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Collaborative Research and Development Agreement - Technological Resources Pty Ltd. and Maxygen Inc.

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THIS COLLABORATIVE RESEARCH AND DEVELOPMENT AGREEMENT (the "Agreement") is made
as of the 19th day of January, 2000 (the "Effective Date")

BETWEEN

TECHNOLOGICAL RESOURCES PTY LIMITED (ACN 002 183 557) through its business unit,
Research and Technology Development, of 55 Collins Street, Melbourne, Victoria
3000, a wholly owned subsidiary of Rio Tinto Limited ("TRPL")

AND

MAXYGEN INC. of 515 Galveston Drive, Redwood City, CA 94063, United States of
America ("MAXYGEN")

PURPOSE OF AGREEMENT

      A.    TRPL wishes to develop Carbon Sequestration technologies for use in
            connection with *******, and for other purposes more generally.

      B.    MAXYGEN has expertise in developing biotechnologies, particularly
            those relating to gene shuffling, across a broad range of
            applications.

      C.    TRPL and MAXYGEN wish to collaborate through the sharing of their
            expertise to develop a particular technology for Carbon
            Sequestration.

      D.    The purpose of this Agreement is to establish the terms and
            conditions upon which the Project will be established, carried out
            and commercialized by TRPL and MAXYGEN.

IT IS AGREED

1.    DEFINITIONS AND INTERPRETATION

      For purposes of this Agreement, the following defined words shall have the
      meanings indicated:

1.1   "Affiliate" means any corporation, firm, limited liability company,
      partnership or other entity that directly or indirectly controls or is
      controlled by or is under common control with MAXYGEN. As used in this
      paragraph, control includes, without limitation, ownership, directly or
      through one or more affiliates, of fifty percent (50%) or more of the
      shares of stock entitled to vote for the election of directors, in the
      case of a corporation, or fifty percent (50%) or more of the equity
      interests in the case of any other type of legal entity, status as a
      general partner in any partnership, or any other arrangement whereby a
      party controls or has the right to control the board of directors or
      equivalent governing body of a corporation or other entity, or if such
      level of ownership or control is prohibited in any country, any entity
      owned or controlled by or owning or

THE SYMBOL "*******" IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
<PAGE>

      controlling at the maximum control or ownership right permitted in the
      country where such entity exists;

1.2   "Agreement" means this agreement, including its Schedules, and any
      amendment to it agreed to in writing by the Parties;

1.3   "Applications" means each of the TRPL Coal Applications, the Non-TRPL Coal
      Applications, the Biomass Applications, the Non-Renewable Energy
      Applications, and the Value Added Products Applications;

1.4   "Background Technology" means the MAXYGEN Background Technology and/or the
      TRPL Background Technology, as appropriate;

1.5   "Biomass" means organisms, living or dead, or the products of living
      organisms;

1.6   "Biomass Applications" means *******;

1.7   "Business Unit" means the TRPL Business unit, Research and Technology
      Development;

1.8   "Carbon Entity" means the joint venture vehicle or any other legal entity
      (if any) established by the Parties or with the authority of the Parties,
      to Exploit the Project Technology for the Applications;

1.9   "Carbon Sequestration" means *******;

1.10  "Confidential Information" means all know-how, financial information and
      other commercially valuable information in whatever form including
      unpatented inventions, trade secrets, formulae, graphs, drawings, designs,
      biological materials, samples, devices, models and other materials of
      whatever description which a Party discloses to the other Party and
      designates as Confidential Information at the time of disclosure. The
      following are exceptions to such information:

      (a)   information which is already in the public domain;

      (b)   information which hereafter becomes part of the public domain
            otherwise than as a result of an unauthorized disclosure by the
            recipient Party or its representatives;

      (c)   information which is or becomes available to the recipient Party,
            other than under an obligation of confidentiality, from a Third
            Party lawfully in possession of such information and who has the
            lawful power to disclose such information to the recipient Party;

      (d)   information which is rightfully known by the recipient Party (as
            shown by its written records) prior to the date of disclosure to it
            hereunder; or

      (e)   information which is independently developed by the recipient Party
            without any use of or reference to any Confidential Information of
            the other Party;

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1.11  "Contributions" means the contributions (including funding, personnel,
      research activities and equipment, etc.) a Party will make to the Project
      as specified in the Project Plan;

1.12  "Control" or "Controlled" means possession of the ability to grant the
      licenses or sublicenses as provided for herein without violating the terms
      of any agreement or other arrangement with any Third Party;

1.13  "Exploit" and/or "Exploitation" means to use, make, have made, import,
      lease, sell, sublicense or otherwise dispose of to a Third Party, or offer
      to use, make, lease, sell, sublicense or otherwise dispose of to a Third
      Party;

1.14  "Feasibility Milestone" means Decision Milestone 2 (as defined in the
      Project Plan) for the Project established in the Project Plan;

1.15  "Gene" means any gene selected for Shuffling in the Project by the
      Management Committee pursuant to clause 3.2;

1.16  "Gene Variant" means any altered form of a Gene which meets the applicable
      criteria agreed by the Management Committee and is made in connection with
      the Project through the use of Shuffling Technology;

1.17  "Improvements" means any enhancement, modification, adaptation or
      extension to the Materials made by MAXYGEN or jointly by TRPL and MAXYGEN,
      and all Intellectual Property Rights subsisting in them;

1.18  "Intellectual Property Rights" means statutory and other proprietary
      rights in respect of trade marks, patents, circuit layouts, copyrights,
      confidential information, know-how and all other rights with respect to
      Intellectual Property as defined in Article 2 of the Convention
      Establishing the World Intellectual Property Organization of July 1967;

1.19  "Management Committee" means the management committee established pursuant
      to clause 3;

1.20  "Manufacturing Costs" means, with respect to Products sold by MAXYGEN
      (and/or its Affiliates) or TRPL (and/or RIO TINTO Group Members), as the
      case may be, (i) ******* costs related to the manufacture of Products, by
      MAXYGEN (and/or its Affiliates) or TRPL (and/or RIO TINTO Group Members),
      as the case may be, including without limitation, costs for personnel,
      materials, quality control, regulatory compliance, administrative
      expenses, subcontractors, fixed and variable manufacturing overhead costs
      and business unit or division *******, and the like, as determined and
      allocated in accordance with generally accepted accounting principles
      (GAAP), consistently applied by the applicable Party, excluding *******,
      or (ii) with respect to Products purchased by MAXYGEN (and/or its
      Affiliates) or TRPL (and/or RIO TINTO Group Members), as the case may be,
      from a Third Party manufacturer, ******* paid to the manufacturer for such
      Products;

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1.21  "Materials" means any chemical or biological substances including, without
      limitation, any: (a) organic or inorganic chemical element or compound;
      (b) gene; (c) vector or construct, plasmid, phage or virus; (d) host
      organism, including bacteria and plant cells; (e) eukaryotic or
      prokaryotic cell line or expression system; (f) protein, including any
      peptide or amino acid sequence, enzyme, antibody or protein conferring
      targeting properties and any fragment of a protein or peptide or enzyme;
      (g) genetic material, including any genetic control element (e.g.,
      promoters), Gene, Gene Variant or Shuffled Gene; or (h) assay or reagent;

1.22  "MAXYGEN Background Technology" means all Materials provided by MAXYGEN
      for use in the Project and Intellectual Property Rights of MAXYGEN which
      are necessary for the conduct of the Project and made available by MAXYGEN
      for the conduct of the Project;

1.23  "MAXYGEN Field" means all uses except *******;

1.24  "Net Revenues" with respect to a particular Product means Net Sales for
      such Product, less:

      (a)   an amount for such manufacturing equal to ******* of the
            Manufacturing Costs related to such Products; and

      (b)   any expenses incurred or accrued in connection with the
            installation, packaging, labeling, marketing, sale or other
            disposition of the Products by MAXYGEN (and/or its Affiliates) or
            TRPL (and/or RIO TINTO Group Members), as the case may be, and
            general and administrative expenses relating to the preceding, as
            determined and allocated in accordance with generally accepted
            accounting principles, consistently applied by the applicable Party.

1.25  "Net Sales" means the amounts (including, without limitation, *******)
      received by MAXYGEN (and/or its Affiliates) or TRPL (and/or RIO TINTO
      Group Members), as the case may be, from Third Parties (including without
      limitation Sublicensees) with respect to the Exploitation of Products,
      less: (i) rebates, credits and cash, trade and quantity discounts,
      actually taken, (ii) excise taxes, sales, use, value added, and other
      consumption taxes and other compulsory payments to governmental
      authorities, actually paid, (iii) the cost of any shipping packages and
      packing, if billed separately, (iv) insurance costs and outbound
      transportation charges prepaid or allowed, (v) import and/or export duties
      and tariffs actually paid, and (vi) amounts allowed or credited due to
      returns or *******. All transfers of Products between MAXYGEN and/or its
      Affiliates or TRPL and/or RIO TINTO Group Members, as the case may be,
      shall be disregarded for purposes of computing Net Sales, unless the
      purchaser is the end-user of such Product;

1.26  "Non-Renewable Energy Applications" means *******;

1.27  "Non-TRPL Coal Applications" means *******;

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<PAGE>

1.28  "Objective" means the development, through the use of Shuffling
      Technology, of Shuffled Genes which have an enhanced capability in Carbon
      Sequestration with a view to Exploitation by the Parties as set forth in
      this Agreement;

1.29  "Parties" means the parties to this Agreement and their successors and
      permitted assigns and "Party" means one of them;

1.30  "Phase I" means the first phase of the Project as described in the Project
      Plan, up to achievement of the Feasibility Milestone;

1.31  "Phase II" means the second phase of the Project involving further
      research for the scale-up the development of a prototype apparatus for the
      Applications utilizing Shuffled Genes or proteins expressed therefrom;

1.32  "Phase II Milestones" means the milestones established by the Parties in
      writing at the commencement of Phase II which milestones are directed at
      achieving the Objective;

1.33  "Product" means any product that is, or incorporates or is made through
      the use of one or more Shuffled Genes or proteins expressed therefrom. Any
      process utilizing one or more Shuffled Genes or proteins expressed
      therefrom shall also be considered a Product;

1.34  "Project" means the research activities comprised in Phase I and Phase II
      which are to be undertaken by the Parties pursuant to this Agreement as
      described more particularly in the Project Plan;

1.35  "Project Commencement Date" means the date thirty (30) days after the
      Effective Date or such earlier date as the Parties may agree in writing to
      commence Phase I of the Project;

1.36  "Project Plan" means the initial plan referred to in clause 2.1 which has
      been agreed by the parties as of the Effective Date for the conduct of the
      Project, which plan may be amended from time to time by the Management
      Committee;

1.37  "Project Technology" means all ideas, inventions, discoveries,
      innovations, data, software, databases, results, information, reports,
      samples, Materials, Improvements, Shuffled Genes, prototypes and
      artifacts, whether or not patentable, instructions, processes and
      formulae, including, without limitation, biological, chemical, physical
      and analytical, safety, manufacturing and quality control data and
      information, in each case, which is/are conceived or reduced to practice
      or otherwise developed or made or the utility of which for the Objective
      is determined or discovered by either Party, or a Third Party on behalf of
      a Party, as part of the conduct of the Project during the Project Term,
      and all Intellectual Property Rights subsisting in the foregoing;

1.38  "Project Term" means the period beginning on the Project Commencement Date
      and ending on the third anniversary of the Project Commencement Date or as
      extended or subject to earlier termination in accordance with clause 2.2;

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<PAGE>

1.39  "Revenues" shall mean:

      (a)   the ******* by MAXYGEN (and/or its Affiliates) or TRPL (and/or RIO
            TINTO Group Members), as the case may be, for:

                  (1)   ******* from Sublicensees with respect to *******;

                  (2)   ******* from Sublicensees with respect to *******;

                  (3)   ******* of Products by Sublicensees;

                  (4)   ******* for Products; and

                  (5)   all other consideration (including, without limitation,
            ******* received by MAXYGEN (and/or its Affiliates) or TRPL (and/or
            RIO TINTO Group Members), as the case may be, attributable to the
            use of one or more Products;

            LESS, in the case of (3), (4) and/or (5) above, on a Product-by-
            Product basis, amounts paid by MAXYGEN (and/or its Affiliates) or
            TRPL (and/or RIO TINTO Group Members), as the case may be, to Third
            Parties for Intellectual Property Rights to manufacture, use, import
            or sell such Product.

      (b)   In the event that a Product is sold in combination with one or more
            other product(s), components, ingredients or active agent(s) which
            are not Products, Revenues from such sales of such Product shall be
            calculated by multiplying the Revenues of that combination by the
            fraction A/(A + B), where A is the gross selling price of the
            Product sold separately and B is the gross selling price of the
            other product, components, ingredient or active agent(s) sold
            separately. In the event that no such separate sales are made by the
            Party, Net Sales for revenue sharing determination shall be as
            reasonably allocated by the Party between such Product and such
            other product, components, ingredient or agent, based upon their
            relative importance and proprietary protection. In the event that
            the other Party believes such allocation is inequitable and the
            Parties are unable to resolve such dispute after bona fide
            negotiations in good faith, the matter may be submitted to
            arbitration pursuant to clause 23 below.

1.40  "RIO TINTO Associate" means a corporation or unincorporated joint venture
      or other business association regulated by contractual arrangement in
      which, as of December 31, 1999, a RIO TINTO Group Member has:

      (a)   not less than a 40% shareholding or participating interest; or

      (b)   if less than a 40% shareholding or participating interest, a
            shareholding or participating interest of at least 25%, provided
            that such shareholding or participating interest is equal to or
            greater than any other shareholding or participating interest;

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<PAGE>

1.41  "RIO TINTO Group Member" means Technological Resources Pty Limited, Rio
      Tinto Corporation plc (of 6 St James's Square, London, England), Rio Tinto
      Limited, and all RIO TINTO Associates having such status as of 31 December
      1999;

1.42  "Schedule" means any schedule to this Agreement;

1.43  "Shuffled Gene" means (i) any Gene Variant that the Management Committee
      designates as meeting applicable criteria established by the Management
      Committee, and (ii) any Shuffled Gene Derivative;

1.44  "Shuffled Gene Derivative" means any modified form of a Shuffled Gene
      designated by the Management Committee, which modification is developed
      from or made to the Shuffled Gene by any means, including without
      limitation, any codon modified variant, splice variant, mutation,
      derivative or variant of a Shuffled Gene, and any fragment(s) of the
      preceding;

1.45  "Shuffle", "Shuffled" and "Shuffling" means the recombination and/or
      rearrangement and/or mutation of genetic material for the creation of
      genetic diversity using intellectual property and/or tangible property
      owned or Controlled by MAXYGEN;

1.46  "Shuffling Technology" means techniques, methodologies, processes,
      materials and/or instrumentation useful for Shuffling, and generally
      applicable screening techniques, methodologies, or processes of using the
      resulting genetic material to identify potential usefulness;

1.47  "Sublicensee" means an entity (other than Affiliates in the case of
      MAXYGEN and RIO TINTO Group Members in the case of TRPL) to whom TRPL or
      MAXYGEN, as the case may be, has granted a license or sublicense to
      Exploit Products;

1.48  "Third Party" means any person other than TRPL, a RIO TINTO Group Member,
      MAXYGEN, or an Affiliate of MAXYGEN;

1.49  TRPL Background Technology" means all Materials provided by TRPL for use
      in the Project and Intellectual Property Rights of TRPL which are
      necessary for the conduct of the Project and made available by TRPL for
      the conduct of the Project;

1.50  "TRPL Coal Applications" means *******;

1.51  "TRPL Field" means *******.

1.52  "Value Added Products Applications" means *******.

1.53  Interpretation.  In this Agreement, except where the context indicates to
      the contrary:

      (a)   the expression "person" includes an individual, a body corporate, a
            joint venture, a trust, an agency or other body;

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<PAGE>

      (b)   words importing the singular will include the plural (and vice
            versa) and words denoting a given gender will include all other
            genders;

      (c)   headings are for convenience only and will not affect interpretation
            of this Agreement;

      (d)   all monetary amounts are expressed in United States currency;

      (e)   the Schedule forms part of this Agreement.

2.    PROJECT AND REPORTING

2.1   Project Plan.  The Parties will conduct the Project with the goal of
      achieving the Objective in accordance with the Project Plan. The Project
      Plan will establish: (i) the scope of the development activities which
      will be performed during each of Phase I and, if applicable, Phase II;
      (ii) objectives, work plan activities and time schedules with respect to
      the Project; and (iii) the Feasibility Milestone for Phase I and, if
      applicable, Phase II Milestone(s). The initial Project Plan has been
      agreed by the Parties in writing as of the Effective Date. The Management
      Committee will review the Project Plan on an ongoing basis and may make
      changes to it.

2.2   Term.  The term of Phase I of the Project will commence on the Project
      Commencement Date and, unless terminated earlier due to the termination of
      the Agreement pursuant to clause 2.11 or clause 14, or extended by mutual
      agreement of the Parties, will terminate upon completion of the Project
      Term. The term of Phase II of the Project, if any, shall be as agreed by
      the Parties.

2.3   Phase I and Phase II.

      (a)   Completion of Phase I.  Phase I will be completed upon achievement
            of the Feasibility Milestone or, if earlier, expiration of the
            Project Term.

      (b)   Negotiation of Phase II.  Upon achievement of the Feasibility
            Milestone, the Parties will promptly negotiate bona fide in good
            faith (i) whether to conduct Phase II, (ii) the duration of Phase
            II, (iii) the research funding to be provided in connection with
            Phase II, and (iv) appropriate modifications to the Project Plan to
            establish the Phase II Milestone(s) and the activities to be
            undertaken by the Parties in Phase II. MAXYGEN agrees for a period
            of six (6) months following the earlier of (a) achievement of
            *******, or (b) the expiration of the Project Term (such six month
            period the "Phase II Negotiation Period"), that TRPL shall be
            MAXYGEN's preferred partner for the conduct of Phase II or, subject
            to clauses 2.12 and 12.4, *******, and that during the Phase II
            Negotiation Period MAXYGEN will not, without TRPL's consent,
            negotiate with any Third Party to enter into a collaboration to
            conduct Phase II research or, subject to clauses 2.12 and 12.4,
            *******. TRPL agrees that if it is not interested in pursuing Phase
            II or other *******, it will promptly notify MAXYGEN in writing. If
            TRPL notifies MAXYGEN that it is not interested in pursuing Phase II
            research prior to expiration of the Phase II Negotiation Period, or
            if the Parties do not agree in

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<PAGE>

            writing upon the items referred to in (i) through (iv) above during
            the Phase II Negotiation Period, then (a) the Project shall
            terminate, (b) neither Party shall have any obligation to conduct
            research in Phase II, (c) TRPL shall have no obligations to provide
            research funding for Phase II, (d) MAXYGEN shall be free to pursue
            such research on its own or with any Third Party, and (e) TRPL shall
            have no rights to use any Project Technology for any purpose.

      (c)   Phase II.  If the Parties agree in writing (i) to conduct Phase II,
            (ii) the duration of Phase II, (iii) the research funding to be
            provided in connection with Phase II, and (iv) appropriate
            modifications to the Project Plan to establish the Phase II
            Milestone(s) and the activities to be undertaken by the Parties in
            Phase II, then the Parties shall devote the agreed-upon resources to
            undertake the Phase II research activities, and TRPL shall provide
            further development funding at the agreed level for the conduct of
            Phase II. Phase II will be completed upon completion of the Phase II
            Milestones or, if earlier, expiration of the time period agreed by
            the Parties for the conduct of Phase II, unless terminated earlier
            in accordance with clause 14.

2.4   Efforts.  Each of MAXYGEN and TRPL will conduct activities in connection
      with the Project as described in the Project Plan. The Parties agree to
      use reasonable efforts to carry out the Project and make their
      Contributions in the manner and at the times specified in the Project
      Plan.

2.5   Project Funding.

      (a)   TRPL Expenses.  TRPL shall be responsible for the expense of its own
            participation in the Project.

      (b)   TRPL Funding.  TRPL shall pay to MAXYGEN funding for Phase I of the
            Project of U.S. ******* each year of Phase I of the Project for
            total amount of U.S. *******. The amount of funding TRPL will pay to
            MAXYGEN for Phase II of the Project, if any, shall be agreed by the
            parties pursuant to clause 2.3(c). MAXYGEN shall have no obligation
            to expend any amount or incur any expense in connection with the
            Project except the amounts paid by TRPL to MAXYGEN pursuant to this
            clause 2.5(b). All payments pursuant to this clause 2.5(b) will be
            made inclusive of any taxes or any other charge payable in respect
            of such payment or the satisfaction by a Party of its obligations
            under this Agreement or any other matter arising out of, connected
            with or related to, this Agreement (including, without limitation,
            any applicable goods and services taxes or value added taxes, sales
            taxes or withholding taxes).

      (c)   Timing of Payments.  The amounts to be paid to MAXYGEN in connection
            with the Project will be paid quarterly, in advance. The initial
            payment for the first quarter of the first year of the Project will
            be made within fourteen (14) days after the Project Commencement
            Date, and subsequent payments will be made on or before the
            applicable quarterly anniversaries of the Project Commencement Date.

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      (d)   Third Party Technology. MAXYGEN will be responsible for all payments
            due to Third Parties for the acquisition of licenses to intellectual
            property necessary for the practice of Shuffling Technology per se
            in the Project, and the costs of negotiating and preparing such
            licenses. If the Management Committee agrees that it is necessary
            for MAXYGEN to acquire any license to any other intellectual
            property or technology (e.g., a gene or Gene) from a Third Party for
            the conduct of MAXYGEN's activities in connection with the Project,
            the Management Committee will determine how such arrangements might
            proceed and what costs TRPL and/or MAXYGEN should contribute (if
            any) to the cost of acquiring the necessary license; provided, if
            the Management Committee does not agree upon allocation of costs
            between the Parties, then MAXYGEN shall have no liability hereunder
            for not acquiring or maintaining such licenses, or for failing to
            undertake or perform any research activities set forth in the
            Project Plan for which such license is necessary.

      (e)   Subcontracts.  With the prior written approval of the Management
            Committee, MAXYGEN may enter into agreements with Third Parties for
            the performance of activities in furtherance of the Project. If any
            such agreement is for the performance of activities in furtherance
            of the Project for which TRPL will be responsible for paying, TRPL
            shall be responsible for directly paying to the third party all
            compensation required to be paid pursuant to such Agreement and/or
            for reimbursing MAXYGEN for all expenses incurred by MAXYGEN in
            connection with such agreements, including, without limitation, the
            out-of-pocket costs of negotiating and preparing such agreements.

      (f)   Capital Expenditures.  If the conduct of the Project necessitates
            the purchase of specialized capital equipment, the Management
            Committee will determine whether such equipment will be purchased;
            provided, it is understood that TRPL shall not be obligated without
            its consent to provide funding in excess of the amounts set forth in
            clause 2.5(b) for Phase I or such funding as the Parties may agree
            for Phase II pursuant to clause 2.3. If the Management Committee
            approves any such purchase, TRPL and MAXYGEN in proportions to be
            agreed by them, will pay the full cost (including costs for taxes,
            shipping, etc.) for such purchases. Neither Party will have any
            obligation to purchase or to contribute to the purchase of any such
            equipment unless both Parties agree pursuant to this clause and
            provide reimbursement as agreed, and neither Party will have any
            liability hereunder for not purchasing or otherwise obtaining access
            to such equipment.

2.6   Technology Advancement Fees.  TRPL will pay to MAXYGEN an annual
      technology advancement fee of ******* each year during Phase I of the
      Project. Such funds shall be used by MAXYGEN for the development of
      Materials or Intellectual Property Rights which may be useful for the
      conduct of the Project. The first such fee will be paid to MAXYGEN on or
      before the Project Commencement Date and each subsequent fee will be paid
      to MAXYGEN on or before each anniversary of the Project Commencement Date.
      Such amounts will not be refundable nor creditable against other amounts
      due to MAXYGEN under this Agreement, and will be paid in addition to any
      amounts due from TRPL pursuant to Section 2.5(b).

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<PAGE>

2.7   Contributions to Project.

      (a)   Phase I.  During Phase I of the Project, (i) TRPL will provide
            funding for the Project as set forth in clause 2.5 and will provide
            representatives on the Management Committee appropriately qualified
            to perform their supervisory and management functions on the
            Management Committee, and (ii) MAXYGEN will:

            (i)   Use reasonable endeavors to ensure the success of the Project,
                  including without limiting the foregoing, (where required by
                  the Project Plan) devoting sufficient research personnel, and
                  laboratory facilities;

            (ii)  Engage personnel appropriately qualified to perform (where
                  required by the Project Plan), supervise, analyze and report
                  on all the results conducted pursuant to the Project; and

            (iii) Deploy such scientific, technical, financial and other
                  resources to accord the Project such priority as is necessary
                  to conduct the Project as specified in the Project Plan.

      (b)   Phase II.  During Phase II of the Project, each Party will:

            (i)   Use reasonable endeavors to ensure the success of the Project,
                  including without limiting the foregoing, (where required by
                  the Project Plan) devoting sufficient research personnel, and
                  laboratory facilities;

            (ii)  Engage personnel appropriately qualified to perform (where
                  required by the Project Plan), supervise, analyze and report
                  on all the results conducted pursuant to the Project; and

            (iii) Deploy such scientific, technical, financial and other
                  resources to accord the Project such priority as is necessary
                  to conduct the Project as specified in the Project Plan.

2.8   Selection of Genes for Shuffling.  With respect to any gene that the
      Management Committee considers for Shuffling in the Project, both Parties
      shall inform the Management Committee of any information of which it is
      aware with respect to Third Party patent applications or patents which may
      relate to the use of the gene in the Project and/or the development or
      commercialization of Products based on Shuffled Genes resulting from the
      Shuffling of such gene in the Project; provided, neither Party shall have
      any obligation to provide the Management Committee with any document which
      would result in (i) a breach of the attorney/client privilege with respect
      thereto or (ii) a breach of an obligation of confidentiality owed to a
      Third Party. It is understood that the Parties anticipate that MAXYGEN
      will propose genes for Shuffling in the Project. The Management Committee
      shall have the sole authority to select the Genes for use in the Project.
      The Management Committee shall consider technical feasibility and freedom
      to operate risks for the commercialization of Products in the selection of
      Genes.

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2.9   Materials; Limited Use.  MAXYGEN shall provide reasonable quantities of
      Materials (which may include, without limitation, Shuffled Genes and/or
      Gene Variants which are potential Shuffled Genes) to TRPL as set forth in
      the Project Plan, which TRPL shall use solely for research activities in
      the conduct of the Project approved in advance by the Management
      Committee. TRPL shall provide a written summary of the results of all such
      research activity to the Management Committee. In the event that TRPL
      obtains rights to Exploit one or more Shuffled Genes as set forth in
      clause 5.2 or 5.3, TRPL shall also have the right to use Shuffled Genes
      provided hereunder for such purpose. Except in connection with the
      practice of the rights granted to TRPL in clause 5.2 and/or 5.3 hereof,
      TRPL shall not without the express prior written consent of MAXYGEN, (i)
      transfer any of the Shuffled Genes, Gene Variants or other Materials
      provided by MAXYGEN to any Third Party, (ii) use the data and information
      obtained from the research activities conducted using such Shuffled Genes,
      Gene Variants or other Materials provided by MAXYGEN (including without
      limitation any sequence information regarding the Shuffled Genes or Gene
      Variants or the proteins expressed therefrom) for any purpose other than
      the purpose of conducting research activities in the Project approved in
      advance by the Management Committee, (iii) authorize any Third Party to
      obtain or use any of the Shuffled Genes, Gene Variants or other Materials
      provided by MAXYGEN for any purpose, or (iv) use any data relating to any
      Shuffled Genes, Gene Variants or other Materials provided by MAXYGEN,
      including without limitation consensus sequences or structural motifs, to
      reverse engineer, reconstruct, synthesize or otherwise modify or copy any
      Shuffled Gene or Gene Variant or any other gene or product with similar
      biological activities, or to attempt the same.

2.10  Reporting. MAXYGEN will provide quarterly written reports (the "Report")
      to the Management Committee no less than fourteen (14) days prior to any
      scheduled meeting. Each Report will document the conduct of the Project,
      the results of the Project, expenditures incurred and milestones achieved
      for the previous quarter.

2.11  Termination.

      (a)   In the event that either Party materially breaches its obligations
            with respect to the conduct of the Project, the other Party shall
            have the right to terminate the Project and this Agreement as set
            forth in clause 14.2 below.

      (b)   In the event that Decision Milestone 1 (as set forth in the Project
            Plan) has not been met on or before the date ******* months
            following the Project Commencement Date, with three (3) months
            written notice, TRPL shall have the right to terminate the Project
            and the Agreement. In the event of such termination, (i) TRPL shall
            have no further obligation to provide Contributions following the
            effective date of such termination, and (ii) MAXYGEN shall retain
            all rights to the Project Technology as set forth in clause 5.1.

      (c)   The Parties may mutually agree to terminate the Project and the
            Agreement as provided in clause 14.3, below.

                                      12
<PAGE>

2.12  Further Agreements Relating to *******.  If Maxygen wishes to enter an
      agreement with a Third Party during the Project with respect to research
      relating to *******, Maxygen shall have the right to do so provided that
      (i) such agreement would not diminish MAXYGEN's obligations to the Project
      nor affect the rights and licenses granted to TRPL in clause 5.2(a) below,
      and (ii) MAXYGEN provides TRPL notice of the agreement prior to its
      execution. MAXYGEN agrees to discuss with TRPL in bona fide good faith the
      impact of any such an agreement on the Project, and subject to its
      confidentiality obligations, to identify to TRPL the other party to such
      agreement, the nature of the arrangement and the activities to be
      performed under such an agreement.

3.    PROJECT MANAGEMENT

3.1   Membership.  The management of the Projects will be carried out by the
      Management Committee consisting of two (2) representatives of each of TRPL
      and MAXYGEN. One representative from each of TRPL and MAXYGEN will have
      technical expertise and one representative from each of TRPL and MAXYGEN
      will have management/commercial expertise. A MAXYGEN representative will
      serve as chairperson of the Management Committee. A Party may change any
      of its appointments to the Management Committee at any time by written
      notice to the other Party. From time to time, the Management Committee may
      establish subcommittees to oversee particular activities.

3.2   Authority.  The Management Committee will be responsible for the
      oversight, direction and management of the Project. The responsibilities
      of the Management Committee will include: (i) selection of the Genes which
      will be Shuffled in the Project as set forth in clause 2.8, (ii)
      establishment of the criteria for identification of Shuffled Genes, (iii)
      designation of Gene Variants as Shuffled Genes (iv) review and
      modification of the Project Plan, (v) ensuring satisfactory flow of
      information by the review of quarterly reports and (vi) approving the
      acquisition of capital equipment and Third Party licenses. Quarterly
      reports will be available to all members of the Management Committee at
      least fourteen (14) days prior to the meeting.

3.3   Decisions.  A quorum for the Management Committee will be the full
      membership of the Management Committee as defined in clause 3.1. All
      decisions of the Management Committee must be unanimous and recorded in
      writing. If the Management Committee is unable to make a unanimous
      decision, the terms of the then-current Project Plan shall remain in
      effect. In the event that a member of the Management Committee believes
      that the then-current Project Plan should be changed and the Management
      Committee cannot agree, then the chairperson of the Management Committee
      will seek to resolve the matter pursuant to clause 23.1, but clauses 23.2,
      23.3 and 23.4 shall not apply to the resolution of such matters.

3.4   Meetings.  The Management Committee will meet on a quarterly basis in
      person or as otherwise agreed and will, additionally, communicate
      regularly by telephone, facsimile and/or video conference. Attendance at
      meetings may be in person, by telephone or by televideo conference, and
      will be at the respective expense of the participating Parties. Each Party
      recognizes the importance of the Management Committee to the success of
      the Project and will use diligent efforts to cause all of its
      representatives to attend all

                                      13
<PAGE>

      meetings of the Management Committee. With the prior approval of the
      Management Committee, other personnel of the Parties may attend Management
      Committee meetings.

3.5   Minutes.  The chairperson of the Management Committee will appoint a
      person to keep accurate minutes of its meetings. Draft minutes will be
      prepared and delivered to each Party within twenty (20) days after each
      meeting. Draft minutes will be edited by each Party's Management Committee
      representatives and will be adopted in final form with their approval and
      agreement and will record the final decisions made by the Management
      Committee. Minutes of the Management Committee meetings will be treated as
      Confidential Information of each Party.

4.    INTELLECTUAL PROPERTY RIGHTS

4.1   Ownership.

      (a)   Background Technology.  All rights to a Party's Background
            Technology remain vested solely in that Party.

      (b)   Project Technology.  MAXYGEN will own all Project Technology
            regardless of which Party conceives, reduces to practice or
            otherwise develops such Project Technology. Subject to clause 4.1(a)
            and the license rights granted pursuant to this Agreement to TRPL,
            TRPL agrees to assign and hereby irrevocably assigns to MAXYGEN its
            entire right, title and interest in the Project Technology and
            Improvements. TRPL agrees to execute in a timely manner such
            documents as MAXYGEN may request to document and perfect MAXYGEN's
            sole ownership of the Project Technology, including all Intellectual
            Property Rights subsisting in it.

      (c)   Governing Law.  It is understood and agreed that inventorship of
            Project Technology (whether or not patentable) will be determined in
            accordance with United States patent laws or the law of California,
            as applicable.

4.2   Research Licenses.  Each Party grants to the other Party a royalty-free,
      non-exclusive, non-transferable right to use its Background Technology to
      the extent necessary for the carrying out of the Project during the
      Project Term, and solely to carry out the Project; provided, (i) nothing
      hereunder grants TRPL any right or license under the MAXYGEN Background
      Technology to practice any Shuffling Technology, and (ii) nothing
      hereunder grants MAXYGEN any right or license under the TRPL Background
      Technology for any use other than performance of the Project.

4.3   Cooperation.  Each Party will do all things reasonably necessary to give
      effect to the ownership and licensing arrangements referred to in this
      clause 4.

4.4   Third Party Rights.  TRPL agrees that MAXYGEN is in the business of
      Shuffling genes on behalf of Third Parties, and that, subject to the
      limitations expressed in clause 12.4 of this Agreement, MAXYGEN has
      granted and will grant to Third Parties rights to acquire licenses for
      genes derived from Shuffling, provided always that MAXYGEN will not,

                                      14
<PAGE>

      during the Project, grant any licenses that are inconsistent with, or
      would prevent the granting of, the licenses to TRPL described in clause
      5.2(a).

      It is understood and agreed by TRPL that, even if MAXYGEN complies with
      its obligations under this Agreement, genes derived through Shuffling
      activities that MAXYGEN conducted with Third Parties in the course of
      MAXYGEN's other business activities may result in Third Party patent
      applications and patents, including patent applications and patents owned
      by such Third Parties, or owned jointly by MAXYGEN and such Third Parties,
      which could conflict with patent applications and patents owned by TRPL.
      MAXYGEN will use its reasonable efforts to avoid such conflict and, unless
      TRPL is damaged as a proximate result of such a material breach by MAXYGEN
      of this clause 4.4, then MAXYGEN will have no liability under this
      Agreement with respect to any such conflict.

4.5   No Implied Licenses.  No rights or licenses with respect to any
      intellectual property owned by MAXYGEN or TRPL are granted or will be
      deemed granted under this Agreement or in connection with it, other than
      those rights expressly granted in this Agreement.

5.    COMMERCIALIZATION OF PROJECT TECHNOLOGY

5.1   Phase I.  Except as provided in clause 5.2 or 12.4 below, or as the
      Parties may agree in writing as set forth in clause 5.3 below, MAXYGEN
      shall have the right to use, sublicense and otherwise Exploit the Project
      Technology without obligation to obtain consent of, pay royalties to, or
      otherwise account to, TRPL, and TRPL will have no rights to use MAXYGEN
      Background Technology or Project Technology for any purpose.

5.2   Phase II.  If the Parties commence the conduct of Phase II as described in
      clause 2.3 above, then each Party will have the right to Exploit the
      Project Technology and the Intellectual Property Rights subsisting in that
      technology for the Applications as set out in this clause 5.2, unless the
      Parties agree otherwise in writing as set forth in clause 5.3, below.

      (a)   To TRPL.

            (i)   Commercial License. Subject to sharing of Revenues as set
                  forth in clause 5.2(c) below, TRPL will be granted an
                  exclusive, irrevocable, worldwide, royalty-bearing license,
                  including the right to sub-license, to Exploit the Project
                  Technology in the TRPL FIELD.

            (ii)  Background Technology.  In furtherance of the license granted
                  in (i), above, and solely to the extent it is necessary to
                  exercise the foregoing license, MAXYGEN will also grant TRPL a
                  non-exclusive, irrevocable, worldwide license under the
                  MAXYGEN Background Technology to Exploit the Project
                  Technology in the TRPL Field in accordance with the foregoing
                  license, provided, in no event shall TRPL have any right or
                  license under the MAXYGEN Background Technology to practice
                  any Shuffling Technology. TRPL will not be obligated, as a
                  result of this

                                      15
<PAGE>

                  license, to pay any additional royalties to MAXYGEN beyond
                  those specified in clause 5.2(c).

      (b)   To MAXYGEN.  Subject to sharing of Revenues as set forth in clause
            5.2(c) below, and solely to the extent it is necessary for MAXYGEN
            to Exploit the Project Technology in the MAXYGEN Field, MAXYGEN will
            be granted a non-exclusive, irrevocable, royalty-bearing license to
            Exploit the TRPL Background Technology for the MAXYGEN Field.

      (c)   Revenue Sharing.  MAXYGEN and TRPL shall share in all Revenues on
            the following basis:

            Exploitation by TRPL (and/or
             RIO TINTO Group Members):                       Share of Revenues-
            ----------------------------

                                                               TRPL     MAXYGEN
                                                             --------   -------
            (i)   TRPL Coal Applications                      *******   *******

            (ii)  Non-TRPL Coal Applications                  *******   *******


            Exploitation by MAXYGEN (and/or
                   its Affiliates):                          Share of Revenues-
            -------------------------------

                                                               TRPL     MAXYGEN
                                                             --------   -------

            (iii) Biomass Applications                        *******   *******

            (iv)  Non-Renewable Energy Applications           *******   *******

            (iv)  Value Added Products Applications           *******   *******


            It is understood and agreed that the revenue sharing set forth in
            this clause 5.2(c) applies with respect to Revenues received by
            MAXYGEN (and/or its Affiliates) or TRPL (and/or RIO TINTO Group
            Members), as the case may be, attributable to the Exploitation of
            Products.

      (d)   Payment Term.  The Revenue sharing payments due from each Party
            under clause 5.2(c) shall be payable on a country-by-country and
            Product-by-Product basis, until the earlier of (i) ******* years
            following the first commercial sale or other Exploitation of such
            Product in such country or (ii) ******* years following the first
            commercial sale or other Exploitation of any Product by such Party.

      (e)   Convenience.  The Parties acknowledge that the other Party may not
            own or control patent applications or patents covering the
            manufacture, sale or use of a particular Product. However, the
            Parties agree that substantial value is contributed by the Parties'
            conduct and support of the Project in accelerated time to market,
            enhanced probability of success and the potential for multiple
            Products and, for the convenience of the Parties, the Parties (for
            their convenience) agree to

                                      16
<PAGE>

            make Revenue sharing payments set forth in clause 5.2(c) during the
            applicable period set forth in clause 5.2(d), regardless of whether
            any particular Product is covered by a patent application or patent.

      (f)   Non-Cash Consideration.  MAXYGEN (and/or its Affiliates) and TRPL
            (and/or RIO TINTO Group Members) shall not transfer Products for
            consideration other than cash or cash equivalents without providing
            the other Party fair compensation therefore consistent with this
            Agreement. If MAXYGEN (and/or its Affiliates) or TRPL (and/or RIO
            TINTO Group Members) receives any consideration in a form other than
            cash or a cash equivalent (e.g., a license under other intellectual
            property owned or Controlled by a Third Party) as part or all of the
            consideration included in the definition of Net Sales and/or
            Revenue, then MAXYGEN or TRPL, as the case may be, shall notify the
            other Party, and the fair market value of the non-cash consideration
            received by MAXYGEN (and/or its Affiliates) or TRPL (and/or RIO
            TINTO Group Members), as the case may be, for such Product shall be
            agreed by MAXYGEN and TRPL, or if the Parties are unable to agree on
            such fair market value, either Party may submit such matter to
            arbitration pursuant to clause 23 below, in order to determine the
            fair market value of such consideration.

5.3   Negotiation of Carbon Entity.  Upon completion of Phase II, the Parties
      will negotiate bona fide in good faith, for a period of three (3) months
      or, if the Phase II Milestones have been achieved in the Project, for a
      period of six (6) months (the applicable period referred to as the
      "Negotiation Period"), whether and on what terms the Parties may be
      willing to (i) establish a joint venture vehicle (the "Carbon Entity") for
      Exploitation of Project Technology for some or all Applications or (ii)
      provide for another arrangement for Exploiting the Project Technology
      (whether by grant to both Parties of non-exclusive rights, with right to
      sublicense, for Exploitation of the Project Technology for the
      Applications, or otherwise). It is understood that such negotiations will
      need to address, among other things, corporate structure of any such
      Carbon Entity, appropriate licenses to be granted to the Carbon Entity
      with respect to the Project Technology and Background Technology of the
      Parties, respective rights of the Parties in connection with the Carbon
      Entity or other agreed means of Exploitation, and appropriate revenue
      sharing terms. The Parties shall have no obligation to continue such
      negotiations after expiration of the Negotiation Period. It is understood
      and agreed that, except to the extent the Parties may otherwise expressly
      agree in writing, the exploitation rights and corresponding revenue
      sharing obligations set forth in clause 5.2 shall remain in effect.

6.    PAYMENTS; BOOKS AND RECORDS

6.1   Reports and Payments.  After the first commercial sale of a Product by a
      Party or its Sublicensees, or RIO TINTO Group Members in the case of TRPL,
      or Affiliates in the case of MAXYGEN, such Party shall make quarterly
      written reports to the other Party within ninety (90) days after the end
      of each calendar quarter, stating in each such report the Revenues
      received by such Party, by country, with respect to each applicable
      Product during the calendar quarter upon which payments are due under
      clause 5.2 and/or 5.3

                                      17
<PAGE>

      above. Concurrently with making such reports, the Party making the report
      shall pay the other Party all amounts due under clause 5.2 and/or 5.3 for
      such calendar quarter.

6.2   Payment Method.  All payments due under this Agreement shall be made by
      bank wire transfer in immediately available funds to a bank account
      designated by the receiving Party. All payments hereunder shall be made in
      U.S. dollars. In the event that the due date of any payment subject to
      clause 5 hereof is a Saturday, Sunday or national holiday, such payment
      may be paid on the following business day. Any payments that are not paid
      on the date such payments are due under this Agreement shall bear interest
      at the prime rate as reported by the Chase Manhattan Bank, New York, New
      York, on the date such payment is due, plus an additional two percent
      (2%), or, if less, at the maximum rate permitted by law, in each case
      calculated on the number of days such payment is delinquent. If any
      currency conversion shall be required in connection with the calculation
      of royalties hereunder, such conversion shall be made using the selling
      exchange rate for conversion of the foreign currency into U.S. Dollars,
      quoted for current transactions reported in The Wall Street Journal for
      the last business day of the calendar quarter to which such payment
      pertains.

6.3   Withholding Taxes.  Except as otherwise provided in clause 2.5(b), all
      amounts required to be paid pursuant to this Agreement may be paid with
      deduction for withholding for or on account of any taxes (other than taxes
      imposed on or measured by the paying Party's net income) or similar
      governmental charge imposed by an applicable jurisdiction ("Withholding
      Taxes"). Upon request, the Party making payment with such deduction shall
      provide to the other Party a certificate evidencing the payment of any
      Withholding Taxes hereunder.

6.4   Other Factors Affecting Payment.  As to countries covered by this
      Agreement which require governmental approval for remitting payments out
      of the country or which limit the amount of payments payable within the
      country, if the payments made hereunder by a Party in respect of Net
      Revenues from sales of Products exceed the rate approved or permitted by
      such country, then the rate of payment payable in respect of sales of
      Products sold in such country shall be the maximum rate approved or
      permitted by that country.

6.5   Local Payment.  If any portion of the payments due hereunder cannot be
      remitted from a country because of government control, and it is legally
      permissible to remit such payments within the country, then the Party
      obligated to make such payment shall have the obligation and the right to
      deposit in a bank of the other Party's election in such country, and in
      trust for the other Party, that portion of payments that could not be
      remitted from the country.

6.6   Inspection of Books and Records.  Each Party shall maintain accurate books
      and records which enable the calculation of the portions of Net Proceeds
      payable hereunder to be verified. The Parties shall retain the books and
      records for each quarterly period for ******* years after the submission
      of the corresponding report under clause 6.1 hereof or such shorter time
      as may be required by applicable law. Upon thirty (30) days prior notice,
      each Party (the "Audited Party") shall make its books and records
      available to

                                      18
<PAGE>

      independent accountants selected by the other Party (the "Auditing
      Party"), which accountants are reasonably acceptable to the Audited Party
      and have entered into a reasonable confidentiality agreement with the
      Audited Party, to conduct a review or audit once per calendar year, for
      the sole purpose of verifying the accuracy of the Audited Party's payments
      in compliance with this Agreement. The accounting firm shall report to the
      Auditing Party only whether there has been a royalty underpayment and, if
      so, the amount thereof.

7.    PATENT PROSECUTION AND ENFORCEMENT

7.1   Treatment of Project Technology.  MAXYGEN will have the sole discretion to
      decide which of the Project Technology will be:

      (a)   retained as its Confidential Information; or

      (b)   included in any patent application or other application for
            registered Intellectual Property Rights.

7.2   Filing of Patents.  If MAXYGEN decides that the Project Technology or any
      part of it will be included in any patent application or other application
      for registered Intellectual Property Rights protection, the application
      will be made by MAXYGEN in its own name and at its cost. TRPL will, at
      MAXYGEN's cost, render such assistance as MAXYGEN reasonably requires in
      the preparation, filing and prosecution of the patent.

7.3   Notice.  Each Party will give the other prompt notice of:

      (a)   any claim or allegation that the exercise of the rights under this
            Agreement constitute an infringement of the rights of any Third
            Party; and

      (b)   any Third Party's infringement or threatened infringement of a
            Party's Intellectual Property Rights in and to Project Technology
            (including without limitation, copyright, design and patent rights),
            of which it becomes aware.

7.4   Enforcement.  If either Party hereto becomes aware that any Intellectual
      Property Rights in and to Project Technology are being or have been
      infringed by any Third Party, such party shall promptly notify the other
      Party in writing describing the facts relating thereto in reasonable
      detail. MAXYGEN shall have the initial right, but not the obligation, to
      institute, prosecute and control any action, suit or proceeding with
      respect to such infringement, including any declaratory judgment action
      (each an "Action"), at its expense; using counsel of its choice. In the
      event that TRPL has exclusive rights to Project Technology in the TRPL
      Field pursuant to clause 5.2 and/or clause 5.3 and MAXYGEN fails to
      initiate or defend any Action involving an infringement that is within the
      scope of such exclusive rights of TRPL within ******* months of receiving
      notice of any infringement, TRPL shall have the right, but not the
      obligation, to initiate and control such an Action, at its expense. In any
      such event, TRPL shall promptly give MAXYGEN written notice thereof, and
      MAXYGEN shall cooperate reasonably with TRPL in connection with any such
      Action, at TRPL's expense; including without limitation, by joining such
      Action as a party if requested by TRPL. Any amounts

                                      19
<PAGE>

      recovered by TRPL in such an Action in excess of amounts paid to reimburse
      MAXYGEN and amounts expended by TRPL for the expenses incurred in
      connection with such Action, shall be *******.

7.5   In the event that TRPL has exclusive rights to Project Technology in the
      TRPL Field pursuant to clause 5.2 and/or 5.3, MAXYGEN will keep TRPL
      reasonably informed regarding any Action as described in clause 7.4
      instituted by MAXYGEN with respect to infringement within the TRPL Field.

8.    INDEPENDENT RESEARCH

8.1   Independent Research.  Subject to clauses 2.3(b), 2.12 and 12.4, each
      Party is entitled to conduct research outside of the Project free of any
      obligation to the other Party. Neither Party will have any obligation to
      conduct any research in the Project except as expressly described in the
      Project Plan.

8.2   No Reverse Engineering.  Except as expressly provided in this Agreement or
      other express written agreement between MAXYGEN and TRPL, TRPL shall not,
      and shall not authorize a RIO TINTO Group Member to, develop or
      commercialize, or authorize the development or commercialization of, or
      Exploit any process or product utilizing in any way any Gene Variant or
      Shuffled Gene, or any gene (or genetic element) which is based on or
      derived from any Gene Variant or Shuffled Gene, regardless of whether such
      gene (or genetic element) is made or obtained through synthesis, or
      mutation of a starting gene (or genetic element), or any product derived
      therefrom which contains or is made with the use of such a gene (or
      genetic element) or a Gene Variant or Shuffled Gene, or protein expressed
      from any of the foregoing. Except pursuant to a further written agreement
      between MAXYGEN and TRPL, TRPL will not itself, or through any Third
      Party, use any Project Technology and/or Improvements or structure-
      function data relating to any Gene Variants, including without limitation,
      consensus sequences or structural motifs, to reverse engineer,
      reconstruct, synthesize or otherwise modify or copy any Gene Variant or
      Shuffled Gene or any other gene or product with similar biological
      activities, or to attempt the same.

9.    CONFIDENTIALITY

9.1   Confidential Information.  Except as expressly provided herein, the
      Parties agree that the receiving Party will keep completely confidential
      and will not publish or otherwise disclose and will not use for any
      purpose except for the purposes contemplated by this Agreement any
      Confidential Information of the other Party (the "Disclosing Party")
      furnished to it by the Disclosing Party pursuant to this Agreement.
      Project Technology shall be deemed Confidential Information of MAXYGEN. In
      addition, except as expressly provided herein or to comply with applicable
      law, regulation or the order of a court of competent jurisdiction, the
      Parties agree that each Party will keep completely confidential and will
      not publish or otherwise disclose the terms of this Agreement.

                                      20
<PAGE>

9.2   Permitted Disclosures.  Confidential Information and/or the terms of this
      Agreement may be disclosed:

      (a)   to employees, agents, consultants and actual or bona fide potential
            Sublicensees of the non-Disclosing Party or its Affiliates (in the
            case of MAXYGEN) or of RIO TINTO Group Members (in the case of
            TRPL), but only to the extent reasonably required to accomplish the
            purposes of this Agreement and only if the non-Disclosing Party
            obtains prior written agreement from such employees, agents,
            consultants and actual or bona fide potential Sublicensees of the
            non-Disclosing Party or its Affiliates (in the case of MAXYGEN) or
            of RIO TINTO Group Members (in the case of TRPL) to whom disclosure
            is to be made to hold in confidence and not make use of such
            information for any purpose other than those permitted by this
            Agreement. Each Party will use at least the same standard of care as
            it uses to protect proprietary or confidential information of its
            own to ensure that such employees, agents and consultants do not
            disclose or make any unauthorized use of the Confidential
            Information; and

      (b)   to the extent reasonably necessary in prosecuting or defending
            litigation, complying with applicable governmental regulations, laws
            or court orders, or otherwise submitting required information to tax
            or other governmental authorities; provided that, if a Party is
            required to make any such disclosure of the terms of this Agreement
            or the other Party's Confidential Information, it will give
            reasonable advance notice to the other Party of such disclosure and,
            will use its reasonable efforts to secure confidential treatment of
            such Confidential Information (whether through protective orders or
            otherwise).

10.   PUBLIC STATEMENTS AND PUBLICATION

10.1  Use of Names.  Except to the extent required to comply with the law or a
      court order, neither Party will use the name or logo of the other Party
      without its written consent. In no event will either Party knowingly make
      any inaccurate or misleading statement concerning the other Party or the
      Project.

10.2  No Prejudice.  Subject to the provisions of clause 10.3, the Parties will
      use their reasonable efforts to ensure nothing is done which might
      prejudice the subsistence or Exploitation of the Project Technology or
      which would preclude the grant of a patent or cause the loss of
      Intellectual Property Rights protection. The Parties agree and acknowledge
      that this clause 10 is subject to the obligations of confidentiality
      contained in clause 9.

10.3  Publicity.  All publicity, press releases and other announcements relating
      to this Agreement and/or the Project will be reviewed in advance by, and
      will be subject to the approval of, both Parties; provided, approval shall
      be deemed to have been given if the reviewing Party does not respond
      within seven (7) days. Notwithstanding the foregoing, either Party may,
      without review or approval of the other Party, (i) publicize the existence
      and general subject matter of this Agreement without the other Party's
      approval, and (ii) disclose the terms of this Agreement to the extent
      required to comply with applicable

                                      21
<PAGE>

      securities laws. The Parties agree to release within ten (10) days after
      the Project Commencement Date a joint press release in an agreed form.
      Once a particular disclosure has been approved for disclosure, either
      Party may make disclosures which do not differ materially from it
      following review and approval by the other Party; provided, such approval
      shall be deemed to have been given if the reviewing Party does not respond
      within two (2) working days of the reviewing Party having received the
      material for review and approval.

10.4  Publication. The Parties (through their Management Committee members for
      so long as it exists, and afterward through such representatives as each
      Party may designate) will cooperate in appropriate publication of the
      results of research and development work performed pursuant to this
      Agreement, but subject to the predominating interest to obtain patent
      protection for any patentable subject matter. To this end, it is agreed
      that prior to any public disclosure of such results, the Party proposing
      disclosure will send the representatives of the other Party described
      above a copy of the information to be disclosed, and will allow the other
      Party thirty (30) days from the date of receipt in which to determine
      whether the information to be disclosed contains subject matter for which
      patent protection should be sought prior to disclosure, or otherwise
      contains Confidential Information of the reviewing Party which such Party
      desires to maintain as a trade secret. If notification is not received
      during the thirty (30) day period, the Party proposing disclosure will be
      free to proceed with the disclosure. If due to a valid business reason or
      a reasonable belief by the non-disclosing Party that the disclosure
      contains (i) Confidential Information of the non-disclosing Party, or (ii)
      subject matter for which a patentable invention should be sought, then
      prior to the expiration of the thirty (30) day period, the non-disclosing
      Party will so notify the representative of the disclosing Party, and the
      disclosing Party will then (a) at the request of the non-disclosing Party
      delete any Confidential Information of the non-disclosing Party, and/or
      (b) delay public disclosure for an additional period of up to sixty (60)
      days to permit the preparation and filing of a patent application on the
      subject matter to be disclosed or other protective action to be taken. The
      determination of authorship for any paper will be in accordance with
      accepted scientific practice.

11.   LIMITATION OF LIABILITY

      Subject to the provisions of clause 12 and clause 13, each Party will
      carry out the Project and use the other Party's Background Technology at
      its own risk. To the full extent permitted at law each Party excludes all
      warranties applicable to the Project, the Project Technology, and its
      Background Technology. Where under law any warranty cannot be excluded,
      each Party's liability is, at the option of the other Party, limited to
      the reperformance of its Contributions to the Project or the payment of
      the cost of having its Contributions to the Projects performed again. TO
      THE FULL EXTENT LAWFUL, NEITHER PARTY IS LIABLE TO THE OTHER PARTY FOR ANY
      SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES ARISING UNDER OR PURSUANT TO
      THIS AGREEMENT, WHETHER IN RESPECT OF ITS NEGLIGENCE OR OTHER DEFAULT, OR
      OTHERWISE.

                                      22
<PAGE>

12.   REPRESENTATIONS AND WARRANTIES

12.1  Each Party represents and warrants to the other that it has the legal
      power, authority and right to enter into this Agreement and to perform its
      respective obligations set forth herein.

12.2  Each Party represents and warrants that as of the Effective Date of this
      Agreement it is not a Party to any agreement or arrangement with any Third
      Party or under any obligation or restriction, including pursuant to its
      certificate of incorporation or bylaws or rules, which in any way limits
      or conflicts with its ability to fulfill any of its obligations under this
      Agreement, and will not enter into any such agreement during the term of
      this Agreement.

12.3  Each Party represents and warrants that, to the best of its belief as of
      the Effective Date of this Agreement, there are no actions, suits,
      investigations, claims or proceedings pending or threatened in any way
      relating to its Background Technology.

12.4  MAXYGEN warrants to TRPL that it has not and will not during the period
      the Project is being conducted enter into any arrangement or understanding
      with any Third Party which arrangement or understanding requires MAXYGEN
      or any of its Affiliates, to provide Material or to conduct any project
      for the primary purpose of using Shuffling Technology for *******.
      Notwithstanding the above, it is understood and agreed that MAXYGEN shall
      have the right, at all times, to provide Material or conduct any projects
      alone or with Third Parties (a) where the primary purpose of such
      activities is *******.

12.5  Subject to clauses 12.3 and 12.4, MAXYGEN and TRPL each specifically
      disclaim that the Project will be successful, in whole or part or that any
      activities undertaken by one or both of them with respect to the Project
      will be successful. MAXYGEN AND TRPL EXPRESSLY DISCLAIM ANY WARRANTIES OR
      CONDITIONS, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT TO THE
      CONFIDENTIAL INFORMATION, INTELLECTUAL PROPERTY RIGHTS OF SUCH PARTY
      INCLUDING WITHOUT LIMITATION, PATENTS OR KNOW-HOW, MATERIALS,
      IMPROVEMENTS, SHUFFLING TECHNOLOGY, PROGRAM TECHNOLOGY, GENE(S), GENE
      VARIANT(S), OR SHUFFLED GENE(S), INCLUDING, WITHOUT LIMITATION, ANY
      WARRANTY OF MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE, VALIDITY
      OF ANY SHUFFLING TECHNOLOGY OR PROJECT TECHNOLOGY, PATENTED OR UNPATENTED,
      OR NON-INFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.

13.   INDEMNIFICATION AND INSURANCE

13.1  MAXYGEN.  MAXYGEN will indemnify, defend and hold harmless TRPL and its
      officers, employees and agents from and against any and all Third Party
      actions, claims, demands, costs, liabilities or expenses (including actual
      legal costs) (each a "Liability") made, sustained, brought or prosecuted
      or in any manner based upon, occasioned by or attributable to any injury
      to any person (including death) or loss of or damage to property

                                      23
<PAGE>

      which may arise from or as a direct result of MAXYGEN's conduct of
      activities in connection with the Project; except, in each case, to the
      extent due to the negligence or willful misconduct of TRPL.
      Notwithstanding the above, the foregoing obligations shall not apply to
      any Liability arising out of or in connection with the use of any
      particular Gene or Shuffled Gene in the Project.

13.2  TRPL.  TRPL will indemnify, defend and hold harmless MAXYGEN and its
      officers, employees and agents from and against any and all Third Party
      actions, claims, demands, costs, liabilities or expenses (including actual
      legal costs) (each a "Liability") made, sustained, brought or prosecuted
      or in any manner based upon, occasioned by or attributable to any injury
      to any person (including death) or loss of or damage to property which may
      arise from or as a direct result of TRPL's conduct of activities in
      connection with the Project; except, in each case, to the extent due to
      the negligence or willful misconduct of MAXYGEN.

13.3  Insurance.  Each Party will procure adequate insurances such as are
      customary and appropriate in their industry, including product liability
      insurance at the time of Exploitation by such Party, and Third Party
      liability insurance in respect of its participation in the Project and its
      use and permitted Exploitation of the Background Technology and Project
      Technology. Each such insurance policy held by MAXYGEN and TRPL will note
      the other Party's interest as a named insured under the policy and include
      a waiver of the insurers' right of subrogation against the other Party.
      Each Party will, on the request of the other Party, produce evidence of
      the currency of the insurance policies referred to in this clause 13. Each
      Party undertakes at all times to comply with the terms of its insurance
      policies the subject of clause 13.

14.   TERM AND TERMINATION

14.1  Term.  The initial term of this Agreement will commence on the Effective
      Date, and, unless terminated earlier as provided in this clause 14,
      continue in full force and effect on a country-by-country and Product-by-
      Product basis until there are no remaining payment obligations for such
      Product in such country.

14.2  Termination for Breach.  A Party may terminate this Agreement and the
      Project by notice in writing to the other Party on the happening of one or
      more of the following:

      (a)   if a Party commits a material breach or default of any of the terms
            and conditions contained herein, and does not within sixty (60) days
            of receipt of notice in writing from the other Party requiring the
            breach to be remedied cure the breach within such time; or

      (b)   if a material warranty, representation or statement given or made by
            a Party in this Agreement is not complied with or proves to be
            untrue and is not otherwise compensable in an award of damages.

14.3  Termination by Mutual Agreement.  The Parties may terminate this Agreement
      by written mutual agreement. In the event that such termination occurs
      during the conduct of the Project, the Parties shall negotiate bona fide
      in good faith an orderly and

                                      24
<PAGE>

      reasonably prompt wind-down of the Project and the associated funding
      obligations of TRPL.

14.4  Termination for Insolvency.  TRPL may, in its sole discretion, terminate
      this Agreement (together with the Project, if such termination is during
      the Project Term) by providing MAXYGEN with written notice on the
      happening of any of the following events:

      (a)   if MAXYGEN is the subject of winding up or liquidation proceedings,
            whether voluntary or compulsory, otherwise than for the purpose of
            and followed by, a reconstruction, amalgamation or reorganization;

      (b)   if MAXYGEN has become insolvent, bankrupt or is subject to the
            appointment of a mortgagee, a receiver or manager or an inspector to
            investigate its affairs, enters into any arrangement or composition
            with its creditors generally, or is unable to pay its debts as and
            when they become due;

      (c)   if execution is levied upon all or any part of the assets of
            MAXYGEN, provided that no breach will take place hereunder if the
            execution is contested in good faith or if within thirty (30) days
            after it is levied payment is made in full to the judgment creditor
            in question of all amounts owing to such judgment creditor,

      such termination to be effective immediately upon receipt of the above
      mentioned written notice. In the event of termination of this Agreement by
      TRPL pursuant to this clause 14.4 during Phase I and/or the Phase II
      Negotiation Period described in clause 2.3, MAXYGEN shall grant to TRPL
      the licenses described in clause 5.2(a), which license shall be subject to
      the sharing of Revenues as set forth in clause 5.2(c).

14.5  Effect of Termination.

      (a)   Accrued Obligations.  Termination of this Agreement for any reason
            will not release either Party hereto from any liability which, at
            the time of such termination, has already accrued to the other Party
            or which is attributable to a period prior to such termination nor
            preclude either Party from pursuing all rights and remedies it may
            have at law or in equity with respect to any breach of this
            Agreement.

      (b)   Return of Confidential Information and Background Technology.  Upon
            termination of this Agreement, TRPL and MAXYGEN will each promptly
            return to the other Party all Confidential Information received from
            the other Party (except one copy of which may be retained by legal
            counsel for archival purposes and ensuring compliance with clause
            9), and all MAXYGEN Background Technology will be returned to
            MAXYGEN.

      (c)   Sublicenses.  Upon termination of this Agreement, any sublicenses
            granted by each Party shall remain in force and effect and shall be
            assigned by the Party granting such sublicense (the "Sublicensing
            Party") to the other Party, provided, however, that the financial
            obligations of each Sublicensee to the non-

                                      25
<PAGE>

            Sublicensing Party shall be limited to the amounts the Sublicensing
            Party would have been obligated to pay to non-Sublicensing Party for
            the activities of such Sublicensee pursuant to this Agreement.

      (d)   Stock on Hand.  In the event this Agreement is terminated for any
            reason after the first commercial sale of one or more Products by a
            Party, such Party and its Sublicensees and its Affiliates (in the
            case of MAXYGEN) and RIO TINTO Group Members (in the case of TRPL)
            shall have right to sell or otherwise dispose of the stock of any
            such Product then on hand, subject to all applicable revenue sharing
            or other payment obligations.

      (e)   Licenses.

            (i)   In the event of any termination by MAXYGEN pursuant to clause
                  14.2(a) for TRPL's failure to make Revenue sharing payments
                  due under clause 5.2(c), the licenses, if any, granted to TRPL
                  pursuant to clause 5.2(a) shall terminate concurrently.

            (ii)  In the event of any termination by TRPL pursuant to clause
                  14.2(a) for MAXYGEN's failure to make Revenue sharing payments
                  due under clause 5.2(c), the licenses, if any, granted to
                  MAXYGEN pursuant to clause 5.2(a) shall terminate
                  concurrently. In the event of any termination by TRPL pursuant
                  to clause 14.4, the licenses, if any, granted to MAXYGEN
                  pursuant to clause 5.2(b) shall terminate concurrently.

            (iii) Except as provided in this clause 14.5(e), the licenses and
                  rights granted to the Parties under this Agreement in effect
                  at the effective date of such termination shall survive;
                  provided, nothing in this clause 14.5(e) shall prohibit, or be
                  construed to prohibit, the later termination of such a
                  surviving license in accordance with clause 14.2(a) and/or
                  14.4 and this clause 14.5(e).

      (f)   Liquidated Damages.  If MAXYGEN terminates this Agreement pursuant
            to clause 14.2 during Phase II of the Project, then TRPL shall pay
            to MAXYGEN as liquidated damages for the failure to pay such amount,
            *******. The payment of such amount shall not limit MAXYGEN's right
            to seek or obtain any other remedies available to it at law or in
            equity.

14.6  Survival.  The provisions of clauses 2.9, 4.1, 4.4, 4.5, 5.1, 5.2(c),
      5.2(d), 5.2(e), 5.2(f), 6, 7.1, 7.2, 7.3, 8, 9, 10, 11, 12.5, 13.1, 13.2,
      14.5, 14.6, 15, 16, 21, 22, 23 and 25 will survive the expiration or
      termination of this Agreement for any reason.

15.   GOVERNING LAW

      This Agreement and any dispute arising from the performance or any breach
      of it, including without limitation, any arbitration, will be governed by
      and construed in accordance with the laws of the State of California.
      without reference to conflicts of laws

                                      26
<PAGE>

      principles. Each Party submits to the jurisdiction of the federal and
      state courts in, and for, the State of California and the courts of appeal
      therefrom.

16.   ASSIGNMENT

      This Agreement will not be assigned by either Party to any third Party
      hereto without the written consent of the other Party, and any purported
      assignment prohibited by this provision shall be null and void; except
      either Party may assign this Agreement, without such consent, to (i) an
      Affiliate, in the case of MAXYGEN, or to a RIO TINTO Group Member, in the
      case of TRPL; or (ii) an entity that acquires all or substantially all of
      the business or assets of such Party to which this Agreement pertains,
      whether by merger, reorganization, acquisition, sale or otherwise. The
      terms and conditions of this Agreement shall be binding on and inure to
      the benefit of the permitted successors and assigns of the Parties.

17.   SEVERABILITY

      Each word, phrase, sentence, paragraph, section, clause and subclause ("a
      provision") of this Agreement is severable and if a court determines that
      a provision is unenforceable, illegal or void then the court may sever
      that provision without affecting the validity of the other provisions of
      this Agreement.

18.   WAIVER

      The failure by TRPL or MAXYGEN to exercise or delay in exercising a power
      or right does not operate as a waiver of that power or right. The exercise
      of a power or right does not preclude its future exercise or the exercise
      of any other power or right.

19.   AMENDMENT

      This Agreement can only be amended by written agreement between the
      Parties.

20.   NOTICES

      Any notice required or permitted by this Agreement will be in writing and
      will be sent by prepaid registered or certified mail, return receipt
      requested, internationally recognized courier or personal delivery, or by
      fax with confirming letter mailed under the conditions described above in
      each case addressed to the other party at the address shown below or at
      such other address for which such party gives notice hereunder. Such
      notice will be deemed to have been given when delivered:

                  If to MAXYGEN:  Maxygen, Inc.
                                  515 Galveston Drive
                                  Redwood City, CA  94063
                                  Attn: Chief Executive Officer

                                      27
<PAGE>

                  If to TRPL:     Technological Resources Pty Limited
                                  55 Collins Street
                                  South Melbourne
                                  Victoria 3000
                                  Attn: General Manager Commercial
21.   ENTIRE AGREEMENT

      This Agreement, together with its Schedules, which are hereby incorporated
      by reference, contains the whole agreement of the Parties relating to its
      subject matter and it supersedes any and all agreements, understandings or
      commitments in connection with the same subject matter.

22.   RELATIONSHIP

      The Parties agree that this document does not create or evidence a
      relationship between them of joint venture, partnership, employer and
      employee or principal and agent.

23.   DISPUTE RESOLUTION

23.1  Senior Executives.  The Parties agree to co-operate and to use all
      reasonable endeavors to resolve any disputes or differences between them.
      Disputes between the Parties representative on the Management Committee
      which remain unresolved for thirty (30) days will be referred to the Chief
      Executive Officer in the case of MAXYGEN and the Managing Director-
      Research & Technology, in the case of TRPL, for resolution.

23.2  Mediation.  If a dispute arises out of or relates to this Agreement, or
      the breach of it, and if said dispute cannot be settled through
      negotiation, the parties agree first to try in good faith to settle the
      dispute by non-binding mediation under the appropriate rules, if any, for
      such mediation under the rules of the International Chamber of Commerce
      ("ICC") or, if there are no such rules at the time of such mediation,
      under the Commercial Mediation Rules of the American Arbitration
      Association, before resorting to arbitration, or some other dispute
      resolution procedures.

23.3  Arbitration.  If the Parties are unable to resolve any dispute,
      controversy or claim between them arising out of or relating to the
      validity, construction, enforceability or performance of this Agreement,
      including disputes relating to alleged breach or to termination of this
      Agreement (each, a "Dispute"), the Dispute will be finally settled by
      binding arbitration conducted pursuant to the applicable rules of the ICC
      then in effect by one (1) arbitrator appointed in accordance with such
      rules. The arbitration shall take place in Melbourne, Australia, if
      initiated by MAXYGEN, and in Palo Alto, California, if initiated by TRPL.
      The arbitrator will determine what discovery will be permitted, consistent
      with the goal of limiting the cost and time which the parties will expend
      for discovery; provided the arbitrator will permit such discovery as they
      deem necessary to permit an equitable resolution of the dispute; provided,
      the arbitrator shall not order or permit discovery against one Party of a
      type and scope such Party cannot obtain against the other Party for use in
      the arbitration as a result of the laws of the country of residence of the
      other Party. The costs of any arbitration, including administrative fees
      and fees of

                                      28
<PAGE>

      the arbitrator, will be shared equally by the Parties. Each Party will
      bear the cost of its own attorneys' fees and expert fees. The decision
      and/or award rendered by the arbitrator will be written (specifically
      stating the arbitrator's findings of facts as well as the reasons upon
      which the arbitrator's decision is based), final and non-appealable
      (except for an alleged act of corruption or fraud on the part of the
      arbitrator) and may be entered in any court of competent jurisdiction. The
      Parties agree that, any provision of applicable law notwithstanding, they
      will not request, and the arbitrator will have no authority to award,
      punitive or exemplary damages against any Party. The arbitrator will have
      the authority to grant injunctive relief and order specific performance.
      The Parties and the arbitrator will use their best efforts to complete any
      such arbitration within one (1) year, unless a Party can demonstrate to
      the arbitrator that the complexity of the issues or other reasons warrant
      the extension of the time table. In such case, the arbitrator may extend
      such time table as reasonably required. The arbitrator will, in rendering
      its decision, apply the substantive law of the State of California,
      without regard to its conflict of laws provisions.

23.4  Interlocutory Relief.  Compliance with this clause 23 is a condition
      precedent to seeking relief in any court or tribunal in respect of a
      dispute, but nothing in this clause 23 will prevent a Party from seeking
      interlocutory relief in courts of appropriate jurisdiction, pending the
      establishment of the arbitral tribunal or pending the arbitral tribunal's
      determination of the merits of the controversy, if necessary to protect
      the Confidential Information, rights or property of that Party.

24.   FORCE MAJEURE

      Neither Party will be liable for any failure to carry out its obligations
      under this Agreement where such failure is due to any cause beyond the
      reasonable control of such party.

25.   MISCELLANEOUS

25.1  Advice of Counsel.  MAXYGEN and TRPL have each consulted counsel of their
      choice regarding this Agreement, and each acknowledges and agrees that
      this Agreement will not be deemed to have been drafted by one Party or
      another and will be construed accordingly.

25.2  Further Assurances.  At any time or from time to time on and after the
      date of this Agreement, either Party will at the request of the other
      Party (i) deliver to the requesting Party such records, data or other
      documents consistent with the provisions of this Agreement, (ii) execute,
      and deliver or cause to be delivered, all such consents, documents or
      further instruments of assignment, transfer or license, and (iii) take or
      cause to be taken all such actions, as the requesting Party may reasonably
      deem necessary or desirable in order for the requesting Party to obtain
      the full benefits of this Agreement.

25.3  Compliance with Laws.  Each Party will furnish to the other Party any
      information requested or required by that Party during the term of this
      Agreement or any extension of it to enable that Party to comply with the
      requirements of any federal, state or

                                      29
<PAGE>

      government agency. Each Party will comply with all applicable U.S. and
      Australian state, regional and local laws, rules and regulations relating
      to its activities to be performed pursuant to this Agreement, and will
      obtain, at its own expense, all necessary approvals, consents and permits
      required by the applicable agencies of the government of the United States
      and foreign jurisdictions.

25.4  Headings.  The captions to the several clauses and subclauses are not a
      part of this Agreement, but are included for convenience of reference only
      and will not affect its meaning or interpretation.

25.5  Binding Effect.  This Agreement will be binding upon and inure to the
      benefit of the parties and their respective legal representatives,
      successors and permitted assigns.

25.6  Counterparts.  This Agreement may be executed in two counterparts, each of
      which will be deemed an original and which together will constitute one
      instrument.

25.7  Business Unit.  The obligations of TRPL under this Agreement are
      obligations of the Business Unit and MAXYGEN acknowledges that nothing in
      this Agreement binds any other Business Unit of TRPL in so far as the
      obligations of TRPL relate to the conduct of the Project.

25.8  Performance Warranty.  Notwithstanding clause 25.7, TRPL and MAXYGEN
      hereby respectively warrant and guarantee the performance of any and all
      rights and obligations of this Agreement by their Sublicensees and
      Affiliates, in the case of MAXYGEN, and RIO TINTO Group Members, in the
      case of TRPL.

                                      30
<PAGE>

EXECUTED BY THE PARTIES AS AN AGREEMENT

Signed for and on behalf of             )
TECHNOLOGICAL                           )
RESOURCES PTY LIMITED                   )
                                        )
By R. Batterham                         )  /s/ R. Batterham
  -----------------------------------   )
(print name)                            )
                                        )
Chief Technologist                      )
-------------------------------------   )
Title                                   )
                                        )
                                        )
a duly authorized officer of TRPL       )
and in the presence of:                 )
                                        )
   J. M. Elliott                        ) /s/ J. M. Elliott
-------------------------------------   )
Witness                                 )
                                        )
                                        )
Signed for and on behalf of             )
MAXYGEN INC.                            )
                                        )
                                        )
By /s/ Russell Howard                   )
  -----------------------------------   )
   Russell Howard                       )
   Chief Executive Officer              )
                                        )
                                        )
a duly authorized officer of            )
MAXYGEN INC.                            )
and in the presence of:                 )
                                        )
   /s/ Michael Rabson                   )
-------------------------------------   )
Witness                                 )

                                      31