, nontransferable license to use such phenotypic data and
         characteristics for Deltagen's research analysis solely for Merck in
         accordance with the purposes of this Agreement.

7.3      Joint Patents and Joint Technology will be owned by both Parties
         jointly. Both parties shall decide whether it is desirable for patent
         applications to be filed for Joint Technology developed. If a patent
         application is filed, the Parties shall share costs equally. If one
         party wishes to patent Joint Technology, but the other party does not,
         then the party wishing to file the application may do so at its own
         expense. In such instance, the party filing the application will own
         all rights in the patent application and the other party shall assign
         its rights in the patent application to the party filing the
         application, provided that the non-filing party shall be granted a
         nonexclusive license to use such rights under such patent application.

7.4      Both Parties shall decide whether to maintain patents or patent
         applications within the Joint Patents and the extent of foreign filing
         of such patent applications. If one party wishes to abandon a patent or
         patent application within the Joint Patents, but the other party wishes
         to maintain it, the party wishing to maintain it may do so by paying
         all necessary fees; the party paying the fees shall own all rights in
         this patent or patent application and the other party will assign its
         rights in such patent or patent application to the paying party. If the
         Parties disagree on whether to file a patent application within the
         Joint Patents in any given country, the party wishing to file in such
         country may do so at its own expense, and will own all rights in such
         patent application in such country and the other party will assign its
         rights in such patent application to the party filing the application.

7.5      As of the date of this Agreement, Deltagen represents and warrants to
         Merck that to Deltagen's best knowledge, using reasonable due
         diligence, Deltagen has the right to enter into this Agreement and
         to grant to Merck the licenses

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

                                         6

<PAGE>

         hereunder. As of the date of this Agreement, Merck represents and
         warrants to Deltagen that to Merck's best knowledge, using
         reasonable due diligence, Merck has the right to enter into this
         Agreement and to grant Deltagen the licenses hereunder.

                  Deltagen shall indemnify and hold harmless Merck and its
         Affiliates, Directors, officers,, employees and agents from and against
         any and all losses, Liabilities, damages and expenses (Including
         reasonable attorneys' fees and costs) (collectively "liabilities") that
         they may suffer as a result of any claims, demands, actions or other
         proceedings 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 Merck.

                  Merck shall indemnify and hold harmless Deltagen and its
         directors, officer, employees and agents from and against any and all
         Liabilities that they may suffer as a result of any claims, demands,
         actions or other proceedings made or instituted by any third party and
         arising out of or relating to (a) a breach of any representation,
         warranty or covenant of Merck under this Agreement or (b) Merck'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.

7.6      After Merck has made all applicable Milestone Payments or other
         payments under Section 3.2 above, and upon delivery by Deltagen to
         Merck's designated carrier (FOB), title shall transfer to Merck and
         Merck shall own exclusively all Knockout Mice produced under this
         Agreement, * * * made by Deltagen on behalf of Merck, regardless of
         whether they are * * * or to non-Knockout Mice. Merck shall have the
         exclusive right to use the Knockout Mice, and their progeny, for any
         purpose, without restriction, including, but not limited to, research,
         development, production, breeding, sales and distribution of the
         Knockout Mice to agents, consultants and Merck Affiliates; provided
         however that Merck shall not use the Knockout Mice directly or
         indirectly to reverse-engineer the methods, processes, techniques or
         similar Deltagen know-how relating directly or indirectly to the
         design, creation, development, generation or production of such
         Knockout Mice.

8.       MISCELLANEOUS

8.1      PUBLICATION. If Merck publishes any information, data or material
         regarding the Knockout Mice contemplated under this Agreement, Merck
         shall acknowledge within the publication, the contribution of Deltagen
         to the generation of such mouse or mice.

8.2      FORCE MAJEURE. Neither party shall be liable for its failure to perform
         its obligations under this Agreement due to contingencies beyond its
         reasonable control, including but not limited to strikes, riots, wars,
         fire, flood, accident, labor disputes, embargoes, inability to obtain
         export or import license, acts of God, or acts in compliance with any
         governmental or state law, regulation or other.

8.3      AMENDMENTS. Amendments or modifications of this Agreement may only be
         made by a written Agreement executed by both Parties.


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

                                         7

<PAGE>


8.4      NOTICES. All notices required or permitted hereunder shall be given in
         writing and sent postage prepaid by first class certified or registered
         mail, or sent by a nationally recognized express courier service, or
         hand delivered at the following addresses:

                           If to Deltagen:
                           William Matthews
                           President
                           Deltagen, Inc.
                           1031 Bing Street
                           San Carlos, CA  94070
                           Fax: (650) 610-6823

                           If to Merck:
                           Dr. Susan Socher
                           Executive Director
                           Scientific Liaison
                           External Scientific Affairs
                           Merck & Co., Inc.
                           770 Sumneytown Pike
                           P.O. Box 4, WP42-217
                           West Point, PA 19486

8.5      REPRESENTATIONS AND WARRANTIES.  Each party represents and warrants
         that:

         8.5.1    It will use commercially reasonable efforts to complete its
                  obligations under this Agreement in compliance with any and
                  all applicable federal, state, or local laws, regulations and
                  guidelines.

         8.5.2    It shall devote the necessary level of personnel and resources
                  to conduct and complete its obligations in a commercially
                  reasonable manner under this Agreement.

8.6      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 GENERATED UNDER THIS
         AGREEMENT OR THE KNOCKOUT MOUSE PROJECTS. DELTAGEN DISCLAIMS ALL OTHER
         WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION A WARRANTY
         OF NON-INFRINGEMENT AND THE IMPLIED WARRANTIES OF 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 UNDER
         THIS AGREEMENT.

8.7      APPLICABLE LAW AND VENUE. This Agreement shall be governed by and
         construed in accordance with the laws of the State of California as
         though made and performed in said state without regard to its conflict
         of law revisions.

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

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

                                         8

<PAGE>


8.9      U.S. EXPORT LAWS AND REGULATIONS. Without limitation, each party shall
         comply with all laws and regulations of the United States relating to
         the export of biological materials, products and technical information.

8.10     ENTIRE AGREEMENT. This Agreement contains the entire understanding of
         the parties with respect to the subject matter hereof. All express or
         implied Agreements -and understandings, either oral or written,
         heretofore made are expressly superseded by this Agreement.

8.11     INDEPENDENT CONTRACTORS. It is expressly agreed that Deltagen and Merck
         shall be independent contractors and that the relationship between the
         two parties shall not constitute a partnership, joint venture or
         agency. Neither Deltagen nor Merck shall have the authority to make any
         statements, representations or commitments or any kind, or to take any
         action, which shall be binding on the other, without the prior consent
         of the party to do so.

8.12     WAIVER. The waiver by either party of any right hereunder or the
         failure to perform or of a breach by the other party shall not be
         deemed a waiver of any other right hereunder or of any other breach or
         failure by said other party whether of a similar nature or otherwise.


                                         9

<PAGE>


AGREED AND ACCEPTED:

DELTAGEN, INC.                           MERCK & CO., INC.

BY  /s/ William Matthews                 BY   /s/ C. Thomas Caskey
   ----------------------------              -----------------------------

NAME  William Matthews                   NAME  C. Thomas Caskey

TITLE  President                         TITLE  Senior Vice President, Research

DATE  July 13th, 1998                    DATE  July 10, 1998

                                       10

<PAGE>


                                   APPENDIX A

        [Superceded by Appendix A to Amendment to Technology Agreement]

                                       11

<PAGE>


                                   APPENDIX B

   FORM NOTIFICATION LETTER FOR INITIATION OF A NEW KNOCKOUT-MOUSE PROJECT

                               (Template follows)
                               (Merck letterhead)


Date

Bill Matthews, Ph.D.
President
Deltagen, Inc.
***

Dear Bill,

This letter is to provide notice to Deltagen of Merck's request to Deltagen to
initiate work on a Knockout Mouse Project under the terms and conditions of the
Technology Agreement between Deltagen, Inc. and Merck, dated
_____________________ (the "Agreement"), including, but not limited to, the
confidentiality obligations of the Agreement. The Knockout Mouse Project to be
initiated is described as follows:

The Merck contact scientist for technical information regarding the project will
be:

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

Sincerely,

Merck's Signatory

Agreed,

-------------------------------------
Deltagen


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

                                       12

<PAGE>



                                  AMENDMENT TO
                              TECHNOLOGY AGREEMENT

         THIS AMENDMENT TO TECHNOLOGY AGREEMENT, dated as of December 21, 1999
(this "Amendment"), is entered into between DELTAGEN, INC. ("Deltagen"), having
a place of business at 1003 Hamilton Avenue, Menlo Park, California 94025, and
MERCK & CO, INC. ("Merck"), having a place of business at One Merck Drive, P.O.
Box 100, Whitehouse Station, New Jersey 08889-0100, and is made with reference
to the following facts:

         A. WHEREAS, the parties entered into that certain Technology Agreement
on July 13, 1998 (the "Technology Agreement").

         B. WHEREAS, the parties desire to modify the Technology Agreement to
increase the number of Knockout Mice under the Technology Agreement, to extend
the term of the Technology Agreement and to modify such other terms as set forth
below.

         NOW, THEREFORE, in consideration of the mutual covenants set forth
below and other valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereby amend the License Agreement, and agree
as follows:

1.       AMENDMENTS.

1.1      The first sentence of Section 2.3 is hereby restated in its entirety
         as follows:

                    Deltagen shall undertake * * * Knockout Mice Projects
                    according to the terms and conditions set forth in this
                    Agreement.

1.2      AMENDMENT TO SECTION 3.1.  Section 3.1 is hereby restated in its
         entirety to read as follows:

                    Merck shall pay to Deltagen * * * of the total estimated
                    cost for the * * * Knockout Mouse Projects and the * * *
                    Knockout Mouse Projects as set forth in Appendix A. Such
                    payment shall be nonrefundable and shall be credited against
                    the Milestones as set forth in Appendix A.

1.3      AMENDMENT TO SECTION 5.1.  Section 5.1 is hereby restated in its
         entirety to read as follows:

                   The term of this Agreement shall commence on the Effective
                   Date and shall remain in effect until the earlier of either
                   (a) termination of this Agreement pursuant to the completion
                   by Deltagen of all Milestones under this Agreement as amended
                   or (b) December 31, 2002; provided however, that all
                   applicable obligations of Deltagen and Merck under this
                   Agreement shall remain in force with respect to any Knockout
                   Mouse Project requested by Merck and initiated by Deltagen
                   which remains ongoing prior to the date set forth in
                   subsection (b) of this paragraph.

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

                                       13
<PAGE>

1.4      AMENDMENT TO SECTION 8.4. The second paragraph of Section 8.4,
         beginning with the phrase "If to Deltagen" and ending with "6823" is
         hereby modified as follows:

                   If to Deltagen:

                   * * *

         President
         Deltagen, Inc.
         1003 Hamilton Avenue
         Menlo Park, CA.
         94025

1.5      AMENDMENT TO APPENDIX A. Appendix A is hereby restated in its
         entirety as set forth in Appendix A attached hereto.

2.       INITIATION PAYMENT. IN PARTIAL CONSIDERATION FOR THIS AMENDMENT, WITHIN
         THIRTY (30) DAYS AFTER THE DATE OF THIS AMENDMENT, MERCK SHALL PAY TO
         DELTAGEN THE SECOND INITIATION PAYMENT OF $300,000.00 SET FORTH IN
         APPENDIX A OF THIS AGREEMENT AS AMENDED.

3.       CONTINUING EFFECT. THIS AMENDMENT SHALL BE EFFECTIVE FOR ALL PURPOSES
         AS OF THE DATE FIRST SET FORTH ABOVE. EXCEPT AS OTHERWISE EXPRESSLY
         MODIFIED BY THIS AMENDMENT, THE TECHNOLOGY AGREEMENT SHALL REMAIN IN
         FULL FORCE AND EFFECT IN ACCORDANCE WITH ITS TERMS.

4.       DEFINED TERMS. ALL TERMS USED, BUT NOT DEFINED, IN THIS AMENDMENT SHALL
         HAVE THE RESPECTIVE MEANINGS AS SET FORTH IN THE TECHNOLOGY AGREEMENT.

[Intentionally Left Blank]

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

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<PAGE>

5.       COUNTERPARTS.  THIS AMENDMENT MAY BE EXECUTED IN COUNTERPARTS, EACH OF
         WHICH SHALL BE DEEMED AN ORIGINAL, BUT ALL OF WHICH TOGETHER SHALL
         CONSTITUTE ONE AND THE SAME INSTRUMENT.

         IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first set forth above.

                                     DELTAGEN, INC.

                                     By:   /s/ Augustine Yee
                                           ----------------------------------

                                     Its:  Vice President Corporate Development
                                           ----------------------------------

                                     MERCK & CO, INC.

                                     By:   /s/ Anthony Ford-Hutchinson
                                           ----------------------------------
                                               Anthony Ford-Hutchinson

                                     Its:  Senior Vice President
                                           ----------------------------------
                                           Basic Research
                                           ----------------------------------

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


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<PAGE>


                             APPENDIX A TO AMENDMENT

                                   APPENDIX A

I.       SCIENTIFIC MILESTONES AND PAYMENT SCHEDULE FOR THE FIRST * * * KNOCKOUT
         MOUSE PROJECTS UNDER THIS TECHNOLOGY AGREEMENT

         The following payments and milestones are with respect to the first
* * * Knockout Mouse Projects undertaken by Deltagen pursuant to the
Technology Agreement. Within * * * of the Effective Date, Deltagen is to
begin development and generation of up to * * * Knockout Mice Projects and
Merck shall pay Deltagen 30% ($255,000) of the * * * of * * * Knockout Mice
Projects (the first * * * gene knockouts are * * *).

         Subsequent payments to Deltagen will be based on the achievement of the
specific Milestones for each knockout as outlined below. Merck understands and
acknowledges that production of Knockout Mouse Project involves a number of
technologically complex steps, and that the time periods for performance are
reasonable estimates only and subject to change due to technological
difficulties encountered. Deltagen shall be obligated to notify Merck 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.

Payment by Merck for initiation of contract:

                                                                        $255,000

The following payments are per Knockout Mouse Project for the first * * *
Projects:

Milestone 1 - * * *                                          $ * * *

Milestone 2 - * * *                                          $ * * *

Milestone 3 - * * *                                          $ * * *

Milestone 4 - * * *                                          $ * * *

Milestone 5 - * * *                                          $ * * *



MILESTONE 1:              * * *
                          Deltagen will * * * based * * *. The cost for * * * is
                          included in the deposit paid by Merck. Anticipated
                          time frame for completion will be within * * * after
                          receipt of necessary * * * information. In the event
                          of unforeseen

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

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                          technical difficulties in * * * resulting from
                          * * *, Deltagen (upon consultation with
                          Merck) will * * *. The reasonable cost for this
                          * * * will be determined on a case-by-case basis,
                          after good faith negotiations between the
                          parties * * *.

MILESTONE 2:              * * *
                          Deltagen will * * *. Deltagen will * * * a maximum
                          of * * *. Deltagen will receive * * * upon the
                          identification of a * * * or Deltagen's * * * of
                          * * *. If * * * in the * * * clones, Deltagen will
                          first * * * or alternatively, * * * (after
                          consultation with, and written agreement by, Merck).
                          The cost of a * * * will not exceed * * *. Cost for
                          * * * will be * * * per * * * colonies * * *.
                          Anticipated time for completion of * * * will be
                          * * * from receipt of * * *. Confirmation of * * *
                          will be obtained * * *. Merck will also receive
                          * * * information in order to confirm * * *.

MILESTONE 3:              * * *
                          Deltagen will transfer up to * * *. Upon the * * *
                          from each * * *, Deltagen will receive a payment of
                          * * * per * * *. Anticipated time frame for
                          completion will be within * * * from receipt of
                          * * *. Deltagen will confirm the * * *.

MILESTONE 4:              * * *
                          Deltagen will * * * animals for * * *. For production
                          of ** * mice with the desired * * *, Deltagen will
                          receive * * * per * * *. Anticipated time frame will
                          be within * * * from receipt of the * * *. The * * *
                          of the * * * will be confirmed * * *.

MILESTONE 5:              * * *
                          Deltagen will perform the following analysis on up to
                          * * * gene Knockout Mice that are generated * * *.
                          * * * mice will * * *. * * * mice will be * * *
                          animals. 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
                          from * * * from each knockout line will be * * * with
                          that will include the following * * *. * * * will be
                          * * * and Deltagen will prepare a written report of
                          all findings. Deltagen will also * * * to Merck upon
                          request. In addition to the above analysis, Deltagen
                          will provide * * *. * * * will * * *. * * * will also
                          be * * *.

                          Upon completion of * * * Knockout Mouse Project,
                          Deltagen will receive * * * per * * *. Anticipated
                          time frame is within * * * from receipt of * * *.

                          All mice in the Deltagen animal facility will be
                          tested routinely for * * *. Results will be provided
                          to Merck on a * * * basis.

II.      Scientific Milestones and Payment Schedule for the Second * * *
         Knockout Mouse Project under this Technology Agreement


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


                                       17

<PAGE>

         The following payments and milestones are with respect to the Second
* * * Knockout Mouse Projects undertaken by Deltagen pursuant to the
Technology Agreement. In partial consideration for Deltagen's agreement to
undertake the Second * * * Knockout Mouse Projects under the Technology
Agreement, within * * * of the date of this Amendment Merck shall pay to
Deltgen an initiation payment (the "Second Initiation Payment") of 30%
($300,000) of the total aggregate amount of such Second * * * Knockout Mice
Projects (the second * * *gene knockouts are * * *).

         Subsequent payments to Deltagen will be based on the achievement of the
specific Milestones for each knockout as outlined below. Merck understands and
acknowledges that production of each Knockout Mouse Project involves a number of
technologically complex steps, and that the time periods for performance are
reasonable estimates only and subject to change due to technological
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.

Second Initiation payment by Merck:  $300,000

The following payments are per Knockout Mouse Project for the Second * * *
Projects:

Milestone 1 - * * *                                          $ * * *

Milestone 2 - * * *                                          $ * * *

Milestone 3 - * * *                                          $ * * *

Milestone 4 - * * *                                          $ * * *

Milestone 5 - * * *                                          $ * * *



MILESTONE 1:              * * * Deltagen will * * * based on * * *. The cost
                          for * * * is included in the deposit paid by Merck.
                          Anticipated time frame for completion will be
                          within * * * after receipt of necessary * * *
                          information. In the event of unforeseen technical
                          difficulties in * * * resulting from * * *,
                          Deltagen (upon consultation with Merck) will * * *.
                          The reasonable cost for this * * * will be
                          determined on a case-by-case basis, after good
                          faith negotiations between the parties * * *.

MILESTONE 2:              * * *
                          Deltagen will * * *. Deltagen will * * * a maximum of
                          * * *. Deltagen will

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

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<PAGE>


                          receive * * *upon the identification of a * * * or
                          Deltagen's * * *. If * * * in the first * * *,
                          Deltagen will first * * * or alternatively, * * *
                          (after consultation with, and written agreement by,
                          Merck). The cost of a * * * will not exceed * * *.
                          Cost for * * *will be * * *per  * * *. Anticipated
                          time for completion of * * *will be * * *from receipt
                          of * * *. Confirmation of * * * will be obtained
                          * * *. Merck will also receive * * * in order to
                          confirm * * *.

MILESTONE 3:              * * *
                          Deltagen will transfer up to * * *. Upon the * * *
                          from each * * *, Deltagen will receive a payment of
                          * * * per * * *. Anticipated time frame for completion
                          will be within * * * from receipt of * * *. Deltagen
                          will confirm the * * *.

MILESTONE 4:              * * *
                          Deltagen will * * * animals for * * *. For production
                          of * * * mice with the desired * * *, Deltagen will
                          receive * * * per * * *. Anticipated time frame will
                          be within * * * from receipt of the * * *. The * * *
                          of the * * * will be confirmed * * *.

MILESTONE 5:              * * *
                          Deltagen will perform the following analysis on up to
                          * * * gene Knockout Mice that are generated * * *will
                          be * * * mice will be * * * animals. 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 * * * from each knockout line will be * * *
                          with that will include the following * * * will be * *
                          * and Deltagen will prepare a written report of all
                          findings. Deltagen will also * * * to Merck upon
                          request. In addition to the above analysis, Deltagen
                          will provide * * * will include * * * will also be
                          * * *.

                          Upon completion of * * * Knockout * * * per
                          Knockout Mouse Project. Anticipated time frame is
                          within * * * from receipt of * * *.

                          All mice in the Deltagen animal facility will be
                          tested routinely for * * *. Results will be provided
                          to Merck on a * * * basis.



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


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