Document:

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                                                                   EXHIBIT 10.42

CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. (S)(S) 200.80(b) (4), 200.83 AND 240.24b-2

                     COLLABORATIVE DNA SEQUENCING AGREEMENT

                                 BY AND BETWEEN

                              DIVERSA CORPORATION

                                      AND

         PE CORPORATION (NY), THROUGH ITS BUSINESS UNIT CELERA GENOMICS
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                               TABLE OF CONTENTS
<TABLE>
<S>                                                                                         <C>
RECITALS                                                                                     3
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1.  DEFINITIONS                                                                              3
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2.  CONTRACT SEQUENCING PROGRAM                                                              7
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3.  BIOSPHERE SEQUENCING PROGRAM                                                             7
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4.  MATERIALS AND DATA TRANSFER                                                              9
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5.  INTELLECTUAL PROPERTY                                                                    9
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6.  PAYMENTS AND ROYALTIES                                                                  11
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7.  CONFIDENTIALITY, PUBLICITY AND ANNOUNCEMENTS                                            13
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8.  REPRESENTATIONS AND WARRANTIES                                                          16
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9.  DISCLAIMERS AND LIMITATION OF LIABILITY                                                 19
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10.  INDEMNITY                                                                              20
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11.  DISPUTE RESOLUTION                                                                     21
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12.  TERM AND TERMINATION                                                                   22
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13.  MISCELLANEOUS                                                                          23
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     EXHIBIT A - TRANFERS OF MATERIALS                                                      27
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     EXHIBIT B - WORK PLAN                                                                  28
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     EXHIBIT C - MATERIALS TRANSER AGREEMENT                                                30
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</TABLE>

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                     COLLABORATIVE DNA SEQUENCING AGREEMENT

     This Collaborative DNA Sequencing Agreement (the "Agreement"), effective as
of the 1st day of December, 2000 (the "Effective Date"), is made by and between
Diversa Corporation, a Delaware corporation ("Diversa"), having its principal
place of business at 4955 Directors Place, San Diego, California 92121, and PE
Corporation (NY), a New York corporation, through the Celera Genomics Group
("Celera"), having a place of business at 45 West Gude Drive, Rockville, MD
20850.  Diversa and Celera are referred to herein individually as "Party" and
collectively as the "Parties."

                                    RECITALS

     WHEREAS, Diversa has discovered and developed genes and gene products and
has expertise in, among other things, the extraction and normalization of
deoxyribonucleic acid ("DNA") utilizing its proprietary technologies;

     WHEREAS, Celera has developed rapid DNA sequencing techniques and has
expertise in the sequencing and analysis of the genomes of organisms; and

     WHEREAS, Celera, subject to the terms and conditions herein, is willing to
sequence certain microbial genes and genomes for Diversa as set forth herein for
Diversa's internal product research and development and commercialization of
products derived from or identified or developed using the genes comprising such
genomes.

     NOW, THEREFORE, in consideration of the mutual covenants set forth in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which the Parties hereby acknowledge, the Parties hereby agree as
follows:

                                1.  DEFINITIONS

For purposes of this Agreement, each capitalized term used shall have the
meaning assigned to it in this Section:

1.1  "Adjustment Factor" shall mean a fraction less than one, with the numerator
     equal to (a) [***] and with the denominator equal to (b) [***]. By way of
     illustration, [***]. Notwithstanding the foregoing, the Joint Committee
     [***].

1.2  "Affiliate" shall mean any corporation, firm, limited liability company,
     partnership or other entity that directly or indirectly controls, is
     controlled by or is under common control with a Party to this Agreement
     (or, for purposes of Sections 1.10 and 1.19 only, a Diversa Partner).
     Control for this purpose shall mean ownership, directly or through one or
     more affiliated entities, of 50 percent (50%) or more of the shares of
     stock entitled to vote for the election of directors in the case of a
     corporation, or 50 percent (50%) or more of the equity interests in the
     case of any other type of legal entity, or any other arrangement whereby a
     Party (or, for purposes of Sections 1.10 and 1.19 only, a Diversa Partner)
     controls or has the right to control the board of directors or equivalent
     governing body of a corporation or other entity.

1.3  "Annotation Information" shall mean the information derived by analyzing
     the Sequence Information to identify features associated with the
     sequences, and the functional information resulting from such analysis,
     including, but not limited to [***].

1.4  "Biosphere Sequencing Program" shall have the meaning set forth in Section
     3.1.

1.5  "Celera Sequence Information" shall mean the respective, consensus, non-
     redundant nucleotide sequences from nucleotide templates sequenced through
     Celera's sequencing programs or obtained from other sources independently
     of the Contract Sequencing Program and Biosphere Sequencing and shall not
     include Sequence Information.

1.6  "Confidential Information" shall have the meaning set forth in Section 7.1.
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*CONFIDENTIAL TREATMENT REQUESTED
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1.7  "Contract Sequencing Program" shall have the meaning set forth in Section
     2.1.

1.8  "Defaulting Party" shall have the meaning set forth in Section 12.2.1.

1.9  "Disclosing Party" shall have the meaning set forth in Section 7.1.

1.10  "Diversa Partner" shall mean [***].

1.11  "Diversa Proprietary Genes" shall mean genes for which the sequences are
      contained in Diversa's proprietary databases prior to Celera's delivery of
      such associated Sequence Information to Diversa by Celera in accordance
      with Section B(2) or B(5)(a), as applicable, of the Work Plan.

1.12  "DNA Evolver" shall have the meaning set forth in Section 3.6.1.

1.13  "Environmental Libraries" shall mean collections of the DNA clones from
      the genomes of mixed, enriched or purified organisms obtained from the
      environmental samples, which collections Diversa makes available to Celera
      pursuant to Section 3.2.

1.14  "Gene Reassembly Process" shall mean [***].

1.15  "Gene Site Saturation Mutagenesis Process" shall mean [***].

1.16  "Improvements" shall have the meaning set forth in Section 4.1.1.

1.17  "Indemnitee" shall have the meaning set forth in Section 10.3.

1.18  "Indemnitor" shall have the meaning set forth in Section 10.3.

1.19  "Internal" and "Internally" shall mean by Diversa itself, by an Affiliate
      controlled by Diversa, or by any Diversa Partner.

1.20  "Inventions" shall have the meaning set forth in Section 5.1.

1.21  "Joint Committee" shall have the meaning set forth in Section 3.5.

1.22  "Market Price" shall mean [***], as reasonably determined and agreed upon
      by the Parties [***].

1.23  "Materials" shall mean the DNA of genes and/or whole genomes selected by
      Diversa for sequencing, including, but not limited to, [***]and provided
      to Celera for the Contract Sequencing Program and/or the Biosphere
      Sequencing Program.

1.24  "Molecular Biology Enzyme" shall mean an enzyme that is both (a) [***],
      and/or a gene encoding such an enzyme.

1.25  "Multiplier" shall mean, [***], a fraction less than one, with the
      numerator equal to (a) [***] and the denominator equal to (b) [***]

1.26  "Net Sales" shall mean with respect to each given country, the invoiced
      sales of Royalty Bearing Products by or on behalf of Diversa and its
      Affiliates or the invoiced services, including, without limitation,
      database subscriptions, by or on behalf of Celera and its Affiliates to
      any Third Party (whether an end-user, a distributor or otherwise),
      exclusive of inter-company transfers or sales to or from Affiliates, less
      the following deductions only to the extent reasonable and customary, from
      such gross amounts which are actually incurred:
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*CONFIDENTIAL TREATMENT REQUESTED

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      following deductions only to the extent reasonable and customary, from
      such gross amounts which are actually incurred:

      (a)  credits or allowances actually granted for damaged products, returns
           or rejections of product and retroactive price reductions;
      (b)  freight, postage, shipping, customs, duties and insurance charges;
      (c)  normal and customary trade, cash and quantity discounts, allowances
           and credits;
      (d)  sales, value added or similar taxes measured by the billing amount,
           when included in billing;
      (e)  charge back payments and rebates granted to managed health care
           organizations or to federal, state and local governments, their
           agencies, and purchasers and reimbursers or to trade customers;
      (f)  commissions paid to Third Parties other than sales personnel and
           sales representatives or sales agents; and
      (g)  rebates (or equivalents thereof) granted to or charged by national,
           state or local government authorities in countries other than the
           United States and actually paid by the Party or its Affiliate in
           accordance with the applicable laws, regulations or rules of such
           countries.

      If a Royalty Bearing Product or a service is sold in the form of a
      combination product or service, Net Sales for such combination product
      shall be calculated by multiplying actual Net Sales of such combination
      product by the fraction A/(A+B) where: A is the invoice price of the
      Royalty Bearing Product or the service contained in the combination
      product if sold separately by the Party or its Affiliate; and B is the
      invoice price of any other active component or components in the
      combination product if sold separately by such Party or its Affiliate. If
      the Royalty Bearing Product or the service is sold in the form of a
      combination product for which the Net Sales cannot reasonably be
      calculated using such formula, then the Net Sales for purposes of
      determining royalty payments shall be negotiated in good faith and agreed
      upon in writing by the Parties based on the relative value contributed by
      each component.

1.27  "Non Defaulting Party" shall have the meaning set forth in Section 12.2.1.

1.28  "Notice of Default" shall have the meaning set forth in Section 12.2.1.

1.29  "PE Primary Enzymes" shall mean enzymes within one of the following
      classes:

          (a) [***]
          (b) [***]
          (c) [***]

1.30  "PE Secondary Enzymes" shall mean enzymes within one of the following
      classes:

          (a)  [***]
          (b)  [***]
          (c)  [***]
          (d)  [***]
          (e)  [***]

1.31  "Performance Default" shall have the meaning set forth in Section 12.2.1.

1.32  "Receiving Party" shall have the meaning set forth in Section 7.1.

1.33  "Representation Default" shall have the meaning set forth in Section
      12.2.1.
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*CONFIDENTIAL TREATMENT REQUESTED

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1.34  "Royalty Base" shall mean, without counting the same amount received by
      Diversa under more than one (1) of the sections below, but including all
      payments received in any manner or form for a particular Royalty-Bearing
      Product, the sum of the following:

      1.34.1  Diversa's Net Sales actually received, which amount shall include
              for Net Sales attributable to Affiliates only the amount of Net
              Sales equal to Diversa's ownership interest in such Affiliates;

      1.34.2  with respect to Third Parties to whom Diversa has licensed or
              otherwise conveyed rights to sell Royalty-Bearing Products, the
              amount, if any, of royalties from sales of Royalty-Bearing
              Products to which Diversa is entitled and which Diversa has
              actually received; and

      1.34.3  the amount of any (a) [***], (b) [***] and (c) [***]; provided,
              however, for any such [***], and/or [***] that are based on or
              attributable to Royalty Bearing Products and technology or
              products other than Royalty Bearing Products, Diversa shall
              determine, in its good faith and using commercially reasonable
              efforts, the portion of such [***] attributable to items included
              in clauses (a), (b) and (c) of this Section 1.34.3.

              For purposes of determining the amounts included in the Royalty
              Base above, any non-cash consideration shall be assigned a value
              by Diversa in good faith, and if external market data for
              substantially similar types of consideration are readily
              available, the value of such non-cash consideration shall be
              determined by reference to such market data, as reasonably
              adjusted by Diversa for relevant differences between the types of
              consideration.

1.35  "Royalty-Bearing Products" shall mean those articles, substances and
      services comprised, in whole or in part, of or derived from any gene
      product expressed by Sequence Information or developed using Sequence
      Information and Annotation Information generated as part of the Biosphere
      Sequencing Program and that may include, without being limited to, [***];
      provided, however, that Royalty-Bearing Products shall not include such
      articles, substances and services comprised, in whole or in part, of or
      derived from (a) [***] or (b) [***]. Notwithstanding the foregoing, the
      term "Royalty-Bearing Products" shall not include any product or service
      discovered or developed by a Party independently of the Sequence
      Information and Annotation Information generated as part of the Biosphere
      Sequencing Program, as demonstrated by written documentation reasonably
      satisfactory to the other Party; provided, however, that if a gene
      sequence corresponding to such Sequence Information is [***] any gene
      sequence identified by Diversa as a result shall also not be deemed to be
      a "Royalty-Bearing Product."

1.36  "S. diversa" shall mean Streptomyces diversa, the various strains
      comprising approximately [***] genomes transferred by Diversa to Celera
      under the Contract Sequencing Program.

1.37  "Sequence Information" shall mean the respective consensus, non-redundant
      nucleotide sequences from nucleotide templates created from Materials and
      sequenced and assembled by Celera pursuant to this Agreement and in
      accordance with the Work Plan.

1.38  "Term" shall have the meaning set forth in Section 12.1.

1.39  "Third Party" shall mean any individual, partnership, joint venture,
      corporation, trust, estate, unincorporated organization, government or any
      department or agency thereof, or any other entity other than Diversa or
      Celera or an Affiliate of Diversa or Celera.

1.40  "Third Party Biosphere Sequencing Agreement" shall have the meaning set
      forth in Section 3.5.1.
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*CONFIDENTIAL TREATMENT REQUESTED

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1.41  "Trimmed Primary Sequence" shall mean Sequence Information from a single
      sequencing reaction run on an automated DNA sequencer and [***], unless
      and to the extent each member of the Joint Committee agrees in writing to
      a [***].

1.42  "Work Plan" shall mean the summary of the activities and schedule for
      conducting such activities, as amended from time to time in writing by the
      Joint Committee, which summary and all amendments thereto are attached to
      this Agreement as Exhibit B.

                        2.  CONTRACT SEQUENCING PROGRAM

2.1  Contract Sequencing Program; Ceiling DNA Amount.  Subject to the terms and
     ------------------------------------------------
     conditions of this Agreement, during the Term, Celera shall sequence and
     annotate up to [***] per year of Materials ("Contract Sequencing Program"),
     unless otherwise agreed in writing by the Parties. Diversa, in its sole
     discretion, in accordance with the Work Plan, shall select the Materials to
     be provided to Celera and the number of base pairs of DNA to be sequenced
     by Celera; provided, however:

     2.1.1  Right of First Refusal.   Celera shall have a right of first refusal
            -----------------------
            to sequence and annotate up to [***] of DNA from Materials per year
            (under the terms and conditions in this Agreement) on any such
            project(s) that Diversa chooses not to perform Internally.
            Notwithstanding anything to the contrary contained herein, Diversa
            shall have an unrestricted right to perform such sequencing and
            annotation work Internally; and

     2.1.2  Initial S. Diversa Sequencing Project. As soon as practicable after
            --------------------------------------
            the later of the Effective Date or Celera's receipt of S. diversa,
            Celera shall sequence and annotate S. diversa in accordance with the
            Work Plan.

                        3.  BIOSPHERE SEQUENCING PROGRAM

3.1  Environmental Materials.  During the Term, Diversa shall provide to Celera
     ------------------------
     for sequencing and annotation at least [***] unique sets of Materials
     chosen by the Joint Committee, each from a different environment or
     organism ("Biosphere Sequencing Program").  Diversa shall have negotiated
     ownership or license rights to all genes, pathways and biomolecules derived
     from the environmental samples provided as part of the Biosphere Sequencing
     Program sufficient to permit Celera to sequence the DNA from such
     Materials.

3.2  Environmental Libraries.  Subject to the terms of Section 3.3 below,
     ------------------------
     Diversa shall make available to Celera, as determined by the Joint
     Committee, Diversa's normalized, diversity-indexed Environmental Libraries
     of Materials optimized for biosphere sequencing.

3.3  Estimated Sequencing Efforts.  During the [***] after the Effective Date,
     ----------------------------
     Diversa shall provide Celera, and Celera shall sequence, assemble and
     annotate, a minimum of [***] of DNA sequence base pairs in Trimmed Primary
     Sequence from the Environmental Libraries and deliver the results in
     accordance with the Work Plan(s) associated with the Biosphere Sequencing
     Program.  During each of the [***] years of the Term, Celera shall
     sequence, assemble and annotate an estimated [***] of DNA from the
     Environmental Libraries (as further determined by the Joint Committee) and
     deliver the results in accordance with the Work Plan(s) associated with the
     Biosphere Sequencing Program and the terms herein.

3.4  Product Applications Development. Diversa, either itself or through
     ---------------------------------
     collaborators, shall be responsible for and diligent in providing product
     applications development and marketing infrastructure for the sales and
     licensing of Royalty-Bearing Products.  Diversa shall use sequenced genes
     for Diversa's internal research and development or in bona fide
     collaborations for the development of Royalty-Bearing Products.
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*CONFIDENTIAL TREATMENT REQUESTED

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3.5  Joint Committee.  Diversa and Celera hereby agree to establish a joint
     ----------------
     committee (the "Joint Committee") to oversee the Biosphere Sequencing
     Program.  The Joint Committee shall be responsible for approving and
     modifying the Work Plan(s) associated with the Biosphere Sequencing
     Program, determining the sequencing and assembly methods to be used as part
     of such Work Plan(s), and assessing the sequencing needs, time frame and
     work prioritization related to the Biosphere Sequencing Program hereunder.

     3.5.1  Membership.  Diversa and Celera each shall appoint, in its sole
            -----------
            discretion, [***] members to the Joint Committee. One of Diversa's
            committee members shall be designated as Joint Committee Chairperson
            with Celera's approval, such approval not to be unreasonably
            withheld. The initial Joint Committee members shall be appointed as
            soon as practicable, but no later than thirty (30) days after the
            Effective Date. Each Party shall provide the other Party with the
            names and contact information for its committee members. All Joint
            Committee members shall be full time employees of Diversa or Celera.

     3.5.2  Meetings.  The Joint Committee shall meet as needed, but no less
            ---------
            than once per quarter. Such meetings shall be at reasonable times
            and shall alternate between the Parties' facilities. The first such
            meeting shall be held within thirty (30) days after the Effective
            Date. Any additional meetings, other than quarterly meetings, shall
            be held at places and on dates selected by the Joint Committee
            Chairperson. Joint Committee members may participate in any such
            meeting in person, by telephone or by videoconference. In addition,
            the Joint Committee may act without a formal meeting by a written
            memorandum signed and agreed to by the majority of the Joint
            Committee. Subject to the obligations set forth in Section 7, other
            employees and consultants of each Party, in addition to the members
            of the Joint Committee, may attend and participate as appropriate in
            the Joint Committee meetings as non-voting observers at the
            invitation of either Party with the prior approval of the other
            Party; provided, however, such employees and consultants shall be
            under confidentiality obligations to that Party having terms at
            least a strict as those of this Agreement, and such consultants'
            work must relate directly to work performed under this Agreement.

     3.5.3  Minutes.  The Joint Committee shall keep minutes of its meetings
            --------
            that record all decisions and all actions recommended or taken. The
            Party hosting the meeting shall be responsible for the preparation
            of the meeting agenda, and the Joint Committee Chairperson shall be
            responsible for arranging the preparation and circulation of the
            draft minutes. Draft minutes shall be delivered by mail, electronic
            mail or facsimile to each Joint Committee member within thirty (30)
            days after each meeting. Draft minutes shall be edited by the Joint
            Committee Chairperson and shall be issued in final form only after
            approval by the Joint Committee or after obtaining signatures from
            the majority of the members of the Joint Committee. A copy of the
            approved minutes shall be retained in each Party's files for at
            least five (5) years after termination of this Agreement.

     3.5.4  Quorum; Voting Decisions.  At each Joint Committee meeting, if all
            -------------------------
            of the members of the Joint Committee are present, decisions shall
            be made by majority vote. In the event that all members are not
            present, at least [***] members appointed by each Party shall
            constitute a quorum and decisions shall be made by unanimous vote.
            If the Joint Committee is unable to reach agreement on any matter,
            such dispute shall be settled pursuant to Section 11.

     3.5.5  Expenses.  Diversa and Celera shall each bear all expenses of its
            ---------
            respective Joint Committee members related to the members'
            participation on the Joint Committee and attendance at Joint
            Committee meetings.

3.6  [***] Arrangements.
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*CONFIDENTIAL TREATMENT REQUESTED

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     3.6.1  During the [***] after the Effective Date, Celera shall not [***].
            For each [***] after the [***] anniversary of the Effective Date
            through the end of the Term that [***]. In addition, for each [***]
            period after the [***] anniversary of the Effective Date through the
            end of the Term that [***].

     3.6.2  [***]

            (a) In the event that [***]. Notwithstanding anything to the
                contrary contained herein, Diversa shall have an unrestricted
                right to perform DNA sequencing activities Internally,
                including, but not limited to, Internal research involving
                discovery by DNA sequencing.

            (b)  In addition, provided that [***]:

                     i.    Diversa shall [***];
                     ii.   [***];
                     iii.  In the event that Diversa [***], Diversa, within
                           [***], shall [***];
                     iv.   [***];
                     v.    In the event that [***], Diversa [***] shall, during
                           the [***], consistent with the terms of clause ii.
                           above;
                     vi.   If [***], has notified Diversa in writing that [***]
                           under clause ii above, or [***], Diversa [***], then
                           Diversa shall [***].

                     Notwithstanding the foregoing or anything contained herein
                     to the contrary, Diversa shall [***]. In the event that
                     [***], Diversa shall [***], pursuant to the terms of this
                     Section 3.6.2(b), [***].

     3.6.3  In the event that Diversa [***], and as part of such [***], the
            [***], Diversa shall (a) provide Celera with the information
            reasonably required to [***] and (b) negotiate with Celera in good
            faith [***]. Notwithstanding anything contained herein to the
            contrary, in no event shall (i) [***] or (ii) [***], be included in
            the Royalty Base or be subject to any payment obligation to Celera
            hereunder.

     3.6.4  Subject to the terms and conditions contained herein, both Parties
            shall be free to enter into collaborations or other agreements with
            Third Parties that [***].

     3.6.5  Status Meeting.  Representatives of Diversa and Celera shall meet on
            ---------------
            or about each anniversary date of the Effective Date to evaluate the
            [***] hereunder. Either Party shall have the right to terminate all
            (but not fewer than all) [***] of each anniversary date. Such
            termination shall be effective upon receipt of written notice by the
            other Party.

                        4.  MATERIALS AND DATA TRANSFER

4.1  Transfer of Materials.
     -----------------------

     4.1.1  Diversa shall transfer Materials to Celera and, upon receipt, Celera
            shall use such Materials, and any and all modifications, derivatives
            and progeny thereof ("Improvements") only to meet its obligations
            under this Agreement, except as otherwise provided herein or agreed
            in writing by the Parties. Any such transfers of Materials shall be
            described in writing and attached as an addendum to Exhibit A.
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*CONFIDENTIAL TREATMENT REQUESTED

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<PAGE>

     4.1.2  Celera acknowledges that any transfer of Materials shall be neither
            a sale nor an offer to sell such Materials.  Other than as permitted
            in this Agreement or with Diversa's prior written consent, Celera
            shall not distribute the Materials to any Third Party, except
            Affiliates and subsidiaries of Celera.

     4.1.3  Celera shall restrict access to Materials only to those persons with
            a need to know and work with such Materials.

4.3  Celera acknowledges that any data and Materials delivered hereunder by
     Diversa are experimental in nature, are for laboratory research use only,
     and have not been approved for diagnostic or therapeutic use in humans or
     animals.  Celera shall not use Materials in in-vivo research in animals or
     humans, or in animal or human diagnostic, therapeutic or other direct
     clinical applications that would require regulatory approval or clearance.

4.4  All such data and Materials are provided without warranties, and Diversa
     shall accept no liability in connection with their use, storage and
     disposal by Celera.  Notwithstanding the foregoing, Diversa shall make a
     reasonable effort to notify Celera immediately of any hazardous
     characteristics that are known, or become known to Diversa.

4.5  Return/Destruction of Materials.  Upon termination or expiration of this
     --------------------------------
     Agreement, Celera shall destroy , or, at Diversa's request and expense,
     return to Diversa all residual Materials (exclusive of those clones
     distributed pursuant to Section 5.2.2).  In the event that Diversa requests
     Celera to return any and/or all residual Materials, Diversa shall provide
     written notice to Celera within sixty (60) days after receiving the
     Sequence Information and Annotation Information from the Materials.

                           5.  INTELLECTUAL PROPERTY

5.1  Diversa Rights and Intellectual Property.  Diversa shall own all right,
     -----------------------------------------
     title and interest in and to Sequence Information, all Annotation
     Information, all Material, all genes, gene pathways and biomolecules
     encoded by or related to such Sequence Information, Annotation Information,
     and Material and all applications thereof that are identified or developed
     under this Agreement and all inventions conceived of or reduced to practice
     by Diversa (collectively, "Inventions").  Except for the rights
     specifically granted to or retained by Celera hereunder, Celera irrevocably
     assigns to Diversa any rights it may have in the foregoing, and if such
     rights cannot be assigned, grants to Diversa an exclusive, irrevocable,
     perpetual, worldwide, fully-paid license, with right to sublicense through
     multiple tiers of sublicense, to such rights.

     5.1.1  Subject to Section 5.5, products identified or developed using any
            Sequence Information generated under the Contract Sequencing Program
            [***].

5.2  Celera Rights.
     --------------

     5.2.1  Celera Database.  Notwithstanding anything to the contrary contained
            ----------------
            herein, on the earlier of (a) [***] after Celera has delivered to
            Diversa under Section B(5)(c) of the Work Plan the Sequence
            Information and Annotation Information or (b) the date Diversa
            notifies Celera in writing that Diversa does not intend to include
            such data and information in a patent application, [***]. However,
            [***]. Nothing in this Agreement is intended or shall be interpreted
            as granting to Diversa or any Third Party any right or interest in
            any of Celera's databases.

     5.2.2  [***] Celera shall not be authorized to agree to modifications to
            such materials transfer agreement without the prior written consent
            of Diversa, which may be given or withheld in Diversa's sole and
            absolute discretion.

5.3  License for Environmental Libraries.  Diversa, subject to the terms and
     ------------------------------------
     conditions in this Agreement, hereby grants to Celera a nonexclusive,
     worldwide, fully paid license to use, access and analyze Diversa's
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*CONFIDENTIAL TREATMENT REQUESTED

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     Environmental Libraries solely for Celera's use in meeting its obligations
     under the Biosphere Sequencing Program.

5.4  Patent Responsibilities. Each Party will be responsible for filing,
     ------------------------
     prosecuting, maintaining, defending and enforcing any patent applications,
     patents and other intellectual property rights owned by such Party.
     Although the Parties do not anticipate that they will jointly discover or
     develop an invention other than an Invention, in the event that they do,
     Diversa shall file, prosecute and maintain all such patents and patent
     applications claiming such inventions and keep Celera fully and timely
     informed of such patents and patent applications.  The Parties shall share
     the costs equally.  In the event that either Party desires to abandon or
     decline responsibility for any patent application, patent or other
     intellectual property right arising out of this Agreement, such Party shall
     provide reasonable prior written notice to the other Party of such
     intention to abandon or decline responsibility, and the other Party shall
     have the right, at its own expense, to file, prosecute, and maintain such
     patent application, patent or other intellectual property right.

     5.4.1  Diversa shall notify Celera within [***] after filing a patent
            application or taking such other actions to protect the Sequence
            Information. In the event that, in the [***] following each delivery
            of Sequence Information by Celera to Diversa, Diversa decides not to
            file, prosecute and/or maintain any patent application, patent or
            other intellectual property protection claiming such Sequence
            Information or other proprietary result or product arising out of
            the results or work from this Agreement, Diversa shall provide
            timely written notice, and transfer right, title and interest in and
            to such Sequence Information or proprietary result, to Celera
            sufficient to enable Celera to file, prosecute, maintain and enforce
            such patent application, patent or other intellectual property
            right.

     5.4.2  At Celera's written request and expense, Diversa shall provide to
            Celera a copy of each patent application claiming any Sequence
            Information and Annotation Information from the Biosphere Sequencing
            Program.

5.5  Prior Patents.
     --------------

     5.5.1  Notwithstanding anything contained herein to the contrary, in no
            event shall Diversa obtain any right, title, or interest in or to
            any part of the Sequence Information and Annotation Information
            delivered under the Work Plan that is included in a patent issued
            to, or patent application filed by, Celera, (a) prior to Diversa's
            delivery to Celera of the Materials from which such Sequence
            Information was developed or (b) independently of this Agreement.

     5.5.2  Notwithstanding anything contained herein to the contrary, in no
            event shall Celera obtain any right, title, or interest in or to any
            part of the Sequence Information and Annotation Information
            delivered under the Work Plan that is included in a patent issued
            to, or patent application filed by, Diversa, (a) prior to Celera's
            delivery to Diversa of such Sequence Information or (b)
            independently of this Agreement.

     5.5.3  Nothing in this Agreement is intended or shall be interpreted as
            granting to Diversa or any Third Party any right or interest in any
            intellectual property (a) invented, discovered, developed, or
            otherwise created independent of this Agreement by any business unit
            or affiliate of PE Corporation (NY) other than the Celera Genomics
            business unit or (b) acquired or licensed by PE Corporation (NY)
            independent of this Agreement through or for the benefit of any
            business unit or affiliate of PE Corporation (NY) other than solely
            for the Celera Genomics business unit.

                          6.   PAYMENTS AND ROYALTIES
_________________________
*CONFIDENTIAL TREATMENT REQUESTED

                                       11
<PAGE>

6.1  Contract Sequencing Program.  For the DNA sequencing under the Contract
     ----------------------------
     Sequencing Program as specified in the Work Plan, Diversa shall pay to
     Celera (a) [***] and (b) [***].

6.2  Biosphere Sequencing Program.
     -----------------------------

     6.2.1  Diversa shall pay Celera, (a) [***], subject to Section 6.2.2, or
            (b) for any part of the Sequence Information delivered to Diversa
            pursuant to the Biosphere Sequencing Program that corresponds to
            [***]. If, at the end of [***] following the Effective Date, Diversa
            has not provided Celera with [***], Celera shall be entitled to
            invoice Diversa for the balance due to Celera [***].

     6.2.2  Change in Market Price.  In the event that [***] decreases to [***]
            -----------------------
            or less, then, notwithstanding Section 6.2.1 above, Diversa shall
            notify Celera in writing and pay to Celera [***]. The new price
            reflecting the decrease in Market Price shall be prospective and
            apply to specific organisms, and no refunds or credits with respect
            to prior payments or invoices shall be granted.

6.3  Celera Databases. In accordance with Section 6.6, for [***] from the
     -----------------
     Effective Date, Celera shall pay Diversa (a) [***], and, (b) [***].

6.4  Royalties on the Royalty Base.  In accordance with Section 6.6, for [***]
     ------------------------------
     from the Effective Date, Diversa shall pay to Celera:

     6.4.1  a royalty of [***] on the first [***];

     6.4.2  With respect to the amount of the Royalty Base in excess of [***], a
            royalty of [***].

     6.4.3  In the event that Diversa is obligated to pay royalties to Third
            Parties on amounts included within the Royalty Base, the Parties
            agree that the royalty rate used to determine the royalties owed by
            Diversa to Celera in Section 6.4.2 above shall be reduced by [***]
            of such Third Party royalties (and reduced proportionately for Third
            Party royalties of less than [***]) and additionally by [***] of any
            Third Party royalties in excess of [***]. Notwithstanding the
            foregoing, the minimum royalty paid to Celera by Diversa shall be no
            less than [***]. The following table illustrates the intended
            application of the foregoing paragraph (assuming that [***], that
            [***], and that [***]):

            [***]

6.5  Taxes.  All amounts payable under this Agreement are exclusive of all
     ------
     sales, use, value-added, withholding, and other taxes and duties.  Diversa
     shall pay all taxes and duties assessed in connection with this Agreement
     and its performance by any authority within or outside of the U.S., except
     for taxes payable on Celera's revenue or income.

6.6  Manner of Payment; Statements. Each Party shall make all payments to the
     ------------------------------
     other Party under this Agreement in United States dollars in accordance
     with the terms in this Section, which terms may be amended from time to
     time by the Parties.

     6.6.1  Non-Royalty Payments by Diversa to Celera.  Within ten (10) days
            --------------------------------------------
            following Celera's delivery to Diversa of the data in Section
            A(5)(a) or B(5)(a) of the Work Plan and Diversa's receipt of an
            invoice from Celera referencing (a) this Agreement, (b) the
            program(s) pursuant to which such sequencing was conducted, (c) the
            rate per Trimmed Primary Sequence applicable to the DNA sequenced,
            and (d) the number of Trimmed Primary Sequences obtained from the
            Material (other reasonable information will be supplied separately
            as agreed by the Parties), Diversa shall pay Celera at the rate
            specified in Section 6.1 or Section 6.2, as applicable. In the
            aforementioned invoice or a separate document, Celera shall use
            reasonable efforts to notify Diversa of the specific
_________________________
*CONFIDENTIAL TREATMENT REQUESTED

                                       12
<PAGE>

            Material that is the subject of the invoice. Diversa shall make all
            payments to Celera by bank wire transfer in immediately available
            funds as follows, or as otherwise specified in writing:

               [***]

     6.6.2  Royalty Payments.  All royalties payable by one Party to the other
            -----------------
            Party under this Article 6 shall be paid [***] on a country-by-
            country basis. Each Party shall submit to the other Party [***] of
            this Agreement, a dated statement showing, among other things:

            (a)  In the case of Diversa, the amount of each of the separate
                 items included within the definition of the term "Royalty Base"
                 for the calendar year; and

            (b)  In the case of Celera, the amounts of [***] for the calendar
                 year pursuant to Section 6.3 above.

6.7  Exchange Rates.  The rate of exchange to be used in calculating the amount
     ---------------
     of currency equivalent in United States Dollars for royalties payable
     hereunder shall be the exchange rate on the last business day in the
     calendar month, as published in the New York edition of the Wall Street
     Journal, preceding the calendar month when the Royalty Base amounts or Net
     Sales amounts (as applicable) are generated.  In the event that such
     publication no longer publishes such rates, another financial publication
     agreed on by the Parties shall be substituted or one shall be chosen by an
     investment banker/analyst agreed on by the Parties.

6.8  Late Payments.  In the event that any payment due hereunder is not made
     --------------
     when due, the payment shall accrue interest from that date due at the rate
     of [***] over the prime rate of interest per month as quoted by Citibank,
     N.A., New York, New York; provided however, that in no event shall such
     rate exceed the maximum legal annual interest rate. The payment of such
     interest shall not limit either Party from exercising any other rights it
     may have as a consequence of the lateness of any payment.

6.9  Examination of Records.  Each Party shall keep for a period covering at
     ----------------------
     least the preceding [***] records pertaining to the development and sale or
     other disposition of products and services pursuant to this Agreement
     sufficient for the other Party to confirm the accuracy of all payments due
     hereunder.  Each Party shall have the right to appoint an independent,
     certified public accountant reasonably acceptable to the other Party (such
     acceptance, not to be unreasonably withheld) examine such records for the
     purpose of verifying any amounts payable, or information provided, under
     this Agreement, provided that such accountant has entered into a
     confidentiality agreement with the Party that contains confidentiality
     provisions substantially similarly restrictive on such agent as the terms
     of this Agreement and also limiting the use and disclosure of such
     information to purposes germane hereto.  Such audits may be exercised
     during normal business hours upon reasonable prior written notice to the
     Party being examined and the accountant shall provide only the results of
     such audit and shall not disclose to any of the other Party's Confidential
     Information provided to it or to which it may have had access during the
     conduct of the audit.  Prompt adjustments shall be made by the Parties to
     reflect the results of such examination.  The Party requesting such
     examination shall bear the full cost of such examination, unless such
     examination discloses a variance of more than [***] from the amounts
     actually due, in which case the Party being examined shall bear the full
     cost of such examination.

                7.  CONFIDENTIALITY, PUBLICITY AND ANNOUNCEMENTS

7.1  Definition of Confidential Information.  "Confidential Information" shall
     ---------------------------------------
     mean all non-public technical and business information, whether
     electronically, orally or in writing, furnished by either Party (the
     "Disclosing Party") to the other Party (the "Receiving Party") in
     connection with this Agreement. Such Confidential Information shall
     include, without limitation, the existence and terms of this Agreement, the
     identity of a microbial species whose genome has been sequenced or is being
     sequenced, any gene or gene sequence
_______________________
*CONFIDENTIAL TREATMENT REQUESTED

                                       13
<PAGE>

     encoding an enzyme or other gene product, any such enzyme or other gene
     product, the use of any such enzyme or other gene product, trade secrets,
     know-how, inventions, technical data or specifications, testing methods,
     business or financial information, research and development activities,
     product and marketing plans, and customer and supplier information,
     invention disclosures, patent disclosures, patent applications, structures,
     models, techniques, processes, compositions, compounds, biological samples,
     and the like, and 7.2 bioinformatics methods, hardware configurations and
     software in various stages of development or any software product (source
     code, object code or otherwise), including its audiovisual components
     (menus, screens, structure and organization) and any human or machine
     readable form of the program, and any writing or medium in which the
     program or information therein is stored, written or described, including,
     without limitation, diagrams, flow charts, designs, drawings,
     specifications, models, data, bug reports, and such items that become known
     to a Party during visits to the facilities of the other Party.

7.2  Obligations. The Parties agree that they shall take all reasonable measures
     ------------
     to protect the secrecy of and avoid disclosure and unauthorized use of the
     Confidential Information.  Without limiting the foregoing, the Parties
     shall take at least those measures that each takes to protect its own
     confidential information of a similar nature, but in no event less than a
     reasonable degree of care. Both Parties shall immediately notify the other
     in the event either Party has knowledge of any unauthorized use or
     disclosure of the Confidential Information.  Except as otherwise authorized
     in this Agreement, the Parties further agree that the Receiving Party shall
     keep confidential and shall not publish or otherwise disclose, and shall
     not use for any purpose, any Confidential Information furnished to it by
     the Disclosing Party pursuant to this Agreement, regardless of the medium
     on which it is provided, including know-how.

7.3  Exceptions.  The obligations of the Receiving Party under Section 7.2 shall
     -----------
     not apply to any specific Confidential Information to the extent that the
     Receiving Party can demonstrate by competent proof that such Confidential
     Information:

     (a)  Was generally known to the public or otherwise part of the public
          domain prior to the time of its disclosure under this Agreement;

     (b)  Entered the public domain after the time of its disclosure under this
          Agreement through means other than an unauthorized disclosure
          resulting from an act or omission by the Receiving Party or its
          directors, officers, employees, consultants, advisors or agents;

     (c)  Was or is independently developed or discovered by the Receiving Party
          without use of the Confidential Information, and which can be
          demonstrated by written record created at the time of such independent
          discovery or development;

     (d)  Was already known to the Receiving Party, other than under an
          obligation of confidentiality, at the time of disclosure by the
          Disclosing Party; or

     (e)  Is or was disclosed to the Receiving Party at any time, whether prior
          to or after the time of its disclosure under this Agreement, by a
          Third Party having no fiduciary relationship with the Disclosing Party
          and having no obligation of confidentiality to the Disclosing Party
          with respect to such Confidential Information.

7.4  Permitted Disclosure.
     ---------------------

     7.4.1  Subject to Section 7.2, the Receiving Party may disclose the
            Disclosing Party's Confidential Information only to the extent such
            disclosure is required for (a) filing or prosecuting patent
            applications and maintaining patents and (b) filing or maintaining
            regulatory applications or approvals.

     7.4.2  Notwithstanding the obligations in Section 7.2, the Receiving Party
            may disclose the Disclosing Party's Confidential Information in (a)
            establishing rights or enforcing obligations under this Agreement;
            or (b) complying with applicable laws, regulations, and/or court or
            administrative

                                       14
<PAGE>

            orders (such as disclosure to the SEC, the EPA, the FDA, or the
            United States Patent and Trademark Office or to their foreign
            equivalents); provided however, that in each case described herein
            if a Receiving Party shall be required to make any disclosure of the
            Disclosing Party's Confidential Information under this Section
            7.4.2, it will (i) give twenty-four (24) hours advance notice to the
            Disclosing Party of such disclosure requirement; (ii) provide a copy
            of the proposed disclosure; and (iii) use commercially reasonable
            efforts in assisting the Disclosing Party to secure confidential
            treatment of such Confidential Information required to be disclosed,
            including cooperating with the other to obtain a protective order
            for the Disclosing Party's Confidential Information.

     7.4.3  The Receiving Party further may disclose the Disclosing Party's
            Confidential Information only to the Receiving Party's employees,
            contractors, consultants, licensees or collaborators who (i) have a
            need-to-know and (ii) are under contract not to disclose or use
            Confidential Information and such disclosure is only in the context
            of the Receiving Party's own scientific results.

7.5  Copies.  A Receiving Party shall not make any copies of the Disclosing
     -------
     Party's Confidential Information without the prior written approval of the
     Disclosing Party except as is reasonably necessary for the Receiving
     Party's internal research and development. Notwithstanding the foregoing,
     the Receiving Party may retain one (1) copy of the Disclosing Party's
     Confidential Information for legal archival purposes.

7.6  Publication & Database Rights.
     ------------------------------

     7.6.1  Publication of DNA Sequence Information.  Notwithstanding Section
            ----------------------------------------
            7.2, Celera and Diversa shall have the right to jointly publish any
            and all Sequence Information generated under the Biosphere
            Sequencing Program immediately following one Party's filing of, or
            both Parties' decision not to file, a patent application covering
            all such Sequence Information to be published. Any such publications
            shall indicate Celera and Diversa as co-authors or give appropriate
            scientific attribution to each Party, as appropriate and as
            determined by the Joint Committee. Celera further shall have the
            right to publish Sequence Information provided that it gives Diversa
            reasonable notice prior to publication that enables Diversa to
            pursue protection of its Confidential Information and provided the
            Joint Committee has determined the appropriate authorship and/or
            scientific attribution to be given to Diversa. The Parties agree
            that the addition of the Sequence Information to a Celera database
            shall not constitute a publication.

     7.6.2  Disclosure for Scientific Publication/Presentation. Notwithstanding
            ---------------------------------------------------
            Section 7.2, either Party may publish scientific results of its work
            pursuant to this Agreement; provided, however, that:

            (a)  at least thirty (30) days prior to submission for any
                 publication of any document, slides, lecture, and/or any other
                 method of publishing that will disclose the other Party's
                 Confidential Information not disclosable under this Section 7,
                 the Party shall provide a copy of such publication to the other
                 Party for the other Party's prior review, comment and written
                 consent, such consent not to be unreasonably withheld. The
                 other Party, at its discretion, may remove its Confidential
                 Information or consent to such disclosure of Confidential
                 Information; provided, however, that in no event shall the
                 other Party delay any such planned disclosure beyond the thirty
                 (30) day period. If the other Party has not removed the
                 Confidential Information and/or responded to the Party's
                 request for written consent within thirty (30) days of the
                 other Party's receipt of the copy, such planned disclosure
                 shall be deemed approved by the other Party. Each Party agrees
                 that the other Party may keep a copy of such disclosure for its
                 records. Each Party further agrees that within forty-eight (48)
                 hours of receiving notice from the publisher of publisher's
                 intent to release the publication, such Party will advise the
                 other Party of such publication, the planned publication date,
                 and furnish a final copy of the publication; and

                                       15
<PAGE>

            (b)  each Party further agrees to include in any publication or
                 presentation resulting from its work or the information
                 developed under this Agreement appropriate scientific
                 attribution to the other Party.

7.7  Joint Press Release.  Notwithstanding Section 7.2, Diversa and Celera
     --------------------
     shall issue a joint press release announcing the execution of this
     Agreement and completion of research under this Agreement, with the text of
     such press release(s) mutually agreed to in writing in advance of issuance.

                       8.  REPRESENTATIONS AND WARRANTIES

8.1  Organization; Good Standing.  Each Party hereby represents to the
     ----------------------------
     other Party on the Effective Date and thereafter throughout the Term that,
     to the best of its knowledge, it (a) is a corporation duly organized,
     validly existing, (b) is in good standing under the laws of the
     jurisdiction of its incorporation, (c) is qualified to do business and in
     good standing in each jurisdiction in which the performance of its
     obligations hereunder requires such qualification and (d) has all requisite
     power and authority, corporate or otherwise, and the legal right to conduct
     its business as now being conducted, to own, lease and operate its
     properties and to execute, deliver and perform under this Agreement.

8.2  Binding Obligation; Due Authorization; No Conflict.  Each Party hereby
     ---------------------------------------------------
     represents to the other Party on the Effective Date and thereafter
     throughout the Term that, to the best of its knowledge, this Agreement is a
     legal and valid obligation binding upon its execution and enforceable in
     accordance with its terms and conditions. The execution, delivery and
     performance of this Agreement by such Party have been duly authorized by
     all necessary corporate action and the person executing this Agreement on
     behalf of such Party has been duly authorized to do so by all requisite
     corporate actions and do not and will not (a) require any consent or
     approval of its stockholders or any Third Party and (b) conflict with, or
     constitute a breach or violation of, any agreement, instrument,
     understanding, oral or written, to which it is a party or by which it may
     be bound, and any judgement of any court or governmental body applicable to
     such a Party and (c) violate any law, decree, order, rule or regulation of
     any court, governmental body or administrative or other agency having
     authority over it.

8.3  Each Party hereby represents to the other Party on the Effective Date and
     thereafter throughout the Term, that it is aware of no action, suit or
     inquiry or investigation contemplated or instituted by any Third Party that
     questions or threatens the validity of this Agreement.

                  9.  DISCLAIMERS AND LIMITATION OF LIABILITY

9.1  NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED AS A REPRESENTATION MADE OR
     WARRANTY GIVEN BY EITHER PARTY OR THEIR SUPPLIERS THAT THE USE OF ANY
     INFORMATION, DATA, SOFTWARE OR OTHER MATERIALS PROVIDED HEREUNDER WILL NOT
     INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK, OR OTHER RIGHTS OF ANY THIRD
     PARTY. THE INFORMATION, DATA, SOFTWARE OR OTHER MATERIALS PROVIDED BY
     EITHER PARTY HEREUNDER ARE PROVIDED "AS IS" WITHOUT WARRANTY OF ANY KIND
     WHATSOEVER, EXPRESS OR IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF
     MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. CELERA MAKES NO
     WARRANTY THAT THE SEQUENCE INFORMATION AND OTHER RESULTS PROVIDED TO
     DIVERSA HEREUNDER DO NOT [***].

9.2  IN NO EVENT SHALL EITHER PARTY OR CELERA'S SUPPLIERS BE LIABLE FOR LOST
     PROFITS, LOSS OF USE, LOSS OF BUSINESS, BUSINESS INTERRUPTION, LOSS OF
     DATA, COST OF COVER OR ANY INDIRECT, SPECIAL, CONSEQUENTIAL OR INCIDENTAL
     DAMAGES OF ANY NATURE WHATSOEVER, HOWEVER CAUSED AND UNDER ANY THEORY OF
     LIABILITY WHETHER BASED IN CONTRACT, WARRANTY, TORT (INCLUDING WITHOUT
     LIMITATION, NEGLIGENCE), STRICT LIABILITY, STATUTORY OR OTHERWISE, ARISING
     OUT OF OR IN CONNECTION WITH THIS AGREEMENT EVEN IF SUCH PARTY HAS BEEN
     ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
----------------
* Confidential Treatment Requested

                                       16
<PAGE>

9.3  THE LIABILITY OF EITHER PARTY, ITS AGENTS, EMPLOYEES, SUBCONTRACTORS AND
     SUPPLIERS WITH RESPECT TO ANY AND ALL SUITS, ACTIONS, LEGAL PROCEEDINGS,
     CLAIMS, DEMANDS, DAMAGES, COSTS AND EXPENSES ARISING OUT OF THE PERFORMANCE
     OR NONPERFORMANCE OF ANY OBLIGATIONS UNDER THIS AGREEMENT, WHETHER BASED ON
     CONTRACT, WARRANTY, TORT (INCLUDING, WITHOUT LIMITATION, NEGLIGENCE),
     STRICT LIABILITY, STATUTORY OR OTHERWISE, SHALL BE LIMITED TO DIRECT,
     ACTUAL DAMAGES INCURRED AS A RESULT OF SUCH PARTY'S FAILURE TO PERFORM ITS
     OBLIGATIONS AS REQUIRED BY THIS AGREEMENT. NEITHER PARTY'S LIABILITY,
     FURTHER, SHALL EXCEED IN THE AGGREGATE, A SUM EQUAL TO [***].

9.4  THE LIMITATION SET FORTH IN SECTION 9.3 ABOVE SHALL NOT APPLY TO DAMAGES
     OCCASIONED BY A BREACH OF THE CONFIDENTIALITY OBLIGATIONS SET FORTH IN THIS
     AGREEMENT OR THE FAILURE OF EITHER PARTY TO COMPLY WITH ITS PAYMENT
     OBLIGATIONS HEREUNDER.

                                 10 INDEMNITY

10.1 Diversa Indemnity.  Diversa shall indemnify, defend and hold Celera
     -----------------
     (including its officers, directors, employees and agents) harmless from and
     against all personal or property losses, liabilities, damages and expenses
     (including attorney's fees and costs) arising (a) out of any false
     representation or warranty or out of the breach or non-fulfillment of any
     material covenant or agreement of Diversa contained herein or contemplated
     hereby; (b) out of the gross negligence or intentional misconduct of
     Diversa in connection with the performance of Diversa of its obligations
     under this Agreement; (c) out of Diversa's use of the Sequence Information,
     Annotation Information or other technology developed or discovered pursuant
     to this Agreement; and/or (d) from products developed by Diversa under this
     Agreement, except in any case described above to the extent any such loss,
     liability, damage or expense arises from the action or inaction of Celera.

10.2 Celera Indemnity: Celera shall indemnify, defend and hold Diversa
     ----------------
     (including its officers, directors, employees and agents) harmless from and
     against all personal or property losses, liabilities, damages and expenses
     (including attorneys' fees and costs) arising (a) out of any false
     representation or warranty or out of the breach or non-fulfillment of any
     material covenant or agreement of Celera contained herein or contemplated
     hereby; (b) out of the gross negligence or intentional misconduct of Celera
     in connection with the performance of its obligations under this Agreement;
     and/or (c) out of Celera's use of Environmental Libraries, Sequencing
     Information, and Annotation Information relating to Celera's sequencing,
     annotation, and database activities related to this Agreement, except in
     any case described above to the extent any such loss, liability, damage or
     expense arises from the action or inaction of Diversa.

10.3 Procedure: A party (the "Indemnitee") that intends to claim indemnification
     ---------
     under this Section 10 shall promptly notify the other party (the
     "Indemnitor") of any loss, liability, damage, expense, claim, demand,
     action or other proceeding in respect of which the Indemnitee intends to
     claim such indemnification, and the Indemnitor shall have the right to
     participate in, and, to the extent the Indemnitor so desires, jointly with
     any other Indemnitor similarly noticed, to assume the defense thereof with
     counsel selected by the Indemnitor and reasonably satisfactory to the
     Indemnitee; provided, however, that an Indemnitee shall have the right to
     retain its own counsel, with the fees and expenses to be paid by the
     Indemnitee, if representation of such Indemnitee by the counsel retained by
     the Indemnitor would be inappropriate due to actual or potential differing
     interests between such Indemnitee and any other party represented by such
     counsel in such proceedings. The indemnity agreement in this Section 10
     shall not apply to amounts paid in settlement of any loss, liability,
     damage, expense, claim, demand, action or other proceeding if such
     settlement shall be effected without the consent of the Indemnitor, which
     consent shall not be withheld unreasonably. The failure to deliver notice
     to the Indemnitor within a reasonable time after the commencement of any
     such action, if prejudicial to its ability to defend such action, shall
     relieve such Indemnitor of any liability to the Indemnitee under this
     Section 10 to the extent Indemnitor is prejudiced by Indemnitee's delay,
     but the omission so to deliver notice to the Indemnitor will not relieve it
     of any liability
---------------------
* Confidential Treatment Requested
                                       17
<PAGE>

     that it may have to the Indemnitee otherwise than under this Section 10.
     The Indemnitor may not settle the action or otherwise consent to an adverse
     judgment in such action or other proceeding that affects the rights or
     interests of the Indemnitee without the express written consent of the
     Indemnitee. The Indemnitee under this Section 10, and its employees and
     agents, shall cooperate fully with the Indemnitor and its legal
     representatives in the investigation of any action, claim or liability
     covered by this indemnification.

10.4 Insurance: Each Party shall maintain, through self-insurance or
     ---------
     commercially placed insurance, adequate coverage for the indemnification
     obligations set forth herein and shall provide competent proof of such
     insurance within forty-eight (48) hours after receipt of a written request
     from the other Party.

                            11.  DISPUTE RESOLUTION

11.1 Informal Dispute Resolution.  In the event that a dispute arises under this
     ----------------------------
     Agreement between the Parties , either Party may, by written notice to the
     other Party, have such dispute referred to the Chief Executive Officer of
     Diversa and the Senior Vice President and General Manager, Discovery
     Services of Celera, or their successors or counterparts, for resolution by
     good faith negotiations at a mutually convenient location and time within
     sixty (60) days after such notice is received. If the Parties are unable to
     reach agreement with respect to a dispute between the Parties pursuant to
     this Section 11.1, then such dispute shall be resolved as described in
     Section 11.2.

11.2 Mediation.  If the dispute is not resolved within thirty (30) days after
     ----------
     referral under Section 11.1, or such other time as mutually agreed upon in
     writing by the Parties, the Parties shall submit the matter to non-binding
     mediation to be administered by the American Arbitration Association (the
     "AAA") under its Commercial Mediation Rules in effect at such time (the
     "Mediation Rules"). The Party desiring such mediation shall initiate it in
     accordance with the Mediation Rules of the AAA. Upon delivery of the
     mediation request, the Parties shall endeavor in good faith to select a
     neutral mediator who is acceptable to each Party. If the Parties have not
     selected a mutually acceptable neutral mediator within five (5) business
     days after delivery of the mediation request, they shall notify the AAA and
     request the AAA to appoint a mediator in accordance with the Mediation
     Rules. Unless otherwise agreed upon by the Parties, all mediation sessions
     shall be held at the AAA regional office closest to Celera's primary place
     of business. The Parties shall endeavor in good faith to resolve the
     dispute through the mediation process contemplated by this Section and
     neither Party shall be entitled unilaterally to terminate the mediation
     prior to thirty (30) days after the appointment of a mediator. Upon any
     termination or appeal of mediation proceeding, the Parties shall submit the
     dispute to binding arbitration pursuant to Section 11.3.

11.3 Binding Arbitration.
     --------------------

     11.3.1  Any dispute under this Agreement that is not settled pursuant to
             Sections 11.1 or 11.2 shall be finally settled by binding
             arbitration, conducted in accordance with the Commercial
             Arbitration Rules of the AAA by one mutually agreed upon
             independent, neutral arbitrator having at least five (5) years of
             experience directly or indirectly related to the disputed issue(s).
             If the Parties do not mutually agree on an arbitrator within forty-
             five (45) days after initiating arbitration, the Parties shall
             request the AAA to appoint an arbitrator. The procedures or rules
             for the arbitration may be modified by mutual written consent of
             the Parties, including having mediation rather than an arbitration
             conducted. Any arbitration shall be in English held in San Diego,
             California if the dispute resolution is initiated by Celera and in
             Rockville, Maryland if the dispute resolution is initiated by
             Diversa. The arbitrator shall determine what discovery shall be
             permitted, consistent with the goal of limiting the cost and time
             that the Parties must expend for discovery; provided, however, that
             the arbitrators shall permit such discovery, as they deem necessary
             to permit an equitable resolution of the dispute. Any written
             evidence originally in a language other than English shall be
             submitted in English translation accompanied by the original or a
             true copy thereof. Except as otherwise expressly provided in this
             Agreement, the costs of the arbitration, including administrative
             and arbitrator fees, shall be shared equally by the Parties and
             each Party shall bear its own costs and attorneys' and witness'
             fees incurred in connection with the arbitration.

                                       18
<PAGE>

     11.3.2  A disputed performance or suspended performance(s) pending the
             resolution of the arbitration must be completed within a reasonable
             time period following the final decision of the arbitrators.

     11.3.3  Any arbitration subject to this Section 11.2 shall be completed
             within one (1) year from the filing of the notice of a request for
             such arbitration and a written decision with reasons therefore
             provided to the Parties.

     11.3.4  Any decision which requires a monetary payment shall require such
             payment to be payable in United States dollars, free of any tax or
             other deduction.

     11.3.5  The Parties agree that the decision shall be the sole, exclusive
             and binding remedy between them regarding any and all disputes,
             controversies, claims and counterclaims presented to the
             arbitrators. If a Party fails to comply with a decision, then the
             other Party may seek judicial recognition and enforcement of the
             award or decision in a court of competent jurisdiction.

     11.3.6  Nothing herein shall be construed as depriving either Party, at any
             time prior to the empanelment of the arbitral tribunal, of the
             right to obtain provisional measures, including, injunctions,
             orders for posting security, attachment of funds or property, or
             any other preliminary relief, in any court of competent
             jurisdiction within the United States. The arbitral tribunal, by
             its own motion or motion of the Parties, is authorized to award any
             form of provisional measures it deems appropriate and the Parties
             may enforce such award in any such court of competent jurisdiction.

11.4 Confidentiality.  The Parties hereby mutually agree that the
     ----------------
     existence, terms, content and decision of any dispute resolution pursuant
     to this Agreement, as well as all information or documents relating
     thereto, shall be maintained in confidence and not be given, shown,
     disclosed to or discussed with any Third Party, except (a) by prior written
     agreement of both Parties; (b) during any legal proceeding to protect or
     secure a Party's rights under such dispute resolution; (c) to counsel and
     accountants who shall agree to maintain its confidentiality; (d) to the
     extent required by applicable reporting requirements; and (e) upon
     compulsory legal process.

                           12. TERM AND TERMINATION

12.1 Term.  This Agreement shall commence on the Effective Date and
     -----
     continue in full force and effect, unless terminated as otherwise provided
     herein, for a period of [***] ("Term").

12.2 Default:
     -------

     12.2.1  Notice of Default: In the event any material representation or
             -----------------
             warranty made hereunder by either Party shall have been untrue
             ("Representation Default") or upon any breach or default of a
             material obligation of this Agreement by a Party ("Performance
             Default"), the Party not in Default ("Non-Defaulting Party") must
             first give the other Party ("Defaulting Party") written notice
             thereof ("Notice of Default"), which notice must state the nature
             of the untruthfulness, breach or default in reasonable detail and
             request the Defaulting Party cure such Default within [***] days.
_______________________
*CONFIDENTIAL TREATMENT REQUESTED

                                       19
<PAGE>

     12.2.2  Termination for Default: The Non-Defaulting Party may, in addition
             -----------------------
             to any other remedies which may be available to such Non-Defaulting
             Party at law or equity, terminate this Agreement in the event of
             (a) a Representation Default by the Defaulting Party or (b) a
             Performance Default by the Defaulting Party; that has not been
             cured within [***] days after receipt of a Notice of Default; or,
             if such Performance Default cannot be cured within such [***] day
             period, and the Defaulting Party shall have failed to commence
             substantial remedial actions within such [***] day period and to
             diligently pursue the same. Notwithstanding the foregoing, if a
             Representation or Performance Default is not curable by its nature,
             the Non-Defaulting Party may immediately terminate this Agreement
             with a Notice of Default to the Defaulting Party.

12.3 Bankruptcy:
     ----------

     12.3.1  A Party may terminate this Agreement if, during the Term, the other
             Party shall file in court or agency pursuant to any statute or
             regulation of any state or country, a petition in bankruptcy or
             insolvency or for reorganization or for an arrangement or for the
             appointment of a receiver or trustee of the Party or of its assets,
             or if the other Party proposes a written agreement of composition
             or extension of its debts, or if the other Party shall be served
             with an involuntary petition in bankruptcy or seeking
             reorganization, liquidation, dissolution, winding-up arrangement,
             composition or readjustment of its debts or any other relief under
             any bankruptcy, insolvency, reorganization or other similar act or
             law of any jurisdiction now or hereafter in effect, or there shall
             have been issued a warrant of attachment, execution, distraint or
             similar process against it, filed in any insolvency proceeding, and
             such petition shall not be dismissed within ninety (90) days after
             the filing thereof, or if the other Party shall propose or be a
             Party to any dissolution or liquidation, or if the other Party
             shall make an assignment for the benefit of creditors.

     12.3.2  All rights and licenses granted under or pursuant to this Agreement
             are, and shall otherwise be deemed to be, for purposes of Section
             365(n) of the U.S. Bankruptcy Code, licenses of rights to
             "intellectual property" as defined under Section 101 of the U.S.
             Bankruptcy Code. The Parties agree that each Party that is a
             licensee of such rights under this Agreement shall retain and may
             fully exercise all of its rights and elections under the U.S.
             Bankruptcy Code. The Parties further agree that, in the event of
             the commencement of a bankruptcy proceeding by or against either
             Party under the U.S. Bankruptcy Code, the Party hereto which is not
             a Party to such proceeding shall be entitled to a complete
             duplicate of (or complete access to, as appropriate) any such
             intellectual property and all embodiments of such intellectual
             property, and same, if not already in their possession, shall be,
             within ten (10) days of the commencement of such proceeding,
             delivered to them (i) upon any such commencement of a bankruptcy
             proceeding upon their written request therefore, unless the Party
             subject to such proceeding (or a trustee on behalf of the subject
             Party) elects to continue to perform all of their obligations under
             this Agreement or (ii) if not delivered under (i) above, upon the
             rejection of this Agreement by or on behalf of the Party subject to
             such proceeding upon written request therefore by the non-subject
             Party.

12.4 Consequences of Termination: The following provisions, and any rights and
     ---------------------------
     obligations pursuant thereto, shall survive termination or expiration of
     this Agreement: Sections 5 (other than 5.3), 6.3, 6.4, 6.6, 6.7, 6.8, 6.9
     and 7 through 13.  In addition, expiration or termination of this Agreement
     will not relieve the Parties of any obligation accruing prior to such
     expiration or termination.

                               13.  MISCELLANEOUS

13.1 Force Majeure.  Neither Party shall be held liable or responsible to the
     --------------
     other Party nor be deemed to have defaulted under or breached this
     Agreement for failure or delay in fulfilling or performing any term of this
     Agreement when such failure or delay is caused by or results from causes
     beyond the reasonable control of the affected Party, including but not
     limited to fire, floods, embargoes, war, acts of war (whether war is
     declared or not), insurrections, riots, civil commotions, strikes, lockouts
     or other labor disturbances, acts of God or acts, omissions or delays in
     acting by any governmental authority or the other Party; provided,

                                       20
---------------
* Confidential Treatment Requested
<PAGE>

     however, that the Party so affected shall use reasonable commercial efforts
     to avoid or remove such causes of nonperformance, and shall continue
     performance hereunder with reasonable dispatch whenever such causes are
     removed. Either Party shall provide the other Party with prompt written
     notice of any delay or failure to perform that occurs by reason of force
     majeure. When such circumstances arise, the Parties shall mutually seek a
     resolution of the delay or the failure to perform and discuss what, if any,
     modification of the terms of this Agreement may be required in order to
     arrive at an equitable solution.

13.2 Assignment. Neither Party shall assign any of its rights or obligations
     -----------
     hereunder in whole or in part without the written consent of the other
     Party, except: (a) as incident to the merger, consolidation, reorganization
     or acquisition of stock or assets or a similar transaction affecting all or
     substantially all of the assets or voting control of the assigning Party;
     (b) to any directly or indirectly wholly-owned subsidiary if the assigning
     Party remains liable and responsible for the performance and observance of
     all of the subsidiary's duties and obligations hereunder; or (c) with the
     consent of the other Party, such consent not to be unreasonably withheld.
     This Agreement shall be binding upon the successors and permitted assigns
     of the Parties, and the name of a Party appearing herein shall be deemed to
     include the names of such Party's successors and permitted assigns to the
     extent necessary to carry out the intent of this Agreement.  Any purported
     assignment in violation of the preceding sentence shall be void.

13.3 Entire Agreement.  This Agreement and the exhibits hereto constitute the
     -----------------
     entire agreement between the Parties with respect to the subject matter
     hereof and supersede all prior and contemporaneous agreements,
     representations, and understandings of the Parties. No Party hereto shall
     be liable or bound to the other in any manner by any warranties,
     representations or covenants with respect to the subject matter hereof
     except as specifically set forth herein.

13.4 Exhibits.  All Exhibits referenced in and attached hereto are incorporated
     ---------
     herein by reference. In case of any discrepancies between terms
     incorporated from the Exhibits and the terms of the Sections herein, the
     terms of the Sections shall prevail. Any amendment to an Exhibit shall be
     approved in writing by a duly authorized representative of each Party.

13.5 Amendment and Waiver.  This Agreement may be amended, supplemented, or
     ---------------------
     otherwise modified only by means of a written instrument signed by both
     Parties.  Any waiver of any rights or failure to act in a specific instance
     shall relate only to such instance and shall not be construed as an
     agreement to waive any rights or fail to act in any other instance, whether
     or not similar.

13.6 Severability.  In the event that any provision of this Agreement shall, for
     -------------
     any reason, be held to be invalid or unenforceable in any respect, such
     invalidity or unenforceability shall not affect any other provision hereof,
     and the Parties shall negotiate in good faith to modify the Agreement to
     preserve (to the extent possible) their original intent; elsewhere, this
     Agreement shall not be affected so long as the Parties are still able to
     realize the principal benefits bargained for in this Agreement.

13.7 Third Parties.  Nothing in this Agreement, express or implied, is intended
     --------------
     to confer upon any party, other than the Parties hereto, except as
     expressly provided in Section 3.5.2(b), and their respective successors and
     permitted assigns, any rights, remedies, obligations or liabilities under
     or by reason of this Agreement.

13.8 Withholding.  To the extent any Party is required by law to withhold or to
     ------------
     make tax payments on behalf of or with respect to the other Party, the
     first Party may withhold such amounts and make such tax payments as so
     required.  For purposes of this Agreement, any such payments or
     withholdings shall be treated as a payment to Party on behalf of whom the
     withholding or payment was made.

13.9 Relationship of Parties.  It is expressly agreed that Diversa and Celera
     ------------------------
     shall be independent contractors and that nothing in this Agreement is
     intended or shall be deemed to constitute a partnership, agency,
     distributorship, employer-employee or joint venture relationship between
     the Parties. No Party shall incur any debts or make any commitments for the
     other, except to the extent, if at all, specifically provided herein.

                                       21
<PAGE>

13.10  No Trademark Rights.  Except as otherwise provided herein or agreed to in
       --------------------
       advance in writing, no right, express or implied, is granted by this
       Agreement to use in any manner the names "Celera," "Celera Genomics," "PE
       Corporation," or "Diversa Corporation," or any other trade name or
       trademark of a Party or the names of any employees thereof, for any
       purpose other than for the Parties' own internal purposes.

13.11  Exports.  The Parties acknowledge that the export of technical data,
       --------
       materials or products is subject to the exporting party receiving any
       necessary export licenses and that the Parties cannot be responsible for
       any delays attributable to export controls which are beyond the
       reasonable control of either Party. Diversa and Celera agree not to
       export or re-export, directly or indirectly, any information, technical
       data, the direct product of such data, samples or equipment received or
       generated under this Agreement in violation of any applicable export
       control laws or governmental regulations. Diversa and Celera agree to
       obtain similar covenants from their licensees, sublicensees and
       contractors with respect to the subject matter of this paragraph.

13.12  Notices.  Any consent, notice or report required or permitted to be given
       --------
       or made under this Agreement by one of the Parties hereto to the other
       shall be in writing, delivered personally or by facsimile (and promptly
       confirmed by telephone, personal delivery or courier) or courier, postage
       prepaid (where applicable), addressed to such other Party at its address
       indicated below, or to such other address as the addressee shall have
       last furnished in writing to the addressor and shall be effective upon
       receipt by the addressee.

          If to Diversa:  Diversa Corporation
                          10665 Sorrento Valley Road
                          San Diego, CA 92121
                          Attention:  Dr. Jay Short, Ph.D.
                          Telephone:  (858) 623-5135
                          Facsimile:  (858) 626-3735

          If to Celera:   Celera Genomics
                          45 West Gude Drive
                          Rockville, MD 20850
                          Attention:  Jerry Steiner
                          Telephone:  (240) 453-4800
                          Facsimile:  (240) 453-3650
                          cc: Legal Department

13.13  Governing Law.  This Agreement shall be governed by and construed under
       --------------
       the substantive laws of the State of Delaware.

13.14  Counterparts.  This Agreement may be executed via facsimile and in two or
       -------------
       more counterparts, each of which shall be deemed an original, but all of
       which together shall constitute one and the same instrument, and shall
       become effective when there exist copies hereof which, when taken
       together, bear the authorized signatures of each of the Parties hereto.
       Only one such counterpart signed by the Party against whom enforceability
       is sought needs to be produced to evidence the existence of this
       Agreement.

13.15  Titles and Subtitles; Form of Pronouns; Construction and Definitions.
       ---------------------------------------------------------------------
       The titles of the sections and paragraphs of this Agreement are for
       convenience only and are not to be considered in construing this
       Agreement. All pronouns used in this Agreement shall be deemed to include
       masculine, feminine and neuter forms, the singular number includes the
       plural and the plural number includes the singular. Unless the context
       otherwise requires, the term "including" shall mean "including, without
       limitation."

                                       22
<PAGE>

     IN WITNESS WHEREOF, the undersigned have duly executed and delivered this
Agreement effective as of the date first above written.

                                   Diversa Corporation

                                   By /s/ Jay M. Short
                                      __________________________________

                                   Name: Jay M. Short, Ph.D.

                                   Title: President and Chief Executive Officer

                                   PE Corporation (NY)

                                   By  /s/ Jerry Steiner
                                      __________________________________

                                   Name: Jerry A. Steiner

                                   Title: Senior Vice President and General
                                   Manager, Discovery Services

                                       23
<PAGE>

                                   EXHIBIT A
                                  ----------

                            TRANSFERS OF MATERIALS
                            ----------------------

                                     [***]

_______________________
*CONFIDENTIAL TREATMENT REQUESTED

                                       24
<PAGE>

                                   EXHIBIT B
                                   ---------

                                   WORK PLAN
                                   ---------

[***]

_______________________
*CONFIDENTIAL TREATMENT REQUESTED

                                       25
<PAGE>

                                   EXHIBIT C
                                   ----------

                          Materials Transfer Agreement

[***]

_______________________
*CONFIDENTIAL TREATMENT REQUESTED

                                       26<PAGE>

                                                                   EXHIBIT 10.43
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R.(s)(s)200.80(b) (4), 200.83 AND 240.24b-2

                    GLAXO RESEARCH AND DEVELOPMENT LIMITED

                                      And

                              GLAXO GROUP LIMITED

                                      And

                              DIVERSA CORPORATION

                          ---------------------------
                            COLLABORATION AGREEMENT
                          ---------------------------

<PAGE>

CONTENTS

1     DEFINITIONS                                                              3

2     RESPONSIBILITIES                                                         6

3     PROJECT MANAGEMENT                                                       9

4     IP OWNERSHIP                                                            10

5     DESIGNATION OF BIOMOLECULES                                             11

6     BIOMOLECULE LICENSING TERMS                                             11

7     EXCLUSIVITY                                                             15

8     DURATION AND TERMINATION                                                16

9     DISCLOSURE OF CONFIDENTIAL INFORMATION                                  17

10    ANNOUNCEMENTS AND PUBLICATIONS                                          18

11    REPRESENTATIONS AND WARRANTIES                                          19

12    ASSIGNMENT; AMENDMENT                                                   20

13    ENTIRE AGREEMENT; SEVERABILITY                                          21

14    RELATIONSHIP OF PARTIES                                                 21

15    FORCE MAJEURE                                                           21

16    GOVERNING LAW AND DISPUTE SETTLEMENT                                    21

17    NOTICES; MISCELLANEOUS                                                  22

18    MANUFACTURING RIGHTS                                                    23

19    COLLABORATION AND LICENCE AGREEMENT RIGHTS AND
      OBLIGATIONS                                                             23
<PAGE>

This Collaboration Agreement (the "Agreement") is made as of 8/th/ December,
---------------------------------------------
2000 by and between Diversa Corporation of 4955 Directors Place, San Diego,
California 92121 (which together with its Affiliates shall be known as
"Diversa") and Glaxo Research and Development Limited of Glaxo Wellcome House,
Berkeley Avenue, Greenford, Middlesex UB6 ONN ("GRD") and Glaxo Group Limited of
Glaxo Wellcome House, Berkeley Avenue, Greenford, Middlesex UB6 ONN ("GGL," and,
together with Diversa and GRD, the "Parties").

WHEREAS:

A.   Diversa and GGL have entered into a Heads of Agreement dated 19th September
     2000 setting out the broad principles governing their relationship.

B.   Diversa has certain IP (as defined below) which it is prepared to share
     with GW and GW has certain screening expertise which it wishes to use with
     such IP to identify Biomolecules.

C.   For the duration of this Agreement the Parties will share certain
     confidential and proprietary information to investigate whether the
     Biomolecules are suitable for use in large scale screening programmes and
     for further development and potential commercialisation in accordance with
     the Project Plan (as defined below).

NOW, therefore, in consideration of the mutual covenants contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which
the Parties hereby acknowledge, the Parties, intending to be legally bound
hereby, agree as follows:

1   DEFINITIONS

1.1  "Affiliate" shall mean any person, company or legal entity then directly or
     indirectly controlled by, controlling or under common control with the
     party with respect to which this term is associated. The term "control"
     means ownership either of record or beneficially of more than fifty per
     cent (50%) of the shares of any such person, company or legal entity or in
     the absence of share ownership in the case of a non corporate entity the
     ability to direct or cause the direction of the management and policies of
     such non corporate entity;

1.2  "Annual Net Sales" shall mean the Net Sales achieved in any period
     beginning on 1/st/ January and ending on 31/st/ December;

1.3  "Available Biomolecule" shall mean a Biomolecule covered by Joint IP or
     Diversa IP and the structure of which has been (a) included on a GW Monthly
     Report and (b) that is not the subject of any Third Party contractual
     commitment with Diversa relating to Medical Use (existing at the time of
     Diversa's receipt of the relevant GW Monthly Report) which would prohibit
     it being exclusively made available to GW,
<PAGE>

      pursuant to the terms of this Agreement. It is generally assumed that
      Available Biomolecules will be [***];

1.4   "Background IP" shall mean the IP owned or licensed (with the right to
      grant further rights thereunder) by each Party which exists at the date of
      this Agreement and which is contributed to the Project Plan.

1.5   "Biomolecules" shall mean [***]. Notwithstanding the foregoing or anything
      to the contrary contained herein, no [***], shall be deemed to be
      Biomolecules under this Agreement; provided, however, that this limitation
                                         --------  -------
      shall not apply with respect to [***], if any, [***] delivered by Diversa
      to GW pursuant to [***] shall be deemed to be Biomolecules subject to the
      first sentence of this Clause 1.5 and all other applicable provisions of
      this Agreement).

1.6   "Confidential Information" shall have the meaning given to it in Clause
      9.1;

1.7   "Designated Biomolecule" shall mean an Available Biomolecule designated by
      GW in accordance with Clause 5.1 and [***];

1.8   "Diversa IP" shall mean all IP in-licensed by Diversa (with the right to
      grant further rights thereunder) and all IP invented or discovered solely
      by or on behalf of Diversa or Diversa's employees or agents arising under
      this Agreement and all IP claiming or covering such inventions;

1.9   "Drug Candidate" shall mean a single Licensed Biomolecule that is approved
      by the GW Drug Discovery Group or equivalent future body for preclinical
      evaluation against a particular therapeutic target. Such approval will be
      based on [***];

1.10  "Exclusive Biomolecules" shall mean (a) any Biomolecules identified by GW
      and which are Available Biomolecules and which remain within the periods
      of exclusivity granted pursuant to Clause 7.1 and (b) any Licensed
      Biomolecules;

1.11  "Finished Product" shall mean any product in a form for use without any
      further manipulation or transformation based on or incorporating a
      Licensed Biomolecule or a GW Biomolecule;

1.12  "Force Majeure" shall have the meaning set out in Clause 15;

1.13  "FTE" shall mean the equivalent of one full year of work on a full time
      basis (determined in accordance with Diversa's normal policies and
      procedures relating to, for example, vacation periods) by a scientist or
      other professional possessing the necessary skills and experience;

1.14  "GW" shall mean GRD and/or GGL together with all of their Affiliate
      companies;

______________________
 *CONFIDENTIAL TREATMENT REQUESTED

                                       2
<PAGE>

1.15  "GW Biomolecules" shall mean all Biomolecules which are covered solely by
      GW IP. It is generally assumed that GW Biomolecules will be [***];

1.16  "GW IP" shall mean all IP in-licensed by GW (with the right to grant
      further rights thereunder) and all IP invented or discovered solely by or
      on behalf of GW or GW's employees or agents arising under this Agreement
      and all IP claiming or covering such inventions;

1.17  "GW Monthly Report" shall mean the report provided pursuant to Clause 2.4;

1.18  "IP" shall mean patents, trade marks, service marks, trade and service
      names, copyrights, topography rights, tooling, database rights and design
      rights (whether or not any of them are registered and including
      applications for registration of any of them), know how, trade secrets,
      confidential information (including the provision of materials hereunder)
      and rights of confidence and all rights or forms of protection of a
      similar nature or having equivalent or similar effect to them subsisting
      anywhere in the world, excluding any information or materials that are in
      the public domain and not subject to any form of intellectual property
      protection;

1.19  "Joint IP" shall mean all IP invented or discovered jointly by GW and
      Diversa arising under this Agreement and all IP claiming or covering such
      inventions;

1.20  "Lead Series" shall mean [***] which is approved [***]. Such approval will
      be based on [***];

1.21  "Licensed Biomolecules" shall mean Available Biomolecules (a) licensed by
      GW under a formal Collaboration and Licence Agreement or (b) for which a
      payment is due from GW under Clauses 6.3 and 6.4 (as may be varied by
      Exhibit A) but for which no formal Licence Agreement has been entered
      into;

1.22  "Major Markets" shall mean the five markets with the greatest number of
      Net Sales in any relevant royalty reporting period;

1.23  "Medical Use" shall mean any use as a pharmaceutical, vaccine, or any
      other drug for human administration;

1.24  "Net Sales" shall mean the gross amount invoiced by GW or any of its
      licensees relating to the sale of Finished Product to external customers,
      less goods returned, price discounts, volume discounts, commissions,
      freight shown on customer invoices, early settlement discounts (where such
      discounts are effectively non discretionary and are given as a matter of
      normal commercial practice), rebates and other allowances off the invoiced
      price, import, value added and any other sales taxes or withholding taxes
      or any other governmental charges imposed and payable by GW to non-
      Affiliates, other than income or franchise taxes or other charges based on
      the income or franchise of GW. If a Licensed Biomolecule or GW Biomolecule
      is sold in physical combination with another active product or products
      where one or more of

______________________
 *CONFIDENTIAL TREATMENT REQUESTED

                                       3
<PAGE>

      such components are not Licensed Biomolecules or GW Biomolecules, Net
      Sales under such circumstances shall be calculated by multiplying Net
      Sales of the combination product in each relevant market either by (i) the
      fraction A/(A+B), in which A is the average selling price of the Licensed
      Biomolecule(s) or GW Biomolecule (s) sold separately in the Major Markets
      and B is the average selling price of the other active ingredients sold
      separately in such markets, where the Licensed Biomolecule(s) or GW
      Biomolecule (s) and other active ingredients are sold separately in such
      markets or (ii) the fraction 1/N , in which N is the number of active
      ingredients in the combination product, where one or more of the Licensed
      Biomolecule(s) or GW Biomolecule (s) and other active ingredients are not
      sold separately in such markets;

1.25  "Non Medical Use" shall mean any use other than Medical Use;

1.26  "Notification Period" shall mean, with respect to a particular Available
      Biomolecule, the period within which GW must identify the Available
      Biomolecule as a Designated Biomolecule and which shall begin on the date
      of Diversa's receipt of the GW Monthly Report which first identifies that
      Biomolecule and which shall end on [***];

1.27  "Project Plan" shall mean the project plan set forth in Exhibit B hereto
      as it may be changed by written agreement of the PMC;

1.28  "PMC" shall mean the Project Management Committee as set out in Clause 3;

1.29  "Redesignated Biomolecules" shall mean a Designated Biomolecule that is
      redesignated by GW in accordance with Clause 5.2 and [***];

1.30  "Redesignation Fee" shall mean the sum of [***] payable by GW to Diversa
      pursuant to Clause 5.2;

1.31  "Third Party" shall mean any party other than GW or Diversa and their
      respective Affiliates; and

1.32  "Valid Claims" shall mean, with respect to any country, a claim of an
      issued and unexpired patent forming part of IP arising under this
      Agreement in such country which has not been held unenforceable,
      unpatentable or invalid by a decision of a court or other governmental
      agency of competent jurisdiction, unappealable or unappealed within the
      time allowed for appeal, and which has not been admitted to be invalid or
      unenforceable through reissue or disclaimer or otherwise.

2     RESPONSIBILITIES

______________________
 *CONFIDENTIAL TREATMENT REQUESTED

                                       4
<PAGE>

2.1  Both Parties shall at all times carry out their obligations under this
     Agreement fully in accordance with the Project Plan, except where such
     obligations have been changed with the consent of the PMC.

2.2  In relation to materials provided under this Agreement the following terms
     shall apply, provided always that the provisions do not conflict with or
     reduce the rights granted in relation to GW's use of Biomolecules or reduce
     either Party's other rights granted under this Agreement:-

     2.2.1     GW will provide to Diversa specified materials as set forth in
               the Project Plan, to be used solely for the research work to be
               performed under the Project Plan. Diversa agrees to return to GW
               all documents, samples and other tangible items containing or
               representing Confidential Information of GW on request.

     2.2.2     Diversa has provided to GW specified materials as set forth in
               the Materials Transfer Agreement dated 3rd November 2000, as
               amended, between Diversa and GRD and will provide to GW certain
               materials as set forth in the Project Plan, in each case, to be
               used solely for the research work to be performed as set forth in
               such Materials Transfer Agreement and under the Project Plan
               respectively. Upon execution of this Agreement, such Materials
               Transfer Agreement shall terminate, and the Parties' respective
               provision and use of all materials shall be governed by the terms
               of this Agreement. Except as specifically set forth in this
               Agreement, GW shall not modify such materials in any way, reverse
               engineer such materials, use such materials for reproduction, or
               offer such materials or any derivative thereof for resale. GW
               agrees to return to Diversa all documents, samples and other
               tangible items containing or representing Confidential
               Information of Diversa on request.

     2.2.3     The materials provided under Clauses 2.2.1 and 2.2.2, including,
               without limitation, the materials provided under the Materials
               Transfer Agreement, are of an experimental nature, are for
               laboratory research use only and have not been approved for
               diagnostic or therapeutic use in humans or animals; are provided
               without any warranties, express or implied, INCLUDING ANY
               WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE,
               neither Party makes any representation that the use of the
               materials will not infringe any patent or proprietary rights of
               Third Parties and neither Party accepts any liability in
               connection with their use, storage and disposal.

     2.2.4     GW shall retain the sole and absolute ownership of all materials
               provided by GW and Diversa shall retain the sole and absolute
               ownership of all materials provided by Diversa. Subject to the
               payment obligations set forth herein, each Party shall
               additionally retain the sole and absolute ownership of all IP
               invented solely by them.

     2.2.5     Each Party agrees that the other Party's materials shall not be
               distributed to

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               any Third Party or entity, except to their respective Affiliates,
               without the prior written consent of the other Party.

     2.2.6     Each Party agrees that it shall not file any patent directed to
               or including any claim covering a particular use of the other
               Party's materials, other than (a) as it is entitled to under the
               terms of this Agreement; or (b) where the disclosing Party gives
               its prior written consent.

     2.2.7     None of the materials provided hereunder shall be used for any
               commercial development directly or indirectly other than as
               permitted under the terms of this Agreement.

2.3  Each Party shall submit a written report to the PMC at the end of each
     phase of the research as set forth in the Project Plan. Such reports shall
     contain the results of the research conducted by such Party.

2.4  It is anticipated that GW's screening and subsequent structure elucidation
     will identify active Biomolecules. On a monthly basis, GW shall prepare and
     deliver to the PMC the GW Monthly Report. The contents of the GW Monthly
     Report shall include:-

     2.4.1     [***];

     2.4.2     [***];

     2.4.3     [***];

     2.4.4     [***];

     2.4.5     [***].

     2.4.6     [***].

2.5  Diversa shall notify the PMC as soon as practicable following Diversa's
     receipt of a GW Monthly Report, but in any event within [***] following
     such time, whether any of the Biomolecules (excluding the GW Biomolecules)
     included in such GW Monthly Report are not Available Biomolecules. Diversa
     shall have no obligations, and GW shall have no rights, under this
     Agreement with respect to any Biomolecules (excluding the GW Biomolecules)
     other than Available Biomolecules. Diversa confirms that it will supply to
     GW, upon request, [***]. For the avoidance of doubt, the GW Biomolecules
     are excluded from this Clause 2.5 since these are not subject to the
     restrictions that apply to Available Biomolecules, and, accordingly, GW
     shall be free to use all GW Biomolecules, subject only to those provisions
     contained herein that expressly relate to GW Biomolecules.

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3   PROJECT MANAGEMENT

3.1  If such a meeting has not yet been held then, within 2 weeks of the date of
     this Agreement, the Parties shall establish and hold the first meeting of
     the PMC. The members of the PMC shall be 4 in number with 2 appointees from
     GW and 2 appointees from Diversa. A quorum will be at least one member
     appointed by GW and at least one member appointed by Diversa.

3.2  At the first meeting of the PMC the members shall appoint one of their
     number to be Chairman and one of their number to be Secretary of the PMC.

3.3  Except as mutually agreed by the Parties, the PMC shall meet on a monthly
     basis at such venue as the members shall agree and each Party shall be
     responsible for all of the costs incurred by their respective appointees in
     attending such meetings. Meetings of the PMC may be held by telephone or
     video conference, provided that all members are able to hear each other.

3.4  Adequate minutes of the PMC meetings shall be kept by the Secretary who
     shall also maintain an official record of the decisions made by the PMC.
     Copies of all minutes and other resolutions of the PMC shall be given to
     the respective PMC members for approval. The review and approval of the
     minutes and other resolutions of the previous meeting and any decisions
     taken by written circular shall be a regular item on the agenda of each
     meeting. Consensus decisions taken by the PMC within the limits of its
     powers may be implemented immediately at the members discretion provided a
     copy of the minutes and resolutions are circulated and signed by all
     members of the PMC.

3.5  The PMC shall endeavour to reach decisions through consensus but shall take
     formal decisions by majority vote. Decisions may be taken at a meeting or
     through a written circular signed by all members of the PMC.

3.6  Upon receiving reasonable advance notice from the Diversa appointees to the
     PMC, one of the GW appointees shall be required to [***].

3.7  The PMC will be responsible for, among other things:-

     3.7.1     strategic guidance of the work under this Agreement,

     3.7.2     monitoring the delivery of the Project Plan,

     3.7.3     research and development decisions and overseeing the day-to-day
               management of the work under this Agreement,

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     3.7.4     reviewing the GW Monthly Reports provided by GW and agreeing any
               changes to the exclusivity status of Available Biomolecules
               contained in the GW Monthly Report. The representatives of either
               Party on the PMC may not unreasonably withhold agreement as to
               the exclusivity status of such Available Biomolecules.

4   IP OWNERSHIP

4.1  Each Party shall continue to own their own Background IP and shall be free
     to exploit it in any way subject to the terms of this Agreement.

4.2  All GW IP whether patentable or not shall be the sole and absolute property
     of GW and GW shall have the sole prerogative to seek or not seek at its own
     expense patent or other IP protection for any such inventions including but
     not limited to Biomolecules, processes, formulations and uses.

4.3  All Diversa IP whether patentable or not shall be the sole and absolute
     property of Diversa and Diversa shall have the sole prerogative to seek or
     not seek at its own expense patent or other IP protection for any such
     inventions including but not limited to Biomolecules, processes,
     formulations and uses.

4.4  Each Party undertakes to sign, execute and do and shall sign, execute and
     do at their own expense all such deeds, documents and things which in the
     other Party's reasonable opinion may be necessary and desirable to vest
     such inventions and any patents or patent applications relating thereto in
     the relevant Party or their Affiliates. For the avoidance of doubt, the
     Party in whom any invention, patent, or patent application is to vest shall
     bear all costs associated with such application and the other Party shall
     only be responsible for its own costs incurred in assisting the Party who
     is applying for such patent or patent application.

4.5  Each Party shall have the right to use the Joint IP for its own use with no
     rights to sub-license without the agreement of suitable terms with the
     other Party. The following shall apply to all Joint IP:-

     4.5.1     The Parties shall be jointly responsible for filing patent
               applications relating to Joint IP.

     4.5.2     The Parties shall mutually agree in writing which Party shall
               file, prosecute and maintain all such patents relating to the
               Joint IP and shall mutually agree on the strategy relating to
               such filing, prosecution and maintenance, the costs of which
               shall be shared equally between the Parties.

     4.5.3     In the event that the Parties cannot agree on which Party shall
               file, prosecute and maintain Joint IP patents, the Parties shall
               select outside Counsel reasonably acceptable to both Parties to
               perform such responsibilities, and the Parties shall have equal
               control and joint responsibility for costs incurred in connection
               with the applicable patents on the Joint IP.

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<PAGE>

4.6  During the term of this Agreement, (a) Diversa shall hold GW harmless from
     and against claims by Diversa of infringement of Diversa IP and Diversa
     Background IP with respect to GW's activities in accordance with this
     Agreement (generally consisting of [***]) and (b) GW shall hold Diversa
     harmless from and against claims by GW of infringement of GW IP and GW
     Background IP with respect to Diversa's activities in accordance with this
     Agreement (generally consisting of [***]), in each case solely for the
     purposes of carrying out the Project Plan. The provisions of this Clause
     4.6 are intended to permit both Parties to carry out their respective
     responsibilities and perform their respective obligations under this
     Agreement and the Project Plan without fear of being made a party to any
     legal action concerning infringing any IP of the other Party that is used
     to carry out such responsibilities or perform such obligations. However,
     neither Party intends to grant to the other Party any licence to use its
     Background IP or, in the case of Diversa, the GW IP and, in the case of GW,
     the Diversa IP, to perform any activities beyond the scope of the roles and
     responsibilities assigned to the Parties under this Agreement and the
     Project Plan.

5   DESIGNATION OF BIOMOLECULES

5.1  Following the first appearance of an Available Biomolecule in any given GW
     Monthly Report, GW will undertake as soon as possible (and in any event
     within the Notification Period) to notify Diversa whether or not GW has any
     interest in such Available Biomolecule. Each Available Biomolecule in which
     GW has notified Diversa that it has interest shall be deemed to be a
     Designated Biomolecule.

5.2  With respect to each Designated Biomolecule, GW will have an additional
     [***] period following the expiry of the Notification Period to decide
     whether to continue to pursue investigation of such Designated Biomolecule.
     Each Designated Biomolecule which GW has notified Diversa that it will
     continue to investigate shall be deemed a Redesignated Biomolecule subject
     to payment of the Redesignation Fee by [***]. Such Redesignation Fee will
     be payable for [***].

6   BIOMOLECULE LICENSING TERMS

6.1  In the event that GW wishes to develop and commercialise any Available
     Biomolecules, GW will have the right to obtain from Diversa an exclusive
     licence to [***], subject to the terms of this Agreement.

6.2  GW's use of any Licensed Biomolecule [***], would be:-

     6.2.1     solely for Medical Use; and

     6.2.2     subject to the milestone and royalty terms specified in Clauses
               6.3, 6.4 and 6.6; and

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     6.2.3     subject to [***]; and

     6.2.4     subject to GW continuing to use all its reasonable efforts to
               continue with its development programme and, if applicable,
               commercialisation efforts, with respect to each Licensed
               Biomolecule.

6.3  The terms of the licence granted to GW would be negotiated in good faith on
     a case by case basis, taking into account the relative contributions of GW
     and Diversa in the light of the overall costs and risks associated with
     bringing a new medicine from discovery to the market. Accordingly, [***].
     These payment terms [***] shall also apply to any GW Biomolecules developed
     and commercialised by GW. For the avoidance of any doubt, [***].

6.4  Payments shall be made by GW to Diversa [***] once in respect of each
     Licensed Biomolecule and/or GW Biomolecule developed by GW upon achievement
     of the specified milestones:-

     6.4.1     GW's first selection of a Licensed Biomolecule and/or GW
               Biomolecule [***];

     6.4.2     GW's first selection of a Licensed Biomolecule and/or GW
               Biomolecule [***];

     6.4.3     GW's first selection of a Licensed Biomolecule and/or GW
               Biomolecule [***];

     6.4.4     First entry of a Licensed Biomolecule and/or GW Biomolecule into
               [***];

     6.4.5     First entry of a Licensed Biomolecule and/or GW Biomolecule into
               [***]

     6.4.6     [***] of a Licensed Biomolecule and/or GW Biomolecule: [***] .

6.5  GW shall notify Diversa as soon as practicable following achievement of any
     of the milestones set forth above with respect to a Licensed Biomolecule
     and/or GW Biomolecule. Following such notice, Diversa shall issue an
     invoice to GW relating to the relevant payment obligation. All payments due
     under Clause 6.4 shall be payable as soon as practicable thereafter, but in
     no event later than thirty (30) days following GW's receipt of the invoice.

6.6  GW will pay royalties to Diversa on Net Sales of any Finished Product on a
     country by country basis for the period in which there is a Valid Claim in
     that country which provides patent protection for the Finished Product,
     [***]:-

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     6.6.1     Annual Net Sales up to [***]: [***]

     6.6.2     Annual Net Sales from [***] to [***]: [***]

     6.6.3     Annual Net Sales over [***]: [***].

     As an example, for the avoidance of doubt (and assuming for this
     purely illustrative purpose that [***]) in the event that GW has
     Annual Net Sales of a Finished Product equal to [***], the royalty
     payment would be [***], calculated as follows: [***].

6.7  All royalties shall be paid quarterly within sixty (60) days of the
     end of the relevant quarter on a country by country basis. GW shall
     submit to Diversa within sixty (60) days of the end of each year of
     this Agreement, a dated statement showing inter alia:-

     6.7.1     Net Sales of the Finished Product in United States Dollars
               in each country where GW has sold any Finished Product
               during that year and the royalties payable thereon in United
               States Dollars to Diversa utilising the rate of exchange
               methodology set out in Clause 6.8; and

     6.7.2     withholding taxes or any cross border transfer funds
               withheld or deducted pursuant to applicable law.

6.8  The rate of exchange to be used in calculating the amount of currency
     equivalent in United States Dollars payable shall be an average for
     the calendar month in which Net Sales of Finished Product are made,
     determined by dividing (i) the sum of the rates applying to each
     Friday of such month, published in the London edition of the Financial
     Times on Mondays by (ii) the number of Fridays in such month for which
     such rate information is available. In the event that any payment due
     hereunder and not disputed in good faith is not made when due, the
     payment shall accrue interest from that date due at the rate of [***]
     Citibank, N.A., New York, New York, applicable to such time, to be
     compounded on an annual basis; provided however, that in no event
     shall such rate exceed the maximum legal annual interest rate. The
     payment of such interest shall not limit either Party from exercising
     any other rights it may have as a consequence of the lateness of any
     payment.

6.9  GW shall keep for rolling three year periods accurate, up to date
     books and records of Net Sales of the Finished Product in sufficient
     detail and in such form so as to enable the royalties payable by GW to
     be properly determined.

6.10 GW shall permit an independent chartered or certified public
     accountant appointed by Diversa, at Diversa's expense, to examine all
     such books and records as are referred to in Clause 6.9 in respect of
     any period pertaining to the Net Sales of the Finished Product for the
     sole purpose of verifying the royalties payable during such period
     provided:-

     6.10.1    reasonable prior written notice is given to GW;

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     6.10.2    access is only required during normal working hours; and

     6.10.3    Diversa and the auditor shall keep and shall use best
               endeavours to procure that any representatives of it shall
               keep confidential any information which it may acquire in
               the exercise of its rights under this Clause (except to the
               extent necessary to enforce Diversa's rights hereunder).

     GW shall promptly pay to Diversa the amount of any underpayment of
     royalties as determined by such examination. In addition,
     notwithstanding the foregoing, in the event that the results of any
     such examination demonstrate a discrepancy of greater than [***] of
     reported royalties payable, GW shall reimburse Diversa for the expense
     of conducting such examination.

6.11 All of the above milestones would be payable [***].

6.12 GW will have no right to develop and commercialise any Available
     Biomolecule(s) and/or GW Biomolecule (s) without making the relevant
     milestone and royalty payments, if any, that are applicable to such
     Available Biomolecule(s) and/or GW Biomolecule (s) as specified in
     Clauses 6.3, 6.4 and 6.6.

6.13 The amounts set out in Clauses 5.2, 6.4 and 6.6 represent the maximum
     extent of GW's financial obligations under this Agreement. Diversa
     agrees that [***].

6.14 Notwithstanding the grant of the exclusive licence to GW pursuant to
     Clause 6.1:-

               6.14.1    Both Parties shall only be entitled to [***];

               6.14.2    Both Parties shall be allowed independently or in
                         collaboration to [***];

               6.14.3    Diversa shall be granted the right to [***].

6.15 In the case of Clause 6.14.1, GW's work shall be solely for the
purpose of [***].

6.16 In the case of Clauses 6.14.1 and 6.14.2:

               6.16.1    Diversa's work is likely to include, but not be limited
                         to, [***], whilst GW's work may include, but not be
                         limited to, [***]. GW's work shall be carried out
                         solely by GW and shall not involve Third Parties;

               6.16.2    GW's freedom to [***] would be subject to [***];

               6.16.3    GW would be free to [***] without [***].

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 *CONFIDENTIAL TREATMENT REQUESTED

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6.17 In the case of Clauses 6.14.1 through 6.14.3, any work on [***] shall
     be restricted to the scope of this Agreement.

7    EXCLUSIVITY

7.1  Diversa shall grant GW the exclusive right to use all Licensed
     Biomolecules [***] in accordance with the terms of this Agreement or
     the different terms of any applicable licence agreement. In addition,
     Diversa shall grant GW the exclusive right to use all Available
     Biomolecules [***] in accordance with this Agreement, until:-

     7.1.1     Expiry of the Notification Period, without GW electing to
               designate such Available Biomolecule as a Designated
               Biomolecule; or

     7.1.2     Expiry of [***] from the end of the Notification Period
               without GW electing to redesignate such Designated
               Biomolecule as a Redesignated Biomolecule, subject to the
               payment of the Redesignation Fee; or

     7.1.3     Expiry [***] from redesignation of any Designated
               Biomolecule as a Redesignated Biomolecule, without the
               Redesignated Biomolecule becoming a Licensed Biomolecule.

     7.1.4     Notification by GW during any of the time periods set out in
               Clauses 7.1.1 through 7.1.3, or, consistent with Clause
               6.2.4 above, that GW does not intend, or no longer intends,
               to pursue investigation of that Available Biomolecule. GW
               shall undertake to ensure such notice is given to Diversa in
               a timely manner following GW's decision not to pursue
               investigation of the Available Biomolecule or following GW
               decision not to continue to use all its reasonable efforts
               to continue with its development programme with respect to
               the Available Biomolecule.

7.2  Where exclusivity lapses, as set forth in Clause 7.1, Diversa shall be
     free to use the relevant Available Biomolecule [***] for any purpose,
     including research and commercialisation purposes, subject to:-

     7.2.1     the Parties agreeing to licensing terms with respect to
               Diversa's use of GW Background IP or Joint IP if any and if
               required, and

     7.2.2     any applicable provisions of a Collaboration and Licence
               Agreement regarding [***] and

     7.2.3     the PMC agreeing the changed exclusivity status of such
               Available Biomolecules.

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     At Diversa's request, with respect to the procedure referred to in
     Clause 7.2.1 above, GW shall, in good faith, engage in licensing
     negotiations with Diversa.

7.3  With respect to GW Biomolecules which have appeared in a GW Monthly
     Report and which GW no longer wishes to develop or commercialise,
     Diversa shall have the right to obtain a [***] to [***], subject to
     [***].

7.4  In the event that Diversa enters into an agreement with a Third Party
     in any therapeutic field, all of GW's rights which are not affected by
     Diversa's Third Party agreement shall be preserved, including, without
     limitation, and if available, the opportunity to obtain access to the
     therapeutic field which is the subject of Diversa's agreement with a
     Third Party on a non-exclusive basis and/or to any other therapeutic
     fields outside the therapeutic field which is the subject of Diversa's
     agreement with a Third Party and/or to obtain exclusivity in respect
     of [***].

8    DURATION AND TERMINATION

8.1  Subject to Clause 8.2, this Agreement will begin on the date hereof
     and will continue unless terminated in accordance with Clause 8.2. For
     the avoidance of any doubt the term of the research work as set forth
     in the Project Plan shall not exceed one year from the date of this
     Agreement, except as mutually agreed to by the Parties.

8.2  This Agreement may be terminated:-

     8.2.1     at any time by mutual written agreement of the Parties, and
               either Party shall have the right to terminate this
               Agreement following [***] from the date hereof upon [***]
               written notice to the other Party; or

     8.2.2     by either Party if the other Party shall become insolvent or
               makes any arrangement or composition with its creditors generally
               or if it has a Receiver or Manager or Administrative Receiver or
               Administrator appointed to the whole or part of its assets or if
               an order shall be made or resolution passed for its winding up
               (other than for the purposes of a bona fide scheme for solvent
               amalgamation or reconstruction); or

     8.2.3     if both Parties agree due to an event of Force Majeure or if
               either Party so elects after an event of Force Majeure has
               continued for a period greater than three months.

8.3  If GW solely terminates this Agreement for any reason other than related to
     Diversa breach or insolvency, then all [***] shall be destroyed or returned
     to Diversa at Diversa's request, except any [***] which GW can continue to
     use and exploit subject to complying with its obligations under this
     Agreement and any formal Licence Agreement under which [***] were licensed
     to GW and except any GW Biomolecules which GW can continue to use and
     exploit subject to complying with its obligations under this Agreement.

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8.4  Except as set forth in Clause 8.3 above, termination of this Agreement
     shall not affect Diversa's and GW's rights and obligations hereunder with
     respect to Exclusive Biomolecules and/or GW Biomolecules at the time of
     such termination, including, without limitation, GW's rights to [***], and
     GW's obligations to make [***] payments under the terms of this Agreement.

9    DISCLOSURE OF CONFIDENTIAL INFORMATION

9.1  For the purpose of this Agreement "Confidential Information" shall mean any
     and all information, including but not limited to, the existence of and
     terms of this Agreement, data, know-how, and any and all subject matter
     (whether patentable or not) pertaining to the Parties' research,
     inventions, development, materials, technology, business plans, processes,
     protocols, enzymes, the commercial applications of enzymes, accessing
     microbial diversity, manipulating and modifying pathways, identifying
     bioactive compounds through recombinant techniques, Biomolecules, clones,
     and any other elements of the Parties' business, which the Parties consider
     to be of value (including, for the avoidance of any doubt, all financial,
     sales, royalty and milestone information contained within this Agreement or
     to be disclosed pursuant to this Agreement).

9.2  A Party (the "Receiving Party") as recipient of Confidential Information
     from the other Party (the "Disclosing Party") shall only disclose such
     Confidential Information to those of its employees with a special need to
     know such Confidential Information and any of its employees to whom
     Confidential Information is disclosed shall be informed of the proprietary
     nature of the Confidential Information and shall be bound by this agreement
     of confidentiality in the same manner that the Receiving Party is bound. A
     Receiving Party shall not disclose to any Third Parties any Confidential
     Information received from the Disclosing Party hereunder, except as
     required by law or under the provisions of this paragraph of this
     Agreement. Each Party shall immediately notify the other upon discovery of
     any loss or unauthorized disclosure of the Confidential Information of the
     other Party.

9.3  The Receiving Party shall have no obligations to the Disclosing Party with
     respect to the use, or disclosure to others not party to this Agreement, of
     such information which:-

     9.3.1     prior to disclosure was known to or in the possession of the
               Receiving Party as evidenced by such Party's written records; or

     9.3.2     is or becomes publicly known during the term of this Agreement,
               other than through a breach of the Receiving Party's obligations
               hereunder; or

     9.3.3     is received from a Third Party having no obligations of
               confidentiality to the Disclosing Party hereunder; or

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     9.3.4     is developed by the Receiving Party independently of any
               disclosures made under this Agreement, as evidenced by such
               party's written records; or

     9.3.5     is required by law or bona fide legal process to be disclosed,
               provided that the Party required to make the disclosure takes all
               reasonable steps to restrict and maintain the confidentiality of
               such disclosure and provides reasonable notice to the Party
               providing the Confidential Information; or

     9.3.6     is authorized to be released in a written release by the
               Disclosing Party.

9.4  Specific items of Confidential Information shall not fall within any
     exception merely because they are embraced by more general information
     falling within any exceptions and any combinations of specific items of
     Confidential Information are themselves within any exceptions, but only if
     the combination itself, and its principles or operation, fall within one of
     such exceptions.

9.5  The Receiving Party shall not use Confidential Information received from
     the Disclosing Party for any purpose other than for discussion and research
     work with the Disclosing Party under this Agreement.

9.6  Confidential Information shall not be reproduced in any form except as
     required to accomplish the intent of this Agreement. Any reproduction of
     any Confidential Information of the Disclosing Party by either Party shall
     remain the property of the Disclosing Party unless otherwise authorized in
     writing by the Disclosing Party.

9.7  The Receiving Party agrees, upon request, to promptly return all tangible
     items relating to Confidential Information of the Disclosing Party,
     including but not limited to, all materials, written materials, drawings,
     data and records provided or otherwise made available by the Disclosing
     Party, and all copies thereof.

9.8  The rights and obligations set forth in this Clause 9 and in Clause 10.2
     below shall survive the termination or expiration of this Agreement for a
     period of ten (10) years after such termination or expiration.

10   ANNOUNCEMENTS AND PUBLICATIONS

10.1 If Diversa wishes to make any announcement regarding this transaction,
     Diversa shall issue a press release regarding this Agreement which shall be
     mutually agreed to by the Parties in writing.

10.2 Except for the information disclosed in the joint press release, neither
     Party shall use the name of the other Party or reveal the existence of or
     terms of this Agreement in any publication, publicity or advertising
     without the prior written approval of the other party, except that:-

     10.2.1    either Party may use the text of a written statement approved in
               advance by both Parties without further approval, and

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     10.2.2    either Party shall have the right to identify the other Party and
               to disclose the terms of this Agreement as required by applicable
               securities laws or other applicable law or regulation, provided
               that such Party takes reasonable and lawful actions to minimize
               the degree of such disclosure.

11   REPRESENTATIONS AND WARRANTIES

11.1 GW represents and warrants to Diversa that each of GRD and GGL is a
     corporation duly organised and validly existing under the laws of the
     United Kingdom and that entry into and performance of this Agreement by
     each of GRD and GGL has been authorised by all necessary corporate action
     and does not conflict with any law or regulation to which either of them
     may be subject.

11.2 Diversa represents and warrants to GW that it is a corporation duly
     organised and validly existing under the laws of the State of Delaware and
     that its entry into and performance of this Agreement has been authorised
     by all necessary corporate action and does not conflict with any law or
     regulation to which it may be subject.

11.3 Both Parties shall comply at all times with all relevant legislation, laws,
     customs, practice, regulations and clinical guidance and best practice in
     conducting the Project Plan and in developing and selling Finished Product,
     including, but not limited to, complying with export control laws that
     apply to them.

11.4 The failure by a Party to exercise or enforce any right conferred upon it
     under this Agreement shall not be deemed to be a waiver of such right nor
     shall it operate to bar the exercise or enforcement thereof at any time or
     times thereafter.

11.5 GW hereby acknowledges that the data and any materials to be provided by
     Diversa under this Agreement will be of an experimental nature, provided
     without warranties, and Diversa shall accept no liability in connection
     with their use, storage and disposal by GW. EXCEPT AS EXPRESSLY SET FORTH
     IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY TO
     THE OTHER PARTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING, WITHOUT
     LIMITATION, ANY WARRANTY OF NON-INFRINGEMENT, MERCHANTABILITY OR FITNESS
     FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT. WITHOUT LIMITING THE
     GENERALITY OF THE FOREGOING, EACH PARTY ACKNOWLEDGES THAT THIS AGREEMENT
     PROVIDES FOR AN INNOVATIVE PROGRAMME USING NEW TECHNOLOGIES AND THAT NO
     WARRANTY IS MADE REGARDING THE SUCCESS OF ANY RESEARCH DONE PURSUANT TO
     THIS AGREEMENT OR THE UTILITY OF ANY INFORMATION, MATERIALS OR TECHNOLOGY
     PROVIDED HEREUNDER. EACH PARTY EXPRESSLY DISCLAIMS ALL WARRANTIES AS TO THE
     VALIDITY OR SCOPE OF PATENTS AND PATENT CLAIMS, ISSUED AND PENDING,
     PROTECTING ITS TECHNOLOGY OR THAT ANY TECHNOLOGY WILL BE FREE FROM
     INFRINGEMENT OF PATENTS OR PROPRIETARY RIGHTS OF THIRD

                                       17
<PAGE>

     PARTIES, OR THAT NO THIRD PARTIES ARE IN ANY WAY INFRINGING PATENT RIGHTS.

11.6 IN NO EVENT WILL EITHER PARTY, ITS DIRECTORS, OFFICERS, EMPLOYEES OR AGENTS
     BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, EXEMPLARY OR
     CONSEQUENTIAL DAMAGES, WHETHER BASED UPON A CLAIM OR ACTION OF CONTRACT,
     WARRANTY, NEGLIGENCE, STRICT LIABILITY, TORT OR OTHERWISE, ARISING OUT OF
     THIS AGREEMENT.

11.7 GW (the "Indemnitor") shall indemnify, defend, and hold harmless Diversa
     and its directors, officers, employees, and agents and their respective
     successors, heirs and assigns (the "Indemnitees"), against any liability,
     damage, loss, or expense incurred by or imposed upon the Indemnitees or any
     one of them in connection with any claims, settlements, suits, actions,
     demands, or judgments arising out of any theory of product liability
     (including, but not limited to, actions in the form of tort, warranty, or
     strict liability) concerning any product (or any process or service) that
     is made, used, or sold by the Indemnitor or its Affiliates or sublicensees
     pursuant to any right or license granted under this Agreement; provided,
     however, that such indemnification right shall not apply to any liability,
     damage, loss, or expense to the extent directly attributable to the
     negligence, reckless misconduct, or intentional misconduct of the
     Indemnitees. An Indemnitee shall not be entitled to indemnification for the
     settlement of any claim pursuant to this Agreement unless it obtains the
     prior written consent of the Indemnitor to such settlement.

11.8 Any Indemnitee that intends to claim indemnification under Clause 11.7
     shall promptly notify the Indemnitor of any claim in respect of which he
     intends to claim such indemnification, and the Indemnitor shall assume the
     defence thereof with counsel mutually satisfactory to the Parties;
     provided, however, that an Indemnitee shall have the right to retain its
     own counsel, with the fees and expenses of no more than the law firm
     representing all Indemnitees in the proceeding or related proceeding, to be
     paid by the Indemnitor, if representation of such Indemnitee by the counsel
     retained by the Indemnitor would be inappropriate due to actual or
     potential differing interests between such Indemnitee and any other party
     represented by such counsel in such proceedings. The indemnity agreement in
     Clause 11.7 shall not apply to amounts paid in settlement of any loss,
     claim, liability or action if such settlement is effected without the
     consent of the Indemnitor. The failure to deliver notice to the Indemnitor
     within a reasonable time after the commencement of any such action, shall
     not relieve the Indemnitor of any liability to the Indemnitee under Clause
     11.7, except to the extent the Indemnitor has been prejudiced by such
     failure to give notice. Each Party and its Affiliates and their employees
     and agents shall cooperate fully with the other Party and its legal
     representatives in the investigation of any action, claim or liability
     covered by this indemnification.

12   ASSIGNMENT; AMENDMENT

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12.1  Except as may be otherwise provided herein, no Party may assign (other
      than to any Affiliate company) or otherwise delegate any or all of its
      rights or obligations under this Agreement without the prior written
      consent of the other Party, which consent shall not be unreasonably
      withheld. Notwithstanding the foregoing, either Party may, without the
      consent of the other Party, assign any or all of its rights and
      obligations under this Agreement to a successor to all or substantially
      all of the business of such Party to which this Agreement relates, whether
      by merger, sale of stock, sale of assets or otherwise; provided that, in
      the event of any such transaction, no intellectual property rights of any
      Third Party that is an acquiring party in such transaction will be
      included in the technology subject to this Agreement and provided that the
      acquiring party assumes all obligations of its assignor under this
      Agreement. In the event that any assignee of Diversa's is a competitor of
      GW's or is an adverse litigant with GW in any litigation, then GW may
      terminate this Agreement upon completion of such merger or sale subject to
      any licences granted pursuant to this Agreement remaining in full force
      and effect.

12.2  No modification or amendment of this Agreement shall be valid or binding
      upon the Parties unless made in writing and duly executed by an authorised
      representative of each Party.

13  ENTIRE AGREEMENT; SEVERABILITY

13.1  This Agreement and its Schedules constitute the entire agreement between
      the Parties with respect to the subject matter hereof and supersedes
      entirely any other document, agreement or understanding between Diversa
      and GW with respect to the subject matter hereof, including, without
      limitation, the non-binding Heads of Agreement dated 19th September 2000
      between Diversa and GGL and the Materials Transfer Agreement dated 3rd
      November 2000, as amended, between Diversa and GRD.

13.2  If any provision of this Agreement shall be determined to be invalid or
      unenforceable, the validity and enforceability of the other provisions of
      this Agreement shall not be affected thereby.

14  RELATIONSHIP OF PARTIES

14.1  The Parties are independent contracting parties. Nothing in this Agreement
      shall operate to constitute any Party as the agent or partner of any other
      Party.

15  FORCE MAJEURE

15.1  If any Party is unable to perform any of its duties under this Agreement
      (other than the payment of any monies due and owing) due to the occurrence
      of an event of Force Majeure, then performance of such obligation shall be
      excused to the extent and for the period required by such cause. For
      purposes of this Agreement, "an event of force majeure" shall mean an
      event that is unforeseeable and of which the occurrence and consequences
      cannot be prevented or avoided by the Parties.

16    GOVERNING LAW AND DISPUTE SETTLEMENT

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16.1  This Agreement shall be governed by and construed in accordance with the
      laws of England.

16.2  Any dispute, controversy or claim arising out of or relating to this
      Agreement, or the interpretation, breach, termination or validity hereof,
      shall be resolved in the first instance through friendly consultation.
      Such consultation shall begin immediately after one Party has delivered to
      the other Parties a written request for such consultation.

16.3  If within 30 days following the date on which a notice described in Clause
      16.2 is given the dispute cannot be resolved, the dispute may be submitted
      to any form of alternative dispute resolution as the Parties may agree or
      failing such agreement to the non-exclusive jurisdiction of the English
      Courts or any other court of competent jurisdiction.

17   NOTICES; MISCELLANEOUS

17.1  All notices and other communications hereunder shall be in writing and
      shall be sent by registered mail, courier or facsimile to the following
      addresses or to such other addresses as may be designated by a Party
      pursuant to a written notice to the other:

17.2  If to Diversa to the address set out above

                           Fax:  1 858 526 5050

                           Attention: President

      with a copy to:

      Cooley Godward LLP
      4365 Executive Drive, Suite 1100
      San Diego, CA 92121
      Attention: L. Kay Chandler, Esq.
      Telephone: 1 858 550 6014
      Fax: 1 858 453 3555

17.3  If to GW to the address set out above:

                           Fax:  44 (0)208 966 8837

                           Attention: The Company Secretary

17.4  The date on which notice shall be deemed to have been effectively given
      shall be determined as follows:

                                       20
<PAGE>

     17.4.1    Notice given in letter form shall be deemed effectively given on
               the 7th day after the date mailed (as indicated by the postmark)
               by registered mail, airmail postage prepaid or the day of actual
               delivery if delivered by courier; and

     17.4.2    Notice given by fax shall be deemed effectively given on the
               first business day following the date of transmission of a notice
               requesting confirmation of receipt, as indicated on the fax in
               question.

17.5  This Agreement may be executed via facsimile and in one or more
      counterparts, each of which shall be deemed an original, and all of which
      together shall be deemed to be one and the same instrument.

18   MANUFACTURING RIGHTS

18.1  GW shall grant Diversa [***], provided:-

      18.1.1    GW [***];

      18.1.2    the manufacturing route is [***];

      18.1.3    [***].

For the avoidance of any doubt [***].

18.2  If GW wishes to manufacture [***], GW shall have the right to [***].

For the avoidance of any doubt [***].

19   COLLABORATION AND LICENCE AGREEMENT RIGHTS AND OBLIGATIONS

19.1  The Option. Upon expiration or termination or at anytime during the course
      of this Agreement, the Parties will have the option to proceed into a
      Collaboration and Licence Agreement. Should the Parties mutually decide to
      proceed into a Collaboration and Licence Agreement the terms of the
      Collaboration and Licence Agreement would be negotiated in good faith and
      in a timely manner, and would include, but not be limited to, the
      following terms set forth in Clauses 19.2 through 19.9 in addition to any
      applicable terms as contained in this Agreement. For the avoidance of any
      doubt, the Parties agree that [***].

___________________
 *CONFIDENTIAL TREATMENT REQUESTED

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19.2  The PMC. The role of the PMC would be expanded to include, among other
      things, [***]. The representatives of either Party on the PMC may not
      unreasonably withhold agreement as to [***].

19.3  [***]. GW shall pay Diversa [***], to be agreed to by the Parties, ranging
      from [***], depending on the scope and term of the collaboration. The
      payments would be phased over the term of the Collaboration and Licence
      Agreement as agreed by the Parties.

19.4  Change to Non-Exclusive Collaboration. During the period of the
      Collaboration and Licence Agreement, (a) Diversa shall hold GW harmless
      from and against claims by Diversa of infringement of Diversa IP and
      Diversa Background IP with respect to GW's activities in accordance with
      the Collaboration and Licence Agreement and (b) GW shall hold Diversa
      harmless from and against claims by GW of infringement of GW IP and GW
      Background IP with respect to Diversa's activities in accordance with the
      Collaboration and Licence Agreement, in each case solely for the purposes
      of carrying out the Collaboration and Licence Agreement. To the extent
      that Diversa would be contractually permitted at the time of execution of
      the Collaboration and Licence Agreement, the Collaboration and Licence
      Agreement shall provide for Diversa and GW to collaborate on a non-
      exclusive basis, except that Diversa would agree to work exclusively with
      GW on the development of Available Biomolecules for Medical Use in any
      field of use as the Parties may agree, subject to GW's payment to Diversa
      of [***] and other terms to be agreed to by the Parties.

19.5  Milestone and royalty amendment. Clauses 6.3, 6.4 and 6.6 would continue
      to apply in relation to the Collaboration and Licence Agreement for any
      [***], as well as any [***]. Payment terms in respect of any Available
      Biomolecule, [***] would be negotiated in good faith without reference to
      the payment terms specified in this Agreement.

19.6  FTE Contribution. GW will pay FTE costs to Diversa:-

      19.6.1    only to the extent that the costs are [***];

      19.6.2    FTEs will be reimbursed at the rate to be agreed upon by the
                Parties during negotiation of the Collaboration and Licence
                Agreement, but in the order of, and at a minimum of, [***] per
                annum;

      19.6.3    the rate set out in Clause 19.6.2 will be subject to annual
                salary inflation, subject to a maximum of [***] per annum;

      19.6.4    the minimum number of FTEs [***];

      19.6.5    funding by GW of GW funded FTEs for the project will be [***].

___________________
 *CONFIDENTIAL TREATMENT REQUESTED

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19.7  [***]. In addition to the terms governing the Parties' use of Exclusive
      Biomolecules, Diversa [***], Diversa [***].

19.8  Reporting. In addition to the Parties' reporting requirements set out in
      this Agreement, on a monthly basis, Diversa shall prepare and deliver to
      the PMC a cumulative bi-monthly report ("Diversa Bi-Monthly Report")
      setting out [***], as well as a record of [***]. The report will indicate,
      among other things, [***].

19.9  Termination. In addition to the termination provisions set out in this
      Agreement, if Diversa solely terminates the Collaboration and Licence
      Agreement, then subject to any other agreement between GW and Diversa,
      Diversa shall at GW's request either [***] or [***].

                           (signature page follows)

_______________________
 *COFIDENTIAL TREATMENT REQUESTED

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<PAGE>

AS WITNESS the hands of the Parties or their duly authorised representative's
the day and year first above written.

SIGNED by:

/s/ Jay M. Short
___________________________________
Name:  Jay M. Short, Ph.D.
Title: President and Chief Executive Officer

a duly authorised representative
for and on behalf of
Diversa Corporation

SIGNED by:

/s/ Allan Baxter
___________________________________
Name:  Dr. Allan Baxter
Title: Director, Group Discovery

a duly authorised representative
for and on behalf of
Glaxo Research and Development Limited

SIGNED by:

/s/ S.M. Bicknell
___________________________________
Name:  S.M. Bicknell
Title: Assistant Secretary

a duly authorised representative
for and on behalf of
Glaxo Group Limited

                                       24
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                                    EXHIBIT A

[***]

___________________
 *CONFIDENTIAL TREATMENT REQUESTED

                                       25
<PAGE>

                                    EXHIBIT B

               Glaxo Wellcome - Diversa Collaboration Agreement
                     Recombinant Natural Product Screening
                                 Project Plan

[***]

___________________
 *CONFIDENTIAL TREATMENT REQUESTED

                                       26

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