Sample Business Contracts


Collaborative DNA Sequencing Agreement - Diversa Corp. and PE Corp. (NY)

Collaboration Forms


                     COLLABORATIVE DNA SEQUENCING AGREEMENT


                                 BY AND BETWEEN

                              DIVERSA CORPORATION

                                      AND

         PE CORPORATION (NY), THROUGH ITS BUSINESS UNIT CELERA GENOMICS
<PAGE>

                               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>

                                       2
<PAGE>

                     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.
____________________
*CONFIDENTIAL TREATMENT REQUESTED
                                       3
<PAGE>

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:
_________________________
*CONFIDENTIAL TREATMENT REQUESTED

                                       4
<PAGE>

      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.
_________________________
*CONFIDENTIAL TREATMENT REQUESTED

                                       5
<PAGE>

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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<PAGE>

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.
_________________________
*CONFIDENTIAL TREATMENT REQUESTED

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<PAGE>

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.
          --------------
_________________________
*CONFIDENTIAL TREATMENT REQUESTED

                                       8
<PAGE>

     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.
_________________________
*CONFIDENTIAL TREATMENT REQUESTED

                                       9
<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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<PAGE>

     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

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