Sample Business Contracts


Collaboration Agreement - Glaxo Research and Development Ltd., Glaxo Group Ltd. and Diversa Corp.

Collaboration Forms


                    GLAXO RESEARCH AND DEVELOPMENT LIMITED



                                      And



                              GLAXO GROUP LIMITED



                                      And



                              DIVERSA CORPORATION



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

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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
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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,
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      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;


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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

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      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

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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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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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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




                                       16
<PAGE>

     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




                                       18
<PAGE>

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



                                       19
<PAGE>

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 [***].


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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 [***].


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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)

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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
<PAGE>

                                    EXHIBIT A

[***]


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                                    EXHIBIT B

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

[***]

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                                       26

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