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As filed with the Securities and Exchange Commission on October 20, 2006

Registration No. 333-135760

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

Amendment No. 3

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

METABOLIX, INC.
(Exact Name of Registrant as Specified in its Charter)

Delaware
(State or Other Jurisdiction
of Incorporation or Organization)		   8731
(Primary Standard Industrial
Classification Code Number)		   04-3158289
(I.R.S. Employer
Identification No.)

21 Erie Street
Cambridge, MA 02139
(617) 492-0505
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive office)

James J. Barber
Chief Executive Officer
Metabolix, Inc.
21 Erie Street
Cambridge, MA 02139
(617) 492-0505
(Name, address, including zip code, and telephone number,
including area code, of agent for service)


Copies to:
John M. Mutkoski, Esq.
Christopher J. Denn, Esq.
Robert E. Puopolo, Esq.
Goodwin Procter LLP
Exchange Place
Boston, Massachusetts 02109
(617) 570-1000		   Charles Ruck
Joshua Tinkelman
Latham & Watkins LLP
885 Third Avenue
Suite 1000
New York, NY 10022
(212) 906-1200

        Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

        If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.    o

        If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

        If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

        If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered
   Proposed Maximum
Aggregate Offering Price(1)
   Amount of
Registration Fee(2)(3)
Common Stock, $0.01 par value per share   $93,380,000   $9,992
(1)
Estimated solely for the purpose of calculating the registration fee pursuant of Rule 457(o) under the Securities Act.

(2)
Calculated pursuant to Rule 457(o) based on an estimate of the proposed maximum aggregate offering price and includes the offering price of shares that the underwriters have the option to purchase to cover over-allotments, if any

(3)
$9,228.75 previously paid.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), shall determine.

Subject to completion, dated October 20, 2006

The information in this prospectus is not complete and may be changed. We may not sell these securities until the Securities and Exchange Commission declares our registration statement effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

5,800,000 Shares    

METABOLIX, INC.
 
GRAPHIC

Common Stock
 
 

$         per share
 
 

Archer Daniels Midland Company, our collaborative partner and an existing stockholder, has agreed to purchase $7.5 million of our shares of common stock in a private placement concurrent with this offering at a price per share equal to the price to the public above. The sale of such shares of common stock will not be registered in this offering. See "Certain Relationships and Related Party Transactions."

This investment involves risk. See "Risk Factors" beginning on page 8.

 
   Per Share
   Total
Initial public offering price   $   $
Underwriting discount   $   $
Proceeds, before expenses, to Metabolix, Inc.   $   $

The underwriters have a 30-day option to purchase up to 870,000 additional shares of common stock from us to cover over-allotments, if any.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

Piper Jaffray

Jefferies & Company   Thomas Weisel Partners LLC

Ardour Capital Investments, LLC

The date of this prospectus is             , 2006.

LOGO



TABLE OF CONTENTS

 
   Page
Prospectus Summary   1
Risk Factors   8
Special Note Regarding Forward-Looking Statements   26
Use of Proceeds   27
Dividend Policy   27
Capitalization   28
Dilution   29
Selected Financial Data   31
Management's Discussion and Analysis of Financial Condition and Results of Operations   33
Business   49
Management   73
Certain Relationships and Related Party Transactions   87
Principal Stockholders   90
Description of Capital Stock   93
Shares Eligible for Future Sale   97
Underwriting   100
Legal Matters   104
Experts   104
Market and Industry Data   104
Where You Can Find More Information   104
Index to Consolidated Financial Statements   F-1

This prospectus is not an offer to sell, nor is it seeking an offer to buy, these securities in any state where the offer or sale is not permitted. The information in this prospectus is complete and accurate as of the date on the front cover, but the information may have changed since that date.

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PROSPECTUS SUMMARY

The items in the following summary are described in more detail later in this prospectus. This summary provides an overview of selected information and does not contain all of the information you should consider before investing in our common stock. Therefore, you should also read the more detailed information set out in this prospectus, including the financial statements and the related notes appearing elsewhere in this prospectus. References in this prospectus to "we," "us" and "our" refer to Metabolix, Inc.

Metabolix, Inc.

We are a biotechnology company that develops and plans to commercialize environmentally sustainable, economically attractive alternatives to petrochemical-based plastics, fuels and chemicals. Our strategy is to develop technology platforms that integrate advanced biotechnology with current industrial practice and to commercialize these platforms with industry leading strategic partners. From our founding in 1992, we have been engaged solely in research and development activities and have not had significant sales of PHA Natural Plastics. We are currently producing and selling pre-commercial quantities of PHA Natural Plastics at a pilot plant for market development.

Our first platform, which we will be commercializing through a strategic alliance with Archer Daniels Midland Company, or ADM, is a proprietary, large-scale fermentation system for producing a versatile family of naturally occurring polymers known as polyhydroxyalkanoates, which we call PHA Natural Plastics. Through the alliance with ADM, we intend to sell these polymers as environmentally friendly, but functionally equivalent alternatives to petrochemical-based plastics in a wide range of commercial applications, including disposable goods, packaging, agricultural products, consumer goods and electronics. Also, as part of the strategic alliance with ADM, we have announced plans to build a 50,000 ton annual capacity commercial scale plant, or Commercial Manufacturing Facility, that will produce biodegradable PHA Natural Plastics out of corn sugar, an abundant agriculturally-produced renewable resource. We are currently producing pre-commercial quantities of PHA Natural Plastics jointly with ADM at a pilot plant having a capacity of 8 tons per month.

Our second technology platform, which is in an early stage, is a system using switchgrass to co-produce both PHA Natural Plastics and biomass feedstock for the production of ethanol. We believe that using switchgrass to co-produce these products can offer superior economic value and productivity as compared to single product systems that produce them individually. We have already achieved significant milestones in this program and can produce small amounts of PHA Natural Plastics in switchgrass. Our goals for this program are to have commercially viable switchgrass varieties in pilot field trials within four years and to establish strategic alliances with attractive partners to commercially exploit this platform. Since our switchgrass program is still in the research and development stage, we have not yet determined a commercialization strategy for this program, which would include a business plan for procuring commercial quantities of switchgrass.

The markets for petrochemical-based plastics, fuels and chemicals are among the largest in the global economy. While these markets encompass a diverse array of products, they are all derived from fossil fuels, particularly petroleum and natural gas. The prolonged broad use of these petrochemical-based products has created several economic, social and environmental issues, including plastic waste management and pollution, rising fossil fuel prices, energy security and climate change. These issues have resulted in rising levels of interest in product alternatives that are renewable, sustainable and not dependent on fossil fuels.

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We believe that the widespread use of renewable agricultural feedstocks as manufacturing inputs can address many of the issues associated with petrochemical-based products. Our goal is to become the leader in discovering, developing and commercializing economically attractive, environmentally sustainable alternatives for petrochemical-based plastics, fuels and chemicals. To achieve this goal, we are building a portfolio of programs that we believe will provide not only an attractive slate of commercial opportunities but also will generate leading and competitive intellectual property positions in the field.

Business Strategy

Key elements of our strategy include:

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ADM Agreement to Purchase Shares

ADM has agreed to purchase $7.5 million of our shares of common stock in a private placement concurrent with this offering at a price per share equal to the price to the public in this offering.

Risks Associated with Our Business

Our business is subject to numerous risks and uncertainties, as more fully described under "Risk Factors" beginning on page 8, which you should carefully consider prior to deciding whether to invest in our common stock. For example:

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Corporate Information

We were incorporated in Massachusetts in June 1992 under the name of Metabolix, Inc. In September 1998, we reincorporated in Delaware.

Our principal executive offices are located at 21 Erie Street, Cambridge, Massachusetts 02139, and our telephone number is (617) 492-0505. Our worldwide web address is www.metabolix.com. The information on our web site is not incorporated by reference into this prospectus and should not be considered to be part of this prospectus.

Metabolix, Biopol and Where Nature Performs are our registered trademarks. This prospectus also includes other registered and unregistered trademarks of ours. All other trademarks, tradenames and service marks appearing in this prospectus are the property of their respective owners.

4


THE OFFERING


Common stock offered by us
 
5,800,000 shares

Common stock to be outstanding after this offering
 
18,435,639 shares

Offering price
 
$             per share

Use of proceeds
 
We intend to use the proceeds from this offering to make investments in equipment for pilot manufacturing and commercial formulation and to fund our working capital needs, including for pre-commercial manufacturing and marketing activities with ADM, for switchgrass biorefinery program research and development, for hiring of additional personnel, for other research and development and for general corporate purposes. See "Use of Proceeds."

Proposed NASDAQ Global Market symbol
 
"MBLX"

The number of shares of common stock that will be outstanding after this offering is based on 12,058,716 shares outstanding as of September 30, 2006, and assumes the issuance of 576,923 shares to ADM (the "ADM Shares") in a concurrent private placement and excludes:

Except as otherwise indicated, all information in this prospectus assumes:

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SUMMARY FINANCIAL DATA

The following tables present summary historical and pro forma as adjusted financial data. We derived the summary statements of operations data for the years ended December 31, 2003, 2004 and 2005 and the summary balance sheet data as of December 31, 2003, 2004 and 2005 from our audited financial statements and related notes included elsewhere in this prospectus. You should read this data together with our financial statements and related notes, "Selected Financial Data," and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this prospectus.

The selected condensed consolidated statement of operations data for the six months ended June 30, 2005 and 2006 and the selected condensed consolidated balance sheet data as of June 30, 2006 have been derived from our unaudited condensed consolidated financial statements included elsewhere in this prospectus. Our unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and notes thereto, which include, in the opinion of our management, all adjustments (consisting of normal recurring adjustments), necessary for a fair statement of the information for the unaudited interim period. Our historical results for any prior or interim period are not necessarily indicative of results to be expected for a full fiscal year or for any future period.

 
   Year ended December 31,
   Six months ended June 30,
  
 
   2003
   2004
   2005
   2005
   2006
  
 
    
    
    
    
   (restated)(3)

  
 
    
    
    
   (unaudited)

  
 
   (in thousands except share and per share data)

  
Statements of Operations Data:                                
Total revenue   $ 2,383   $ 3,678   $ 2,781   $ 1,509   $ 3,810  
   
 
 
 
 
 
Operating expenses:                                
  Research and development expenses, including cost of revenue     6,204     5,427     5,980     2,824     4,669  
  General and administrative expenses     2,692     3,252     3,825     2,078     3,816  
   
 
 
 
 
 
  Total operating expenses     8,896     8,679     9,805     4,902     8,485  
   
 
 
 
 
 
Loss from operations     (6,513 )   (5,001 )   (7,024 )   (3,393 )   (4,675 )
Interest income and (expense), net     (128 )   (54 )   99     32     340  
Loss on investment in related party     —     —     (700 )(1)   —     —  
   
 
 
 
 
 
Net loss   $ (6,641 ) $ (5,055 ) $ (7,625 ) $ (3,361 ) $ (4,335 )
   
 
 
 
 
 
Net loss per share Basic and Diluted   $ (3.33 ) $ (1.68 ) $ (2.56 ) $ (1.13 ) $ (1.45 )
Number of shares used in per share calculations Basic and Diluted     1,991,106     3,009,137     2,975,116     2,973,441     2,987,860  
Pro forma net loss per share Basic and Diluted (unaudited)(2)               $ (0.73 )       $ (0.34 )
Pro forma number of shares used in per share calculation Basic and Diluted (unaudited)(2)                 10,391,929           12,729,420  
(1)
At December 31, 2005, we determined that the fair value of our preferred stock investment in Tepha, Inc. was impaired and recorded an asset impairment charge as to our entire investment in Tepha, Inc.

footnotes continued on following page

6

(2)
We have computed the pro forma basic and diluted net loss per common share and the shares used to compute pro forma basic and diluted net loss per common share included in the statement of operations data to reflect the conversion of all of our outstanding preferred stock into 9,992,043 shares of our common stock as we describe in Note 3 of the notes to our consolidated financial statements.

(3)
See Note 2 to our financial statements with regard to restating our financial statements as of and for the six months ended June 30, 2006 for stock-based compensation.

The summary consolidated balance sheet data as of June 30, 2006 is presented:


 
   As of December 31,
   As of June 30, 2006
  
 
   2003
   2004
   2005
   Actual
   Pro forma
as adjusted
  
 
    
    
    
   (restated)(2)

    
  
 
    
    
    
   (unaudited)

  
 
   (in thousands)

  
Balance Sheet Information:                                
Cash and short-term investments(1)   $ 1,495   $ 4,455   $ 3,174   $ 15,872   $ 91,194  
Total assets(1)     3,331     7,510     7,325     22,044     97,366  
Long-term obligations     266     1,440     1,280     1,199     1,199  
Long-term deferred revenue     —     3,000     5,621     6,258     6,258  
Total liabilities     4,546     7,246     9,874     10,361     10,361  
Redeemable, convertible preferred stock     32,640     39,235     44,009     61,442     —  
Accumulated deficit     (37,495 )   (42,549 )   (50,175 )   (54,510 )   (54,510 )
Total stockholders' equity (deficit)(1)     (33,855 )   (38,971 )   (46,558 )   (49,759 )   87,005  
(1)
A $1.00 increase (decrease) in the assumed public offering price of $13.00 would increase (decrease) each of cash and short-term investments, total assets, and total stockholders' equity (deficit) by $5.4 million, assuming the number of shares offered by us, as set forth on the cover of this prospectus, remains the same after deducting the underwriting discounts and commissions and estimated offering expenses payable by us.

(2)
See Note 2 to our financial statements with regard to restating our financial statements as of and for the six months ended June 30, 2006 for stock-based compensation.

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RISK FACTORS

Investing in our common stock involves a high degree of risk. You should carefully consider the following risks and other information in this prospectus, including our financial statements and related notes appearing elsewhere in this prospectus, before you decide to invest in shares of our common stock. If any of the events described below actually occurs, our business, financial condition and operating results could be harmed. In such an event, the market price of our common stock would likely decline and you could lose part or all of your investment in our common stock.

Risks Related to Our Business

We may not be able to successfully manufacture PHA Natural Plastics at commercial scale in a timely or economical manner.

We are currently producing PHA Natural Plastics using our fermentation platform in relatively small quantities, at pilot scale, for use in marketing activities. The current and anticipated methods for manufacturing PHA Natural Plastics, both by fermentation and in crops, and the anticipated methods for producing fuels, are highly complex processes in which a variety of difficulties may arise. We may not be able to resolve any such difficulties in a timely or cost effective fashion, if at all. We are currently developing methods for producing PHA Natural Plastics in plants, namely switchgrass, though we are only operating at research scale. We cannot predict the cost of producing PHA Natural Plastics at commercial scale by fermentation or in switchgrass given the stage of development of this program. We cannot assure you that we will be able to successfully manufacture PHA Natural Plastics at a commercial scale in a timely or economical manner using either of our technology platforms.

PHA Natural Plastics can be produced in a large number of different formulations. Each formulation results in a material that has different performance attributes, such as flexibility, hardness or clarity. As such, different formulations will have utility in different commercial applications. Formulation development is a time-consuming and expensive activity. The development of new formulations requires significant and lengthy product development efforts, including planning, designing, developing and testing at the technological, product and manufacturing-process levels. These activities require us to make significant investments. Although there are many potential applications for PHA Natural Plastics, our resource constraints require us to focus on specific formulations and to forgo other opportunities. We expect that one or more of the potential formulations we choose to develop will not be technologically feasible or will not achieve commercial acceptance, and we cannot predict which, if any, of our formulations we will successfully develop or commercialize.

Since ADM has yet to begin construction of the Commercial Manufacturing Facility, manufacturing costs at such facility are unknown and may ultimately be higher than we expect. While we believe that manufacturing costs will be reduced over time as we gain manufacturing know-how, we cannot be sure that we can manufacture PHA Natural Plastics in an economical manner. If we, in connection with our alliance with ADM, fail to commence production in a timely manner or to develop manufacturing capacity and experience, fail to continue to contract for manufacturing on acceptable terms, or fail to manufacture PHA Natural Plastics economically on a commercial scale or in commercial volumes, our commercialization of PHA Natural Plastics and our business, financial condition and results of operations will be materially adversely affected.

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We may not be successful in the development of our products, including PHA Natural Plastics in switchgrass.

In addition to our development and scale-up work to produce PHA Natural Plastics through fermentation, we are also at an early stage of development of technology and a process to produce PHA Natural Plastics in crops. We are currently focused on the genetic and process engineering required in connection with such programs. Because we will be funding much, or perhaps all, of the development of such programs, there is a risk that we may not be able to continue to fund such programs to completion or to provide the support necessary to distribute, market and sell resulting products, if any, on a worldwide basis. These development programs will consume substantial resources.

To date our efforts to produce PHA Natural Plastics in crops has focused primarily on the genetic engineering required to cause the crops to aggregate PHA Natural Plastics in the plant mass during the life cycle of the plant. We have not yet achieved a high enough concentration of PHA Natural Plastic in commercial crops to make the current technology and process economically feasible at a commercial scale. If we are able to complete the genetic engineering work that leads to such aggregation at acceptable levels, we will also need to perform additional process engineering so that PHA Natural Plastics can be recovered from the harvested crops, processed and formulated as required to constitute a marketable product. Such engineering work may not be successful and we may not have the financial resources to fund such work.

In connection with these efforts, we are acquiring know-how and developing technology internally that will be useful in efforts to engineer the crops so that upon completion of the harvest and recovery of PHA Natural Plastics, the residual material, or biomass, can be readily converted into fuel through, for example, burning the biomass with coal or other conventional fuels or by converting the biomass into a liquid fuel such as ethanol. These development efforts are at a very early stage. The technological challenges associated with these programs are extraordinary and we may not be able to overcome these challenges. We will be required to invest a significant amount over a long period of time to complete such development work, if it can be completed at all.

If ADM does not successfully build the Commercial Manufacturing Facility on time and on budget, our revenues and the distribution of profits, if any, to us will be delayed.

The cost of planning, designing, constructing and operating the Commercial Manufacturing Facility being developed to serve the alliance with ADM Polymer Corp., a wholly-owned subsidiary of ADM, and the cost of ancillary facilities and services related to the production of PHA Natural Plastics by the Joint Sales Company, will be very significant. Although the final costs of construction have not been determined, we estimate that our portion of these expenses will be between $25 and $35 million. ADM will be advancing a disproportionate share of the financial capital needed for such activities and as such, all profits, after payment of all royalties, reimbursements and fees, from the Joint Sales Company will first be distributed to ADM until ADM's disproportionate investment in the Joint Sales Company has been returned. If there are difficulties, delays or other unforeseen issues with such activities, the cost of such activities will almost certainly increase and the revenue from sales, if any, of PHA Natural Plastics and the distribution of profits, if any, to us will be delayed.

We may not be able to develop manufacturing capacity sufficient to meet demand in an economical manner or at all.

If demand for PHA Natural Plastics increases beyond the scope of the Commercial Manufacturing Facility being built to serve the Joint Sales Company, we may incur significant expenses in the

9


expansion and/or construction of manufacturing facilities and increases in personnel in order to increase manufacturing capacity. To finance the expansion of a commercial-scale manufacturing facility is complex and expensive. We cannot assure you that we will have the necessary funds to finance the development of the Commercial Manufacturing Facility or that ADM will pay its share of the joint venture, or that we will be able to develop this manufacturing infrastructure in a timely or economical manner, or at all. Our collaborative partners could experience financial or other setbacks unrelated to our collaboration that could, nevertheless, adversely affect us.

We may not achieve market acceptance of our products.

We do not currently have customers for any of our products. Market acceptance of our products will depend on numerous factors, many of which are outside of our control, including among others:


Our customer prospects are currently evaluating and performing tests on our plastics prior to making any purchase decisions. We may not be able to successfully demonstrate that our plastics have properties comparable or superior to those of environmentally sustainable competitors or similar to conventional petrochemical-based plastics. There can be no assurance that products based on our technologies will be perceived as being comparable or superior to existing products or new products being developed by competing companies or that such products will otherwise be accepted by consumers. The market for our products may not be willing to support premium prices to purchase environmentally sustainable plastics. If there is not broad market acceptance of our products, we may not generate significant revenues.

We have limited marketing and sales experience and capabilities, which may make the commercialization of our products difficult.

We currently have limited marketing and sales experience and capabilities and virtually no distribution experience or capabilities. We have recently hired a Vice President, Sales and Marketing and a Vice President, Chief Brand Officer to add to those capabilities. We cannot assure you that we will be able to identify or hire additional individuals or that such individuals will perform to the level required. We will, in some instances, rely significantly on sales, marketing and distribution arrangements with our

10


collaborative partners and other third parties. For example, we will rely on ADM Polymer to participate in and execute important aspects of the distribution of PHA Natural Plastics manufactured by ADM and we will use the ADM client base for marketing purposes. Our future revenues will be materially dependent upon the success of the efforts of these third parties and our ability to augment our own resources by identifying and hiring new employees. If we are unable to develop or obtain access to sales and marketing expertise, sales of our products, if any, may be adversely affected.

We rely heavily on ADM and will rely heavily on future collaborative partners.

An important component of our current business plan is to enter into strategic partnerships with large corporations:

The strategic alliance with ADM is an example of our implementation of this strategy. These arrangements with collaborative partners are, and will continue to be, critical to our success in manufacturing our products and selling such products profitably. ADM Polymer, a subsidiary of ADM, and, we anticipate, our other future collaborative partners, will be permitted by contract to terminate their agreements with us for no reason and on limited notice. We and ADM have the ability to terminate the Commercial Alliance Agreement with 30 days notice if, based upon a change in circumstances beyond the reasonable control of the other party, the projected financial return from the commercial alliance is deemed by the other party to be either too uncertain or inadequate. We and ADM also have the ability to terminate the Commercial Alliance Agreement with 90 days notice in the case of a breach by the other party. We cannot guarantee that any of these relationships will be entered into, or if entered into, will continue. Failure to make or maintain these arrangements or a delay or failure in a collaborative partner's performance under any such arrangements would materially adversely affect our business and financial condition.

We cannot control our collaborative partners' performance or the resources they devote to our programs. We may not always agree with our partners nor will we have control of our partners' activities on behalf of any alliance. The performance of our programs may be adversely affected and programs may be delayed or terminated or we may have to use funds, personnel, equipment, facilities and other resources that we have not budgeted to undertake certain activities on our own as a result of these disagreements. Performance issues, program delay or termination or unbudgeted use of our resources may materially adversely affect our business and financial condition.

Disputes may arise between us and a collaborative partner and may involve the issue of which of us owns the technology and other intellectual property that is developed during a collaboration or other issues arising out of the collaborative agreements. Such a dispute could delay the program on which we are working or could prevent us from obtaining the right to commercially exploit such developments. It could also result in expensive arbitration or litigation, which may not be resolved in our favor.

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Our collaborative partners could merge with or be acquired by another company or experience financial or other setbacks unrelated to our collaboration that could, nevertheless, adversely affect us. For example, our collaboration with BP was recently terminated after the division with which we were collaborating was sold to a third party buyer who was not interested in continuing the collaboration.

Our success will be influenced by the price of petroleum, the primary ingredient in conventional petrochemical-based plastics, relative to corn sugar, the primary ingredient in our products.

Our success will be influenced by the cost of PHA Natural Plastics relative to petrochemical-based plastics. The cost of petrochemical-based plastic is in part based on the price of petroleum. Our products are primarily manufactured using corn sugar, an agricultural feedstock. ADM currently supplies all required agricultural feedstock as part of our strategic alliance. Over the past 32 years, the prices of petroleum and corn have diverged dramatically with the increase in petroleum price being approximately eight times whereas the price of corn has remained relatively flat over the same period. If the price of corn or corn sugar were to dramatically increase while the price of petroleum decreased, we may not be able to produce PHA Natural Plastics on a cost effective basis relative to petrochemical-based plastics. While we expect to be able to command a premium price for our environmentally sustainable products, a material decrease in the cost of conventional petrochemical-based plastics may require a reduction in the prices of our products for them to remain attractive in the marketplace. In such instance, if corn prices remain stable or increase, we may be required to price our products at a level that causes us to operate at a loss.

Our future profitability is uncertain, and we have a limited operating history on which you can base your evaluation of our business.

We have had net operating losses since being founded in 1992. At June 30, 2006, our accumulated deficit was approximately $54.5 million. Since 1992, we have been engaged solely in research and development activities. As a part of our strategic alliance, ADM Polymer has yet to begin construction of the commercial scale Commercial Manufacturing Facility for PHA Natural Plastics. We currently expect the Commercial Manufacturing Facility to become operational in 2008, and until such time, our revenues from sales of PHA Natural Plastics will be limited. Because we have a limited history at commercial operations and we operate in a rapidly evolving industry, we cannot be certain that we will generate sufficient revenue to operate our business and become profitable.

Our product revenue will be dependent on the successful completion of the scale-up and commercialization of PHA Natural Plastics through our strategic alliance with ADM, through other partnerships or joint ventures, if any, with third parties and separately for our own account. In addition, if we are unable to develop, commercialize and further advance technologies relating to the production of PHA Natural Plastics in crops and other products, or if sales of such PHA Natural Plastics or products are not significant, we could have significant losses in the future due to ongoing expenses to perform research and product development and our inability to obtain additional research and development funding in connection with such products.

In addition, the amount we spend will impact our ability to become profitable and this will depend, in part, on:

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We may not achieve any or all of these goals and, thus, we cannot provide assurances that we will ever be profitable or achieve significant revenues. If we fail to achieve profitability or significant revenues, the market price of our common stock will likely decrease.

We may need to secure additional funding and may be unable to raise additional capital on favorable terms or at all.

We have consumed substantial amounts of capital since our inception in 1992 for our research and development activities. For the year ended December 31, 2005 we used $6.3 million in cash, cash equivalents and investment securities to fund our operating and investing activities. Although we believe our existing cash resources of $16.6 million as of August 31, 2006 plus the proceeds of this offering and the sale of the ADM Shares and anticipated payments from the strategic alliance with ADM of $1.57 million per calendar quarter will be sufficient to fund our anticipated cash requirements for at least the next 24 months, we may require significant additional financing in the future to fund our operations. We cannot assure you that additional financing will be available on terms acceptable to us, or at all. Until we can generate significant continuing revenues, we expect to satisfy our future cash needs through strategic collaborations, private or public sales of our securities, debt financings, governmental research grants, or by licensing all or a portion of our programs or technology. If funds are not available, we may be required to delay, reduce the scope of, or eliminate one or more of our research or development programs or our commercialization efforts. Further, additional funding may significantly dilute existing stockholders.

If we lose key personnel or are unable to attract and retain necessary talent, we may be unable to develop or commercialize our products under development.

We are highly dependent on James Barber, our President and Chief Executive Officer, Oliver Peoples, our Chief Scientific Officer and Johan van Walsem, our VP of Manufacturing, Development and Operations. Dr. Barber possesses unique talent and experience relating to our business and the markets in which we operate. Dr. Peoples and Mr. van Walsem possess unique information related to our research and manufacturing operations. Dr. Peoples was one of our founders and has led and directed all of our scientific research and development programs. Dr. Peoples has such particular knowledge in the research, development and intellectual property aspects in connection with the production of PHA Natural Plastics, that in the case of the loss of his services we would be unable to readily find a suitable replacement with comparable knowledge and experience necessary to further our research and development programs. Mr. van Walsem directs our manufacturing operation and has been instrumental in developing manufacturing know-how sufficient to operate our pilot scale manufacturing plant. Mr. van Walsem has also been directing the design of the commercial scale Commercial Manufacturing Facility with ADM. The loss of Mr. van Walsem's services to us would be difficult to readily replace and may adversely impact the achievement of our objectives.

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Our success depends largely upon the continued service of our management and scientific staff and our ability to attract, retain and motivate highly skilled technical, scientific, management, regulatory compliance and marketing and sales personnel. Because of the unique talents and experience of many of our scientific, engineering and technical staff, competition for our personnel is intense. The loss of key personnel or our inability to hire and retain personnel who have required expertise and skills could materially adversely affect our research and development efforts and our business.

Confidentiality agreements with employees and others may not adequately prevent disclosure of our trade secrets and other proprietary information and may not adequately protect our intellectual property, which could limit our ability to compete.

Because we operate in the highly technical field of biotechnology discovery and development, we rely in part on trade secret protection in order to protect our proprietary technology and processes. However, trade secrets are difficult to protect. We enter into confidentiality and intellectual property assignment agreements with our employees, consultants, outside scientific collaborators, and other advisors. These agreements generally require that the other party keep confidential and not disclose to third parties all confidential information developed by the party or made known to the party by us during the course of the party's relationship with us. These agreements also generally provide that inventions conceived by the party in the course of rendering services to us will be our exclusive property. However, these agreements may not be honored and may not effectively assign intellectual property rights to us. Enforcing a claim that a party illegally obtained and is using our trade secrets is difficult, expensive and time consuming and the outcome is unpredictable. In addition, courts outside the United States may be less willing to protect trade secrets. The failure to obtain or maintain trade secret protection could adversely affect our competitive position.

Patent protection for our products is important and uncertain.

Our commercial success will depend in part on our obtaining and maintaining patent, trade secret and trademark protection of our technologies in the United States and other jurisdictions, as well as successfully enforcing this intellectual property and defending this intellectual property against third-party challenges. We will only be able to protect our technologies from unauthorized use by third parties by keeping them as trade secrets or to the extent that valid and enforceable intellectual property protections, such as patents, cover them. In particular, we place considerable emphasis on obtaining patent protection for significant new technologies, products and processes in the United States and in foreign jurisdictions where we plan to use such technologies. Legal means may afford only limited protection and may not adequately protect our rights or permit us to gain or keep our competitive advantage. Foreign jurisdictions may not afford the same protections as U.S. law, and we cannot ensure that foreign patent applications will have the same scope of the U.S. patents.

Our patent position involves complex legal and factual questions. Accordingly, we cannot predict the breadth of claims that may be allowed or enforced in our patents or in third-party patents. For example:

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Patents may not be issued for any pending or future pending patent applications owned by or licensed to us, and claims allowed under any issued patent or future issued patent owned or licensed by us may not be valid or sufficiently broad to protect our technologies. Moreover, we may be unable to protect certain of our intellectual property in the United States or in foreign countries. Any issued patents owned by or licensed to us now or in the future may be challenged, invalidated, or circumvented, and the rights under such patents may not provide us with competitive advantages. For example, P&G filed a nullity action in the Federal Patent Court in Munich, Germany, against the German equivalent of one of our patents covering the method of use of producing biopolymers. In addition, competitors may design around our technology or develop competing technologies. We could incur substantial costs to bring suits in which we may assert our patent rights against others or defend ourselves in suits brought against us. An unfavorable outcome of any such litigation could have a material adverse effect on our business and results of operations.

We also rely on trade secrets to protect our technology, especially where we believe patent protection is not appropriate or obtainable. However, trade secrets are difficult to protect. We vigorously pursue confidentiality agreements and contractual provisions with our collaborators, potential customers, employees, and consultants to protect our trade secrets and proprietary know-how. These agreements may be breached and we may not have adequate remedies for such breach. While we use reasonable efforts to protect our trade secrets, our employees, consultants, contractors or scientific and other advisors, our potential customers, or our strategic partners may unintentionally or willfully disclose our proprietary information to competitors. If we were to enforce a claim that a third party had illegally obtained and was using our trade secrets, our enforcement efforts would be expensive and time consuming, and the outcome would be unpredictable. In addition, courts outside the United States are sometimes unwilling to protect trade secrets. Moreover, if our competitors independently develop equivalent knowledge, methods and know-how, it will be more difficult for us to enforce our rights and our business could be harmed.

If we are not able to defend the patent or trade secret protection position of our technologies, then we will not be able to exclude competitors from developing or marketing competing technologies, and we may not generate enough revenues from product sales to justify the cost of development of our technologies and to achieve or maintain profitability.

We also rely on trademarks to establish a market identity for our products. We currently have five registered trademarks in the United States and three pending trademark applications filed with the U.S. Patent and Trademark Office and we expect to file additional applications as new trademarks are selected for our products. To maintain the value of our trademarks, we might have to file lawsuits against third parties to prevent them from using trademarks confusingly similar to or dilutive of our registered or unregistered trademarks. Also, we might not obtain registrations for our pending or future trademark applications, and might have to defend our registered trademark and pending trademark applications from challenge by third parties. Enforcing or defending our registered and unregistered trademarks might result in significant litigation costs and damages, including the inability to continue using certain trademarks. In the event that we are unable to continue using certain trademarks, we may be forced to rebrand our products, which could result in the loss of brand recognition, and could require us to devote resources to advertise and market brands.

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A substantial portion of the technology used in our business is owned by or subject to retained rights of third parties.

We often enter into research and development agreements with academic institutions that retain rights to the developed intellectual property. The academic institutions generally retain ownership rights over the technology for use in non-commercial academic and research fields, including in some cases the right to license the technology to third parties for use in those fields. It is difficult to monitor and enforce such noncommercial academic and research uses, and we cannot predict whether the third party licensees would comply with the use restrictions of these licenses. We could incur substantial expenses to enforce our rights against such licensees. In addition, even though the rights that academic institutions obtain are generally limited to the noncommercial academic and research fields, they may obtain rights to commercially exploit developed intellectual property in limited instances. Furthermore, under research and development agreements with academic institutions, our rights to intellectual property developed thereunder is not always certain, but instead may be in the form of an option to obtain license rights to such intellectual property. If we fail to timely exercise our option rights and/or we are unable to negotiate a license agreement, the academic institution may offer a license to the developed intellectual property to third parties for commercial purposes. Any such commercial exploitation could adversely affect our competitive position and have a material adverse effect on our business.

A substantial portion of our core technology is protected by patents that are owned by Massachusetts Institute of Technology, or MIT, and exclusively licensed to us for the life of the patents. The MIT license covers 11 issued U.S. patents, one U.S. application and numerous foreign counterparts. We cannot be certain that our right to use these patents will continue. MIT has the right to terminate this exclusive license for our nonpayment of royalties or our material breach which remains uncured. Although no material licenses are due to expire in the near future, the expiration of patents licensed from third parties or the termination of those licenses could have a material adverse effect on our business.

Some of our patents may cover inventions that were conceived or first reduced to practice under, or in connection with, U.S. government contracts or other federal funding agreements. With respect to inventions conceived or first reduced to practice under such federal funding agreements, the U.S. government may retain a nonexclusive, non-transferable, irrevocable, paid-up license to practice or have practiced for or on behalf of the United States the invention throughout the world. In addition, if we fail to comply with our reporting obligations or to adequately exploit the developed intellectual property under these federal funding agreements, the U.S. government may obtain additional rights to the developed intellectual property, including the right to take title to any patents filed by us or to permit others to commercially exploit the intellectual property itself. Furthermore, our ability to exclusively license or assign the intellectual property developed under these federal funding agreements to third parties may be limited or subject to the U.S. government's approval or oversight. These limitations could have a significant impact on the commercial value of the developed intellectual property.

Third parties may claim that we infringe their intellectual property, and we could suffer significant litigation or licensing expense as a result.

Various U.S. and foreign issued patents and pending patent applications, which are owned by third parties, exist in areas relevant to PHA Natural Plastics and fuels, their compositions, formulations and uses, and processes for their production. Such third parties may claim that we infringe their patents. Because patent applications are maintained in secrecy for a period of time after they are filed, there may be currently pending applications, unknown to us, which may later result in issued patents that

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our technologies may infringe. For example, we are aware of competitors with patents relating to PHA Natural Plastic. Such competitors may allege that we infringe these patents. There could also be existing patents of which we are not aware that our technologies may inadvertently infringe. If third parties assert claims against us alleging that we infringe their patents or other intellectual property rights, we could incur substantial costs and diversion of management resources in defending these claims, and the defense of these claims could have a material adverse effect on our business. In addition, if third parties assert claims against us and we are unsuccessful in defending against these claims, these third parties may be awarded substantial damages, as well as injunctive or other equitable relief against us, which could effectively block our ability to make, use, sell, distribute, or market our products and services in the United States or abroad. We cannot currently predict whether a third party will assert a claim against us, or pursue infringement litigation against us; nor can we predict the ultimate outcome of any such potential claims or litigation.

In the event that a claim relating to intellectual property is asserted against us, or third parties not affiliated with us hold pending or issued patents that relate to our products or technology, we may seek licenses to such intellectual property or challenge those patents. However, we may be unable to obtain these licenses on acceptable terms, if at all, and our challenge of the patents may be unsuccessful. Our failure to obtain the necessary licenses or other rights could prevent the sale, manufacture, or distribution of some of our products and, therefore, could have a material adverse effect on our business.

If we are unable to manage our growth effectively, our business could be adversely affected.

While historically we have focused the majority of our efforts on research and development of processes to produce PHA Natural Plastics using our fermentation platform, we plan to grow by allocating additional resources to developing marketing and sales expertise and resources, entering into additional collaborations with strategic partners, adding personnel with specific technological experience, and developing and commercializing additional products, such as PHA Natural Plastics using our switchgrass technology platform, and biological production of other chemicals and chemical intermediates from renewable resources. Our ability to grow in this manner will require that we manage a diverse range of relationships and projects, expand our personnel resources and perhaps broaden our geographic presence. Our inability to do any of these could prevent us from successfully implementing our growth strategy, and our business could be adversely affected.

We believe that sustained growth at a higher rate will place a strain on our management, as well as on our other human resources. To manage this growth, we must continue to attract and retain qualified management, professional, scientific and technical and operating personnel. If we are unable to do so, we may be unable to staff and manage projects adequately, which may slow the development process, result in the commercialization of fewer products or compromise the quality of our work.

We may not be successful in identifying market needs for new technologies and developing new products to meet those needs.

The success of our business model depends on our ability to correctly identify market opportunities for biologically produced plastics, fuels and chemicals. We intend to identify new market needs, but we may not always have success in doing so, in part because customers may perceive risks in adopting new materials, like PHA Natural Plastics, for use with existing products and because the markets for new materials and other products are not well-developed.

The materials and manufacturing technologies we research and develop are new and are steadily changing and advancing. The products that are derived from these technologies may not be applicable or compatible with the demands in existing markets. Our existing products and technologies may become uncompetitive or obsolete if our competitors adapt more quickly than we do to new technologies and changes in customers' requirements. Furthermore, we may not be able to identify new opportunities as they arise for our products since future applications of any given product may not be readily determinable, and we cannot reasonably estimate the size of any markets that may develop. If we are not able to successfully develop new products, we may be unable to increase our product revenues.

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Our products are made using genetically modified products which may be, or may be perceived as being, harmful to human health or the environment.

PHA Natural Plastics are new materials produced from genetically-engineered microbes and in the future may be produced in genetically-engineered crops. Some countries have adopted regulations prohibiting or limiting the production of genetically-engineered crops. Regulations or prohibitions on the production of genetically-engineered crops could harm our business and impair our ability to produce PHA Natural Plastics in that manner.

The subject of genetic engineering of crops and other species has received negative publicity and has aroused public debate. Government authorities could, for social or other purposes, prohibit or regulate the development and use of genetically-engineered organisms. Social concerns could adversely affect acceptance of our potential products. Governmental regulation or negative publicity could reduce or eliminate market demand for our products which could have a material adverse effect on our results of operations and financial condition.

We face and will face substantial competition in several different markets that may adversely affect our results of operations.

The plastics, fuels and chemicals that we have developed or plan to develop will compete with other technologically innovative products as well as conventional petrochemical-based plastics, materials and fuels. We face and will face substantial competition from a variety of companies in the biodegradable, renewable resource based plastic segment, within which there are three distinct technologies: PHA, PLA and starch based biodegradables. While some of our competitors' existing products that are produced from renewable feedstocks do not have the range of properties that PHA Natural Plastics offer, such products are, nonetheless, suitable for use in a range of products at a price which may be lower than our premium priced product offerings. Other companies active in the PHA plastic segment include Kaneka. Our other competitors include, but are not limited to, key players in PLA and starch based biodegradables, Cargill, Mitsui Chemical, Toyota, Novamont and Stanelco, as well as all of the producers of petrochemical-based plastics.

Many of our competitors have longer operating histories, greater name recognition, larger customer bases and significantly greater financial, sales and marketing, manufacturing, distribution, technical and other resources than we do. These competitors may be able to adapt more quickly to new or emerging technologies and changes in customer requirements. In addition, current and potential competitors have established or may establish financial or strategic relationships among themselves or with existing or potential customers or other third parties. Accordingly, new competitors or alliances among competitors could emerge and rapidly acquire significant market share. We cannot assure you that we will be able to compete successfully against current or new competitors.

We are subject to significant foreign and domestic government regulations, including environmental and health and safety regulations, and failure to comply with these regulations could harm our business.

Our current and planned activities involve the use of a broad range of materials that are, or may be, considered hazardous under applicable laws and regulations. Accordingly, we are subject to a number of foreign, federal, state, and local laws and regulations relating to health and safety, protection of the environment, and the storage, use, disposal of, and exposure to, hazardous materials and wastes. We could incur costs, fines and civil and criminal penalties, personal injury and third party property damage claims, or could be required to incur substantial investigation or remediation costs if we were to violate or become liable under environmental, health and safety laws. Moreover, a failure to comply with environmental laws could result in fines and the revocation of environmental permits, which

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could prevent us, or our strategic partners, from conducting business. Liability under environmental laws can be joint and several and without regard to fault. There can be no assurance that violations of environmental health and safety laws will not occur in the future as a result of the inability to obtain permits, human error, equipment failure or other causes. Environmental laws could become more stringent over time, imposing greater compliance costs and increasing risks and penalties associated with violations, which could harm our business. Accordingly, violations of present and future environmental laws could restrict our ability to expand facilities, pursue certain technologies, and could require us to acquire costly equipment, or to incur potentially significant costs to comply with environmental regulations.

Compliance with foreign, federal, state and local environmental laws and regulations represents a small part of our present budget. If we fail to comply with any such laws or regulations, however, a government entity may levy a fine on us or require us to take costly measures to ensure compliance. Any such fine or expenditure may adversely affect our business activities, financial condition or results of operations. We cannot predict the extent to which future legislation and regulation could cause us to incur additional operating expenses, capital expenditures, or restrictions and delays in the development of our products and properties.

Our government grants may subject us to government audits, which could materially harm our business and results of operations.

We may be subject to audits by the U.S. federal government as part of routine audits of our activities funded by our government grants. As part of an audit, these agencies may review our performance, cost structures and compliance with applicable laws, regulations and standards. If any of our costs are found to be allocated improperly, the costs may not be reimbursed and any costs already reimbursed for such contract may have to be refunded. Accordingly, an audit could result in a material adjustment to our revenue and results of operations. Moreover, if an audit uncovers improper or illegal activities, we may be subject to civil and criminal penalties and administrative sanctions.

We face risks associated with our international business.

We expect to establish, and to expand over time, international commercial operations and activities. Such international business operations are subject to a variety of risks associated with conducting business internationally, including:

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We do not know the impact that these regulatory, geopolitical and other factors may have on our international business in the future.

If we are unable to develop, implement and maintain appropriate internal controls we will not be able to comply with applicable regulatory requirements imposed on reporting companies.

Beginning with our annual report for the year ending December 31, 2007, Section 404 of the Sarbanes-Oxley Act of 2002 requires us to include an internal control report with our annual report on Form 10-K. That report must include management's assessment of the effectiveness of our internal control over financial reporting as of the end of the fiscal year. Additionally, under the current rules, our independent registered public accounting firm will be required to issue a report on management's assessment of our internal control over financial reporting and a report on their evaluation of the operating effectiveness of our internal control over financial reporting.

Our business operations are relatively small and, as a result, we have operated with very limited staffing of key accounting and administrative functions. Such limited staffing made it difficult for us to segregate certain accounting functions. As our business matures from solely research and development into commercial operations and we become a registered public company, we will need additional accounting and finance staffing to support our expanding business operations and to comply with the additional reporting and regulatory requirements of being a public company. We plan on hiring additional personnel in our accounting and finance function in order to have sufficient staffing levels. Our development, implementation and maintenance of appropriate internal controls will depend materially on our successful hiring and retention of key senior accounting personnel with appropriate technical accounting expertise.

We continue to informally evaluate our existing internal control over financial reporting against the standards adopted by the Public Company Accounting Oversight Board, or PCAOB. In addition, we have not yet begun a formal evaluation, documentation and analysis of our internal controls. During the course of our ongoing informal evaluation of the internal controls, or once we begin the formal evaluation, documentation and testing of our internal controls, we may identify areas requiring improvement, and may have to design enhanced processes and controls to address issues identified through this review. Remedying any deficiencies, significant deficiencies or material weaknesses that we or our independent registered public accounting firm may identify may require us to incur significant costs and expend significant time and management resources. While we believe that we will be able to successfully implement internal controls, we cannot assure you that any of the measures we implement to remedy any such deficiencies will effectively mitigate or remedy such deficiencies or weaknesses. Investors could lose confidence in our financial reports, and our stock price may be adversely affected, if our internal control over financial reporting is found not to be effective by management or by an

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independent registered public accounting firm or if we make disclosure of existing or potential significant deficiencies or material weaknesses in those controls.

Changes in, or interpretations of, accounting rules and regulations, such as revenue recognition and expensing of stock options, could result in unfavorable accounting treatment or require us to change our compensation policies.

Accounting methods and policies, including policies governing revenue recognition, expenses, and accounting for stock options are subject to further review, interpretation and guidance from relevant accounting authorities, including the SEC. Changes to, or interpretations of, accounting methods or policies in the future may require us to reclassify, restate or otherwise change or revise our financial statements, including those contained in this prospectus.

Prior to January 1, 2006, we were not required to record stock-based compensation charges if the employee's stock option exercise price equaled or exceeded the fair market value of our common stock at the date of grant. As permitted by SFAS No. 123, we accounted for share-based payments to employees through December 31, 2005 using APB Opinion No. 25's intrinsic value method and, as such, generally recognized no compensation cost for employee stock options. Accordingly, the adoption of SFAS No. 123R's fair value method will have a material adverse impact on our results of operations, although it will have no impact on our overall financial position. The effect of adopting SFAS No. 123R on the six-months ended June 30, 2006 was an increase in net loss by $187,000 and the total compensation cost related to these options not yet recognized in the financial statements is approximately $1,648,000 to be expensed over the next 3.74 years. The actual impact of SFAS No. 123R in future periods will depend on levels of share-based payments granted in the future and the assumptions for the variables which impact the computation.

We rely heavily on stock options to motivate existing employees and to attract new employees. Since we are now required to expense stock options, we may then choose to reduce our reliance on stock options as employee compensation. If we reduce our use of stock options, it may be more difficult for us to attract and retain qualified employees. If we do not reduce our reliance on stock options, our reported losses will increase.

Our pilot manufacturing recovery operations are currently conducted at a single location which makes us susceptible to disasters.

Our pilot manufacturing recovery operations are currently conducted at a single location in Fort Mill, South Carolina. As part of the strategic alliance with ADM, ADM intends to construct a Commercial Manufacturing Facility at a single location in Clinton, Iowa, where we will initially conduct all of our commercial manufacturing operations. Our headquarters and research and development operations are located at a single facility in Cambridge, Massachusetts. We take precautions to safeguard our facilities, including insurance, health and safety protocols, and off-site storage of critical research results and of computer data. However, a natural disaster, such as a fire, flood or earthquake, could cause substantial delays in our operations, damage or destroy our manufacturing equipment, inventory or development projects, and cause us to incur additional expenses. The insurance we maintain against fires, floods, earthquakes and other natural disasters may not be adequate to cover our losses in any particular case.

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Risks Related to This Offering

There is no existing market for our common stock, and we do not know if one will develop to provide you with adequate liquidity. If the stock price fluctuates after this offering, you could lose a significant part of your investment.

Prior to this offering, there has been no public market for our common stock. An active public trading market may not develop after completion of this offering or, if developed, may not be sustained. The initial public offering price for our common stock will be determined by negotiations between us and the underwriters and may not be indicative of prices that will prevail in the open market following this offering. The public trading price for our common stock after this offering will be affected by a number of factors, including:

As a result of these factors, you may not be able to resell your shares at, or above, the initial offering price. In addition, the stock prices of many technology companies have experienced wide fluctuations that have often been unrelated to the operating performance of those companies. These factors may materially and adversely affect the market price of our common stock.

New investors in our common stock will experience immediate and substantial dilution.

Our initial public offering price is substantially higher than the book value per share of our common stock. If you purchase common stock in this offering, you will incur immediate dilution of $8.28 in net tangible book value per share of common stock, based on an assumed initial public offering price

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of $13.00 per share, the mid-point of the range on the front cover of this prospectus and assuming the underwriters do not exercise their overallotment option. In addition, the number of shares available for issuance under our stock plans may increase annually without further stockholder approval. Investors will incur additional dilution upon the exercise of stock options and warrants. See "Dilution."

If a substantial number of shares become available for sale and are sold in a short period of time, the market price of our common stock could decline.

If our existing stockholders sell a large number of shares of our common stock or the public market perceives that these sales may occur, the market price of our common stock could decline. Upon the closing of this offering and the sale of the ADM Shares, assuming no outstanding options or warrants are exercised prior to the closing of this offering, we will have approximately 18,435,639 shares of common stock outstanding. The 5,800,000 shares to be sold under this prospectus will be freely tradable without restriction or further registration under the federal securities laws, unless purchased by our affiliates. Taking into consideration the effect of the 180-day lock-up agreements that have been entered into by certain of our stockholders, we estimate that the remaining 12,635,639 shares of our common stock outstanding upon the closing of this offering will be available for sale pursuant to Rule 144, Rule 144(k) and Rule 701, as follows:

Number of Shares
    
213,552   shares will be immediately eligible for sale in the public market without restriction pursuant to Rule 144(k);

127,492
 
additional shares will be eligible for sale in the public market under Rule 144 or Rule 701 beginning 90 days after the date of this prospectus, subject to volume, manner of sale, and other limitations under those rules;

11,713,763
 
additional shares will become eligible for sale, subject to the provisions of Rule 144, Rule 144(k) or Rule 701, beginning 180 days after the date of this prospectus, upon the expiration of agreements not to sell such shares entered into between the underwriters and such stockholders; and

580,832
 
additional shares will be eligible for sale from time to time thereafter upon expiration of their respective one-year holding periods, but could be sold earlier if the holders exercise any available registration rights.

Existing stockholders holding an aggregate of 14,023,579 shares of common stock (including shares of our common stock issuable upon conversion of our preferred stock or purchasable pursuant to warrants to purchase our common stock and the issuance of the ADM Shares in the concurrent private placement), based on shares outstanding as of September 30, 2006, have rights with respect to the registration of these shares of common stock with the SEC. See "Description of Capital Stock — Registration Rights." If we register these shares of common stock, these holders will be able to sell immediately those shares in the public market.

Piper Jaffray, on behalf of the underwriters, may in its sole discretion, at any time without notice, agree to release all or any portion of the shares subject to the lock-up agreements, which would result in more shares being available for sale in the public market at earlier dates. Sales of common stock by existing stockholders in the public market, the availability of these shares for sale, our issuance of securities or the perception that any of these events might occur could materially and adversely affect the market price of our common stock.

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Our management will have broad discretion over the use of the proceeds to us from this offering and might not apply the proceeds of this offering in ways that increase the value of your investment.

Our management will have broad discretion to use the net proceeds from this offering, and you will have to rely on the judgment of our management regarding the application of these proceeds. Our management might not apply the net proceeds of this offering in ways that increase the value of your investment. We expect to use the net proceeds from this offering to make investments in equipment and operations for formulating PHA Natural Plastics to their final form for commercial sale and to finance our working capital needs, including:


We have not allocated these net proceeds for any specific purposes. Our management might not be able to yield a significant return, if any, on any investment of these net proceeds.

Our directors and management will collectively control approximately 32.04% of our outstanding common stock.

Immediately after this offering, our directors and executive officers and their affiliates will collectively control approximately 32.04% of our outstanding common stock or approximately 30.69% if the underwriters exercise their over-allotment option in full. As a result, these stockholders, if they act together, will be able to influence our management and affairs and all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. You and other stockholders will have minimal influence over these actions. This concentration of ownership may have the effect of delaying or preventing a change in control of our company and might adversely affect the market price of our common stock.

Our financial results may vary significantly from period to period which may reduce our stock price.

Our financial results may fluctuate as a result of a number of factors, many of which are outside of our control, which may cause the market price of our common stock to fall. For these reasons, comparing our operating results on a period-to-period basis may not be meaningful, and you should not rely on our past results as an indication of our future performance. Our financial results may be negatively affected by any of the risk factors listed in this "Risk Factors" section and, in particular, the following risks:

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Provisions in our certificate of incorporation and by-laws and Delaware law might discourage, delay or prevent a change of control of our company or changes in our management and, therefore, depress the trading price of our common stock.

Provisions of our certificate of incorporation and by-laws and Delaware law may discourage, delay or prevent a merger, acquisition or other change in control that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares of our common stock. These provisions may also prevent or frustrate attempts by our stockholders to replace or remove our management. These provisions include:

The affirmative vote of the holders of at least 75% of our shares of capital stock entitled to vote is necessary to amend or repeal the above provisions of our certificate of incorporation. In addition, absent approval of our board of directors, our by-laws may only be amended or repealed by the affirmative vote of the holders of at least 75% of our shares of capital stock entitled to vote.

In addition, Section 203 of the Delaware General Corporation Law prohibits a publicly-held Delaware corporation from engaging in a business combination with an interested stockholder, generally a person which together with its affiliates owns, or within the last three years has owned, 15% of our voting stock, for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner.

The existence of the foregoing provisions and anti-takeover measures could limit the price that investors might be willing to pay in the future for shares of our common stock. They could also deter potential acquirers of our company, thereby reducing the likelihood that you could receive a premium for your common stock in an acquisition.

We do not currently intend to pay dividends on our common stock and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock.

We have never declared or paid any cash dividends on our common stock and do not currently intend to do so for the foreseeable future. We currently intend to invest our future earnings, if any, to fund our growth. Therefore, you are not likely to receive any dividends on your common stock for the foreseeable future.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements. All statements other than statements of historical facts contained in this prospectus, including statements regarding our future results of operations and financial position, business strategy and plans prospects, projected revenue or costs and objectives of management for future research, development or operations, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, although not all forward-looking statements contain these identifying terms. We have identified below some important factors that could cause our forward-looking statements to differ materially from actual results, performance or financial conditions:

In some cases, you can identify forward-looking statements by terms such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these terms or other similar words, although not all forward-looking statements contain these identifying terms. These statements are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our business, financial condition and results of operations. We discuss many of the risks in greater detail under the heading "Risk Factors." Also, these forward-looking statements represent our estimates and assumptions only as of the date of this prospectus. Except as required by law, we assume no obligation to update any forward-looking statements after the date of this prospectus.

This prospectus also contains estimates and other statistical data made by independent parties and by us relating to market size and growth, commodity prices and other industry data. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. In addition, projections, assumptions and estimates of our future performance and the future performance of the industries in which we operate are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this prospectus. These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.

26


USE OF PROCEEDS

We estimate that the net proceeds to us of the sale of the common stock that we are offering including the sale of the ADM Shares, will be approximately $75.3 million or approximately $85.8 million if the underwriters exercise their over-allotment option in full, assuming an initial public offering price of $13.00 per share, which is the midpoint of the range listed on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses that we must pay. A $1.00 increase (decrease) in the assumed initial public offering price of $13.00 would increase (decrease) the net proceeds to us from this offering by $5.4 million, assuming the number of shares offered by us, as set forth on the cover of this prospectus, remains the same and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. An increase or decrease in the assumed initial public offering price of $13.00 will not change the proceeds we receive from the sale of ADM Shares.

We intend to use the net proceeds of this offering as follows:


We may also use a portion of the net proceeds to us to expand our current business through strategic alliances with, or acquisitions of, other businesses, products, intellectual properties or technologies. We currently have no agreements or commitments for any specific acquisitions at this time.

This expected use of the net proceeds of this offering represents our current intentions based upon our present plans and business condition. The amounts and timing of our actual expenditures will depend upon numerous factors, including cash flows from operations and the anticipated growth of our business. We will retain broad discretion in the allocation and use of our net proceeds. See "Risk Factors — Risks Related to This Offering — Our management will have broad discretion over the use of proceeds to us from this offering and might not apply the proceeds of this offering in ways that increase the value of your investment."

Pending any use, as described above, we plan to invest the net proceeds in investment-grade, short-term, interest-bearing securities.


DIVIDEND POLICY

We have never declared or paid any cash dividends on our capital stock and do not expect to pay any cash dividends for the foreseeable future. We intend to use future earnings, if any, in the operation and expansion of our business. Any future determination relating to our dividend policy will be made at the discretion of our board of directors, based on our financial condition, results of operations, contractual restrictions, capital requirements, business properties, restrictions imposed by applicable law and other factors our board of directors may deem relevant.

27


CAPITALIZATION

The following table sets forth our capitalization as of June 30, 2006, as follows:

You should read the following table in conjunction with our financial statements and related notes and the sections entitled "Selected Financial Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" appearing elsewhere in this prospectus.

 
   As of June 30, 2006
  
 
   (restated)(2)
Actual
   Pro forma
as adjusted
  
 
   (In thousands, except share and
per share amounts)

  
Cash and cash equivalents(1)   $ 15,225   $ 90,547  
Short term investment     647     647  
Preferred stock     61,442     —  
Stockholders' equity (deficit):              
  Common stock, $.01 par value; 26,500,000 shares authorized, 2,073,390 shares issued, and 2,062,766 shares outstanding, actual; 100,000,000 shares authorized, 18,442,356 shares issued and 18,431,732 outstanding, pro forma as adjusted;     21     185  
  Treasury stock (at cost), 10,624 shares     (35 )   (35 )
  Additional paid-in capital(1)     4,870     141,470  
  Deferred compensation     (105 )   (105 )
  Accumulated deficit     (54,510 )   (54,510 )
   
 
 
Total stockholders' equity (deficit)(1)     (49,759 )   87,005  
   
 
 
Total capitalization(1)   $ 11,683   $ 87,005  
   
 
 
(1)
A $1.00 increase (decrease) in the assumed initial public offering price of $13.00 would increase (decrease) each of cash and cash equivalents, common stock, additional paid-in capital, total stockholders' equity (deficit) and total capitalization by $5.4 million, assuming the number of shares offered by us, as set forth on the cover of this prospectus, remains the same and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us.

(2)
See Note 2 to our financial statements with regard to restating our financial statements as of and for the six months ended June 30, 2006 for stock-based compensation.

28


DILUTION

Our net tangible book value as of June 30, 2006, was $11.7 million, or $0.97 per share of common stock. Net tangible book value per share represents the amount of our total tangible assets less our total liabilities, divided by the number of shares of common stock outstanding as of June 30, 2006 after giving effect to the assumed conversion of all of our convertible preferred stock.

After giving effect to the sale by us of 5,800,000 shares of common stock in this offering at an assumed initial public offering price of $13.00 per share, which is the midpoint of the range listed on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, and after giving effect to the receipt by us of $7.5 million from the sale by us of the 576,923 ADM Shares at an assumed initial public offering price of $13.00, our adjusted net tangible book value as of June 30, 2006 would have been approximately $87 million, or approximately $4.72 per share. This amount represents an immediate increase in net tangible book value of $3.75 per share to our existing stockholders and an immediate dilution in net tangible book value of approximately $8.28 per share to new investors purchasing shares of common stock in this offering at the assumed initial public offering price. Assuming the underwriters exercise their over-allotment option, our adjusted net tangible book value as of June 30, 2006 would have been approximately $97.5 million, or approximately $5.05 per share. This amount represents an immediate increase in net tangible book value of $4.08 per share to our existing stockholders and an immediate dilution in net tangible book value of approximately $7.95 per share to new investors purchasing shares of common stock in this offering at the assumed initial public offering price. We determine dilution by subtracting the adjusted net tangible book value per share after this offering from the amount of cash that a new investor paid for a share of common stock. The following table illustrates this dilution on a per share basis:

Assumed initial public offering price per share         $ 13.00
  Historical net tangible book value (deficit) per share as of June 30, 2006   $ (24.12 )    
  Increase per share attributable to pro forma conversion of preferred stock     25.09      
   
     
  Pro forma net tangible book value per share before this offering     0.97      
  Increase per share attributable to this offering   $ 3.75      
   
     
Pro forma net tangible book value per share after this offering           4.72
         
Dilution per share to new investors         $ 8.28
         

The following table summarizes, as of June 30, 2006, the differences between the number of shares purchased from us, the total consideration paid to us in cash and the average price per share that existing stockholders and new investors paid. The following table also reflects the consideration to be paid to us in connection with the exercise of outstanding options and warrants held by officers, directors and affiliates. The following table does not reflect any non-cash consideration paid to us, or deemed to be paid to us, by our existing stockholders. The calculation below is based on an assumed initial public offering price of $13.00 per share, which is the midpoint of the range listed on the cover page of this prospectus, before deducting estimated underwriting discounts and commissions and estimated offering expenses that we must pay:

29

 
   Shares Purchased
   Total Consideration
    
 
   Average Price
Per Share
 
   Number
   Percent
   Amount
   Percent
Existing stockholders   12,058,716   59 % $ 66,333,097   42 % $ 5.50
Shares underlying options and warrants held by officers, directors, and affiliates   1,960,253   10     9,286,438   6     4.74
New investors   6,376,923   31     82,900,000   52     13.00
   
 
 
 
 
Total   20,395,892   100 % $ 158,519,535   100 % $ 7.77
   
 
 
 
 

A $1.00 increase (decrease) in the assumed initial public offering price of $13.00 would result in no change to our pro forma net tangible book value per share after this offering, would increase (decrease) the pro forma as adjusted net tangible book value per share after this offering by $0.30 per share and would increase (decrease) the dilution in pro forma net tangible book value to new investors by $0.70 per share, assuming the number of shares offered by us, as set forth on the cover of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. These numbers assume the issuance of 576,923 shares to ADM at an assumed initial public offering price of $13.00. An increase or decrease in the assumed initial public offering price of $13.00 would decrease or increase the number of shares sold to ADM as ADM has agreed to purchase $7.5 million in stock at the initial public offering price.

As of September 30, 2006, we had outstanding options to purchase a total of 2,305,598 shares of common stock at a weighted average exercise price of $2.75 per share, and outstanding warrants to purchase a total of 1,773,369 shares of common stock at a weighted average exercise price of $6.23 per share. To the extent any of these options or warrants are exercised, there will be further dilution to new investors.

30


SELECTED FINANCIAL DATA

The selected condensed consolidated statement of operations data for the years ended December 31, 2003, 2004 and 2005 and balance sheet data as of December 31, 2004 and 2005 have been derived from our consolidated financial statements and related notes, which are included elsewhere in this prospectus, and have been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as indicated in their report. The selected condensed consolidated statement of operations data for the years ended December 31, 2001 and 2002 and the balance sheet data as of December 31, 2001, 2002 and 2003 have been derived from our audited financial statements that do not appear in this prospectus. The selected financial data set forth below should be read in conjunction with our financial statements, the related notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this prospectus. The historical results are not necessarily indicative of the results to be expected for any future period.

The selected condensed consolidated statement of operations data for the six months ended June 30, 2006 and 2005 and the selected condensed consolidated balance sheet data as of June 30, 2006 have been derived from our unaudited condensed consolidated financial statements included elsewhere in this prospectus. Our unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and notes thereto, which include, in the opinion of our management, all adjustments (consisting of normal recurring adjustments), necessary for a fair statement of the information for the unaudited interim period. Our historical results for any prior or interim period are not necessarily indicative of results to be expected for a full fiscal year or for any future period.

 
   Year ended December 31,
   Six months ended
June 30,
  
 
   2001
   2002
   2003
   2004
   2005
   2005
   2006
  
 
    
    
    
    
    
    
   (restated)(4)

  
 
    
    
    
    
    
   (unaudited)

  
 
   (in thousands, except share and per share data)

  
Statement of Operations Data:                                            
Total revenue   $ 441   $ 1,989   $ 2,383   $ 3,678   $ 2,781   $ 1,509   $ 3,810  
   
 
 
 
 
 
 
 
Operating expenses:                                            
  Research and development expenses, including cost of revenue     6,309 (1)   4,409     6,204     5,427     5,980     2,824     4,669  
  General and administrative expenses     3,024     2,644     2,692     3,252     3,825     2,078     3,816  
   
 
 
 
 
 
 
 
  Total operating expenses     9,333     7,053     8,896     8,679     9,805     4,902     8,485  
   
 
 
 
 
 
 
 
Loss from operations     (8,892 )   (5,064 )   (6,513 )   (5,001 )   (7,024 )   (3,393 )   (4,675 )
Interest income and (expense), net     (44 )   (124 )   (128 )   (54 )   99     32     340  
Loss on investment in related party     —     —     —     —     (700 )(2)   —     —  
   
 
 
 
 
 
 
 
Net loss   $ (8,936 ) $ (5,188 ) $ (6,641 ) $ (5,055 ) $ (7,625 ) $ (3,361 ) $ (4,335 )
   
 
 
 
 
 
 
 
Net loss per share Basic and Diluted   $ (5.02 ) $ (2.91 ) $ (3.33 ) $ (1.68 ) $ (2.56 ) $ (1.13 ) $ (1.45 )
Number of shares used in per share calculations Basic and Diluted     1,781,351     1,781,876     1,991,106     3,009,137     2,975,116     2,973,441     2,987,860  
Pro forma net loss per share Basic and Diluted (unaudited)(3)                           $ (0.73 )       $ (0.34 )
Pro forma number of shares used in per share calculation Basic and Diluted (unaudited)(3)                             10,391,929           12,729,420  
(1)
Research and development expenses include the cost associated with acquired technology of $3,000.

(2)
At December 31, 2005, we determined that the fair value of our preferred stock investment in Tepha, Inc. was impaired and recorded an asset impairment charge to our entire investment in Tepha, Inc.

(3)
We have computed the pro forma basic and diluted net loss per common share and the shares used to compute pro forma basic and diluted net loss per common share included in the statement of operations data as we describe in Note 3 to our consolidated financial statements.

(4)
See Note 2 to our financial statements with regard to restating our financial statements as of and for the six months ended June 30, 2006 for stock-based compensation.

31

The summary consolidated balance sheet data as of June 30, 2006 is presented:


 
   As of December 31,
    
    
  
 
   As of
June 30,
2006
   Pro forma
as adjusted
  
 
   2001
   2002
   2003
   2004
   2005
  
 
    
    
    
    
    
   (restated)(2)

    
  
 
    
    
    
    
    
   (unaudited)

    
  
 
   (in thousands)

  
Balance Sheet Information:                                            
Cash and short-term investments(1)   $ 298   $ 868   $ 1,495   $ 4,455   $ 3,174   $ 15,872   $ 91,194  
Total assets(1)     1,202     2,561     3,331     7,510     7,325     22,044     97,366  
Long-term obligations     1,455     857     266     1,440     1,280     1,199     1,199  
Long-term deferred revenue     —     —     —     3,000     5,621     6,258     6,258  
Total liabilities     3,972     3,588     4,546     7,246     9,874     10,361     10,361  
Redeemable convertible preferred stock     22,490     27,764     32,640     39,235     44,009     61,442     —  
Accumulated deficit     (25,666 )   (30,855 )   (37,495 )   (42,549 )   (50,175 )   (54,510 )   (54,510 )
Total stockholders' equity (deficit)(1)     (25,259 )   (28,791 )   (33,855 )   (38,971 )   (46,558 )   (49,759 )   87,005  
(1)
A $1.00 increase (decrease) in the assumed public offering price of $13.00 would increase (decrease) each of cash and short-term investments, total assets, and total stockholders' equity (deficit) by $5.4 million, assuming the number of shares offered by us, as set forth on the cover of this prospectus, remains the same after deducting the underwriting discounts and commissions and estimated offering expenses payable by us.

(2)
See Note 2 to our financial statements with regard to restating our financial statements as of and for the six months ended June 30, 2006 for stock-based compensation.

32


MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and related notes that appear elsewhere in this prospectus. In addition to historical financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results may differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this prospectus, particularly in "Risk Factors."

Overview

We are a biotechnology company that develops and plans to commercialize environmentally sustainable, economically attractive alternatives to petrochemical-based plastics, fuels and chemicals. Our strategy is to develop technology platforms that integrate advanced biotechnology with current industrial practice and commercialize these platforms with industry leading strategic partners. Our first platform, which we will be commercializing through a strategic alliance with Archer Daniels Midland Company, or ADM, is a proprietary, large-scale microbial fermentation system for producing a versatile family of naturally occurring polymers known as polyhydroxyalkanoates, which we call PHA Natural Plastics. Our microbial fermentation system combines our proprietary engineered bacteria with corn sugar and other materials in a fermenter. The bacteria digests the corn sugar and produces PHA Natural Plastics inside of the bacteria. We separate the PHA Natural Plastics from the remainder of the bacteria and formulate the polymer into its final form for commercial sale. Through the alliance with ADM, we intend to sell these polymers as environmentally friendly, but functionally equivalent alternatives to petrochemical-based plastics in a wide range of commercial applications, including disposable goods, packaging, agricultural products, consumer goods and electronics. As part of the strategic alliance with ADM, we have announced plans to build a 50,000 ton annual capacity commercial scale plant, or the Commercial Manufacturing Facility, that will produce biodegradable PHA Natural Plastics out of corn sugar, an abundant agriculturally-produced renewable resource. We are currently producing pre-commercial quantities of PHA Natural Plastics jointly with ADM at a pilot plant having a capacity of 8 tons per month.

Our second technology platform, which is in an early stage, is a biomass biorefinery system using switchgrass to co-produce both PHA Natural Plastics and biomass feedstock for the production of ethanol or other biofuels. For this system, we are engineering switchgrass to produce PHA Natural Plastics in the leaf and stem of the plant. We intend to extract the polymer from switchgrass and use the remaining plant material as a biomass feedstock for the production of energy products including electricity and ethanol or other biofuels. Switchgrass is a commercially and ecologically attractive, non-food energy crop that is indigenous to North America and is generally considered to be a leading candidate for cellulose-derived production of ethanol and other biofuels. We believe that using switchgrass to co-produce these products can offer superior economic value and productivity as compared to single product systems that produce them individually. We have been working on our biomass biorefinery platform using switchgrass with support from the U.S. Department of Energy and the U.S. Department of Agriculture for several years, and we believe we are a scientific leader in this field. Our goals for this program are to have commercially viable switchgrass varieties in pilot field trials within four years and to establish strategic alliances with attractive partners to commercially exploit this platform.

To date, we have generated revenues primarily from government grants and to a lesser extent from license fees, royalty payments, and research and development revenue. We have funded our operations

33


primarily through the sale of equity securities, government grants and, more recently, from upfront and milestone payments from our collaborative partners.

In 2004, we entered into the Technology Alliance and Option Agreement with ADM Polymer Corporation, or ADM Polymer, a subsidiary of ADM. The goal of the Technology Alliance and Option Agreement was to demonstrate the capabilities of our fermentation and recovery technologies at commercial scale and to prepare a master plan and budget for the construction of a commercial facility with a 50,000 ton per year capacity. Upon achievement of such goals, ADM Polymer had the option to enter into a commercial alliance, by execution of the Commercial Alliance Agreement, for further research, development, manufacture, use and sale of PHA Natural Plastics. In November of 2004, we received a $3.0 million upfront payment from ADM, and in May 2006, we received $2.0 million in milestone payments associated with the achievement of certain goals. On July 12, 2006, ADM Polymer exercised its option under our Technology Alliance and Option Agreement and entered into a Commercial Alliance Agreement with us. Upon entering into the Commercial Alliance Agreement, the Technology Alliance and Option Agreement terminated pursuant to its terms. We anticipate our funding from commercial partners under collaborative arrangements to rise as the Commercial Alliance Agreement calls for up to 12 quarterly payments of $1.575 million during the construction period of the Commercial Manufacturing Facility. The first two such payments totaling $3.15 million were received in July 2006.

Since our inception in 1992, we have focused on the research of our platform technologies, the acquisition of patents to enhance these platforms, product development and pilot manufacturing of PHA Natural Plastics. Commercialization of PHA Natural Plastics will require significant additional expenditures, including research and development, pilot manufacturing, product development and sales and marketing organization development, and we expect these expenditures to increase in future years.

As of June 30, 2006, we had 43 full-time employees, of whom 31 are scientists specializing in PHA Natural Plastics production in microbial fermentation and plant technologies as well as extraction and manufacturing of PHA Natural Plastics from these technologies. We expect that we will add a significant number of employees throughout the remainder of 2006 and during 2007 to support our research, development, sales and marketing and to build the infrastructure necessary to operate as a public company.

We have incurred significant losses since our inception. As of June 30, 2006, our deficit accumulated from inception to date was $54.5 million (as restated, see note 2 to the financial statements) and total stockholders' deficit was $49.8 million. We recognized net losses of $7.6 million, $5.1 million and $6.6 million in 2005, 2004 and 2003, respectively and $4.3 million (as restated, see note 2 to the financial statements) and $3.4 million in the first six months of 2006 and 2005, respectively. We expect our net losses to increase in the next two years as we continue our pilot manufacturing development, expand our research and development and add the necessary infrastructure to support operating as a public company.

Collaborative Arrangements

Our strategy for collaborative arrangements is to retain substantial participation in the future economic value of our technology while receiving current cash payments to offset research and development costs and working capital needs. By their nature, these agreements are complex and have multiple elements that cover a variety of present and future activities. In addition, certain elements of these agreements are intrinsically difficult to separate and treat as separate units for accounting purposes. Consequently, we expect to defer recognizing most, if not all, of the payments we receive from partners as revenue until future years.

34


We entered into our alliance with ADM in November 2004 and a joint development arrangement with BP in February 2005. As of June 30, 2006, all payments received from ADM had been recorded as deferred revenue on our balance sheet. We expect that future payments from ADM, through at least the construction phase of the Commercial Alliance Agreement, including quarterly operating payments, and other payments will be classified as deferred revenue as well. The deferred revenue associated with the BP arrangement was recognized in full during the first quarter of 2006 when the alliance was terminated. We anticipate recognizing revenue for the payments received from ADM after the obligations under the multiple element arrangements are delivered.

We received the following payments from these arrangements to offset operating cash needs during 2004 and 2005 and first six months of 2006:

United States Government Contracts and Grants

As of June 30, 2006, gross proceeds of $3.13 million remained to be received under our various government contracts and grants, which include amounts for reimbursement to our subcontractors, as well as reimbursement for our employees' time and benefits and other expenses related to performance under the various contracts.

The status of our United States government contracts and grants is as follows:

Program Title
   Funding Agency
   Total
government
funds
(in $M)
   Total received
through
June 30, 2006
(in $M)
   Remaining
amount to be
received as of
June 30, 2006
(in $M)
   Contract/Grant
Expiration
Biomass Biorefinery for the Production of Polymers and Fuel   Department of Energy(1)   $ 7.48   $ 5.51   $ 1.83   Apr. 2007

Industrial Genome Engineering
 
Department of Commerce
 
$
1.64
 
$
1.64
 
$
—
 
Jul. 2005

Advanced Biorefinery Feedstocks
 
Department of Agriculture
 
$
2.00
 
$
1.79
 
$
0.21
 
Oct. 2006

PHA Bioplastic Packaging Materials
 
SERDP(2)
 
$
1.01
 
$
—
 
$
1.01
 
Aug. 2008

Blow Molded Bioproducts from Natural Plastics
 
Department of Agriculture
 
$
0.08
 
$
—
 
$
0.08
 
Dec. 2006

 
 
 
 

 

 

 
 
 
Total
 
 
 
$
12.21
 
$
8.94
 
$
3.13
 
 

 
 
 
 

 

 

 
 
(1)
Funding of these government contracts and grants beyond the United States government's current fiscal year is subject to annual congressional appropriations.

(2)
Strategic Environmental Research and Development Program.

35

Revenues

Revenues for the years ended December 31, 2005, 2004 and 2003 were primarily derived from government grants and totaled $2.8 million, $3.7 million and $2.4 million, respectively. Revenues totaled $3.8 million and $1.5 million for the first six months ended June 30, 2006 and 2005, respectively. The six month 2006 amounts include $2.5 million of revenue associated with the termination of the BP joint development agreement. We expect the revenues from government grants to fluctuate due to availability of funding from the government, and the revenue from collaborative arrangements will be recognized as future obligations under the agreements are completed. We expect research and development revenue to decline for the remainder of 2006 as we are not anticipating any other revenue from collaborative agreements to be recognized.

Research and Development Expenses

Our operating expenses to date have substantially been for research and development activities. Research and development expenses consist of costs associated with research activities, as well as costs associated with our product development efforts, including pilot manufacturing costs. All research and development costs, including those funded by third parties, are expensed as incurred. Research and development expenses include:

Research and development expenses for 2005, 2004 and 2003 were $6.0 million, $5.4 million and $6.2 million, respectively, and $4.7 million and $2.8 million in the first six months of 2006 (as restated, see note 2 to the financial statements) and 2005, respectively. These expenses are related to developing our platform technologies and PHA Natural Plastics pilot manufacturing production. We expect that our expenses will increase significantly during 2006 as we continue pilot manufacturing production and expand our research and development programs.

We have not reported our internal historical research and development costs or our personnel and personnel-related costs on a project-by-project basis. Our programs share a substantial amount of our common fixed costs such as facilities, depreciation, utilities and maintenance. Accordingly, we do not track our research and development costs by individual research and development program.

We expect to incur increasing research and development expenses in future periods as we continue our pilot manufacturing and product development trials for our product derived from microbial fermentation. The potential for commercial success of our PHA Natural Plastics may be impacted by numerous factors, including partnership continuance with ADM, product properties, manufacturing capability and commercial viability.

In addition, we expect research and development expenditures to grow as we advance our switchgrass program and explore other commercial opportunities our technology platform can be applied to. We cannot predict what it will cost to complete our research and development projects or when they will be completed and commercialized. The timing and cost of any project is dependent upon achieving technical objectives, which are inherently uncertain. In addition, our business strategy contemplates

36

entering into collaborative arrangements with third parties for one or more of our programs. In the event that third parties assume responsibility for certain research or development activities, the estimated completion dates of those activities will be under the control of the third party rather than with us. We cannot forecast with any certainty which programs if any, will be subject to future collaborative arrangements, in whole or in part, and how such arrangements would affect our research and development plans or capital requirements.

As a result of the uncertainties discussed above, we are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will receive cash inflows from the commercialization and sale of products. Our inability to complete our research and development projects in a timely manner or our failure to enter into collaborative agreements, when appropriate, could significantly increase our capital requirements and could adversely impact our liquidity. These uncertainties could force us to seek additional, external sources of financing from time to time in order to continue with our strategy. Our inability to raise additional capital, or to do so on terms reasonably acceptable to us, would jeopardize the future success of our business.

General and Administrative Expenses

General and administrative expenses consist principally of salaries and related costs for personnel in executive, finance, accounting, marketing and sales, business development, information technology, legal and human resources functions. Other general and administrative expenses include patent related costs, facility costs not otherwise included in research and development expenses and professional fees for legal, consulting and accounting services.

General and administrative expenses were $3.8 million, $3.3 million and $2.7 million in 2005, 2004 and 2003, respectively, and $3.8 million and $2.1 million in the first six months of 2006 (as restated, see note 2 to the financial statements) and 2005, respectively. These expenses include patent protection fees for our extensive patent portfolio. We expect that our general and administrative expenses will increase as we expand our legal and accounting staff and marketing and sales staff, add infrastructure and incur additional costs related to operating as a public company, including directors' and officers' insurance, investor relations programs, increased director fees, increased professional fees and non-cash stock-based compensation expense.

Critical Accounting Estimates and Judgments

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates.

We believe that of our significant accounting policies, which are described in the notes to our consolidated financial statements, the following accounting policies involve a greater degree of judgment and complexity. Accordingly, we believe that the following accounting policies are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of operations.

Revenue Recognition

We recognize revenue under government research grants when the related expense is incurred and we have obtained governmental approval to use the grant funds for agreed upon budgeted expenses.

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For revenue received under our arrangements with ADM and BP, we recognize revenue in accordance with the Staff Accounting Bulletin ("SAB") 104, Revenue Recognition, and Emerging Issues Task Force ("EITF") Issue No. 00-21, Revenue Arrangements with Multiple Deliverables.

Our arrangement with ADM contains multiple elements including obligations for us to provide future formulation services, sales and marketing services and certain research and development activities, amongst others. We have determined that these elements cannot be separated and accounted for individually as separate units of accounting. Therefore payments received from ADM have been classified as deferred revenue at the respective balance sheet dates and will be recognized in future periods after the commencement of product commercialization and as the final deliverables under the arrangements are being completed. More specifically, we believe revenue will commence approximately at the time of the first commercial sale of PHA Natural Plastics and amounts will be recognized proportionately over the period that the final services are provided, over the remaining term of the Commercial Alliance Agreement. As of June 30, 2006, payments received from ADM totaling $6.2 million have been recorded as deferred revenue, including non-refundable up-front payments totaling $3.0 million, $2.0 million in milestone payments and approximately $1.2 million in reimbursements related to pilot manufacturing construction and operating costs.

Under our joint development arrangement with BP, we received $2.0 million in 2005. Due to these amounts being applicable for determining BP's equity participation in a potential future joint venture between the parties, these amounts were recorded as deferred revenue at December 31, 2005. We recognized the revenue for this amount, plus an additional $0.5 million which became due in the first quarter of 2006, upon the termination notice from BP in January 2006, as we have been released from any future obligations under this agreement.

Fees to license the use of the Company's proprietary and licensed technologies are recognized only after both the license period has commenced and the technology has been delivered to the customer. Royalty revenue is recognized when it becomes determinable and collectibility is reasonably assured, otherwise the Company recognizes revenue upon receipt of payment.

Stock-Based Compensation

Effective January 1, 2006, we adopted Statement of Financial Accounting Standards ("SFAS") No. 123-revised, Share-Based Payment ("SFAS 123R"), which revises SFAS No. 123, Accounting for Stock-Based Compensation ("SFAS 123") and supersedes Accounting Principles Board ("APB") Opinion No. 25, Accounting for Stock Issued to Employees ("APB 25"). SFAS 123R requires that all stock-based compensation be recognized as an expense in the consolidated financial statements and that such expense be measured at the fair value of the award.

We adopted SFAS 123R using the prospective method of application, which requires us to recognize compensation expense on a prospective basis; therefore, prior period consolidated financial statements have not been restated. Compensation expense recognized includes the expense of stock options granted on and subsequent to January 1, 2006. Stock options granted by us prior to that time are specifically excluded from SFAS 123R and will continue to be accounted for in accordance with APB 25. These options were valued using the minimum value method.

Determining the appropriate fair value model and calculating the fair value of stock-based payment awards require the use of highly subjective assumptions, including the expected life of the stock-based payment awards and stock price volatility. In 2006, we began using the Black-Scholes option-pricing model to value our option grants and determine the related compensation expense. The assumptions used in calculating the fair value of stock-based payment awards represent management's best estimates, but the estimates involve inherent uncertainties and the application of management

38


judgment. As a result, if factors change and we use different assumptions, our stock-based compensation expense could be materially different in the future. Prior to the adoption of SFAS 123R, we had adopted SFAS 123, but in accordance with SFAS 123, we had elected not to apply fair value-based accounting for awards under our employee stock incentive plan through December 31, 2005. Instead, we measured compensation expense for our stock plans using the intrinsic value method prescribed by APB 25, and related interpretations and provided pro forma disclosures as permitted under SFAS No. 148, Accounting for Stock-Based Compensation — Transition and Disclosure an amendment of SFAS 123.

In 2006, we have employed the following key assumptions to determine fair values of option grants pursuant to the Black-Scholes option pricing model.

 
   June 30, 2006
  
Expected dividend yield   —  
Risk-free interest rate   4.89 %
Expected option term (in years)   6.1  
Volatility   75 %

To estimate expected volatility we reviewed the volatilities of publicly traded peer companies and adjusted for expected higher volatility associated with being a newly traded public company. Management believes that the historical volatility of the Company's stock price does not best represent the expected volatility of the stock price. We are currently a private company and therefore lack company-specific historical and implied volatility information. We intend to continue to consistently use the same group of publicly traded peer companies to determine volatility in the future until such time that sufficient information regarding the volatility of our share price becomes available or that the selected companies are no longer suitable for this purpose.

The risk-free interest rate used for each grant is equal to the U.S. Treasury yield curve in effect at the time of grant for instruments with a similar expected life.

For the period ended June 30, 2006, the expected term of the options granted was determined using the "simplified" method for "plain vanilla" options as permitted by Staff Accounting Bulletin No. 107.

The stock price volatility and expected terms utilized in the calculation of fair values involve management's best estimates at that time, both of which impact the fair value of the option calculated under the Black-Scholes methodology and, ultimately, the expense that will be recognized over the life of the option. SFAS 123R also requires that the Company recognize compensation expense for only the portion of options that are expected to vest. Therefore, the Company has estimated expected forfeitures of stock options with the adoption of SFAS 123R. In developing a forfeiture rate estimate, the Company considered its historical experience, its growing employee base and the limited liquidity of its common stock. If the actual number of forfeitures differs from those estimated by management, additional adjustments to compensation expense may be required in future periods.

We have historically granted stock options at exercise prices equivalent to the fair value of our common stock as estimated by our board of directors, with input from management, as of the date of grant. Because there has been no public market for our common stock, our board of directors determined the fair value of our common stock by considering a number of objective and subjective factors, including our operating and financial performance and corporate milestones, the prices at which we sold shares of convertible preferred stock, the superior rights and preferences of securities senior to our common stock at the time of each grant and the risk and non-liquid nature of our common stock. In years prior to 2006, we have not historically obtained contemporaneous valuations

39


by an unrelated valuation specialist because, at the time of the issuances of stock options, we believed our estimates of the fair value of our common stock to be reasonable based on the foregoing factors.

In anticipation of a potential public offering, we re-assessed the valuation of our common stock at December 31, 2005. There was an immaterial difference between the original estimated fair value and the re-assessed valuation of the common stock related to the grants made during December 2005. Therefore, we have not made any retrospective adjustments to our accounting for stock options.

In 2006, determining the fair value of our stock has required making complex and subjective judgments. Our approach to valuation of the enterprise is based on a discounted future cash flow approach that uses our estimates of revenue, driven by assumed market growth rates, and estimated costs as well as appropriate discount rates. These estimates are consistent with the plans and estimates that we use to manage the business. There is inherent uncertainty in making these estimates. The enterprise value as determined was allocated to preferred and common shares using the option-pricing method which involves making estimates of the anticipated timing of a potential liquidity event such as a sale of our company or an initial public offering, and estimates of the volatility of our equity securities. The anticipated timing is based on the plans of our board and management. Estimating the volatility of the share price of a privately held company is complex because there is no readily available market for the shares. We estimated the volatility of our stock based on available information on volatility of stocks of publicly traded companies in the industry. Had we used different estimates of volatility, the allocations between preferred and common shares would have been different.

During the six months ended June 30, 2006, we granted stock options to acquire 17,570 shares of common stock at an exercise price of $1.84, 112,376 shares of common stock at an exercise price of $3.36, and 185,116 shares of common stock at an exercise price of $5.14.

In connection with this offering, our board of directors determined to undertake a reassessment of the fair value of our common stock as of each of the 2006 grant dates. In connection with this undertaking, our board of directors considered the following:

Following this reassessment, our board of directors, with input from management, determined that the exercise prices of stock option grants in 2006 were less than the respective fair values of our common stock on the grant dates for accounting purposes. We have therefore revised the Black-Scholes fair value of these stock option grants to reflect the reassessed fair value of our common stock. The table below details the original and revised values associated with these grants.

Shares Granted
   Exercise Price
per Share
   Reassessed
Fair Value of
Common Stock
   Black-Scholes
Fair Value
as Determined
on Grant Date
   Black-Scholes
Fair Value
as Revised
   Increase in Fair
Value of
Options Granted
185,116   $ 5.14   $ 9.86   $ 644,904   $ 1,402,488   $ 757,584
112,376     3.36     7.52     308,473     716,431     407,958
  11,850     1.84     3.24     10,141     18,987     8,846

Of the options granted during the six months ended June 30, 2006, 272,155 are employee stock options that are accounted for under SFAS 123R. Pursuant to SFAS 123R, the Black-Scholes Fair Value

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of these grants will be recognized as compensation expense on a straight line basis over the vesting period of the options. Due to the reassessment of fair values, we have restated our SFAS 123R stock-based compensation expense during the period to increase it by $98,416 to $187,217 from $88,801. The compensation expense on unvested options at June 30, 2006 for the future years will be increased by $918,899 to $1,647,810 from $728,911 and will be recognized in future periods net of forfeitures as follows:

 
   2nd half
2006
   2007
   2008
   2009
   2010
123R Stock Based Compensation Charge   $ 211,696   $ 423,391   $ 423,391   $ 419,496   $ 169,836

We account for stock compensation arrangements with non-employees in accordance with Emerging Issues Task Force No. 96-18, or EITF No. 96-18, Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services, using a fair value approach. For stock options granted to non-employees, the fair value of the stock options is estimated using the Black-Scholes valuation model. Stock-based compensation expense is recognized over the period of expected service by the non-employee. As the service is performed, we are required to update these assumptions and periodically revalue unvested options and make adjustments to the stock-based compensation expense using the new valuation. These adjustments may result in additional or lesser stock-based compensation expense than originally estimated or recorded, with a corresponding increase or decrease in compensation expense in the statement of operations. Ultimately, the final compensation charge for each option grant to non-employees is unknown until those options have vested or services have been completed or the performance of services is completed.

Of the options granted during the six months ended June 30, 2006, 42,907 are stock options granted to non-employees. In addition to the options granted in 2006, there were options granted in 2005 that are accounted for in the same way. The reassessed values of common stock had the effect of increasing compensation charges related to both 2006 and prior years grants. We have restated our compensation expense related to these non-employees options during the period to increase it by $212,364 from $163,759 to $376,123. The actual expense we record in future periods may total to more or less than $450,922 as these options will be revalued in future periods.

During the six months ended June 30, 2006, 41,954 variable options granted to an officer of the company in 2005 were determined to be highly probable for meeting the performance condition. As a result compensation expense and deferred compensation was recorded during the period. Due to the reassessment of fair values, we have restated our stock compensation expense related to this vesting during the period to increase it by $136,227 from $95,289 to $231,516 . The deferred compensation expense will be increased by $61,922 from $43,313 to $105,235 and will be recognized in future periods net of forfeitures.

Results of Operations

Comparison of the Six Months Ended June 30, 2006 and 2005

Revenue

Our revenue for the six months ended June 30, 2006 and 2005 was $3.8 million and $1.5 million, respectively. We recognized revenue from research and development services of $2.5 million and $31,000 during the first six months of 2006 and 2005, respectively. The increase was due to the recognition of $2.5 million in revenue from our joint development arrangement with BP in the first six months of 2006 upon the termination of the arrangement by BP in January 2006, as we have been

41


released from any future performance obligations. We also recognized revenue for government grants of $1.1 million and $1.3 million during the first six months of 2006 and 2005, respectively. In the first six months of 2006, we recognized revenue of $190,000 from license fees and royalty income as compared to $134,000 in the same period for 2005.

Research and Development Expenses

Research and development expenses increased to approximately $4.7 million in the first six months of 2006 (as restated, see note 2 to the financial statements) from $2.8 million in the same period in 2005. The increase was due primarily to increased spending on pilot material production of PHA Natural Plastics, increased staffing and other personnel related costs to support our collaborative arrangements. We expect that research and development expenses for pilot manufacturing and testing of PHA Natural Plastics will continue to increase in later periods of 2006 as we prepare to develop, test and refine products to meet the product specification requirements of our customers. We expect that our staffing and personnel related costs will also increase to support the research programs for our microbial and plant programs. We incurred $22,000 in expense during the first six months of 2006 (as restated, see note 2 to the financial statements) due to the adoption of SFAS 123R on January 1, 2006, and we expect to record increased compensation expenses in future quarters of 2006 and future years.

General and Administrative Expenses

General and administrative expenses increased to $3.8 million in the first six months of 2006 (as restated, see note 2 to the financial statements) from $2.1 million in the first six months of 2005. This increase was primarily due to increased staffing in sales and marketing expenses and also staffing necessary to manage and support our preparation for going public. Our general and administrative expenses also increased due to stock based compensation charges of $764,000 (as restated, see note 2 to the financial statements) primarily due to a 2005 variable option grant and options granted to nonemployees and expenses associated with the adoption of SFAS 123R. Expenses during the first six months of 2006 (as restated, see note 2 to the financial statements) due to the adoption of SFAS 123R on January 1, 2006 totaled $165,000 and we expect to record increased compensation expenses in future quarters of 2006 and future years.

We expect that our general and administrative expenses will increase as we expand our legal and accounting staff and marketing and sales staff, add infrastructure and incur additional costs related to operating as a public company, including directors' and officers' insurance, investor relations programs, increased director fees, increased professional fees and non-cash stock-based compensation expense.

Comparison of the Years Ended December 31, 2005 and 2004

Revenue

Our revenue for 2005 and 2004 was $2.8 million and $3.7 million, respectively. We recognized revenue from government grants of $2.4 million during 2005 as compared to $3.2 million during 2004. The decrease of $0.8 million of government grant revenue was due to the expiration of a government grant in 2005. We expect that our grant revenue will fluctuate year to year depending on available funding from government agencies. We recorded approximately $2.6 million of payments from collaborative arrangements as deferred revenue. In 2005, we recognized revenue of $242,000 from license fees and related royalty payments as compared to $392,000 during 2004. The decrease was substantially due to a change in our assessment regarding the collectibility of certain license fees and royalty payments due from a related party which are now recognized on a cash basis. We also recognized $106,000 and $97,000 of research and development revenue during 2005 and 2004 respectively.

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Research and Development Expenses

Research and development expenses increased to $6.0 million in 2005 from approximately $5.4 million in 2004. The increase was due primarily to increased rent for expanded facilities and related operating expenses, as well as increased staffing and other personnel related costs to support our collaborative arrangements in 2005. We expect that research and development expenses for pilot manufacturing and testing of PHA Natural Plastics will continue to increase in 2006 as we prepare to test and refine product to meet the product specification requirements of our customers. We expect that our staffing and personnel related costs will also increase to support the research programs for our microbial and plant programs.

General and Administrative Expenses

General and administrative expenses increased to $3.8 million in 2005 from $3.3 million in 2004. This increase was primarily due to increased patent costs for protecting our extensive and increasing patent portfolio, as well as some increased staffing necessary to manage and support our growth. We also expect to record additional compensation expenses related to the adoption of SFAS 123R in 2006 and future years.

We expect that our general and administrative expenses will increase as we expand our legal and accounting staff and marketing and sales staff, add infrastructure and incur additional costs related to operating as a public company, including directors' and officers' insurance, investor relations programs, increased director fees, increased professional fees and non-cash stock-based compensation expense.

Loss on investment in related party

During 2005 we recorded an asset impairment charge of $700,000 for an investment in Tepha, Inc., a related party. We do not expect to incur any additional such charges during 2006 as there is no remaining net book value. See Footnote 8 to our financial statements included in this prospectus.

Comparison of the Years Ended December 31, 2004 and 2003

Revenue

Our revenue for 2004 and 2003 was $3.7 million and $2.4 million, respectively. We recognized revenue from government grants of $3.2 million during 2004 as compared to $2.1 million during 2003. The increase of approximately $1.1 million of government grant revenue was due to the start of a new government grant in 2004 and the full year in operation of another multi-year grant received during 2003. We expect that our grant revenue will fluctuate year to year depending on available funding from government agencies. We recorded approximately $3.0 million of payments in 2004 from collaborative arrangements as deferred revenue and we recognized $234,000 of previously deferred government revenue. In 2004, we recognized revenue of $392,000 from license fees and related royalty payments as compared to $113,000 during 2003. The primary reason for this increase in royalties received was due to a licensing agreement with a related party. We also recognized $97,000 and $120,000 of research and development revenue during 2004 and 2003, respectively.

Research and Development Expenses

Research and development expenses decreased to $5.4 million in 2004 from $6.2 million in 2003. The higher expenses during 2003 were due primarily to increased contract spending of $0.5 million to test larger scale proof-of-concept production of PHA Natural Plastics.

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General and Administrative Expenses

General and administrative expenses increased to $3.3 million in 2004 from $2.7 million in 2003. This increase was primarily due to increased professional fees incurred to negotiate and enter into agreements relating to our alliance with ADM concluded during 2004 and our joint development arrangement with BP in early 2005. We also incurred increased consultant costs to manage and support our growth.

Income Taxes

Since inception, we have incurred operating losses and, accordingly, have not recorded a provision for income taxes for any of the periods presented. As of December 31, 2005, we had net operating loss carryforwards for federal and state income tax purposes of $26.0 million and $16.8 million, respectively. As of December 31, 2005, we also had federal and state research and development tax credit carryforwards of $1.1 million and $0.9 million, respectively. If not utilized, the federal and state net operating loss carryforwards will begin expiring in 2008 and 2006, respectively and tax credit carryforwards will expire beginning in 2012. The annual limitation may result in the expiration of our net operating loss and tax credit carryforwards before they can be used and therefore we have fully reserved the associated tax asset. Utilization of net operating loss and credit carryforwards may be subject to a substantial annual limitation due to limitations provided by the Internal Revenue Code of 1986, as amended, that are applicable if we experience an "ownership change" that may occur, for example, as a result of this offering aggregated with certain other sales of our stock before or after this offering.

Liquidity and Capital Resources

Since inception, we have financed our operations primarily through private placements of equity securities, receiving aggregate net proceeds from such sales totaling $61.4 million, revenues primarily from government grants and our joint development arrangement with BP totaling $15.7 million and payments arising from our strategic alliance with ADM of $6.2 million as of June 30, 2006. As of June 30, 2006, we had $15.9 million in cash, cash equivalents and short-term investments. Our cash and investment balances are held in money market accounts and short-term instruments. Cash in excess of immediate requirements is invested in short-term instruments with regard to liquidity and capital preservation.

Net cash used in operating activities was $2.8 million and $2.7 million during the first six months in 2006 (as restated, see note 2 to the financial statements) and 2005, respectively and $4.4 million, $1.0 million and $5.1 million in 2005, 2004 and 2003 respectively. The net cash used in each of these periods primarily reflects net loss for these periods, offset in part by depreciation, non-cash stock-based compensation for non-employees and non-cash changes in operating assets and liabilities. During 2004 the landlord for our new research facilities provided lease incentives to offset our leasehold improvement costs of approximately $1.5 million and we also received $3.0 million in payments under the alliance agreement with ADM. During 2005 we received $2.0 million and $620,000 in payments from the joint development arrangement with BP and alliance agreement with ADM, respectively. During the first six months of 2006, we received a $500,000 final payment from the joint development arrangement with BP, and $2.0 million in milestone payments and $587,000 in reimbursements related to pilot manufacturing construction and operation costs from ADM in conjunction with our alliance agreement.

Net cash used in investing activities was $267,000 and $51,000 during the first six months in 2006 and 2005, respectively, and $1.9 million, $3.1 million and $35,000 in 2005, 2004 and 2003,

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respectively. Investing activities consist primarily of purchases and sales of marketable securities and capital purchases. During 2005, we rolled over the certificate of deposit along with an additional amount of interest earned amounting to $36,000 and during 2004, we purchased a $1.3 million certificate of deposit. During the first six months in 2006 we purchased additional certificates of deposits for $16.2 million and a certificate of deposit for $1.3 million matured. Purchases of property and equipment were $958,000 and $54,000 during the first six months in 2006 and 2005, respectively, and $1.9 million, $1.3 million and $35,000 in 2005, 2004 and 2003, respectively. The majority of the purchase of property and equipment in 2004 related to our moving to a different location, mostly funded by the landlord through lease incentives. The primary increase in the purchase of property and equipment during 2005 was due to the construction costs of approximately $1.2 million for our pilot manufacturing facility for the pilot production of PHA Natural Plastics, co-funded through our alliance with ADM, and approximately $560,000 during 2005 and an additional $350,000 during the first six months of 2006 for the construction of a greenhouse to support our switchgrass program. We expect to make significant investments in the purchase of property and equipment to support our pilot manufacturing, formulating PHA Natural Plastics to their final form for commercial sale and other efforts. We estimate that we will use approximately $10 to $20 million of the proceeds of this offering to fund these investments.

Net cash provided by financing activities was $16.5 million and $4.5 million during the first six months in 2006 (as restated, see note 2 to the financial statements) and 2005, respectively, and $5.0 million in 2005 and $5.8 million in each of 2003 and 2004. Financing activities consist primarily of proceeds from the sale of our preferred stock and promissory notes. We received net proceeds from the issuance of preferred stock of $17.4 million and $4.8 million during the first six months in 2006 and 2005, respectively, and $4.8 million, $6.5 million and $6.3 million in 2005, 2004 and 2003, respectively. Payments on a convertible promissory note and capital lease obligations were each of $417,000, $721,000 and $521,000 during 2005, 2004 and 2003, respectively.

Operating Capital and Capital Expenditure Requirements

We anticipate commercializing our first product through our alliance with ADM during 2008. However, we anticipate that we will continue to incur net losses for the next several years as we incur expenses to commercialize our PHA Natural Plastics, and expand our marketing, sales, manufacturing and corporate infrastructure.

We believe that our cash, cash equivalents and short-term marketable securities balances, and the interest we earn on these balances, as well as cash expected from our ADM alliance plus the proceeds of this offering, will be sufficient to meet our anticipated cash requirements with respect to the initial commercial launch of our PHA Natural Plastics for at least the next 24 months. If our available cash, cash equivalents and short-term marketable securities are insufficient to satisfy our liquidity requirements, or if we develop additional products, we may seek to sell additional equity or debt securities or obtain a credit facility. The sale of additional equity and debt securities may result in additional dilution to our stockholders. If we raise additional funds through the issuance of debt securities or preferred stock, these securities could have rights senior to those of our common stock and could contain covenants that would restrict our operations. We may require additional capital beyond our currently forecasted amounts. Any such required additional capital may not be available on reasonable terms, if at all. If we are unable to obtain additional financing, we may be required to reduce the scope of, delay or eliminate some or all of our planned research, development and commercialization activities, which could harm our business.

Because of the numerous risks and uncertainties associated with plant construction and commercialization of PHA Natural Plastics, we are unable to estimate the exact amounts of our

45


capital and working capital requirements. We estimate our capital expenditures through completion of construction of the commercial manufacturing facility in 2008 to be in the range of $10 to $20 million to purchase property and equipment to support our pilot manufacturing and formulating PHA Natural Plastics to their final form for commercial sale and for research and development. Our future funding requirements will depend on many factors, including, but not limited to:

Off-Balance Sheet Arrangement

As of June 30, 2006, we had no off-balance sheet arrangements as defined in Item 303(a)(4) of the Securities and Exchange Commission's Regulation S-K.

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Contractual Obligations

Our future contractual obligations primarily for future rental payment obligations on the current office and lab space, including financing costs, at December 31, 2005 were as follows:

 
   Payment due by period
Contractual Obligations
   Total
   Less than
1 year
   2-3 years
   4-5 years
   More than
5 years
Operating lease obligations   $ 8,385   $ 988   $ 1,976   $ 1,977   $ 3,444
Capital lease obligations   $ 63   $ 63   $ 0   $ 0   $ 0
Purchase obligations   $ 250   $ 25   $ 50   $ 50   $ 125
   
 
 
 
 
Total   $ 8,698   $ 1,076   $ 2,026   $ 2,027   $ 3,569
   
 
 
 
 

Related Party Transactions

We have recorded license and royalty revenue from a related party and have an option grant to a related party. We also have various transactions with our alliance partner ADM, a related party. Additionally, the Company recorded as impairment charge on a related party investment. For a full description, see Note 8 to our notes to consolidated financial statements and the "Certain Relationships and Related Party Transactions."

Recent Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board ("FASB") issued SFAS No. 123R, which replaces SFAS No. 123 and supersedes APB No. 25. SFAS No. 123R will require all share-based payments to employees, including grants of employee stock options, to be recognized in the statement of operations based on their fair values. The Company implemented SFAS No. 123R in the reporting period beginning January 1, 2006, which resulted in an immaterial effect on its stock compensation expense for the period ended March 31, 2006. The Company expects stock compensation expense to materially increase in future periods as a result of the adoption of this standard and future possible stock grant activity.

In April 2005, the FASB issued FASB Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations — an interpretation of FASB Statement No. 143 ("FIN No. 47"). FIN No. 47 expands on the accounting guidance of Statement of Financial Accounting Standards No. 143, Accounting for Asset Retirement Obligations ("SFAS No. 143"), providing clarification of the term, conditional asset retirement obligation, and guidelines for the timing of recording the obligation. The interpretation is effective for fiscal years ending after December 15, 2005. The Company adopted FIN No. 47 and has recorded a long-term liability for its asset retirement obligations of $66,218, and an associated non-current asset of $64,615, at December 31, 2005 which represents the contractual obligations associated with the potential removal of a leasehold addition constructed during 2005.

In May 2005, the FASB issued Statement of Financial Accounting Standards No. 154, Accounting Changes and Error Corrections, a replacement of APB Opinion No. 20, Accounting Changes, and FASB issued Statement of Financial Accounting Standards No. 3, Reporting Accounting Changes in Interim Financial Statements ("SFAS 154"). SFAS No. 154 requires retrospective application to prior period financial statements of changes in accounting principle, unless it is impracticable to determine either the period-specific effects or the cumulative effect of the change. This statement requires that retrospective application of a change in accounting principle be limited to the direct effects of a

47


change. SFAS 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005.

In July, 2006 the FASB issued Financial Accounting Standards Interpretation No. (FIN) 48, Accounting for Uncertainty in Income Taxes. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements in accordance with SFAS No. 109. FIN 48 prescribes a recognition threshold and measurement attributable for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosures and transitions. FIN 48 is effective for fiscal years beginning after December 15, 2006. The adoption of this statement is not expected to have a material impact on our consolidated financial position or results of operations.

Quantitative and Qualitative Disclosures about Market Risk

We had unrestricted cash, cash equivalents, short-term investments and restricted cash totaling $16.4 million at June 30, 2006. The unrestricted cash and cash equivalents are held for working capital purposes. We do not enter into investments for trading or speculative purposes. Some of the securities in which we invest, however, may be subject to market risk. This means that a change in prevailing interest rates may cause the principal amount of the investment to fluctuate. To minimize this risk in the future, we intend to maintain our portfolio of cash equivalents and short-term investments in a variety of securities, including commercial paper, money market funds, debt securities and certificates of deposit. Due to the short-term nature of these investments, we believe that we do not have any material exposure to changes in the fair value of our investment portfolio as a result of changes in interest rates. As of June 30, 2006 all of our investments were held in money market accounts and short-term instruments.

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BUSINESS

Overview

We are a biotechnology company that develops and plans to commercialize environmentally sustainable, economically attractive alternatives to petrochemical-based plastics, fuels and chemicals. Our strategy is to develop technology platforms that integrate advanced biotechnology with current industrial practice and to commercialize these platforms with industry leading strategic partners. Our first platform, which we will be commercializing through a strategic alliance with Archer Daniels Midland Company, or ADM, is a proprietary, large-scale microbial fermentation system for producing a versatile family of naturally occurring polymers known as polyhydroxyalkanoates, which we call PHA Natural Plastics. Our microbial fermentation system combines our proprietary engineered bacteria with corn sugar and other materials in a fermenter. The bacteria digests the corn sugar and produces PHA Natural Plastics inside of the bacteria. We separate the PHA Natural Plastics from the remainder of the bacteria and formulate the polymer into its final form for commercial sale. Through the alliance with ADM, we intend to sell these polymers as environmentally friendly, but functionally equivalent alternatives to petrochemical-based plastics in a wide range of commercial applications, including disposable goods, packaging, agricultural products, consumer goods and electronics. Also, as part of the strategic alliance with ADM, we have announced plans to build a 50,000 ton (100 million pounds) annual capacity commercial scale plant, or the Commercial Manufacturing Facility, that will produce biodegradable PHA Natural Plastics out of corn sugar, an abundant agriculturally-produced renewable resource. We are currently producing pre-commercial quantities of PHA Natural Plastics jointly with ADM at a pilot plant having a capacity of 8 tons per month. For a more detailed description of our relationship with ADM, see "Business — Fermentation Alliance with Archer Daniels Midland Company."

Our second technology platform, which is in an early stage, is a biomass biorefinery system using switchgrass to co-produce both PHA Natural Plastics and biomass feedstock for the production of ethanol or other biofuels. For this system, we are engineering switchgrass to produce PHA Natural Plastics in the leaf and stem of the plant. We intend to extract the polymer from switchgrass and use the remaining plant material as a biomass feedstock for the production of energy products including electricity and ethanol or other biofuels. Switchgrass is a commercially and ecologically attractive, non-food energy crop that is indigenous to North America and is generally considered to be a leading candidate for cellulose-derived production of ethanol and other biofuels. We believe that using switchgrass to co-produce these products can offer superior economic value and productivity as compared to single product systems that produce them individually. We have been working on our biomass biorefinery platform using switchgrass with support from the U.S. Department of Energy and the U.S. Department of Agriculture for several years, and we believe we are a scientific leader in this field. Our goals for this program are to have commercially viable switchgrass varieties in pilot field trials within four years and to establish strategic alliances with attractive partners to commercially exploit this platform.

As demonstrated by our first two technology platforms, we take an integrated systems approach to our technology development. We are focused on developing entire production systems from gene to end product as opposed to developing specific technologies (for example, gene sequencing, shuffling or directed evolution) or singular aspects of a product's production (for example, providing a key enzyme, catalyst or ingredient). We believe this systems approach optimizes manufacturing productivity and, when commercialized, will enable us to capture more economic value from any platform that we pursue. We have core capabilities in microbial genetics, fermentation process engineering, chemical engineering, polymer science, plant genetics and botanical science, and we have assembled these capabilities in a way that has allowed us to integrate biotechnology with chemical engineering and

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industrial practice. We believe that our approach can be applied to other products and chemicals to help establish and grow an environmentally sustainable chemical industry.

We intend to explore the opportunities to apply our core capabilities in microbial engineering and plant transformation to develop biological routes to other chemicals and chemical intermediates and to research switchgrass varieties with improved traits for higher yields and greater ease of conversion to fuels such as ethanol.

To exploit our first technology platform, we are working with ADM to build the Commercial Manufacturing Facility in Clinton, Iowa, which we expect will commence commercial production of PHA Natural Plastics in 2008. The facility will produce PHA Natural Plastics which are highly versatile and range in properties from strong, moldable thermoplastics to highly elastic materials and soft, sticky compositions. They can be made as resins or as latex with excellent film-forming characteristics. These properties allow for a wide variety of commercial applications, offering an environmentally-friendly alternative to petroleum-derived synthetic materials which are not biodegradable. Through the strategic alliance with ADM we intend to initially position PHA Natural Plastics as premium priced specialty materials catering to customers who want to match the functionality of petrochemical-based plastic, but add the dimension of environmental responsibility to their products and brands.

With ADM we have initiated product and business development activities including pilot production of material at an 8 ton per month scale facility, working with potential customers, and initiation of qualification trials of our material for selected customer applications. We expect that our products will initially be sold to companies that are:

We own over 320 issued patents and 100 patent applications world wide, and have licensed an additional 60 issued patents and 32 patent applications world wide. These patents cover, among other things, the fundamental biotechnology needed to produce PHA Natural Plastics as well as compositions, processes and derived products.

Market Opportunity

Emerging Issues Surrounding Petrochemicals

The markets for petrochemical-based plastics, fuels and chemicals are among the largest in the global economy. While these markets encompass a diverse array of products, they are all derived from fossil fuels, particularly petroleum and natural gas. The prolonged broad use of these petrochemical-based products has created several economic, social and environmental issues, including plastic waste management and pollution, rising fossil fuel prices, energy security and climate change. These issues have resulted in rising levels of interest in product alternatives that are renewable, sustainable and not dependent on fossil fuels.

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Plastic Waste Management and Pollution — According to the U.S. Environmental Protection Agency, 26.7 million tons of plastic solid waste was deposited into the U.S. municipal solid waste ("MSW") stream in 2003. Plastics are a rapidly growing contributor to U.S. MSW, having increased from less than 1% in 1960 to over 11% in 2003. In spite of intensive efforts to promote collection and recycling, only 1.4 million tons of plastic or 5.2% of plastic solid waste was recycled that year. While the balance is deposited in land fills and waste treatment facilities, many plastic items, particularly single use items such as bottles and caps, cups, lids and straws, and grocery bags become litter in the environment where they can become a significant problem. Plastic waste can create a significant monetary burden on state and local governments. This situation has led California to consider legislation banning the use of such plastic items or imposing significant taxes on them.

Moreover, current disposal methods may have adverse consequences to people's health, safety and the environment. Most wastes are placed in landfills or burned in incinerators. The burning process may produce dioxins and other hazardous substances that are released into the environment. In addition, landfills are filling up and requiring more land sources. Though attempts to slow the growth of landfills have been attempted through recycling legislation, it is still recognized that other solutions will need to be pursued to address the problem.

The threat that petrochemical-based plastics pose to the marine ecosystem has been well documented. Recent studies have noted that the world's oceans show increasing levels of persistent plastic particles of a size ingestible by marine creatures at the bottom of the food chain. Larger plastic items are also accumulating in large quantities in certain parts of the ocean and marine birds and mammals have been found killed by ingesting or getting tangled in plastic debris. Los Angeles County is now under court order to clean up the plastic waste in the Los Angeles River, at an estimated cost of $2-$3 billion.

The Rising Cost of Fossil Fuel — According to the U.S. Department of Energy's Report on International Energy Outlook dated July 2005, worldwide demand for oil is expected to rise by over 50% from 78 million barrels a day in 2002 to 119 million barrels a day in 2025. World oil prices have increased from an average of $36 per barrel in 2004 to over $70 per barrel during parts of 2006. Declining domestic production in the United States, higher demand in the developed world, rising demand in emerging markets, the increasing cost of drilling activities, underinvestment in infrastructure, and the increasing proportion of hydrocarbon reserves in politically unstable regions, are all stimulating an environment of rising and increasingly volatile oil and natural gas prices. The lack of substantial excess supply leaves the existing petrochemical market subject to the significant risk of supply disruptions or dramatically higher oil prices. According to the American Chemistry Council, approximately 9% of the oil and natural gas consumed in the United States is used in the production of plastics. Because fossil fuels are the primary feedstock for the plastics industry, polymer prices have also been experiencing increases in both level and volatility.

Energy Security — There is a growing view that developing alternatives to fossil fuel is a matter of national security. While the United States accounts for just 5% of the world's population and 2% of the world's oil reserves, the United States consumes 25% of world oil production. The majority of the U.S. oil needs are imported, with significant supplies coming from unstable parts of the world (the Middle East, Nigeria, Venezuela, and Russia), presenting risks to the economy and national security. Furthermore, oil is a finite resource, and there is growing evidence that the natural peak for production may occur within the next 20 years.

Climate Change — There is a growing scientific consensus that global climate change is occurring and that the rise in carbon dioxide emissions over the last 100 years has contributed to this situation. A significant source of CO2 emissions comes from the use of fossil fuel. The broad acceptance of the

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Kyoto protocol is evidence of the wide spread concern for global climate change in the industrialized world. In the United States, companies have started to account for carbon emissions, to prepare for carbon limits and credit trading schemes, and to seek solutions for reducing their carbon emission profile.

The Plastics Market

The plastics market is a large and global marketplace consisting of a broad range of polymer resins. The market includes several widely used, high volume commodity resins and numerous lower volume, higher performance resins targeting specialized end uses. Over the past forty years the plastics market has posted relatively consistent growth driven by a number of important fundamental factors including:

The growth in plastic use has generally been in line with overall economic growth as plastics have entered numerous new markets and product applications based on their functionality and ability to meet numerous user requirements. Plastics that perform well in extreme environment conditions and applications, offering good thermal and electrical insulating properties and corrosion resistance have been developed. By varying formulations and additive packages, plastic products can be produced in many shapes, sizes, colors and densities that satisfy specific application needs. Consequently, plastics are sold into a highly diverse set of markets including: electronics, automotive, furnishings, building and construction, textiles, packaging, and consumer products.

There are many different categories of plastics sold into the market today, but they are generally categorized into two broad groups: commodity polymers and specialty polymers. The most commonly known commodity polymers include polyethylene, polypropylene, polystyrene, PET and polyvinyl chloride. The commodity polymers are high volume resins which tend to be lower value added materials produced in volumes of tens of billions of pounds per year. According to SRI Consulting, in 2004, the total global consumption of commodity grade plastics constituted approximately 90% of the total plastics market on a volume basis and amounted to over 260 billion pounds. Specialty polymers fill niches within the broader plastics market by offering unique and tailored functionalities and characteristics that cannot be addressed by the commodity classes. In 2004 this category of plastic constituted just over ten percent of the total plastic market on a volume basis and amounted to over 35 billion pounds of consumed material. Some of the more widely known specialty polymers include polycarbonate, ABS (Acrylonitrile Butadiene Styrene), nylon and thermoplastic elastomers. Specialty polymer pricing varies widely based on the type of resin and the performance characteristics offered by the material. However, these resins are typically priced at a premium to commodity plastics and, according to Plastics Technology, were selling at values starting above $0.80 per pound and reaching as high, in some cases, as $3.60 per pound in June 2006. In contrast, the commodity grade resins were generally priced at less than $1.00 per pound at that time. Pricing has been volatile due to fluctuations in raw materials costs and supply/demand characteristics.

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Fuels and Biofuels Markets

According to the U.S. Department of Energy's Report on International Energy Outlook July 2005, worldwide demand for oil is expected to rise by over 50% from 78 million barrels a day in 2002 to 119 million barrels a day in 2025. The issues surrounding petrochemicals discussed above have given rise to increasing demand for fuels produced from renewable sources. Biofuels such as ethanol and biodiesel are produced from renewable sources such as corn, sugar cane and rapeseed. In 2005, a record 4 billion gallons of ethanol was produced in the United States, an increase of 17% from 2004 and 126% since 2001. Even so, ethanol represented less than 3% of 140 billion gallons of gasoline consumed in the United States in 2005. In August 2005, the United States enacted the Energy Policy Act of 2005, creating a national Renewable Fuels Standard (RFS) to encourage increased usage of ethanol. With the enactment of the nationwide RFS, the United States has made a commitment to renewable fuels, such as ethanol and biodiesel. The Act establishes a baseline for renewable fuel use, beginning with 4 billion gallons per year in 2006 and expanding to 7.5 billion gallons by 2012. The vast majority of the renewable fuel used is expected to be ethanol, necessitating a doubling of the domestic ethanol industry in the next 6 years. In addition to rising gasoline and oil prices, other factors will contribute to increased demand for biofuels. Many states are considering legislation to capitalize on the environmental and energy security benefits of renewable fuels by requiring their use.

While ethanol is typically produced from starch contained in grains such as corn and grain sorghum, it can also be produced from cellulose. Cellulose is the main component of plant cell walls and is the most common organic compound on earth. The production of ethanol from corn is a mature technology that is not likely to see significant reductions in production cost. The ability to produce ethanol from low-cost biomass will be an important factor in making it competitive as a gasoline additive. The Energy Policy Act 2005 provides that beginning in 2013, a minimum of 250 million gallons a year of cellulosic derived ethanol must be included in the RFS. It also creates grant and loan guarantee programs for cellulose ethanol.

The Metabolix Solution

We have developed and plan to commercialize an economically attractive, environmentally sustainable alternative to petrochemical-based plastics that is both biodegradable and functionally equivalent to traditional petrochemical-based plastics. The use of a renewable agricultural feedstock as a manufacturing input and the biodegradability of PHA Natural Plastics can potentially address many of the issues associated with petrochemical-based products. In aerobic conditions, our PHA Natural Plastics degrade into water and carbon dioxide.

A Solution to Plastic Waste and Pollution from Persistent Plastics — PHA Natural Plastics are biodegradable under a wide variety of conditions and therefore offer new options for addressing the burdens of traditional plastic solid waste on the municipal waste stream and the dangers posed within the marine ecosystem. For example, PHA Natural Plastics will decompose in landfills where air, moisture and bacteria are present. They will also rapidly decompose in the biologically intense environment of a waste treatment facility and will degrade when flushed into household septic systems. They are recyclable and can be cleanly incinerated, and can also be degraded in industrial or backyard composting environments. PHA Natural Plastics will also biodegrade in aquatic environments, and so offer a solution to the hazard of persistent plastics in wetland, river, coastal, and ocean ecosystems. It is critical to note, however, that PHA Natural Plastics are functionally durable and do not spontaneously degrade in cold, hot or wet conditions.

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Leveraging the Stability of Agricultural Commodity Pricing — Our use of corn sugar as a feedstock to produce PHA Natural Plastics reduces the reliance on fossil fuel as the primary input source, thus significantly addressing the effects of the increasing cost of fossil fuel. The prices of agricultural commodities, and corn in particular, have been relatively stable during the past few decades compared to the price of fossil fuel, which has significantly increased over the same period. We believe that polymers based on agricultural feedstocks, such as PHA Natural Plastics, may experience a more predictable cost structure and may become competitive to traditional petrochemical-based polymers over time. The chart below shows that over the past 32 years, the price of corn has remained relatively stable while the price of oil has been volatile and has risen by approximately eight times. Furthermore, even if pricing dynamics for corn and corn sugar change from past experience, we believe the volatility of oil prices will provide an incentive to diversify feedstocks.

Comparison of Oil and Corn Prices (January 1974 to March 2006)

GRAPHIC

Sources:
Monthly Crude Oil Prices, January 1974 to March 2006; Energy Information Administration
Monthly Corn for Grain Prices, January 1974 to March 2006; USDA National Agricultural Statistic Service

Reducing Dependency on Foreign Energy — We believe the widespread use of our PHA Natural Plastics can help lower the United States' exposure to oil imported from politically unstable countries. In addition, we believe that the PHA-producing switchgrass which we intend to develop offers the United States an additional opportunity in biofuels production, which currently is focused primarily on corn-based ethanol. We estimate that an annual crop of 159 million tons of PHA-producing switchgrass could produce fuel equivalent to one million barrels of oil per day, approximately 5% of current U.S. oil consumption, as well as 15 million tons of polymer per year.

Decreasing Carbon Dioxide Emissions — We believe that the widespread use of our PHA Natural Plastics can not only decrease the use of fossil fuel but also can reduce the emission of carbon dioxide into the atmosphere. While the production of PHA Natural Plastics produces carbon dioxide, both the agricultural production of corn feedstock for microbial fermentation and the direct production of PHA Natural Plastics in plants such as switchgrass have the added benefit of removing carbon dioxide from

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the environment through photosynthesis. While fermentation processes do require electricity which may be generated by carbon dioxide emitting sources, the increasing availability of clean power (such as biomass, wind or solar power) is an attractive alternative to employ as the business develops.

History of PHA Natural Plastics and Formation of Metabolix

Polymers are found in nature in a wide range of organisms including bacteria, plants and in some animals. Polyhydroxyalkanoates, or PHAs, which we call PHA Natural Plastics, also naturally occur within certain organisms, including bacteria. PHA was first isolated from Bacillus megaterium by Maurice Lemoigne at the Institute Pasteur in 1925. Lemoigne determined that these bacteria use PHA as a store of energy and consume it for food in times of famine. It is this characteristic that gives PHA its biodegradability in the environment.

Though PHA polymers are found in nature, their production in wild-type bacterial strains is inefficient and costly for commercial purposes. In 1981, Imperial Chemical Industries, or ICI, developed a controlled fermentation process using a wild-type bacterial strain to produce a PHA copolymer that they introduced under the trade name Biopol. While a handful of applications were developed for Biopol, the cost to produce the polymer was prohibitively high using the naturally occurring bacterial strains that were available at the time. Commercialization was not possible, but the Biopol assets remained largely intact and were eventually sold to Monsanto, Inc.

By the late 1980s, tools for genetic engineering had advanced substantially. Bacteria were already being genetically designed to produce various products, such as protein drugs. At the Massachusetts Institute of Technology, Dr. Oliver Peoples, our Chief Scientific Officer, working in the lab of Dr. Anthony Sinskey, a member of our Board of Directors, identified the key genes required for the biosynthesis of PHA Natural Plastics and invented and patented the first transgenic systems for their production. The use of genetically engineered production organisms, instead of wild-type strains, broadly expanded the number of compositions that could be made and enabled the tight level of control and high efficiency and productivity that are required for cost-effective industrial manufacturing.

We were formed in 1992 to exploit these discoveries. In order to fully capture the opportunity, we also acquired Monsanto's patent estate which relates to PHA Natural Plastics, which included the Biopol assets, in 2001. We have since fully developed an integrated manufacturing process including both transgenic strains and a proprietary recovery process that have been demonstrated to work in commercial equipment.

Business Strategy

Our goal is to be the leader in discovering, developing and commercializing economically attractive, environmentally sustainable alternatives to petrochemical-based plastics, fuels and chemicals. To achieve this goal, we are building a portfolio of programs that we believe will provide not only an attractive slate of commercial opportunities but also will generate leading and competitive intellectual property positions in the field. Key elements of our strategy include:

Establishing Production of PHA Natural Plastics — We have put into operation an 8 ton per month capacity pilot manufacturing facility to produce PHA Natural Plastics to seed the market, and as part of our strategic alliance, ADM and Metabolix have announced plans to build a 50,000 ton annual capacity Commercial Manufacturing Facility to produce PHA Natural Plastics. The ADM site in Clinton, Iowa is being designed, engineered and is expected to be built to accommodate significant

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expansion beyond its initial capacity. We anticipate that commercial production will commence in 2008.

Market Positioning and Sales — We are building a marketing and sales team to educate and develop our prospective customer base. This team will focus on positioning PHA Natural Plastics as premium priced, specialty materials that are environmentally attractive alternatives to petrochemical-based plastics. We intend to build a brand around PHA Natural Plastics consistent with this positioning and will seek to co-brand PHA Natural Plastics with our customers. The focus of this effort will be to build a pipeline of approximately 100 customer prospects across a range of applications, and presently we have ongoing relationships with over 30 customer prospects for approximately 50 different applications. Our goal is to dedicate a substantial amount of our commercial production capacity to these customers before the Commercial Manufacturing Facility commences operations.

Continuing Microbial Research and Process Development — We have identified opportunities to improve our production strains and our fermentation and recovery processes. We believe that significant reductions in the cost to manufacture PHA Natural Plastics can occur as we successfully exploit these opportunities. We also believe that as we acquire more experience with manufacturing our products at commercial scale, we will identify further improvements we can make.

Developing Applications for PHA Natural Plastics — We have developed formulations of our polymer suitable for injection molding, casting film and sheet, thermoforming and paper coating. These grades will be refined further to tailor them for specific customer performance requirements and additional grades will be developed for other applications. In addition, we will develop new formulations and processing protocols to extend the applications into which we can sell our products. Specific areas of work will include: foam, blown film, blow molded bottles, stretch wrap and fiber.

Advancing Switchgrass Research and Other Plant Strains — We believe that we are pioneering the technical process of introducing traits into switchgrass for the production of PHA Natural Plastics directly in the plant. Our switchgrass platform is currently in the research phase. In order to achieve a commercially attractive system, we intend to further improve our plant strains to achieve high levels of PHA Natural Plastics content by weight. We also intend to research introducing traits to increase crop yields in terms of tons per acre, and enhance biomass processability for the production of ethanol.

We intend to explore additional crop varieties that offer attractive commercial opportunities. These may include rapeseed, which is suitable for northern climates and can co-produce PHA Natural Plastics along with bio-diesel feedstock, and sugar cane, which is suitable for tropical climates and can co-produce PHA Natural Plastics along with ethanol feedstock.

Partnering our Switchgrass Program — As we have done with ADM for our microbial fermentation platform, we will seek to leverage our technology and establish strategic partnerships with one or more industry leading companies that can provide access to resources and infrastructure valuable for commercializing this platform. At the same time, we will seek an arrangement that allows us to retain an attractive share of the economic value of the project. In order to fund continued development, we intend to actively pursue grants from the government for our switchgrass program.

Building Governmental Awareness of Our Approach — Policy makers are seeking opportunities to reduce dependence on imported fossil fuel, decrease carbon dioxide emission and address landfill and pollution issues. We intend to continue to build our governmental affairs initiatives. We believe that

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higher awareness of our solution may result in opportunities to obtain additional funding or legislative support that can facilitate and accelerate the adoption of our products.

Extending Our Technology to Sustainable Production of Large Volume Chemicals and Intermediates — Our technical capabilities can be applied to produce a number of important commercial chemicals and chemical intermediates through biological conversion of sustainable feedstocks such as sugars.

Furthering our Leading and Competitive Intellectual Property Position — We have built a patent estate around our platform technologies and a variety of inventions relevant to the commercialization of PHA Natural Plastics. We are extending this patent estate within our core business as well as to other commercial opportunities in the area of bio-based plastics, fuels and chemicals. Some of the areas in which we may seek to establish leading and competitive intellectual property include:


Fermentation Alliance with Archer Daniels Midland Company

On November 3, 2004, we entered into a strategic alliance with ADM Polymer Corporation, a wholly-owned subsidiary of ADM, one of the largest agricultural processors in the world. The strategic alliance has three phases, which are described below and include: (i) a Technology Alliance Phase, (ii) a Commercial Alliance Phase and (iii) a Joint Venture Phase.

Technology Alliance Phase — The purpose of this phase, which has been achieved, was to determine whether our process for fermenting and recovering PHA Natural Plastics could achieve certain performance benchmarks in commercial scale equipment and to prepare a master plan and preliminary budget for the construction of the Commercial Manufacturing Facility. In November of 2004, we received a $3.0 million upfront payment from ADM, and in May 2006, we received $2.0 million in milestone payments associated with the achievement of Technology Alliance goals.

Commercial Alliance Phase — The purpose of this phase is to build the Commercial Manufacturing Facility, to market and sell PHA Natural Plastics through a separate legal entity owned equally by each of Metabolix and ADM Polymer, which we refer to as the Joint Sales Company, to make arrangements for the financing of the operation and to allocate distributions of cash flow. We anticipate that the Joint Sales Company will offer PHA Natural Plastics for sale in pellet form (for further processing and re-sale as finished goods or components by customers) and in other forms as may be determined by the Joint Sales Company (see "Product Applications").

On July 12, 2006, ADM exercised its option to enter into the Commercial Alliance. The Commercial Alliance Phase will last until the expiration of all patents relating to PHA Natural Plastics produced through fermenation (including patents licensed by us to the Joint Sales Company and patents claiming

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inventions made during the strategic alliance with ADM Polymer), unless we and ADM convert the strategic alliance into a joint venture (as described below) or unless either party terminates the strategic alliance. During the Commercial Alliance Phase, ADM will take responsibility for and will finance construction of the Commercial Manufacturing Facility, which it will own and contract on a dedicated basis to the Joint Sales Company. In addition, ADM will finance the working capital requirements of the Joint Sales Company. We are responsible for formulation operations and investing in formulation equipment, and we will take responsibility for continuing research and development. In addition, we will lead the sales and marketing efforts on behalf of the Joint Sales Company until completion of the construction of the Commercial Manufacturing Facility. At that time, the Joint Sales Company will assume control of such activities. The Joint Sales Company will make up to twelve quarterly payments of $1.575 million to us to support these activities during the construction of the Commercial Manufacturing Facility. The first two such payments totaling $3.15 million were received in July 2006. Subsequent quarterly payments will become due and payable on the first business day of each successive calendar quarter during the construction of the Commercial Manufacturing Facility. In the event construction is completed and sale of commercial product commences prior to the Joint Sales Company making all twelve such payments, the quarterly payments will cease, and the Joint Sales Company will pay us a lump sum equal to the number of remaining unpaid payments multiplied by $250,000.

Upon the commencement of commercial sales, the Joint Sales Company will pay royalties to us for all PHA Natural Plastic sold by the Joint Sales Company. The Joint Sales Company will also pay manufacturing fees to ADM for production of PHA Natural Plastics and will pay formulation fees to us for certain formulation services. The Joint Sales Company will compensate ADM and us for services that we each may provide to the Joint Sales Company under separate service agreements. For example, we anticipate that we may provide research, development, marketing and sales services to the Joint Sales Company under such a service agreement.

ADM will construct, finance, own and operate the Commercial Manufacturing Facility through a manufacturing agreement with the Joint Sales Company. Even though the Joint Sales Company is a separate legal entity owned equally by each of Metabolix and ADM Polymer, ADM Polymer will disproportionately fund the activities of the Joint Sales Company subject to certain limitations. In order to rebalance the respective investments made by the parties, a preferential distribution of cash flow will be used, whereby all profits, after payment of all royalties, reimbursements and fees, from the Joint Sales Company will be distributed to ADM until ADM's disproportionate investment in the Joint Sales Company, and the costs of constructing the Commercial Manufacturing Facility, have been returned to ADM. Once ADM has recouped such amounts, the profits of the Joint Sales Company shall be distributed in equal amounts to the parties.

Our agreements with ADM limit ADM's and our right to work with other parties, or alone, in developing or commercializing PHA Natural Plastics through fermentation. These agreements do not, however, limit our right to develop, manufacture or sell PHA Natural Plastics produced through plants such as switchgrass (rather than through fermentation) outside of the Joint Sales Company.

These agreements also include detailed provisions setting out the rights and obligations of the parties in the event of a termination of the Commercial Alliance. These provisions include the right of the parties to terminate the Commercial Alliance upon a material default of a material obligation by the other party after a notice and cure period has expired. The parties are also permitted, under limited circumstances, to terminate the Commercial Alliance if a change in circumstances that is not reasonably within the control of a party makes the anticipated financial return from the project

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inadequate or too uncertain. ADM and we have agreed that the following are examples of a change in circumstances beyond the reasonable control of ADM:

The agreement does not provide examples of a change in circumstances beyond our reasonable control. Finally, the parties have specific obligations to fulfill in the event of termination or if they file for bankruptcy protection. The obligations on termination are generally structured to permit the non-breaching party (in the event the strategic alliance is terminated due to a breach of the agreements) to continue to develop the business established by the Joint Sales Company. For example, on such a termination due to a breach by us, ADM would be permitted to continue to produce and sell PHA Natural Plastics (generally in limited quantities and subject to a royalty to us) and we would be required to perform formulation services for ADM for a period of time following the termination. Similarly, on a termination due to a breach by ADM, we would be permitted to continue to produce and sell PHA Natural Platistics and ADM would be required to perform fermentation services for us for a period of time following the termination.

Joint Venture Phase — When market demand exceeds the capacity of the Commercial Manufacturing Facility and the initial license granted by us, ADM has the option to form a new entity owned equally by each of Metabolix and ADM Polymer with us to build additional capacity and expand the commercial operation beyond the limits of the initial production capacity. Under certain circumstances, if ADM does not exercise its option, then Metabolix would have an opportunity to manufacture and sell PHA Natural Plastics outside of the Commercial Alliance.

License Agreement with Massachusetts Institute of Technology

On July 15, 1993 we entered into an exclusive license agreement with Massachusetts Institute of Technology. The license covered intellectual property rights claiming inventions relating to our core genetic engineering technology as described in several patent applications and invention disclosures. The MIT license has been amended three times to add or subtract specific patent applications to the rights licensed to us. The MIT license was amended a fourth time to clarify certain rights relating to the right to grant sublicenses.

The MIT license is a world wide exclusive license. The license does not expire until the expiration of the last patent within the licensed patent rights. Under the license, we are permitted to perform all services and manufacture and sell all products that are claimed by the patents licensed to us under the agreement. The license is subject to termination by either party upon an uncured material breach by the other party. On termination of the MIT license, all obligations of the parties on the date of termination remain in effect and all other rights and licenses under the agreement terminate. Under the agreement, we have an obligation to use diligent efforts to develop and market products that are subject to the license. Under the license, we paid a license issue fee to MIT and we are obligated to

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pay an annual license fee to MIT if annual royalties are less than a specified amount. Under the license we are required to pay a royalty to MIT based on net sales of products or services covered by a patent that is subject to the license and to share proceeds received from third parties in connection with the grant of a sublicense of rights granted under the license. We believe that the economic terms of the MIT agreement are substantially consistent with the economic terms for early-stage university license deals.

The MIT license contains other terms that are customary for university licenses, including without limitation, provisions relating to reporting requirements, patent prosecution, and indemnification.

Metabolix PHA Natural Plastics Target Markets

We believe PHA Natural Plastics from fermentation is the first of several attractive opportunities we will pursue to meet the world's plastic, fuel and chemical needs through the biological conversion of renewable and sustainable agricultural feedstocks. We believe PHA Natural Plastics possess comparable functional properties to petrochemical polymers serving applications that cover as much as half of the global polymer market. Our strategy is to enter this market with premium priced products that address specialized segments that can be served competitively by PHA Natural Plastics' distinctive properties.

Market Segments

We initially intend to target three market segments: branded products, regulated markets and products requiring biodegradability as a key functional property.

Branded Products — The market for branded products and services with attributes of environmental responsibility and sustainability is an emerging business opportunity. We intend to brand PHA Natural Plastics and we expect that by co-branding with products that use our PHA Natural Plastics we and our customers will be able to jointly promote environmental sustainability. Numerous companies have begun to position themselves and their products as more environmentally responsible. Some recent and well publicized examples of this include:

We believe that producers are positioning products as environmentally responsible or superior to gain a competitive advantage as producers believe consumer preferences are shifting. We believe the use of

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PHA Natural Plastics in branded products either directly or for packaging will facilitate and enhance our customers' efforts to exploit this trend.

Regulated Markets — Regulatory action, such as bans, taxes, subsidies, mandates and initiatives, to encourage substitution of renewable and sustainable materials for incumbents is rising. Examples of this can be found in the following jurisdictions:

In the geographic segments where regulatory changes occur, our PHA Natural Plastics can meet requirements for bio-based content or biodegradability that favor PHA Natural Plastics over conventional petrochemical-based plastics. In addition, producers are now anticipating regulatory change and are initiating programs to introduce sustainable materials into their products prior to or in an attempt to forestall implementation of such regulation. We believe that as awareness of our practical and affordable alternative grows, the pace of regulatory change may accelerate.

Products Requiring Biodegradability — There are a number of applications for which biodegradability will be a key functional property. These markets consist largely of agricultural and construction applications, where the employment of implements and materials that decay naturally after use can increase efficiency, simplify cleanup and reduce disposal cost. While there are biodegradable offerings on the market today, we do not believe that existing products provide both the robust performance in use combined with the degradation in a variety of conditions that PHA Natural Plastics offer. For example, some materials break down quite rapidly when exposed to water and would not be durable enough if used in agricultural applications. Other materials will only degrade in hot compost environments. PHA Natural Plastics, however, can be engineered to provide months of use in the environment and then be plowed under the soil or left on-site to decompose over time in normal soil conditions where bacteria are present. Potential applications in this segment include:

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Product Applications

To approach these market segments, we have developed four initial classes of functional formulations: injection molding, casting film and sheet, thermoforming and paper coating. We have begun product and business development activities, including working with potential customers to determine their specific needs, and we have begun the process of qualifying our material for a myriad of customer applications. Presently, we have ongoing relationships with over 30 customer prospects for approximately 50 different applications. We are actively developing additional customer prospects to qualify our products in the following application areas:

Segment
  Examples of Application
Single Use Disposables   •   Hot cups (paper and plastic)   •   Single serve coffee packs
    •   Lids   •   Utensils
    •   Dinnerware   •   Golf tees
Packaging   •   Caps and closures   •   Cosmetics cases
    •   Food wrap   •   Stretch wrap
    •   Detergent sachets   •   Bags
    •   Food jars and tubs   •   Foam
    •   Beverage cartons        
Agriculture &   •   Degradable stakes   •   Degradable mulch film
Erosion Control   •   Degradable erosion control netting   •   Degradable plant pots
Consumer Products   •   Personal hygiene products   •   Flushable household products
Electronics   •   Cell phone housings        

To serve these market opportunities, we have developed formulations of PHA Natural Plastics that can be processed in conventional petrochemical-based plastics processing equipment for injection molding, casting film and sheet, thermoforming and paper coating. We have demonstrated our materials in prototyping trials internally and in some cases shared them with our customer prospects. We also have plans to develop additional formulations to address the market segments above. We are presently working on a $1.0 million contract awarded by the U.S. Department of Defense to develop formulations suitable for packaging foam and stretch pallet wrap. We also have plans to explore formulations for producing blown film, blow molded bottles and fiber.

Marketing and Sales

Initially, we will be leading the marketing and sales effort on behalf of the Joint Sales Company. Sales of PHA Natural Plastics will be highly technical in nature. Our expertise in polymer science combined with our familiarity with the properties of the PHA family of polymers will be essential to developing resin grades that meet specific customer requirements. We will also conduct joint marketing and sales efforts with ADM through the Joint Sales Company. ADM is a world leader in agricultural processing and fermentation technology and is one of the world's largest processors of corn, soybeans, wheat and

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cocoa. ADM is also a leader in the production of ethanol and corn sweeteners. With a strong existing customer base, we expect that ADM will provide sales prospects for the alliance.

It is our goal to have established customer relationships to dedicate a substantial portion of the Commercial Manufacturing Facility's initial output before production starts in 2008. To this end, we are expanding our product development team and commencing efforts in applications development, pilot manufacturing, marketing and sales. At present, we have ongoing efforts with over 30 different customers for 50 different applications. We intend to build a pipeline of approximately 100 customer projects to maximize our production and marketing opportunities to fill the plant to capacity.

We are currently focusing our efforts on applications in the areas of injection molding, casting film and sheet, thermoforming and paper coating. We have developed prototype grades for each of these applications and have delivered small quantities of material to customer prospects for initial testing. If such tests are successful, we would expect some of our customer prospects to evaluate additional volumes of PHA Natural Plastics in larger scale product qualification trials and test marketing, which in turn may lead to product adoption and sales.

We intend to brand the PHA Natural Plastics and, where possible, to co-brand the materials with products that incorporate them. Prospective buyers of PHA Natural Plastics are seeking not only the functional properties they provide but also the progress toward sustainability, renewability and environmental responsibility they confer upon the products made or packaged with them. This will enable our customers to convey environmental responsibility to their end consumers by referencing our brand with their product. We have an ongoing effort to design branding ideas and conduct market research on them.

PHA Natural Plastics will initially be positioned as specialty materials that serve both a functional need (which petrochemical polymers may satisfy) and a social need (which petrochemical polymers cannot address). Consequently, we expect the Joint Sales Company to price PHA Natural Plastics as specialty products at a premium to the prices of large volume commodity polymers but comparable to a number of specialty polymers. The business model for positioning products with an environmental benefit at higher price points is increasingly prevalent with examples in several different industries ranging from retail food stores to gasoline-electric hybrid automobiles.

Through the strategic alliance with ADM, we intend to sell PHA Natural Plastics into markets around the globe. We intend to establish marketing and sales efforts either directly or through regional alliances with local firms in the Far East and Europe. We will also consider selected market development arrangements in certain discrete segments (fiber, for example) where there may be advantages to working exclusively with a market leader in that segment.

Our Technology and Product Development Process

We believe we have one of the most advanced capabilities to perform metabolic pathway engineering in the world and that we are skilled in our ability to integrate the biotechnology we develop into large scale industrial production processes. We believe that our advanced capabilities will allow us to:

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Biology and Genetic Engineering — Today, biotechnology is used extensively for the production of protein-based drugs and enzymes. To produce these materials, a new gene is inserted into the DNA of a host organism, usually e-coli bacteria, the workhorse of the pharmaceutical industry. When that gene is expressed (i.e., turned on) the cell will produce the desired protein that is associated with the inserted gene. We have taken this process several steps further. In order to convert sugar to a polymer, the sugar molecule must undergo not one but several chemical alterations to turn it into a monomer, the precursor to plastic. To execute all these reactions, we have encoded not one but several genes into the host DNA to produce each of the enzyme catalysts necessary for each step in the process. These genes come from multiple microbial sources and are selected for optimum performance using proprietary screening technology that we have developed. In addition to producing the monomer from sugar, depending on the kind of polymer desired, another feedstock may also be processed through a series of steps, requiring different genes and enzymes, to produce a different monomer. The two monomers are then joined together, or polymerized, by yet one more genetically produced enzyme. These are complex multi-gene systems, and we integrate them directly into the genome of the organism to enhance its stability under what are rigorous operating conditions. Our process creates a complete biological system where all of the reactions to convert feedstock into polymer take place within the cell, essentially creating a biofactory. So, while most biotechnology products today involve identifying a single gene to produce one protein, we have identified and chromosomally inserted a series of genes to produce several proteins and have done so in such a way that they are expressed in a concerted and harmonious fashion to execute the right reactions at the right times in a reliable way. We are not aware of other efforts in this field that have executed metabolic pathway engineering to this level of sophistication and with the level of success that we have experienced. The illustration below shows a schematic of our multi-gene system to produce PHA Natural Plastics.

GRAPHIC

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Industrial Fermentation Process Engineering — We also have important capabilities in industrial fermentation process engineering that we incorporate into our technology development process. Simply engineering a bacterial strain to convert sugar to polymer is insufficient because the conditions present in a laboratory bench scale experiment are considerably different than those present in an industrial scale manufacturing operation. Not only are there variable operating conditions (such as temperature, pressure, oxygenation and distribution of nutrients), but also the microbe must grow and uniformly multiply over 400 billion times to fill up a 100,000 gallon industrial reactor. We have tightly integrated our fermentation scale-up research capabilities with our genetic engineering capabilities to create a feedback loop where data from fermentation experiments can readily influence microbial design and where microbial engineering approaches can guide the fermentation group to structure the optimal protocols (recipes) for running fermentations.

Chemical Process Engineering — The third element of our technology and product development process involves sophisticated process chemistry and chemical engineering to separate the polymer from the biological cell material once fermentation is complete. We have a dedicated team that has developed a proprietary process for PHA Natural Plastics recovery at the industrial scale. We have invented a process that achieves a high level of purity without damaging the polymer and that we believe can be implemented cost effectively at commercial scale. In work recently completed with ADM, we successfully demonstrated our ability to efficiently isolate polymer from the cell debris, clean and dry the polymer and prepare it for processing into pellets, its final form.

Polymer Science and Product Development — The final element of our product development involves tailoring the polymer to provide the product properties and meet the processing requirements for specific customer applications. Typically, this work involves establishing which combination and ratio of comonomers is best suited for the target application, modifying and blending individual polymer grades, blending the pure polymer with additives such as nucleating agents, plasticizers, fillers and other materials to optimize performance properties, and finally designing processing protocols to successfully convert the material to its target form. When the composition and blend is right, the material will flow, form, crystallize or otherwise process into its end state with the customer's desired properties at an attractive conversion cost. Our product development team has considerable expertise in polymer science and to date has developed blends suitable for injection molding, casting film and sheet, thermoforming and paper coating. In the future, we have plans to create formulations for blown film, blow molding, foam and fiber.

In sum, we have successfully integrated capabilities in biology, genetics, fermentation process engineering, chemical engineering and polymer science. We believe this integrated set of capabilities will be a source of competitive advantage. These same capabilities are being applied to our switchgrass program where we intend to develop an industrial system to produce not only PHA Natural Plastics but also cost advantaged biomass for ethanol production. We believe our capabilities can also be applied successfully to other bio-based plastics, fuels and chemicals projects.

Research & Development

We have a long standing and ongoing research and development program that is designed to exploit our systems approach to industrial biotechnology. While some biotechnology companies develop platform technologies (genomics, DNA synthesis, shuffling and directed evolution for example) or focus on singular aspects of a product's production (providing a key enzyme, catalyst or ingredient), we are focused on developing entire production systems from gene to end product. We believe that the technical challenges of successfully deploying biotechnology in industrial settings are high and that systems developed in an integrated and comprehensive environment will generate the optimum possible results and provide us with a competitive advantage. Furthermore, we believe fully developed,

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commercially viable processes will command higher values from potential partners than individual components or technologies.

The primary goals of our research and development program are to:

Our research and development efforts are presently focused in three critical areas:

Microbial Fermentation — We have ongoing strain development efforts to develop microbes that can produce higher yields of PHA Natural Plastic at lower cost than our current strains. We have identified specific projects that we believe will allow us to approach the maximum theoretical productivity of these systems. In addition, we are engaged in strain development work to facilitate production of other members of the PHA polymer family that will allow us to extend the range of market applications we can address. This work will be combined with our ongoing product development effort, which is broadening the range of formulations we can make with our lead polymer composition.

Polymer Producing Plants — We are developing a technology to produce PHA Natural Plastics directly in plants, specifically targeting switchgrass. This effort builds on our success in creating high productivity microbial biofactories and may enable the production of PHA Natural Plastics with economics that are as or more favorable than general purpose commodity plastics such as polyethylene, polypropylene, and polystyrene.

New Systems and Products — We plan to further apply our platform technologies to other commercial opportunities in the area of bio-based plastics, fuels and chemicals. We have an ongoing effort to evaluate new program opportunities in the following areas:

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We currently employ 36 personnel conducting research and development for our programs. Among our research staff, 14 hold Ph.D.s and 19 hold masters or bachelors degrees in their respective disciplines. Our staff has expertise in the following areas: microbial genetics, bioinformatics, metabolic engineering, systems biology, plant genetic engineering, fermentation process engineering, chemical engineering, and polymer science and engineering.

We supplement our internal resources by collaborating with outside parties including universities for specific targeted projects and over the last several years have sponsored targeted research projects at these as well as other institutions:

University of Massachusetts at Lowell   University of Calgary
University of Munster   Oak Ridge National Laboratories and National Renewable Energy Laboratories

Switchgrass Biomass Biorefinery Program

We are developing a breakthrough technology to produce PHA Natural Plastics directly in plants. This effort builds on our success in creating high productivity microbial bio-factories and offers the potential to produce PHA Natural Plastics at comparable or lower costs than the current cost of producing commodity petrochemical-based plastics such as polyethylene, polypropylene, and polystyrene. We are presently focusing our efforts on switchgrass, a commercially and ecologically attractive, non-food energy crop that is indigenous to North America. We believe we can engineer a system that co-produces PHA Natural Plastics along with biomass for conversion to fuels (such as ethanol) or energy. We believe the co-production of PHA Natural Plastics with energy in one system will offer superior economic value and productivity to a single product system. We have received significant funding from the United States Government as well as from BP for these efforts. We have also performed work on rapeseed for co-production of PHA Natural Plastics along with biodiesel fuel.

Switchgrass is an attractive biomass to energy crop that is generally considered to be a leading candidate for cellulose-derived ethanol production. It is a high density perennial crop that can grow on marginal land and does not require substantial inputs in terms of water or fertilization. It has the capability of sequestering significant amounts of carbon dioxide from the atmosphere in its root systems. It was the dominant plant species over the Great Plains of the United States prior to the introduction of modern agriculture and sometimes referred to as prairie grass. Switchgrass is found from the eastern United States west to Montana and Arizona, Canada and Mexico.

We believe we are a leader in the science and technology related to the transformation of switchgrass. Precise insertion of novel pathways in switchgrass is challenging due to the tendency of plants to eliminate foreign genes and due to the lengthy time required for cross-breeding of plant generations having new genes. We have developed several proprietary approaches to more efficiently introduce complex, multi-gene, multi-step pathways into switchgrass and we expect that these approaches will have value outside of the PHA family of products. For example, we believe we can introduce traits into switchgrass that can improve the yield of switchgrass per acre as well as enhance its processability for conversion to fuel.

We have already achieved several significant milestones in this program and can produce small amounts of PHA Natural Plastics in switchgrass. Our research is currently focused on increasing PHA Natural Plastic production levels to amounts we believe would be commercially viable and our goal is to reach field trial demonstrations within the next four years.

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We believe that our switchgrass biomass biorefinery program offers the potential to improve the economics of producing not only PHA Natural Plastic but also fuels, such as ethanol. Polymer production economics can be improved because the manufacture of the material will take place within the plant. With our current process, only the feedstock (i.e. corn sugar) is produced within the plant and considerable costs are incurred converting that feedstock to the polymer. Through direct production in switchgrass, we can eliminate those conversion costs and potentially achieve production economics comparable to those of general agricultural products, which are inexpensive. It is also commonplace within both the agricultural and the energy industries to produce a variety of co-products from raw materials to maximize value. As with a barrel of oil that is converted to both gasoline and plastic, or a bushel of corn that is converted to sweetener and other products, we believe that a variety of switchgrass that is convertible to both fuel and PHA Natural Plastic can have more value than one that is not.

While the cost of producing PHA Natural Plastics in switchgrass may be considerably lower than the cost of producing these materials by fermentation, we believe the introduction of plant based materials can significantly expand the market for fermentation based materials. The scale and complexity of agriculturally producing PHA Natural Plastics will limit the grades of material produced to just a few. Conversely, fermentation based manufacturing allows many grades to be produced with a variety of property sets. Together, low cost plant based material can be blended with fermentation material to achieve an optimal balance between cost and performance.

In 2001, the U.S. Department of Energy awarded us a $7.5 million, 5-year grant to develop production of PHA Natural Plastics directly in crops that can be used to generate energy. In 2003, the U.S. Department of Agriculture awarded us an additional $2.0 million for this program. This concept, called a "Biomass Biorefinery", is based on the coproduction of energy and higher value PHA Natural Plastics. It is analogous to today's energy/petrochemical industry where synthetic plastics are derivative value-adding products to the production of energy from petroleum and natural gas.

Competition

The plastics market is large with many established players. The market has grown around the chemical processing of oil and natural gas, and is concentrated in the conventional, non-biodegradable petrochemical-based segment. Metabolix is focused on the biological processing of agricultural feedstocks and the production of biodegradable, renewable resource-based plastics, fuels and chemicals.

The current plastics market is primarily based on oil and natural gas. Established players in this segment include Dow Chemical, DuPont, BASF, Bayer, General Electric, Mitsubishi Chemical and Huntsman Chemical, among many others. The price of conventional petrochemical-based plastic is volatile, as it is dependent on petrochemicals as a key manufacturing input. In addition, the non-biodegradability of conventional petrochemical-based plastics makes them persistent in and harmful to the environment and creates significant waste.

A few companies, such as DuPont, have taken steps toward plastics based on renewable resources, and are commercializing plastics that use building blocks derived from renewable resources as components. These products remain primarily fossil carbon based and are not biodegradable. Other producers of petrochemical-based plastics, including BASF, Mitsubishi Chemical, and DuPont, now produce certain petrochemical grades that are biodegraded in industrial compost environments, but are otherwise persistent in the environment and are still subject to the volatility of oil and natural gas prices.

Our most comparable competitors are in the biodegradable, renewable resource based plastic segment, within which there are three distinct technologies: PHA, PLA and starch-based biodegradables. Just as

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a wide variety of different petrochemical-based plastics now serve the needs of the market, we believe that these three technologies are more complementary than competitive. We believe that of these three technologies, PHA Natural Plastics offer the broadest range of properties and processing options, and will address the largest proportion of opportunities as an environmentally attractive yet functionally equivalent alternative to conventional petrochemical-based plastics. Unlike PLA and most starch-based biodegradables, PHA Natural Plastics can:

Other companies active in the PHA plastics segment include Kaneka and minor producers in Brazil and China. The key players in PLA and starch based biodegradables are Cargill, Mitsui Chemical, Toyota, Novamont and Stanelco.

Biodegradability
   Fossil Carbon Based Plastics
   Biomass Renewable Resource Based Plastics
Biodegradable   Synthetic Biodegradable Polyesters:

- -Dow Chemical
- -DuPont
- -BASF
- -Mitsubishi Chemical
- -Showa Denko		   PHA:
- -Metabolix' PHA Natural Plastics
- -Kaneka's "PHBH"
PLA:
- -Cargill's NatureWorks™
- -Mitsui Chemical's Lacea™
- -Toyota

Starch-based Biodegradables:
- -Novamont's MaterBi™
- -Stanelco's Starpol™
 
 
Non-Biodegradable   -Traditional petrochemical-based
   products		   DuPont — Sorona™ (~30% bio-based)
Dow Chemical — Soybean Polyurethanes
Arkema — Nylon 11

We believe our PHA Natural Plastics products compare well against other biodegradable plastics when judged on the following factors:

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We believe that the principal advantages of our products will be the use of renewable feedstocks and biodegradability combined with their performance when compared to our competitor's products. We believe that we compare favorably with these competitors and have more stable feedstock input costs than conventional petrochemical-based plastics manufacturers.

Our ability to remain competitive will depend to a great extent upon our ongoing performance in the areas of product development and product performance. We cannot assure you that our products will achieve market acceptance or that we will be successful in the face of increasing competition from new products by existing competitors or new competitors entering the markets in which we intend to sell our products.

We believe that the principal advantages of our products will be the use of renewable feedstocks and biodegradability combined with their performance when compared to our competitor's products. We believe that we compare favorably with these competitors and have more stable feedstock input costs than conventional petrochemical-based plastics manufacturers.

Our ability to remain competitive will depend to a great extent upon our ongoing performance in the areas of product development and product performance. We cannot assure you that our products will achieve market acceptance or that we will be successful in the face of increasing competition from new products by existing competitors or new competitors entering the markets in which we intend to sell our products.

Intellectual Property

Our continued success depends in large part on our proprietary technology. We rely on a combination of patent, copyright, trademark and trade secret laws, as well as confidentiality agreements, to establish and protect our proprietary rights.

We own over 320 issued patents and 100 patent applications world wide, and we have licensed from third parties approximately 60 issued patents and over 30 patent applications world wide. All but 5 of these issued patents, and their foreign counterparts, relate to the technology in our current business plan. These patents cover, among other things, the fundamental biotechnology needed to produce PHA Natural Plastics as well as compositions, processes and derived products. Of the licensed patents and patent applications, many are owned by Massachusetts Institute of Technology and exclusively licensed to us. Under the MIT licensing agreement, we currently pay annual license fees. During the fiscal year ended December 31, 2005, these fees totaled approximately $25,000. In addition, under this licensing agreement, we are obligated to pay royalties on future sales of products, if any, covered by the licensed patents.

Our patents are directed to compositions of polymers, genes, vectors, expression systems in plants and bacteria, devices, coatings, films, as well as methods of manufacture and use. The terms of such patents are set to expire at various times between 2009 and 2022.

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We will continue to file and prosecute patent applications when and where appropriate to attempt to protect our rights in our proprietary technologies. It is possible that our current patents, or patents which we may later acquire, may be successfully challenged or invalidated in whole or in part. It is also possible that we may not obtain issued patents for our pending patent applications or other inventions we seek to protect. In that regard, we sometimes permit certain intellectual property to lapse or go abandoned under appropriate circumstances and due to uncertainties inherent in prosecuting patent applications, sometimes patent applications are rejected and we subsequently abandon them. It is also possible that we may develop proprietary products or technologies in the future that are not patentable or that the patents of others will limit or altogether preclude our ability to do business. In addition, any patent issued to us may not provide us with any competitive advantages, in which event we may abandon such patent.

Our registered U.S. trademarks include Metabolix, Biopol, and Where Nature Performs. Our marks Metabolix and Where Nature Performs and certain other trademarks have also been registered in selected foreign countries.

Our means of protecting our proprietary rights may not be adequate and our competitors may independently develop technology that is similar to ours. Legal protections afford only limited protection for our technology. The laws of many countries do not protect our proprietary rights to as great an extent as do the laws of the United States. Despite our efforts to protect our proprietary rights, unauthorized parties have in the past attempted, and may in the future attempt, to copy aspects of our products or to obtain and use information that we regard as proprietary. Third parties may also design around our proprietary rights, which may render our protected products less valuable, if the design around is favorably received in the marketplace. In addition, if any of our products or the technology underlying our products is covered by third-party patents or other intellectual property rights, we could be subject to various legal actions. We cannot assure you that our products do not infringe patents held by others or that they will not in the future.

Litigation may be necessary to enforce our intellectual property rights, to protect our trade secrets, to determine the validity and scope of the proprietary rights of others, or to defend against claims of infringement or invalidity, misappropriation, or other claims. Any such litigation, including The Procter & Gamble Company, or P&G, nullity action filed in Federal Patent Court in Munich, Germany described below in "Legal Proceedings", could result in substantial costs and diversion of our resources. Moreover, any settlement of or adverse judgment resulting from such litigation could require us to obtain a license to continue to use the technology that is the subject of the claim, or otherwise restrict or prohibit our use of the technology. Any required licenses may not be available to us on acceptable terms, if at all.

Employees

As of September 30, 2006, we had 49 full-time employees located in Cambridge, Massachusetts, one in California and one in Fort Mill, South Carolina, of whom 36 are in research and development, 6 are in marketing, 1 is in government programs and 8 are in operations/general and administration. None of our employees are subject to a collective bargaining agreement. We consider our relationships with our employees to be good.

Facilities

We currently lease approximately 28,000 square feet of office and research and development space at 21 Erie Street, Cambridge, Massachusetts. Our lease for this facility expires in 2014, with an option to renew for two additional five year periods. We do not own any real property. We believe that our

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leased facilities and additional and alternative space available to us will be adequate to meet our needs for the remainder of the year.

We have entered into an agreement with Nation Ford Chemical, or NFC, to act as a contract manufacturer and to operate an 8 ton per month recovery facility for pilot manufacturing in Fort Mill, South Carolina. We deliver raw materials to NFC for manufacturing and processing of PHA Natural Plastics, which is stored and then shipped at our instruction. The agreement terminates April 13, 2007, provided that the agreement will automatically be renewed for successive periods of 180 days, unless we or NFC give written notice of cancellation 30 days prior to the commencement of any such 180 day period. This plant is a model for the larger extraction assets to be employed at the Commercial Manufacturing Facility and the current processes, technology and systems will be replicated at a larger scale at the Commercial Manufacturing Facility.

Legal Proceedings

On March 8, 2005, P&G filed a nullity action in the Federal Patent Court in Munich, Germany, against the German equivalent of one of our patents covering the method of use of producing biopolymers. The patent at issue is licensed exclusively to us by MIT and will expire in July 2010. The nullity action alleges, among other things, extension of subject matter, insufficiency of disclosure, lack of novelty, and lack of inventive step. We are controlling the response to the nullity action with MIT's cooperation. We believe this nullity action is without merit and we intend to vigorously defend this action. However, the litigation process is inherently uncertain and there can be no assurance as to the ultimate outcome of this matter.

From time to time, we may be subject to other legal proceedings and claims arising in the ordinary course of business. We are not currently aware of any such proceedings or claims that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or results of operations.

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MANAGEMENT

Executive Officers and Directors

The following table sets forth information regarding our executive officers and directors, including their ages and positions as of October 17, 2006:

Name
   Age
   Position
James J. Barber, Ph.D.   53   President and Chief Executive Officer, Director
Oliver P. Peoples, Ph.D.   48   Chief Scientific Officer, Vice President, Research, Director
Johan van Walsem   43   Vice President, Manufacturing, Development and Operations
Thomas G. Auchincloss, Jr.   45   Chief Financial Officer, Vice President, Finance and Corporate Development
Robert C. Findlen   44   Vice President, Marketing
Brian Igoe   53   Vice President, Chief Brand Officer
Edward M. Muller(1)   70   Chairman of the Board, Director
Edward M. Giles(2)(3)   70   Director
Jay Kouba, Ph.D.(1)(3)   54   Director
Jack W. Lasersohn(2)(3)   53   Director
Anthony J. Sinskey, Sc.D.(2)(3)   66   Director
Matthew Strobeck, Ph.D.(2)   33   Director
Robert L. Van Nostrand(1)   49   Director
(1)
Member of the audit committee

(2)
Member of the compensation committee

(3)
Member of the nominating and corporate governance committee

James J. Barber, Ph.D. has served as our chief executive officer and as a director since joining Metabolix in January 2000. Prior to joining Metabolix, from September 1993 to January 2000, Dr. Barber was the global business director for the organometallics and catalysts business of Albemarle Corporation. From March 1992 to September 1993, Dr. Barber served as director, business development with Ethyl Corporation, a chemical manufacturing and supply company, where he was responsible for acquisitions and managed venture capital activities. Dr. Barber received a B.S. in Chemistry from Rensselaer Polytechnic Institute and a Ph.D. in Organic Chemistry from the Massachusetts Institute of Technology.

Oliver P. Peoples, Ph.D., a co-founder of Metabolix, has served as our chief scientific officer and vice president of research since January 2000, and was previously our director of research and vice president. Dr. Peoples has served as a director since June 1992. Prior to founding Metabolix, Dr. Peoples was a research scientist with the Department of Biology at the Massachusetts Institute of Technology where he emerged as a pioneer of the new field of metabolic pathway engineering and its applications in industrial biotechnology. The research carried out by Dr. Peoples at MIT established the fundamental tools and methods for engineering bacteria and plants to produce PHA Natural Plastics. Dr. Peoples has published numerous peer-reviewed academic papers and is an inventor of over 90 patents and patent applications worldwide. Dr. Peoples received a Ph.D. in Molecular Biology from the University of Aberdeen, Scotland.

Johan van Walsem has served as our vice president of manufacturing, development and operations since October 2003, and was previously our director of manufacturing and development from September 2001 to October 2003. Prior to joining Metabolix, from December 2000 to

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September 2001, Mr. van Walsem was senior biochemical engineer with Montec Research, a division of Resodyn Corporation, where he was responsible for all fermentation technology development. Prior to that, Mr. von Walsem worked with AECI Bioproducts in South Africa in technology management and new product development, commercializing the first large scale biotechnology-based amino acid production in Africa. Mr. van Walsem received a master's degree in Chemical Engineering from the University of Pretoria (South Africa) and an M.B.A. from the University of South Africa.

Thomas G. Auchincloss, Jr. has served as our chief financial officer and vice president of finance and corporate development since May 2005. From April 2002 to May 2005, Mr. Auchincloss was a consultant to Metabolix, providing business development, financial and strategic consulting services. From 1994 to 2001, Mr. Auchincloss served in a variety of positions at Vertex Pharmaceuticals Incorporated, most recently as vice president, finance and treasurer. Prior to Vertex, Mr. Auchincloss served as an investment banker in the corporate finance department at Bear Stearns & Co. Inc. where he was responsible for executing a variety of transactions including public and private financings, mergers and acquisitions and financial advisory assignments. Mr. Auchincloss received a B.S. in Business Administration from Babson College and an M.B.A. in Finance from the Wharton School.

Robert C. Findlen has served as our vice president of marketing since June 2006. Prior to joining Metabolix, from March 2002 to June 2006, Mr. Findlen worked at GE Plastics, first from June 2003 to June 2006 as product market director, LNP Plastics, and then from March 2002 to May 2003 as vice president and director, LNP Americas Commercial Business. LNP Engineering Plastics was acquired by GE Plastics in March 2002. Prior to the acquisition, Mr. Findlen held a number of positions at LNP Engineering Plastics, most recently, from 1998 to 2003, as vice president of sales and marketing. Mr. Findlen received a B.S. in Plastics Engineering from University of Massachusetts at Lowell.

Brian Igoe has served as our vice president and chief brand officer since August 2006. Prior to joining Metabolix, from February 2005 to August 2006, Mr. Igoe was executive vice president and chief marketing officer of Oco, Inc., a managed software company. Prior to that, Mr. Igoe was vice president of Alloy Marketing and Promotions from February 2002 until January 2005, and from January 1993 to January 2002 he served as executive vice president of Target Marketing and Promotions (TMP) which was acquired by Alloy Marketing and Promotions. Prior to TMP, Mr. Igoe was the owner and president of Igoe Marketing and Development, where he worked with clients such as Canada Dry and ASICS Corporation. Prior to founding Igoe Marketing and Development, Mr. Igoe served as director of product development for the Keds Corporation from February 1990 to January 1992 and served as director of advanced technologies at Reebok International Ltd. from February 1984 to January 1990. He also worked in marketing and product development from January 1980 to January 1984 with Nike, Inc. Mr. Igoe received a B.S. in Hotel, Restaurant and Travel Administration and Marketing from the University of Massachusetts at Amherst.

Edward M. Muller has served as the chairman of the board of directors since November 1993 and was previously our president and chief executive officer from October 1993 to January 2000. Mr. Muller held a number of positions, including chief executive officer, while at Halcon-SD Group between 1961 and 1985. That company developed a number of key processes for the production of raw materials for the polyester, nylon, polystyrene, and polyurethane industries. Mr. Muller serves on the board of directors of Tepha, Inc. Mr. Muller received a B.Ch.E. from The Cooper Union and a M.B.A. in Finance and Economics from New York University.

Edward M. Giles has served as a director since November 1993. Mr. Giles has served as the chairman of The Vertical Group, Inc., an investment fund administration company since January 1989. Mr. Giles was previously President of F. Eberstadt & Co., Inc., a securities firm. Mr. Giles serves on the board of

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directors as well as the audit committee of Ventana Medical Systems, Inc. Mr. Giles also serves on the board of directors of Tepha, Inc. Mr. Giles received a B.Ch.E. from Princeton University, and a S.M. in Industrial Management from the Massachusetts Institute of Technology.

Jay Kouba, Ph.D., has served as director since June 2006. Since January 2006, Dr. Kouba has served as the president of Ohio Consulting, a strategic management consulting firm. From January 1999 to December 2005, Dr. Kouba held several positions with BP's Petrochemicals Segment. From August 2004 to December 2005, Dr. Kouba served as senior vice president, strategy, marketing and technology for Innovene BP's olefins and polymers subsidiary, and earlier in 2004, as Vice President, Sales, Marketing and Logistics. Between 1999 and 2003, Dr. Kouba was Vice President, Technology. Dr. Kouba received a B.S. in Chemistry from Stanford University, a Ph.D. in Chemistry from Harvard University and a M.B.A. from University of Chicago.

Jack W. Lasersohn has served as a director since December 1999. Since 1989, Mr. Lasersohn has served as a general partner of The Vertical Group, L.P., a private venture capital firm. Mr. Lasersohn was a vice president and then director of the venture capital division of F. Eberstadt & Co., a securities firm, and Mr. Lasersohn serves as a director of Kyphon Inc., as well as several privately-held medical companies. Mr. Lasersohn received a B.S. in Physics from Tufts University, an M.A. from the Fletcher School of Law & Diplomacy at Tufts University and a J.D. from Yale University.

Anthony J. Sinskey, Sc.D., a co-founder of Metabolix, has served as a director since June 1992. From 1968 to present, Dr. Sinskey has been on the faculty of the Massachusetts Institute of Technology. Currently at M.I.T., he is Professor of Microbiology in the Department of Biology and Professor of Health Sciences and Technology in the Harvard-M.I.T. Health Sciences and Technology Program, as well as Co-Director of the Center for Biomedical Innovation. Dr. Sinskey serves on the board of directors of Tepha, Inc. Dr. Sinskey received a Sc.D. from Massachusetts Institute of Technology and a B.S. from the University of Illinois.

Matthew Strobeck, Ph.D., has served as director since September 2006. From May 2003 to the present, Dr. Strobeck has served as a senior investment analyst at Westfield Capital Management, specializing in healthcare and life sciences. Dr. Strobeck previously served as a consultant to the senior economic advisor to the commissioner of the Food and Drug Administration from August 2003 to May 2004. Prior to the Food and Drug Administration, Dr. Strobeck was a fellow in the Department of Biology at the Massachusetts Institute of Technology from December 2001 to June 2002. Dr. Strobeck received his B.S. from St. Lawrence University, a Ph.D. from the University of Cincinnati, a S.M. from Harvard University and a S.M. from the Massachusetts Institute of Technology Sloan School of Management.

Robert L. Van Nostrand has served as a director since October 2006. Since 2005, Mr. Van Nostrand has served as the Senior Vice President and Chief Compliance Officer of OSI Pharmaceuticals, Inc., a biotechnology company focused on developing therapeutics for cancer, eye disease and diabetes. Mr. Van Nostrand has been with OSI for almost twenty years, previously serving as the Vice President and Chief Financial Officer from 1996 through 2005. Mr. Van Nostrand also served as Vice President, Finance and Administration and OSI's Treasurer and Secretary. Mr. Van Nostrand joined OSI as Controller and Chief Accounting Officer in September 1986. Prior to joining OSI, Mr. Van Nostrand was in a managerial position with Touche Ross & Co. (currently Deloitte and Touche). Mr. Van Nostrand serves on the board of directors of Apex Bioventures, Inc., a special purpose acquisition company focused in life sciences, and upon Apex's initial public offering, Mr. Van Nostrand will serve as Chairman of its audit committee. Mr. Van Nostrand received a B.S. in Accounting from Long Island University, New York, and completed advanced management studies at the the Wharton School. Mr. Van Nostrand is a Certified Public Accountant.

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Board Composition

We currently have nine directors, of whom Edward M. Giles and Jack W. Lasersohn were elected as directors under the board composition provisions of a stockholders agreement and our certificate of incorporation. The board composition provisions of the stockholders agreement and our certificate of incorporation will be terminated upon the closing of this offering. Upon the termination of these provisions, there will be no further contractual obligations regarding the election of our directors. Our directors hold office until their successors have been elected and qualified or until the earlier of their resignation or removal.

Following this offering, the board of directors will be divided into three classes with members of each class of directors serving for staggered three-year terms. The board of directors will consist of three Class I directors (currently Mr. Muller, Dr. Strobeck and Mr. Van Nostrand), three Class II directors (currently Mr. Lasersohn, Dr. Kouba and Dr. Peoples) and three Class III directors (currently Mr. Giles, Dr. Sinskey and Dr. Barber), whose initial terms will expire at the annual meetings of stockholders held in 2007, 2008 and 2009, respectively. Our classified board could have the effect of making it more difficult for a third party to acquire control of us.

Board Committees

Our board of directors has established an audit committee, a compensation committee and a nominating and corporate governance committee, each of which operates pursuant to a separate charter adopted by our board of directors. The composition and functioning of all of our committees will comply with all applicable requirements of the Sarbanes-Oxley Act of 2002, the NASDAQ Stock Market and the Securities and Exchange Commission rules and regulations.

Audit Committee.  Robert Van Nostrand, Edward M. Muller, and Jay Kouba, Ph.D., currently serve on the audit committee. Mr. Van Nostrand is the chairman of our audit committee. The audit committee's responsibilities include:

Compensation Committee.  Anthony J. Sinskey, Sc.D., Edward M. Giles, Jack W. Lasersohn and Matthew Strobeck currently serve on the compensation committee. Dr. Sinskey is the chairman of our compensation committee. The compensation committee's responsibilities include:

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Nominating and Corporate Governance Committee.  Jack W. Lasersohn, Edward M. Giles, Jay Kouba, and Anthony J. Sinskey currently serve on the nominating and corporate governance committee. Mr. Lasersohn is the chairman of our nominating and corporate governance committee. The nominating and corporate governance committee's responsibilities include:

Compensation of Directors

Upon completion of the proposed initial public offering, each non-employee member of our board of directors will be entitled to receive an annual retainer of $30,000. In addition, each non-employee director serving as a member but not chair of our audit committee, compensation committee and nominating and corporate governance committee will be entitled to an annual retainer of $5,000, and the chairs of the audit committee, compensation committee and nominating and corporate governance committee will be entitled to an additional annual retainer of $15,000, $10,000 and $10,000, respectively.

Under the 2006 Stock Plan, each non-employee member of our board of directors on the effective date of the proposed initial public offering will be granted a fully vested nonqualified stock option to acquire 20,000 shares of common stock, less the number of shares subject to outstanding stock options

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held by such director on that date. Each non-employee director who is first elected to serve as a director after the initial public offering will be granted a fully vested nonqualified stock option to acquire 20,000 shares of stock. In addition, after each annual meeting of stockholders, beginning with the 2007 annual meeting, each non-employee director will automatically be granted a non-qualified stock option to acquire 10,000 shares of stock, which will vest one year after the date of grant. All of these non-employee director stock options will have an exercise price equal to the fair market value of the stock on the date the stock option is granted.

In June 2006, we granted Dr. Kouba an option to purchase 16,346 shares of our common stock as compensation for his service on our board of directors. This option has an exercise price of $5.14 per share and is fully vested and exercisable immediately. We have not otherwise paid separate compensation for services rendered as a director.

Compensation Committee Interlocks and Insider Participation

None of our executive officers serves as a member of the board of directors or compensation committee, or other committee serving an equivalent function, of any other entity that has one or more of its executive officers serving as a member of our board of directors or compensation committee.

Executive Officers

Each of our executive officers has been elected by our board of directors and serves until his or her successor is duly elected and qualified or until his or her earlier resignation or removal.

Executive Compensation

Compensation Earned

The following summarizes the compensation earned during the year ended December 31, 2005, by our chief executive officer and our three other most highly compensated executive officers who were serving as executive officers on December 31, 2005. We refer to these individuals as our "named executive officers." The compensation in this table does not include certain perquisites and other personal benefits received by the named executive officers that did not exceed the lesser of $50,000 or 10% of any officer's total compensation reported in this table.

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Summary Compensation Table

 
    
    
   Long-Term
Compensation
    
 
   Annual Compensation
    
Name and Principal Position
   Securities
Underlying
Options (#)
   All Other
Compensation($)
  Salary
   Bonus
James J. Barber
President and Chief Executive Officer		   $ 235,000     —   324,658   $ 106,739(1)

Oliver P. Peoples
Vice President, Research
 
$
182,400
 
 
—
 
117,691
 
 
—

Johan van Walsem
Vice President, Manufacturing, Development and Operations
 
$
172,267
 
$
10,000
 
179,806
 
 
—

Thomas G. Auchincloss, Jr.
Chief Financial Officer
 
$
155,600(2)
 
 
—
 
179,806
 
 
—
(1)
Represents $75,000 of loan principal and $31,739 of interest on that loan forgiven by us during 2005.

(2)
Represents Mr. Auchincloss's salary during the year ended 2005 from commencement of his employment with us on May 1, 2005, plus $40,000 in fees for consulting services rendered to us from January 1, 2005 to May 1, 2005.

Option Grants in Last Fiscal Year

The following table presents all grants of stock options during the year ended December 31, 2005 to each of the named executive officers. We have not granted any stock appreciation rights. The option grants listed below were made under our 1995 Stock Plan or 2005 Stock Plan at exercise prices equal to the fair market value of our common stock on the date of grant, as determined by our board of directors. The potential realizable value, if applicable, is calculated based on the term of the option at its time of grant, which is ten years. This value is net of exercise prices and before taxes, and is based on an assumed initial public offering price of $13.00 per share, the mid-point of the initial public offering price range, and the assumption that our common stock appreciates at the annual rate shown, compounded annually, from the date of grant until its expiration date. These numbers are calculated based on the Securities and Exchange Commission requirements and do not reflect our projection or estimatef of future stock price growth. Actual gains, if any, on stock option exercises will depend on the future performance of the common stock and the date on which the options are exercised.

The percentage of total options granted to employees in 2005 shown in the table below is based on options to purchase an aggregate of 1,224,083 shares of common stock granted to employees in 2005.

In general, options granted to new employees in 2005 vest in quarterly installments over four years.

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   Potential Realizable
Value at Assumed
Annual Rates of
Stock Price
Appreciation for
Option Term
 
   Individual Grants
 
   Number of
Securities
Underlying
Options
Granted (#)
    
    
    
 
   Percent of Total
Options Granted
to Employees in
Fiscal Year (%)
    
    
Name
   Exercise or
Base Price
($/Share)
   Expiration
Date
  5% ($)
   10% ($)
James J. Barber   324,658(1)   26.5   1.84   12/14/15   6,278,989   10,351,182
Oliver P. Peoples   117,691   9.6   1.65   9/20/15   2,297,781   3,773,982
Johan van Walsem   179,806   14.7   1.65   9/20/15   3,510,505   5,765,816
Thomas G. Auchincloss, Jr.   179,806   14.7   1.65   9/20/15   3,510,505   5,765,816
(1)
Includes 125,863 options that vest, in part, upon the attainment of specified performance and corporate financing milestones.

Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values

The following table sets forth certain information concerning the number and value of options exercised by the named executive officers during 2005, if any, and the number and value of any exercised and unexercised options held by the named executive officers at December 31, 2005. There was no public market for our common stock as of December 31, 2005. Accordingly, the value of unexercised in-the-money options, if applicable, represents the total gain that would be realized if all in-the-money options held at December 31, 2005 were exercised, determined by multiplying the number of shares underlying the options by the difference between an assumed initial public offering price of $13.00 per share, the mid-point of the initial public offering price range, and the per share option exercise price.

 
    
    
   Number of Securities
Underlying Unexercised
Options at
December 31, 2005
    
    
 
    
    
   Value of Unexercised In-the-Money Options at December 31, 2005
Name
   Shares
Acquired
on Exercise (#)
   Value Realized($)
  Exercisable
   Unexercisable
   Exercisable
   Unexercisable
James J. Barber   —   —   302,796   247,988   $ 2,558,973   $ 2,768,709
Oliver P. Peoples   —   —   173,265   112,789   $ 1,236,128   $ 1,259,704
Johan van Walsem   —   —   78,664   150,179   $ 287,276   $ 1,678,952
Thomas G. Auchincloss, Jr.   —   —   80,707   148,137   $ 778,828   $ 1,677,715

Employee Benefit Plans

1995 Stock Plan

Our 1995 Stock Plan was adopted by our board of directors and approved by our stockholders in June 1995 and amended in February 1998, September 1998, November 1998, November 1999, March 2000 and March 2003. Our 1995 Stock Plan is administered by the compensation committee of our board of directors. The compensation committee has the full authority and discretion to interpret the 1995 Stock Plan and to apply its provisions. Our 1995 Stock Plan permitted us to make grants of incentive and non-qualified stock options. The 1995 Stock Plan also permitted us to award both shares of our common stock and opportunities to make direct purchases of our common stock.

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Stock options granted under our 1995 Stock Plan have a maximum term of ten years from the date of grant and incentive stock options have an exercise price of no less than the fair market value of our common stock on the date of grant. Awards granted under our 1995 Stock Plan are not transferable other than by will or the laws of descent and distribution. In the event of a change-in-control of the Company, our board of directors and the board of directors of the surviving or acquiring entity shall, as to outstanding awards under the 1995 Stock Plan, make appropriate provision for the continuation, assumption or other disposition of such awards.

Our 1995 Stock Plan was terminated in June 2005 and no further grants or awards have since been, or will be, made thereunder. Grants and awards that are outstanding under our 1995 Stock Plan continue to be governed by the terms of our 1995 Stock Plan and the agreements related to such grants and awards. As of September 30, 2006, there were outstanding options under our 1995 Stock Plan to purchase a total of 746,703 shares of our common stock.

2005 Stock Plan

Our 2005 Stock Plan was adopted by our board of directors and approved by our stockholders in June 2005. Our 2005 Stock Plan permits us to make grants of incentive stock options, non-qualified stock options, stock grants and other stock-based awards. We have initially reserved 1,838,925 shares of our common stock for the issuance of awards under the 2005 Stock Plan. This number is subject to adjustment in the event of a stock split, stock dividend or other change in our capitalization. Generally, shares that are forfeited or canceled from awards under the 2005 Stock Plan also will be available for future awards. In addition, awards returned to our 1995 Stock Plan as a result of their expiration, cancellation or termination are automatically made available for issuance under our 2005 Stock Plan. We do not intend to grant additional options under this plan after this offering and the aggregate number of shares to be issued under 2005 Stock Plan will be reduced to 1,558,895, which represents the total number of shares issuable upon exercise of outstanding options granted under the 2005 Stock Plan.

The 2005 Stock Plan is administered by our compensation committee. The compensation committee has full power and authority to select the participants to whom awards will be granted, to make any combination of awards to participants, to accelerate the exercisability or vesting of any award and to determine the specific terms and conditions of each award, subject to the provisions of our 2005 Stock Plan. All of our employees, directors and consultants are eligible to participate in the 2005 Stock Plan.

The exercise price of stock options awarded under our 2005 Stock Plan may not be less than the fair market value of our common stock on the date of the option grant and the term of each option granted under our 2005 Stock Plan may not exceed ten years from the date of grant. The compensation committee will determine at what time or times each option may be exercised (provided that in no event may it exceed ten years from the date of grant) and, subject to the provisions of our 2005 Stock Plan, the period of time, if any, after retirement, death, disability or other termination of employment during which options may be exercised.

Stock grants may also be awarded under our 2005 Stock Plan. Stock grants are awards of shares of our common stock that may be subject to restrictions or repurchase rights established by the compensation committee. The compensation committee may impose whatever conditions to vesting it determines to be appropriate in connection with such stock grants.

Other stock-based awards may also be granted under our 2005 Stock Plan. Other stock-based awards are awards based on our common stock having terms and conditions as the compensation committee may determine and could include the grant of shares based upon certain conditions, the grant of

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securities convertible into shares of our common stock, and the grant of stock appreciation rights, phantom stock awards or stock units.

Unless the compensation committee provides otherwise, our 2005 Stock Plan does not generally allow for the transfer of awards and only the recipient of an award may exercise an award during his or her lifetime. In the event of a change-in-control of the Company, our board of directors and the board of directors of the surviving or acquiring entity shall, as to outstanding awards under the 2005 Stock Plan, make appropriate provision for the continuation, assumption or other disposition of such awards.

No awards may be granted under our 2005 Stock Plan after June 1, 2015 and we do not intend to grant any awards under our 2005 Stock Plan after this offering. In addition, our board of directors may amend or discontinue our 2005 Stock Plan at any time and the compensation committee may amend or cancel any outstanding award for the purpose of satisfying changes in law or for any other lawful purpose. Our stockholders may also vote to terminate the 2005 Stock Plan. No amendment may adversely affect the rights under any outstanding award without the holder's consent.

As of September 30, 2006, there were 1,558,895 outstanding options to purchase shares of our common stock under our 2005 Stock Plan and, assuming that no shares are returned to our 1995 Stock Plan and made available for issuance under our 2005 Stock Plan, 280,519 shares of our common stock are available for future issuance or grant under our 2005 Stock Plan.

2006 Stock Plan

Our 2006 Stock Option and Incentive Plan, or 2006 Option Plan, was adopted by our board of directors and approved by our stockholders in October 2006. The 2006 Option Plan permits us to make grants of incentive stock options, non-qualified stock options, stock appreciation rights, deferred stock awards, restricted stock awards, unrestricted stock awards, cash-based awards and dividend equivalent rights. We have initially reserved 2,500,000 shares of our common stock for the issuance of awards under the 2006 Option Plan. The 2006 Option Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each January 1, beginning in 2007, by 4.5% of the outstanding number of shares of common stock on the immediately preceding December 31; provided that the maximum aggregate number of shares reserved may not exceed 25% of the total number of outstanding shares of stock and provided further that not more than 10,000,000 shares will be issued under the plan. This number is subject to adjustment in the event of a stock split, stock dividend or other change in our capitalization. Generally, shares that are forfeited or canceled from awards, held back upon exercise of an award, or otherwise reacquired by the Company under the 2006 Option Plan also will be available for future awards. No awards have been granted under the 2006 Option Plan to date.

The 2006 Option Plan is administered by our compensation committee. The compensation committee has full power and authority to select the participants to whom awards will be granted, to make any combination of awards to participants, to accelerate the exercisability or vesting of any award and to determine the specific terms and conditions of each award, subject to the provisions of the 2006 Option Plan. All full-time and part-time officers, employees, directors and other key persons (including consultants and prospective employees) are eligible to participate in the 2006 Option Plan.

The exercise price of stock options awarded under the 2006 Option Plan may not be less than the fair market value of the common stock on the date of the option grant. The compensation committee will determine at what time or times each option may be exercised (provided that in no event may it exceed ten years from the date of grant) and, subject to the provisions of the 2006 Option Plan, the

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period of time, if any, after retirement, death, disability or other termination of employment during which options may be exercised.

Stock appreciation rights may be granted under our 2006 Option Plan. Stock appreciation rights allow the recipient to receive the number of shares equal to the appreciation in the fair market value of our common stock between the exercise date and the date of grant. The compensation committee determines the terms of stock appreciation rights, including when such rights become exercisable.

Restricted stock, unrestricted stock, cash-based awards, deferred stock awards and dividend equivalent rights may also be granted under our 2006 Option Plan. Restricted stock awards are shares of our common stock that vest in accordance with terms and conditions established by the compensation committee. The compensation committee may impose whatever conditions to vesting it determines to be appropriate. Shares of restricted stock that do not vest are automatically subject to our right of repurchase or forfeiture. Unrestricted stock awards are awards of shares of stock that are free of any restrictions. The compensation committee may grant unrestricted stock awards in respect of past services or in lieu of other compensation. Cash-based awards are awards that entitle the recipient to receive a cash-denominated payment. The compensation committee shall establish the terms and conditions of cash-based awards, including the conditions upon which any such award will become vested or payable. Cash-based awards may be made in cash or shares of stock in the compensation committee's discretion. Deferred stock awards are units entitling the recipient to receive shares of stock paid out on a deferred basis, and subject to such restrictions and conditions, as the compensation committee shall determine. Dividend equivalent rights are the right to receive credits based on cash dividends that would have been paid on the shares of stock underlying the award and are subject to the terms and conditions specified by the compensation committee at the time of grant. The 2006 Option Plan also permits the compensation committee to grant awards that are intended to qualify as "performance-based compensation" under Section 162(m) of the Code. These awards are only payable upon the attainment of specified performance goals, as described in the 2006 Option Plan. The maximum performance- based award payable in any performance cycle to any one individual is 750,000 shares or $10,000,000 in the event of a performance-based award that is a cash-based award.

Under the 2006 Stock Plan, each person who is a non-employee member of our board of directors on the effective date of the proposed initial public offering will be granted a fully vested nonqualified stock option to acquire 20,000 shares of common stock, less the number of shares subject to outstanding stock options held by such director on that date. Each non-employee director who is first elected to serve as a director after the initial public offering will be granted a fully vested nonqualified stock option to acquire 20,000 shares of stock. In addition, after each annual meeting of stockholders, beginning with the 2007 annual meeting, each non-employee director will automatically be granted a non-qualified stock option to acquire 10,000 shares of stock, which will vest one year after the date of grant. All of these non-employee director stock options will have an exercise price equal to the fair market value of the stock on the date the stock option is granted.

Unless the compensation committee provides otherwise, our 2006 Option Plan does not generally allow for the transfer of awards and only the recipient of an award may exercise an award during his or her lifetime. In the event of a change-in-control of Metabolix, our board of directors and the board of directors of the surviving or acquiring entity shall, as to outstanding awards under the 2006 Option Plan, make appropriate provision for the continuation or assumption of such awards.

No awards may be granted under the 2006 Option Plan after the tenth anniversary of the Effective Date. In addition, our board of directors may amend or discontinue the 2006 Option Plan at any time and the compensation committee may amend or cancel any outstanding award for the purpose of satisfying changes in law or for any other lawful purpose. No such amendment may adversely affect

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the rights under any outstanding award without the holder's consent. Other than in the event of a necessary adjustment in connection with a change in our stock or a merger or similar transaction, the compensation committee may not "reprice" or otherwise reduce the exercise price of outstanding stock options.

As of September 30, 2006, there were no outstanding options to purchase shares of our common stock under our 2006 Option Plan and, assuming that no shares are returned to our 1995 Stock Plan and 2005 Option Plan and made available for issuance under our 2006 Option Plan, 2,500,000 shares of our common stock are available for future issuance or grant under our 2006 Option Plan.

401(k) Plan

We maintain a tax-qualified retirement plan that provides all regular employees with an opportunity to save for retirement on a tax-advantaged basis. Under our 401(k) Plan, participants may elect to defer a portion of their compensation on a pre-tax basis and have it contributed to the plan subject to applicable annual Internal Revenue Code limits. Pre-tax contributions are allocated to each participant's individual account and are then invested in selected investment alternatives according to the participant's directions. Employee elective deferrals are 100% vested at all times. Our 401(k) Plan allows for discretionary matching contributions to be made by us. As a tax-qualified retirement plan, contributions to our 401(k) Plan and earnings on those contributions are not taxable to the employees until distributed from our 401(k) Plan and all contributions are deductible by us when made.

Employment, Severance and Non-Competition Arrangements

We have employment agreements with Dr. Barber, Dr. Peoples, Mr. van Walsem, Mr. Auchincloss, Mr. Findlen and Mr. Igoe.

Dr. Barber, our president and chief executive officer, entered into an employment agreement with us on December 14, 2005, which was amended and restated on September 19, 2006. The agreement entitles Dr. Barber to an annual base salary of $19,583 per month, subject to adjustment from time to time. In addition, we agreed to forgive a $75,000 loan made to Dr. Barber in 2000 in exchange for Dr. Barber's covenants under the agreement. Under the agreement, Dr. Barber was granted incentive stock options under our 2005 Stock Plan, with an exercise price of $1.84 per share, as follows: (i) an option to purchase 198,796 shares of our common stock, 18% of which vested as of the date of grant, the remainder to vest over a 4 year period, subject to the terms of the agreement; (ii) options to purchase 83,909 shares of our common stock, the vesting of such options to be contingent upon the occurrence of certain financing milestones; and (iii) an option to purchase 41,955 shares of our common stock, the vesting of such option to be contingent upon the advancement of our strategic alliance with ADM and certain financing milestones.

Dr. Peoples, our vice president, research, entered into an employment agreement with us on July 20, 2006. The agreement entitles Dr. Peoples to an annual base salary of $16,666 per month, subject to adjustment from time to time. Pursuant to the agreement, Dr. Peoples received a $75,000 bonus in July 2006, and he will receive an additional $75,000 bonus following completion of this offering. Pursuant to the terms of the agreement, if we terminate Dr. Peoples' employment without "cause" or if Dr. Peoples terminates his employment for "good reason" (each, as defined in the agreement), he will be entitled to a lump-sum cash payment equal to 24 months' base salary and a pro rata portion of the target bonus for the year in which termination occurs, plus payment of COBRA premiums for 24 months. If we terminate Dr. Peoples' employment without cause or if Dr. Peoples terminates his employment for "good reason" within the twenty-four month period immediately following, or the two month period immediately prior to, a "change of control" (as defined in the agreement), in addition to

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any accrued obligations, and subject to certain conditions, Dr. Peoples will receive: (i) a lump-sum cash payment equal to two times the sum of his then-current base salary plus 50% of his then-current target bonus, (ii) payment of COBRA premiums for 24 months, and (iii) full vesting of his stock options. To the extent Dr. Peoples would be subject to tax under 4999 of the Code as a result of company payments and benefits, the payments and benefits will be reduced to maximize his total after-tax payments.

Mr. van Walsem, our vice president, manufacturing, development and operations, has entered into an employment agreement with us dated May 1, 2006, which was amended and restated on September 22, 2006, that provides for a base salary of $16,666 per month, subject to adjustment from time to time. Mr. Auchincloss, our chief financial officer, has entered into an employment agreement with us dated January 10, 2006, which was amended and restated on September 22, 2006 that provides for a base salary of $16,666 per month, subject to adjustment from time to time. Mr. Findlen, our vice president, marketing, has entered into an employment agreement with us dated May 24, 2006, which was amended and restated on September 22, 2006 that provides for a base salary of $16,666 per month, subject to adjustment from time to time. Mr. Brian Igoe, our vice president, chief brand officer, has entered into an employment agreement with us dated August 29, 2006, that provides for a base salary of $16,666 per month, subject to adjustment from time to time. Additionally, Mr. Findlen's employment agreement provides for a signing bonus of $60,000, payable in two installments and Mr. Igoe's employment agreement provides for a signing bonus of $20,000. Each of our executives will be eligible to receive annual bonuses under a bonus scheme to be established by us no later than December 31, 2006, based on individual and company performance, with an initial target bonus of 50% of base salary. Pursuant to the terms of the agreements with Dr. Barber, Mr. Van Walsem, Mr. Auchincloss, Mr. Findlen and Mr. Igoe, if we terminate the executive's employment without "cause" or if the executive terminates his employment for "good reason" (each, as defined in the agreement), in addition to any accrued obligations, and contingent on the executive's provision of a timely and complete release of claims against us, for the period of twelve months following the termination he will be entitled to continuation of his base salary and payment of COBRA premiums. In addition, if the award of a bonus has become customary, the executive will be entitled to a payment equal to the average of the bonuses paid to him in the two years preceding the termination. If we terminate the executive's employment without cause or if the executive terminates his employment for "good reason" within the twenty-four month period immediately following, or the two month period immediately prior to, a "change of control" (as defined in the agreement), in addition to any accrued obligations and subject to certain conditions: (i) for a period of twelve months following the termination, we will continue the executive's base salary and payment of COBRA premiums, (ii) if the award of a bonus has become customary, the executive will be entitled to a payment equal to the average of the bonuses paid to him in the two years preceding the termination, and (iii) all of the executive's stock options will be accelerated, subject to certain conditions. To the extent the executive would be subject to tax under 4999 of the Code as a result of company payments and benefits, the payments and benefits will be reduced to maximize his total after-tax payments.

Each of our executive officers has signed an employee noncompetition, nondisclosure and inventions agreement. These agreements include a provision prohibiting the executive, during his employment by us and for a period of two years thereafter, from engaging in certain business activities. Dr. Barber and Mr. van Walsem are restricted from business activities in the field of methods of production, application and use of PHAs, their derivatives and other related technology developed by us. Mr. Auchincloss, Dr. Peoples, Mr. Findlen and Mr. Igoe are restricted from business activities which are directly or indirectly in competition with the products or services being developed, manufactured, marketed, distributed, planned, sold or otherwise provided by us or which are in any way directly or indirectly detrimental to our business.

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Limitation of Liability and Indemnification

As permitted by the Delaware General Corporation Law, we have adopted provisions in our certificate of incorporation and by-laws to be in effect at the closing of this offering that limit or eliminate the personal liability of our directors. Consequently, a director will not be personally liable to us or our stockholders for monetary damages or breach of fiduciary duty as a director, except for liability for:

These limitations of liability do not alter director liability under the federal securities laws and do not affect the availability of equitable remedies such as an injunction or rescission.

In addition, our by-laws provide that:

Contemporaneous with the completion of this offering, we intend to enter into indemnification agreements with each of our officers and directors. These agreements provide that we will indemnify each of our directors to the fullest extent permitted by law and advance expenses to each indemnitee in connection with any proceeding in which indemnification is available.

We intend to obtain, contemporaneously with the offering, director and officer liability insurance that covers certain liabilities of our directors and officers arising out of claims based on acts or omissions in their capacities as directors or officers, including liabilities under the Securities Act of 1933, as amended. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers, or persons controlling the registrant pursuant to the foregoing provisions, we have been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

These provisions may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. These provisions may also have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit us and our stockholders. Furthermore, a stockholder's investment may be adversely affected to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions. We believe that these provisions, the indemnification agreements and the insurance are necessary to attract and retain talented and experienced directors and officers.

At present, there is no pending litigation or proceeding involving any of our directors or officers where indemnification will be required or permitted. We are not aware of any threatened litigation or proceeding that might result in a claim for such indemnification.

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Other than compensation agreements and other arrangements which are described as required in "Management" and the transactions described below, since January 1, 2002, there has not been, and there is not currently proposed, any transaction or series of similar transactions to which we were or will be a party in which the amount involved exceeded or will exceed $60,000 and in which any director, executive officer, holder of five percent or more of any class of our capital stock or any member of their immediate family had or will have a direct or indirect material interest.

All of the transactions set forth below were approved by a majority of the board of directors, including a majority of the independent and disinterested members of the board of directors. We believe that we have executed all of the transactions set forth below on terms no less favorable to us than we could have obtained from unaffiliated third parties. It is our intention to ensure that all future transactions between us and our officers, directors and principal stockholders and their affiliates, are approved by a majority of the board of directors, including a majority of the independent and disinterested members of the board of directors, and are on terms no less favorable to us than those that we could obtain from unaffiliated third parties.

Private Placements of Securities

In April 2002 and May 2002, we issued and sold 637,461 shares of Series I convertible preferred stock at price of $10.80 per share. In connection with the issuance of Series I preferred stock during 2002, we issued warrants to purchase 520,990 shares of common stock at an exercise price of $13.21 per share. Also in April 2002 and May 2002, we exchanged 529,780 shares of Series H convertible preferred stock for 529,780 shares of Series I convertible preferred stock. Concurrently, we issued warrants to purchase 432,983 shares of common stock at an exercise price of $13.21 per share in connection with the exchange.

In June 2003, we issued 270,704 shares of Series I preferred stock at $10.80 per share. In conjunction with the issuance of the Series I preferred stock during 2003, we issued warrants to purchase 221,238 shares of common stock at an exercise price of $13.21 per share.

In November 2003, we issued 324,074 shares of Series J convertible preferred stock at $10.80 per share. In conjunction with the issuance of Series J preferred stock, shareholders of 1,208,880 shares of Series I preferred stock exercised their right to exchange the shares of Series I preferred stock for 1,208,880 shares of Series J preferred stock. Shareholders of 192,147 shares of Series I preferred stock who elected not to participate in the Series J preferred stock offering had their 192,147 shares of Series I preferred stock converted into 192,147 shares of Series I-1 convertible preferred stock. In connection with the issuance of Series J preferred stock, we issued warrants to purchase 264,865 shares of common stock at an exercise price of $0.12 per share. Concurrently, we issued warrants to purchase 988,004 shares of common stock at an exercise price of $0.12 per share in connection with the exchange of Series I preferred stock for Series J preferred stock. In addition, we cancelled warrants to purchase 348,386 shares of common stock at an exercise price of $13.21 per share. In January 2004, we issued an additional 57,370 shares of Series J preferred stock at $10.80 per share. In conjunction with the issuance of Series J preferred stock in 2004, the remaining shareholders of 36,918 shares of Series I preferred stock exercised their right to exchange the shares of Series I preferred stock for 36,918 shares of Series J preferred stock. In connection with the issuance of the Series J preferred stock during 2004, we issued warrants to purchase 46,881 shares of common stock at an exercise price of $0.12 per share. Concurrently, we issued warrants to purchase 30,173 shares of common stock at an exercise price of $0.12 per share in connection with the exchange of Series I preferred stock for Series J preferred stock.

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In April through August 2004, we issued 1,100,766 shares of Series 04 convertible preferred stock at $5.40 per share. In conjunction with the issuance of Series 04 preferred stock, shareholders of 1,625,242 shares of Series J preferred stock exercised their right to exchange the shares of Series J preferred stock for 3,250,484 shares of Series 04 preferred stock. A holder of 2,000 shares of Series J preferred stock who elected not to participate in the Series 04 preferred stock offering had his 2,000 shares of Series J preferred stock converted into 2,000 shares of Series J-1 convertible preferred stock. In conjunction with the issuance of Series 04 preferred stock in 2004 and the exchange of the shares of Series J preferred stock, 155,041 warrants to purchase common stock were cancelled.

From March through May 2005, we issued 893,652 shares of Series 04 convertible preferred stock at $5.40 per share.

In January 2006, we issued 2,920,000 shares of Series 05 convertible preferred stock at $6.00 per share.

The following table summarizes, on a common stock equivalent basis, the participation by our five percent stockholders, officers and directors.

Purchaser(1)
   Total Common Stock Equivalents
   Aggregate Consideration Paid
   Investment Participation
State Farm Mutual Automobile Insurance Co.   629,469   $ 5,970,207   Series I, J, 04 and 05
The Vertical Group, L.P.(2)   390,128   $ 3,775,269   Series I, J, 04 and 05
Archer Daniels Midland Company   681,083   $ 4,999,998   Series 05
Thomas G. Auchincloss, Jr.   10,630   $ 90,460   Series I, J, 04 and 05
Edward M. Muller   38,667   $ 510,959   Series I
Edward M. Giles(3)   217,393   $ 2,100,257   Series I, J, 04 and 05
Jack W. Lasersohn(2)   390,128   $ 3,775,269   Series I, J, 04 and 05
Anthony J. Sinskey   39,467   $ 336,559   Series I, J, 04 and 05
Matthew Strobeck(4)   544,865   $ 4,000,002   Series 05
(1)
See "Principal Stockholders" for more detail on shares held by these purchasers.

(2)
Represents the combined holdings of Vertical Fund I, L.P. and Vertical Fund II, L.P., the sole general partner of each of which is The Vertical Group, L.P. Mr. Lasersohn, who is one of our directors, is a general partner of Vertical Group, L.P. Mr. Lasersohn shares voting and investment power over shares held by Vertical Fund I. L.P. and Vertical Fund II, L.P.

(3)
Mr. Giles, who is one of our directors, is limited partner of Vertical Fund I, L.P. Mr. Giles is the Chairman of the Board of The Vertical Group, Inc. Mr. Giles does not, directly or indirectly, have any voting or dispositive power over shares held by Vertical Fund I, L.P. or Vertical Fund II, L.P.

(4)
Represents the combined holdings of Guggenheim Portfolio Company XIX, LLC, Westfield Life Sciences Fund II L.P., Westfield Life Sciences Fund L.P. and Westfield Microcap Fund L.P. Mr. Strobeck, who is one of our directors, is a senior investment analyst at Westfield Capital Management Company, LLC. Mr. Strobeck shares voting and investment power over shares held by Guggenheim Portfolio Company XIX, LLC, Westfield Life Sciences Fund II L.P., Westfield Life Sciences Fund L.P., and Westfield Microcap Fund L.P.

Transactions with Archer Daniels Midland Company

ADM has agreed to purchase $7.5 million of our shares of common stock in a private placement concurrent with this offering at a price per share equal to the initial public offering price. The sale of such shares to ADM will not be registered in this offering. ADM will have piggyback registration rights and one demand registration right with respect to such shares upon the expiration of the lock-up agreement.

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On July 12, 2006, we and ADM Polymer, a wholly-owned subsidiary of ADM, entered into the Commercial Alliance Agreement and related agreements. We were also a party to a Technology Alliance and Option Agreement with ADM as part of our strategic alliance which terminated upon execution of the Commercial Alliance Agreement.

Transactions with our Executive Officers and Directors

We have employment agreements with Dr. Barber, Dr. Peoples, Mr. van Walsem, Mr. Auchincloss, Mr. Findlen and Mr. Igoe, which provide for certain salary, bonus, stock option and severance compensation. For more information regarding these agreements, see "Management — Employment, Severance and Non-Competition Arrangements."

Prior to completion of this offering, we intend to enter into indemnification agreements with each of our executive officers and directors, providing for indemnification against expenses and liabilities reasonably incurred in connection with their service for us on our behalf. For more information regarding these agreements, see "Management — Limitation of Liability and Indemnification."

In September 2005, we retained Dr. ChoKyun Rha, the spouse of our director, Dr. Sinskey, to serve as an advisor for the purpose of building and managing business relationships in Asia. In consideration for Dr. Rha's services, on September 20, 2005, we granted Dr. Rha a nonqualified stock option to purchase 16,346 shares of our common stock, with an exercise price of $1.65 per share, vesting over a period of four years.

In 1999, we entered into a sublicense agreement with Tepha, Inc. ("Tepha"), to sublicense certain technology to Tepha. Our directors Messrs. Muller and Giles and Dr. Sinskey serve on the board of directors of Tepha. The agreement with Tepha contains provisions for sublicense maintenance fees to be paid to us upon Tepha achieving certain financing milestones and for product related milestone payments. Under the agreement, we will also receive royalties on net sales of licensed products or sublicensing revenues received by Tepha, subject to a minimum payment each year.

In December 2002, we amended this agreement to provide that $800,000 of Tepha's payment obligation pursuant to the agreement became payable in both cash and equity. In October 2002, Tepha paid us $100,000 in cash, and the balance of the payment obligation was satisfied in December 2002 through the issuance of 648,149 shares of Tepha's Series A redeemable convertible preferred stock. We licensed or sublicensed additional technology to Tepha in 2003, 2004 and 2005. We recognized license and royalty revenues of $112,800, $316,880, $242,100 and $189,800 from Tepha for the years ended December 31, 2003, 2004, 2005 and for the six months ended June 30, 2006 respectively. We believe that the terms of the agreements with Tepha are no less favorable to us than license agreements that might be entered into with an independent third party.

In June 2000, in connection with his relocation to Massachusetts, we made a $75,000 loan to James J. Barber, our chief executive officer. The loan was evidenced by a promissory note bearing interest at the rate of 6.62% per annum. In December 2005 the loan principal of $75,000 and the outstanding interest balance of $106,739 were forgiven in full.

Stock Option Awards

For information regarding stock options and stock awards granted to our named executive officers and directors, see "Management — Compensation of Director" and "Management — Executive Compensation."

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PRINCIPAL STOCKHOLDERS

The following table sets forth the beneficial ownership information of our common stock at September 30, 2006, and as adjusted to reflect the sale of the shares of common stock in this offering and the sale of the ADM Shares, for:

Unless otherwise noted below, the address of the persons and entities listed on the table is c/o Metabolix, Inc., 21 Erie Street, Cambridge, MA 02139. We have determined beneficial ownership in accordance with the rules of the SEC. Except as indicated by the footnotes below, we believe, based on the information furnished to us, that the persons and entities named in the table below have sole voting and investment power with respect to all shares of common stock reflected as beneficially owned, subject to applicable community property laws. We have based our calculation of the percentage of beneficial ownership on 12,058,716 shares of common stock outstanding on September 30, 2006, assuming the conversion of all of the outstanding convertible preferred stock, and 18,435,639 shares of common stock outstanding upon completion of this offering, which includes the sale of the ADM Shares.

In computing the number of shares of common stock beneficially owned by a person and the percentage ownership of that person, we deemed outstanding shares of common stock subject to options or warrants held by that person that are currently exercisable or exercisable within 60 days of September 30, 2006. We did not deem these shares outstanding, however, for the purpose of computing the percentage ownership of any other person. Beneficial ownership representing less than 1% is denoted with an asterisk (*).

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   Shares Beneficially Owned Prior to this offering
   Shares Beneficially Owned After this offering
  
Beneficial Owner
  
  Number
   Percent
   Number
   Percent
  
5% Stockholders:                  
The Vertical Group, L.P.(1)
25 DeForest Ave
Summit, NJ 07901		   1,699,983   13.94 % 1,699,983   9.15 %

State Farm Mutual(2)
Automobile Insurance Co.
One State Farm Plaza
Bloomington, IL 61701
 
2,355,617
 
18.63
%
2,355,617
 
12.38
%

Archer Daniels Midland Company(3)
4666 Faries Parkway
Decatur, IL 62526
 
681,083
 
5.65
%
1,258,006
 
6.82
%

Westfield Capital
One Financial Center
Boston, MA 02111
 
544,865
 
4.52
%
544,865
 
2.96
%

Directors and Named Executive Officers:
 
 
 
 
 
 
 
 
 
  James J. Barber(4)   376,824   3.03 % 376,824   2.00 %
  Oliver P. Peoples(5)   627,684   5.11 % 627,684   3.36 %
  Johan van Walsem(6)   134,853   1.11 % 134,853   *  
  Thomas G. Auchincloss, Jr.(7)   155,285   1.27 % 155,285   *  
  Robert C. Findlen   —   *   —   *  
  Brian Igoe   —   *   —   *  
  Edward M. Muller(8)   1,256,596   10.29 % 1,256,596   6.76 %
  Edward M. Giles(1)(9)   1,047,139   8.53 % 1,047,139   5.62 %
  Jay Kouba(10)   16,346   *   16,346   *  
  Jack W. Lasersohn(1)   1,699,983   13.94 % 1,699,983   9.15 %
  Anthony J. Sinskey(11)   492,217   4.08 % 492,217   2.67 %
  Matthew Strobeck(12)   544,865   4.52 % 544,865   2.96 %
  Robert L. Van Nostrand   —   *   —   *  
  All executive officers and directors as a group (13)   6,351,792   47.24 % 6,351,792   32.04 %
*
less than 1%.

(1)
Consists of 893,382 shares held by The Vertical Fund I, L.P. and 95,427 shares issuable to Vertical Fund I, L.P. upon exercise of warrants. Also consists of 666,542 shares held by Vertical Fund II, L.P. and 44,632 shares issuable to Vertical Fund II, L.P. upon exercise of warrants. Mr. Lasersohn is a General Partner of The Vertical Group, L.P., the sole general partner of each of Vertical Fund I, L.P. and Vertical Fund II, L.P., and may be deemed to share voting and investment power with respect to all shares held by those entities. Mr. Lasersohn disclaims beneficial ownership of such shares except to the extent of his pecuniary interest, if any. Mr. Giles is a limited partner of The Vertical Group, L.P., the sole general partner of each of Vertical Fund I, L.P. and Vertical Fund II, L.P., and the Chairman of the Board of The Vertical Group, Inc. Mr. Giles does not have any direct or indirect voting and investment power with respect to the shares held by Vertical Fund I, L.P. and Vertical Fund II, L.P. Mr. Giles disclaims beneficial ownership of such shares except to the extent of his pecuniary interest, if any.

(2)
Includes 585,833 shares issuable to State Farm Mutual Automobile Insurance Co. upon exercise of warrants.

footnotes continued on following page

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(3)
ADM has agreed to purchase $7.5 million of our shares of common stock in a private placement concurrent with this offering at a price per share equal to the price to the public. The sale of such shares of common stock will not be registered in this offering.

(4)
Includes 363,482 shares issuable to Dr. Barber upon exercise of stock options.

(5)
Includes 219,034 shares issuable to Dr. Peoples upon exercise of stock options. Also includes 16,346 shares held by the George Stormont Trust for the benefit of certain family members. Dr. Peoples disclaims beneficial ownership of such shares except to the extent of his pecuniary interest, if any.

(6)
Represents shares issuable to Mr. van Walsem upon exercise of stock options.

(7)
Includes 1,021 shares issuable to Mr. Auchincloss upon exercise of warrants. Also includes 138,941 shares issuable to Mr. Auchincloss upon exercise of stock options. Also includes 1,634 shares held on behalf of his minor children. Mr. Auchincloss disclaims beneficial ownership of such shares except to the extent of his pecuniary interest, if any.

(8)
Includes 145,468 shares issuable to Mr. Muller upon exercise of warrants. Also includes 45,628 shares held by certain trusts for the benefit of family members and 4,764 shares issuable upon exercise of warrants held by such trusts. Mr. Muller disclaims beneficial ownership of such shares except to the extent of his pecuniary interest, if any.

(9)
Includes 211,777 shares issuable to Mr. Giles upon exercise of warrants. Also includes 342,260 shares held by certain entities over which Mr. Giles may be deemed to share voting and investment power with respect to such shares. Mr. Giles disclaims beneficial ownership of such shares except to the extent of his pecuniary interest, if any.

(10)
Represents shares issuable to Mr. Kouba upon exercise of stock options.

(11)
Includes 8,442 shares issuable to Dr. Sinskey upon exercise of warrants. Also includes 4,086 shares issuable to Chokyun Rha, Dr. Sinskey's spouse, upon exercise of options, of which Dr. Sinskey disclaims beneficial ownership except to the extent of his pecuniary interest, if any.

(12)
Consists of 40,865 shares held by Guggenheim Portfolio Company XIX, LLC, 382,987 held by Westfield Life Sciences Fund II L.P., 54,486 held by Westfield Microcap Fund L.P., and 67,427 held by Westfield Life Sciences Fund L.P. Mr. Strobeck is a senior investment analyst at Westfield Capital Management Company, LLC. Mr. Strobeck shares voting and investment power over shares held by Guggenheim Portfolio Company XIX, LLC, Westfield Life Science Fund II L.P., Westfield Life Science Fund L.P. and Westfield Microcap Fund L.P.

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DESCRIPTION OF CAPITAL STOCK

General

Upon completion of this offering, our authorized capital stock will consist of 100,000,000 shares of common stock, par value $0.01 per share, and 5,000,000 shares of undesignated preferred stock, par value $0.01 per share. The following description of our capital stock is intended as a summary only. We refer in this section to our second amended and restated certificate of incorporation as our certificate of incorporation, and we refer to our amended and restated by-laws as our by-laws.

Common Stock

As of September 30, 2006, there were 12,058,716 shares of our common stock outstanding and held of record by approximately 121 stockholders, assuming conversion of all outstanding shares of preferred stock.

Holders of our common stock are entitled to one vote for each share of common stock held of record for the election of directors and on all matters submitted to a vote of stockholders. Holders of our common stock are entitled to receive dividends ratably, if any, as may be declared by our board of directors out of legally available funds, subject to any preferential dividend rights of any preferred stock then outstanding. Upon our dissolution, liquidation or winding up, holders of our common stock are entitled to share ratably in our net assets legally available after the payment of all our debts and other liabilities, subject to the preferential rights of any preferred stock then outstanding. Holders of our common stock have no preemptive, subscription, redemption or conversion rights. The rights, preferences and privileges of holders of common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock that we may designate and issue in the future. Except as described below in "Provisions of our Certificate of Incorporation and By-Laws and Delaware Anti-Takeover Law," a majority vote of common stockholders is generally required to take action under our certificate of incorporation and by-laws.

Preferred Stock

Upon completion of this offering, our board of directors will be authorized, without action by the stockholders, to designate and issue up to an aggregate of 5,000,000 shares of preferred stock in one or more series. The board of directors can fix the rights, preferences and privileges of the shares of each series and any of its qualifications, limitations or restrictions. Our board of directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of common stock. The issuance of preferred stock, while providing flexibility in connection with possible future financings and acquisitions and other corporate purposes could, under certain circumstances, have the effect of delaying, deferring or preventing a change in control of our company and might harm the market price of our common stock.

Our board of directors will make any determination to issue such shares based on its judgment as to our company's best interests and the best interests of our stockholders. We have no current plans to issue any shares of preferred stock.

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Warrants

As of September 30, 2006, warrants to purchase a total of 1,773,369 shares of our common stock were outstanding with exercise prices of $0.12 per share, $3.30 per share and $13.21 per share. These warrants expire on various dates through May 21, 2014.

Registration Rights

We entered into a stockholders' agreement, dated as of January 19, 2006, with the holders of shares of our common stock issuable upon conversion of the shares of preferred stock and other stockholders, including certain members of our management. Under this agreement, holders of shares having registration rights can demand that we file a registration statement or request that their shares be covered by a registration statement that we are otherwise filing. All of these registration rights are subject to conditions and limitations, including the right of the underwriters of an offering to limit the number of shares included in such registration and our right to postpone a requested registration for a period of no more than 180 days if we determine that this offering would be materially detrimental to us.

Demand Registration Rights.  The holders of approximately 12,250,210 shares of common stock, after this offering, assuming the issuance of the ADM Shares, subject to exceptions, are entitled to certain demand registration rights, upon the request of holders of a certain percentage of such shares, pursuant to which they may require us to file a registration statement under the Securities Act at our expense with respect to their shares of common stock. We are required to use our best efforts to effect any such registration. In addition, we have granted ADM one demand registration right with respect to the ADM Shares.

Piggyback Registration Rights.  If we propose to register any of our securities under the Securities Act for our own account or the account of any other holder, the holders of approximately 12,250,210 shares of common stock, after this offering, assuming the issuance of the ADM Shares, are entitled to notice of such registration and are entitled to include shares of their common stock therein. In addition, we have granted ADM piggyback registration rights with respect to the ADM Shares.

We will pay all registration expenses, other than underwriting discounts and commissions, related to any demand or piggyback registration. The stockholders' agreement contains customary cross- indemnification provisions, pursuant to which we are obligated to indemnify the selling stockholders in the event of material misstatements or omissions in the registration statement attributable to us, and they are obligated to indemnify us for material misstatements or omissions attributable to them.

Provisions of our Certificate of Incorporation and By-Laws and Delaware Anti-Takeover Law

Our certificate of incorporation and by-laws will, upon completion of this offering, include a number of provisions that may have the effect of encouraging persons considering unsolicited tender offers or other unilateral takeover proposals to negotiate with our board of directors rather than pursue non-negotiated takeover attempts. These provisions include the items described below.

Board Composition and Filling Vacancies.  In accordance with our certificate of incorporation, our board is divided into three classes serving staggered three-year terms, with one class being elected each year. Our certificate of incorporation also provides that directors may be removed only for cause and then only by the affirmative vote of the holders of 75% or more of the shares then entitled to vote at an election of directors. Furthermore, any vacancy on our board of directors, however occurring,

94


including a vacancy resulting from an increase in the size of our board, may only be filled by the affirmative vote of a majority of our directors then in office even if less than a quorum.

No Written Consent of Stockholders.  Our certificate of incorporation provides that all stockholder actions are required to be taken by a vote of the stockholders at an annual or special meeting, and that stockholders may not take any action by written consent in lieu of a meeting.

Meetings of Stockholders.  Our by-laws provide that only a majority of the members of our board of directors then in office may call special meetings of stockholders and only those matters set forth in the notice of the special meeting may be considered or acted upon at a special meeting of stockholders. Our by-laws limit the business that may be conducted at an annual meeting of stockholders to those matters properly brought before the meeting.

Advance Notice Requirements.  Our by-laws establish advance notice procedures with regard to stockholder proposals relating to the nomination of candidates for election as directors or new business to be brought before meetings of our stockholders. These procedures provide that notice of stockholder proposals must be timely given in writing to our corporate secretary prior to the meeting at which the action is to be taken. Generally, to be timely, notice must be received at our principal executive offices not less than 90 days nor more than 120 days prior to the first anniversary date of the annual meeting for the preceding year. The notice must contain certain information specified in the by-laws.

Amendment to By-Laws and Certificate of Incorporation.  As required by the Delaware General Corporation Law, any amendment of our certificate of incorporation must first be approved by a majority of our board of directors and, if required by law or our certificate of incorporation, thereafter be approved by a majority of the outstanding shares entitled to vote on the amendment, and a majority of the outstanding shares of each class entitled to vote thereon as a class, except that the amendment of the provisions relating to stockholder action, directors, limitation of liability and the amendment of our by-laws and certificate of incorporation must be approved by not less than 75% of the outstanding shares entitled to vote on the amendment, and not less than 75% of the outstanding shares of each class entitled to vote thereon as a class. Our by-laws may be amended by the affirmative vote of a majority of the directors then in office, subject to any limitations set forth in the by-laws; and may also be amended by the affirmative vote of at least 75% of the outstanding shares entitled to vote on the amendment, or, if the board of directors recommends that the stockholders approve the amendment, by the affirmative vote of the majority of the outstanding shares entitled to vote on the amendment, in each case voting together as a single class.

Blank Check Preferred Stock.  Our certificate of incorporation provides for 5,000,000 authorized shares of preferred stock. The existence of authorized but unissued shares of preferred stock may enable our board of directors to render more difficult or to discourage an attempt to obtain control of us by means of a merger, tender offer, proxy contest or otherwise. For example, if in the due exercise of its fiduciary obligations, our board of directors were to determine that a takeover proposal is not in the best interests of us or our stockholders, our board of directors could cause shares of preferred stock to be issued without stockholder approval in one or more private offerings or other transactions that might dilute the voting or other rights of the proposed acquirer or insurgent stockholder or stockholder group. In this regard, our certificate of incorporation grants our board of directors broad power to establish the rights and preferences of authorized and unissued shares of preferred stock. The issuance of shares of preferred stock could decrease the amount of earnings and assets available for distribution to holders of shares of common stock. The issuance may also adversely affect the rights and powers, including voting rights, of these holders and may have the effect of delaying, deterring or preventing a change in control of us.

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Section 203 of the Delaware General Corporation Law

Upon completion of this offering, we will be subject to the provisions of Section 203 of the Delaware General Corporation Law. In general, Section 203 prohibits a publicly held Delaware corporation from engaging in a "business combination" with an "interested stockholder" for a three-year period following the time that this stockholder becomes an interested stockholder, unless the business combination is approved in a prescribed manner. A "business combination" includes, among other things, a merger, asset or stock sale or other transaction resulting in a financial benefit to the interested stockholder. An "interested stockholder" is a person who, together with affiliates and associates, owns, or did own within three years prior to the determination of interested stockholder status, 15% or more of the corporation's voting stock. Under Section 203, a business combination between a corporation and an interested stockholder is prohibited unless it satisfies one of the following conditions:

NASDAQ Stock Market Listing

We have applied to the NASDAQ Global Market for the quotation of our common stock under the trading symbol MBLX.

Transfer Agent and Registrar

Upon completion of this offering, the transfer agent and registrar for our common stock will be American Stock Transfer & Trust Company.

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SHARES ELIGIBLE FOR FUTURE SALE

Immediately prior to this offering, there was no public market for our common stock. Future sales of substantial amounts of common stock in the public market, or the perception that such sales may occur, could adversely affect the market price of our common stock. Although we have applied to have our common stock approved for quotation on the NASDAQ Global Market, we cannot assure you that there will be an active public market for our common stock.

Upon completion of this offering, we will have outstanding an aggregate of 18,435,639 shares of common stock, assuming the issuance of 5,800,000 shares of common stock offered hereby, the issuance of the ADM Shares and no exercise of the underwriter's overallotment option and no exercise of outstanding options or warrants. Of these shares, 5,800,000 shares sold in this offering will be freely tradable without restriction or further registration under the Securities Act, except for any shares purchased by our "affiliates," as that term is defined in Rule 144 under the Securities Act, whose sales would be subject to certain limitations and restrictions described below.

All remaining 12,635,639 shares of common stock held by existing stockholders were issued and sold by us in reliance on exemptions from the registration requirements of the Securities Act. Of these shares, 12,294,595 shares will be subject to "lock-up" agreements with the underwriters or us described below on the effective date of this offering. On the effective date of this offering, there will be 225,967 shares that are not subject to lock-up agreements and eligible for sale pursuant to Rule 144(k). Upon expiration of the lock-up agreements 180 days after the effective date of this offering, 9,062,942 shares will become eligible for sale, subject in most cases to the limitations of Rule 144. In addition, holders of stock options could exercise such options and sell certain of the shares issued upon exercise as described below.

Days After Date of this Prospectus
   Shares Eligible for Sale
   Comment
Upon Effectiveness   5,800,000   Shares sold in this offering

Upon Effectiveness
 
213,552
 
Freely tradable shares saleable under Rule 144(k) that are not subject to the lock-up

90 Days
 
127,492
 
Shares saleable under Rules 144 and 701 that are not subject to a lock-up

180 Days
 
11,713,763
 
Lock-ups released, subject to extension; shares saleable under Rules 144 and 701

Thereafter
 
580,832
 
Restricted securities held for one year or less

Lock-up Agreements

We, each of our directors and executive officers, and certain of our other stockholders, who collectively own 12,294,595 shares of our common stock, including the issuance of the ADM shares, based on shares outstanding as of September 30, 2006, have agreed that, without the prior written consent of Piper Jaffray on behalf of the underwriters, we and they will not, subject to limited exceptions, during the period ending 180 days after the date of this prospectus, subject to extension in specified circumstances:

97

whether any transaction described above is to be settled by delivery of our common stock or such other securities, in cash or otherwise. Any determination to release any shares subject to the lock-up agreements would be made on a case-by-case basis based on a number of factors at the time of determination, including the market price of the common stock, the liquidity of the trading market for the common stock, general market conditions, the number of shares proposed to be sold and the timing, purpose and terms of the proposed sale. Piper Jaffray on behalf of the underwriters will have discretion in determining if, and when, to release any shares subject to lock-up agreements.

The 180-day restricted period described in the preceding paragraph will be automatically extended if: (1) during the last 17 days of the 180-day restricted period we issue an earnings release or announce material news or a material event; or (2) prior to the expiration of the 180-day restricted period, we announce that we will release earnings results during the 15-day period following the last day of the 180-day period, in which case the restrictions described in the preceding paragraph will continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release of the announcement of the material news or material event.

We do not currently expect any release of shares subject to lock-up agreements prior to the expiration of the applicable lock-up periods. Upon the expiration of the applicable lock-up periods, substantially all of the shares subject to such lock-up restrictions will become eligible for sale, subject to the limitations discussed above.

Rule 144

In general, under Rule 144 as currently in effect, beginning 90 days after the date of this prospectus, a person who has beneficially owned shares of our common stock for at least one year, including an affiliate, would be entitled to sell in "broker's transactions" or to market makers, within any three-month period, a number of shares that does not exceed the greater of:

Sales under Rule 144 are generally subject to the availability of current public information about us.

Rule 144(k)

Under Rule 144(k), a person who is not deemed to have been an affiliate of ours at any time during the 90 days preceding a sale, and who has beneficially owned the shares proposed to be sold for at least two years, is entitled to sell such shares without having to comply with the manner of sale, public information, volume limitation or notice filing provisions of Rule 144. Therefore, unless otherwise restricted, "144(k) shares" may be sold immediately upon the completion of this offering.

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Rule 701

In general, under Rule 701, any of our employees, directors, officers, consultants or advisors who purchased shares from us in connection with a compensatory stock or option plan or other written agreement before the effective date of this offering is entitled to sell such shares 90 days after the effective date of this offering in reliance on Rule 144, without having to comply with the holding period and notice filing requirements of Rule 144 and, in the case of non-affiliates, without having to comply with the public information, volume limitation or notice filing provisions of Rule 144.

The SEC has indicated that Rule 701 will apply to typical stock options granted by an issuer before it becomes subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, along with the shares acquired upon exercise of such options, including exercises after the date of this prospectus. Securities issued in reliance on Rule 701 are restricted securities and subject to the contractual restrictions described above, beginning 90 days after the date of this prospectus, may be sold by persons other than affiliates subject only to the manner of sale provisions of Rule 144 and by affiliates without compliance with its one year minimum holding period requirements.

Stock Options

We intend to file one or more registration statements on Form S-8 under the Securities Act to register all shares of common stock subject to outstanding stock options and common stock issued or issuable under our stock plans. We expect to file the registration statement covering shares offered pursuant to our stock plans shortly after the date of this prospectus, permitting the resale of such shares by nonaffiliates in the public market without restriction under the Securities Act, but subject to the provisions of the lock-up agreements.

Registration Rights

Upon completion of this offering, the holders of approximately 11,673,287 shares of our common stock will be eligible to exercise certain rights with respect to the registration of such shares under the Securities Act. In addition, we have granted ADM registration rights with respect to the ADM Shares. See "Description of Capital Stock — Registration Rights." Upon the effectiveness of a registration statement covering these shares, the shares would become freely tradable.

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UNDERWRITING

The underwriters named below have agreed to buy, subject to the terms of the purchase agreement, the number of shares listed opposite their names below. Piper Jaffray is acting as book-running manager for the offering and together with Jefferies & Company, Inc., Thomas Weisel Partners LLC and Ardour Capital Investments, LLC is acting as representative of the underwriters. The underwriters are committed to purchase and pay for all of the shares if any are purchased other than those shares covered by the over-allotment option described below.

Underwriters
   Number
of Shares
Piper Jaffray & Co.    
Jefferies & Company, Inc.    
Thomas Weisel Partners LLC    
Ardour Capital Investments, LLC    
   
  Total   5,800,000
   

The underwriters have advised us that they propose to offer the shares to the public at $                    per share. The underwriters propose to offer the shares to certain dealers at the same price less a concession of not more than $                    per share. The underwriters may allow and the dealers may reallow a concession of not more than $                    per share on sales to certain other brokers and dealers. After this offering, these figures may be changed by the underwriters.

We have granted to the underwriters an option to purchase up to an additional 870,000 shares of common stock from us, at the same price to the public, and with the same underwriting discount, as set forth in the table above. The underwriters may exercise this option any time during the 30-day period after the date of this prospectus, but only to cover over-allotments, if any. To the extent the underwriters exercise the option, each underwriter will become obligated, subject to certain conditions, to purchase approximately the same percentage of the additional shares as it was obligated to purchase under the purchase agreement.

We estimate that the total fees and expenses payable by us, excluding underwriting discounts and commissions will be approximately $2.3 million, which includes legal, accounting and printing costs and various other fees associated with registration and listing of our common stock. The following table shows the underwriting fees to be paid to the underwriters in connection with this offering. These amounts are shown assuming both no exercise and full exercise of the underwriters' over-allotment option.

 
   No Exercise
   Full Exercise
Per share   $     $  
   
 
Total   $                 $              
   
 

We have agreed to indemnify the underwriters against certain liabilities, including civil liabilities under the Securities Act, or to contribute to payments that the underwriters may be required to make in respect of those liabilities.

We and each of our directors, executive officers and certain of our shareholders have agreed to certain restrictions on our ability to sell additional shares of our common stock for a period of 180 days after the date of this prospectus. We have agreed not to directly or indirectly offer for sale, sell, contract to

100


sell, grant any option for the sale of, or otherwise issue or dispose of, any shares of common stock, options or warrants to acquire shares of common stock, or any related security or instrument, without the prior written consent of Piper Jaffray. The agreements provide exceptions for (1) sales to underwriters pursuant to the purchase agreement, (2) our sales in connection with the exercise of options granted and the granting of options to purchase shares under our existing stock option plans and (3) certain other exceptions.

The 180-day restricted period described in the preceding paragraph will be automatically extended if: (1) during the last 17 days of the 180-day restricted period we issue an earnings release or announce material news or a material event; or (2) prior to the expiration of the 180-day restricted period, we announce that we will release earnings results during the 16-day period following the last day of the 180-day period, in which case the restrictions described in the preceding paragraph will continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release of the announcement of the material news or material event.

Prior to this offering, there has been no established trading market for the common stock. The initial public offering price for the shares of common stock offered by this prospectus was negotiated by us and the underwriters. The factors considered in determining the initial public offering price include the history of and the prospects for the industry in which we compete, our past and present operations, our historical results of operations, our prospects for future earnings, the recent market prices of securities of generally comparable companies and the general condition of the securities markets at the time of this offering and other relevant factors. There can be no assurance that the initial public offering price of the common stock will correspond to the price at which the common stock will trade in the public market subsequent to this offering or that an active public market for the common stock will develop and continue after this offering.

To facilitate this offering, the underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of the common stock during and after this offering. Specifically, the underwriters may over-allot or otherwise create a short position in the common stock for their own account by selling more shares of common stock than have been sold to them by us. The underwriters may elect to cover any such short position by purchasing shares of common stock in the open market or by exercising the over-allotment option granted to the underwriters. In addition, the underwriters may stabilize or maintain the price of the common stock by bidding for or purchasing shares of common stock in the open market and may impose penalty bids. If penalty bids are imposed, selling concessions allowed to syndicate members or other broker-dealers participating in this offering are reclaimed if shares of common stock previously distributed in this offering are repurchased, whether in connection with stabilization transactions or otherwise. The effect of these transactions may be to stabilize or maintain the market price of the common stock at a level above that which might otherwise prevail in the open market. The imposition of a penalty bid may also effect the price of the common stock to the extent that it discourages resales of the common stock. The magnitude or effect of any stabilization or other transactions is uncertain. These transactions may be effected on the NASDAQ Global Market or otherwise and, if commenced, may be discontinued at any time.

In connection with this offering, some underwriters may also engage in passive market making transactions in the common stock on the NASDAQ Global Market. Passive market making consists of displaying bids on the NASDAQ Global Market limited by the prices of independent market makers and effecting purchases limited by those prices in response to order flow. Rule 103 of Regulation M promulgated by the SEC limits the amount of net purchases that each passive market maker may make and the displayed size of each bid. Passive market making may stabilize the market price of the common stock at a level above that which might otherwise prevail in the open market and, if commenced, may be discontinued at any time.

101


From time to time in the ordinary course of their respective businesses, certain of the underwriters and their affiliates may in the future engage in commercial banking or investment banking transactions with us and our affiliates. As of the date of this prospectus, certain affiliates of the underwriters are the beneficial owners in the aggregate of 68,835 shares of our common stock.

Directed Share Program

At our request, Piper Jaffray has reserved for sale as part of the underwritten offering, at the initial public offering price, up to 5% of the total number of shares offered by this prospectus, for our directors, officers, employees, business associates and other persons with whom we have a relationship. The number of shares of common stock available for sale to the general public will be reduced to the extent such persons purchase such reserved shares. Any reserved shares that are not so purchased will be offered by the underwriters to the general public on the same basis as the other shares offered in this prospectus.

Notice to Prospective Investors

In relation to each member state of the European Economic Area that has implemented the Prospectus Directive (each, a relevant member state), each underwriter has represented and agreed that with effect from and including the date on which the Prospectus Directive is implemented in that relevant member state, or the relevant implementation date, it has not made and will not make an offer of shares of our common stock to the public in this offering in that relevant member state prior to the publication of a prospectus in relation to such shares which have been approved by the competent authority in that relevant member state or, where appropriate, approved in another relevant member state and notified to the competent authority in that relevant member state, all in accordance with the Prospectus Directive, except that it may, with effect from and including the relevant implementation date, make an offer of our common stock to the public in that relevant member state at any time:

provided that no such offer of shares shall result in a requirement for the publication of a prospectus pursuant to Article 3 of the Prospectus Directive or any measure implementing the Prospectus Directive in a relevant member state and each person who initially acquires any share or to whom any offer is made under this offering will be deemed to have represented, acknowledged and agreed that it is a "qualified investor" within the meaning of Article 2(1)(e) of the Prospectus Directive.

For purposes of this provision, the expression an "offer to the public" in any relevant member state means the communication in any form and by any means of sufficient information on the terms of the offer and the securities to be offered so as to enable an investor to decide to purchase or subscribe the

102


securities, as the expression may be varied in that member state by any measure implementing the Prospectus Directive in that member state, and the expression "Prospectus Directive" means Directive 2003/71/EC and includes any relevant implementing measure in each relevant member state.

We have not authorized and do not authorize the making of any offer of our common stock through any financial intermediary on our behalf, other than offers made by the underwriters with a view to the final placement of the common stock as contemplated in this prospectus supplement. Accordingly, no purchaser of our common stock, other than the underwriters, is authorized to make any further offer of our common stock on behalf of the sellers or the underwriters.

The shares have not been and will not be offered to the public within the meaning of the German Sales Prospectus Act (Verkaufsprospektgesetz) or the German Investment Act (Investmentgesetz). The shares have not been and will not be listed on a German exchange. No sales prospectus pursuant to the German Sales Prospectus Act has been or will be published or circulated in Germany or filed with the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht) or any other governmental or regulatory authority in Germany. This propectus does not constitute an offer to the public in Germany and it does not serve for public distribution of the shares in Germany. Neither this prospectus, not any other document issued in connection with this offering, may be issued or distributed to any person in Germany except under circumstances which do not constitute an offer to the public within the meaning of the German Sales Prospectus Act or the German Investment Act.

Each underwriter has represented, warranted and agreed that: (i) it has not offered or sold and, prior to the expiry of a period of six months from the closing date, will not offer or sell any shares to persons in the United Kingdom except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or otherwise in circumstances which have not resulted and will not result in an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995; (ii) it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000, or FSMA) received by it in connection with the issue or sale of any shares in circumstances in which section 21(1) of the FSMA does not apply to our company and (iii) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the shares in, from or otherwise involving the United Kingdom.

The shares offered pursuant to this prospectus will not be offered, directly or indirectly, to the public in Switzerland and this prospectus does not constitute a public offering prospectus as that term is understood pursuant to Article 652a or Article 1156 of the Swiss Federal Code of Obligations. We have not applied for a listing of the shares being offered pursuant to this prospectus on the SWX Swiss Exchange or on any other regulated securities market, and consequently, the information presented in this prospectus does not necessarily comply with the information standards set out in the relevant listing rules. The shares being offered pursuant to this prospectus have not been registered with the Swiss Federal Banking Commission as foreign investment funds, and the investor protection afforded to acquirers of investment fund certificates does not extend to acquirers of securities.

If you purchase shares of common stock offered in this prospectus, you may be required to pay stamp taxes and other charges under the laws and practices of the country of purchase, in addition to the offering price listed on the cover page of this prospectus.

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LEGAL MATTERS

Goodwin Procter LLP, Boston, Massachusetts, will pass upon the validity of the shares of common stock offered hereby. Latham & Watkins LLP, New York, New York, will pass upon certain legal matters relating to this offering for the underwriters. As at the date of this prospectus, Christopher J. Denn, a partner at Goodwin Procter LLP, is the beneficial owner of 4,387 shares of our common stock.


EXPERTS

The financial statements as of December 31, 2005 and 2004 and for each of the three years in the period ended December 31, 2005 included in this prospectus have been so included in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of such firm as experts in auditing and accounting.


MARKET AND INDUSTRY DATA

Unless otherwise indicated, information contained in this prospectus concerning the plastics, fuels and biofuels markets and industries, including our general expectations and market position, market opportunity and market share, is based on information from independent industry analysts and third party sources and management estimates. Management estimates are derived from publicly available information released by independent industry analysts and third party sources, as well as data from our internal research, and are based on assumptions made by us based on such data and our knowledge of such industry and markets, which we believe to be reasonable. None of the sources cited in this prospectus has consented to the inclusion of any data from its reports, nor have we sought their consent. Our internal research has not been verified by any independent source, and we have not independently verified any third party information. In addition, while we believe the market position, market opportunity and market share information included in this prospectus is generally reliable, such data involves risks and uncertainties and are subject to change based on various factors, including those discussed under the heading "Risk Factors."


WHERE YOU CAN FIND MORE INFORMATION

We have filed a registration statement on Form S-1 with the SEC for the stock we are offering by this prospectus. This prospectus does not include all of the information contained in the registration statement. You should refer to the registration statement and its exhibits for additional information. Whenever we make reference in this prospectus to any of our contracts, agreements or other documents, the references are not necessarily complete and you should refer to the exhibits filed as part of the registration statement for copies of the actual contract, agreement or other document. After this offering, we will file annual, quarterly and special reports, proxy statements and other information with the SEC.

You can obtain copies of our SEC filings, including the registration statement, over the Internet at the SEC's web site at www.sec.gov. You may also read and copy any document we file with the SEC at its public reference facilities at 100 F Street, NE, Washington, DC 20549. You may also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street, NE, Washington, DC 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference facilities.

You should rely on the information contained in this prospectus and in the registration statement as well as other information you deem relevant. We have not authorized anyone to provide you with

104


information different from that contained in this prospectus. This prospectus is an offer to sell, or a solicitation of offers to buy, securities only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale or exchange of securities. However, we have a duty to update that information while this prospectus is in use by you where, among other things, any facts or circumstances arise which, individually or in the aggregate, represent a fundamental change in the information contained in this prospectus or any material information with respect to the plan of distribution was not previously disclosed in the prospectus or there is any material change to such information in the prospectus. This prospectus does not offer to sell or solicit any offer to buy any securities other than the common stock to which it relates, nor does it offer to sell or solicit any offer to buy any of these securities in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction.

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METABOLIX, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

 
   Page
Report of Independent Registered Public Accounting Firm   F-2
Consolidated Financial Statements    
Balance Sheets   F-3
Statements of Operations   F-4
Statements of Stockholders' Equity (Deficit)   F-5
Statements of Cash Flows   F-6
Notes to Financial Statements   F-7

F-1


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
Metabolix, Inc.

The 0.8173-for-1 reverse stock split approved on September 20, 2006 described in Note 16 to the consolidated financial statements has not been consummated at October 20, 2006. When it has been consummated, we will be in a position to furnish the following report:

"In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, stockholders' equity (deficit) and cash flows present fairly, in all material respects, the financial position of Metabolix, Inc. and its subsidiary at December 31, 2004 and 2005, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2005 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion."

/s/ PricewaterhouseCoopers LLP

Boston, Massachusetts
June 26, 2006, (except for Note 15,
as to which the date is July 25, 2006).

F-2

Metabolix, Inc.

Consolidated Balance Sheets

 
   December 31,
    
    
  
 
   June 30,
2006
(restated)
   Pro Forma
June 30,
2006
  
 
   2004
   2005
  
 
    
    
   (Unaudited)

  
Assets                          
Current assets                          
  Cash and cash equivalents   $ 3,151,673   $ 1,834,632   $ 15,224,914   $ 15,224,914  
  Short-term investments     1,302,906     1,339,015     646,665     646,665  
  Restricted cash     497,486     496,367     498,129     498,129  
  Accounts receivable     26,675     30,000     —     —  
  Unbilled receivable     399,334     430,873     956,917     956,917  
  Other current assets     47,855     123,709     274,206     274,206  
   
 
 
 
 
    Total current assets     5,425,929     4,254,596     17,600,831     17,600,831  
Property and equipment, net     1,383,799     3,005,472     3,535,791     3,535,791  
Other assets     —     64,526     907,473     907,473  
Investment in related party     700,000     —     —     —  
   
 
 
 
 
    Total assets   $ 7,509,728   $ 7,324,594   $ 22,044,095   $ 22,044,095  
   
 
 
 
 
Liabilities, Redeemable Convertible Preferred Stock and Stockholder' Equity (Deficit)                          
Current liabilities                          
  Accounts payable   $ 1,494,883   $ 1,299,356   $ 1,300,529   $ 1,300,529  
  Accrued expenses     725,616     830,704     1,423,252     1,423,252  
  Advances on financing from investors     2,000     614,994     —     —  
  Current portion of capital lease obligations     118,929     62,571     14,117     14,117  
  Current portion of deferred rent     165,470     165,470     165,469     165,469  
  Convertible promissory note     299,731     —     —     —  
   
 
 
 
 
    Total current liabilities     2,806,629     2,973,095     2,903,367     2,903,367  
Capital lease obligations     60,694     —     —     —  
Deferred rent     1,378,911     1,213,443     1,130,708     1,130,708  
Long-term deferred revenue     3,000,000     5,620,808     6,258,286     6,258,286  
Other long-term liabilities     —     66,218     68,548     68,548  
   
 
 
 
 
    Total liabilities     7,246,234     9,873,564     10,360,909     10,360,909  

Commitments and contingencies (Note 8)
 
 
 
 
 
 
 
 
 
 
 
 
 

Redeemable convertible preferred stock (Note 10)
 
 
39,234,609
 
 
44,008,906
 
 
61,442,480
 
 
—
 

Stockholders' equity (deficit)
 
 
 
 
 
 
 
 
 
 
 
 
 
  Common stock ($0.01 par value per share); 23,000,000 shares authorized in 2004 and 2005 and 26,500,000 shares authorized in June 30, 2006; 1,808,641, 1,812,828 and 2,073,390 shares issued in 2004, 2005 and June 30, 2006, respectively; 1,798,017, 1,802,204 and 2,062,766 shares outstanding in 2004, 2005 and June 30, 2006, respectively; 12,065,433 and 12,054,809 shares issued and outstanding on a pro forma basis at June 30, 2006 (unaudited)     18,086     18,128     20,734     120,654  
  Treasury stock (at cost); 10,624 shares in 2004, 2005 and 2006     (35,100 )   (35,100 )   (35,100 )   (35,100 )
  Additional paid-in capital     3,595,037     3,633,661     4,870,117     66,212,677  
  Deferred compensation     —     —     (105,235 )   (105,235 )
  Accumulated deficit     (42,549,138 )   (50,174,565 )   (54,509,810 )   (54,509,810 )
   
 
 
 
 
    Total stockholders' equity (deficit)     (38,971,115 )   (46,557,876 )   (49,759,294 )   11,683,186  
   
 
 
 
 
    Total liabilities, redeemable convertible preferred stock and stockholders' equity (deficit)   $ 7,509,728   $ 7,324,594   $ 22,044,095   $ 22,044,095  
   
 
 
 
 

The accompanying notes are an integral part of these consolidated financial statements.

F-3

Metabolix, Inc.

Consolidated Statements of Operations

 
    
    
    
   Six Months Ended June 30,
  
 
   Years Ended December 31,
  
 
    
   2006
(restated)
  
 
   2003
   2004
   2005
   2005
  
 
    
    
    
   (Unaudited)

  
Revenue                                
Research and development revenue   $ 120,430   $ 96,875   $ 106,462   $ 31,387   $ 2,502,450  
License fee and royalty revenue                                
  From related parties     112,800     316,880     242,100     134,000     189,800  
  Other     —     75,000     —     —     —  
Grant revenue     2,149,995     3,189,449     2,432,439     1,343,500     1,117,486  
   
 
 
 
 
 
    Total revenue     2,383,225     3,678,204     2,781,001     1,508,887     3,809,736  

Operating expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Research and development expenses, including cost of revenue     6,203,632     5,426,601     5,980,339     2,823,666     4,669,271  
General and administrative expenses     2,692,105     3,251,800     3,825,303     2,077,846     3,815,311  
   
 
 
 
 
 
    Total operating expenses     8,895,737     8,678,401     9,805,642     4,901,512     8,484,582  
   
 
 
 
 
 
    Loss from operations     (6,512,512 )   (5,000,197 )   (7,024,641 )   (3,392,625 )   (4,674,846 )
Other income (expense)                                
  Interest income     6,876     14,154     109,356     44,042     341,902  
  Interest expense     (134,430 )   (68,468 )   (10,142 )   (11,904 )   (2,301 )
  Loss on investment in related party     —     —     (700,000 )   —     —  
   
 
 
 
 
 
    Net loss   $ (6,640,066 ) $ (5,054,511 ) $ (7,625,427 ) $ (3,360,487 ) $ (4,335,245 )
   
 
 
 
 
 
Net loss per share                                
  Basic and Diluted   $ (3.33 ) $ (1.68 ) $ (2.56 ) $ (1.13 ) $ (1.45 )
Number of shares used in per share calculations                                
  Basic and Diluted     1,991,106     3,009,137     2,975,116     2,973,441     2,987,860  
Pro forma net loss per share                                
  Basic and Diluted (unaudited)               $ (0.73 )       $ (0.34 )
Pro forma number of shares used in per share calculations                                
  Basic and Diluted (unaudited)                 10,391,929           12,729,420  

The accompanying notes are an integral part of these consolidated financial statements.

F-4

Metabolix, Inc.

Consolidated Statements of Stockholders' Equity (Deficit)

 
   Common Stock
   Treasury Stock
    
    
    
    
  
 
   Shares
   Par
value
   Shares
   Amount
   Additional
Paid-in
Capital
   Deferred
Compensation
   Accumulated
Deficit
   Total
  
Balance, December 31, 2002   1,792,500   $ 17,925   10,624   $ (35,100 ) $ 2,080,349   $ —   $ (30,854,561 ) $ (28,791,387 )
Issuance of common stock warrants in connection with Series I preferred stock financing                         149,405                 149,405  
Issuance of common stock warrants in connection with Series J preferred stock financing                         373,725                 373,725  
Issuance of common stock warrants in connection with an exchange of Series I preferred stock and cancellation of warrants for Series I-1 and Series J preferred stock                         908,771                 908,771  
Exercise of common stock options   16,141     161               21,215                 21,376  
Stock-based compensation related to common stock options issued to nonemployees                         123,554                 123,554  
Net loss                                     (6,640,066 )   (6,640,066 )
   
 
 
 
 
 
 
 
 
Balance, December 31, 2003   1,808,641     18,086   10,624     (35,100 )   3,657,019   $ —     (37,494,627 )   (33,854,622 )

Issuance of common stock warrants in connection with Series J preferred stock financing
 
 
 
 
 
 
 
 
 
 
 
 
66,140
 
 
 
 
 
 
 
 
66,140
 
Issuance of common stock warrants in connection with an exchange of Series I preferred stock for Series J preferred stock                         41,730                 41,730  
Cancellation of 189,716 shares of common stock warrants in connection with the exchange of Series J-1 and Series 04 preferred stock                         (218,774 )               (218,774 )
Stock-based compensation related to common stock options issued to nonemployees                         48,922                 48,922  
Net loss                                     (5,054,511 )   (5,054,511 )
   
 
 
 
 
 
 
 
 
Balance, December 31, 2004   1,808,641     18,086   10,624     (35,100 )   3,595,037   $ —     (42,549,138 )   (38,971,115 )
Exercise of common stock options   4,187     42               11,602                 11,644  
Stock-based compensation related to common stock options issued to nonemployees                         27,022                 27,022  
Net loss                                     (7,625,427 )   (7,625,427 )
   
 
 
 
 
 
 
 
 
Balance, December 31, 2005   1,812,828     18,128   10,624     (35,100 )   3,633,661   $ —     (50,174,565 )   (46,557,876 )

Exercise of common stock warrants (unaudited)
 
249,300
 
 
2,493
 
 
 
 
 
 
 
300,327
 
 
 
 
 
 
 
 
302,820
 
Exercise of common stock options (unaudited)   11,262     113               28,954                 29,067  
Stock-based compensation related to common stock options issued to nonemployees and employees (unaudited, restated)                         907,175     (105,235 )         801,940  
Net loss (unaudited, restated)                                     (4,335,245 )   (4,335,245 )
   
 
 
 
 
 
 
 
 
Balance, June 30, 2006 (Unaudited)   2,073,390   $ 20,734   10,624   $ (35,100 ) $ 4,870,117   $ (105,235 ) $ (54,509,810 ) $ (49,759,294 )
   
 
 
 
 
 
 
 
 

The accompanying notes are an integral part of these consolidated financial statements.

F-5

Metabolix, Inc.

Consolidated Statements of Cash Flows

 
   Years Ended December 31,
   Six Months Ended
June 30,
  
 
   2003
   2004
   2005
   2005
   2006
  
 
    
    
    
    
   (restated)

  
 
    
    
    
   Unaudited

  
Cash flows from operating activities                                
Net loss   $ (6,640,066 ) $ (5,054,511 ) $ (7,625,427 ) $ (3,360,487 ) $ (4,335,245 )
Adjustments to reconcile net loss to cash used in operating activities                                
  Depreciation     307,508     265,253     314,565     136,976     427,692  
  Stock-based compensation     123,554     48,922     27,022     2,154     801,979  
  Loss on investment in related party     —     —     700,000     —     —  
  Changes in operating assets and liabilities                                
    Accounts receivable     (36,848 )   10,173     (3,325 )   16,800     30,000  
    Unbilled receivable     (261,679 )   180,477     (31,539 )   (206,170 )   (526,044 )
    Other current assets     (9,543 )   (14,842 )   (75,854 )   (108,729 )   (150,497 )
    Other assets     84,050     234,082     (64,526 )   —     39,526  
    Accounts payable     928,774     (429,303 )   (195,527 )   (759,323 )   (51,427 )
    Accrued expenses     473,126     (439,535 )   105,088     617,709     363,565  
    Deferred rent     (30,270 )   1,452,699     (165,469 )   (82,735 )   (82,736 )
    Deferred revenue     (84,050 )   2,765,918     2,620,808     1,050,000     637,478  
   
 
 
 
 
 
      Net cash used in operating activities     (5,145,444 )   (980,667 )   (4,394,184 )   (2,693,805 )   (2,845,709 )

Cash flows from investing activities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Purchase of property and equipment     (35,182 )   (1,324,397 )   (1,870,019 )   (53,764 )   (958,012 )
Restricted cash     —     (497,486 )   1,119     3,241     (1,762 )
Proceeds from maturity of short-term investments     —     —     1,287,521     —     17,585,098  
Purchase of short-term investments     —     (1,302,906 )   (1,323,630 )   —     (16,892,787 )
   
 
 
 
 
 
      Net cash used in investing activities     (35,182 )   (3,124,789 )   (1,905,009 )   (50,523 )   (267,463 )

Cash flows from financing activities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal payments for capitalized lease obligations     (84,636 )   (124,544 )   (117,052 )   (64,404 )   (48,454 )
Payments on convertible promissory note     (436,379 )   (596,877 )   (299,731 )   (299,731 )   —  
Advances for financing from investors     —     —     612,994     —     —  
Proceeds from issuance of redeemable convertible preferred stock and warrants, net of issuance costs     6,307,220     6,484,038     4,774,297     4,828,695     16,818,581  
Proceeds from options exercised     21,376     —     11,644     6,413     29,067  
Proceeds from warrants exercised     —     —     —     —     302,820  
Deferred initial public offering costs     —     —     —     —     (598,560 )
   
 
 
 
 
 
      Net cash provided by financing activities     5,807,581     5,762,617     4,982,152     4,470,973     16,503,454  
   
 
 
 
 
 
Net increase (decrease) in cash and cash equivalents     626,955     1,657,161     (1,317,041 )   1,726,645     13,390,282  
Cash and cash equivalents at beginning of period     867,557     1,494,512     3,151,673     3,151,673     1,834,632  
   
 
 
 
 
 
Cash and cash equivalents at end of period   $ 1,494,512   $ 3,151,673   $ 1,834,632   $ 4,878,318   $ 15,224,914  
   
 
 
 
 
 

Supplemental disclosure of cash flow information
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash paid during the period for interest   $ 93,635   $ 35,233   $ 10,141   $ 5,169   $ 2,301  

Supplemental disclosure of noncash activities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equipment acquired under capital lease obligations     191,982     71,600     —     —     —  
Conversion of advances from investors to preferred stock     —     —     —     —     (614,993 )

The accompanying notes are an integral part of these consolidated financial statements.

F-6

Metabolix, Inc.

Notes to Consolidated Financial Statements

(Information as of June 30, 2006
and the six months ended
June 30, 2006 and 2005
is unaudited)

1.    Nature of Business

 Metabolix, Inc. (the "Company"), which began operations on June 19, 1992, uses advanced biotechnology to develop environmentally sustainable, economically attractive alternatives to petrochemical-based plastics, fuels and chemicals. Metabolix is a leader in applying the advanced tools of metabolic engineering and molecular biology to efficiently produce PHA Natural Plastics in microbial systems and directly in nonfood plant crops. In 2005 the Company determined that it is no longer a development stage enterprise due to the commencement of its principal operations, significant collaboration agreements and its revenue levels.

The Company has incurred losses since inception and expects to incur net operating losses and negative cash flows in the near term as expenditures for research and development and commercialization exceed its revenues. The Company plans to continue to seek additional financing and collaboration arrangements to fund operations. If the Company is unable to obtain cash from these sources at acceptable terms, management intends to reduce expenses so that it can continue to meet its obligations. There can be no assurance that the Company will be successful in raising additional funds or reducing spending to a sufficient level. The Company completed a preferred stock financing round in January 2006 (Note 10).

The Company is subject to risks common to companies in the biotechnology industry including, but not limited to, development by the Company's competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, the need to obtain additional funding, and compliance with government regulations.

2.    Restated Interim Financial Statements

 The unaudited consolidated financial statements as of and for the six months ended June 30, 2006 have been restated to include a $447,010 incremental compensation charge resulting from an adjustment to the fair value of options that were granted by the Company to its employees and certain non-employee consultants in the first six months of 2006 (see Note 12). Subsequent to the initial issuance of its interim financial statements for the six months ended June 30, 2006, the Company reassessed the fair value of its common stock and determined that the exercise prices of the employee stock options granted in the first six months of 2006 were less than the reassessed fair values of the Company's common stock at the related date of grant for accounting purposes. The restated aggregate fair value of these grants to be recognized over the four-year vesting period is $2,481,913. The Company had previously assigned an aggregate fair value of $1,109,381 to these grants.

F-7


The effect of the restatement is as follows for the six months ended June 30, 2006:

 
   As previously reported
   As restated
  
Income Statement:              
Research and development expense     4,640,315     4,669,271  
General and administrative expense     3,397,257     3,815,311  
Loss from operations     (4,227,836 )   (4,674,846 )
Net loss     (3,888,235 )   (4,335,245 )
Net loss per share basic and diluted   $ (1.30 ) $ (1.45 )
Pro forma net loss per share basic and diluted   $ (0.31 ) $ (0.34 )

In addition to the item noted above, the Company has restated its unaudited Statement of Cash Flows for the six months ended June 30, 2006 to appropriately classify $598,560 of deferred initial public offering costs to financing activities from operating activities, where it had previously been included in the change in other assets.

3.    Summary of Significant Accounting Policies

Unaudited Interim Financial Statements

The consolidated financial statements and related notes of the Company for the six months ended June 30, 2005 and June 30, 2006, respectively, are unaudited. Management believes the unaudited consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the financial position and results of operations in such periods. Results of operations for the six months ended June 30, 2006 are not necessarily indicative of the results that may be expected for the year ended December 31, 2006.

Unaudited Pro Forma Presentation

Unaudited pro forma net loss per share is computed using the weighted average number of common shares outstanding and warrants that can be issued with little or no consideration during the period, including the pro forma effects of automatic conversion of all outstanding redeemable convertible preferred stock into shares of the Company's common stock effective upon the assumed closing of the Company's proposed initial public offering as if such conversion had occurred at the date of original issuance.

Upon the closing of the Company's initial public offering of securities, all of the outstanding shares of Series A, B, C, D, E, F, G, I-1, J-1, 04, and 05 convertible preferred stock will automatically convert

F-8


on a one-for-0.8173 basis to 9,992,041 shares of the Company's common stock. The unaudited pro forma presentation of the balance sheet has been prepared assuming the conversion of the convertible preferred stock into common stock as of June 30, 2006.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its former wholly-owned subsidiary, Metabolix Canada. The subsidiary was closed during 2005. All significant intercompany transactions were eliminated.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity date of ninety days or less at the date of purchase to be cash equivalents. Cash and cash equivalents consist of cash on deposit.

Short-Term Investments

The Company considers all highly liquid investments with a maturity date of one year or less at the balance sheet date to be short-term investments. Short-term investments consist of certificates of deposit, for which the carrying amount approximates fair value as of December 31, 2004 and 2005. As of June 30, 2006, the Company held a corporate bond of $646,665.

Restricted Cash

The Company has restricted cash consisting of a certificate of deposit supporting a letter of credit, of $496,367 and $498,129 at December 31, 2005 and June 30, 2006, respectively, in connection with its leased facility.

F-9


Comprehensive Income (Loss)

Statement of Financial Accounting Standards No. 130, Reporting Comprehensive Income ("SFAS No. 130"), requires that changes in comprehensive income be shown in the financial statements with the same prominence as other financial statements. For all periods presented the Company's net loss is equal to comprehensive loss and as a result separate disclosure is not necessary.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk primarily consist of cash and cash equivalents and short-term investments. The Company invests its excess cash and cash equivalents in interest bearing certificates of deposit of a major U.S. bank. Accordingly, management believes these investments are subject to minimal credit and market risk and are of high credit quality.

At December 31, 2004 and 2005, all of the Company's unbilled receivables were due under U.S. government grants and credit risk is considered minimal. Additionally, all grant revenues were related to U.S. government grants for all periods presented.

Fair Value of Financial Instruments

The carrying amounts of the Company's financial instruments as of December 31, 2004 and 2005, which include cash equivalents, accounts receivable, unbilled receivable, accounts payable, accrued expenses, promissory note and advances on financing from investors, approximate their fair values due to the short-term nature of these instruments.

Segment Information

Statement of Financial Accounting Standards No. 131, Disclosures about Segments of an Enterprise and Related Information ("SFAS 131"), establishes standards for reporting information on operating segments in interim and annual financial statements. The Company operates in one segment, which is the business of developing technologies for the production of polymers and chemicals in plants and in microbes. The chief operating decision-makers review the Company's operating results on a consolidated basis and manage operations as a single operating segment.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Repairs and maintenance are charged to operations as incurred. Gains and losses on the disposition of equipment are recorded in net income or loss and the related cost and accumulated depreciation are removed from the respective

F-10


accounts. Depreciation is computed using the straight-line method over the estimated useful lives as follows:

 
   Estimated
Useful Life
Equipment   21/2 - 3 years
Furniture and Fixtures   5
Software   3
Capital leases and leasehold improvements   Shorter of life or term of lease

The Company accounts for operating lease incentive payments received from the lessor in accordance with Statement of Financial Accounting Standards No. 13, Accounting for Leases ("SFAS 13"). Under SFAS 13, leasehold improvements made by a lessee that are funded by landlord incentives or allowances under an operating lease should be recorded by the lessee as leasehold improvement assets and amortized over the shorter of their economic lives or the lease term. The Company records landlord incentive received as deferred rent and amortizes those amounts as reductions to lease expense over the lease term.

Impairment of Long-Lived Assets

The Company accounts for the impairment and disposal of long-lived assets utilizing Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets ("SFAS 144"). SFAS 144 requires that long-lived assets, such as property, plant and equipment, and purchased intangible assets subject to amortization, be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. SFAS No. 144 further refines the requirements of Statement of Financial Accounting Standards No. 121, Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of ("SFAS No. 121"), that companies (1) recognize an impairment loss only if the carrying amount of a long-lived asset is not recoverable based on its undiscounted future cash flows and (2) measure an impairment loss as the difference between the carrying amount and fair value of the asset.

Redeemable Convertible Preferred Stock

The preferred stock contains certain redemption features that are considered outside the control of the Company, including redemption upon a change in control. Therefore the Company presents redeemable convertible preferred stock as temporary equity in the mezzanine level of the consolidated balance sheet.

F-11


Research and Development Expenses

All costs associated with internal research and development as well as research and development services conducted for others are expensed as incurred. Research and development expenses include direct costs for salaries, employee benefits, subcontractors, facility related expenses, depreciation and stock-based compensation related to employees and non-employees involved in the company's research and development. Costs related to revenue-producing contracts are recorded as research and development expenses.

Revenue Recognition

The Company recognizes revenue in accordance with the Staff Accounting Bulletin No. 104, Revenue Recognition ("SAB 104"), and Emerging Issues Task Force (EITF) Issue No. 00-21, Revenue Arrangements with Multiple Deliverables, for all revenue transactions entered into in fiscal periods beginning after June 15, 2003. Principal sources of revenue are government grants, license fees, royalty revenues and research and development payments that are primarily derived from collaborative agreements with other companies.

The Company's research and development revenue includes research services and delivery of specified materials or sample product produced resulting from the research services and revenue is recognized upon completion of the related services.

Fees to license the use of the Company's proprietary and licensed technologies in research performed by the customer are recognized only after both the license period has commenced and the technology has been delivered. Royalty revenue is recognized when it becomes determinable and collectibility is reasonably assured, otherwise the Company recognizes revenue upon receipt of payment.

The Company analyzes its multiple element arrangements to determine whether the elements can be separated and accounted for individually as separate units of accounting in accordance with EITF No. 00-21. The Company recognizes up-front license payments or technology access fees as revenue if the license or access fee has stand-alone value and the fair value of the undelivered items can be determined. If the license is considered to have stand-alone value but the fair value of any of the undelivered services or items cannot be determined, the license payments are initially deferred and recognized as revenue over the period of performance of undelivered services or as undelivered items are delivered.

Revenue from milestone payments related to arrangements under which the Company has continuing performance obligations are recognized as revenue upon achievement of the milestone only if all of the following conditions are met: the milestone payments are nonrefundable; achievement of the milestone was not reasonably assured at the inception of the arrangement; substantive effort is involved in

F-12


achieving the milestone; and the amount of the milestone is reasonable in relation to the effort expended or the risk associated with the achievement of the milestone. If any of these conditions are not met, the milestone payments are deferred and recognized as revenue over the term of the arrangement as the Company completes its performance obligations.

Government research grants that provide for payments to the Company for work performed are recognized as revenue when the related expense is incurred and the Company has obtained governmental approval to use the grant funds for agreed upon budgeted expenses. Government grant revenue is earned as research expenses related to the grants are incurred.

Intellectual Property Costs

The Company includes all costs associated with the prosecution and maintenance of patents within general and administrative expenses in the consolidated statement of operations.

Stock-Based Compensation

Prior to January 1, 2006, as permitted by Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation ("SFAS No. 123"), the Company accounted for its stock-based awards to employees and directors using the intrinsic value method prescribed in Accounting Principles Board Opinion No. 25 ("APB No. 25"), Accounting for Stock Issued to Employees, and related interpretations. The Company recognizes compensation expense for stock options granted to nonemployees in accordance with the requirements of SFAS No. 123 and Emerging Issues Task Force ("EITF") Issue No. 96-18, Accounting for Equity Instruments that Are Issued to Other than Employees for Acquiring, or in Conjunction with Selling, Goods or Services ("EITF  96-18"). EITF 96-18 requires that such equity instruments be recorded at their fair value at the measurement date, which is generally the vesting date of the instruments. Therefore, the measurement of stock-based compensation is subject to periodic adjustments as the underlying equity instruments vest.

On January 1, 2006, the Company adopted Statement of Financial Accounting Standards No. 123(R), Share-Based Payments ("SFAS No. 123(R)"). Under the provisions of SFAS No. 123(R), compensation cost recognized for the six months ended June 30, 2006 includes compensation cost for all share-based payments granted subsequent to January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of SFAS No. 123(R) and will be recognized over the vesting period of the applicable award on a straight-line basis. The effect of adopting SFAS No. 123(R) for the six months ended June 30, 2006 (as restated) was an increase in net loss by $187,217 and a $0.06 increase to basic and diluted net loss per share. There is no expense recorded for options which were granted prior to January 1, 2006 under the minimum value method and with an exercise price equal to the fair value of common stock and that had a fixed measurement date at the time of grant.

F-13


Had compensation expense been determined based on the fair value of the options at the grant date consistent with the provisions of SFAS No. 123, the Company's net loss would have increased to the pro forma amounts below:

 
   Years Ended December 31,
  
 
   2003
   2004
   2005
  
Net loss as reported   $ (6,640,066 ) $ (5,054,511 ) $ (7,625,427 )
Add stock-based employee compensation expense included in reported net loss     —     —     —  
Deduct stock-based employee compensation expense determined under fair value method     (80,316 )   (32,264 )   (106,255 )
   
 
 
 
Net loss — pro forma   $ (6,720,382 ) $ (5,086,775 ) $ (7,731,682 )
   
 
 
 
Net loss per share, as reported                    
  Basic and Diluted   $ (3.33 ) $ (1.68 ) $ (2.56 )

Pro forma net loss per share
 
 
 
 
 
 
 
 
 
 
  Basic and Diluted   $ (3.38 ) $ (1.69 ) $ (2.60 )

Number of shares used in per share calculations
 
 
 
 
 
 
 
 
 
 
  Basic and Diluted     1,991,106     3,009,137     2,975,116  

Pursuant to the requirements of SFAS No. 123, for the three years ended December 31, 2005 the Company had estimated the fair value of its stock options, by applying the minimum value method which does not consider expected volatility of the underlying stock using the following assumptions and for the six months ended June 30, 2006, the Company determined the fair value of stock options using the Black-Scholes option pricing model with the following assumptions for option grants, respectively:

 
   Years Ended
December 31,
    
  
 
   Six Months Ended
June 30, 2006
  
 
   2003
   2004
   2005
  
Expected dividend yield   —   —   —   —  
Risk-free interest rate   3.77 % 4.08 % 4.22 % 4.89 %
Expected option term (in years)   5   5   5   6.1  
Volatility   —   —   —   75 %

For the six months ended June 30, 2006, expected volatility is based on review of historical volatilities for similar companies as adjusted to anticipate increased expected volatility associated with being a newly public company. Management believes that the historical volatility of the Company's stock price does not best represent the expected volatility of the stock price.

The risk-free interest rate used for each grant is equal to the U.S. Treasury yield curve in effect at the time of grant for instruments with a similar expected life.

F-14

For the period ended June 30, 2006, the expected term of the options granted was determined using the "simplified" method for "plain vanilla" options as permitted by Staff Accounting Bulletin No. 107.

The stock price volatility and expected terms utilized in the calculation involve management's best estimates at that time, both of which impact the fair value of the option calculated under the Black-Scholes methodology and, ultimately, the expense that will be recognized over the life of the option. SFAS 123(R) also requires that the Company recognize compensation expense for only the portion of options that are expected to vest. Therefore, the Company has estimated expected forfeitures of stock options for the grants valued. In developing a forfeiture rate estimate, the Company considered its historical experience, its growing employee base and the limited liquidity of its common stock. If the actual number of forfeitures differs from those estimated by management, additional adjustments to compensation expense may be required in future periods.

Earnings per Share

Basic net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding and warrants outstanding that were previously issued for little or no consideration, excluding the dilutive effects of common stock equivalents. Common stock equivalents include stock options, certain warrants and convertible securities. Diluted net income per share assumes the conversion of all outstanding shares of redeemable convertible preferred stock using the "if converted" method, if dilutive, and includes the dilutive effect of common stock equivalents under the treasury stock method.

The number of shares of potentially dilutive common stock related to redeemable convertible preferred stock, options and warrants that were excluded from the calculation of dilutive shares since the inclusion of such shares would be anti-dilutive for the years ended December 31, 2003, 2004, 2005, and the periods ended June 30, 2005 and 2006 are shown below:

 
    
    
    
   Six Months Ended
June 30,
 
   2003
   2004
   2005
   2005
   2006
 
    
    
    
   (Unaudited)

   (Unaudited)
Redeemable convertible preferred stock   4,600,314   6,875,186   7,605,556   7,605,556   9,992,043
Common stock options   681,322   762,635   2,036,982   1,067,377   2,285,167
Common stock warrants   789,444   939,150   939,150   939,150   830,911
   
 
 
 
 
    6,071,080   8,576,971   10,581,688   9,612,083   13,108,121
   
 
 
 
 

F-15

Foreign Currency Translation

The financial statements of the Company's former wholly-owned Canadian subsidiary which ceased to exist during 2005, were remeasured using the U.S. dollar as the functional currency. Monetary assets and liabilities were translated using the current exchange rate. Nonmonetary assets and liabilities are remeasured using historical exchange rates. Revenue and expenses were remeasured using average exchange rates for the period, except for items related to nonmonetary assets and liabilities, which are translated using historical exchange rates. All remeasurement gains and losses were included in determining net loss for the period in which exchange rates change and were immaterial for all years presented.

Income Taxes

The Company follows the provisions of Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes ("SFAS No. 109"). SFAS No. 109 requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. A valuation allowance is provided to reduce the deferred tax asset to a level which, more likely than not, will be realized.

Recent Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board ("FASB") issued SFAS No. 123(R), which replaces SFAS No. 123 and supersedes APB No. 25. SFAS No. 123(R) which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the statement of operations based on their fair values. The Company implemented SFAS No. 123(R) in the reporting period beginning January 1, 2006, which resulted in a material effect on its stock compensation expense for the period ended June 30, 2006. The Company expects stock compensation expense to materially increase in future periods as a result of the adoption of this standard and future possible stock grant activity.

In April 2005, the FASB issued FASB Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations—an interpretation of FASB Statement No. 143 (FIN No. 47). FIN No. 47 expands on the accounting guidance of Statement of Financial Accounting Standards No. 143, Accounting for Asset Retirement Obligations (SFAS No. 143), providing clarification of the term, conditional asset retirement obligation, and guidelines for the timing of recording the obligation. The interpretation is effective for fiscal years ending after December 15, 2005. The Company adopted FIN No. 47 and has recorded a long-term liability for its asset retirement obligations of $66,218 and an

F-16


associated non-current asset of $64,615 at December 31, 2005 which represents the contractual obligations associated with the potential removal of a leasehold addition constructed during 2005.

In May 2005, the FASB issued Statement of Financial Accounting Standards No. 154, Accounting Changes and Error Corrections, a replacement of APB Opinion No. 20, Accounting Changes, and FASB issued Statement of Financial Accounting Standards No. 3, Reporting Accounting Changes in Interim Financial Statements ("SFAS No. 154"). SFAS No. 154 requires retrospective application to prior period financial statements of changes in accounting principle, unless it is impracticable to determine either the period-specific effects or the cumulative effect of the change. This statement requires that retrospective application of a change in accounting principle be limited to the direct effects of a change. SFAS 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005.

In July, 2006 the FASB issued Financial Accounting Standards Interpretation No. (FIN) 48, Accounting for Uncertainty in Income Taxes. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprises' financial statements in accordance with SFAS No. 109. FIN 48 prescribes a recognition threshold and measurement attributable for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosures and transitions. FIN 48 is effective for fiscal years beginning after December 15, 2006. The adoption of this statement is not expected to have a material impact on the Company's consolidated financial position or results of operations.

4.    Significant Collaborations

ADM Agreement

On November 3, 2004, the Company signed an agreement with ADM Polymer Corporation ("ADM"), a subsidiary of Archer Daniels Midland Company, to establish an alliance whereby the Company would provide technology and licenses thereto and research and development services, and ADM would provide manufacturing services and capital necessary to produce PHA Natural Plastics on a commercial scale basis. This agreement was amended by the parties on September 8, 2005 to define certain cost sharing activities related to pilot manufacturing, to change certain milestones and make other minor modifications. The arrangement is comprised of two primary agreements: (1) the Technology Alliance and Option Agreement and (2) the Commercial Alliance Agreement.

Technology Alliance and Option Agreement

The goal of the Technology Alliance and Option Agreement is to demonstrate the capabilities of the Company's fermentation and recovery technologies at commercial scale and to prepare a master plan

F-17


and budget for the construction of a 50,000 ton commercial manufacturing facility, which would provide the basis for entering into the Commercial Alliance Agreement.

The Technology Alliance and Option Agreement provides ADM with an option (the "Option") to enter into a commercial alliance for further research, development, manufacture, use and sale of PHA Natural Plastics on the terms and conditions set forth in the Commercial Alliance Agreement (see below). The Option is exercisable by ADM under certain conditions at any time until 30 days after the expiration of the term of the Technology Alliance and Option Agreement. This Agreement was scheduled to expire on October 6, 2006. On July 12, 2006, ADM exercised the Option (see Note 15).

Under the Technology Alliance and Option Agreement, ADM made a nonrefundable, noncreditable upfront payment of $3,000,000 to the Company in 2004. In May 2006, the Company received a $2,000,000 payment from ADM in recognition of achieving certain technical goals under the Technology Alliance and Option Agreement (unaudited). Due to future obligations of the Company under the agreements for which fair value cannot be determined, including the requirement to provide research and development activities and recovery services under the Technology Alliance and Option Agreement and certain manufacturing services, including formulation, and sales and marketing activities and other services under the Commercial Alliance Agreement (as discussed below), the entire upfront payment and milestone payment received have been recorded as deferred revenue. The Company's policy is to expense, as period costs, the direct and incremental costs incurred associated with this collaboration.

In connection with the 2005 amendment, ADM agreed to reimburse the Company for one-half of certain costs incurred by the Company related to the Company's establishment of pilot manufacturing capabilities. If the Technology Alliance was terminated without ADM exercising its Option to enter into a commercial alliance, the Company would have been required to refund to ADM a portion of these reimbursements. Amounts reimbursed in 2005 and during the six month period ended June 30, 2006, totaled approximately $620,000 and $587,000, respectively, and have been recorded as deferred revenue.

Revenue recognition for amounts deferred through June 30, 2006 are expected to commence approximately at the time of the first commercial sale of PHA Natural Plastics (see Commercial Alliance Agreement below) and amounts will be recognized proportionately over the period that the final services are provided over the remaining term of the Commercial Alliance Agreement.

Commercial Alliance Agreement

The Commercial Alliance Agreement specifies the terms and structure of the relationship between the Company and ADM once the Option is exercised by ADM. As of December 31, 2005 and June 30, 2006, the Option had not been exercised (see Note 15). The primary goal of this agreement is to

F-18


establish the activities and obligations of the Company and ADM by which the parties will commercialize PHA Natural Plastics. These activities include: the establishment of a Joint Sales Company (JSC) to market and sell PHA Natural Plastics, the construction of a manufacturing facility capable of producing 50,000 tons of material annually, the licensing of technology to the JSC and to ADM, and the conducting of various research, development, manufacturing, sales and marketing, formulation and administrative services by the parties.

The JSC will be a limited liability company, formed and equally owned by the Company and ADM, and is intended to: (i) serve as the commercial entity to establish and develop the commercial market for the PHA Natural Plastics, and conduct the marketing and sales in accordance with the goals of the commercial alliance, (ii) assist in the coordination and integration of the manufacturing, formulation and marketing activities, and (iii) administer and account for financial matters on behalf of the parties. The Company and ADM will each have 50% equity and voting interest in the JSC.

A summary of the key activities under this agreement is as follows: (i) ADM will arrange for and finance the construction of a facility in which it will manufacture PHA Natural Plastics under contract to the JSC; (ii) the Company will either arrange for and finance the acquisition or construction of a facility in which it will formulate PHA materials or it will arrange for third parties to formulate the PHA Natural Plastics; (iii) the Company, acting in the name and on behalf of the JSC, will establish the initial market for the PHA Natural Plastics. The Company will also continue its research and development efforts to further advance the technology and expand and enhance the commercial potential of PHA materials. Subject to certain limitations, ADM will finance the working capital requirements of the JSC.

The JSC will make up to twelve payments of $1,575,000 per calendar quarter to the Company to support these activities during the construction of the Commercial Manufacturing Facility. In the event construction is completed and sale of commercial product commences prior to the JSC making all twelve such payments, the quarterly payments will cease, and the JSC will pay the Company a lump sum equal to the number of remaining unpaid payments multiplied by $250,000.

Upon the commencement of commercial sales, the JSC will pay the Company royalties on sales as well as reimburse it for the cost of services provided pursuant to the agreement.

While the JSC will be a fifty-fifty joint venture, ADM will be advancing a disproportionate share of the financial capital needed to construct the manufacturing plant and to fund the activities of the JSC. Therefore, a preferential distribution of cash flow will be used, whereby all profits (after payment of all royalties, reimbursements and fees) from the JSC shall be distributed to ADM until ADM's disproportionate investment in the JSC has been returned in full. Once ADM has recouped such amounts, the profits of the JSC shall be distributed in equal amounts to the parties.

F-19

The Commercial Alliance Agreement provides for expansion of the operations of the JSC beyond the initial license of 50,000 tons annual production through an equally owned joint venture. While certain principles of the joint venture have been agreed to, the detailed terms and conditions will not be determined until a later date.

The agreements include detailed provisions setting out the rights and obligations of the parties in the event of a termination of the Commercial Alliance. These provisions include the right for parties to terminate the Commercial Alliance upon a material default of a material obligation by the other party after a notice and cure period has expired. The parties are also permitted to terminate the Commercial Alliance if a change in circumstances that is not reasonably within the control of a party makes the anticipated financial return from the project inadequate or too uncertain. Finally, the parties have specific obligations to fulfill in the event of termination or if they file for bankruptcy protection.

BP America Production Company

On February 14, 2005, the Company signed a joint development agreement with BP America Production Company ("BP") to advance the Company's technology for producing PHA polymers in plants and to conduct an evaluation of the potential for using PHA producing plants in a biomass to energy system. In exchange for the Company completing certain research and development activities, the agreement provided for BP to pay the Company $500,000 at the start of each calendar quarter during the term of the agreement with the first two such payments due within five days of the effective date of the agreement. The Company received $2,000,000 in 2005 related to this agreement. Due to these amounts being applicable for determining BP's equity participation in a potential future joint venture between the parties, these amounts were recorded as deferred revenue at December 31, 2005.

In January 2006, the Company received notice of termination from BP with respect to the joint development agreement and as a result, there will no longer be any continuing obligations from either party. During the six months ended June 30, 2006, the Company recognized $2,500,000 in revenue from the BP arrangement, consisting of the $2,000,000 of deferred revenue and the $500,000 final payment due under the arrangement, which was received in June 2006 (unaudited).

F-20

5.    Property and Equipment

 Property and equipment consist of the following:

 
   December 31,
    
  
 
   June 30,
2006
  
 
   2004
   2005
  
 
    
    
   (Unaudited)

  
Equipment   $ 1,810,395   $ 2,011,264   $ 2,207,285  
Equipment under lease     342,539     249,030     188,950  
Furniture and Fixtures     21,071     24,255     55,542  
Leasehold improvements     1,284,020     3,104,947     3,894,059  
Software     19,773     22,938     22,938  
   
 
 
 
  Total property and equipment, at cost     3,477,798     5,412,434     6,368,774  
Less: Accumulated depreciation     (2,093,999 )   (2,406,962 )   (2,832,983 )
   
 
 
 
  Property and equipment, net   $ 1,383,799   $ 3,005,472   $ 3,535,791  
   
 
 
 

Depreciation expense for the six months ended June 30, 2005 and 2006 and for the years ended December 31, 2003, 2004 and 2005 was $136,976 (unaudited), $427,692 (unaudited), $307,508, $265,253 and $312,964, respectively. Accumulated depreciation for equipment acquired under capital leases was $225,964 and $200,750, respectively, as of December 31, 2004 and 2005.

During 2004 the Company received a lease incentive payment of $1,521,045 from its lessor for leasehold improvements. In accordance with SFAS No. 13, the Company has recorded the leasehold improvements as an asset and is amortizing them over their useful life, along with a corresponding deferred rent liability that will be amortized as a reduction of lease expense over the remaining term of the lease.

6.    Convertible Promissory Note

 In conjunction with the purchase of certain technology in 2001, the Company issued a promissory note in the amount of $2,000,000. The note accrued interest beginning January 2002 at a rate of 10% per annum, through March 2005. Payments due on the promissory note were due in quarterly installments of $142,857 through March 2005. At December 31, 2005, the convertible promissory note had been repaid in full.

F-21

7.    Accrued Expenses

 Accrued expenses consist of the following:

 
   December 31,
    
 
   June 30,
2006
 
   2004
   2005
 
    
    
   (Unaudited)
Intellectual property costs   $ 111,938   $ 92,104   $ 105,459
Contracted research and development     31,805     126,259     9,383
Professional services     299,128     497,295     561,470
Tolling fees     —     —     220,000
Other     282,745     115,046     526,940
   
 
 
  Total accrued expenses   $ 725,616   $ 830,704   $ 1,423,252
   
 
 

8.    Commitments and Contingencies

Leases

The Company leases its facility under an operating lease, which expires in May 2014. The Company leases equipment under capital leases with various rates of interest, ranging from 10.07% to 15.71%, with expiration dates through August 2006. All commitments are collateralized by equipment under lease. Rental payments under operating leases for the years ended December 31, 2003, 2004 and 2005, were $484,003, $590,169 and $834,148, respectively. The deferred rent liability recorded on the balance sheet includes the unamortized balance of the landlord incentive payments and the cumulative difference between actual facility lease payments and lease expense recognized ratably over the operating lease period. At December 31, 2005, the Company's future minimum payments required under operating and capital leases are as follows:

 
   Operating
   Capital
  
2006   $ 988,185   $ 65,001  
2007     988,185     —  
2008     988,185     —  
2009     988,185     —  
2010     988,185     —  
2011 and thereafter     3,443,948     —  
   
 
 
  Total commitments and contingencies   $ 8,384,873     65,001  
   
       
Less: Amount representing interest           (2,430 )
         
 
  Present value of minimum lease payments           62,571  
Less: Current portion           (62,571 )
         
 
Capital leases — long term         $ —  
         
 

F-22

Patent Action

The Procter & Gamble Company ("P&G") filed a nullity action on March 8, 2005 in Germany seeking to revoke the German equivalent of one of the Company's patents. The patent is licensed by the Massachusetts Institute of Technology ("MIT") exclusively to the Company. The Company is controlling the response to the nullity action, at the Company's expense, with MIT's cooperation.

The Company believes this nullity action is without merit and intends to vigorously defend this patent. The Company is unable to determine the potential outcome at this time and has not reserved for any potential liability in this matter at either December 31, 2005 or June 30, 2006.

Funded Research Arrangements

The Company has entered into various arrangements with universities and other unrelated third parties to perform certain research and development activities. As of June 30, 2006, the Company has committed funding of approximately $299,491 to these universities and unrelated parties. Certain of these arrangements also contain provisions for future royalties to be paid by the Company on sales of products developed under the arrangements. The Company has the right in most arrangements to terminate the relationship by giving written notice, after which the Company would be liable for services rendered to date under the arrangement.

License Agreement with Massachusetts Institute of Technology ("MIT")

The Company's exclusive license agreement with MIT requires the Company to pay annual license fees of $25,000 and additional potential royalty payments to MIT based on a percentage of net sales of products or services covered by a patent that is subject to the license. There are no material license fees or royalties accrued at December 31, 2004, 2005 and approximately $27,000 accrued at June 30, 2006.

9.    Related Party Transactions

Tepha, Inc.

During 1999, the Company entered into a sublicense agreement with Tepha, Inc. ("Tepha"), to sublicense technology to Tepha. The Company's director, Dr. Williams, is the president, chief executive officer and a director of Tepha. In addition, the Company directors Messrs. Muller and Giles and Dr. Sinskey serve on the Board of Directors of Tepha. The agreement with Tepha contains provisions for sublicense maintenance fees to be paid to the Company upon Tepha achieving certain financing milestones and for product related milestone payments. Under the agreement, the Company will also

F-23


receive royalties on net sales of licensed products or sublicensing revenues received by Tepha, subject to a minimum payment each year.

In December 2002, the Company amended this agreement to provide that $800,000 of Tepha's payment obligation pursuant to the agreement became payable in both cash and equity. In October 2002, Tepha paid the Company $100,000 and the balance of the payment obligation was satisfied in December 2002 through the issuance of 648,149 shares of Tepha's Series A redeemable convertible preferred stock. The Company licensed or sublicensed additional technology to Tepha in subsequent periods. The Company recognized license and royalty revenues of $112,800, $316,880, $242,100 and $189,800 from Tepha for the years ended December 31, 2003, 2004, 2005 and six months ended June 30, 2006 (unaudited), respectively.

The Company reviewed the preferred stock investment in Tepha for other than temporary impairment in accordance with Statement of Financial Accounting Standard No. 115, Accounting for Certain Investments in Debt and Equity Securities ("SFAS No. 115") and determined that at December 31, 2005, its investment was fully impaired based on its current fair value and, therefore, recorded an asset impairment charge of $700,000 in 2005.

ADM

The Company's collaborative partner ADM made a $5,000,000 investment in the Company as part of the Series 05 redeemable convertible preferred stock issuance in January 2006 (Note 10). ADM makes various payments to the Company under the collaborative agreements signed during November 2004 and July 2006 (Notes 4 and 15.)

Dr. ChoKyun Rha

The Company retained Dr. ChoKyun Rha, a related party, to serve as an advisor for the purpose of building and managing business relationships in Asia. Dr. Rha is the spouse of a director of the Company. In consideration for Dr. Rha's services, on September 20, 2005, the Company granted her a nonqualified stock option for the purchase of 16,346 shares of the Company's common stock, vesting over a period of four years, with an exercise price of $1.65 per share, which was the fair market value per share of the common stock at the date of grant of the option (Note 12).

F-24

10.    Redeemable Convertible Preferred Stock

 At December 31, 2005 the total number of shares of all classes of stock which the Company had authorization to issue was 41,600,000, consisting of 18,600,000 shares of $0.01 par value preferred stock, and 23,000,000 shares of $0.01 par value common stock.

Redeemable convertible preferred stock consists of the following at December 31:

 
   2003
 
   Number
of Shares
Authorized
   Shares
Outstanding
   Liquidation
Preference
   Carrying
Value
Series A preferred stock   1,033,000   1,033,000   $ 1,177,620   $ 1,177,279
Series B preferred stock   396,000   396,000     633,600     633,600
Series C preferred stock   785,000   785,000     1,884,000     1,884,000
Series D preferred stock   733,000   733,000     3,371,800     3,374,732
Series E preferred stock   420,751   420,751     4,544,111     4,515,903
Series F preferred stock   186,899   186,899     2,018,509     2,018,509
Series G preferred stock   312,119   312,119     3,370,885     3,370,885
Series H preferred stock   300,000   —     —     —
Series I preferred stock   1,437,945   36,918     398,714     335,220
Series I-1 preferred stock   1,437,945   192,147     2,075,188     1,800,000
Series J preferred stock   1,837,945   1,532,954     16,555,903     13,529,539
Series J-1 preferred stock   1,837,945   —     —     —
   
 
 
 
    10,718,549   5,628,788   $ 36,030,330   $ 32,639,667
   
 
 
 
 
   2004
 
   Number
of Shares
Authorized
   Shares
Outstanding
   Liquidation
Preference
   Carrying
Value
Series A preferred stock   1,033,000   1,033,000   $ 1,177,620   $ 1,177,279
Series B preferred stock   396,000   396,000     633,600     633,600
Series C preferred stock   785,000   785,000     1,884,000     1,884,000
Series D preferred stock   733,000   733,000     3,371,800     3,374,732
Series E preferred stock   420,751   420,751     4,544,111     4,515,903
Series F preferred stock   186,899   186,899     2,018,509     2,018,509
Series G preferred stock   312,119   312,119     3,370,885     3,370,885
Series H preferred stock   300,000   —     —     —
Series I-1 preferred stock   192,147   192,147     2,075,188     1,800,000
Series J preferred stock   1,627,242   —     —     —
Series J-1 preferred stock   1,627,242   2,000     21,600     19,010
Series 04 preferred stock   4,458,188   4,351,250     23,496,750     20,440,691
Series 04-1 preferred stock   4,458,188   —     —     —
   
 
 
 
    16,529,776   8,412,166   $ 42,594,063   $ 39,234,609
   
 
 
 

F-25

 
   2005
 
   Number
of Shares
Authorized
   Shares
Outstanding
   Liquidation
Preference
   Carrying
Value
Series A preferred stock   1,033,000   1,033,000   $ 1,177,620   $ 1,177,279
Series B preferred stock   396,000   396,000     633,600     633,600
Series C preferred stock   785,000   785,000     1,884,000     1,884,000
Series D preferred stock   733,000   733,000     3,371,800     3,374,732
Series E preferred stock   420,751   420,751     4,544,111     4,515,903
Series F preferred stock   186,899   186,899     2,018,509     2,018,509
Series G preferred stock   312,119   312,119     3,370,885     3,370,885
Series H preferred stock   300,000   —     —     —
Series I-1 preferred stock   192,147   192,147     2,075,188     1,800,000
Series J preferred stock   1,627,242   —     —     —
Series J-1 preferred stock   1,627,242   2,000     21,600     19,010
Series 04 preferred stock   5,458,188   5,244,902     28,322,471     25,214,988
Series 04-1 preferred stock   5,458,188   —     —     —
   
 
 
 
    18,529,776   9,305,818   $ 47,419,784   $ 44,008,906
   
 
 
 

At June 30, 2006, the total number of shares of all stock which the Company has authorized to issue is 47,400,000 (unaudited), consisting of 20,900,000 (unaudited) shares of $0.01 par value preferred stock, and 26,500,000 (unaudited) shares of $0.01 par value common stock.

Redeemable convertible preferred stock consists of the following at June 30:

 
   2006
 
   (Unaudited)
 
   Number
of Shares
Authorized
   Shares
Outstanding
   Liquidation
Preference
   Carrying
Value
Series A preferred stock   1,033,000   1,033,000   $ 1,177,620   $ 1,177,279
Series B preferred stock   396,000   396,000     633,600     633,600
Series C preferred stock   785,000   785,000     1,884,000     1,884,000
Series D preferred stock   733,000   733,000     3,371,800     3,374,732
Series E preferred stock   420,751   420,751     4,544,111     4,515,903
Series F preferred stock   186,899   186,899     2,018,509     2,018,509
Series G preferred stock   312,119   312,119     3,370,885     3,370,885
Series I-1 preferred stock   192,147   192,147     2,075,188     1,800,000
Series J-1 preferred stock   2,000   2,000     21,600     19,010
Series 04 preferred stock   5,244,902   5,244,902     28,322,471     25,214,988
Series 04-1 preferred stock   5,244,902   —     —     —
Series 05 preferred stock   2,920,000   2,920,000     17,520,000     17,433,574
Series 05-1 preferred stock   2,920,000   —     —     —
   
 
 
 
    20,390,720   12,225,818   $ 64,939,784   $ 61,442,480
   
 
 
 

F-26

The following table depicts the preferred stock activity for the years ended December 31, 2003, 2004, 2005 and the period ended June 30, 2006:

 
   Series A-H
Redeemable
Preferred Stock
   Series I & I-1
Redeemable
Preferred Stock
   Series J & J-1
Redeemable
Preferred Stock
   Series 04 & 04-1
Redeemable
Preferred Stock
   Series 05
Redeemable
Preferred Stock
   Total
Redeemable
Preferred Stock
  
 
   Shares
   Value
   Shares
   Value
   Shares
   Value
   Shares
   Value
   Shares
   Value
   Shares
   Value
  
Balance, December 31, 2002   3,866,769   $ 16,974,908   1,167,241   $ 10,789,439   —   $ —   —   $ —   —   $ —   5,034,010   $ 27,764,347  
Issuance of Series I preferred stock and common stock warrants, net of issuance costs of $74,268             270,704     2,699,931                                 270,704     2,699,931  
Issuance of Series J preferred stock and common stock warrants for cash and upon conversion of notes payable and accrued expenses, net of issuance costs of $42,115                       324,074     3,084,160                       324,074     3,084,160  
Exchange of 1,401,027 shares of Series I preferred stock and cancellation of warrants for 192,147 shares of Series I-1 preferred stock and 1,208,880 shares of Series J preferred stock and issuance of warrants             (1,208,880 )   (11,354,150 ) 1,208,880     10,445,379                       —     (908,771 )
   
 
 
 
 
 
 
 
 
 
 
 
 
Balance, December 31, 2003   3,866,769     16,974,908   229,065     2,135,220   1,532,954     13,529,539   —     —   —     —   5,628,788     32,639,667  
Issuance of Series J preferred stock and common stock warrants, net of issuance costs of $12,015                       57,370     541,440                       57,370     541,440  
Exchange of 36,918 shares of Series I preferred stock for 36,918 shares of Series J preferred stock and issuance of warrants             (36,918 )   (335,220 ) 36,918     293,490                       —     (41,730 )
Exchange of 1,627,242 shares of Series J preferred stock for 2,000 shares of Series J-1 preferred stock and 3,250,484 shares of Series 04 preferred stock and cancellation of 189,716 shares of common stock warrants                       (1,625,242 )   (14,345,459 ) 3,250,484     14,564,233             1,625,242     218,774  
Issuance of Series 04 preferred stock, net of issuance costs of $67,678                                 1,100,766     5,876,458             1,100,766     5,876,458  
   
 
 
 
 
 
 
 
 
 
 
 
 
Balance, December 31, 2004   3,866,769     16,974,908   192,147     1,800,000   2,000     19,010   4,351,250     20,440,691   —     —   8,412,166     39,234,609  
Issuance of Series 04 preferred stock, net of issuance costs of $54,399                                 893,652     4,774,297             893,652     4,774,297  
   
 
 
 
 
 
 
 
 
 
 
 
 
Balance, December 31, 2005   3,866,769     16,974,908   192,147     1,800,000   2,000     19,010   5,244,902     25,214,988   —     —   9,305,818     44,008,906  
Issuance of Series 05 preferred stock, net of issuance costs of $86,426 (unaudited)                                           2,920,000     17,433,574   2,920,000     17,433,574  
   
 
 
 
 
 
 
 
 
 
 
 
 
Balance, June 30, 2006 (Unaudited)   3,866,769   $ 16,974,908   192,147   $ 1,800,000   2,000   $ 19,010   5,244,902   $ 25,214,988   2,920,000   $ 17,433,574   12,225,818   $ 61,442,480  
   
 
 
 
 
 
 
 
 
 
 
 
 

F-27

The rights and preferences of the preferred stock at December 31, 2005 are as follows:

Dividends

The holders of outstanding preferred stock shall be entitled to receive, out of funds legally available, when and if declared by the Board of Directors, dividends at the same rate as dividends that are paid with respect to the common stock, treating each share of preferred stock as being equal to the number of shares of common stock into which each such share of preferred stock is then convertible.

Liquidation Preferences

In the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Company, the holders of preferred stock then outstanding shall be entitled to be paid out of the assets of the Corporation available for distribution to its stockholders before any payment shall be made to the holders of common stock or any other class or series of stock ranking on liquidation junior to the preferred stock by reason of their ownership thereof, an amount equal to:

F-28

Each of the above shall be appropriately adjusted for stock splits, stock dividends, reclassifications, recapitalizations or other similar events affecting the preferred stock.

If upon any such liquidation, dissolution or winding-up of the Company the remaining assets of the Company available for distribution to its stockholders shall be insufficient to pay the holders of shares of preferred stock the full amount to which they shall be entitled, the assets of the Company shall be distributed as follows:

After the payment of all preferential amounts required to be paid to the holders of preferred stock and any other class or series of stock of the Company ranking on liquidation senior to or on a parity with the preferred stock, upon the dissolution, liquidation or winding-up of the Company, the remaining net assets of the Company available for distribution shall be distributed ratably among the participating holders of Series 04 preferred, Series 04-1 preferred, Series J preferred, Series J-1 preferred, Series I-1 preferred and common stock.

Change in Control

A merger or consolidation of the Company, or the sale of all or substantially all the assets of the Company, shall be deemed to be a liquidation, dissolution or winding up of the Company, and the holders of preferred stock shall be paid the liquidation amount for their shares, but only if, in the case of a merger, after giving effect to such merger, the holders of the Company's securities immediately prior to such merger own 50% or less of any surviving entity's voting securities.

F-29

Voting

Each holder of outstanding shares of preferred stock shall be entitled to the number of votes equal to the number of whole shares of common stock into which the shares of preferred stock held by such holder are then convertible. Except as provided by law, by the provisions of the Certificate of Incorporation or by the provisions establishing any other series of preferred stock, holders of any outstanding series of preferred stock shall vote together with the holders of common stock as a single class on all actions to be taken by the stockholders of the Company.

In addition, the Certificate of Incorporation provides holders of certain series of preferred stock with additional voting rights and requires the Company to secure stockholder consent for certain actions as defined in the Certificate of Incorporation.

Conversion

The holders of the preferred stock shall have conversion rights as follows:

Right to Convert

Each share of preferred stock shall be convertible, at the option of the holder, at any time and from time to time, into such number of fully paid and nonassessable shares of common stock as is determined by dividing the Adjusted Purchase Price for the series of preferred stock being converted by the applicable Conversion Price in effect at the time of conversion. The Adjusted Purchase Price and the Conversion Price shall initially be equal to the liquidation preferences.

All shares of preferred stock then outstanding shall convert into shares of common stock at the then effective conversion rate at the closing of the sale of shares of common stock in a fully underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933.

Adjustment of Series J and Series 04 Conversion Price Upon Issuance of Common Stock

If the Company shall, at any time there are shares of Series J preferred and/or Series 04 preferred outstanding, issue or sell, any shares of common stock for a consideration per share less than the Conversion Price of such series of preferred stock in effect immediately prior to the time of such issue or sale, then, the Effective Conversion Price for such series of preferred stock shall be reduced to the price determined by dividing (i) an amount equal to the sum of (a) the number of shares of common stock outstanding or deemed outstanding, determined on a fully diluted basis assuming the exercise, conversion and exchange of all outstanding shares of Convertible Securities and Options immediately prior to such issue or sale multiplied by the then existing per share Effective Conversion Price for such series of preferred stock and (b) the consideration, if any, received by the Company upon such issue or

F-30

sale, by (ii) the total number of shares of common stock outstanding or deemed outstanding determined on a fully diluted basis assuming the exercise, conversion and exchange of all outstanding shares of Convertible Securities and Options immediately after such issue or sale.

Pay to Play

In the event that the Company issues any securities which would result in the reduction of the Effective Conversion Price of the Series J preferred and/or the Series 04 preferred (a "Dilutive Equity Financing"), the Company shall, after the initial closing of such Dilutive Equity Financing, provide notice to each holder of the Series J preferred and /or Series 04 preferred, that did not purchase its Participation Amount of the securities issued in such Dilutive Equity Financing (the "Pay to Play Notice"). If such holder does not purchase or agree to purchase its Participation Amount by the close of business on the 15th day after delivery of the Pay to Play Notice, then, as of such date, such holder shall be deemed to be a "Non-Participating holder" and all of the shares of the Series J preferred and/or Series 04 preferred owned by the Non-participating Holder shall automatically be converted into one share of a newly created series of preferred stock (Series J-1 or Series 04-1, as the case may be), which series shall be identical in all respects to the Series J or Series 04 preferred except that the Conversion Price of the newly created series of preferred stock shall be equal to the Effective Conversion Price of the Series J or Series 04 preferred immediately prior to the applicable Subsequent Dilutive Equity Financing and shall not be subject to further anti-dilution adjustments.

Redeemable Convertible Preferred Stock Issuances for 2003 through 2005 and for the period ended June 30, 2006 (unaudited)

In June 2003, the Company issued 270,704 shares of Series I preferred stock at $10.80 per share and warrants to purchase common stock for gross proceeds of $2,923,604.

In November 2003, the Company issued 324,074 shares of Series J redeemable convertible preferred stock at $10.80 per share and warrants to purchase common stock for gross proceeds of $3,499,999.

In November 2003, in conjunction with the issuance of Series J preferred stock, shareholders of 1,208,880 shares of Series I preferred stock exercised their right to exchange the shares of Series I preferred stock for 1,208,880 shares of Series J preferred stock.

F-31

In November 2003, shareholders of 192,147 shares of Series I preferred stock who elected not to participate in the Series J preferred stock offering had their 192,147 shares of Series I preferred stock converted into 192,147 shares of Series I-1 redeemable convertible preferred stock in accordance with the preferred stock provisions.

In January 2004, the Company issued an additional 57,370 shares of Series J preferred stock at $10.80 per share and warrants to purchase common stock for gross proceeds of $619,596.

In January 2004, in conjunction with the issuance of Series J preferred stock, the remaining shareholders of 36,918 shares of Series I preferred stock exercised their right to exchange the shares of Series I preferred stock for 36,918 shares of Series J preferred stock.

In April through August 2004, the Company issued 1,100,766 shares of Series 04 redeemable convertible preferred stock at $5.40 per share for gross proceeds of $5,944,136. In conjunction with the issuance of Series 04 preferred stock, shareholders of 1,625,242 shares of Series J preferred stock exercised their right to exchange the shares of Series J preferred stock for 3,250,484 shares of Series 04 preferred stock.

Shareholders of 2,000 shares of Series J preferred stock who elected not to participate in the Series 04 preferred stock offering had their 2,000 shares of Series J preferred stock converted into 2,000 shares of Series J-1 redeemable convertible preferred stock in accordance with the preferred stock provisions.

From March through May 2005, the Company issued 893,652 shares of Series 04 redeemable convertible preferred stock at $5.40 per share for gross proceeds of $4,825,721.

In January 2006, the Company issued 2,920,000 shares of Series 05 redeemable convertible preferred stock at $6.00 per share for gross proceeds of $17,520,000. The rights and preferences associated with this Series are similar to those rights of Series 04 redeemable convertible preferred stock. The Company also authorized 2,920,000 shares of Series 05-1 redeemable convertible preferred stock which has the rights similar to those of Series 04-1. The Company also cancelled Series H and Series J preferred stock during its first quarter ended March 31, 2006. There was no associated Series H or Series J preferred stock outstanding.

Warrants

In connection with the issuance of the Series H preferred stock during 2001, the Company issued warrants to purchase 108,239 shares of common stock at an exercise of $13.21 per share. The warrants expire five years from issuance date. The warrants were recorded at their relative fair value of $169,703 as a reduction to the carrying value of the Series H preferred stock and a corresponding increase to additional paid-in capital. The fair value of the warrants was estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions: no dividend yield, 90% volatility, risk-free interest rate of 5.13%, and a life of five years.

F-32

In connection with the issuance of Series I preferred stock during 2002, the Company issued warrants to purchase 520,990 shares of common stock at an exercise price of $13.21 per share; and concurrently, the Company issued warrants to purchase 432,983 shares of common stock at an exercise price of $13.21 per share in connection with the exchange of Series H preferred stock for Series I preferred stock. The warrants expire five years from issuance date. The warrants were recorded at their relative fair value of $1,553,389 as a reduction to the carrying value of the Series I preferred stock and a corresponding increase to additional paid-in capital. The fair value of the warrants was estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions: no dividend yield, 100% volatility, risk-free interest of 4.65%, and a life of five years.

In conjunction with the issuance of the Series I preferred stock during 2003, the Company issued warrants to purchase 221,238 shares of common stock at an exercise price of $13.21 per share. The warrants expire five years from issuance date. The warrants were recorded at their relative fair value of $149,405 as a reduction to the carrying value of the Series I preferred stock and a corresponding increase to additional paid-in capital. The fair value of the warrants was estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions: no dividend yield, 100% volatility, risk-free interest of 2.27%, and a life of five years.

In connection with the issuance of Series J preferred stock, the Company issued warrants to purchase 264,865 shares of common stock at an exercise price of $0.12 per share; and concurrently, the Company issued warrants to purchase 988,004 shares of common stock at an exercise price of $0.12 per share in connection with the exchange of Series I preferred stock for Series J preferred stock. The warrants expire five years from issuance date. In addition, the Company cancelled warrants to purchase 348,386 shares of common stock at an exercise price of $13.21 per share. The warrants issued were recorded at their relative fair value of $1,282,495 as a reduction to the carrying value of the Series J preferred and a corresponding increase to additional paid-in capital, net of the reversal of the canceled warrants. The fair value of the warrants was estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions: no dividend yield, 100% volatility, risk-free interest rate of 3.29%, and a life of five years.

In connection with the issuance of the Series J preferred stock during 2004, the Company issued warrants to purchase 46,881 shares of common stock at an exercise price of $0.12 per share; and concurrently, the Company issued warrants to purchase 30,173 shares of common stock at an exercise price of $0.12 per share in connection with the exchange of Series I preferred stock for Series J preferred stock. The warrants expire five years from issuance date. The warrants were recorded at their relative fair value of $107,870 as a reduction to the carrying value of the Series J preferred stock and a corresponding increase to additional paid-in capital. The fair value of the warrants was estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions: no dividend yield, 100% volatility, risk-free interest rate range of 3.12% - 3.29%, and a life of five years.

F-33

In connection with signing the lease agreement in 2004, the Company issued the landlord warrants to purchase 4,086 shares of common stock at an exercise price of $3.30 per share. The warrants expire ten years from the lease term commencement date. The fair value of the warrants was immaterial.

In conjunction with the issuance of Series 04 preferred stock in 2004 and the exchange of the shares of Series J preferred stock, 155,041 warrants to purchase common stock were cancelled resulting in a decrease of additional paid-in capital of $218,773.

During the six months ended June 30, 2006, 228,501 and 20,800 of the outstanding $0.12 and $13.21 warrants, respectively, were exercised (unaudited). Also, during the six months ended June 30, 2006, 87,439 warrants at $13.21 expired (unaudited).

11.    Common Stock

Common Stock Issuances

In 1992, the Company issued 245,190 shares of common stock to initial investors at a price of $0.04 per share or total proceeds of $9,000.

In November 1993, the Company issued 980,760 shares of common stock to new and existing stockholders at a price of $0.031 per share or total proceeds of $30,000. Additionally, in November 1993, the Company issued 408,650 shares of Class A common stock to existing stockholders at a price of $0.24 per share or total proceeds of $100,000. The outstanding shares of Class A common stock were automatically converted into common stock upon issuance of a preferred series in 1994 and Class A common shares are no longer authorized by the Company.

12.    Stock Compensation Plans

 In 1995, the Company adopted a stock plan (the "1995 Plan"). The 1995 Plan provided for the granting of incentive stock options, nonqualified stock options, stock awards, and opportunities to make direct purchases of stock, to employees, officers, directors and consultants of the Company. In June 2005, the 1995 Plan was terminated, and the Company adopted a new plan (the "2005 Plan" and, together with the 1995 Plan, referred to as the "Plans"). No further grants or awards have been, or may be, made under the 1995 Plan. Options that are outstanding under the 1995 Stock Plan continue to be governed by the 1995 Stock Plan. The 2005 Plan provides for the granting of incentive stock options, nonqualified stock options, stock grants, and stock-based awards to employees, officers, directors and consultants of the Company. The number of shares of common stock authorized for issuance under the 2005 Plan is 1,838,925 shares plus the amount of shares, if any, that were subject to options under the 1995 Stock Plan at June 2, 2005, but which subsequently become unissued upon the cancellation, surrender or termination of such options. At December 31, 2005, there were 2,448 and 2,656 shares that were subject to outstanding options under the 1995 Plan and the 2005 Plan, respectively, which had been unissued as a result of termination.

F-34

Options granted under the Plans generally vest ratably over four years from the date of hire, or date of commencement of services with the Company for nonemployees, and generally expire ten years from the date of issuance.

A summary of the number of shares of common stock for which outstanding options were exercisable under each of the Plans follows:

 
   1995 Stock Plan
   2005 Stock Plan
 
   Number
Exercisable
   Weighted
Average
Exercise Price
   Number
Exercisable
   Weighted
Average
Exercise Price
December 31, 2003   406,677   $ 3.11   —   $ —
December 31, 2004   516,136     3.07   —     —
December 31, 2005   644,751     3.79   296,775     1.70
June 30, 2006 (unaudited)   671,724     3.76   458,032     1.84

A summary of the activity related to the shares of common stock covered by outstanding options under each of the plans follows:

 
   1995 Stock Option Plan
   2005 Stock Option Plan
 
   Number
of Shares
   Exercise Price
Per Share
   Weighted
Average
Exercise
Price
   Number of
Shares
   Exercise Price
Per Share
   Weighted
Average
Exercise
Price
Balance at December 31, 2002   489,877   $0.49 - $13.21   $ 4.04   —   $—   $ —
Granted   216,365   $3.30     3.30   —   —     —
Exercised   (16,137 ) $0.49 - $3.30     1.32   —   —     —
Cancelled   (8,783 ) $3.30     3.30   —   —     —
   
           
         
Balance at December 31, 2003   681,322   $1.41 - $13.21     3.88   —   —     —
Granted   89,483   $1.65     1.65   —   —     —
Exercised   —   —     —   —   —     —
Cancelled   (8,170 ) $1.65 - $3.30     3.14   —   —     —
   
           
         
Balance at December 31, 2004   762,635   $1.41 - $13.21     3.62   —   —     —
Granted   —   —     —   1,283,641   $1.65 - $1.84     1.70
Exercised   (3,265 ) $1.65 - $3.30     3.09   (918 ) 1.65     1.65
Cancelled   (2,454 ) $1.65 - $3.30     2.48   (2,657 ) 1.65     1.65
   
           
         
Balance at December 31, 2005   756,916   $1.41 - $13.21   $ 3.63   1,280,066   $1.65 - $1.84   $ 1.70
   
           
         

The weighted average fair value per share of options granted during fiscal years 2003, 2004 and 2005 was approximately $1.41, $0.54 and $0.33, respectively.

F-35

A summary of information about the shares of common stock covered by outstanding and exercisable options under the option plans at December 31, 2005 follows:

 
   Outstanding
    
    
 
   Exercisable
 
    
   Weighted
Average
Remaining
Contractual
Life (Years)
    
Exercise Prices
   Number of
Shares
   Weighted
Average
Exercise
Price
   Number of
Shares
   Weighted
Average
Exercise
Price
$1.41   40,045   1.52   $ 1.41   40,045   $ 1.41
$1.65   1,042,440   9.51   $ 1.65   266,482   $ 1.65
$1.84   324,658   9.96   $ 1.84   76,670   $ 1.84
$3.30   582,436   5.57   $ 3.30   510,926   $ 3.30
$13.21   47,403   4.06   $ 13.21   47,403   $ 13.21
   
           
     
$1.41 - 13.21   2,036,982   8.17   $ 2.42   941,526   $ 3.13
   
           
     

At December 31, 2005, 560,395 shares were available for future option grants, stock grants, and stock-based awards under the 2005 Plan.

During the six months ended June 30, 2006, the Company granted stock options to acquire 17,570 shares of common stock at an exercise price of $1.84, 112,376 shares of common stock at an exercise price of $3.36, and 185,116 shares of common stock at an exercise price of $5.14.

In connection with this offering, the Company's board of directors determined to undertake a reassessment of the fair value of our common stock as of each of the 2006 grant dates. In connection with this undertaking, the Company's board of directors considered the following:


Following this reassessment, the Company's board of directors, with input from management, determined that the exercise prices of stock option grants in 2006 were less than the respective fair values of our common stock on the grant dates for accounting purposes. The Company has therefore revised the Black-Scholes fair value of these stock option grants to reflect the reassessed fair value of the Company's common stock.

F-36

In December 2005, 324,660 options were granted to an officer of the Company of which 125,864 contain performance based vesting conditions. These options were issued at an exercise price of $1.84 which was below their fair market value of $1.91 at the time of grant and the related compensation expense was immaterial for the period ended December 31, 2005. The 125,864 options are a variable award and are subject to remeasurement which could result in the recording of compensation expense in the future, depending on the probability of achieving certain performance conditions. All other option grants awards during 2003, 2004 and 2005 were issued at an exercise price equal to the fair market value on the date of issuance.

During the six months ended June 30, 2006, 41,954 of the 125,864 variable options granted to the officer of the Company during 2005 were cancelled due to the term expiration; 41,954 of these variable options were determined to be highly probable for meeting the performance condition and as a result $231,516 in compensation expense and $105,235 in deferred compensation was recorded during the period (unaudited, restated).

During 2005 and through June 30, 2006 (unaudited), the Company granted the following options to employees and nonemployees:

Grants Made During Quarter Ended
   Number of Options
Granted
   Weighted-Average
Exercise Price
   Weighted-Average
Fair Value per
Share
   Weighted-
Average Intrinsic
Value per Share
6/30/2006 (unaudited, restated)   297,492   $ 4.47   $ 8.98   $ 4.51
3/31/2006 (unaudited, restated)   17,570   $ 1.84   $ 2.81   $ 0.97
12/31/2005   324,658   $ 1.84   $ 1.91   $ 0.07
9/30/2005   652,200   $ 1.65   $ 1.65   $ —
6/30/2005   306,783   $ 1.65   $ 1.65   $ —
3/31/2005   —   $ —   $ —   $ —

During 2003, 2004, 2005 and the six months ended June 30, 2006, the Company granted stock options to purchase 75,395, 17,980, 59,558 and 42,907 (unaudited) shares of common stock, respectively, to nonemployees. The compensation expense related to these options is recognized over a period of four years. The 2005 and 2006 grants vest quarterly and the 2003 and 2004 grants vest on an annual basis and such vesting is contingent upon future services provided by the consultants to the Company. Relating to these options, the Company recorded stock based compensation expense of $123,554, $48,922, $27,022 and $376,123 (unaudited, restated) during 2003, 2004, 2005 and the six months ended June 30, 2006, respectively. Options remaining unvested for the nonemployee are subject to remeasurement each reporting period prior to vesting in full. Since the fair market value of the options issued to the nonemployee is subject to change in the future, the compensation expense recognized in each year may not be indicative of future compensation charges.

F-37


The fair value of each option granted to non-employees was estimated using the Black-Scholes option pricing model with the following assumptions:

Dividend yield   —
Volatility   75 - 100%
Risk-free interest rate   3.94 - 5.15%
Option term   10 years

Stock Options under SFAS No. 123(R) for the period ended June 30, 2006 (unaudited, restated)

A summary of stock option activity under the Plans for the six months ended June 30, 2006 (unaudited) is presented below:

 
   1995 Stock Option Plan
   2005 Stock Option Plan
 
   Number
of Shares
   Exercise Price
Per Share
   Weighted
Average
Exercise
Price
   Number of
Shares
   Exercise Price
Per Share
   Weighted
Average
Exercise
Price
Balance at December 31, 2005   756,916   $1.41 - $13.21   $ 3.63   1,280,066   $1.65 - $1.84   $ 1.70
Granted   —   —     —   315,062   $1.84 - $5.14     4.32
Exercised   (7,966 ) $1.65 - $3.30     2.96   (3,294 ) $1.65     1.65
Cancelled   (2,247 ) $1.65 - $3.30     2.10   (53,370 ) $1.65 - $1.84     1.81
   
           
         
Balance at June 30, 2006   746,703   $1.41 - $13.21     3.64   1,538,464   $1.65 - $5.14     2.23
   
           
         

A summary of information about the shares of common stock covered by outstanding and exercisable options under the option plans at June 30, 2006 (unaudited) follows:

 
   Outstanding
    
    
 
   Exercisable
 
    
   Weighted Average
Remaining
Contractual Life
(Years)
    
Exercise Prices
   Number of Shares
   Weighted Average
Exercise Price
   Number of
Shares
   Weighted Average
Exercise Price
$1.41   40,045   1.02   $ 1.41   40,045   $ 1.41
$1.65   1,028,548   9.02   $ 1.65   386,240   $ 1.65
$1.84   296,188   9.47   $ 1.84   98,222   $ 1.84
$3.30   575,491   5.06   $ 3.30   534,221   $ 3.30
$3.36   112,376   9.81   $ 3.36   7,279   $ 3.36
$5.14   185,116   9.96   $ 5.14   16,346   $ 5.14
$13.21   47,403   3.57   $ 13.21   47,403   $ 13.21
   
           
     
$1.41 - 13.21   2,285,167   7.94   $ 2.69   1,129,756   $ 2.98
   
           
     

F-38

At June 30, 2006 the aggregate intrinsic value of outstanding and exercisable options was $16,537,600 and $7,926,107, respectively (unaudited, restated). At June 30, 2006 the weighted average contractual remaining life of exercisable options was 6.60 years.

The weighted average fair value of stock options granted during the six months ended June 30, 2006 was $7.31 (unaudited, restated).

As of June 30, 2006, the total compensation cost related to nonvested options not yet recognized in the financial statements is approximately $1,647,810 (unaudited, restated) and the weighted average period over which it is expected to be recognized is 3.74 years (unaudited).

13.    Income Taxes

 There is no provision for income taxes because the Company has incurred operating losses since inception. The reported amount of income tax expense for the years differs from the amount that would result from applying domestic federal statutory tax rates to pretax losses primarily because of changes in valuation allowance. Significant components of the Company's net deferred tax asset at December 31, 2003, 2004 and 2005 are as follows:

 
   2003
   2004
   2005
  
Net operating loss carryforwards   $ 8,301,389   $ 9,136,063   $ 9,905,024  
Capitalization of research and development expenses     3,798,657     3,572,974     4,670,977  
Credit carryforwards     1,343,156     1,431,308     1,736,233  
Other temporary differences     2,453,955     3,664,049     4,802,220  
   
 
 
 
  Total deferred tax assets     15,897,157     17,804,394     21,114,454  
   
 
 
 
Valuation allowance     (15,897,157 )   (17,804,394 )   (21,114,454 )
   
 
 
 
  Net deferred tax asset   $ —   $ —   $ —  
   
 
 
 

At December 31, 2005, the Company had net operating loss carryforwards for federal and state income tax purposes of approximately $26,033,000 and $16,807,000, respectively. The Company's federal and state net operating loss carryforwards will begin to expire in 2008 and 2006, respectively. The Company also has available research and development credits for federal and state income tax purposes of approximately $1,075,000 and $888,000, respectively. The federal and state research and development credit will begin to expire in 2012. The Company also has available investment tax credits for state income tax purposes of approximately $114,000, which began to expire in 2005. However, changes in the Company's ownership, as defined in the Internal Revenue Code, may limit the Company's ability to utilize the net operating loss and tax credit carryforwards.

F-39

Management of the Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets, which are comprised principally of net operating loss carryforwards and research and development credits. Under the applicable accounting standards, management has considered the Company's history of losses and concluded that it is more likely than not that the Company will not recognize the benefits of federal and state deferred tax assets. Accordingly, a full valuation allowance has been established against the deferred tax assets.

Utilization of the net operating losses and credits may be subject to a substantial annual limitation due to ownership change limitations provided by the Internal Revenue Code of 1986, as well as similar state and foreign provisions. These ownership changes may limit the amount of net operating loss and credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. Subsequent ownership changes could further affect the limitation in future years. These annual limitation provisions may result in the expiration of certain net operating losses and credits before utilization.

14.    Employee Benefits

 The Company established a 401(k) savings plan in 1995, in which substantially all of its permanent employees are eligible to participate. Participants may contribute up to $14,000 of their annual compensation to the plan in 2005, subject to certain limitations. The Company has not made any contribution from inception to December 31, 2005.

15.    Subsequent Events

 On July 12, 2006, ADM exercised its option under the Technology Alliance and Option Agreement and entered into the Commercial Alliance Agreement with the Company at which time the Technology Alliance and Option Agreement terminated pursuant to its terms.

On July 14, 2006, the Company filed its initial public offering S-1 registration statement.

On July 25, 2006, the Company received the first two quarterly payments due from ADM under the Commercial Alliance Agreement totaling $3.15 million.

16.    Reverse Stock Split

 On September 20, 2006, a 0.8173-for-1 reverse stock split was approved by the Board of Directors and is reflected in these consolidated financial statements.

F-40

LOGO


5,800,000 Shares

METABOLIX, INC.

Common Stock

GRAPHIC

PROSPECTUS

No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this prospectus. You must not rely on any unauthorized information or representations. This prospectus is an offer to sell only the shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date.

Through and including                           , 2006 (the 25th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer's obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

Piper Jaffray

Jefferies & Company   Thomas Weisel Partners LLC

Ardour Capital Investments, LLC

, 2006


PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

The following table sets forth the costs and expenses, other than the underwriting discount, payable by us in connection with the sale of common stock being registered. All amounts are estimated except the SEC registration fee and the NASD filing fees.

 
   Amount
Securities and Exchange Commission registration fee   $ 9,992
NASD registration fee     9,125
NASDAQ listing application fee     105,000
Blue sky fees and expenses     20,000
Transfer agent and registrar fee     25,000
Printing and engraving expenses     200,000
Accountant fees and expenses     550,000
Legal fees and expenses     1,000,000
Miscellaneous     380,883
   
Total   $ 2,300,000


Item 14. Indemnification of Directors and Officers.

Section 145(a) of the Delaware General Corporation Law provides, in general, that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation), because he or she is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding, if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful.

Section 145(b) of the Delaware General Corporation Law provides, in general, that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor because the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification shall be made with respect to any claim, issue or matter as to which he or she shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or other adjudicating court determines that, despite the adjudication of liability but in view of all of the circumstances of the case, he or she is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or other adjudicating court shall deem proper.

II-1


Section 145(g) of the Delaware General Corporation Law provides, in general, that a corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of his or her status as such, whether or not the corporation would have the power to indemnify the person against such liability under Section 145 of the Delaware General Corporation Law.

Article VII of our amended and restated certificate of incorporation (the "Charter"), provides that no director of our company shall be personally liable to us or our stockholders for monetary damages for any breach of fiduciary duty as a director, except for liability (1) for any breach of the director's duty of loyalty to us or our stockholders, (2) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (3) in respect of unlawful dividend payments or stock redemptions or repurchases, or (4) for any transaction from which the director derived an improper personal benefit. In addition, our Charter provides that if the Delaware General Corporation Law is amended to authorize the further elimination or limitation of the liability of directors, then the liability of a director of our company shall be eliminated or limited to the fullest extent permitted by the Delaware General Corporation Law, as so amended.

Article VII of the Charter further provides that any repeal or modification of such article by our stockholders or an amendment to the Delaware General Corporation Law will not adversely affect any right or protection existing at the time of such repeal or modification with respect to any acts or omissions occurring before such repeal or modification of a director serving at the time of such repeal or modification.

Article V of our amended and restated by-laws (the "By-Laws"), provides that we will indemnify each of our directors and officers and, in the discretion of our board of directors, certain employees, to the fullest extent permitted by the Delaware General Corporation Law as the same may be amended (except that in the case of an amendment, only to the extent that the amendment permits us to provide broader indemnification rights than the Delaware General Corporation Law permitted us to provide prior to the amendment) against any and all expenses, judgments, penalties, fines and amounts reasonably paid in settlement that are incurred by the director, officer or such employee or on the director's, officer's or employee's behalf in connection with any threatened, pending or completed proceeding or any claim, issue or matter therein, to which he or she is or is threatened to be made a party because he or she is or was serving as a director, officer or employee of our company, or at our request as a director, partner, trustee, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of our company and, with respect to any criminal proceeding, had no reasonable cause to believe his or her conduct was unlawful. Article V of the By-Laws further provides for the advancement of expenses to each of our directors and, in the discretion of the board of directors, to certain officers and employees.

In addition, Article V of the By-Laws provides that the right of each of our directors and officers to indemnification and advancement of expenses shall be a contract right and shall not be exclusive of any other right now possessed or hereafter acquired under any statute, provision of the Charter or By-Laws, agreement, vote of stockholders or otherwise. Furthermore, Article V of the By-Laws authorizes us to provide insurance for our directors, officers and employees, against any liability, whether or not we would have the power to indemnify such person against such liability under the Delaware General Corporation Law or the provisions of Article V of the By-Laws.

II-2


In connection with the sale of common stock being registered hereby, we intend to enter into indemnification agreements with each of our directors and our executive officers. These agreements will provide that we will indemnify each of our directors and such officers to the fullest extent permitted by law and the Charter and By-Laws.

We also intend to obtain a general liability insurance policy which covers certain liabilities of directors and officers of our company arising out of claims based on acts or omissions in their capacities as directors or officers.

In any underwriting agreement we enter into in connection with the sale of common stock being registered hereby, the underwriters will agree to indemnify, under certain conditions, us, our directors, our officers and persons who control us within the meaning of the Securities Act of 1933, as amended, against certain liabilities.


Item 15. Recent Sales of Unregistered Securities.

In the three years preceding the filing of this registration statement, we have issued the following securities that were not registered under the Securities Act:

(a) Issuances of Capital Stock

In June 2003, we issued and sold an aggregate of 270,704 shares of Series I convertible preferred stock to 20 investors for an aggregate purchase price of $2,923,603.

In November 2003, we issued and sold an aggregate of 324,074 shares of Series J convertible preferred stock to 19 investors for an aggregate purchase price of $3,499,999.

In November 2003, in conjunction with the issuance of Series J convertible preferred stock, shareholders of 1,208,880 shares of Series I convertible preferred stock exercised their right to exchange their shares of Series I convertible preferred stock for 1,208,880 shares of Series J convertible preferred stock.

In November 2003, shareholders of 192,147 shares of Series I convertible preferred stock not participating in the Series J convertible preferred stock offering had their 192,147 shares of Series I convertible preferred stock converted into 192,147 shares of Series I-1 redeemable convertible preferred stock in accordance with the preferred stock provisions.

In January 2004, we issued and sold an aggregate of 57,370 shares of Series J convertible preferred stock to 15 investors for an aggregate purchase price of $619,596.

In January 2004, in conjunction with the issuance of Series J convertible preferred stock, shareholders of 36,918 shares of Series I convertible preferred stock exercised their right to exchange their shares of Series I convertible preferred stock for 36,918 shares of Series J convertible preferred stock.

In April through August 2004, we issued and sold an aggregate of 1,100,766 shares of Series 04 convertible preferred stock to 39 investors for an aggregate purchase price of $5,944,136. In conjunction with the issuance of Series 04 convertible preferred stock, shareholders of 1,625,242 shares of Series J convertible preferred stock exercised their right to exchange the shares of Series J convertible preferred stock for 3,250,484 shares of Series 04 convertible preferred stock.

II-3


Shareholders of 2,000 shares of Series J convertible preferred stock not participating in the Series 04 preferred stock offering had their 2,000 shares of Series J convertible preferred stock converted into 2,000 shares of Series J-1 redeemable convertible preferred stock in accordance with the preferred stock provisions.

From March through May 2005, we issued and sold an aggregate of 893,652 shares of Series 04 convertible preferred stock to 29 investors for an aggregate purchase price of $4,825,721.

In January 2006, we issued 2,920,000 shares of Series 05 convertible preferred stock at $6.00 per share.

ADM has agreed to purchase $7.5 million of our shares of common stock in a private placement concurrent with this offering at a price per share equal to the initial public offering price. The sale of shares to ADM will not be registered in this offering.

No underwriters were used in the foregoing transactions. All sales of securities described above were made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act (and/or Regulation D promulgated thereunder) for transactions by an issuer not involving a public offering. All of the foregoing securities are deemed restricted securities for the purposes of the Securities Act.

(b) Grants and Exercises of Stock Options.

From May 1, 2003 to September 30, 2006, we granted stock options to purchase an aggregate of 1,790,548 shares of our common stock, with exercise prices ranging from $1.65 to $8.81 per share, to employees, directors and consultants pursuant to our stock option plans. Since May 1, 2003, we issued and sold an aggregate of 15,443 shares of our common stock upon exercise of stock options granted pursuant to our stock plans for an aggregate consideration of $2,194. The issuance of common stock upon exercise of the options were exempt either pursuant to Rule 701, as a transaction pursuant to a compensatory benefit plan, or pursuant to Section 4(2), as a transaction by an issuer not involving a public offering. The common stock issued upon exercise of options and in connection with awards of restricted stock are deemed restricted securities for the purposes of the Securities Act.

(c) Issuance of Warrants.

In conjunction with the issuance of the Series I preferred stock during 2003, the Company issued warrants to purchase 221,238 shares of common stock at an exercise price of $13.21 per share.

In connection with the issuance of Series J preferred stock, the Company issued warrants to purchase 264,865 shares of common stock at an exercise price of $0.12 per share; and concurrently, the Company issued warrants to purchase 988,004 shares of common stock at an exercise price of $0.12 per share in connection with the exchange of Series I preferred stock for Series J preferred stock. The warrants expire five years from issuance date. In addition, the Company canceled warrants to purchase 348,386 shares of common stock at an exercise price of $13.21 per share.

In connection with the issuance of the Series J preferred stock during 2004, the Company issued warrants to purchase 46,881 shares of common stock at an exercise price of $0.12 per share; and concurrently, the Company issued warrants to purchase 30,173 shares of common stock at an exercise price of $0.12 per share in connection with the exchange of Series I preferred stock for Series J preferred stock.

II-4


In connection with signing the lease agreement in 2004, the Company issued the landlord warrants to purchase 4,086 shares of common stock at an exercise price of $3.30 per share.

During 2004, the Company canceled warrants to purchase 155,041 shares of common stock at an exercise price of $0.12 per share. The cancellation resulted in a decrease of additional paid-in capital of $218,774.

This issuance was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act (and/or Regulation D promulgated thereunder) for transactions by an issuer not involving a public offering. The common stock issued upon exercise of the warrant are deemed restricted securities for the purposes of the Securities Act.


Item 16. Exhibits and Financial Statement Schedules.

(a) See the Exhibit Index on the page immediately preceding the exhibits for a list of exhibits filed as part of this registration statement on Form S-1, which Exhibit Index is incorporated herein by reference.

(b) Financial Statement Schedules

None.


Item 17. Undertakings.

The undersigned registrant hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and this offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-5


SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-1 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Cambridge, Massachusetts, on this 20th day of October, 2006.

    METABOLIX, INC.

 
 
By:
/s/  JAMES J. BARBER      
Name: James J. Barber
Title: President, Chief Executive Officer and Director

II-6

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and on the dates indicated:


 
 
 
 
 
/s/  JAMES J. BARBER      
James J. Barber		   President, Chief Executive Officer, and Director (Principal Executive Officer)   October 20, 2006

/s/  DR. OLIVER P. PEOPLES      
Dr. Oliver P. Peoples
 
Chief Scientific Officer, Vice President Research and Director
 
October 20, 2006

/s/  THOMAS G. AUCHINCLOSS, JR.      
Thomas G. Auchincloss, Jr.
 
Vice President and Chief Financial Officer (Principal Financial Officer)
 
October 20, 2006

/s/  ANINDA KATRAGADDA      
Aninda Katragadda
 
Director of Finance and Corporate Controller (Principal Accounting Officer)
 
October 20, 2006

*
Edward M. Muller
 
Chairman of the Board, Director
 
October 20, 2006

*
Edward M. Giles
 
Director
 
October 20, 2006

*
Dr. Jay Kouba
 
Director
 
October 20, 2006

*
Jack W. Lasersohn
 
Director
 
October 20, 2006

*
Dr. Anthony J. Sinskey
 
Director
 
October 20, 2006

*
Dr. Matthew Strobeck
 
Director
 
October 20, 2006

/s/  ROBERT L. VAN NOSTRAND      
Robert L. Van Nostrand
 
Director
 
October 20, 2006

*By:
 
/s/  JAMES J. BARBER      
James J. Barber
Attorney-in-fact
 
 

II-7


POWER OF ATTORNEY

The undersigned director of Metabolix, Inc. hereby constitutes and appoints James J. Barber and Thomas G. Auchincloss, Jr. as the attorneys-in-fact for the undersigned, in any and all capacities, with full power of substitution to sign any and all pre- or post-effective amendments to this Registration Statement, any subsequent Registration Statement for the same offering which may be filed pursuant to rule 462(b) under the Securities Act of 1933, as amended, and any and all pre- or post-effective amendments thereto, and to file the same with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premise, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact may lawfully do or cause to be done by virtue hereof.


/s/  ROBERT L. VAN NOSTRAND      
Robert L. Van Nostrand
 
Director
 
October 20, 2006

II-8


EXHIBIT INDEX

Number
   Description
1.1*   Form of Underwriting Agreement

3.1**
 
Form of Amended and Restated Certificate of Incorporation of the Registrant

3.2**
 
Form of Second Amended and Restated Certificate of Incorporation of the Registrant
(to be effective upon the completion of this offering)

3.3**
 
Amended and Restated By-laws of the Registrant

4.1**
 
Specimen Stock Certificate for shares of the Registrant's Common Stock

4.2**
 
Form of Common Stock Purchase Warrant issued in each of the Series I Financing, the Series J Financing and the Series 04 financing

5.1/*\
 
Opinion of Goodwin Procter LLP

10.1†**
 
1995 Stock Plan

10.1.1†**
 
1995 Stock Plan, Form of Incentive Stock Option Agreement

10.1.2†**
 
1995 Stock Plan, Form of Non-Qualified Stock Option Agreement

10.2†**
 
2005 Stock Plan

10.2.1†**
 
2005 Stock Plan, Form of Incentive Stock Option Agreement

10.2.2†**
 
2005 Stock Plan, Form of Non-Qualified Stock Option Agreement

10.3†/*\
 
2006 Stock Option and Incentive Plan

10.3.1†/*\
 
2006 Stock Option and Incentive Plan, Form of Incentive Stock Option Agreement

10.3.2†/*\
 
2006 Stock Option and Incentive Plan, Form of Non-Qualified Stock Option Agreement

10.3.3†/*\
 
2006 Stock Option and Incentive Plan, Form of Director Non-Qualified Stock Option Agreement

10.4#/*\
 
License Agreement between the Registrant and Massachusetts Institute of Technology dated July 15, 1993, as amended

10.5#/*\
 
Commercial Alliance Agreement by and among the Registrant, ADM/Metabolix Sales Company, LLC and ADM Polymer Corporation dated July 14, 2006

10.6#/*\
 
Operating Agreement of ADM/Metabolix Sales Company, LLC by and between the Registrant and ADM Polymer Corporation dated July 14, 2006

10.7**
 
Letter Agreement by and between the Registrant and Archer Daniels Midland Company dated November 3, 2004.

10.8†/*\
 
Amended and Restated Employment Agreement by and between the Registrant and James J. Barber dated September 19, 2006

10.9†/*\
 
Amended and Restated Employment Agreement by and between the Registrant and Thomas G. Auchincloss dated September 22, 2006

10.10†/*\
 
Amended and Restated Employment Agreement by and between the Registrant and Johan van Walsem dated September 22, 2006

10.11†/*\
 
Amended and Restated Employment Agreement by and between the Registrant and Robert C. Findlen dated September 22, 2006
     


10.12†/*\
 
Form of Employee Noncompetition, Nondisclosure and Inventions Agreement with James J. Barber, Oliver P. Peoples, Johan van Walsem and Thomas G. Auchincloss.

10.13†/*\
 
Form of Noncompetition, Nondisclosure and Inventions Agreement with Mr. Findlen and Mr. Igoe.

10.14†/*\
 
Form of Indemnification Agreement

10.15**
 
Lease Agreement by and between the Registrant and 21 Erie Realty Trust dated as of December 29, 2003 for the premises located at 21 Erie Street, Cambridge, Massachusetts 02139

10.16**
 
Fifth Amended and Restated Stockholders Agreement by and among the Registrant and certain of its stockholders dated January 19, 2006.

10.17**
 
Amendment No. 1 to Fifth Amended and Restated Stockholders Agreement by and among the Registrant and certain of its stockholders dated July 12, 2006

10.18**
 
Stock Purchase Agreement between the Registrant and Archer Daniels Midland Company dated July 12, 2006

10.19#/*\
 
License Agreement by and between the Registrant and Tepha, Inc. dated as of October 1, 1999.

10.20#/*\
 
License Agreement by and between the Registrant and Tepha, Inc. dated as of September 9, 2003.

10.21#/*\
 
Technology Alliance and Option Agreement by and between the Registrant and ADM Polymer Corporation dated as of November 4, 2004.

10.22#/*\
 
First Amendment to Technology Alliance and Option Agreement by and between the Registrant and ADM Polymer Corporation dated as of September 8, 2005.

10.23†**
 
Employment Agreement by and between the Registrant and Brian Igoe dated August 29, 2006.

10.24†**
 
Employment Agreement by and between the Registrant and Oliver P. Peoples dated July 20, 2006.

23.1/*\
 
Consent of Goodwin Procter LLP (included in Exhibit 5.1)

23.2/*\
 
Consent of PricewaterhouseCoopers LLP

24.1/*\
 
Power of Attorney (included in page II-8)
†
Indicates a management contract or any compensatory plan, contract or arrangement.

*
To be filed by amendment.

**
Previously filed.

/*\
Filed herewith.

#
Confidential treatment requested for portions of this document.



QuickLinks

TABLE OF CONTENTS
PROSPECTUS SUMMARY
THE OFFERING
SUMMARY FINANCIAL DATA
RISK FACTORS
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
USE OF PROCEEDS
DIVIDEND POLICY
CAPITALIZATION
DILUTION
SELECTED FINANCIAL DATA
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
BUSINESS
MANAGEMENT
Summary Compensation Table
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
PRINCIPAL STOCKHOLDERS
DESCRIPTION OF CAPITAL STOCK
SHARES ELIGIBLE FOR FUTURE SALE
UNDERWRITING
LEGAL MATTERS
EXPERTS
MARKET AND INDUSTRY DATA
WHERE YOU CAN FIND MORE INFORMATION
METABOLIX, INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Metabolix, Inc. Consolidated Balance Sheets
Metabolix, Inc. Consolidated Statements of Operations
Metabolix, Inc. Consolidated Statements of Stockholders' Equity (Deficit)
Metabolix, Inc. Consolidated Statements of Cash Flows
Metabolix, Inc. Notes to Consolidated Financial Statements (Information as of June 30, 2006 and the six months ended June 30, 2006 and 2005 is unaudited)
PART II INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
Item 14. Indemnification of Directors and Officers.
Item 15. Recent Sales of Unregistered Securities.
Item 16. Exhibits and Financial Statement Schedules.
Item 17. Undertakings.
SIGNATURES
POWER OF ATTORNEY
EXHIBIT INDEX

                                                                    Exhibit 5.1

                                                                October 20, 2006

Metabolix, Inc.
21 Erie Street
Cambridge, Massachusetts 02139

        Re: SECURITIES BEING REGISTERED UNDER REGISTRATION STATEMENT ON FORM S-1
            --------------------------------------------------------------------

Ladies and Gentlemen:

     This opinion letter is furnished to you in connection with your filing of a
Registration Statement on Form S-1 (File No. 333-135760) (as amended or
supplemented, the "Registration Statement") pursuant to the Securities Act of
1933, as amended (the "Securities Act"), relating to the registration of the
offering by Metabolix, Inc., a Delaware corporation (the "Company"), of up to
6,670,000 shares (the "Shares") of the Company's Common Stock, $0.01 par value
per share, including Shares purchasable by the underwriters upon their exercise
of an over-allotment option granted to the underwriters by the Company. The
Shares are being sold to the several underwriters named in, and pursuant to, an
underwriting agreement among the Company and such underwriters substantially in
the form filed as an Exhibit to the Registration Statement (the "Underwriting
Agreement").

     We have reviewed such documents and made such examination of law as we have
deemed appropriate to give the opinions expressed below. We have relied, without
independent verification, on certificates of public officials and, as to matters
of fact material to the opinions set forth below, on certificates and other
inquiries of officers of the Company.

     The opinion expressed below is limited to the Delaware General Corporation
Law (which includes applicable provisions of the Delaware Constitution and
reported judicial decisions interpreting the Delaware General Corporation Law
and the Delaware Constitution).

     Based on the foregoing, we are of the opinion that the Shares have been
duly authorized and, upon issuance and delivery against payment therefor in
accordance with the terms of the Underwriting Agreement, will be validly issued,
fully paid and non-assessable.

     We hereby consent to the inclusion of this opinion as Exhibit 5.1 to the
Registration Statement and to the references to our firm under the caption
"Legal Matters" in the Registration Statement. In giving our consent, we do not
admit that we are in the category of persons whose consent is required under
Section 7 of the Securities Act or the rules and regulations thereunder.

                                                Very truly yours,

                                                /s/ Goodwin Procter LLP

                                                GOODWIN PROCTER LLP




                                                                    Exhibit 10.3

                                 METABOLIX, INC.

                      2006 STOCK OPTION AND INCENTIVE PLAN

SECTION 1. GENERAL PURPOSE OF THE PLAN; DEFINITIONS

     The name of the plan is the Metabolix, Inc. 2006 Stock Option and Incentive
Plan (the "Plan"). The purpose of the Plan is to encourage and enable the
officers, employees, Non-Employee Directors and other key persons (including
consultants and prospective employees) of Metabolix, Inc. (the "Company") and
its Subsidiaries upon whose judgment, initiative and efforts the Company largely
depends for the successful conduct of its business to acquire a proprietary
interest in the Company. It is anticipated that providing such persons with a
direct stake in the Company's welfare will assure a closer identification of
their interests with those of the Company and its stockholders, thereby
stimulating their efforts on the Company's behalf and strengthening their desire
to remain with the Company.

     The following terms shall be defined as set forth below:

     "ACT" means the Securities Act of 1933, as amended, and the rules and
regulations thereunder.

     "AWARD" or "AWARDS," except where referring to a particular category of
grant under the Plan, shall include Incentive Stock Options, Non-Qualified Stock
Options, Stock Appreciation Rights, Deferred Stock Awards, Restricted Stock
Awards, Unrestricted Stock Awards, Cash-based Awards and Dividend Equivalent
Rights.

     "AWARD AGREEMENT" means a written or electronic agreement setting forth the
terms and provisions applicable to an Award granted under the Plan. Each Award
Agreement is subject to the terms and conditions of the Plan.

     "BOARD" means the Board of Directors of the Company.

     "CASH-BASED AWARD" means an Award entitling the recipient to receive a
cash-denominated payment.

     "CODE" means the Internal Revenue Code of 1986, as amended, and any
successor Code, and related rules, regulations and interpretations.

     "COMMITTEE" means the compensation committee of the Board or a similar
committee performing the functions of the compensation committee and which is
comprised of not less than two Non-Employee Directors who are independent.

     "COVERED EMPLOYEE" means an employee who is a "Covered Employee" within the
meaning of Section 162(m) of the Code.

     "DEFERRED STOCK AWARD" means an Award of phantom stock units to a grantee.



     "DIVIDEND EQUIVALENT RIGHT" means an Award entitling the grantee to receive
credits based on cash dividends that would have been paid on the shares of Stock
specified in the Dividend Equivalent Right (or other award to which it relates)
if such shares had been issued to and held by the grantee.

     "EFFECTIVE DATE" means the date on which the Plan is approved by
stockholders as set forth in Section 20.

     "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder.

     "FAIR MARKET VALUE" of the Stock on any given date means the fair market
value of the Stock determined in good faith by the Committee; provided, however,
that if the Stock is admitted to quotation on the National Association of
Securities Dealers Automated Quotation System ("NASDAQ"), NASDAQ National System
or a national securities exchange, the determination shall be made by reference
to market quotations. If there are no market quotations for such date, the
determination shall be made by reference to the last date preceding such date
for which there are market quotations; provided further, however, that if the
date for which Fair Market Value is determined is the first day when trading
prices for the Stock are reported on NASDAQ or on a national securities
exchange, the Fair Market Value shall be the "Price to the Public" (or
equivalent) set forth on the cover page for the final prospectus relating to the
Company's Initial Public Offering.

     "INCENTIVE STOCK OPTION" means any Stock Option designated and qualified as
an "incentive stock option" as defined in Section 422 of the Code.

     "INITIAL PUBLIC OFFERING" means the consummation of the first fully
underwritten, firm commitment public offering pursuant to an effective
registration statement under the Act covering the offer and sale by the Company
of its equity securities, or such other event as a result of or following which
the Stock shall be publicly held.

     "NON-EMPLOYEE DIRECTOR" means a member of the Board who is not also an
employee of the Company or any Subsidiary.

     "NON-QUALIFIED STOCK OPTION" means any Stock Option that is not an
Incentive Stock Option.

     "OPTION" or "STOCK OPTION" means any option to purchase shares of Stock
granted pursuant to Section 5.

     "PERFORMANCE-BASED AWARD" means any Restricted Stock Award, Deferred Stock
Award or Cash-based Award granted to a Covered Employee that is intended to
qualify as "performance-based compensation" under Section 162(m) of the Code and
the regulations promulgated thereunder.

     "PERFORMANCE CRITERIA" means the criteria that the Committee selects for
purposes of establishing the Performance Goal or Performance Goals for an
individual for a Performance Cycle. The Performance Criteria (which shall be
applicable to the organizational level specified


                                        2



by the Committee, including, but not limited to, the Company or a unit,
division, group, or Subsidiary of the Company) that will be used to establish
Performance Goals are limited to the following: earnings before interest, taxes,
depreciation and amortization, net income (loss) (either before or after
interest, taxes, depreciation and/or amortization), changes in the market price
of the Stock, economic value-added, funds from operations or similar measure,
sales or revenue, mergers, acquisitions, financing, corporate partnering or
strategic transactions, operating income (loss), cash flow (including, but not
limited to, operating cash flow and free cash flow), return on capital, assets,
equity, or investment, stockholder returns, return on sales, gross or net profit
levels, productivity, expense, margins, operating efficiency, customer
satisfaction, working capital, earnings (loss) per share of Stock, sales or
market shares and number of customers, branding establishment or awareness,
technical or product development advances, research and development and/or
engineering milestones, and achievement of corporate collaborative agreement
milestones, any of which may be measured either in absolute terms or as compared
to any incremental increase or as compared to results of a peer group.

     "PERFORMANCE CYCLE" means one or more periods of time, which may be of
varying and overlapping durations, as the Committee may select, over which the
attainment of one or more Performance Criteria will be measured for the purpose
of determining a grantee's right to and the payment of a Restricted Stock Award,
Deferred Stock Award or Cash-based Award.

     "PERFORMANCE GOALS" means, for a Performance Cycle, the specific goals
established in writing by the Committee for a Performance Cycle based upon the
Performance Criteria.

     "RESTRICTED STOCK AWARD" means an Award entitling the recipient to acquire,
at such purchase price (which may be zero) as determined by the Committee,
shares of Stock subject to such restrictions and conditions as the Committee may
determine at the time of grant.

     "SALE EVENT" shall mean (i) the dissolution or liquidation of the Company,
(ii) the sale of all or substantially all of the assets of the Company on a
consolidated basis to an unrelated person or entity, (iii) a merger,
reorganization or consolidation in which the outstanding shares of Stock are
converted into or exchanged for securities of the successor entity and the
holders of the Company's outstanding voting power immediately prior to such
transaction do not own a majority of the outstanding voting power of the
successor entity immediately upon completion of such transaction, or (iv) the
sale of all of the Stock of the Company to an unrelated person or entity.

     "SALE PRICE" means the value as determined by the Committee of the
consideration payable, or otherwise to be received by stockholders, per share of
Stock pursuant to a Sale Event.

     "SECTION 409A" means Section 409A of the Code and the regulations and other
guidance promulgated thereunder.

     "STOCK" means the Common Stock, par value $0.01 per share, of the Company,
subject to adjustments pursuant to Section 3.

     "STOCK APPRECIATION RIGHT" means an Award entitling the recipient to
receive shares of Stock having a value equal to the excess of the Fair Market
Value of the Stock on the date of


                                       3



exercise over the exercise price of the Stock Appreciation Right multiplied by
the number of shares of Stock with respect to which the Stock Appreciation Right
shall have been exercised.

     "SUBSIDIARY" means any corporation or other entity (other than the Company)
in which the Company has at least a 50 percent interest, either directly or
indirectly.

     "TEN PERCENT OWNER" means an employee who owns or is deemed to own (by
reason of the attribution rules of Section 424(d) of the Code) more than 10
percent of the combined voting power of all classes of stock of the Company or
any parent or subsidiary corporation.

     "UNRESTRICTED STOCK AWARD" means an Award of shares of Stock free of any
restrictions.

SECTION 2. ADMINISTRATION OF PLAN; COMMITTEE AUTHORITY TO SELECT GRANTEES AND
           DETERMINE AWARDS

     (a) Committee. The Plan shall be administered by the Committee.

     (b) Powers of Committee. The Committee shall have the power and authority
to grant Awards consistent with the terms of the Plan, including the power and
authority:

          (i) to select the individuals to whom Awards may from time to time be
granted;

          (ii) to determine the time or times of grant, and the extent, if any,
of Incentive Stock Options, Non-Qualified Stock Options, Stock Appreciation
Rights, Restricted Stock Awards, Deferred Stock Awards, Unrestricted Stock
Awards, Cash-based Awards and Dividend Equivalent Rights, or any combination of
the foregoing, granted to any one or more grantees;

          (iii) to determine the number of shares of Stock to be covered by any
Award;

          (iv) to determine and modify from time to time the terms and
conditions, including restrictions, not inconsistent with the terms of the Plan,
of any Award, which terms and conditions may differ among individual Awards and
grantees, and to approve the form of written instruments evidencing the Awards;

          (v) to accelerate at any time the exercisability or vesting of all or
any portion of any Award;

          (vi) subject to the provisions of Section 5(a)(ii), to extend at any
time the period in which Stock Options may be exercised; and

          (vii) at any time to adopt, alter and repeal such rules, guidelines
and practices for administration of the Plan and for its own acts and
proceedings as it shall deem advisable; to interpret the terms and provisions of
the Plan and any Award (including related written instruments); to make all
determinations it deems advisable for the administration of the Plan; to decide
all disputes arising in connection with the Plan; and to otherwise supervise the
administration of the Plan.


                                       4



     All decisions and interpretations of the Committee shall be binding on all
persons, including the Company and Plan grantees.

     (c) Delegation of Authority to Grant Awards. The Committee, in its
discretion, may delegate to the Chief Executive Officer of the Company, or other
officers of the Company as permitted by applicable law, all or part of the
Committee's authority and duties with respect to the granting of Awards, to
individuals who are (i) not subject to the reporting and other provisions of
Section 16 of the Exchange Act or (ii) not Covered Employees. Any such
delegation by the Committee shall include a limitation as to the amount of
Awards that may be granted during the period of the delegation and shall contain
guidelines as to the determination of the exercise price of any Stock Option or
Stock Appreciation Right, the conversion ratio or price of other Awards and the
vesting criteria. The Committee may revoke or amend the terms of a delegation at
any time but such action shall not invalidate any prior actions of the
Committee's delegate or delegates that were consistent with the terms of the
Plan.

     (d) Award Agreement. Awards under the Plan shall be evidenced by Award
Agreements that set forth the terms, conditions and limitations for each Award
which may include, without limitation, the term of an Award, the provisions
applicable in the event employment or service terminates, and the Company's
authority to unilaterally or bilaterally amend, modify, suspend, cancel or
rescind an Award.

     (e) Indemnification. Neither the Board nor the Committee, nor any member of
either or any delegate thereof, shall be liable for any act, omission,
interpretation, construction or determination made in good faith in connection
with the Plan, and the members of the Board and the Committee (and any delegate
thereof) shall be entitled in all cases to indemnification and reimbursement by
the Company in respect of any claim, loss, damage or expense (including, without
limitation, reasonable attorneys' fees) arising or resulting therefrom to the
fullest extent permitted by law and/or under the Company's articles or bylaws or
any directors' and officers' liability insurance coverage which may be in effect
from time to time and/or any indemnification agreement between such individual
and the Company.

     (f) Foreign Award Recipients. Notwithstanding any provision of the Plan to
the contrary, in order to comply with the laws in other countries in which the
Company and its Subsidiaries operate or have employees or other individuals
eligible for Awards, the Committee, in its sole discretion, shall have the power
and authority to: (i) determine which Subsidiaries shall be covered by the Plan;
(ii) determine which individuals outside the United States are eligible to
participate in the Plan; (iii) modify the terms and conditions of any Award
granted to individuals outside the United States to comply with applicable
foreign laws; (iv) establish subplans and modify exercise procedures and other
terms and procedures, to the extent the Committee determines such actions to be
necessary or advisable (and such subplans and/or modifications shall be attached
to this Plan as appendices); provided, however, that no such subplans and/or
modifications shall increase the share limitations contained in Section 3(a)
hereof; and (v) take any action, before or after an Award is made, that the
Committee determines to be necessary or advisable to obtain approval or comply
with any local governmental regulatory exemptions or approvals. Notwithstanding
the foregoing, the Committee may not take any actions hereunder, and no Awards
shall be granted, that would violate the Exchange Act


                                       5



or any other applicable United States securities law, the Code, or any other
applicable United States governing statute or law.

SECTION 3. STOCK ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION

     (a) Stock Issuable. The maximum number of shares of Stock reserved and
available for issuance under the Plan (subject to adjustment as provided in
Section 3(b)) shall be 2,500,000 shares plus on each January 1, beginning in
2007, an additional number of shares equal to 4.5% of the outstanding number of
shares of Stock on the immediately preceding December 31; provided that the
maximum aggregate number of shares of Stock reserved and available for issuance
under the Plan and under the Company's 1995 Stock Plan and 2005 Option Plan may
not exceed 25% of the total number of outstanding shares of Stock; and provided
further that not more than 10,000,000 shares shall be issued under the Plan.
Without limiting the generality of the foregoing, not more than 10,000,000
shares shall be issued in the form of Incentive Stock Options under the Plan.
For purposes of this limitation, the shares of Stock underlying any Awards under
the Plan that are forfeited, canceled, held back upon exercise of an Option or
settlement of an Award to cover the exercise price or tax withholding,
reacquired by the Company prior to vesting, satisfied without the issuance of
Stock or otherwise terminated (other than by exercise) shall be added back to
the shares of Stock available for issuance under the Plan. Subject to such
overall limitations, shares of Stock may be issued up to such maximum number
pursuant to any type or types of Award; provided, however, that Stock Options or
Stock Appreciation Rights with respect to no more than 750,000 shares of Stock
may be granted to any one individual grantee during any one calendar year
period. The shares available for issuance under the Plan may be authorized but
unissued shares of Stock or shares of Stock reacquired by the Company.

     (b) Changes in Stock. Subject to Section 3(c) hereof, if, as a result of
any reorganization, recapitalization, reclassification, stock dividend, stock
split, reverse stock split or other similar change in the Company's capital
stock, the outstanding shares of Stock are increased or decreased or are
exchanged for a different number or kind of shares or other securities of the
Company, or additional shares or new or different shares or other securities of
the Company or other non-cash assets are distributed with respect to such shares
of Stock or other securities, or, if, as a result of any merger or
consolidation, sale of all or substantially all of the assets of the Company,
the outstanding shares of Stock are converted into or exchanged for securities
of the Company or any successor entity (or a parent or subsidiary thereof), the
Committee shall make an appropriate or proportionate adjustment in (i) the
maximum number of shares reserved for issuance under the Plan, (ii) the number
of Stock Options or Stock Appreciation Rights that can be granted to any one
individual grantee and the maximum number of shares that may be granted under a
Performance-based Award, (iii) the number and kind of shares or other securities
subject to any then outstanding Awards under the Plan, (iv) the repurchase
price, if any, per share subject to each outstanding Restricted Stock Award, (v)
the price for each share subject to any then outstanding Stock Options and Stock
Appreciation Rights under the Plan, without changing the aggregate exercise
price (i.e., the exercise price multiplied by the number of Stock Options and
Stock Appreciation Rights) as to which such Stock Options and Stock Appreciation
Rights remain exercisable, and (vi) the number of Stock Options automatically
granted to Non-Employee Directors. The Committee shall also adjust the number of
shares subject to outstanding Awards and the exercise price and the terms of


                                       6



outstanding Awards to take into consideration, extraordinary dividends,
acquisitions or dispositions of stock or property to the extent necessary to
avoid distortion in the value of Awards. The adjustment by the Committee shall
be final, binding and conclusive. No fractional shares of Stock shall be issued
under the Plan resulting from any such adjustment, but the Committee in its
discretion may make a cash payment in lieu of fractional shares.

     No adjustment shall be made under this Section 3(b) in the case of an
Option or Stock Appreciation Right, without the consent of the grantee, if it
would constitute a modification, extension or renewal of the Option within the
meaning of Section 424(h) of the Code or a modification of the Option or Stock
Appreciation Right such that the Option or Stock Appreciation Right becomes
treated as "nonqualified deferred compensation" subject to Section 409A.

     (c) Mergers and Other Transactions. In the case of a Sale Event, the
parties to such Sale Event shall provide for the assumption or continuation of
Awards by the successor entity, or the substitution of such Awards with new
Awards of the successor entity or parent thereof, with appropriate adjustment as
to the number and kind of shares and, if appropriate, the per share exercise
prices, as such parties shall agree (after taking into account any acceleration
hereunder). If the parties to such Sale Event do not provide for such
assumption, continuation or substitution, then subject to the consummation of
such Sale Event, all Options and Stock Appreciation Rights that are not
exercisable immediately prior to the effective time of the Sale Event shall
become fully exercisable as of the effective time of the Sale Event and all
other Awards shall become fully vested and nonforfeitable as of the effective
time of the Sale Event, except as the Committee may otherwise specify with
respect to particular Awards in the relevant Award documentation, and Awards
with conditions and restrictions relating to the attainment of performance goals
may become vested and nonforfeitable in connection with such Sale Event in the
Committee's discretion. In addition, if Awards are not assumed, continued or
substituted, then upon the effective time of the Sale Event, the Plan and all
outstanding Awards will terminate. In the event of such termination, each
grantee shall be permitted, within a specified period of time prior to the
consummation of the Sale Event as determined by the Committee, to exercise all
outstanding Options and Stock Appreciation Rights held by such grantee,
including any that may become exercisable upon the consummation of the Sale
Event; provided, however, that the exercise of Options and Stock Appreciation
Rights not exercisable prior to the Sale Event shall be subject to the
consummation of the Sale Event.

     Notwithstanding anything to the contrary in this Section 3(c), in the event
of a Sale Event pursuant to which holders of the Stock of the Company will
receive upon consummation thereof a cash payment for each share surrendered in
the Sale Event, the Company shall have the right, but not the obligation, to
make or provide for a cash payment to the grantees holding Options and Stock
Appreciation Rights, in exchange for the cancellation thereof, in an amount
equal to the difference between (A) the Sale Price times the number of shares of
Stock subject to outstanding Options and Stock Appreciation Rights (to the
extent then exercisable at prices not in excess of the Sale Price) and (B) the
aggregate exercise price of all such outstanding Options and Stock Appreciation
Rights.

     (d) Substitute Awards. The Committee may grant Awards under the Plan in
substitution for stock and stock based awards held by employees, directors or
other key persons


                                       7



of another corporation in connection with the merger or consolidation of the
employing corporation with the Company or a Subsidiary or the acquisition by the
Company or a Subsidiary of property or stock of the employing corporation. The
Committee may direct that the substitute awards be granted on such terms and
conditions as the Committee considers appropriate in the circumstances. Any
substitute Awards granted under the Plan shall not count against the share
limitation set forth in Section 3(a).

SECTION 4. ELIGIBILITY

     Grantees under the Plan will be such full or part-time officers and other
employees, Non-Employee Directors and key persons (including consultants and
prospective employees) of the Company and its Subsidiaries as are selected from
time to time by the Committee in its sole discretion.

SECTION 5. STOCK OPTIONS

     Any Stock Option granted under the Plan shall be in such form as the
Committee may from time to time approve.

     Stock Options granted under the Plan may be either Incentive Stock Options
or Non-Qualified Stock Options. Incentive Stock Options may be granted only to
employees of the Company or any Subsidiary that is a "subsidiary corporation"
within the meaning of Section 424(f) of the Code. To the extent that any Option
does not qualify as an Incentive Stock Option, it shall be deemed a
Non-Qualified Stock Option.

     (a) Stock Options Granted to Employees and Key Persons. The Committee in
its discretion may grant Stock Options to eligible employees and key persons of
the Company or any Subsidiary. Stock Options granted pursuant to this Section
5(a) shall be subject to the following terms and conditions and shall contain
such additional terms and conditions, not inconsistent with the terms of the
Plan, as the Committee shall deem desirable. If the Committee so determines,
Stock Options may be granted in lieu of cash compensation at the optionee's
election, subject to such terms and conditions as the Committee may establish.

          (i) Exercise Price. The exercise price per share for the Stock covered
by a Stock Option granted pursuant to this Section 5(a) shall be determined by
the Committee at the time of grant but shall not be less than 100 percent of the
Fair Market Value on the date of grant. In the case of an Incentive Stock Option
that is granted to a Ten Percent Owner, the option price of such Incentive Stock
Option shall be not less than 110 percent of the Fair Market Value on the grant
date.

          (ii) Option Term. The term of each Stock Option shall be fixed by the
Committee, but no Stock Option shall be exercisable more than ten years after
the date the Stock Option is granted. In the case of an Incentive Stock Option
that is granted to a Ten Percent Owner, the term of such Stock Option shall be
no more than five years from the date of grant.

          (iii) Exercisability; Rights of a Stockholder. Stock Options shall
become exercisable at such time or times, whether or not in installments, as
shall be determined by the Committee at or after the grant date. The Committee
may at any time accelerate the


                                       8



exercisability of all or any portion of any Stock Option. An optionee shall have
the rights of a stockholder only as to shares acquired upon the exercise of a
Stock Option and not as to unexercised Stock Options.

          (iv) Method of Exercise. Stock Options may be exercised in whole or in
part, by giving written notice of exercise to the Company, specifying the number
of shares to be purchased. Payment of the purchase price may be made by one or
more of the following methods to the extent provided in the Option Award
Agreement:

               (A) In cash, by certified or bank check or other instrument
     acceptable to the Committee;

               (B) Through the delivery (or attestation to the ownership) of
     shares of Stock that have been purchased by the optionee on the open market
     or that are beneficially owned by the optionee and are not then subject to
     restrictions under any Company plan. Such surrendered shares shall be
     valued at Fair Market Value on the exercise date. To the extent required to
     avoid variable accounting treatment under FAS 123R or other applicable
     accounting rules, such surrendered shares shall have been owned by the
     optionee for at least six months; or

               (C) At the discretion of the Committee, in accordance with a
     cashless exercise program established with a securities brokerage firm and
     approved by the Committee; provided that in the event the optionee chooses
     to pay the purchase price as so provided, the optionee and the broker shall
     comply with such procedures and enter into such agreements of indemnity and
     other agreements as the Committee shall prescribe as a condition of such
     payment procedure.

Payment instruments will be received subject to collection. The transfer to the
optionee on the records of the Company or of the transfer agent of the shares of
Stock to be purchased pursuant to the exercise of a Stock Option will be
contingent upon receipt from the optionee (or a purchaser acting in his stead in
accordance with the provisions of the Stock Option) by the Company of the full
purchase price for such shares and the fulfillment of any other requirements
contained in the Option Award Agreement or applicable provisions of laws
(including the satisfaction of any withholding taxes that the Company is
obligated to withhold with respect to the optionee). In the event an optionee
chooses to pay the purchase price by previously-owned shares of Stock through
the attestation method, the number of shares of Stock transferred to the
optionee upon the exercise of the Stock Option shall be net of the number of
shares attested to. In the event that the Company establishes, for itself or
using the services of a third party, an automated system for the exercise of
Stock Options, such as a system using an internet website or interactive voice
response, then the paperless exercise of Stock Options may be permitted through
the use of such an automated system.

          (v) Annual Limit on Incentive Stock Options. To the extent required
for "incentive stock option" treatment under Section 422 of the Code, the
aggregate Fair Market Value (determined as of the time of grant) of the shares
of Stock with respect to which Incentive Stock Options granted under this Plan
and any other plan of the Company or its parent and subsidiary corporations
become exercisable for the first time by an optionee during any calendar


                                       9



year shall not exceed $100,000 or such other limit in effect from time to time
under the Code. To the extent that any Stock Option exceeds this limit, it shall
constitute a Non-Qualified Stock Option.

     (b) Stock Options Granted to Non-Employee Directors.

          (i) Automatic Grant of Options.

               (A) Each person who is a Non-Employee Director on the effective
     date of the Initial Public Offering shall be granted a Non-Qualified Stock
     Option to acquire 20,000 shares of Stock, less the number of shares subject
     to outstanding Stock Options held by such Director on such effective date.
     Each such Option shall be fully vested and exercisable from the date of
     grant.

               (B) Each Non-Employee Director who is first elected to serve as a
     Director after the Initial Public Offering shall be granted, on the fifth
     business day after his election, a Non-Qualified Stock Option to acquire
     20,000 shares of Stock. Each such Option shall be fully vested and
     exercisable from the date of grant.

               (C) Each Non-Employee Director who is serving as a Director of
     the Company on the fifth business day after each annual meeting of
     stockholders, beginning with the 2007 annual meeting, shall automatically
     be granted on such day a Non-Qualified Stock Option to acquire 10,000
     shares of Stock. Each such Option shall be vest and become exercisable one
     year after the date of grant.

               (D) The exercise price per share for the Stock covered by a Stock
     Option granted under this Section 5(b) shall be equal to the Fair Market
     Value of the Stock on the date the Stock Option is granted.

               (E) The Committee, in its discretion, may grant additional
     Non-Qualified Stock Options to Non-Employee Directors. Any such grant may
     vary among individual Non-Employee Directors.

          (ii) Exercise; Termination.

               (A) Unless otherwise determined by the Committee, an Option
     granted under Section 5(b)(E) shall be exercisable in full as of the grant
     date. An Option issued under this Section 5(b) shall not be exercisable
     after the expiration of ten years from the date of grant.

               (B) Options granted under this Section 5(b) may be exercised only
     by written notice to the Company specifying the number of shares to be
     purchased. Payment of the full purchase price of the shares to be purchased
     may be made by one or more of the methods specified in Section 5(a)(iv). An
     optionee shall have the rights of a stockholder only as to shares acquired
     upon the exercise of a Stock Option and not as to unexercised Stock
     Options.


                                       10



SECTION 6. STOCK APPRECIATION RIGHTS

     (a) Exercise Price of Stock Appreciation Rights. The exercise price of a
Stock Appreciation Right shall not be less than 100 percent of the Fair Market
Value of the Stock on the date of grant (or more than the Stock Option exercise
price per share, if the Stock Appreciation Right was granted in tandem with a
Stock Option).

     (b) Grant and Exercise of Stock Appreciation Rights. Stock Appreciation
Rights may be granted by the Committee in tandem with, or independently of, any
Stock Option granted pursuant to Section 5 of the Plan. In the case of a Stock
Appreciation Right granted in tandem with a Non-Qualified Stock Option, such
Stock Appreciation Right may be granted either at or after the time of the grant
of such Option. In the case of a Stock Appreciation Right granted in tandem with
an Incentive Stock Option, such Stock Appreciation Right may be granted only at
the time of the grant of the Option.

     A Stock Appreciation Right or applicable portion thereof granted in tandem
with a Stock Option shall terminate and no longer be exercisable upon the
termination or exercise of the related Option.

     (c) Terms and Conditions of Stock Appreciation Rights. Stock Appreciation
Rights shall be subject to such terms and conditions as shall be determined from
time to time by the Committee, subject to the following:

          (i) Stock Appreciation Rights granted in tandem with Options shall be
exercisable at such time or times and to the extent that the related Stock
Options shall be exercisable.

          (ii) Upon exercise of a Stock Appreciation Right, the applicable
portion of any related Option shall be surrendered.

SECTION 7. RESTRICTED STOCK AWARDS

     (a) Nature of Restricted Stock Awards. The Committee shall determine the
restrictions and conditions applicable to each Restricted Stock Award at the
time of grant. Conditions may be based on continuing employment (or other
service relationship) and/or achievement of pre-established performance goals
and objectives. The grant of a Restricted Stock Award is contingent on the
grantee executing the Restricted Stock Award Agreement. The terms and conditions
of each such Award Agreement shall be determined by the Committee, and such
terms and conditions may differ among individual Awards and grantees.

     (b) Rights as a Stockholder. Upon execution of the Restricted Stock Award
Agreement and payment of any applicable purchase price, a grantee shall have the
rights of a stockholder with respect to the voting of the Restricted Stock,
subject to such conditions contained in the Restricted Stock Award Agreement.
Unless the Committee shall otherwise determine, (i) uncertificated Restricted
Stock shall be accompanied by a notation on the records of the Company or the
transfer agent to the effect that they are subject to forfeiture until such
Restricted Stock are vested as provided in Section 7(d) below, and (ii)
certificated Restricted Stock shall remain in the possession of the Company
until such Restricted Stock is vested as


                                       11



provided in Section 7(d) below, and the grantee shall be required, as a
condition of the grant, to deliver to the Company such instruments of transfer
as the Committee may prescribe.

     (c) Restrictions. Restricted Stock may not be sold, assigned, transferred,
pledged or otherwise encumbered or disposed of except as specifically provided
herein or in the Restricted Stock Award Agreement. Except as may otherwise be
provided by the Committee either in the Award Agreement or, subject to Section
17 below, in writing after the Award Agreement is issued, if any, if a grantee's
employment (or other service relationship) with the Company and its Subsidiaries
terminates for any reason, any Restricted Stock that has not vested at the time
of termination shall be repurchased by the Company for the price paid by the
grantee (if any) or, if no purchase price was paid by the grantee, shall
automatically and without any requirement of notice to such grantee from or
other action by or on behalf of, the Company be deemed to have been reacquired
by the Company from such grantee or such grantee's legal representative
simultaneously with such termination of employment (or other service
relationship), and thereafter shall cease to represent any ownership of the
Company by the grantee or rights of the grantee as a stockholder. Following such
repurchase or deemed reacquisition of unvested Restricted Stock that are
represented by physical certificates, a grantee shall surrender such
certificates to the Company upon request without consideration.

     (d) Vesting of Restricted Stock. The Committee at the time of grant shall
specify the date or dates and/or the attainment of pre-established performance
goals, objectives and other conditions on which the non-transferability of the
Restricted Stock and the Company's right of repurchase or forfeiture shall
lapse. Subsequent to such date or dates and/or the attainment of such
pre-established performance goals, objectives and other conditions, the shares
on which all restrictions have lapsed shall no longer be Restricted Stock and
shall be deemed "vested." Except as may otherwise be provided by the Committee
either in the Award Agreement or, subject to Section 17 below, in writing after
the Award Agreement is issued, a grantee's rights in any shares of Restricted
Stock that have not vested shall automatically terminate upon the grantee's
termination of employment (or other service relationship) with the Company and
its Subsidiaries and such shares shall be subject to the provisions of Section
7(c) above.

SECTION 8. DEFERRED STOCK AWARDS

     (a) Nature of Deferred Stock Awards. The Committee shall determine the
restrictions and conditions applicable to each Deferred Stock Award at the time
of grant. Conditions may be based on continuing employment (or other service
relationship) and/or achievement of pre-established performance goals and
objectives. The grant of a Deferred Stock Award is contingent on the grantee
executing the Deferred Stock Award Agreement. The terms and conditions of each
such Award Agreement shall be determined by the Committee, and such terms and
conditions may differ among individual Awards and grantees. At the end of the
deferral period, the Deferred Stock Award, to the extent vested, shall be paid
to the grantee in the form of shares of Stock.

     (b) Election to Receive Deferred Stock Awards in Lieu of Compensation. The
Committee may, in its sole discretion, permit a grantee to elect to receive a
portion of future cash compensation otherwise due to such grantee in the form of
a Deferred Stock Award. Any such election shall be made in writing and shall be
delivered to the Company no later than the date


                                       12



specified by the Committee and in accordance with Section 409A and such other
rules and procedures established by the Committee. The Committee shall have the
sole right to determine whether and under what circumstances to permit such
elections and to impose such limitations and other terms and conditions thereon
as the Committee deems appropriate. Any such deferred compensation shall be
converted to a fixed number of phantom stock units based on the Fair Market
Value of Stock on the date the compensation would otherwise have been paid to
the grantee but for the deferral.

     (c) Rights as a Stockholder. During the deferral period, a grantee shall
have no rights as a stockholder; provided, however, that the grantee may be
credited with Dividend Equivalent Rights with respect to the phantom stock units
underlying his Deferred Stock Award, subject to such terms and conditions as the
Committee may determine.

     (d) Termination. Except as may otherwise be provided by the Committee
either in the Award Agreement or, subject to Section 17 below, in writing after
the Award Agreement is issued, a grantee's right in all Deferred Stock Awards
that have not vested shall automatically terminate upon the grantee's
termination of employment (or cessation of service relationship) with the
Company and its Subsidiaries for any reason.

SECTION 9. UNRESTRICTED STOCK AWARDS

     Grant or Sale of Unrestricted Stock. The Committee may, in its sole
discretion, grant (or sell at par value or such higher purchase price determined
by the Committee) an Unrestricted Stock Award under the Plan. Unrestricted Stock
Awards may be granted in respect of past services or other valid consideration,
or in lieu of cash compensation due to such grantee.

SECTION 10. CASH-BASED AWARDS

     (a) Grant of Cash-based Awards. The Committee may, in its sole discretion,
grant Cash-based Awards to any grantee in such number or amount and upon such
terms, and subject to such conditions, as the Committee shall determine at the
time of grant. The Committee shall determine the maximum duration of the
Cash-based Award, the amount of cash to which the Cash-based Award pertains, the
conditions upon which the Cash-based Award shall become vested or payable, and
such other provisions as the Committee shall determine. Each Cash-based Award
shall specify a cash-denominated payment amount, formula or payment ranges as
determined by the Committee. Payment, if any, with respect to a Cash-based Award
shall be made in accordance with the terms of the Award and may be made in cash
or in shares of Stock, as the Committee determines.

SECTION 11. PERFORMANCE-BASED AWARDS TO COVERED EMPLOYEES

     (a) Performance-based Awards. Any employee or other key person providing
services to the Company and who is selected by the Committee may be granted one
or more Performance-based Awards in the form of a Restricted Stock Award,
Deferred Stock Award or Cash-based Award payable upon the attainment of
Performance Goals that are established by the Committee and relate to one or
more of the Performance Criteria, in each case on a specified date or dates or
over any period or periods determined by the Committee. The Committee shall
define in an objective fashion the manner of calculating the Performance
Criteria it selects to use


                                       13



for any Performance Period. Depending on the Performance Criteria used to
establish such Performance Goals, the Performance Goals may be expressed in
terms of overall Company performance or the performance of a division, business
unit, or an individual. The Committee, in its discretion, may adjust or modify
the calculation of Performance Goals for such Performance Period in order to
prevent the dilution or enlargement of the rights of an individual (i) in the
event of, or in anticipation of, any unusual or extraordinary corporate item,
transaction, event or development, (ii) in recognition of, or in anticipation
of, any other unusual or nonrecurring events affecting the Company, or the
financial statements of the Company, or (iii) in response to, or in anticipation
of, changes in applicable laws, regulations, accounting principles, or business
conditions provided however, that the Committee may not exercise such discretion
in a manner that would increase the Performance-based Award granted to a Covered
Employee. Each Performance-based Award shall comply with the provisions set
forth below.

     (b) Grant of Performance-based Awards. With respect to each
Performance-based Award granted to a Covered Employee, the Committee shall
select, within the first 90 days of a Performance Cycle (or, if shorter, within
the maximum period allowed under Section 162(m) of the Code) the Performance
Criteria for such grant, and the Performance Goals with respect to each
Performance Criterion (including a threshold level of performance below which no
amount will become payable with respect to such Award). Each Performance-based
Award will specify the amount payable, or the formula for determining the amount
payable, upon achievement of the various applicable performance targets. The
Performance Criteria established by the Committee may be (but need not be)
different for each Performance Cycle and different Performance Goals may be
applicable to Performance-based Awards to different Covered Employees.

     (c) Payment of Performance-based Awards. Following the completion of a
Performance Cycle, the Committee shall meet to review and certify in writing
whether, and to what extent, the Performance Goals for the Performance Cycle
have been achieved and, if so, to also calculate and certify in writing the
amount of the Performance-based Awards earned for the Performance Cycle. The
Committee shall then determine the actual size of each Covered Employee's
Performance-based Award, and, in doing so, may reduce or eliminate the amount of
the Performance-based Award for a Covered Employee if, in its sole judgment,
such reduction or elimination is appropriate.

     (d) Maximum Award Payable. The maximum Performance-based Award payable to
any one Covered Employee under the Plan for a Performance Cycle is 750,000
Shares (subject to adjustment as provided in Section 3(b) hereof) or
$10,000,000, in the case of a Performance-based Award that is a Cash-based
Award.

SECTION 12. DIVIDEND EQUIVALENT RIGHTS

     (a) Dividend Equivalent Rights. A Dividend Equivalent Right may be granted
hereunder to any grantee as a component of another Award or as a freestanding
award. The terms and conditions of Dividend Equivalent Rights shall be specified
in the Award Agreement. Dividend equivalents credited to the holder of a
Dividend Equivalent Right may be paid currently or may be deemed to be
reinvested in additional shares of Stock, which may thereafter accrue additional
equivalents. Any such reinvestment shall be at Fair Market Value on the date of
reinvestment or such other price as may then apply under a dividend reinvestment
plan


                                       14



sponsored by the Company, if any. Dividend Equivalent Rights may be settled in
cash or shares of Stock or a combination thereof, in a single installment or
installments. A Dividend Equivalent Right granted as a component of another
Award may provide that such Dividend Equivalent Right shall be settled upon
exercise, settlement, or payment of, or lapse of restrictions on, such other
Award, and that such Dividend Equivalent Right shall expire or be forfeited or
annulled under the same conditions as such other Award. A Dividend Equivalent
Right granted as a component of another Award may also contain terms and
conditions different from such other Award.

     (b) Interest Equivalents. Any Award under this Plan that is settled in
whole or in part in cash on a deferred basis may provide in the grant for
interest equivalents to be credited with respect to such cash payment. Interest
equivalents may be compounded and shall be paid upon such terms and conditions
as may be specified by the grant.

     (c) Termination. Except as may otherwise be provided by the Committee
either in the Award Agreement or, subject to Section 17 below, in writing after
the Award Agreement is issued, a grantee's rights in all Dividend Equivalent
Rights or interest equivalents granted as a component of another Award that has
not vested shall automatically terminate upon the grantee's termination of
employment (or cessation of service relationship) with the Company and its
Subsidiaries for any reason.

SECTION 13. TRANSFERABILITY OF AWARDS

     (a) Transferability. Except as provided in Section 13(b) below, during a
grantee's lifetime, his or her Awards shall be exercisable only by the grantee,
or by the grantee's legal representative or guardian in the event of the
grantee's incapacity. No Awards shall be sold, assigned, transferred or
otherwise encumbered or disposed of by a grantee other than by will or by the
laws of descent and distribution. No Awards shall be subject, in whole or in
part, to attachment, execution, or levy of any kind, and any purported transfer
in violation hereof shall be null and void.

     (b) Committee Action. Notwithstanding Section 13(a), the Committee, in its
discretion, may provide either in the Award Agreement regarding a given Award or
by subsequent written approval that the grantee (who is an employee or director)
may transfer his or her Awards (other than any Incentive Stock Options) to his
or her immediate family members, to trusts for the benefit of such family
members, or to partnerships in which such family members are the only partners,
provided that the transferee agrees in writing with the Company to be bound by
all of the terms and conditions of this Plan and the applicable Award.

     (c) Family Member. For purposes of Section 13(b), "family member" shall
mean a grantee's child, stepchild, grandchild, parent, stepparent, grandparent,
spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including
adoptive relationships, any person sharing the grantee's household (other than a
tenant of the grantee), a trust in which these persons (or the grantee) have
more than 50 percent of the beneficial interest, a foundation in which these
persons (or the grantee) control the management of assets, and any other entity
in which these persons (or the grantee) own more than 50 percent of the voting
interests.


                                       15



     (d) Designation of Beneficiary. Each grantee to whom an Award has been made
under the Plan may designate a beneficiary or beneficiaries to exercise any
Award or receive any payment under any Award payable on or after the grantee's
death. Any such designation shall be on a form provided for that purpose by the
Committee and shall not be effective until received by the Committee. If no
beneficiary has been designated by a deceased grantee, or if the designated
beneficiaries have predeceased the grantee, the beneficiary shall be the
grantee's estate.

SECTION 14. TAX WITHHOLDING

     (a) Payment by Grantee. Each grantee shall, no later than the date as of
which the value of an Award or of any Stock or other amounts received thereunder
first becomes includable in the gross income of the grantee for Federal income
tax purposes, pay to the Company, or make arrangements satisfactory to the
Committee regarding payment of, any Federal, state, or local taxes of any kind
required by law to be withheld by the Company with respect to such income. The
Company and its Subsidiaries shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to the
grantee. The Company's obligation to deliver evidence of book entry (or stock
certificates) to any grantee is subject to and conditioned on tax withholding
obligations being satisfied by the grantee.

     (b) Payment in Stock. Subject to approval by the Committee, a grantee may
elect to have the Company's minimum required tax withholding obligation
satisfied, in whole or in part, by (i) authorizing the Company to withhold from
shares of Stock to be issued pursuant to any Award a number of shares with an
aggregate Fair Market Value (as of the date the withholding is effected) that
would satisfy the withholding amount due, or (ii) transferring to the Company
shares of Stock owned by the grantee with an aggregate Fair Market Value (as of
the date the withholding is effected) that would satisfy the withholding amount
due.

SECTION 15. ADDITIONAL CONDITIONS APPLICABLE TO NONQUALIFIED DEFERRED
            COMPENSATION UNDER SECTION 409A.

     In the event any Stock Option or Stock Appreciation Right under the Plan is
materially modified and deemed a new grant at a time when the Fair Market Value
exceeds the exercise price, or any other Award is otherwise determined to
constitute "nonqualified deferred compensation" within the meaning of Section
409A (a "409A Award"), the following additional conditions shall apply and shall
supersede any contrary provisions of this Plan or the terms of any agreement
relating to such 409A Award.

     (a) Exercise and Distribution. Except as provided in Section 15(b) hereof,
no 409A Award shall be exercisable or distributable earlier than upon one of the
following:

          (i) Specified Time. A specified time or a fixed schedule set forth in
the written instrument evidencing the 409A Award.

          (ii) Separation from Service. Separation from service (within the
meaning of Section 409A) by the 409A Award grantee; provided, however, that if
the 409A Award grantee is a "key employee" (as defined in Section 416(i) of the
Code without regard to paragraph (5) thereof) and any of the Company's Stock is
publicly traded on an established securities market or


                                       16



otherwise, exercise or distribution under this Section 15(a)(ii) may not be made
before the date that is six months after the date of separation from service.

          (iii) Death. The date of death of the 409A Award grantee.

          (iv) Disability. The date the 409A Award grantee becomes disabled
(within the meaning of Section 15(c)(ii) hereof).

          (v) Unforeseeable Emergency. The occurrence of an unforeseeable
emergency (within the meaning of Section 15(c)(iii) hereof), but only if the net
value (after payment of the exercise price) of the number of shares of Stock
that become issuable does not exceed the amounts necessary to satisfy such
emergency plus amounts necessary to pay taxes reasonably anticipated as a result
of the exercise, after taking into account the extent to which the emergency is
or may be relieved through reimbursement or compensation by insurance or
otherwise or by liquidation of the grantee's other assets (to the extent such
liquidation would not itself cause severe financial hardship).

          (vi) Change in Control Event. The occurrence of a Change in Control
Event (within the meaning of Section 15(c)(i) hereof), including the Company's
acceleration of vesting of such grant upon a Change in Control Event or
termination of the Plan or any 409A Award granted hereunder within 12 months of
the Change in Control Event.

     (b) No Acceleration. A 409A Award may not be accelerated or exercised prior
to the time specified in Section 15(a) hereof, except in the case of one of the
following events:

          (i) Domestic Relations Order. The 409A Award may permit the
acceleration of the exercise or distribution time or schedule to an individual
other than the grantee as may be necessary to comply with the terms of a
domestic relations order (as defined in Section 414(p)(1)(B) of the Code).

          (ii) Conflicts of Interest. The 409A Award may permit the acceleration
of the exercise or distribution time or schedule as may be necessary to comply
with the terms of a certificate of divestiture (as defined in Section 1043(b)(2)
of the Code).

          (iii) Change in Control Event. The Committee may exercise the
discretionary right to accelerate the vesting of such 409A Award upon a Change
in Control Event or to terminate the Plan or any 409A Award granted thereunder
within 12 months of the Change in Control Event and cancel the 409A Award for
compensation.

     (c) Definitions. Solely for purposes of this Section 15 and not for other
purposes of the Plan, the following terms shall be defined as set forth below:

          (i) "Change in Control Event" means the occurrence of a change in the
ownership of the Company, a change in effective control of the Company, or a
change in the ownership of a substantial portion of the assets of the Company
(as defined in Section 1.409A-3(g) of the proposed regulations promulgated under
Section 409A by the Department of the Treasury on September 29, 2005 or any
subsequent guidance).


                                       17



          (ii) "Disabled" means a grantee who (i) is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment that can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months, or (ii) is, by reason
of any medically determinable physical or mental impairment that can be expected
to result in death or can be expected to last for a continuous period of not
less than 12 months, receiving income replacement benefits for a period of not
less than three months under an accident and health plan covering employees of
the Company or its Subsidiaries.

          (iii) "Unforeseeable Emergency" means a severe financial hardship to
the grantee resulting from an illness or accident of the grantee, the grantee's
spouse, or a dependent (as defined in Section 152(a) of the Code) of the
grantee, loss of the grantee's property due to casualty, or similar
extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the grantee.

SECTION 16. TRANSFER, LEAVE OF ABSENCE, ETC.

     Except as required by law or set forth in an Award Agreement, Awards
granted under the Plan shall not be affected by any change of an Award holder's
status within or among the Company and its Subsidiaries so long as the Award
holder continues to be an employee, director or consultant of the Company or any
Subsidiary. Accordingly, for purposes of the Plan, the following events shall
not be deemed a termination of employment:

     (a) a transfer to the employment of the Company from a Subsidiary or from
the Company to a Subsidiary, or from one Subsidiary to another; or

     (b) an approved leave of absence for military service or sickness, or for
any other purpose approved by the Company, if the employee's right to
re-employment is guaranteed either by a statute or by contract or under the
policy pursuant to which the leave of absence was granted or if the Committee
otherwise so provides in writing.

SECTION 17. AMENDMENTS AND TERMINATION

     The Board may, at any time, amend or discontinue the Plan and the Committee
may, at any time, amend or cancel any outstanding Award for the purpose of
satisfying changes in law or for any other lawful purpose, but no such action
shall adversely affect rights under any outstanding Award without the holder's
consent. Except as provided in Section 3(b) or 3(c), in no event may the
Committee exercise its discretion to reduce the exercise price of outstanding
Stock Options or Stock Appreciation Rights or effect repricing through
cancellation and re-grants. Any material Plan amendments (other than amendments
that curtail the scope of the Plan), including any Plan amendments that (i)
increase the number of shares reserved for issuance under the Plan, (ii) expand
the type of Awards available under, materially expand the eligibility to
participate in, or materially extend the term of, the Plan, or (iii) materially
change the method of determining Fair Market Value, shall be subject to approval
by the Company stockholders entitled to vote at a meeting of stockholders. In
addition, to the extent determined by the Committee to be required by the Code
to ensure that Incentive Stock Options granted under the Plan are qualified
under Section 422 of the Code or to ensure that compensation earned under Awards
qualifies as performance-based compensation under Section 162(m) of the Code,


                                       18



Plan amendments shall be subject to approval by the Company stockholders
entitled to vote at a meeting of stockholders. Nothing in this Section 17 shall
limit the Committee's authority to take any action permitted pursuant to Section
3(c).

SECTION 18. STATUS OF PLAN

     With respect to the portion of any Award that has not been exercised and
any payments in cash, Stock or other consideration not received by a grantee, a
grantee shall have no rights greater than those of a general creditor of the
Company unless the Committee shall otherwise expressly determine in connection
with any Award or Awards. In its sole discretion, the Committee may authorize
the creation of trusts or other arrangements to meet the Company's obligations
to deliver Stock or make payments with respect to Awards hereunder, provided
that the existence of such trusts or other arrangements is consistent with the
foregoing sentence.

SECTION 19. GENERAL PROVISIONS

     (a) No Distribution. The Committee may require each person acquiring Stock
pursuant to an Award to represent to and agree with the Company in writing that
such person is acquiring the shares without a view to distribution thereof.

     (b) Delivery of Stock Certificates. Stock certificates to grantees under
this Plan shall be deemed delivered for all purposes when the Company or a stock
transfer agent of the Company shall have mailed such certificates in the United
States mail, addressed to the grantee, at the grantee's last known address on
file with the Company. Uncertificated Stock shall be deemed delivered for all
purposes when the Company or a Stock transfer agent of the Company shall have
given to the grantee by electronic mail (with proof of receipt) or by United
States mail, addressed to the grantee, at the grantee's last known address on
file with the Company, notice of issuance and recorded the issuance in its
records (which may include electronic "book entry" records). Notwithstanding
anything herein to the contrary, the Company shall not be required to issue or
deliver any certificates evidencing shares of Stock pursuant to the exercise of
any Award, unless and until the Board has determined, with advice of counsel (to
the extent the Board deems such advice necessary or advisable), that the
issuance and delivery of such certificates is in compliance with all applicable
laws, regulations of governmental authorities and, if applicable, the
requirements of any exchange on which the shares of Stock are listed, quoted or
traded. All Stock certificates delivered pursuant to the Plan shall be subject
to any stop-transfer orders and other restrictions as the Committee deems
necessary or advisable to comply with federal, state or foreign jurisdiction,
securities or other laws, rules and quotation system on which the Stock is
listed, quoted or traded. The Committee may place legends on any Stock
certificate to reference restrictions applicable to the Stock. In addition to
the terms and conditions provided herein, the Board may require that an
individual make such reasonable covenants, agreements, and representations as
the Board, in its discretion, deems necessary or advisable in order to comply
with any such laws, regulations, or requirements. The Committee shall have the
right to require any individual to comply with any timing or other restrictions
with respect to the settlement or exercise of any Award, including a
window-period limitation, as may be imposed in the discretion of the Committee.


                                       19



     (c) Stockholder Rights. Until Stock is deemed delivered in accordance with
Section 19(b), no right to vote or receive dividends or any other rights of a
stockholder will exist with respect to shares of Stock to be issued in
connection with an Award, notwithstanding the exercise of a Stock Option or any
other action by the grantee with respect to an Award.

     (d) Other Compensation Arrangements; No Employment Rights. Nothing
contained in this Plan shall prevent the Board from adopting other or additional
compensation arrangements, including trusts, and such arrangements may be either
generally applicable or applicable only in specific cases. The adoption of this
Plan and the grant of Awards do not confer upon any employee any right to
continued employment with the Company or any Subsidiary.

     (e) Trading Policy Restrictions. Option exercises and other Awards under
the Plan shall be subject to such Company's insider trading policy and
procedures, as in effect from time to time.

     (f) Forfeiture of Awards under Sarbanes-Oxley Act. If the Company is
required to prepare an accounting restatement due to the material noncompliance
of the Company, as a result of misconduct, with any financial reporting
requirement under the securities laws, then any grantee who is one of the
individuals subject to automatic forfeiture under Section 304 of the
Sarbanes-Oxley Act of 2002 shall reimburse the Company for the amount of any
Award received by such individual under the Plan during the 12-month period
following the first public issuance or filing with the United States Securities
and Exchange Commission, as the case may be, of the financial document embodying
such financial reporting requirement.

SECTION 20. EFFECTIVE DATE OF PLAN

     This Plan shall become effective upon approval by the holders of a majority
of the votes cast at a meeting of stockholders at which a quorum is present. No
grants of Stock Options and other Awards may be made hereunder after the tenth
anniversary of the Effective Date and no grants of Incentive Stock Options may
be made hereunder after the tenth anniversary of the date the Plan is approved
by the Board.

SECTION 21. GOVERNING LAW

     This Plan and all Awards and actions taken thereunder shall be governed by,
and construed in accordance with, the laws of the State of Delaware, applied
without regard to conflict of law principles.

DATE APPROVED BY BOARD OF DIRECTORS:

DATE APPROVED BY STOCKHOLDERS:


                                       20



                                                              EXHIBIT 10.3.1

                            INCENTIVE STOCK OPTION AGREEMENT

                               UNDER THE METABOLIX, INC.
                     2006 STOCK OPTION AND INCENTIVE PLAN


Name of Optionee:
No. of Option Shares:
Option Exercise Price per Share: $
                           [FMV ON GRANT DATE (110% OF FMV IF A 10% OWNER)]
Grant Date:
Expiration Date:
                         [UP TO 10 YEARS (5 IF A 10% OWNER)]


         Pursuant to the Metabolix, Inc. 2006 Stock Option and Incentive
Plan, as amended through the date hereof (the "Plan"), Metabolix, Inc. (the
"Company") hereby grants to the Optionee named above an option (the "Stock
Option") to purchase on or prior to the Expiration Date specified above all
or part of the number of shares of Common Stock, par value $0.01 per share
(the "Stock"), of the Company specified above at the Option Exercise Price
per Share specified above subject to the terms and conditions set forth
herein and in the Plan.

         1.  EXERCISABILITY SCHEDULE.  No portion of this Stock Option may be
exercised until such portion shall have become exercisable.  Except as set
forth below, and subject to the discretion of the Committee to accelerate the
exercisability schedule hereunder, this Stock Option shall be exercisable
with respect to the following number of Option Shares on the dates indicated:

                  INCREMENTAL NUMBER OF
                OPTION SHARES EXERCISABLE*         EXERCISABILITY DATE
                -------------------------          -------------------

          -------------              (---%)            ------------
          -------------              (---%)            ------------
          -------------              (---%)            ------------
          -------------              (---%)            ------------
          -------------              (---%)            ------------

       * Max. of $100,000 per yr.

         Once exercisable, this Stock Option shall continue to be exercisable
at any time or times prior to the close of business on the Expiration Date,
subject to the provisions hereof and of the Plan.



2.       MANNER OF EXERCISE.

         (a)  The Optionee may exercise this Stock Option only in the
following manner:  from time to time on or prior to the Expiration Date of
this Stock Option, the Optionee may give written notice to the Company of his
or her election to purchase some or all of the Option Shares purchasable at
the time of such notice.  This notice shall specify the number of Option
Shares to be purchased.

         Payment of the purchase price for the Option Shares may be made by
one or more of the following methods: (i) in cash, by certified or bank check
or other instrument acceptable to the Committee; (ii) through the delivery
(or attestation to the ownership) of shares of Stock that have been purchased
by the Optionee on the open market or that are beneficially owned by the
Optionee and are not then subject to any restrictions under any Company plan
and that otherwise satisfy any holding periods as may be required by the
Committee; (iii) at the discretion of the Committee, in accordance with a
cashless exercise program established with a securities brokerage firm and
approved by the Committee, provided that in the event the Optionee chooses to
pay the option purchase price as so provided, the Optionee and the broker
shall comply with such procedures and enter into such agreements of indemnity
and other agreements as the Committee shall prescribe as a condition of such
payment procedure; or (iv) a combination of (i), (ii) and (iii) above.
Payment instruments will be received subject to collection.

         The transfer to the Optionee on the records of the Company or of the
transfer agent of the Option Shares will be contingent upon the Company's
receipt from the Optionee of full payment for the Option Shares, as set forth
above and any agreement, statement or other evidence that the Company may
require to satisfy itself that the issuance of Stock to be purchased pursuant
to the exercise of Stock Options under the Plan and any subsequent resale of
the shares of Stock will be in compliance with applicable laws and
regulations.  In the event the Optionee chooses to pay the purchase price by
previously-owned shares of Stock through the attestation method, the number
of shares of Stock transferred to the Optionee upon the exercise of the Stock
Option shall be net of the shares attested to.  In the event that the Company
establishes, for itself or using the services of a third party, an automated
system for the exercise of Stock Options, such as a system using an internet
website or interactive voice response, then the paperless exercise of Stock
Options may be permitted through the use of such an automated system.

         (b) The shares of Stock purchased upon exercise of this Stock Option
shall be transferred to the Optionee on the records of the Company or of the
transfer agent upon compliance to the satisfaction of the Committee with all
requirements under applicable laws or regulations in connection with such
issuance and with the requirements hereof and of the Plan.  The determination
of the Committee as to such compliance shall be final and binding on the
Optionee.  The Optionee shall not be deemed to be the holder of, or to have
any of the rights of a holder with respect to, any shares of Stock subject to
this Stock Option unless and until this Stock Option shall have been
exercised pursuant to the terms hereof, the Company or the transfer agent
shall have transferred the shares to the Optionee, and the Optionee's name
shall have been entered as the stockholder of record on the books of the
Company.  Thereupon, the Optionee shall have full voting, dividend and other
ownership rights with respect to such shares of Stock.



                                       2


         (c) The minimum number of shares with respect to which this Stock
Option may be exercised at any one time shall be 100 shares, unless the
number of shares with respect to which this Stock Option is being exercised
is the total number of shares subject to exercise under this Stock Option at
the time.

         (d) Notwithstanding any other provision hereof or of the Plan, no
portion of this Stock Option shall be exercisable after the Expiration Date
hereof.

    3.   TERMINATION OF EMPLOYMENT.  If the Optionee's employment by the
Company or a Subsidiary (as defined in the Plan) is terminated, the period
within which to exercise the Stock Option may be subject to earlier
termination as set forth below.

         (a) TERMINATION DUE TO DEATH.  If the Optionee's employment
terminates by reason of the Optionee's death, any exercisable portion of this
Stock Option outstanding on such date may be exercised by the Optionee's
legal representative or legatee for a period of 12 months from the date of
death or until the Expiration Date, if earlier.

         (b) TERMINATION DUE TO DISABILITY.  If the Optionee's employment
terminates by reason of the Optionee's disability (as determined by the
Committee), any exercisable portion of this Stock Option outstanding on such
date may be exercised by the Optionee for a period of 12 months from the date
of termination or until the Expiration Date, if earlier.  The death of the
Optionee during the 12-month period provided in this Section 3(b) shall
extend such period for another 12 months from the date of death or until the
Expiration Date, if earlier.

         (c) TERMINATION FOR CAUSE.  If the Optionee's employment terminates
for Cause, any portion of this Stock Option outstanding on such date shall
terminate immediately and be of no further force and effect.  For purposes
hereof, "Cause" shall mean a determination by the Company that the Optionee
shall be dismissed as a result of (i) any material breach by the Optionee of
any agreement between the Optionee and the Company; (ii) the conviction of,
indictment for or plea of nolo contendere by the Optionee to a felony or a
crime involving moral turpitude; or (iii) any material misconduct or willful
and deliberate non-performance (other than by reason of disability) by the
Optionee of the Optionee's duties to the Company.

         (d) OTHER TERMINATION.  If the Optionee's employment terminates for
any reason other than the Optionee's death, the Optionee's disability, or
Cause, and unless otherwise determined by the Committee, any portion of this
Stock Option outstanding on such date may be exercised, to the extent
exercisable on the date of termination, for a period of three months from the
date of termination or until the Expiration Date, if earlier.  Any portion of
this Stock Option that is not exercisable on the date of termination shall
terminate immediately and be of no further force or effect.

         The Committee's determination of the reason for termination of the
Optionee's employment shall be conclusive and binding on the Optionee and his
or her representatives or legatees.

    4.   INCORPORATION OF PLAN.  Notwithstanding anything herein to the
contrary, this Stock Option shall be subject to and governed by all the terms
and conditions of the Plan, including the powers of the Committee set forth
in Section 2(b) of the Plan.  Capitalized terms in


                                       3


this Agreement shall have the meaning specified in the Plan, unless a
different meaning is specified herein.

    5.   TRANSFERABILITY.  This Agreement is personal to the Optionee, is
non-assignable and is not transferable in any manner, by operation of law or
otherwise, other than by will or the laws of descent and distribution.  This
Stock Option is exercisable, during the Optionee's lifetime, only by the
Optionee, and thereafter, only by the Optionee's legal representative or
legatee.

    6.   STATUS OF THE STOCK OPTION.  This Stock Option is intended to
qualify as an "incentive stock option" under Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), but the Company does not
represent or warrant that this Stock Option qualifies as such.  The Optionee
should consult with his or her own tax advisors regarding the tax effects of
this Stock Option and the requirements necessary to obtain favorable income
tax treatment under Section 422 of the Code, including, but not limited to,
holding period requirements. To the extent any portion of this Stock Option
does not so qualify as an "incentive stock option," such portion shall be
deemed to be a non-qualified stock option.  If the Optionee intends to
dispose or does dispose (whether by sale, gift, transfer or otherwise) of any
Option Shares within the one-year period beginning on the date after the
transfer of such shares to him or her, or within the two-year period
beginning on the day after the grant of this Stock Option, he or she will so
notify the Company within 30 days after such disposition.

    7.   TAX WITHHOLDING.  The Optionee shall, not later than the date as of
which the exercise of this Stock Option becomes a taxable event for Federal
income tax purposes, pay to the Company or make arrangements satisfactory to
the Committee for payment of any Federal, state, and local taxes required by
law to be withheld on account of such taxable event.  The Optionee may elect
to have the minimum required tax withholding obligation satisfied, in whole
or in part, by (i) authorizing the Company to withhold from shares of Stock
to be issued, or (ii) transferring to the Company, a number of shares of
Stock with an aggregate Fair Market Value that would satisfy the withholding
amount due.  The Company and its Subsidiaries shall, to the extent permitted
by law, have the right to deduct any such taxes from any payment of any kind
otherwise due to the Optionee.

    8.   NO OBLIGATION TO CONTINUE EMPLOYMENT.  Neither the Company nor any
Subsidiary is obligated by or as a result of the Plan or this Agreement to
continue the Optionee in employment and neither the Plan nor this Agreement
shall interfere in any way with the right of the Company or any Subsidiary to
terminate the employment of the Optionee at any time.


                                       4


    9.   NOTICES.  Notices hereunder shall be mailed or delivered to the
Company at its principal place of business and shall be mailed or delivered
to the Optionee at the address on file with the Company or, in either case,
at such other address as one party may subsequently furnish to the other
party in writing.


                                    METABOLIX, INC.

                                    By:  __________________________________
                                                      Title:


The foregoing Agreement is hereby accepted and the terms and conditions
thereof hereby agreed to by the undersigned.

Dated:  _______________________     _______________________________________
                                    Optionee's Signature




                                    Optionee's name and address:

                                    _______________________________________


                                    _______________________________________


                                    _______________________________________



                                    5




                                                                EXHIBIT 10.3.2

                         NON-QUALIFIED STOCK OPTION AGREEMENT

                                UNDER THE METABOLIX, INC.
                          2006 STOCK OPTION AND INCENTIVE PLAN


Name of Optionee:
No. of Option Shares:
Option Exercise Price per Share: $
                                        [FMV ON GRANT DATE]
Grant Date:
Expiration Date:

         Pursuant to the Metabolix, Inc. 2006 Stock Option and Incentive
Plan, as amended through the date hereof (the "Plan"), Metabolix, Inc. (the
"Company") hereby grants to the Optionee named above an option (the "Stock
Option") to purchase on or prior to the Expiration Date specified above all
or part of the number of shares of Common Stock, par value $0.01 per share
(the "Stock") of the Company specified above at the Option Exercise Price per
Share specified above subject to the terms and conditions set forth herein
and in the Plan.  This Stock Option is not intended to be an "incentive stock
option" under Section 422 of the Internal Revenue Code of 1986, as amended.

    1.   EXERCISABILITY SCHEDULE.  No portion of this Stock Option may be
exercised until such portion shall have become exercisable.  Except as set
forth below, and subject to the discretion of the Committee to accelerate the
exercisability schedule hereunder, this Stock Option shall be exercisable
with respect to the following number of Option Shares on the dates indicated:

               INCREMENTAL NUMBER OF
             OPTION SHARES EXERCISABLE            EXERCISABILITY DATE
             ------------------------             -------------------

       -------------             (---%)             ------------
       -------------             (---%)             ------------
       -------------             (---%)             ------------
       -------------             (---%)             ------------
       -------------             (---%)             ------------

         Once exercisable, this Stock Option shall continue to be exercisable
at any time or times prior to the close of business on the Expiration Date,
subject to the provisions hereof and of the Plan.






    2.   MANNER OF EXERCISE.

         (a) The Optionee may exercise this Stock Option only in the
following manner:  from time to time on or prior to the Expiration Date of
this Stock Option, the Optionee may give written notice to the Company of his
or her election to purchase some or all of the Option Shares purchasable at
the time of such notice.  This notice shall specify the number of Option
Shares to be purchased.

         Payment of the purchase price for the Option Shares may be made by
one or more of the following methods: (i) in cash, by certified or bank check
or other instrument acceptable to the Committee; (ii) through the delivery
(or attestation to the ownership) of shares of Stock that have been purchased
by the Optionee on the open market or that are beneficially owned by the
Optionee and are not then subject to any restrictions under any Company plan
and that otherwise satisfy any holding periods as may be required by the
Committee; (iii) at the discretion of the Committee, in accordance with a
cashless exercise program established with a securities brokerage firm and
approved by the Committee, provided that in the event the Optionee chooses to
pay the option purchase price as so provided, the Optionee and the broker
shall comply with such procedures and enter into such agreements of indemnity
and other agreements as the Committee shall prescribe as a condition of such
payment procedure; or (iv) a combination of (i), (ii) and (iii) above.
Payment instruments will be received subject to collection.

         The transfer to the Optionee on the records of the Company or of the
transfer agent of the Option Shares will be contingent upon the Company's
receipt from the Optionee of full payment for the Option Shares, as set forth
above and any agreement, statement or other evidence that the Company may
require to satisfy itself that the issuance of Stock to be purchased pursuant
to the exercise of Stock Options under the Plan and any subsequent resale of
the shares of Stock will be in compliance with applicable laws and
regulations.  In the event the Optionee chooses to pay the purchase price by
previously-owned shares of Stock through the attestation method, the number
of shares of Stock transferred to the Optionee upon the exercise of the Stock
Option shall be net of the Shares attested to.  In the event that the Company
establishes, for itself or using the services of a third party, an automated
system for the exercise of Stock Options, such as a system using an internet
website or interactive voice response, then the paperless exercise of Stock
Options may be permitted through the use of such an automated system.

         (b) The shares of Stock purchased upon exercise of this Stock Option
shall be transferred to the Optionee on the records of the Company or of the
transfer agent upon compliance to the satisfaction of the Committee with all
requirements under applicable laws or regulations in connection with such
issuance and with the requirements hereof and of the Plan.  The determination
of the Committee as to such compliance shall be final and binding on the
Optionee.  The Optionee shall not be deemed to be the holder of, or to have
any of the rights of a holder with respect to, any shares of Stock subject to
this Stock Option unless and until this Stock Option shall have been
exercised pursuant to the terms hereof, the Company or the transfer agent
shall have transferred the shares to the Optionee, and the Optionee's name
shall have been entered as the stockholder of record on the books of the
Company.  Thereupon, the Optionee shall have full voting, dividend and other
ownership rights with respect to such shares of Stock.


                                    2



         (c) The minimum number of shares with respect to which this Stock
Option may be exercised at any one time shall be 100 shares, unless the
number of shares with respect to which this Stock Option is being exercised
is the total number of shares subject to exercise under this Stock Option at
the time.

         (d) Notwithstanding any other provision hereof or of the Plan, no
portion of this Stock Option shall be exercisable after the Expiration Date
hereof.

    3.   TERMINATION OF SERVICE.  If the Optionee ceases to be [an employee]
[a consultant] of the Company or a Subsidiary (as defined in the Plan), the
period within which to exercise the Stock Option may be subject to earlier
termination as set forth below.

         (a) TERMINATION DUE TO DEATH.  If the Optionee ceases to be
[an employee][a consultant] by reason of the Optionee's death, any
exercisable portion of this Stock Option outstanding on such date may be
exercised by the Optionee's legal representative or legatee for a period of
12 months from the date of death or until the Expiration Date, if earlier.

         (b) TERMINATION DUE TO DISABILITY.  If the Optionee ceases to be
[an employee][a consultant] by reason of the Optionee's disability (as
determined by the Committee), any exercisable portion of this Stock Option
outstanding on such date may be exercised by the Optionee for a period of 12
months from the date of termination or until the Expiration Date, if earlier.
 The death of the Optionee during the 12-month period provided in this
Section 3(b) shall extend such period for another 12 months from the date of
death or until the Expiration Date, if earlier.

         (c) TERMINATION FOR CAUSE.  If the Optionee ceases to be
[an employee][a consultant] due to termination for Cause, any portion of this
Stock Option outstanding on such date shall terminate immediately and be of
no further force and effect.  For purposes hereof, "Cause" shall mean a
determination by the Company that the Optionee shall be dismissed as a result
of (i) any material breach by the Optionee of any agreement between the
Optionee and the Company; (ii) the conviction of, indictment for or plea of
nolo contendere by the Optionee to a felony or a crime involving moral
turpitude; or (iii) any material misconduct or willful and deliberate
non-performance (other than by reason of disability) by the Optionee of the
Optionee's duties to the Company.

         (d) OTHER TERMINATION.  If the Optionee ceases to be an [an employee]
[a consultant] for any reason other than the Optionee's death, the Optionee's
disability or Cause, and unless otherwise determined by the Committee, any
portion of this Stock Option outstanding on such date may be exercised, to
the extent exercisable on the date of termination, for a period of three
months from the date of termination or until the Expiration Date, if earlier.
 Any portion of this Stock Option that is not exercisable on the date of
termination shall terminate immediately and be of no further force or effect.

         The Committee's determination of the reason for termination of the
Optionee's service to the Company shall be conclusive and binding on the
Optionee and his or her representatives or legatees.



                                    3



    4.   INCORPORATION OF PLAN.  Notwithstanding anything herein to the
contrary, this Stock Option shall be subject to and governed by all the terms
and conditions of the Plan, including the powers of the Committee set forth
in  Section 2(b) of the Plan.  Capitalized terms in this Agreement shall have
the meaning specified in the Plan, unless a different meaning is specified
herein.

    5.   TRANSFERABILITY.  This Agreement is personal to the Optionee, is
non-assignable and is not transferable in any manner, by operation of law or
otherwise, other than by will or the laws of descent and distribution.  This
Stock Option is exercisable, during the Optionee's lifetime, only by the
Optionee, and thereafter, only by the Optionee's legal representative or
legatee.

    6.   TAX WITHHOLDING.  The Optionee shall, not later than the date as of
which the exercise of this Stock Option becomes a taxable event for Federal
income tax purposes, pay to the Company or make arrangements satisfactory to
the Committee for payment of any Federal, state, and local taxes required by
law to be withheld on account of such taxable event.  The Optionee may elect
to have the minimum required tax withholding obligation satisfied, in whole
or in part, by (i) authorizing the Company to withhold from shares of Stock
to be issued, or (ii) transferring to the Company, a number of shares of
Stock with an aggregate Fair Market Value that would satisfy the withholding
amount due.   The Company and its Subsidiaries shall, to the extent permitted
by law, have the right to deduct any such taxes from any payment of any kind
otherwise due to the Optionee.

     7.   NO OBLIGATION TO CONTINUE EMPLOYMENT.  Neither the Company nor any
Subsidiary is obligated by or as a result of the Plan or this Agreement to
continue the Optionee in employment and neither the Plan nor this Agreement
shall interfere in any way with the right of the Company or any Subsidiary to
terminate the employment of the Optionee at any time.


                                    4



    8.   NOTICES.  Notices hereunder shall be mailed or delivered to the
Company at its principal place of business and shall be mailed or delivered
to the Optionee at the address on file with the Company or, in either case,
at such other address as one party may subsequently furnish to the other
party in writing.



                                       METABOLIX, INC.

                                       By: ___________________________________
                                           Title:


The foregoing Agreement is hereby accepted and the terms and conditions
thereof hereby agreed to by the undersigned.


Dated: ___________________________     ______________________________________
                                       Optionee's Signature


                                       Optionee's name and address:

                                       ______________________________________

                                       ______________________________________

                                       ______________________________________



                                    5



                                                                EXHIBIT 10.3.3

                          NON-QUALIFIED STOCK OPTION AGREEMENT
                               FOR NON-EMPLOYEE DIRECTORS

                               UNDER THE METABOLIX, INC.
                          2006 STOCK OPTION AND INCENTIVE PLAN

Name of Optionee:
No. of Option Shares:
Option Exercise Price per Share: $
                                 [FMV ON GRANT DATE]
Grant Date:
Expiration Date:
                      [NO MORE THAN 10 YEARS]

         Pursuant to the Metabolix, Inc. 2006 Stock Option and Incentive
Plan, as amended through the date hereof (the "Plan"), Metabolix, Inc. (the
"Company") hereby grants to the Optionee named above, who is a Director of
the Company but is not an employee of the Company, an option (the "Stock
Option") to purchase on or prior to the Expiration Date specified above all
or part of the number of shares of Common Stock, par value $0.01 per share
(the "Stock"), of the Company specified above at the Option Exercise Price
per Share specified above subject to the terms and conditions set forth
herein and in the Plan.  This Stock Option is not intended to be an
"incentive stock option" under Section 422 of the Internal Revenue Code of
1986, as amended.

    1.   EXERCISABILITY SCHEDULE.  No portion of this Stock Option may be
exercised until such portion shall have become exercisable.  Except as set
forth below, and subject to the discretion of the Committee to accelerate the
exercisability schedule hereunder, this Stock Option shall be exercisable
with respect to the following number of Option Shares on the dates indicated:

              INCREMENTAL NUMBER OF
            OPTION SHARES EXERCISABLE             EXERCISABILITY DATE
           ---------------------------            --------------------

         -------------            (---%)              ------------
         -------------            (---%)              ------------
         -------------            (---%)              ------------
         -------------            (---%)              ------------
         -------------            (---%)              ------------




           Once exercisable, this Stock Option shall continue to be
exercisable at any time or times prior to the close of business on the
Expiration Date, subject to the provisions hereof and of the Plan.

    2.   MANNER OF EXERCISE.

         (a) The Optionee may exercise this Stock Option only in the
following manner:  from time to time on or prior to the Expiration Date of
this Stock Option, the Optionee may give written notice to the Company of his
or her election to purchase some or all of the Option Shares purchasable at
the time of such notice.  This notice shall specify the number of Option
Shares to be purchased.

         Payment of the purchase price for the Option Shares may be made by
one or more of the following methods: (i) in cash, by certified or bank check
or other instrument acceptable to the Committee; (ii) through the delivery
(or attestation to the ownership) of shares of Stock that have been purchased
by the Optionee on the open market or that are beneficially owned by the
Optionee and are not then subject to any restrictions under any Company plan
and that otherwise satisfy any holding periods as may be required by the
Committee; (iii) at the discretion of the Committee, in accordance with a
cashless exercise program established with a securities brokerage firm and
approved by the Committee, provided that in the event the Optionee chooses to
pay the option purchase price as so provided, the Optionee and the broker
shall comply with such procedures and enter into such agreements of indemnity
and other agreements as the Committee shall prescribe as a condition of such
payment procedure; or (iv) a combination of (i), (ii) and (iii) above.
Payment instruments will be received subject to collection.

         The transfer to the Optionee on the records of the Company or of the
transfer agent of the Option Shares will be contingent upon the Company's
receipt from the Optionee of full payment for the Option Shares, as set forth
above and any agreement, statement or other evidence that the Company may
require to satisfy itself that the issuance of Stock to be purchased pursuant
to the exercise of Stock Options under the Plan and any subsequent resale of
the shares of Stock will be in compliance with applicable laws and
regulations.  In the event the Optionee chooses to pay the purchase price by
previously-owned shares of Stock through the attestation method, the number
of shares of Stock transferred to the Optionee upon the exercise of the Stock
Option shall be net of the Shares attested to.  In the event that the Company
establishes, for itself or using the services of a third party, an automated
system for the exercise of Stock Options, such as a system using an internet
website or interactive voice response, then the paperless exercise of Stock
Options may be permitted through the use of such an automated system.

         (b) The shares of Stock purchased upon exercise of this Stock Option
shall be transferred to the Optionee on the records of the Company or of the
transfer agent upon compliance to the satisfaction of the Committee with all
requirements under applicable laws or regulations in connection with such
transfer and with the requirements hereof and of the Plan.  The determination
of the Committee as to such compliance shall be final and binding on the
Optionee.  The Optionee shall not be deemed to be the holder of, or to have
any of the rights of a holder with respect to, any shares of Stock subject to
this Stock Option unless and until this Stock Option shall have been
exercised pursuant to the terms hereof, the Company or the transfer agent
shall have transferred the shares to the Optionee, and the Optionee's name
shall have been



                                      2



entered as the stockholder of record on the books of the Company.  Thereupon,
the Optionee shall have full voting, dividend and other ownership rights with
respect to such shares of Stock.

         (c) The minimum number of shares with respect to which this Stock
Option may be exercised at any one time shall be 100 shares, unless the
number of shares with respect to which this Stock Option is being exercised
is the total number of shares subject to exercise under this Stock Option at
the time.

         (d) Notwithstanding any other provision hereof or of the Plan, no
portion of this Stock Option shall be exercisable after the Expiration Date
hereof.

    3.   TERMINATION AS DIRECTOR. If the Optionee ceases to be a Director of
the Company, the period within which to exercise the Stock Option may be
subject to earlier termination as set forth below.

         (a) TERMINATION BY REASON OF DEATH.  If the Optionee ceases to be a
Director by reason of the Optionee's death, any exercisable portion of this
Stock Option outstanding on such date may be exercised by his or her legal
representative or legatee for a period of 12 months from the date of death or
until the Expiration Date, if earlier.

         (b) OTHER TERMINATION.  If the Optionee ceases to be a Director for
any reason other than the Optionee's death, any exercisable portion of this
Stock Option outstanding on such date may be exercised for a period of six
months from the date of termination or until the Expiration Date, if earlier.

    4.   INCORPORATION OF PLAN.  Notwithstanding anything herein to the
contrary, this Stock Option shall be subject to and governed by all the terms
and conditions of the Plan, including the powers of the Committee set forth
in Section 2(b) of the Plan.  Capitalized terms in this Agreement shall have
the meaning specified in the Plan, unless a different meaning is specified
herein.

    5.   TRANSFERABILITY.  This Agreement is personal to the Optionee, is
non-assignable and is not transferable in any manner, by operation of law or
otherwise, other than by will or the laws of descent and distribution.  This
Stock Option is exercisable, during the Optionee's lifetime, only by the
Optionee, and thereafter, only by the Optionee's legal representative or
legatee.

    6.   NO OBLIGATION TO CONTINUE AS A DIRECTOR.  Neither the Plan nor this
Stock Option confers upon the Optionee any rights with respect to continuance
as a Director of the Company.

    7.   NOTICES.  Notices hereunder shall be mailed or delivered to the
Company at its principal place of business and shall be mailed or delivered
to the Optionee at the address on file with the Company or, in either case,
at such other address as one party may subsequently furnish to the other
party in writing.



                                    3



                                       METABOLIX, INC.



                                       By:  __________________________________
                                            Title:


The foregoing Agreement is hereby accepted and the terms and conditions
thereof hereby agreed to by the undersigned.


Dated: _________________________       _______________________________________
                                       Optionee's Signature


                                       Optionee's name and address:

                                       ______________________________________

                                       ______________________________________

                                       ______________________________________




                                    4




WHENEVER CONFIDENTIAL INFORMATION IS OMITTED HEREIN (SUCH OMISSIONS ARE DENOTED
BY AN ASTERISK*), SUCH CONFIDENTIAL INFORMATION HAS BEEN SUBMITTED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.

                      MASSACHUSETTS INSTITUTE OF TECHNOLOGY

                                LICENSE AGREEMENT

                                   (EXCLUSIVE)

                                                             Date: July 15, 1993

*    CONFIDENTIAL TREATMENT REQUESTED


                                        1



                                TABLE OF CONTENTS

                                                                            Page

PREAMBLE 1                                                                     1

ARTICLE 1 - DEFINITIONS                                                        1

ARTICLE 2 - GRANT                                                              4

ARTICLE 3 - DUE DILIGENCE                                                      5

ARTICLE 4 - ROYALTIES                                                          6

ARTICLE 5 - REPORTS AND RECORDS                                                8

ARTICLE 6 - PATENT PROSECUTION                                                 9

ARTICLE 7 - INFRINGEMENT                                                      10

ARTICLE 8 - PRODUCT LIABILITY                                                 13

ARTICLE 9 - EXPORT CONTROLS                                                   14

ARTICLE 10 - NON-USE OF NAMES                                                 14

ARTICLE 11 - ASSIGNMENT                                                       15

ARTICLE 12 - DISPUTE RESOLUTION                                               16

ARTICLE 13 - TERMINATION                                                      16

ARTICLE 14 - PAYMENTS, NOTICES AND OTHER COMMUNICATIONS                       17

ARTICLE 15 - MISCELLANEOUS PROVISIONS                                         18

*    CONFIDENTIAL TREATMENT REQUESTED


                                        i



                                    PREAMBLE

     This Agreement is made and entered into this 15th day July, 1993, (the
"Effective Date") by and between MASSACHUSETTS INSTITUTE OF TECHNOLOGY, a
corporation duly organized and existing under the laws of the Commonwealth of
Massachusetts and having its principal office at 77 Massachusetts Avenue,
Cambridge, Massachusetts 02139, U.S.A. (hereinafter referred to as "M.I.T."),
and METABOLIX, INC., a corporation duly organized under the laws of the
Commonwealth of Massachusetts and having its principal office at 285
Commonwealth Avenue, Boston, Massachusetts 02115, U.S.A. (hereinafter referred
to as "LICENSEE").

                                   WITNESSETH

     WHEREAS, M.I.T. is the owner of certain PATENT RIGHTS (as later defined
herein) relating to M.I.T. Case No. 4403, "Method for Producing Novel Polyester
Biopolymers" by Oliver P. Peoples and Anthony J. Sinskey, USSN 566,535, USSN
700,109 and related technology, and has the right to grant licenses under said
PATENT RIGHTS, subject only to a royalty-free, nonexclusive license heretofore
granted to the United States Government.

     WHEREAS, M.I.T. desires to have the PATENT RIGHTS utilized in the public
interest and is willing to grant a license thereunder;

     WHEREAS, LICENSEE has represented to M.I.T., to induce M.I.T. to enter into
this Agreement, that LICENSEE is knowledgeable with respect to the subject
matter related to the LICENSED PRODUCT(s) (as later defined herein) and/or the
use of the LICENSED PROCESS(es) (as later defined herein) and that it shall
commit itself to a thorough, vigorous and diligent program of exploiting the
PATENT RIGHTS so that public utilization shall result therefrom; and

     WHEREAS, LICENSEE desires to obtain a license under the PATENT RIGHTS upon
the terms and conditions hereinafter set forth.

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto agree as follows:

                             ARTICLE 1 - DEFINITIONS

     For the purposes of this Agreement, the following words and phrases shall
have the following meanings:

     1.1 "LICENSEE" shall include a related company of METABOLIX, INC. the
voting stock of which is directly or indirectly at least fifty percent (50%)
owned and controlled by

*    CONFIDENTIAL TREATMENT REQUESTED


                                        1



METABOLIX, INC., an organization which directly or indirectly controls more than
fifty percent (50%) of the voting stock of METABOLIX, INC. and an organization
the majority ownership of which is directly or indirectly common to the
ownership of METABOLIX, INC.

     1.2 "PATENT RIGHTS" shall mean all of the following M.I.T. intellectual
property:

          (a)  The United States and foreign patents and/or patent applications
               and invention disclosures listed in Appendix A;

          (b)  United States and foreign patents issued from the application and
               invention disclosures listed in Appendix A and from divisionals
               and continuations of these applications and invention
               disclosures;

          (c)  claims of United States and foreign continuation-in-part
               applications and of the resulting patents which are directed to
               subject matter specifically described in the United States and
               foreign applications and invention disclosures listed in Appendix
               A;

          (d)  claims of all foreign patent applications and of the resulting
               patents which are directed to subject matter specifically
               described in the United States patents and/or patent applications
               and invention disclosures described in (a), (b), (c) or (d)
               above; and

          (e)  any reissues of United States patents described in (a), (b), (c)
               or (d) above.

     1.3 A "LICENSED PRODUCT" shall mean any product or part thereof which:

          (a)  is covered in whole or in part by an issued, unexpired valid
               claim or a pending claim contained in the PATENT RIGHTS in the
               country in which any such product or part thereof is made, used
               or sold; or

          (b)  is manufactured by using a process or is employed to practice a
               process which is covered in whole or in part by an issued,
               unexpired valid claim or a pending claim contained in the PATENT
               RIGHTS in the country in which a LICENSED PROCESS is used or in
               which such product or part thereof is used or sold.

     1.4 A "LICENSED PROCESS" shall mean any process which:

          (a)  is covered in whole or in part by an issued, unexpired valid
               claim or a pending claim contained in the PATENT RIGHTS in the
               country in which such process is used or in which the LICENSED
               PRODUCT made thereby is used or sold.

*    CONFIDENTIAL TREATMENT REQUESTED


                                        2



     1.5 "NET SALES" shall mean LICENSEE's (and its sublicensees') billings for
LICENSED PRODUCTS and LICENSED PROCESSES produced hereunder less the sum of the
following:

          (a)  discounts allowed in amounts customary in the trade;

          (b)  sales, tariff duties and/or use taxes directly imposed and with
               reference to particular sales;

          (c)  outbound transportation prepaid or allowed; and

          (d)  amounts allowed or credited on returns.

     No deduction shall be made for commissions paid to individuals whether they
be with independent sales agencies or regularly employed by LICENSEE and on its
payroll, or for cost of collections. LICENSED PRODUCTS shall be considered
"sold" when billed out or invoiced. "NET SALES" shall not include LICENSED
PRODUCTS sold for clinical testing, research or development purposes.

     Where the LICENSED PRODUCT is a combination product consisting of polymer
whose composition or manufacture is covered by the PATENT RIGHTS plus other
materials which are not covered by the PATENT RIGHTS, the "NET SALES" shall mean
the NET SALES of the full product multiplied by the fully loaded manufacturing
cost of the polymer divided by the total fully loaded manufacturing cost of the
total combination material. When the LICENSED PRODUCT consists of a combination
product consisting of a component made from the polymer, plus other components,
then "NET SALES" shall mean NET SALES of the total product multiplied by the
fully loaded manufacturing cost of the polymer component divided by the fully
loaded manufacturing cost of the total product. By "fully loaded" is meant the
cost of goods sold plus overhead allocated to production and the sale thereof.

*    CONFIDENTIAL TREATMENT REQUESTED


                                        3



                               ARTICLE 2 - GRANT

     2.1 M.I.T. hereby grants to LICENSEE the worldwide right and license to
make, have made, use, lease and sell the LICENSED PRODUCTS and to practice the
LICENSED PROCESSES to the end of the term for which the PATENT RIGHTS are
granted unless this Agreement shall be sooner terminated according to the terms
hereof.

     2.2 LICENSEE agrees that to the extent possible LICENSED PRODUCTS leased or
sold in the United States shall be manufactured substantially in the United
States and that in those cases where domestic manufacture is impractical it will
request appropriate waivers from the Department of Commerce pursuant to 37
C.F.R. Sec. 401.14(i).

     2.3 In order to establish a period of exclusivity for LICENSEE, M.I.T.
hereby agrees that it shall not grant any other license to make, have made, use,
lease and sell LICENSED PRODUCTS or to utilize LICENSED PROCESSES during the
term of this agreement.

     2.4 M.I.T. reserves the right to practice under the PATENT RIGHTS for its
own noncommercial research purposes.

     2.5 M.I.T. further grants to LICENSEE a ninety (90) day first option to
negotiate for an exclusive license to new inventions dominated by the claims of
the PATENT RIGHTS as originally licensed which arise from the laboratory of
Prof. Anthony Sinskey at M.I.T. within four (4) years of the Effective Date of
this Agreement. Such option shall be subject to any rights granted in
sponsorship agreements to sponsors of the research from which any such invention
arises.

*    CONFIDENTIAL TREATMENT REQUESTED


                                        4



     2.6 LICENSEE shall have the right to enter into sublicensing agreements for
the rights, privileges and licenses granted hereunder. Upon any termination of
this Agreement, sublicensees' rights shall also terminate, subject to Paragraph
13.6 hereof.

     2.7 LICENSEE agrees that any sublicenses granted by it shall provide that
the obligations to M.I.T. of Articles 2, 5, 7, 8, 9, 10, 12, 13 and 15 of this
Agreement shall be binding upon the sublicensee as if it were a party to this
Agreement. LICENSEE further agrees to attach copies of these Articles to
sublicense agreements.

     2.8 LICENSEE agrees to forward to M.I.T. a copy of any and all sublicense
agreements promptly upon execution by the parties.

     2.9 The license granted hereunder shall not be construed to confer any
rights upon LICENSEE by implication, estoppel or otherwise as to any technology
not specifically set forth in Appendix A hereof.

                           ARTICLE 3 - DUE DILIGENCE

     3.1 LICENSEE shall use diligent efforts to bring LICENSED PRODUCTS to
market through a thorough, vigorous and diligent program for exploitation of the
PATENT RIGHTS and to continue active, diligent development and marketing efforts
for LICENSED PRODUCTS throughout the life of this Agreement.

     3.2 LICENSEE shall raise a cumulative total of investment capital and/or
research and development funds of at least:

          (a)  Five Hundred Thousand Dollars ($500,000) within twelve (12)
               months from the Effective Date,

          (b)  Two Million Dollars ($2,000,000) including funds under (a) hereof
               within twenty-seven (27) months from the Effective Date,

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                                        5



          (c)  Five Million Dollars ($5,000,000) including funds under (a) and
               (b) hereof within fifty-one (51) months from the Effective Date.

     Included in the cumulative investment capital and/or research and
development funds hereunder shall be such funds invested or expanded by a joint
venture in which LICENSEE owns at least a 33% interest provided that such finds
are used substantially for the development and marketing of LICENSED PRODUCTS.

     3.3 LICENSEE's failure to perform in accordance with Paragraphs 3.1 and 3.2
above shall be grounds for M.I.T. to terminate this Agreement pursuant to
Paragraph 13.3 hereof.

                              ARTICLE 4 - ROYALTIES

     4.1 For the rights, privileges and license granted hereunder, LICENSEE
shall pay royalties to M.I.T. in the manner hereinafter provided to the end of
the term of the PATENT RIGHTS or until this Agreement shall earlier be
terminated:

          (a)  A License Issue Fee of *, which said License Issue Fee shall be
               deemed earned and due in two parts:

               (i)  * due upon the signing of this Agreement; and

               (ii) * due upon the raising of Two Million Dollars ($2,000,000)
                    in investment capital by LICENSEE.

          (b)  License Maintenance Fees of Twenty-Five Thousand Dollars
               ($25,000) per year payable on the second anniversary of the
               Effective Date and on each subsequent anniversary during the term
               of this Agreement; provided, however, that Running Royalties
               subsequently due on NET SALES for each said year, if any, shall
               be creditable against the License Maintenance Fee for said year.
               License Maintenance Fees paid in excess of Running Royalties
               shall not be creditable to Running Royalties for future years.

          (c)  * of the NET SALES of LICENSED PRODUCTS and LICENSED PROCESSES by
               LICENSEE.

          (d)  A share of sublicensing revenue received by LICENSEE equal to:

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                                        6



               (i)  * if only the PATENT RIGHTS are sublicensed.

               (ii) Where the sublicensee revenue includes revenue received for
                    PATENT RIGHTS sublicensed in conjunction with products
                    and/or substantial technology developed by LICENSEE, * up to
                    the time LICENSEE has raised Five Hundred Thousand Dollars
                    ($500,000) as provided in Section 3.2(a) hereof, thereafter
                    * up to the time LICENSEE has raised Two Million Dollars
                    ($2,000,000) as provided in Section 3.2(b) hereof and
                    thereafter * for the remaining term of this Agreement.

               In no case shall the revenue paid to M.I.T. for each sublicense
               be less than * of the sales value of the LICENSED PRODUCTS made,
               used or sold by that sublicensee.

          (e)  Shares of common stock of LICENSEE equal to * of the outstanding
               common and preferred shares of LICENSEE at the completion of the
               first round of equity of investment.

          (f)  Antidilution: If, following the first round of equity funding,
               LICENSEE issues additional shares of stock such that
               M.I.T.'s total share of outstanding stock falls below *, then
               LICENSEE shall grant to M.I.T. additional shares such that
               M.I.T.'s fraction of total outstanding shares remains at * until
               a total of Four Million Dollars ($4,000,000) is invested in
               LICENSEE. Thereafter, no additional shares shall be due to
               M.I.T., provided that in subsequent rounds of financing, M.I.T.
               shall have the right to invest in additional shares, on a pro
               rata basis, at the same price as is granted to other
               investors holding common or preferred stock.

     4.2 All payments due hereunder shall be paid in full, without deduction of
taxes or other fees which may be imposed by any government and which shall be
paid by LICENSEE.

     4.3 No multiple royalties shall be payable because any LICENSED PRODUCT,
its manufacture, use, lease or sale are or shall be covered by more than one
PATENT RIGHTS patent application or PATENT RIGHTS patent licensed under this
Agreement.

     4.4 Royalty payments shall be paid in United States dollars in Cambridge,
Massachusetts, or at such other place as M.I.T. may reasonably designate
consistent with the laws and regulations controlling in any foreign country. If
any currency conversion shall be

*    CONFIDENTIAL TREATMENT REQUESTED


                                       7



required in connection with the payment of royalties hereunder, such conversion
shall be made by using the exchange rate prevailing at the Chase Manhattan Bank
(N.A.) on the last business day of the calendar quarterly reporting period to
which such royalty payments relate.

                        ARTICLE 5 - REPORTS AND RECORDS

     5.1 LICENSEE shall keep full, true and accurate books of account containing
all particulars that may be necessary for the purpose of showing the amounts
payable to M.I.T. hereunder. Said books of account shall be kept at LICENSEE's
principal place of business or the principal place of business of the
appropriate division of LICENSEE to which this Agreement relates. Said books and
the supporting data shall be open at all reasonable times for three (3) years
following the end of the calendar year to which they pertain, to the inspection
of M.I.T. or its agents for the purpose of verifying LICENSEE's royalty
statement or compliance in other respects with this Agreement. Should such
inspection lead to the discovery of a greater than Ten Percent (10%) discrepancy
in reporting, LICENSEE agrees to pay the full cost of such inspection.

     5.2 LICENSEE, within sixty (60) days after December 31 of each year prior
to the first commercial sale of a LICENSED PRODUCT and sixty days after March
31, June 30, September 30 and December 31, of each year after the first
commercial sales of a LICENSED PRODUCT, shall deliver to M.I.T. true and
accurate reports, giving such particulars of the business conducted by LICENSEE
during the preceding three-month period under this Agreement as shall be
pertinent to a royalty accounting hereunder. These shall include at least the
following:

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                                       8



          (a)  number of LICENSED PRODUCTS manufactured and sold by LICENSEE;

          (b)  total billings for LICENSED PRODUCTS manufactured and sold by
               LICENSEE;

          (c)  accounting for all LICENSED PROCESSES used or sold by LICENSEE;

          (d)  deductions applicable as provided in Paragraph 1.5;

          (e)  total royalties due; and

          (f)  names and addresses of all sublicensees of LICENSEE.

     LICENSEE shall endeavor to obtain similar information from its sublicensees
and will provide such information which is obtained to M.I.T.

     5.3 With each such report submitted, LICENSEE shall pay to M.I.T. the
royalties due and payable under this Agreement. If no royalties shall be due,
LICENSEE shall so report.

     5.4 On or before the ninetieth (90th) day following the close of LICENSEE's
fiscal year, LICENSEE shall provide M.I.T. with LICENSEE's certified financial
statements for the preceding fiscal year including, at a minimum, a Balance
Sheet and an Operating Statement.

     5.5 The royalty payments set forth in this Agreement and amounts due under
Article 6 shall, if overdue, bear interest until payment at a per annum rate Two
Percent (2%) above the prime rate in effect at the Chase Manhattan Bank (N.A.)
on the due date. The payment of such interest shall not foreclose M.I.T. from
exercising any other rights it may have as a consequence of the lateness of any
payment.

                         ARTICLE 6 - PATENT PROSECUTION

     6.1 Throughout the term of this Agreement, LICENSEE, at its own expense,
shall have the right, but shall not be obligated, to file such United States
and/or foreign patent

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                                       9



applications covering any patentable invention included within the Patent
Rights; to prosecute and defend such applications against third party
oppositions; and upon grant of any Letters Patent covering inventions included
within the Patent Rights, to maintain such Letters Patent in force. LICENSEE
agrees to seek strong, broad claims in the best interest of M.I.T. and shall not
abandon the subject matter of any substantive claim without the permission of
M.I.T., such permission not to be unreasonably withheld. If LICENSEE elects not
to file or prosecute such applications or maintain such Letters Patent, LICENSEE
shall so notify M.I.T., in which event M.I.T. shall have the right to file or
prosecute such applications and to maintain such Letters Patent.

     6.2 Payment of all out-of-pocket fees and costs relating to the filing,
prosecution, and maintenance of the PATENT RIGHTS shall be the responsibility of
LICENSEE, whether such fees and costs were incurred before or after the date of
this Agreement. Payment for out-of-pocket costs incurred by M.I.T. prior to the
Effective Date shall be made in three parts:

          (a)  Twenty-Five Percent (25%) on or before a date three (3) months
               from the Effective Date of this Agreement;

          (b)  Twenty-Five Percent (25%) on or before a date nine (9) months
               from the Effective Date of this Agreement;

          (c)  The remaining Fifty Percent (50%) on or before a date fifteen
               (15) months from the Effective Date of this Agreement,

     Patenting costs incurred by M.I.T. after the Effective Date of this
Agreement shall be paid within sixty (60) days of invoicing by M.I.T.

                            ARTICLE 7 - INFRINGEMENT

     7.1 LICENSEE shall inform M.I.T. promptly in writing of any alleged
infringement of the PATENT RIGHTS by a third party and of any available evidence
thereof.

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                                       10



     7.2 During the term of this Agreement, LICENSEE shall have the right, but
shall not be obligated, to prosecute at its own expense any such infringements
of the PATENT RIGHTS and, in furtherance of such right, M.I.T. hereby agrees
that LICENSEE may join M.I.T. as a party plaintiff in any such suit, without
expense to M.I.T. The total cost of any such infringement action commenced or
defended solely by LICENSEE shall be borne by LICENSEE, LICENSEE may, for such
purposes, use the name of M.I.T. as party plaintiff; provided, however, that
such right to bring an infringement action shall remain in effect only for so
long as the license granted herein remains exclusive. No settlement, consent
judgement or other voluntary final disposition of the suit may be entered into
without the consent of M.I.T. which consent shall not unreasonably be withheld.
LICENSEE shall indemnify M.I.T. against any order for costs that may be made
against M.I.T. in proceedings commenced and defended solely by LICENSEE.

     7.3 In the event that LICENSEE shall undertake the enforcement and/or
defense of the PATENT RIGHTS by litigation, LICENSEE may withhold up to * of the
royalties otherwise thereafter due M.I.T. hereunder and apply the same toward
reimbursement of up to * of LICENSEE's expenses, including reasonable attorneys'
fees, in connection therewith. Any recovery of damages by LICENSEE for any such
suit shall be applied first in satisfaction of any unreimbursed expenses and
legal fees of LICENSEE relating to the suit, and next toward reimbursement of
M.I.T. for any royalties past due or withheld and applied pursuant to this
Article VII. The balance remaining from any such recovery attributable to
damages for lost sales shall be divided according to the royalty percentages set
forth in Section 4.1; any remaining balance shall be paid to LICENSEE.

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                                       11



     7.4 If within six (6) months after having been notified of any alleged
infringement, LICENSEE shall have been unsuccessful in persuading the alleged
infringer to desist and shall not have brought and shall not be diligently
prosecuting an infringement action, or if LICENSEE shall notify M.I.T. at any
time prior thereto of its intention not to bring suit against any alleged
infringer, then, and in those events only, M.I.T. shall have the right, but
shall not be obligated, to prosecute at its own expense any infringement of the
PATENT RIGHTS, and, in furtherance of such right, LICENSEE hereby agrees that
M.I.T. may include LICENSEE as a party plaintiff in any such suit, without
expense to LICENSEE. The total cost of any such infringement action commenced or
defended solely by M.I.T. shall be borne by M.I.T., and M.I.T. shall keep any
recovery or damages for past infringement derived therefrom.

     7.5 In the event that a declaratory judgment action alleging invalidity or
noninfringement of any of the PATENT RIGHTS shall be brought against LICENSEE,
M.I.T., at its option, shall have the right, within sixty (60) days after
commencement of such action, to join in the defense of the action at its own
expense.

     7.6 In any infringement suit as either party may institute to enforce the
PATENT RIGHTS pursuant to this Agreement, the other party hereto shall, at the
request and expense of the party initiating such suit, cooperate in all respects
and, to the extent possible, have its employees testify when requested and make
available relevant records, papers, information, samples, specimens and the
like.

     7.7 LICENSEE, during the period of this Agreement, shall have the sole
right in accordance with the terms and conditions herein to sublicense any
alleged infringer for future use of the PATENT RIGHTS.

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                                       12



                         ARTICLE 8 - PRODUCT LIABILITY

     8.1 LICENSEE shall at all times during the term of this Agreement and
thereafter, indemnify, defend and hold M.I.T., its trustees, officers, employees
and affiliates, harmless against all claims and expenses, including legal
expenses and reasonable attorneys' fees, arising out of the death of or injury
to any person or persons or out of any damage to property and against any other
claim, proceeding, demand, expense and liability of any kind whatsoever
resulting from the production, manufacture, sale, use, lease, consumption or
advertisement of the LICENSED PRODUCT(s) and/or LICENSED PROCESS(es) or arising
from any obligation of LICENSEE hereunder.

     8.2 Prior to the first use of a LICENSED PRODUCT on humans, LICENSEE shall
obtain and carry in full force and effect liability insurance which shall
protect LICENSEE and M.I.T. in regard to events covered by Paragraph 8.1 above.

     8.3 EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, M.I.T. MAKES
NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR
IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS FOR
A PARTICULAR PURPOSE, AND VALIDITY OF PATENT RIGHTS CLAIMS, ISSUED OR PENDING.
NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED AS A REPRESENTATION MADE OR
WARRANTY GIVEN BY M.I.T. THAT THE PRACTICE BY LICENSEE OF THE LICENSE GRANTED
HEREUNDER SHALL NOT INFRINGE THE PATENT RIGHTS OF ANY THIRD PARTY.

*    CONFIDENTIAL TREATMENT REQUESTED


                                       13



                          ARTICLE 9 - EXPORT CONTROLS

     It is understood that M.I.T. is subject to United States laws and
regulations controlling the export of technical data, computer software,
laboratory prototypes and other commodities (including the Arms Export Control
Act, as amended and the Export Administration Act of 1979), and that its
obligations hereunder are contingent on compliance with applicable United States
export laws and regulations. The transfer of certain technical data and
commodities may require a license from the cognizant agency of the United States
Government and/or written assurances by LICENSEE that LICENSEE shall not export
data or commodities to certain foreign countries without prior approval of such
agency. M.I.T. neither represents that a license shall not be required not that,
if required, it shall be issued.

                         ARTICLE 10 - NON-USE OF NAMES

     Except as required by law, LICENSEE shall not use the names or trademarks
of the Massachusetts Institute of Technology, nor any adaptation thereof, nor
the names of any of its employees, in any advertising, promotional or sales
literature without prior written consent obtained from M.I.T., or said employee,
in each case, except that LICENSEE may state that it is licensed by M.I.T. under
one or more of the patents and/or applications comprising the PATENT RIGHTS.
LICENSEE may, however, use the name of Oliver P. Peoples, Anthony J. Sinskey,
and/or any other employee of M.I.T. who is a consultant or member of an advisory
board of LICENSEE, with their permission, and provided, also, that their
affiliation with LICENSEE is identified.

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                            ARTICLE 11 - ASSIGNMENT

     This Agreement is not assignable, except in the case where LICENSEE
transfers its business relating to the subject matter hereof or transfers a
subsidiary of LICENSEE, or a joint venture in which LICENSEE is a participant,
or all of any other entity in which LICENSEE has a controlling interest,
whereupon transferee shall acquire all of LICENSEE's benefits and obligations
hereunder. Any other assignment shall be void.

                        ARTICLE 12 - DISPUTE RESOLUTION

     12.1 Except for the right of either party to apply to a court of competent
jurisdiction for a temporary restraining order, a preliminary injunction or
other equitable relief to preserve the status quo or prevent irreparable harm,
any and all claims, disputes or controversies arising under, out of or in
connection with the Agreement, including any dispute relating to patent validity
or infringement, which the parties shall be unable to resolve within one hundred
and twenty (120) days shall be mediated in good faith. The party raising such
dispute shall promptly advise the other party of such claim, dispute or
controversy in a writing which describes in reasonable detail the nature of such
dispute. By not later than ten (10) business days after the recipient has
received such notice of dispute, each party shall have selected for itself a
representative who shall have the authority to bind such party, and shall
additionally have advised the other party in writing of the name and title of
such representative. By not later than twenty (20) business days after the date
of such notice of dispute, such representatives shall schedule a date for a
mediation hearing with the Cambridge Dispute Settlement Center or Endispute Inc.
in Cambridge, Massachusetts. The parties shall enter into good faith mediation
and shall share the costs equally. If the representatives of the parties have
not been able to

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                                       15



resolve the dispute within thirty (30) business days after such mediation
hearing, the parties shall have the right to pursue any other remedies legally
available to resolve such dispute in either the Courts of the Commonwealth of
Massachusetts or in the United States District Court for the District of
Massachusetts, to whose jurisdiction for such purposes M.I.T. and LICENSEE each
hereby irrevocably consents and submits.

     12.2 Notwithstanding the foregoing, nothing in this Article shall be
construed to waive any rights or timely performance of any obligations existing
under this Agreement.

                            ARTICLE 13 - TERMINATION

     13.1 If LICENSEE shall cease to carry on its business, this Agreement shall
terminate upon notice by M.I.T., except as provided in Article 11.

     13.2 Should LICENSEE fail to make any payment whatsoever due and payable to
M.I.T. hereunder, M.I.T. shall have the right to terminate this Agreement
effective on sixty (60) days' notice, unless LICENSEE shall make all such
payments to M.I.T. within said sixty (60) day period. Upon the expiration of the
sixty (60) day period, if LICENSEE shall not have made all such payments to
M.I.T., the rights, privileges and license granted hereunder shall automatically
terminate.

     13.3 Upon any material breach or default of this Agreement by LICENSEE,
other than those occurrences set out in Paragraphs 13.1 and 13.2 hereinabove,
which shall always take precedence in that order over any material breach or
default referred to in this Paragraph 13.3, M.I.T. shall have the right to
terminate this Agreement and the rights, privileges and license granted
hereunder effective on one hundred and twenty (120) days' notice to LICENSEE.
Such termination shall become automatically effective unless LICENSEE shall have
cured any such

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                                       16



material breach or default prior to the expiration of the one hundred and twenty
(120) day period.

     13.4 LICENSEE shall have the right to terminate this Agreement at any time
on six (6) months' notice to M.I.T., and upon payment of all amounts due M.I.T.
through the effective date of the termination.

     13.5 Upon termination of this Agreement for any reason, nothing herein
shall be construed to release either party from any obligation that matured
prior to the effective date of such termination. LICENSEE and any sublicensee
thereof may, however, after the effective date of such termination, sell all
LICENSED PRODUCTS, and complete LICENSED PRODUCTS in the process of manufacture
at the time of such termination and sell the same, provided that LICENSEE shall
pay to M.I.T. the Running Royalties thereon as required by Article 4 of this
Agreement and shall submit the reports required by Article 5 hereof on the sales
of LICENSED PRODUCTS.

     13.6 Upon termination of this Agreement for any reason, any sublicensee not
then in default shall have the right to seek a license from M.I.T. M.I.T. agrees
to negotiate such licenses in good faith under reasonable terms and conditions.

            ARTICLE 14 - PAYMENTS, NOTICES AND OTHER COMMUNICATIONS

     Any payment, notice or other communication pursuant to this Agreement shall
be sufficiently made or given on the date of mailing if sent to such party by
certified first class mail, postage prepaid, addressed to it at its address
below or as it shall designate by written notice given to the other party:

     In the case of M.I.T.:

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                                       17



                    Director
                    Technology Licensing Office
                    Massachusetts Institute of Technology
                    Room E32-300
                    Cambridge, Massachusetts 02139

In the case of LICENSEE:

                    President
                    Metabolix, Inc.
                    285 Commonwealth Ave.
                    Boston, MA 02115

                      ARTICLE 15 - MISCELLANEOUS PROVISIONS

     15.1 This Agreement shall be construed, governed, interpreted and applied
in accordance with the laws of the Commonwealth of Massachusetts, U.S.A., except
that questions affecting the construction and effect of any patent shall be
determined by the law of the country in which the patent was granted.

     15.2 The parties hereto acknowledge that this Agreement sets forth the
entire Agreement and understanding of the parties hereto as to the subject
matter hereof, and shall not be subject to any change or modification except by
the execution of a written instrument subscribed to by the parties hereto.

     15.3 The provisions of this Agreement are severable, and in the event that
any provisions of this Agreement shall be determined to be invalid or
unenforceable under any controlling body of the law, such invalidity or
unenforceability shall not in any way affect the validity or enforceability of
the remaining provisions hereof.

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     15.4 The failure of either party to assert a right hereunder or to insist
upon compliance with any term or condition of this Agreement shall not
constitute a waiver of that right or excuse a similar subsequent failure to
perform any such term or condition by the other party.

     IN WITNESS WHEREOF, the parties have duly executed this Agreement the day
and year set forth below.

                                        MASSACHUSETTS INSTITUTE OF TECHNOLOGY


                                        By  /s/ J.D. Litster
                                            ------------------------------------
                                        Name J.D. Litster
                                        Title Vice President for Research
                                        Date July 15, 1993


                                        METABOLIX, INC.


                                        By  /s/ Edward M. Muller
                                            ------------------------------------
                                        Name Edward M. Muller
                                        Title Chief Executive Officer
                                        Date 7/15/93

*    CONFIDENTIAL TREATMENT REQUESTED


                                       19



                           APPENDIX A - PATENT RIGHTS

UNITED STATES PATENT RIGHTS

     M.I.T. Case No. 4403

     "Method for Producing Novel Polyester Biopolymers"
     By Oliver P. Peoples and Anthony J. Sinskey

     USSN 566,535        08/13/90
     USSN 700,109        05/08/91
     USSN 944,488        09/14/92
     USSN 944,839        09/14/92
     USSN 944,881        09/14/92
     Application Filed   06/03/93

FOREIGN PATENT RIGHTS

     Japan application filed 07/10/90
     EPC SN 88908449.7 filed 07/10/90
     CANADA filed 07/10/90

INVENTION DISCLOSURES

     M.I.T. Case No. 6113
     "Polymerase Technology for the Production of Long Chain and Short Chain
     Polymers"
     By: Tillman Gerngross, Oliver P. Peoples, Anthony J. Sinskey and Simon F.
     Williams

     M.I.T. Case No. 5977
     "Antibodies to A. eutrophus H16 PHB Synthase"
     By: Anthony J. Sinskey and Oliver P. Peoples

     M.I.T. Case No. 6010
     "Use of PHA Polymerases to Detect, Modify or Control Formation PHA's in
     Plants, Animals or Other Biological Systems"
     By: Oliver P. Peoples and Anthony J. Sinskey

     M.I.T. Case No. 6086
     "Anti-Short-Chain Polyhydroxyalkanoate Monoclonal Antibodies"
     By: Oliver P. Peoples, Anthony J. Sinskey and Simon F. Williams

*    CONFIDENTIAL TREATMENT REQUESTED


                                       20



                      MASSACHUSETTS INSTITUTE OF TECHNOLOGY
                         28 CARLTON STREET, ROOM E32-300
                            CAMBRIDGE, MA 02142-1324

TECHNOLOGY LICENSING OFFICE                            TELEPHONE: (617) 253-8088
                                                       FACSIMILE: (617) 258-8790
                                                       TELEX: 921473 MIT CAM

                                 August 10, 1993

Mr. Edward M. Muller
Metabolix Inc.
P.O. Box 695
Cambridge, MA 02142

                      LETTER OF AMENDMENT (FIRST AMENDMENT)

Dear Ed;

     This is in response to your letter of July 21 concerning the
M.I.T./Metabolix License Agreement dated July 15, 1993.

     We hereby recognize that the following M.I.T. Cases

     No. 5977
     "Antibodies to A. eutrophus H16 PHB Synthase"
     By Anthony J. Sinskey and Oliver P. Peoples

     No. 6010
     "Use of PHA Polymerases to Detect, Modify or Control Formation PHA's in
     Plants, Animals or Other Biological Systems"
     By Oliver P. Peoples and Anthony J. Sinskey

     No. 6086
     "Anti-Short-Chain Polyhydroxyalkanoate Monoclonal Antibodies"
     By Oliver P. Peoples, Anthony J. Sinskey, and Simon F. Williams

were waived by M.I.T. to the inventors and are therefore no longer the property
of M.I.T.

*    CONFIDENTIAL TREATMENT REQUESTED


                                       21



     This letter therefore amends the License Agreement to remove these cases
from the PATENT RIGHTS of Appendix A.

     Please sign and return one copy of this letter acknowledging this Amendment
for Metabolix.

                                        Sincerely,


                                        /s/ Lita L. Nelson
                                        ----------------------------------------
                                        Lita L. Nelsen
                                        Director

LLN/ak

5977.6010.6086.Metabolix.agt.810

ACKNOWLEDGED by:

METABOLIX, INC.


By: /s/Edward M. Muller
    ---------------------------------
Name: Edward M. Muller
Title: Chief Executive Officer
Date: August 23, 1993

*    CONFIDENTIAL TREATMENT REQUESTED


                                       22



                                SECOND AMENDMENT

This Second Amendment with the effective date of March 6, 1995 is to the License
Agreement dated July 15, 1993, between MASSACHUSETTS INSTITUTE OF TECHNOLOGY and
METABOLIX, INC.

The parties thereto now further agree as follows:

1. The PATENT RIGHTS of M.I.T. Case 6726 "Overproduction of Soluble PHA
Synthase" by Oliver P. Peoples, et al., shall be jointly owned by the parties.
Inventor Oliver P. Peoples, an employee of Metabolix, shall assign his rights in
the invention jointly to M.I.T. and Metabolix, recognizing that his work on this
invention was performed at both institutions. As of the date of this amendment,
these PATENT RIGHTS consist of:

          U.S.S.N. 290131, Filed 08/12/94

2. M.I.T.'s rights in the PATENT RIGHTS of this case shall be added to the
PATENT RIGHTS of the License Agreement, thereby granting Metabolix an exclusive
license to these PATENT RIGHTS.

3. Metabolix shall reimburse M.I.T. for all of its out-of-pocket costs incurred
for filing and prosecution of these PATENT RIGHTS.

4. After execution of this Amendment, Metabolix shall assume responsibility for
prosecution of M.I.T. Case 6726, at its own expense, keeping M.I.T. informed of
its actions. M.I.T. agrees that Metabolix may abandon all or a portion of the
PATENT RIGHTS at Metabolix's own discretion.

Agreed to for:

MASSACHUSETTS INSTITUTE OF TECHNOLOGY


By: /s/Lita L. Nelson
    ----------------------------------------
Name: Lita L. Nelson
Title: Director, Technology Licensing Office
Date: March 31, 1995


METABOLIX, INC.


By: /s/ Edward M. Muller
    ----------------------------------------
Name: Edward M. Muller
Title: President
Date: March 14, 1993

*    CONFIDENTIAL TREATMENT REQUESTED


                                       23



                                 THIRD AMENDMENT

This Amendment with the effective date of March 6, 1995 is to the License
Agreement dated July 15, 1993 between MASSACHUSETTS INSTITUTE OF TECHNOLOGY and
METABOLIX, INC.

The parties thereto now further agree as follows:

1. The PATENT RIGHTS of M.I.T. Case 6867 Polyhydroxyalkanoates of Higher
Molecular Weight and Control of the Molecular Weight of Polyhydroxyalkanoates by
Modulation of Polyhydroxyalkanoate Synthase by Chokyun Rha, Anthony J. Sinskey,
and K.D. Snell shall be added to the PATENT RIGHTS of the License Agreement
under all the terms and conditions of the License Agreement.

2. Metabolix shall reimburse M.I.T. for all costs incurred in the filing,
prosecution and maintenance of the PATENT RIGHTS of this case. M.I.T. shall
consult with Metabolix on foreign filing of the PATENT RIGHTS of this case and
shall file and prosecute foreign patents only upon Matabolix's request.

4. Metabolix shall pay to M.I.T. a license issue fee of * for Case 6867. No
additional license maintenance fees or royalties shall be due other than those
specified in the License Agreement.

Agreed to for:

MASSACHUSETTS INSTITUTE OF TECHNOLOGY


By: /s/Lita L. Nelson
    ----------------------------------------
Name: Lita L. Nelson
Title: Director, Technology Licensing Office
Date: March 31, 1995


METABOLIX, INC.


By: /s/ Edward M. Muller
    ----------------------------------------
Name: Edward M. Muller
Title: President
Date: March 14, 1993

*    CONFIDENTIAL TREATMENT REQUESTED


                                       24



                                FOURTH AMENDMENT

     This Fourth Amendment, effective as of the date set forth above the
signatures of the patties below, amends the License Agreement dated July 15,
1993, as amended ("7/15/93 LICENSE AGREEMENT") between the Massachusetts
Institute of Technology ("M.I.T.") and Metabolix, Inc. ("LICENSEE").

     WHEREAS, LICENSEE and M.I.T. wish to modify the provisions of the 7/15/93
LICENSE AGREEMENT.

     NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties hereby agree to modify the 7/15/93 LICENSE
AGREEMENT as follows:

     1. Section 2.6 shall be deleted and replaced with the following:

     LICENSEE shall have the right to enter into sublicensing agreements for the
rights, privileges and licenses granted hereunder. In addition, LICENSEE may
grant any sublicensee the right to sublicense to third parties any or all of the
rights, privileges and licenses granted to such sublicensee and such third party
sublicenses may also include the right to sublicense.

     Upon any termination of this Agreement, the rights of all sublicensees
shall also terminate, subject to Paragraph 13.6 hereof.

     2. Section 13.6 shall be deleted and replaced with the following:

     Upon termination of this Agreement for any reason, any of LICENSEE's direct
sublicensees that are not then in default shall have the right to seek a license
from M.I.T. M.I.T. agrees to negotiate such licenses in good faith under
reasonable terms and conditions. Notwithstanding the foregoing, should Tepha,
Inc. request a license, M.I.T. hereby agrees to grant such a license under terms
and conditions no less favorable as a whole than those granted to Tepha, Inc. by
LICENSEE.

     3. The final paragraph of Section 4.1(d) shall be deleted and replaced with
the following:

     The royalties due under this Section 4.1(d) shall apply to revenue received
by LICENSEE from any and all sublicenses, regardless of whether the sublicense
is granted by LICENSEE, or by any sublicensee or any of their sublicensees. In
no case shall the revenue paid to M.I.T. for each sublicense be less than * of
the sales value of the LICENSED PRODUCTS made, used or sold by that sublicensee.

*    CONFIDENTIAL TREATMENT REQUESTED


                                       25



     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
under seal by their duly authorized representatives.

THE EFFECTIVE DATE OF THIS FOURTH AMENDMENT IS SEPTEMBER 29, 2002.


MASSACHUSETTS INSTITUTE OF TECHNOLOGY   METABOLIX, INC.


By: /s/Lita L. Nelson                   By: /s/James J. Barber
    ---------------------------------       ------------------------------------
Name: Lita L. Nelson                    Name: James J. Barber
Title: Director, Technology Licensing   Title: President
       Office

*    CONFIDENTIAL TREATMENT REQUESTED


                                       26



                                 FIFTH AMENDMENT

     This Fifth Amendment, effective as of July 6, 2005, pertains to the
Exclusive Patent License Agreement, effective on July 15, 1993, by and between
the Massachusetts Institute of Technology ("M.I.T.") and Metabolix, Inc.
("COMPANY").

     WHEREAS, COMPANY now wishes the License Agreement to include only M.I.T.
case numbers 4403 ("Genes Encoding B-Ketothiolase And Acetoacetyl-Coa
Reductase,") and 6867 ("Polyhydroxyalkanoates Of Higher Molecular Weight And
Control Of The Molecular Weight Of Polyhydroxyalkanoates By Modulation Of
Polyhydroxyalkanoate Synthase Activity");

     WHEREAS, COMPANY therefore wishes to remove from the License Agreement
M.I.T case numbers 6113, "Polymerase Technology For The Production Of Long Chain
And Short Chain Polyesters" and 6726, "Overexpression And Purification Of The
Soluble Polyhydroxyalkanoate Synthase From Alcaligenes Eutrophus Evidence For A
Required Post-Translational Modification For Catalytic Activity";

     NOW, THEREFORE, M.I.T. and COMPANY hereby agree to modify the Exclusive
Patent License Agreement as follows:

     M.I.T. case numbers 6113 and 6726 are removed from the Agreement, and
     COMPANY is not responsible for costs incurred on these cases after July 6,
     2005.

All other terms and conditions of the Exclusive Patent License Agreement shall
remain unchanged.

THE AMENDMENT EFFECTIVE DATE IS JULY 6, 2005.

Agreed to for:

MASSACHUSETTS INSTITUTE OF TECHNOLOGY   METABOLIX, INC.


By: /s/Lita L. Nelson                   By: /s/James J. Barber
    ---------------------------------       ------------------------------------
Name: Lita L. Nelson                    Name: James J. Barber
Title: Director, Technology Licensing   Title: President
       Office

*    CONFIDENTIAL TREATMENT REQUESTED


                                       27



WHENEVER CONFIDENTIAL INFORMATION IS OMITTED HEREIN (SUCH OMISSIONS ARE DENOTED
BY AN ASTERISK*), SUCH CONFIDENTIAL INFORMATION HAS BEEN SUBMITTED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.

                          COMMERCIAL ALLIANCE AGREEMENT

     This Commercial Alliance Agreement (the "Agreement") dated as of July 12,
2006 (the "Effective Date") is entered into by and among ADM Polymer
Corporation, a corporation duly incorporated and validly existing under the laws
of the State of Delaware, with headquarters located at 4666 Faries Parkway,
Decatur, IL 62526 ("ADM Sub"), Metabolix, Inc., a corporation duly incorporated
and validly existing under the laws of the State of Delaware, with headquarters
located at 21 Erie Street, Cambridge, MA 02139-4260 ("MBX") and ADM / Metabolix
Sales Company, LLC, a limited liability company duly formed and validly existing
under the laws of the State of Delaware, with headquarters located at 21 Erie
Street, Cambridge MA 02139-4260 (the "Joint Sales Company") (MBX, ADM Sub, and
the Joint Sales Company are each a "Party" and are collectively, the "Parties").

                                    RECITALS

     WHEREAS, ADM Sub is a wholly owned subsidiary of Archer-Daniels-Midland
Company ("ADM");

     WHEREAS, MBX and ADM Sub are parties to that certain Technology Alliance
and Option Agreement dated November 3, 2004 (the "Technology Alliance and Option
Agreement") pursuant to which the Parties conducted a mutual assessment of the
technical and commercial feasibility of commercializing PHA Material (as defined
below);

     WHEREAS, MBX granted to ADM Sub the option (the "Commercial Alliance
Option"), on the terms and conditions set forth in the Technology Alliance and
Option Agreement, to enter into a broader commercial alliance as set forth
herein and in the Commercial Alliance Agreements (as defined below) regarding
the manufacture, use and sale of PHA Material;

     WHEREAS, the conditions to ADM Sub's exercise of the Commercial Alliance
Option have been satisfied and ADM Sub has exercised the Commercial Alliance
Option in accordance with the Technology Alliance and Option Agreement; and

     WHEREAS, as a result of ADM Sub's exercise of the Commercial Alliance
Option, MBX and ADM Sub are, as of the date hereof, forming the Joint Sales
Company to assist in the commercialization of the PHA Material and PHA
Formulations, enter into this Agreement and the remaining Commercial Alliance
Agreements in order to establish and begin operation of the broader commercial
alliance, all on the terms and conditions set forth herein and in the remaining
Commercial Alliance Agreements.

     NOW, THEREFORE, in consideration of the recitals and the mutual covenants
and promises contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties hereto
do hereby agree as follows.

                                    ARTICLE 1
                                   DEFINITIONS

*    CONFIDENTIAL TREATMENT REQUESTED



     "ADM SUB ALLIANCE TECHNOLOGY" means any Technology developed, conceived or
reduced to practice during the course of performance of the Commercial Alliance,
solely by employees of, or consultants to, ADM Sub or its Affiliates, including
without limitation, employees of ADM Sub or its Affiliates who are providing
services to the Joint Sales Company under any of the Commercial Alliance
Agreements (alone or jointly with a Third Party), with or without the material
use of any MBX Technology or Joint Alliance Technology. Technology that is
within the meaning of the term "ADM Program Technology" (as that term is defined
in the Technology Alliance and Option Agreement) is hereby deemed to be included
within the term "ADM Sub Alliance Technology." For the purposes of this
definition, employees of or consultants to the Joint Sales Company (other than
employees of ADM Sub or its Affiliates who are providing services to the Joint
Sales Company under any of the Commercial Alliance Agreements) will be deemed to
be employees of both ADM Sub and MBX. Notwithstanding the foregoing, Unfunded
Technology shall not be included as part of the ADM Sub Alliance Technology.

     "ADM SUB BACKGROUND TECHNOLOGY" means any Technology that is Controlled by
ADM Sub: (i) as of the Effective Date or (ii) developed, conceived or reduced to
practice solely by employees of, or consultants to, ADM Sub or its Affiliates in
the conduct of activities outside of the Commercial Alliance, without the
material use of any MBX Technology or Alliance Technology. Technology that is
within the meaning of the term "ADM Program Technology" (as that term is defined
in the Technology Alliance and Option Agreement) is hereby deemed not to be
included within the term "ADM Sub Background Technology."

     "ADM SUB CONSTRUCTION MASTER PLAN AND BUDGET" shall have the meaning set
forth in the Technology Alliance and Option Agreement.

     "ADM SUB FORMULATION ENGINEER" shall have the meaning set forth in Section
4.3.3.

     "ADM SUB MANUFACTURING AGREEMENT" shall have the meaning set forth in
Section 2.1.1.

     "ADM SUB MANUFACTURING FACILITY" shall have the meaning set forth in
Section 4.1.

     "ADM SUB PATENT RIGHTS" means any Patent Rights Controlled by ADM Sub and
claiming or covering the ADM Technology.

     "ADM SUB PROPRIETARY MATERIALS" means any Proprietary Materials Controlled
by ADM Sub and used by ADM Sub, provided by ADM Sub for use, or necessary or
useful in the Commercial Alliance.

     "ADM SUB SERVICES AGREEMENT" shall have the meaning set forth in Section
2.1.1.

     "ADM TECHNOLOGY" means, collectively, ADM Sub Proprietary Materials, ADM
Sub Background Technology and ADM Sub Alliance Technology.

     "AFFILIATE" of a Person means any other Person that directly, or indirectly
through one or more intermediaries, controls, is controlled by or is under
common control with such Person. "Control" and, with correlative meanings, the
terms "controlled by" and "under common control with" shall mean the power to
direct or cause the direction of the management or policies of a

*    CONFIDENTIAL TREATMENT REQUESTED


                                       2



Person, whether through the ownership of voting securities, by contract,
resolution, regulation or otherwise. The Joint Sales Company is hereby deemed
not to be an Affiliate of ADM, ADM Sub or MBX. Tepha, Inc. is hereby deemed not
to be an Affiliate of MBX.

     "ALLIANCE TECHNOLOGY" means ADM Sub Alliance Technology, Joint Alliance
Technology and MBX Alliance Technology

     "BUSINESS DAY" means a day of the year on which banks are not required to
be closed in New York, New York.

     "CALENDAR QUARTER" shall mean each of the following periods in each year:
(i) January 1 through March 31, (ii) April 1 through June 30, (iii) July 1
through September 30 and (iv) October 1 through December 31.

     "CAPITAL CONTRIBUTION" shall have the meaning set forth in the Operating
Agreement.

     "COMMERCIAL ALLIANCE" means the research, development and commercial
activities to be conducted by the Parties as set forth herein, including without
limitation, the Pilot Activities, the manufacturing, formulation, marketing,
distribution and sale of PHA Material and PHA Formulations, the planning,
construction and maintenance of the ADM Sub Manufacturing Facility and the MBX
Formulation Facility, the establishment and operation of the Joint Sales Company
and the evaluation of the Expansion Proposal and potential exercise of the Joint
Venture Option.

     "COMMERCIAL ALLIANCE AGREEMENTS" means this Agreement and the ADM Sub
Manufacturing Agreement, the MBX Formulation Agreement, the Operating Agreement,
the ADM Sub Services Agreement, the MBX Services Agreement, the Consolidated
Confidentiality Agreement and the Loan and Security Agreement.

     "COMMERCIAL ALLIANCE OPTION" shall have the meaning set forth in the above
recitals.

     "COMMERCIAL PHASE" shall mean the period commencing upon the date of the
First Commercial Sale of a PHA Material, produced in the ADM Sub Manufacturing
Facility, to a Third Party by the Joint Sales Company, and expiring upon the
expiration or termination of this Agreement.

     "COMMERCIALLY REASONABLE EFFORTS" shall mean, with respect to the efforts
to be applied by a Party in performing a referenced obligation hereunder, the
amount and quality of effort and resources that would be applied by a reasonable
manager or management team at a corporation having comparable expertise and
assets as such Party, to accomplish a task or to perform an obligation having
comparable relative importance to the success or failure of a commercial
enterprise that is comparable to the Commercial Alliance. For purposes of this
definition, a commercial enterprise would be comparable to the Commercial
Alliance if it poses similar anticipated technical and business risks or
challenges and similar anticipated financial return to the Parties as measured
at the time of the expenditure of the effort. When ADM Sub has an obligation to
use "Commercially Reasonable Efforts" herein, the following shall apply: (i) the
term "Commercially Reasonable Efforts" shall be defined as it is in this
definition but by

*    CONFIDENTIAL TREATMENT REQUESTED


                                       3


reference to ADM Sub and ADM as if they were a single entity, and (ii) in
determining whether ADM Sub have satisfied its obligations, the efforts applied
by and ADM Sub and ADM shall both be taken fully into account.

     "CONFIDENTIAL INFORMATION" means: (a) all tangible embodiments of
Technology produced or discovered by either Party or jointly by one or more
Parties under the Commercial Alliance Program, and all information concerning
the terms of this Agreement, and (b) with respect to a Party (the "Receiving
Party"), all information, Technology and Proprietary Materials which are
disclosed by any other Party (the "Disclosing Party") to the Receiving Party
hereunder or to any of its employees, consultants, or Affiliates; except to the
extent that the information, (i) as of the date of disclosure is demonstrably
known to the Receiving Party or its Affiliates, as shown by written
documentation, other than by virtue of a prior confidential disclosure to such
Party or its Affiliates; (ii) as of the date of disclosure is in, or
subsequently enters, the public domain, through no fault or omission of the
Receiving Party, or any of its Affiliates; (iii) is obtained from a Third Party
having a lawful right to make such disclosure free from any obligation of
confidentiality to the Disclosing Party; or (iv) is independently developed by
or for the Receiving Party without reference to or reliance upon any
Confidential Information of the Disclosing Party as demonstrated by competent
written records.

     "CONSTRUCTION" AND "CONSTRUCT" shall mean, in respect to a building, the
activities, and their performance, that are usual and appropriate to create a
completed facility that: (i) is in all material respects in compliance with all
material safety, health, zoning, environmental and other regulations and laws
applicable to it whether such applicability is based on its location, physical
dimensions and attributes, its intended uses or otherwise and (ii) is designed
to enable and support state-of-the-art operations pertaining to its intended
purpose. The terms "Construction" and "Construct" shall include the following
activities and their performance with respect to a facility: planning,
designing, engineering, construction, procurement, equipping and acquiring the
necessary permits.

     "CONSTRUCTION COSTS" are those reasonable costs and expenses that are
actually incurred by either ADM or ADM Sub in connection with the Construction
of the ADM Sub Manufacturing Facility, or MBX in connection with the
Construction or acquisition of the MBX Formulation Facility, in either case, as
and to the extent such costs and expenses were: (i) reasonably incurred in
Construction consistent with the plans, designs, engineering and budget in the
ADM Sub Construction Master Plan and Budget as approved by the TAC as provided
in the Technology Alliance and Option Agreement (or as approved by the Steering
Committee pursuant to Section 4.2.2), or the MBX Facility Master Plan and Budget
(as applicable), (ii) reasonably incurred in Construction consistent with the
plans, designs, engineering and budget in any amended ADM Sub Construction
Master Plan and Budget or the MBX Facility Master Plan and Budget (as
applicable), which amendments were approved by the Steering Committee to the
extent required herein; or (iii) were otherwise designated by the Steering
Committee as Construction Costs. Without limiting the foregoing, the Steering
Committee shall not approve as Construction Costs costs and expenses which it
determines are excessive in amount, or costs and expenses that relate to
improvements of existing facilities, or features of new facilities, to the
extent such improvements or features are not for the benefit for the Commercial
Alliance.

*    CONFIDENTIAL TREATMENT REQUESTED


                                       4



     "CONSTRUCTION PHASE" means the period commencing upon the Effective Date
and expiring upon the first to occur of: (i) the date of the First Commercial
Sale of a PHA Material (including, without limitation, PHA Material that is
contained within PHA Formulations) produced in the ADM Sub Manufacturing
Facility, to a Third Party by the Joint Sales Company and (ii) the termination
of this Agreement.

     "CONTROL" OR "CONTROLLED" means (a) with respect to Technology (other than
Proprietary Materials) or Patent Rights, the possession by a Party of the
ability to grant a license or sublicense to such Technology or Patent Rights as
provided herein without violating the terms of any agreement or arrangement
between such Party and any Third Party, and (b) with respect to Proprietary
Materials, the possession by a Party of the ability to supply such Proprietary
Materials to the other Party for use as provided herein without violating the
terms of any agreement or arrangement between the supplying Party and any Third
Party. A Party shall be deemed not to "Control" any Technology, Patent Rights or
Proprietary Materials of any other Party solely by virtue of rights therein, or
possession thereof, that was granted or acquired solely in accordance with this
Agreement or any other Commercial Alliance Agreement.

     "DEFENDING PARTY" shall have the meaning set forth in Section 11.3.1.

     "EFFECTIVE DATE" means the date first above written.

     "EXCLUSIVE PERIOD" shall mean that period of time commencing upon the
Effective Date and continuing until the first to occur of: (i) the JV Option
expiring without having been exercised by ADM Sub and (ii) the end of the Term.

     "EXPANSION PROPOSAL" shall have the meaning set forth in Section 9.1.1.

     "FERMENTATION AND RECOVERY PROCESS" means the process used to produce
fermentation broth containing PHA Material, to produce PHA Cell Paste from
fermentation broth, and to recover PHA Material from such PHA Cell Paste using
solvent and aqueous recovery processes.

     "FIELD" means the research, development, manufacture, use, sale and
importation of PHA Material and PHA Formulations; provided that the Field shall
not include any uses that are within the "Field of Use" as that term is defined
in the License Agreement by and between MBX and Tepha, Inc. dated October 1,
1999, as amended on December 17, 2002.

     "FIRST COMMERCIAL SALE" means the sale of not less than 1,000,000 pounds of
PHA Material (including, without limitation, PHA Material that is contained
within PHA Formulations) manufactured in the ADM Sub Manufacturing Facility,
that meets the then-current specifications for PHA Material, to Third Parties,
who are satisfied with the quality, and who purchased the PHA Material in
greater than sample quantities for commercial use.

     "FUNDED TECHNOLOGY" shall have the meaning set forth in Section 4.4.1.

     "INFRINGEMENT" shall have the meaning set forth in Section 11.3.1.

*    CONFIDENTIAL TREATMENT REQUESTED


                                       5



     "JOINT ALLIANCE TECHNOLOGY" means Technology developed, conceived or
reduced to practice jointly by employees of, or consultants to, ADM Sub on the
one hand, and MBX on the other, (in either case, with or without a Third Party)
during the course of performance of the Commercial Alliance. Technology that is
within the meaning of the term "Joint Program Technology" (as that term is
defined in the Technology Alliance and Option Agreement) is hereby deemed to be
included within the term "Joint Alliance Technology." For the purposes of this
definition, employees of the Joint Sales Company, excluding employees of ADM,
ADM Sub or MBX who are providing services to the Joint Sales Company under the
ADM Sub Services Agreement or the MBX Services Agreement, will be deemed to be
employees of both ADM Sub and MBX. Notwithstanding the foregoing, Unfunded
Technology shall not be included as part of Joint Alliance Technology.

     "JOINT VENTURE" shall have the meaning set forth in Section 9.1.1.

     "JOINT VENTURE ENTITY" shall have the meaning set forth in Section 9.1.1.

     "JV OPTION" shall have the meaning set forth in Section 9.1.

     "KNOWLEDGE means, with respect to MBX, the actual knowledge and awareness,
without the requirement of investigation, of any of the following four (4)
members of MBX management: President and CEO, Chief Scientific Officer, Chief
Financial Officer and Director of Manufacturing and Development, without the
requirement of investigation, and, with respect to ADM Sub, the actual knowledge
and awareness, without the requirement of investigation, of any of the following
nine (9) members of ADM management: Senior Vice President (Corn Processing and
Food Specialties), President of Natural Health & Nutrition Division, Assistant
Controller, Corporate Counsel - Intellectual Property, Senior Attorney, Senior
Vice President Venture Research, Vice President Technology Assessment, President
of ADM Research Division, and Vice President of Research, Molecular Biology -
Fermentation.

     "LEDGER ACCOUNT" shall have the meaning set forth in the Operating
Agreement.

     "LICENSE FEE" shall have the meaning set forth in Section 7.2.3.

     "LIMITED SUBLICENSE RIGHT" means that with respect to a particular license
of rights that the licensee shall have no right to sublicense or otherwise
enable a Third Party to perform or participate in the performance of the
Fermentation and Recovery Process, or any part thereof, but that the licensee
shall have the right otherwise to grant sublicenses of such licensed rights, and
further that the Joint Sales Company shall have the right to contract with Third
Parties to conduct Pilot Sourcing as per Section 4.4.2, and the licensee shall
have the right to contract with Third Parties to troubleshoot, consult, or
further develop aspects of the Fermentation and Recovery Process, provided that
the licensee shall pursuant to a written agreement with such third party own all
Technology arising from such contracted activity. Notwithstanding the foregoing,
the licensee shall not transfer or convey any cell line constituting part of the
MBX Proprietary Materials to any Third Party.

     "LOAN AND SECURITY AGREEMENT" shall have the meaning set forth in Section
2.1.1.

*    CONFIDENTIAL TREATMENT REQUESTED


                                       6



     "MANUFACTURING COST" shall have the meaning set forth in the ADM Sub
Manufacturing Agreement.

     "MBX ALLIANCE TECHNOLOGY" means any Technology developed, conceived or
reduced to practice during the course of performance of the Commercial Alliance,
solely by employees of, or consultants to, MBX or its Affiliates, including
without limitation, employees of MBX or its Affiliates who are providing
services to the Joint Sales Company under any of the Commercial Alliance
Agreements (alone or jointly with a Third Party), with or without the material
use of any ADM Technology or Joint Alliance Technology. Technology that is
within the meaning of the term "MBX Program Technology" (as that term is defined
in the Technology Alliance and Option Agreement) is hereby deemed to be included
within the term "MBX Alliance Technology." For the purposes of this definition,
employees of or consultants to the Joint Sales Company (other than employees of
MBX or its Affiliates who are providing services to the Joint Sales Company
under any of the Commercial Alliance Agreements) will be deemed to be employees
of both ADM Sub and MBX. Notwithstanding the foregoing, Unfunded Technology
shall not be included as part of MBX Alliance Technology.

     "MBX APPLICATIONS PATENT RIGHTS" means and Patent Rights Controlled by MBX
that claim or cover specific uses, within the Field, of PHA Materials or PHA
Formulations.

     "MBX BACKGROUND TECHNOLOGY" means any Technology that is Controlled by MBX:
(i) as of the Effective Date or (ii) developed, conceived or reduced to practice
solely by employees, of, or consultants to, MBX or its Affiliates in the conduct
of activities outside of the Commercial Alliance, without the material use of
any ADM Technology or Alliance Technology. Technology that is within the meaning
of the term "MBX Program Technology" (as that term is defined in the Technology
Alliance and Option Agreement) is hereby deemed not to be included within the
term "MBX Background Technology."

     "MBX FACILITY MASTER PLAN AND BUDGET" shall have the meaning set forth in
Section 4.3.2.

     "MBX FORMULATION AGREEMENT" shall have the meaning set forth in Section
2.1.1.

     "MBX FORMULATION FACILITY" shall have the meaning set forth in Section 4.1.

     "MBX PATENT RIGHTS" means any Patent Rights Controlled by MBX and claiming
or covering the MBX Technology, including without limitation, the MBX
Applications Patent Rights.

     "MBX PROPRIETARY MATERIALS" means any Proprietary Materials Controlled by
MBX and used by MBX, provided by MBX for use, or necessary or useful in the
Commercial Alliance. MBX Proprietary Materials shall include, without
limitation, all PHA Material and PHA Formulations supplied as samples to ADM or
ADM Sub, all cell lines (including all master stocks and working stock whether
prepared by ADM or ADM Sub or MBX) and all fermentation media, supplied by MBX
to ADM or ADM Sub, and all progeny, derivatives and mutated forms developed
therefrom.

     "MBX SERVICES AGREEMENT" shall have the meaning set forth in Section 2.1.1.

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     "MBX TECHNOLOGY" means, collectively, MBX Proprietary Materials, MBX
Background Technology and MBX Alliance Technology.

     "MBX TECHNOLOGY MANAGER" shall have the meaning set forth in Section 4.2.3.

     "MIT LICENSE" means that certain License Agreement dated July 15, 1993 by
and between MBX and Massachusetts Institute of Technology, as amended.

     "NEUTRAL PARTY" shall have the meaning set forth in Section 11.3.1.

     "NON-EXCLUSIVE PERIOD" means that period of time during the Term following
the end of the Exclusive Period.

     "OFFEREE PARTY" shall have the meaning set forth in Section 9.7.

     "OFFEROR PARTY" shall have the meaning set forth in Section 9.7.

     "OPERATING AGREEMENT" shall have the meaning set forth in Section 2.1.1.

     "OPERATING PAYMENT" AND "OPERATING PAYMENTS" shall each have the meaning
set forth in Section 4.5 hereof.

     "PATENT COMMITTEE" shall have the meaning set forth in Section 11.1.

     "PATENT RIGHTS" means the rights and interests in and to issued patents and
pending patent applications (which for purposes of this Agreement shall be
deemed to include certificates of inventions and applications for certificates
of invention and priority rights) in any country, including all provisional
applications, substitutions, continuations, continuations-in-part, divisionals,
and renewals, all letters patent granted thereon, and all reissues,
reexaminations and extensions thereof, Controlled by a Party.

     "PERMITTED ACTIVITIES" shall have the meaning set forth in Section 8.4.

     "PERSON" means any individual, partnership (whether general or limited),
limited liability company, corporation, trust, estate, association, nominee or
other entity.

     "PHA CELL PASTE" means the paste, containing the PHA Material, recovered
from whole fermentation broth and meeting the specifications set forth in
EXHIBIT H.

     "PHA FORMULATIONS" means PHA Material that has been processed by blending
different types of PHA Material together with other polymers and/or with other
additives, including nucleants, clarifiers, flow modifiers, plasticizers, flame
retardants and heat stabilizers.

     "PHA KNOW-HOW MATERIAL" means PHA Material, the manufacture, use, sale or
importation of which is accomplished or performed with the use of the MBX
Technology or Joint Alliance Technology.

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     "PHA MATERIAL" means the following forms of polyhydroxyalkanoate: *, when
produced by any means other than via Plants, and any other forms of
polyhydroxyalkanoate, produced by any means other than via Plants, that are
substitutable by any customer with one or more of the above substances, are
generally technically and commercially feasible in the marketplace, and have a
potential adverse affect on the sales or profitability of the Joint Sales
Company in a material way. For avoidance of doubt, any PHB copolymers having at
least fifty percent (50%) of the *, when produced by any means other than via
Plants, are hereby deemed to be included in the definition of PHA Material.

     "PHA PATENTED MATERIAL" means PHA Material, the manufacture, use, sale or
importation of which within or into the United States by a Person other than
MBX, absent the licenses granted herein, would infringe a Valid Claim of the MBX
Patent Rights or a Valid Claim within Patent Rights claiming or covering any
Technology within the Joint Alliance Technology.

     "PHA-RELATED MATERIALS" means any polymer material consisting of one or
more hydroxyacids of the general formula: *.

     "PHA SUPPLEMENTAL KNOW-HOW MATERIAL" means PHA Material, the manufacture,
use, sale or importation of which is accomplished or performed with the use of a
cell line Controlled by MBX and delivered by MBX to the Joint Sales Company at
any time during the Term.

     "PILOT ACTIVITIES" means the activities related to Pilot Sourcing as
described in Section 4.4.2, the process development activities described in
Section 4.4.1 and the sales activities described in Section 4.4.3.

     "PILOT FACILITIES" means the facility, or facilities, at which the Pilot
PHA Material is produced, purified, formulated and packaged for sale.

     "PILOT PHA MATERIAL" shall have the meaning set forth in Section 4.4.2.

     "PILOT SOURCING" shall have the meaning set forth in Section 4.4.2.

     "PILOT SOURCING COSTS" shall have the meaning set forth in Section 4.4.2.

     "PLANTS" shall mean photosynthetic organisms when not raised through
fermentation, but in any case excluding*. For avoidance of doubt, * is included
within the definition of Plants.

     "PROJECT TEAMS" shall have the meaning set forth in Section 3.4.

     "PROJECTS" shall have the meaning set forth in Section 3.4.

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     "PROPRIETARY MATERIALS" means any tangible chemical, biological or physical
research materials that are furnished by or on behalf of one Party to any other
Party in connection with this Agreement, regardless of whether such materials
are specifically designated as proprietary by the transferring Party.

     "ROFN" shall have the meaning set forth in Section 7.4.

     "ROFN RIGHTS" shall have the meaning set forth in Section 7.4.

     "ROYALTY TERM" means that period commencing upon * and continuing until the
later of the expiration or termination of * from the Effective Date.

     "SECTION 7 BREACH" shall have the meaning set forth in Section 10.2.1.

     "SENIOR EXECUTIVES" shall have the meaning set forth in Section 14.3.1.

     "STRATEGIC ALLIANCE" shall have the meaning set forth in Section 3.1.1.

     "STRATEGIC ALLIANCE PARTNER" shall have the meaning set forth in Section
3.1.1.

     "STEERING COMMITTEE" shall have the meaning set forth in Section 3.1.

     "SUPPLEMENTAL ROYALTY TERM" means that period commencing upon the delivery
by MBX to ADM, ADM Sub or the Joint Sales Company of a cell line Controlled by
MBX used in the production or manufacture of PHA Supplemental Know-How Material
and ending upon the * to occur of (i) the *, and (ii) * from the date of such
delivery.

     "TAC" shall have the meaning set forth in the Technology Alliance and
Option Agreement.

     "TECHNOLOGY" means and includes all inventions, discoveries, improvements,
trade secrets, know-how, trademarks, servicemarks, tradenames and proprietary
methods and Proprietary Materials, whether or not patentable.

     "TECHNOLOGY ALLIANCE AND OPTION AGREEMENT" shall have the meaning set forth
in the above recitals.

     "TECHNOLOGY TRANSFER" shall have the meaning set forth in Section 6.7.

     "TERM" shall have the meaning set forth in Section 10.1.

     "THIRD PARTY" shall mean any person, corporation, partnership or other
entity other than the Parties and their respective Affiliates.

     "THIRD PARTY ROYALTY OFFSET" shall have the meaning set forth in Section
9.8.4.

     "UNFUNDED TECHNOLOGY" shall have the meaning set forth in Section 4.4.1.

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     "UNITS" shall have the meaning set forth in the Operating Agreement.

     "VALID CLAIM" means a claim within a patent application or patent that has
not been abandoned or finally determined to be unenforceable or invalid by a
court or administrative agency with competent jurisdiction where all appeal
rights have been exhausted or expired.

     "50,000 TON ANNUAL DESIGN CAPACITY" shall have the meaning set forth in
Section 4.2.1.

                                    ARTICLE 2
                   OVERVIEW AND COMMERCIAL ALLIANCE AGREEMENTS

     2.1 OVERVIEW OF THE COMMERCIAL ALLIANCE. The purpose and goal of the
Commercial Alliance is to advance and exploit the research, development and
marketing activities undertaken by ADM Sub and MBX in the performance of the
Technology Alliance and Option Agreement by combining, on a larger scale and for
a longer term, ADM Sub's fermentation capabilities, market knowledge and capital
with MBX's technology, formulation expertise, market knowledge and intellectual
property rights and to create and establish a commercial outlet for PHA Material
and PHA Formulations through the Joint Sales Company in order to create a
commercial venture in the Field. The Commercial Alliance shall be conducted by
MBX and ADM Sub, each on an individual basis and through their ownership and
participation as members in the Joint Sales Company, all in accordance with this
Agreement and the other Commercial Alliance Agreements.

          2.1.1 COMMERCIAL ALLIANCE AGREEMENTS. Unless otherwise indicated
below, the Parties, as of the Effective Date, have executed and delivered the
following Commercial Alliance Agreements as provided for therein. The following
summary description of the Commercial Alliance Agreements is provided solely for
informational purposes and is not to amend the terms set forth therein or to
inform the interpretation of such terms.

               (a) OPERATING AGREEMENT. The operating agreement, executed and
delivered by the Parties as of the Effective Date and appended hereto as Exhibit
A (the "Operating Agreement"), is the agreement pursuant to which the Joint
Sales Company was formed and shall operate and which defines the respective
rights and obligations of MBX and ADM Sub as the members of the Joint Sales
Company, all as and to the extent set forth therein and subject to the terms and
conditions set forth therein.

               (b) ADM SUB MANUFACTURING AGREEMENT. The manufacturing agreement,
executed and delivered by ADM Sub and the Joint Sales Company as of the
Effective Date and appended hereto as Exhibit B (the "ADM Sub Manufacturing
Agreement"), is the agreement pursuant to which ADM Sub shall manufacture PHA
Material for the Joint Sales Company.

               (c) MBX FORMULATION AGREEMENT. The formulation agreement, which
will be executed and delivered by MBX and the Joint Sales Company if and when
MBX commences the Construction of the MBX Formulation Facility or acquires the
MBX Formulation Facility, is appended hereto as Exhibit C (the "MBX Formulation
Agreement"), and

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is the agreement pursuant to which MBX shall produce PHA Formulations for the
Joint Sales Company from the PHA Material manufactured by ADM Sub.

               (d) ADM SUB SERVICES AGREEMENT. The services agreement, executed
and delivered by ADM Sub and the Joint Sales Company as of the Effective Date
and appended hereto as Exhibit D (the "ADM Sub Services Agreement"), is the
agreement pursuant to which ADM Sub will provide services to the Joint Sales
Company.

               (e) MBX SERVICES AGREEMENT. The services agreement, executed and
delivered by MBX and the Joint Sales Company as of the Effective Date and
appended hereto as Exhibit E (the "MBX Services Agreement"), is the agreement
pursuant to which MBX will provide services to the Joint Sales Company.

               (f) LOAN AND SECURITY AGREEMENT. The loan and security agreement,
executed and delivered by ADM Sub and the Joint Sales Company as of the
Effective Date and appended hereto as Exhibit F (the "Loan and Security
Agreement") is the agreement pursuant to which ADM Sub will make available to
the Joint Sales Company a credit facility.

                                    ARTICLE 3
                        STEERING COMMITTEE; PROJECT TEAMS

     3.1 STEERING COMMITTEE. MBX and ADM Sub hereby establish a joint steering
committee (the "Steering Committee") to plan and oversee the establishment and
activities of the Commercial Alliance in such instances where ADM Sub and MBX
are acting on an individual basis and in such instances where ADM Sub and MBX
are acting as members of the Joint Sales Company, all as further set forth
herein.

          3.1.1 RESPONSIBILITIES AND AUTHORITY OF THE STEERING COMMITTEE. The
Steering Committee shall have the rights and obligations provided for herein, in
the other Commercial Alliance Agreements and as agreed to by ADM Sub and MBX in
writing from time-to-time during the Term. Without limiting the foregoing, the
Steering Committee shall have the general responsibility of (i) coordinating the
planning and execution of the individual activities of ADM Sub and MBX in
connection with the Commercial Alliance, including without limitation by
controlling or participating (as specifically provided herein or in the other
Commercial Alliance Agreements) in decision-making on both a strategic and
tactical level, by assisting in setting priorities for performance and resource
allocation, and by assisting in avoiding or resolving disputes among ADM Sub,
MBX and the Joint Sales Company, and (ii) coordinating the planning and
execution of the activities of ADM Sub and MBX as members of the Joint Sales
Company, in all cases, subject to the right and authority of ADM Sub, MBX and
the Joint Sales Company to make decisions and take actions required to perform
their obligations hereunder and under the other Commercial Alliance Agreements
in accordance herewith and therewith, including without limitation, those
decisions and actions that are specifically identified as reserved to any of
them hereunder or thereunder. Without limiting the foregoing, the following
actions, designations and documents shall require the prior approval of the
Steering Committee before such actions may be taken or before such designations
or documents shall be valid and binding commitments:

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               (a) the designation of costs and expenses incurred in connection
     with the Construction of the ADM Sub Manufacturing Facility (pursuant to
     Section 4.2.5) or the Construction or acquisition of the MBX Formulation
     Facility (pursuant to Section 4.3.5) as "Construction Costs" to be credited
     or debited against the Ledger Account, as that term is defined in the
     Operating Agreement, as and to the extent provided for in the Operating
     Agreement;

               (b) the appointment of the following key personnel: (i) ADM Sub
     Project Manager (to be nominated by ADM Sub), (ii) ADM Sub Manufacturing
     Manager (to be nominated by ADM Sub); (iii) MBX Technology Manager (to be
     nominated by MBX); (iv) Marketing and Sales Manager of the Joint Sales
     Company (to be nominated by MBX pursuant to the terms of the Operating
     Agreement) and (v) Assistant Marketing and Sales Manager of the Joint Sales
     Company (to be nominated by ADM Sub pursuant to the terms of the Operating
     Agreement);

               (c) the decision to contract with a Third Party to perform
     strategic, ongoing research, development or commercial activities with or
     on behalf of either Party or the Joint Sales Company in connection with the
     Commercial Alliance as part of a contractual relationship (such Third Party
     is a "Strategic Alliance Partner" and such contractual relationship is a
     "Strategic Alliance");

               (d) the establishment of strategic and operational plans for
     performance hereunder and under the other Commercial Alliance Agreements,
     the preparation and finalization of budgets for funding such performance,
     the establishment of high-level procedures and policies, including without
     limitation, accounting policies and procedures, in connection with such
     performance;

               (e) any action that requires the consent of the members to the
     Joint Sales Company, as specified in the Operating Agreement.

          3.1.2 CERTAIN LIMITATIONS ON THE RESPONSIBILITIES AND AUTHORITY OF THE
STEERING COMMITTEE. The Steering Committee shall have no authority to act on
behalf of ADM, ADM Sub, MBX or the Joint Sales Company in connection with Third
Parties. Without limiting the foregoing, the Steering Committee shall have no
authority to, and shall not purport to or attempt to: (i) negotiate agreements
on behalf of ADM, ADM Sub, MBX or the Joint Sales Company, (ii) make
representations or warranties on behalf of ADM, ADM Sub, MBX or the Joint Sales
Company, (iii) waive rights of ADM, ADM Sub, MBX or the Joint Sales Company,
(iv) extend credit on behalf of ADM, ADM Sub, MBX or the Joint Sales Company, or
(v) take or grant licenses of intellectual property on behalf of ADM, ADM Sub,
MBX or the Joint Sales Company.

          3.1.3 DECISION-MAKING STANDARD FOR THE STEERING COMMITTEE. All
decisions and other actions of the Steering Committee shall be made in good
faith and with due care, after consideration of the information that is
reasonably available to the Steering Committee, with the intention that: (i) the
resulting decision or actions will conform to, or be consistent with, the
provisions and requirements of this Agreement and the other Commercial Alliance
Agreements and (ii) the resulting decision or action will maintain or increase
the likelihood that ADM Sub, MBX and the Joint Sales Company will achieve the
purposes and goal of the Commercial Alliance as set forth in Section 2.1.
Without limiting the foregoing, the Steering Committee is expressly prohibited
from taking into account interests of a Party, or of any members of the

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Steering Committee, other than their respective interests in achieving the
purposes and goal of the Commercial Alliance as set forth in Section 2.1.

     3.2 MEMBERSHIP OF STEERING COMMITTEE. ADM Sub and MBX shall each appoint an
equal number of members to the Steering Committee (not to exceed five (5)
members each), one of whom shall be designated by each of ADM Sub and MBX as its
"Co-Chair." ADM Sub and MBX shall have the right at any time to substitute
individuals, on a permanent or temporary basis, for any of its previously
designated representatives to the Steering Committee, including its Co-Chair, by
giving written notice thereof to the other Party. Initial designees to the
Steering Committee shall be as follows:

     For MBX:     James Barber (Co-Chair)
                  Oliver Peoples
                  Thomas Auchincloss
                  Johan van Walsem
                  Robert Findlen

     For ADM Sub: John Rice (Co-Chair)
                  Terry Stoa
                  Tom Binder
                  Kevin Moore
                  Nick Lawless

     3.3 MEETINGS.

          3.3.1 SCHEDULE OF MEETINGS. The Steering Committee shall establish a
schedule of times for its meetings, taking into account, without limitation, the
planning needs of the Commercial Alliance. The Steering Committee shall meet
monthly unless otherwise agreed upon by ADM Sub and MBX. Meetings shall also be
convened upon the determination of either or both of the Co-Chairs of the
Steering Committee by written notice (including notice via e-mail) thereof to
their respective members that a meeting is required to discuss or resolve any
matter or matters with respect to the Commercial Alliance. Meetings shall
alternate between the respective offices of ADM Sub or MBX or another mutually
agreed upon location; provided, however, that the Co-Chairs of the Steering
Committee may mutually agree to meet by teleconference or video conference or
may act by a written memorandum signed by the Co-Chairs of the Steering
Committee.

          3.3.2 QUORUM; VOTING; DECISIONS. At each meeting of the Steering
Committee, the participation of at least one member designated by each of ADM
Sub and MBX shall constitute a quorum. Each Steering Committee member shall have
one vote on all matters before the Steering Committee; provided, however, that
the member or members of each of ADM Sub and MBX present at any meeting shall
have the authority to cast the votes of any of such Party's members who are
absent from the meeting. All decisions of the Steering Committee shall be made
by majority vote of all of the members, except when acting in its capacity as a
representative committee of the members of the Joint Sales Company where
unanimous consent

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of the members is required, in which case the decisions of the Steering
Committee shall be made by unanimous vote of all of its members. Whenever any
action by the Steering Committee is called for hereunder during a time period in
which a meeting is not scheduled, the Co-Chairs shall cause the Steering
Committee to take the action in the requested time period by calling a special
meeting or by action without a formal meeting by written memorandum signed by
both Co-Chairs of the Steering Committee. Representatives of each of ADM Sub and
MBX, in addition to the members of the Steering Committee, may attend meetings
as non-voting observers with prior notice to the other Party. In the event that
the Steering Committee is unable to resolve any matter before it, such matter
shall be resolved as set forth in Section 14.3 hereof.

          3.3.3 MINUTES. A secretary shall be appointed to keep accurate minutes
of the deliberations of the Steering Committee recording all proposed decisions
and all actions recommended or taken. Drafts of such minutes shall be delivered
to the Co-Chairs of the Steering Committee within a reasonable period of time
not to exceed five (5) days after a Steering Committee meeting. Draft minutes
shall be edited by ADM Sub and MBX and shall be issued in final form within a
reasonable time not to exceed ten (10) days after the meeting only with their
approval and agreement as evidenced by their signatures on the minutes.
Responsibility for appointment of the secretary shall rotate annually between
MBX and ADM Sub.

          3.3.4 EXPENSES. MBX and ADM Sub shall each bear all expenses of their
respective Steering Committee members related to their participation on the
Steering Committee and attendance at Steering Committee meetings.

     3.4 PROJECT TEAMS. ADM Sub and MBX, either: (i) acting through the Steering
Committee, or (ii) as set forth herein or in the other Commercial Alliance
Agreements, may, from time-to-time, form project teams to support the activities
of the Steering Committee with respect solely to discrete, defined projects
("Projects") that are to be performed in support of, or as part of, the
Commercial Alliance ("Project Teams"). Each Project Team shall function in
accordance with the terms and conditions set forth herein, as set forth in the
other Commercial Agreements or as otherwise agreed to by the Steering Committee
in writing.

          3.4.1 RESPONSIBILITIES AND AUTHORITY OF THE PROJECT TEAMS. Each
Project Team shall have the rights and obligations provided for herein, in the
other Commercial Alliance Agreements, or as expressly delegated to it by the
Steering Committee in writing from time-to-time during the Term.

          3.4.2 CERTAIN LIMITATIONS ON THE RESPONSIBILITIES AND AUTHORITY OF THE
PROJECT TEAMS. The rights and authority of the Project Teams are derived from
and are subordinate to the rights and authority of the Steering Committee.
Without limiting the foregoing, no Project Team shall have any rights or
authority to make decisions or take actions that are not directly related to the
applicable Project and all Project Teams shall be subject to the same
limitations as are applicable to the Steering Committee as set forth in Section
3.1.2.

          3.4.3 DECISION-MAKING STANDARD FOR THE STEERING COMMITTEE. The Project
Teams shall make decisions and take actions subject to the same standards as are
applicable to the Steering Committee as set forth in Section 3.1.3 hereof.

     3.5 MEMBERSHIP OF PROJECT TEAMS. Each Project Team shall be comprised of
such number of members as is provided herein, in another Commercial Alliance
Agreement or as

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provided by the Steering Committee. Unless otherwise mutually agreed by ADM Sub
and MBX, any Project Team concerning the ADM Sub Manufacturing Facility shall be
comprised of a majority of members appointed by ADM Sub, and any Project Team
concerning the MBX Formulation Facility shall be comprised of a majority of
members appointed by MBX. Project Team members may also be members of the
Steering Committee. Each of ADM Sub and MBX shall have the right at any time to
substitute individuals, on a permanent or temporary basis, for any of its
previously designated representatives to a Project Team by giving written notice
thereof to the other Party.

     3.6 MEETINGS.

          3.6.1 SCHEDULE OF MEETINGS. Each Project Team shall establish a
schedule of times for its meetings, taking into account, without limitation, the
planning needs of the applicable Project. Meetings shall alternate between the
respective offices of ADM Sub and MBX or another mutually agreed upon location;
provided, however, that ADM Sub and MBX may mutually agree to meet by
teleconference or video conference or may act by a written memorandum signed by
the Co-Chairs of the Project Team.

          3.6.2 QUORUM; VOTING; DECISIONS. At each meeting of a Project Team,
the participation of at least one member designated by each of ADM Sub and MBX
shall constitute a quorum. Each Project Team member shall have one vote on all
matters before the Project Team; provided, however, that the member or members
of each of ADM Sub and MBX present at any meeting shall have the authority to
cast the votes of any of such Party's members who are absent from the meeting.
Unless provided otherwise herein or in another Commercial Alliance Agreement,
all decisions of the Project Team shall be made by majority vote of all of the
members. Representatives of each of ADM Sub and MBX, in addition to the members
of the Project Team, may attend meetings as non-voting observers with prior
notice to the other Party. In the event that a Project Team is unable to resolve
any matter before it, such matter shall be referred to the Steering Committee
for resolution.

          3.6.3 MINUTES. A secretary for each Project Team shall be appointed to
keep accurate minutes of the deliberations of such Project Team recording all
proposed decisions and all actions recommended or taken. Copies of such minutes
shall be made available to the Steering Committee as it shall request.

          3.6.4 EXPENSES. MBX and ADM Sub shall each bear all expenses of their
respective Project Team members related to their participation on Project Teams
and attendance at Project Team meetings.

          3.6.5 REPORTS. Each Project Team shall produce such reports for the
Steering Committee as the Steering Committee shall request from time-to-time.

     3.7 BUSINESS INTEGRATION AND COORDINATION. ADM Sub and MBX, with and
through the Commercial Alliance Business Team, subject to the terms and
conditions of the Commercial Alliance Agreements, shall coordinate and integrate
the efforts of the Parties to plan and execute manufacturing, formulation,
marketing and sales activities in such a manner as to establish and maintain an
efficient and profitable commercial operation.

          3.7.1 COMMERCIAL ALLIANCE BUSINESS TEAM. The Parties shall form a
Commercial Alliance Business Team (the "Commercial Alliance Business Team") to
assist in

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the integration and coordination of the manufacturing, formulation, marketing
and sales activities of the Parties. The Commercial Alliance Business Team shall
be a Project Team of the Steering Committee and shall function, and otherwise be
subject to, the provisions set forth in Sections 3.4 through 3.6, inclusive,
except that decisions shall be made by unanimous agreement. The Commercial
Alliance Business Team shall be composed of the Marketing and Sales Manager of
the Joint Sales Company, the Assistant Marketing and Sales Manager of the Joint
Sales Company, the ADM Sub Manufacturing Manager, the MBX Technology Manager and
during the Construction Phase, the ADM Sub Project Manager. The Marketing and
Sales Manager of the Joint Sales Company shall be the chair of the Commercial
Alliance Business Team. The Commercial Alliance Business Team may be expanded by
the Steering Committee in order to add persons with technical knowledge or to
ensure the integration of key functional areas within the Commercial Alliance
into the planning and coordination process.

          3.7.2 BUSINESS PLANNING. The Commercial Alliance Business Team will
have access to and review the plans and reports prepared by any established
Project Teams, ADM Sub and MBX relating to manufacturing, formulation and
marketing the PHA Material and PHA Formulations. The Commercial Alliance
Business Team will analyze such input and make reports or recommendations to the
Board of the Joint Sales Company, the Steering Committee or other Project Teams,
as appropriate, in order to ensure that: (i) complete, current and accurate
information is available across relevant Project Teams and functional groups,
(ii) the activities of any Project Teams do not conflict, and to the extent they
are interdependent, they are appropriately coordinated and (iii) input from
Third Parties, such as Strategic Alliance Partners, customer segments and key
customers are adequately taken into account in planning, prioritizing and
executing manufacturing, formulation, marketing and sales activities.

                                    ARTICLE 4
                               CONSTRUCTION PHASE

     4.1 OVERVIEW AND GOAL OF CONSTRUCTION PHASE. The primary goal of the
Construction Phase is to prepare for the commercial launch of PHA Material and
PHA Formulations manufactured in facilities owned by the Parties. In order to
achieve this goal, the Parties will pursue the following primary objectives: (i)
ADM Sub will arrange for and finance the construction of a facility in which it
will manufacture PHA Material pursuant to the terms of the ADM Sub Manufacturing
Agreement (the "ADM Sub Manufacturing Facility"), (ii) MBX will either arrange
for and finance the acquisition or construction of a facility in which it will
produce the PHA Formulations pursuant to the terms of the MBX Formulation
Agreement (the "MBX Formulation Facility") or it will use Commercially
Reasonable Efforts to arrange for other access to a facility in which a Third
Party will produce the PHA Formulations pursuant to the terms of an agreement
with the Joint Sales Company and (iii) MBX, acting in the name and on behalf of
the Joint Sales Company, will establish the market for the PHA Material and PHA
Formulations, in each case, with the support and participation of the other
Parties and the Steering Committee and as more fully set forth herein and in the
other Commercial Alliance Agreements.

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     4.2 CONSTRUCTION OF THE ADM SUB MANUFACTURING FACILITY. ADM Sub shall have
primary responsibility for the Construction of the ADM Sub Manufacturing
Facility consistent with the ADM Sub Construction Master Plan and Budget to
produce PHA Material in accordance with the terms and conditions of the ADM Sub
Manufacturing Agreement. MBX will have the right to actively participate in each
of these activities, as set forth in more detail below, in order to assist ADM
Sub in achieving the foregoing goal.

          4.2.1 SPECIFICATIONS OF THE ADM SUB MANUFACTURING FACILITY. The ADM
Sub Manufacturing Facility will be designed to produce, through microbial
fermentation, approximately fifty thousand (50,000) tons of PHA Material, having
an acceptable level of purity, during each twelve (12) month period, on an
ongoing basis through a stable and robust operation, over a period of years. The
Parties acknowledge that the actual production of PHA Material from the ADM Sub
Manufacturing Facility will vary from year to year based upon multiple factors
and variables. The designed capacity, irrespective of the actual production
which may be achieved, is hereinafter defined as the "50,000 Ton Annual Design
Capacity". ADM Sub will use Commercially Reasonable Efforts to Construct the ADM
Sub Manufacturing Facility to enable and support state-of-the-art PHA Material
manufacturing operations, consistent with the ADM Sub Construction Master Plan
and Budget. ADM Sub shall proceed with the Construction in a manner intended to
complete Construction of the ADM Sub Manufacturing Facility within twenty-four
(24) to thirty-six (36) months following the Effective Date.

          4.2.2 ADM SUB CONSTRUCTION MASTER PLAN AND BUDGET. In the event the
ADM Sub Construction Master Plan and Budget was not developed pursuant to the
Technology Alliance and Option Agreement, ADM Sub, in consultation with any
appointed Project Team and the Metabolix Technology Manager, and with the
assistance of such Third Party consultants as shall be approved by the Steering
Committee, shall develop the ADM Sub Construction Master Plan and Budget and
submit same to the Steering Committee for approval. ADM Sub will use
Commercially Reasonable Efforts to implement the ADM Sub Construction Master
Plan and Budget. The ADM Sub Construction Master Plan and Budget shall be
amended, from time to time, in an effort to ensure that it remains sufficiently
accurate and complete so that if the activities called for in the ADM Sub
Construction Master Plan and Budget were to be executed in accordance with its
terms, ADM Sub would have satisfied all of its obligations hereunder with
respect to the Construction of the ADM Sub Manufacturing Facility. The ADM Sub
Construction Master Plan and Budget shall also be subject to amendment in the
event that ADM Sub reasonably expects that the total amount set forth in the
budget within the ADM Sub Construction Master Plan and Budget will not be
sufficient to fund the activities remaining to be performed under the ADM Sub
Construction Master Plan and Budget. Such amendments will include an updated
budget with a description and the amount of all additional costs and expenses
that ADM Sub desires to have designated as Construction Costs. All amendments to
the ADM Sub Construction Master Plan and Budget will be subject to the approval
of the Steering Committee, subject to the standards set forth in Section 3.1.3.
For avoidance of doubt, no amendment to the ADM Sub Construction Master Plan and
Budget will be required due to a variance in the actual cost of a particular
item or service as compared to the budgeted cost of such item or service unless
such variance (alone or cumulatively with other such variances) causes ADM Sub
to reasonably expect that the total amount set forth in the budget within the

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ADM Sub Construction Master Plan and Budget will not be sufficient to fund the
activities remaining to be performed under the ADM Sub Construction Master Plan
and Budget.

          4.2.3 MBX TECHNOLOGY MANAGER. Metabolix shall appoint, subject to the
approval of the Steering Committee, a representative to serve as its technology
manager (the "MBX Technology Manager"). The MBX Technology Manager, and up to
three (3) MBX employees having varied areas of technical expertise, shall be
given a reasonable opportunity to review, consult and sign off on key
engineering designs and documents relating to the Construction of the ADM Sub
Manufacturing Facility, in accordance with good engineering and process
management principles, including, without limitation, piping and instrumentation
diagrams, major plant item design calculations and data sheets, purchase
contract technical specifications for major plant items, sterile engineering
design and operating philosophy, pre-delivery performance and acceptance testing
of major plant items, conceptual functional specifications for control and
automation, analytical and quality control procedures, hazard and operability
studies, fermentation recipe specifications (including without limitation raw
material specifications) and change orders during the course of the contract.
Notwithstanding the foregoing, after providing the MBX Technology Manager and
any appointed Project Team with the requisite opportunities to review and to
provide input on decisions relating the Construction of the ADM Sub
Manufacturing Facility, and after giving reasonable consideration to such input,
ADM Sub shall have the right and responsibility to make final decisions with
respect to all such matters.

          4.2.4 ACCESS TO SITE, BOOKS AND RECORDS. The MBX Technology Manager,
and up to three (3) MBX employees, shall have reasonable access, after giving
reasonable prior notice, during hours of operation, to: (i) the site on which
the ADM Sub Manufacturing Facility is being Constructed, throughout the
Construction process, (ii) individuals involved in the Construction process,
including without limitation, construction managers, engineers and supervisors,
and (iii) all documents relating to the Construction of the ADM Sub
Manufacturing Facility, including without limitation, the ADM Sub Construction
Master Plan and Budget and the various documents and agreements that relate to
the preparation and amendment thereof, including without limitation all surveys,
blueprints, engineering studies, piping and instrumentation diagrams, equipment
design calculations and drawings, piping layouts, purchase contracts, sterile
engineering designs and construction details, equipment test reports, automation
and control designs, analytical and quality control procedures, hazard and
operability studies, fermentation recipe specifications (including without
limitation raw material specifications) and change orders during the course of
the contract, in each case, whether prepared by ADM Sub or a Third Party. For
purposes of the foregoing sentence, the term "reasonable access" means and
includes such access as is necessary or convenient for such individuals to
fulfill their obligations hereunder in the manner required hereby without unduly
burdening the other individuals involved in the Construction process or
unnecessarily delaying the Construction process. All site visits or record
reviews undertaken at ADM Sub facilities will be conducted in accordance with
policies and procedures in force at such facilities, including without
limitation, policies designed to promote safety and policies against sexual
harassment and discrimination.

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          4.2.5 ADM SUB FINANCIAL RESPONSIBILITY. ADM Sub shall be solely
responsible for all costs incurred in connection with the ADM Sub Manufacturing
Facility, subject to application as a credit against the Ledger Account (as such
term is defined in the Operating Agreement), as and to the extent provided in
the Operating Agreement, of those costs and expenses that were designated as
Construction Costs by the TAC as part of the ADM Sub Construction Master Plan
and Budget as provided in the Technology Alliance and Option Agreement or as are
designated as Construction Costs as set forth herein and in Section 4.2.2. In
addition to the foregoing approval procedures, ADM Sub shall have the right to
seek a re-designation of any categories or items of costs and expenses that it
believes should be designated and approved as Construction Costs at anytime
during the Term. The Steering Committee shall, on a quarterly basis during the
Construction Period, or more frequently as reasonably requested by ADM Sub or
MBX, review the ADM Sub Construction Master Plan and Budget to evaluate and
approve any material additional or changed information concerning the design or
Construction of the ADM Sub Manufacturing Facility, subject to the standards set
forth in Section 3.1.3.

     4.3 ACQUISITION, CONSTRUCTION AND ACCESS TO FORMULATION FACILITY. MBX shall
have primary responsibility for arranging the acquisition or Construction of the
MBX Formulation Facility in a manner reasonably calculated to result in the
consistent production of PHA Formulations by MBX for the Joint Sales Company in
accordance with terms and conditions of the MBX Formulation Agreement, or to use
Commercially Reasonable Efforts to arrange for other access to a formulation
facility in a manner reasonably calculated to result in the consistent
production of PHA Formulations by a Third Party for the Joint Sales Company in
accordance with terms and conditions of an agreement between such Third Party
and the Joint Sales Company. ADM Sub will have the right to actively participate
in each of these activities, as set forth in more detail below, in order to
assist MBX in achieving the foregoing goal. Formulation activities to be
conducted at the MBX Formulation Facility or the Third Party formulation
facility, as the case may be, will include, without limitation, blending
different types of PHA Material together, and with other polymers and/or with
other additives, such as nucleants, clarifiers, flow modifiers, plasticizers,
flame retardants and heat stabilizers.

          4.3.1 SPECIFICATIONS OF THE MBX FORMULATION FACILITY. The MBX
Formulation Facility or the Third Party formulation facility, as the case may
be, will be sufficient to enable and support state-of-the-art PHA Material
formulation operations at a scale reasonably calculated to meet the formulation
needs of the Commercial Alliance with respect to the output from the ADM Sub
Manufacturing Facility and market demand. MBX shall proceed with the acquisition
or Construction of MBX Formulation Facility, or gaining access to a Third Party
formulation facility, in sufficient time to meet the formulation needs of the
Commercial Alliance with respect to the output from the ADM Sub Manufacturing
Facility and market demand.

          4.3.2 MBX FACILITY MASTER PLAN AND BUDGET. MBX, in consultation with
any appointed Project Team, and with the assistance of such Third Party
consultants as shall be approved by the Steering Committee, shall develop a plan
and budget for the acquisition or Construction of the MBX Formulation Facility
or gaining access to a Third Party formulation facility (the "MBX Facility
Master Plan and Budget") and submit same to the Steering Committee for approval.
MBX will use Commercially Reasonable Efforts to implement the

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MBX Facility Master Plan and Budget. The MBX Facility Master Plan and Budget
shall be amended, from time to time, in an effort to ensure that it remains
sufficiently accurate and complete so that if the activities called for in the
MBX Facility Master Plan and Budget were to be executed in accordance with its
terms, MBX would have satisfied all of its obligations hereunder with respect to
the acquisition or Construction of MBX Formulation Facility or gaining access to
a third Party formulation facility. The MBX Facility Master Plan and Budget
shall be subject to amendment in the event that MBX reasonably expects that the
total amount set forth in the budget within the MBX Facility Master Plan and
Budget will not be sufficient to fund the activities remaining to be performed
under the MBX Facility Master Plan and Budget. Such amendments to the MBX
Facility Master Plan and Budget will include an updated budget with a
description and the amount of all additional costs and expenses that MBX desires
to have designated as Construction Costs. Such amendments to the MBX Facility
Master Plan and Budget will be subject to the approval of the Steering
Committee, subject to the standards set forth in Section 3.1.3. For avoidance of
doubt, no amendment to the MBX Facility Master Plan and Budget will be required
due to a variance in the actual cost of a particular item or service as compared
to the budgeted cost of such item or service unless such variance (alone or
cumulatively with other such variances) causes MBX to reasonably expect that the
total amount set forth in the budget within the MBX Facility Master Plan and
Budget will not be sufficient to fund the activities remaining to be performed
under the MBX Facility Master Plan and Budget.

          4.3.3 PROJECT TEAM; FORMULATION ENGINEER. ADM Sub shall appoint,
subject to the approval of the Steering Committee, a representative to serve as
its formulation engineer (the "ADM Sub Formulation Engineer"). The ADM Sub
Formulation Engineer, and up to three (3) employees of ADM Sub, shall be given a
reasonable opportunity to review, consult and sign off on key aspects of the MBX
Facility Master Plan and Budget. If the MBX Formulation Facility is to be
Constructed by MBX, the ADM Sub Formulation Engineer, and up to three (3)
employees of ADM Sub or its Affiliates, shall be given reasonably opportunity to
review, consult and sign off on key engineering designs and documents relating
to the Construction of the MBX Manufacturing Facility, in accordance with good
engineering and process management principles, including without limitation,
piping and instrumentation diagrams, major plant item design calculations and
data sheets purchase contract technical specifications for major plant items,
sterile engineering design and operating philosophy, pre-delivery performance
and acceptance testing of major plant items, conceptual functional
specifications for control and automation, analytical and quality control
procedures, hazard and operability studies, and change orders during the course
of the contract. If the MBX Formulation Facility is to be acquired or in the
event MBX is gaining access to a Third Party formulation facility, the ADM Sub
Formulation Engineer, and up to three (3) employees of ADM Sub or its
Affiliates, shall be given reasonable opportunity to inspect the facilities and
review, consult and sign off on key engineering designs and documents relating
to the operation of any such facility to produce PHA Formulations.
Notwithstanding the foregoing, after providing the ADM Sub Formulation Engineer
and any appointed Project Team with the requisite opportunities to review and to
provide input on material decisions relating to the MBX Facility Master Plan and
Budget, and after giving reasonable consideration to such input, MBX shall have
the right and responsibility to make final decisions with respect to all such
matters.

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          4.3.4 ACCESS TO SITE, BOOKS AND RECORDS. If the MBX Formulation
Facility is to be Constructed by MBX, then the ADM Sub Formulation Engineer, and
up to three (3) employees of ADM Sub, shall have reasonable access, after giving
prior notice, during regular business hours, to (i) the site on which the MBX
Formulation Facility is being Constructed, throughout the Construction process,
(ii) individuals involved in the Construction process, including without
limitation, construction managers, engineers and supervisors, and (iii) all
documents relating to the Construction of the MBX Formulation Facility,
including without limitation, the MBX Facility Master Plan and Budget and the
various documents and agreements that relate to the preparation and amendment
thereof, including without limitation all surveys, blueprints, engineering
studies, piping and instrumentation diagrams, equipment design calculations and
drawings, piping layouts, purchase contracts, sterile engineering designs and
construction details, equipment test reports, automation and control designs,
analytical and quality control procedures, hazard and operability studies, and
change orders during the course of the contract, in each case, whether prepared
by MBX or a Third Party. If the MBX Formulation Facility is not going to be
Constructed by MBX, then the ADM Sub Formulation Engineer shall have reasonable
access, during regular business hours, to the site of the MBX Formulation
Facility and all documents relating to the potential MBX Formulation Facilities
or Third Party formulation facilities that MBX has in its control, including
without limitation, the MBX Facility Master Plan and Budget and the various
documents and agreements that relate to the preparation and amendment thereof,
including without limitation a survey of available facilities, detailed
documentation of the capabilities of the most highly-rated facilities, cost,
schedule of availability and other relevant information and data, whether
prepared by MBX or a Third Party. For purposes of the foregoing sentence, the
term "reasonable access" means and includes such access as is necessary or
convenient for such individuals to fulfill their obligations hereunder in the
manner required hereby without unduly burdening the other individuals involved
in the execution of the MBX Facility Master Plan and Budget unnecessarily
delaying the execution of the MBX Facility Master Plan and Budget. All site
visits or record reviews undertaken at MBX facilities will be conducted in
accordance with policies and procedures in force at such facilities, including
without limitation, policies designed to promote safety and policies against
sexual harassment and discrimination.

          4.3.5 MBX FINANCIAL RESPONSIBILITY. MBX shall be solely responsible
for all costs incurred in connection with the MBX Formulation Facility, subject
to application as a debit against the Ledger Account (as such term is defined in
the Operating Agreement), as and to the extent provided in the Operating
Agreement, of those costs and expenses that are designated by the Steering
Committee as Construction Costs as set forth herein and in Section 4.3.2. The
Steering Committee shall conduct a complete review of the MBX Facility Master
Plan and Budget, promptly after the completion of such document, and shall
designate and approve those items or categories of costs and expenses provided
in such documents as Construction Costs and shall indicate whether and why
certain items or categories of costs and expenses do not qualify as Construction
Costs, in whole or in part, and whether such costs and expenses could so qualify
under other circumstances, for example, if more information were provided as the
necessity and reasonableness of the particular costs and expenses or the
features or facilities to which such costs and expenses relate. The Steering
Committee shall, on a quarterly basis during the Construction Phase, or more
frequently as reasonably requested by MBX, review the MBX Facility Master Plan
and Budget to evaluate any material additional or changed information

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concerning the design of the MBX Formulation Facility, subject to the standards
set forth in Section 3.1.3. In addition to the foregoing review procedures, MBX
shall have the right to seek a re-designation of any categories or items of
costs and expenses that it believes should be designated as Construction Costs
at anytime during the Term.

          4.3.6 PHA FORMULATION FEE. The Joint Sales Company will pay to MBX a
formulation fee equal to * on all sales or other conveyances of PHA Material
contained within PHA Formulations, on a one hundred percent (100%) purity basis,
that is not formulated for the Joint Sales Company by MBX in the MBX Formulation
Facility. The formulation fee shall be due and payable on a monthly basis. The
formulation fee for sales or conveyances completed during any month shall be due
and payable to MBX on or before the last business day of the succeeding month.
Amounts due under this Section 4.3.6 shall be payable by wire transfer of
immediately available funds to an MBX bank account in accordance with
instructions to be provided to the Joint Sales Company by MBX. Any amounts that
are not paid when due hereunder shall accrue interest at the rate of four
percent (4%) per annum in excess of the one year London Interbank Offered Rate
(LIBOR) then most recently published in THE WALL STREET JOURNAL. The right to
demand and receive the interest provided hereunder shall be in addition to any
other rights available to MBX hereunder or at law.

     4.4 PILOT ACTIVITIES.

          4.4.1 RESEARCH AND DEVELOPMENT; FUNDED TECHNOLOGY. During the
Construction Phase and thereafter during the Term, MBX will continue its
research and development efforts, on its own and with Third Parties, provided
that MBX shall pursuant to a written agreement with such Third Party own or
obtain an option to exclusively license all Technology arising from such
activity, aimed at improving the MBX Technology relating to the production of
PHA Cell Paste, PHA Material and PHA Formulations, including without limitation,
MBX's microbial strains, fermentation processes and recovery technology. The
goal of these efforts is for MBX to develop a microbial strain and processes
capable of producing PHA Material at a cost of approximately * at a
manufacturing scale of * per year and to develop related Technology that will
expand and enhance the commercial potential of the PHA Material for use in the
Field. Beginning with the commencement of the Commercial Phase, MBX and ADM Sub
shall each, from time to time, have the option of proposing to the Steering
Committee certain studies or other research efforts in the Field. The Joint
Sales Company shall have the option to fund such studies or research efforts in
accordance with a work plan and budget to be prepared by the Party making such
proposal. If the Steering Committee approves, and the Joint Sales Company
commits to, and in fact does, fund such a study or research effort, any
Technology developed, conceived or reduced to practice in the course of such
study or research effort shall be deemed to be funded technology ("Funded
Technology") and will automatically be subject to the licenses and rights
granted herein as part of the Joint Alliance Technology without further action
by either Party. Subject to the standards set forth in Section 3.1.3, the
Steering Committee shall determine the party best able to perform the work
outlined in an approved proposal, considering all relevant factors, including,
for example, the availability of particular human or the resources, access to
Technology, materials or know-how, or technical experience. If the Steering
Committee determines that ADM Sub and MBX are both equally able to perform such
work, then the Steering Committee shall request MBX to perform such

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work. If the Steering Committee does not approve, or if the Joint Sales Company
declines to, or in fact fails to, fund such a study or research effort, and the
Party which proposes the study or research performs such study or research, any
Technology developed, conceived or reduced to practice in the course of such
study or research effort shall be deemed to be unfunded technology ("Unfunded
Technology") and shall be solely owned by MBX or ADM Sub, as the case may be,
and, anything herein to the contrary notwithstanding, shall not be subject to
the rights and licenses granted herein, subject to the Parties subsequently
agreeing to a license or similar agreement to the contrary. For the avoidance of
doubt, the parties acknowledge that the research and development projects that
may be subject to the proposals described above may be performed by Third
Parties to be identified in such proposals, and in such cases the Steering
Committee shall either accept or reject the proposal on behalf of the Joint
Sales Company but shall have no right to require that a different Third Party or
any of the Parties shall perform such research and development project.

          4.4.2 PILOT MANUFACTURING. During the Term, the Parties will use
reasonable efforts to obtain access to pilot quantities of PHA Material from a
combination of one or more contract manufacturers, ADM Sub personnel and
facilities and MBX personnel and facilities, for use solely in research and
development efforts and to support or facilitate marketing and sales efforts of
PHA Material and/or PHA Formulations, but, after the First Commercial Sale, not
to supply all, or a segment, of the commercial market for PHA Material as part
of an ongoing commercial sales operation (such activity is "Pilot Sourcing"). To
the extent the Pilot Sourcing utilizes the personnel and facilities of Third
Party contract manufacturers and/or the personnel and facilities of MBX, MBX
shall control the selection and operations of such personnel and facilities. To
the extent the Pilot Sourcing utilizes the personnel and facilities of ADM Sub,
ADM Sub shall control the selection and operations of such personnel and
facilities. During the Construction Phase, MBX will investigate available
options for Pilot Sourcing and, if MBX identifies a viable option, then MBX will
present a proposal to the Steering Committee for the Steering Committee's
consideration and approval. The proposal shall include the identity of the
manufacturer(s), the personnel and facilities that ADM Sub and MBX would devote
to the efforts, the site(s) of the Pilot Sourcing, the anticipated quantity to
be produced under the proposal, the anticipated delivery schedule for PHA
Material under the proposal and the estimated capital and operating cost to ADM
Sub and MBX under the proposal (each such proposal is hereinafter a "Pilot
Sourcing Proposal"). MBX will use reasonable efforts to implement any Pilot
Sourcing Proposal approved by the Steering Committee. ADM Sub and MBX shall
share equally the total cost and expenses incurred by them in connection with
any approved Pilot Sourcing Proposal, including the cost of ADM Sub personnel
and facilities and MBX personnel and facilities all of which will be accounted
for on a cost basis, defined in a manner to be agreed upon as part of any such
proposal ("Pilot Sourcing Costs"), and any Technology developed in connection
with such activities shall be part of the Joint Alliance Technology. After the
Construction Phase, MBX will present any Pilot Sourcing Proposal to the Joint
Sales Company for the Joint Sales Company's consideration and approval. MBX will
use reasonable efforts to implement any Pilot Sourcing Proposal approved by the
Steering Committee. The Joint Sales Company shall bear the Pilot Sourcing Costs
in connection with any approved Pilot Sourcing Proposal and any Technology
developed in connection with such activities shall be part of the Joint Alliance
Technology. In the event that the Steering Committee or the Joint Sales Company,
as applicable, do not approve a particular Pilot Sourcing

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Proposal, MBX may proceed to implement the proposal at its own expense and any
Technology developed in connection with such activities shall be part of the MBX
Alliance Technology. Any PHA Cell Paste or PHA Material obtained in connection
with the Pilot Sourcing ("Pilot PHA Material") shall be used solely for internal
research and development purposes or shall be provided to Third Parties as set
forth in Section 4.4.3 below.

          4.4.3 DISPOSITION OF PILOT PHA MATERIAL. During the Construction
Phase, MBX will market and sell the Pilot PHA Material in the name of and on
behalf of the Joint Sales Company and, during the Construction Phase, the
proceeds of such sales will be distributed as set forth in this Section 4.4.3
rather than as set forth in the Operating Agreement. Proceeds from the sale of
Pilot PHA Material will be distributed to the Parties on a pro rata basis to
reimburse them for the Pilot Sourcing Costs with the remainder, if any, to be
distributed to the Parties on a pro rata basis to reimburse them for their
respective reasonable costs and expenses incurred in connection with marketing
and sales activities carried out by them in furtherance of the Commercial
Alliance and approved by the Steering Committee. After the Construction Phase,
the Joint Sales Company will market and sell the Pilot PHA Material and the
proceeds of sales of Pilot PHA Material will be distributed, if at all, in
accordance with the terms and conditions set forth in the Operating Agreement.

          4.4.4 IN-LICENSE TECHNOLOGY. Beginning with the Effective Date, MBX
and ADM Sub shall each, from time to time, have the option of proposing to the
Steering Committee certain in-licensing or acquisition of Technology that may be
useful in connection with the activities of the Parties hereunder, or under the
other Commercial Alliance Agreements. The Joint Sales Company shall have the
option to so in-license or acquire such Technology at its expense, in which
case, the Joint Sales Company shall negotiate the terms and conditions of such
license or acquisition. If the Steering Committee approves, and the Joint Sales
Company commits to, and in fact does, license or acquire such Technology then
such Technology shall be deemed part of the Joint Alliance Technology and will
automatically be subject to the licenses and rights granted herein without
further action by either Party. If the Steering Committee does not approve, or
if the Joint Sales Company declines to, or in fact fails to, in-license or
acquire such Technology, then if either Party supported the proposal then such
Party shall have the right to in-license or acquire such Technology at its
expense, and shall be deemed a part of the Unfunded Technology and shall be
solely owned by MBX or ADM Sub, as the case may be, and, anything herein to the
contrary notwithstanding, shall not be subject to the rights and licenses
granted herein, subject to the Parties subsequently agreeing to a license or
similar agreement to the contrary.

     4.5 CERTAIN FINANCIAL COMMITMENTS DURING THE CONSTRUCTION PHASE. In partial
consideration of the rights and licenses granted herein to the Joint Sales
Company, the Joint Sales Company shall make the non-refundable payments
described herein to MBX during the Construction Phase. The Joint Sales Company
shall pay to MBX up to (a) two (2) equal payments of one million, five hundred
and seventy-five thousand dollars ($1,575,000) each, and (b) up to: (i) ten (10)
equal payments of one million, five hundred and seventy-five thousand dollars
($1,575,000) during each Calendar Quarter during the Construction Phase. Such
twelve (12) payments are each an "Operating Payment" and together the "Operating
Payments"). The first two Operating Payments totaling three million one hundred
fifty thousand dollars

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($3,150,000) shall be due and payable within ten (10) days after the Effective
Date and each Operating Payment thereafter shall become due and payable on the
first Business Day of each successive Calendar Quarter during the Construction
Phase. The Steering Committee shall have the right to increase the amount of the
Operating Payments at any time during the Term to support additional work by MBX
in support of the Commercial Alliance. If the Construction Phase ends before all
twelve (12) Operating Payments become due and payable hereunder, and this
Agreement remains in effect, then the Joint Sales Company shall make a final
payment to MBX within thirty (30) days of the end of the Construction Phase as
determined in accordance with the following formula:

                             X = $250,000 x (12 - Y)

For the purposes of the above formula, "X" equals the amount of the final
payment in dollars and "Y" equals the number of Operating Payments that became
due and payable during the Construction Phase. Amounts due under this Section
4.5 shall be payable by wire transfer of immediately available funds to an MBX
bank account in accordance with instructions to be provided to the Joint Sales
Company by MBX. Any amounts that are not paid when due hereunder shall accrue
interest at the rate of four percent (4%) per annum in excess of the one year
London Interbank Offered Rate (LIBOR) then most recently published in THE WALL
STREET JOURNAL. The right to demand and receive the interest provided hereunder
shall be in addition to any other rights available to MBX hereunder or at law.
For avoidance of doubt, the failure by ADM Sub to provide funds to the Joint
Sales Company to make the Operating Payments as and when provided for herein
shall be deemed a breach of this Agreement by ADM Sub.

                                    ARTICLE 5
                JOINT SALES COMPANY; MARKETING AND SALES ACTIVITY

     5.1 FORMATION AND PURPOSE OF JOINT SALES COMPANY.

          5.1.1 GENERAL PURPOSES. As is referenced above, the Joint Sales
Company is a limited liability company, formed and owned by the Parties, and
intended to: (i) serve as the commercial entity to establish and develop the
commercial market for the PHA Material and PHA Formulations, and to conduct the
marketing and sales of PHA Material and PHA Formulations in furtherance of the
goals of the Commercial Alliance, (ii) assist in the coordination and
integration of the manufacturing, formulation and marketing activities in such a
manner as to establish and maintain an efficient and profitable commercial
operation and (iii) administer and account for certain financial matters
relating to the investments of the Parties in the Commercial Alliance and the
allocation and distribution of losses and profits therefrom to the Parties, as
more fully set forth in the Operating Agreement.

     5.2 MARKETING AND SALES ROLE. During the Construction Phase, MBX will use
Commercially Reasonable Efforts to establish the market for the PHA Material and
PHA Formulations in the name of the Joint Sales Company. ADM Sub shall have the
right to appoint a representative to participate in such efforts. During the
Commercial Phase, the Joint Sales

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Company will develop, expand and supply the global market for PHA Material and
PHA Formulations.

          5.2.1 STRATEGIC ALLIANCE PARTNERS. During the Construction Phase, MBX
will have primary responsibility for determining whether it is advisable to seek
a Strategic Alliance Partner to support and participate in the activities
described in this Article 5 and for identifying, contacting and negotiating, on
behalf of the Joint Sales Company, with potential Strategic Alliance Partners.
Notwithstanding the foregoing, MBX shall obtain the approval of the Steering
Committee and the Joint Sales Company before entering into any contractual
arrangement with a Third Party to assume responsibility for an active and
ongoing role in executing a strategic plan to establish the market for the PHA
Material or PHA Formulations.

          5.2.2 FINANCIAL MATTERS RELATING TO MARKETING AND SALES. Subject to
reimbursement of certain costs and expenses to the extent available under
Section 4.4.2, ADM Sub and MBX shall each be solely responsible for its own
costs and expenses incurred in connection with performing marketing and sales
activities undertaken during the Construction Phase.

     5.3 FUNDING OF JOINT SALES COMPANY.

          5.3.1 CAPITAL CONTRIBUTIONS. ADM Sub and MBX shall each make an
investment of capital in the Joint Sales Company in the amount of * as set forth
herein. ADM Sub shall remit such amount in cash to the Joint Sales Company
within ten (10) days after the Effective Date. MBX shall be credited with a
capital investment of * in exchange for foregoing receipt of the payment of the
License Fee by the Joint Sales Company to MBX. As is more fully set forth in the
Operating Agreement, future investments of capital by ADM Sub credited to the
Ledger Account pursuant to the Operating Agreement shall not cause ADM Sub to
acquire additional Units in the Joint Sales Company or to otherwise effect the
Parties' equal ownership of the Joint Sales Company.

          5.3.2 LOAN FACILITY. ADM Sub shall, as more fully set forth in the
Loan and Security Agreement, make available a loan facility to the Joint Sales
Company to fund certain cash requirements of the Joint Sales Company.

                                    ARTICLE 6
                      COMMERCIAL PHASE; ANCILLARY SERVICES

     6.1 OVERVIEW AND GOAL OF THE COMMERCIAL PHASE. The primary goal of the
Commercial Phase is to leverage the Parties' assets, including without
limitation, assets developed during the Construction Phase, such as the ADM Sub
Manufacturing Facility, the MBX Formulation Facility, the market developed
through the efforts of the Parties, including the sale of the Pilot PHA
Material, and the business relationships established by and on behalf of the
Joint Sales Company, in order to manufacture at the 50,000 Ton Annual Design
Capacity and sell the resulting PHA Material and PHA Formulations during the
Commercial Phase as a profitable, ongoing business venture. In order to achieve
this goal, the Parties will pursue the

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following primary objectives: (i) ADM Sub will, as and to the extent required in
the ADM Sub Manufacturing Agreement, dedicate the ADM Sub Manufacturing Facility
and its personnel to manufacturing PHA Material for sale to the Joint Sales
Company, (ii) MBX will, as and to the extent required in the MBX Formulation
Agreement, arrange for formulating PHA Material, whether in a dedicated facility
or not, (iii) the Parties will, as and to the extent set forth herein and in the
other Commercial Alliance Agreements, participate in and support, financially
and otherwise, the efforts of the Joint Sales Company to develop, expand and
supply the global market for PHA Material and PHA Formulations.

     6.2 ADM SUB MANUFACTURING. Throughout the Commercial Phase, ADM Sub shall
provide PHA Material to the Joint Sales Company in accordance with the terms and
conditions set forth in the ADM Sub Manufacturing Agreement. The ADM Sub
manufacturing services will be overseen by a manager appointed for this purpose
by ADM Sub with the approval of the Steering Committee (the "ADM Sub
Manufacturing Manager"). The performance parameters, including without
limitation, the product specifications, and procedures for forecasting,
ordering, delivery and payment for such PHA Materials are all as provided in the
ADM Sub Manufacturing Agreement. Distribution of amounts received by the Joint
Sales Company upon sale of the PHA Material and PHA Formulations shall be as
provided in the Operating Agreement.

     6.3 MBX FORMULATION. Throughout the Commercial Phase, MBX shall provide
formulation services with respect to the PHA Formulations for the Joint Sales
Company in accordance with the terms and conditions set forth in the MBX
Formulation Agreement. The performance parameters and procedures by which the
Joint Sales Company will access those services are all as provided in the MBX
Formulation Agreement. The distribution of amounts received by the Joint Sales
Company upon sale of the PHA Materials and PHA Formulations shall be as provided
in the Operating Agreement.

     6.4 JOINT SALES COMPANY. Unless expressly stated otherwise in this
Agreement or the other Commercial Alliance Agreements, or unless the Parties
agree otherwise in writing, once the Commercial Phase commences, all PHA
Material and PHA Formulations, excepting Pilot PHA Material, to be sold, or
otherwise disposed of, by or for the benefit of the Commercial Alliance, shall
be purchased solely from ADM Sub by the Joint Sales Company, and, if formulation
services for PHA Formulations are required, they shall be purchased solely from
MBX by the Joint Sales Company.

          6.4.1 ANCILLARY SERVICES. The Parties hereby acknowledge that MBX will
provide certain ancillary services to the Joint Sales Company as set forth in
the MBX Services Agreement. The Parties further acknowledge that ADM Sub will
provide certain ancillary services to the Joint Sales Company as set forth in
the ADM Sub Services Agreement.

                                    ARTICLE 7
           INTELLECTUAL PROPERTY; LICENSES; TECHNOLOGY TRANSFER; ROFN

     7.1 OWNERSHIP.

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          7.1.1 SOLE OWNERSHIP. Subject to the rights and licenses granted
herein and in the other Commercial Alliance Agreements, ADM Sub shall own all
right, title and interest in and to any: (i) ADM Sub Background Technology, (ii)
ADM Sub Alliance Technology and (iii) ADM Sub Proprietary Materials. Subject to
the rights and licenses granted herein and in the other Commercial Alliance
Agreements, MBX shall own all right, title and interest in and to any: (x) MBX
Background Technology, (y) MBX Alliance Technology and (z) MBX Proprietary
Materials.

          7.1.2 JOINT OWNERSHIP. Subject to Section 7.1.1, and subject to the
rights and licenses granted herein and in the other Commercial Alliance
Agreements, MBX and ADM Sub shall jointly own all Joint Alliance Technology. ADM
Sub hereby grants to MBX a perpetual, royalty-free, fully-sublicenseable license
to ADM Sub's rights in Joint Alliance Technology for the research, development,
manufacture, use, sale and importation of PHA-Related Material produced via
Plants. MBX hereby grants to ADM Sub a perpetual, royalty-free, exclusive,
fully-sublicenseable license to MBX's rights in Joint Alliance Technology for
use in all fields that are part of ADM's and its Affiliates' commercial
activities at any time during the Term of the Commercial Alliance, but
excluding: (i) uses that are within the Field, (ii) uses that are within the
term "Field of Use" as that term is defined in the License Agreement by and
between MBX and Tepha, Inc. dated October 1, 1999, as amended on December 17,
2002 and (iii) any and all uses of PHA-Related Material produced via Plants.
Subject to the rights and licenses granted herein and in the other Commercial
Alliance Agreements, MBX and ADM Sub hereby agree that they shall each have the
right to assign, sell, license or otherwise convey their rights in the Joint
Alliance Technology without notice to or consent of the other Party and without
any obligation to share the proceeds of such activity with the other Party, or
otherwise to account to the other Party in connection with such activities. In
all other respects, the rights of the Parties as joint owners shall be
determined by the laws of the United States of America and the State of
Delaware. Trademarks that are developed by or on behalf of the Joint Sales
Company for use in connection with the marketing and sale of PHA Material or PHA
Formulations during the Term shall be included within the Joint Alliance
Technology and the Parties agree and covenant not to use any such trademarks, or
other trademarks licensed hereunder, in a manner that would cause a diminution
in value of such trademarks, including without limitation, by using such
trademarks in connection with other goods, by using such trademarks in a
misleading or confusing manner or by using any trademarks that are confusingly
similar to any such trademark.

          7.1.3 DISCLOSURE; ASSIGNMENTS. MBX shall promptly disclose in writing
to ADM Sub the making, conception or reduction to practice of any Alliance
Technology. ADM Sub shall promptly disclose in writing to MBX the making,
conception or reduction to practice of any Alliance Technology. Each Party
hereby assigns all of its right, title and interest in and to any Alliance
Technology to the other Party to the extent necessary to conform to the
allocation of ownership rights set forth in this Section 7.1. The Parties agree
to take such actions, including without limitation, executing and delivering
such documents, as the other Party may reasonably request in order to give
effect to and to evidence the foregoing assignments of rights.

     7.2. LICENSE GRANTS BY MBX.

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          7.2.1 GRANT BY MBX TO ADM SUB. Subject to the terms and conditions set
forth herein, MBX hereby grants to ADM Sub a royalty-free, exclusive license,
without the right to sublicense, under MBX's right, title and interest in and to
the MBX Technology, the MBX Patent Rights and the Joint Alliance Technology,
solely to manufacture PHA Material and PHA Formulations in North America during
the Construction Phase in the quantities and form requested in writing by MBX,
or the Joint Sales Company, and agreed to by ADM Sub, and solely for sale by ADM
Sub to MBX and/or the Joint Sales Company for use within the Field, such
exclusivity to be subject to MBX's right to conduct the Permitted Activities as
set forth in Section 8.4. MBX shall not itself, or grant any license to any
third party to, manufacture, have made, offer for sale, sell, have sold or
import PHA Cell Paste, PHA Material or PHA Formulations, subject to MBX's right
to conduct the Permitted Activities as set forth in Section 8.4.

          7.2.2 GRANT BY MBX TO THE JOINT SALES COMPANY; GRANT OF SUBLICENSE.
Subject to the terms and conditions set forth herein, including without
limitation Section 9.8, MBX hereby grants to the Joint Sales Company the
following licenses, with Limited Sublicense Right: (i) upon completion of the
Construction Phase, a royalty-bearing, exclusive license during the Term, under
MBX's right, title and interest in and to the MBX Technology, the MBX Patent
Rights and the Joint Alliance Technology, solely to make and have made PHA
Material and PHA Formulations in North America, such exclusivity to be subject
to MBX's right to conduct the Permitted Activities as set forth in Section 8.4,
and (ii) upon the Effective Date, a royalty-bearing, exclusive license under
MBX's right, title and interest in and to the MBX Technology, the MBX Patent
Rights and the Joint Alliance Technology to offer for sale, sell, have sold and
import PHA Material and PHA Formulations for use in the Field worldwide. The
foregoing licenses shall, in all instances, be limited such that the Joint Sales
Company shall only be permitted to make and have made that amount of PHA
Material (including, without limitation, PHA Material that is contained within
PHA Formulations) that is produced by the ADM Sub Manufacturing Facility, having
a 50,000 Ton Annual Design Capacity, during any period of twelve (12)
consecutive months during the Term. MBX shall not itself, or grant any license
to any third party to, manufacture, have made, offer for sale, sell, have sold
or import PHA Cell Paste, PHA Material or PHA Formulations, subject to MBX's
right to conduct the Permitted Activities as set forth in Section 8.4. The Joint
Sales Company hereby grants an exclusive, royalty free sublicense of its right
to make and have made PHA Material to ADM Sub; provided, however, that such
sublicense shall be limited solely to permit ADM Sub to make such PHA Material
for sale to the Joint Sales Company under the ADM Sub Manufacturing Agreement
and solely for delivery directly to, or as directed by, the Joint Sales Company.
MBX hereby grants its consent to the foregoing grant of such limited sublicense
by the Joint Sales Company to ADM Sub. Notwithstanding anything to the contrary
herein, ADM, ADM Sub and the Joint Sales Company shall not transfer or convey
any cell line constituting part of the MBX Proprietary Materials to any Third
Party.

          7.2.3 PAYMENT OF ROYALTIES. In consideration of the grant of the
license by MBX under Section 7.2.2, the Joint Sales Company shall pay to MBX an
upfront license fee (the "License Fee") equal to *. Notwithstanding the
foregoing, MBX and the Joint Sales Company hereby agree that MBX shall forego
receipt of the payment of the License Fee, and the Joint Sales Company shall
retain the License Fee and shall treat such amount as a capital contribution

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                                       30



by MBX to the Joint Sales Company as further set forth in Section 5.3.1. During
the Royalty Term, the Joint Sales Company will pay to MBX a royalty equal to:
(i) * on all sales or other conveyances of PHA Patented Material (including,
without limitation, PHA Material that is contained within PHA Formulations), on
a one hundred percent (100%) purity basis; and (ii) * on all sales or other
conveyances of PHA Know-How Material (including, without limitation, PHA
Material that is contained within PHA Formulations), on a one hundred percent
(100%) purity basis. During the Supplemental Royalty Term, the Joint Sales
Company will pay to MBX a royalty equal to * on all sales or other conveyances
of PHA Supplemental Know-How Material (including, without limitation, PHA
Material that is contained within PHA Formulations), on a one hundred percent
(100%) purity basis. In the event more than one royalty applies to the
manufacture, use, sale or importation of a particular product, then the highest
royalty shall be the only applicable royalty hereunder. The royalties on sales
or conveyances completed during any month shall be due and payable to MBX on or
before the last business day of the succeeding month. Amounts due under this
Section 7.2.3 shall be payable by wire transfer of immediately available funds
to an MBX bank account in accordance with instructions to be provided to the
Joint Sales Company by MBX. Any amounts that are not paid when due hereunder
shall accrue interest at the rate of four percent (4%) per annum in excess of
the one year London Interbank Offered Rate (LIBOR) then most recently published
in THE WALL STREET JOURNAL. The right to demand and receive the interest
provided hereunder shall be in addition to any other rights available to MBX
hereunder or at law.

     7.3 LICENSE GRANTS BY ADM SUB.

          7.3.1 GRANT BY ADM SUB TO MBX. Subject to the terms and conditions set
forth herein, ADM Sub hereby grants to MBX a *, non-exclusive license, without
the right to sublicense (except in connection with the Pilot Activities), under
ADM Sub's right, title and interest in and to the ADM Technology and the ADM Sub
Patent Rights, solely to use, offer for sale, sell, have sold and import PHA
Material and PHA Formulations during the Construction Phase in the quantities
and form requested in writing by MBX, or the Joint Sales Company, and agreed to
by ADM Sub, in connection with the Commercial Alliance as expressly permitted
under this Agreement, including without limitation, in connection with the Pilot
Activities.

          7.3.2 GRANT BY ADM SUB TO THE JOINT SALES COMPANY. Subject to the
terms and conditions set forth herein, ADM Sub hereby grants to the Joint Sales
Company a *, exclusive, fully-sublicenseable license during the Term, under ADM
Sub's right, title and interest in and to the ADM Technology, the ADM Sub Patent
Rights and the Joint Alliance Technology, solely to make and have made PHA
Material and PHA Formulations in North America and to offer for sale, sell, have
sold and import PHA Material and PHA Formulations worldwide. The foregoing
license shall be limited such that the Joint Sales Company shall only be
permitted to make and have made that amount of PHA Material (including, without
limitation, PHA Material that is contained within PHA Formulations) that is
produced by the ADM Sub Manufacturing Facility, having a 50,000 Ton Annual
Design Capacity, during any period of twelve (12) consecutive months during the
Term.

     7.4. RIGHT OF FIRST NEGOTIATION. MBX hereby grants to the Joint Sales
Company, a right of first negotiation as set forth in this Section 7.4 (the
"ROFN"). If MBX comes to Control

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Technology or Patent Rights pertaining * (the "ROFN Rights"), and MBX decides to
offer a Third Party a license or similar rights under the ROFN Rights at anytime
during the Term and prior to the expiration of the JV Option (including the
expiration of the possibility that the JV Option could reset under Section
9.8.5), then MBX shall first offer to the Joint Sales Company the right to
negotiate towards a license under which such ROFN Rights would be licensed by
MBX to the Joint Sales Company and, if ADM Sub accepts such offer on behalf of
the Joint Sales Company, then ADM Sub, on behalf of the Joint Sales Company, and
MBX shall negotiate in good faith towards such a license on such terms as each,
in its sole discretion, shall determine to be acceptable. In the event that MBX
and the Joint Sales Company have not executed a written agreement including the
terms of a license agreed upon by ADM Sub and MBX within one hundred twenty
(120) days after the initial offer from MBX to the Joint Sales Company, then MBX
shall be free to offer a license or similar rights under the ROFN Rights to a
Third Party; provided, however, (i) any such license or similar rights offered
to a Third Party shall not include economic terms that are more favorable to
such Third Party than the economic terms MBX last proposed to the Joint Sales
Company; and (ii) MBX shall remain subject to, and by granting any such license
or similar rights to any Third Party shall not breach, the restrictions and
obligations set forth in this Agreement (including without limitation Section
8.4, to the extent then-applicable) and the other Commercial Alliance
Agreements.

     7.5 NO IMPLIED RIGHTS. The Parties hereby agree and acknowledge that no
rights or licenses under their respective intellectual property rights are
granted hereunder, by implication, estoppel or otherwise, by any of them.

     7.6 TECHNOLOGY TRANSFER; LIMITED ACCESS. MBX and ADM Sub hereby acknowledge
the technology transfer conducted pursuant to the Technology Alliance and Option
Agreement. MBX hereby agrees to use Commercially Reasonable Efforts to conduct
an additional transfer of MBX Technology, which technology transfer will be
periodically updated during the Construction Phase to include improvements to
the MBX Technology, including without limitation, process improvements developed
as described under Section 4.4.1, as and to the extent reasonably necessary to
enable ADM Sub to perform its obligations under the ADM Sub Manufacturing
Agreement (the "Technology Transfer"). MBX and ADM Sub shall each devote such
personnel and other resources as are reasonably required to complete the
Technology Transfer in an efficient manner. ADM Sub acknowledges that some of
the MBX Technology that will be transferred to ADM Sub is in the form of trade
secrets. In an effort to ensure the maximum continued protection of MBX's rights
in such trade secrets, and in keeping with the confidentiality obligations
herein, ADM Sub covenants that it will provide access to the MBX Technology only
to employees of ADM and ADM Sub who have a need to have access to such MBX
Technology in order to complete the Technology Transfer and perform ADM Sub's
obligations under the ADM Sub Manufacturing Agreement.

     7.7 ACKNOWLEDGEMENT REGARDING MIT LICENSE. The Parties hereby acknowledge
that certain of the MBX Patent Rights and MBX Technology are Controlled by MBX
pursuant and subject to the MIT License. All licenses granted herein to such MBX
Patent Rights and MBX Technology are subject to certain rights retained by MIT
in the MIT License and the Parties agree that the obligations to MIT set forth
in Articles 2, 5, 7, 8, 9, 10, 12, 13 and 15

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(copies of said articles are attached hereto as EXHIBIT G) are binding upon the
Joint Sales Company and ADM Sub as if they were parties to the MIT License.

                                    ARTICLE 8
           DUE DILIGENCE; REPRESENTATIONS AND WARRANTIES; EXCLUSIVITY

     8.1 CONDUCT OF COMMERCIAL ALLIANCE. The Parties shall use Commercially
Reasonable Efforts to perform their respective obligations under the Commercial
Alliance, in accordance with the provisions herein and the provisions set forth
in the other Commercial Alliance Agreements.

          8.1.1 CERTAIN MUTUAL REPRESENTATIONS. Each Party hereby represents and
warrants to the other Parties as follows: (i) it shall use Commercially
Reasonable Efforts to perform its obligations in connection with the Commercial
Alliance in accordance with high scientific and engineering principles and
procedures, and in compliance in all material respects with all requirements of
applicable laws, rules, and regulations, (ii) it shall use Commercially
Reasonable Efforts to achieve the objectives of the Commercial Alliance
efficiently and expeditiously and (iii) it shall proceed diligently with the
Commercial Alliance, using Commercially Reasonable Efforts, including by
allocating time, effort, equipment, and skilled personnel to complete the
Commercial Alliance successfully and promptly.

     8.2 REPRESENTATIONS AND WARRANTIES.

          8.2.1 MBX REPRESENTATIONS. Except as otherwise disclosed on Schedule
8.2.1 attached hereto and incorporated herein by reference, MBX represents and
warrants, as of the Effective Date, that: (a) MBX possesses the full legal
right, authority and power to enter into this Agreement and to grant the
licenses to the Joint Sales Company as set forth herein, and that no consent or
approval is required in connection therewith; (b) to MBX's Knowledge, the MBX
Patent Rights are valid and enforceable within the Field, and MBX has no
Knowledge of any current or threatened claim by a Third Party that any of the
MBX Patent Rights are invalid or unenforceable within the Field or that
practicing any of the MBX Patent Rights or MBX Technology within the Field would
infringe a Third Party's Patent Rights; (c) there is no existing or, to MBX's
Knowledge, threatened litigation concerning the ownership or use within the
Field of the MBX Technology or MBX Patent Rights; (d) all MBX Patent Rights that
have been prosecuted by MBX (directly or through legal counsel) have been
prosecuted in good faith; (e) to the Knowledge of MBX, all MBX Patent Rights
that have been prosecuted by a Third Party (directly or through legal counsel)
have been prosecuted in good faith; (f) MBX has not sold, transferred, granted
any licenses, or otherwise conveyed any rights in or to the MBX Technology or
MBX Patent Rights that would prevent MBX from granting the rights and licenses
granted herein; (g) MBX shall not Knowingly provide any false or misleading
information to ADM Sub in connection with the Technology Transfer or the
performance of the Commercial Alliance; (h) MBX has disclosed to ADM Sub any
information, which, to MBX's Knowledge, identifies significant health or safety
risks associated with the production or recovery of PHA Material or PHA
Formulations; (i) to its Knowledge, MBX can fulfill its obligations hereunder
without violating, infringing or misappropriating any rights, including any
contract, statutory or

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intellectual property rights or any confidentiality rights of any Third Party;
(j) MBX has no Knowledge of any existing or threatened acts by any Third Party
that would infringe the MBX Technology or the MBX Patent Rights; (k) MBX has no
Knowledge of any prior art that would render the MBX Patent Rights unpatentable,
(l) the MBX Patent Rights include all of the patents and patent applications
which MBX Controls which would be infringed by the research, development,
manufacture, use, sale or importation of PHA Material and PHA Formulations;
provided, that if any such patents or patent applications are not encompassed
within the definition of the term "MBX Patent Rights", such definition shall be
construed as if such patents or patent applications were so included, (m) MBX
has provided ADM Sub with true copies of the agreements listed on Schedule 8.2.1
and that these agreements are all the agreements that are currently effective or
that are entered into but that are to become effective after the Effective Date
that MBX or its Affiliates have entered into with Third Parties pursuant to
which: (1) MBX or its Affiliates have granted to a Third Party the right to
practice the MBX Patent Rights within the Field (2) a Third Party granted to MBX
or its Affiliates the right to practice such Third Party's intellectual property
rights within the Field, (3) MBX or its Affiliates and a Third Party have or
shall conduct activities relating to the production or sale of PHA Material or
PHA Formulations, or (4) MBX or its Affiliates shall have transferred or
conveyed a cell line intended to produce PHA Material to a Third Party, (n)
Schedule 8.2.1 contains a summary description of all agreements to which MBX or
its Affiliates are a party concerning the manufacture, distribution or sale of
polyhydroxyalkanoates or concerning the license of Technology or Patent Rights
concerning the manufacture, distribution or sale of polyhydroxyalkanoates, (o)
except as summarized in Schedule 8.2.1, neither MBX nor its Affiliates is
currently negotiating any agreements or arrangements with Third Parties that
contemplate the licensing, research, manufacture or other production of
polyhydroxyalkanoates; (p) Schedule 8.2.1 contains a complete list of all
written opinions of counsel MBX has received concerning the patentability or
enforceability of any MBX Patent Rights or Patent Rights Controlled by any Third
Party and (q) Schedule 8.2.1 contains a complete list of all written notices MBX
has received from any Third Parties alleging that MBX is or may be infringing a
Third Party's patent or other intellectual property right; (r) Schedule 8.2.1
contains a complete list of all written notices MBX has provided to any Third
Party alleging that such Third Party is or may be infringing MBX Technology or
MBX Patent Rights. Anything herein to the contrary notwithstanding, MBX shall
only be required to provide copies to ADM Sub of those material transfer
agreements entered into with Third Parties pursuant to which MBX or its
Affiliates shall have transferred or conveyed a cell line intended to produce
PHA Material or that does not conform in all material respects with the form of
material transfer agreement attached hereto to Schedule 8.2.1. Anything herein
to the contrary notwithstanding, the Parties hereby agree and acknowledge as
follows: (i) with respect to such of the Technology and Patent Rights that are
Controlled by MBX and that include or claim processes or methods ("Methods IP")
of manufacturing, processing or using compositions of matter, it is acknowledged
that MBX may not have, or be able to license to ADM Sub or the Joint Sales
Company hereunder, the freedom to practice such Methods IP with respect to
compositions that are owned or controlled by Third Parties and that MBX makes no
representation or warranty as to such freedom to operate; (ii) with respect to
such of the Technology and Patent Rights that are Controlled by MBX and that
include or claim compositions of matter of PHA Formulations ("Formulations IP"),
it is acknowledged that MBX may not have, or be able to license to ADM Sub or
the Joint Sales Company hereunder, the right to make, use or sell PHA
Formulations that are claimed by such Formulations IP to the extent

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that a Third Party owns or controls the right to manufacture, use or sell a
component, ingredient or combination that is included within a particular PHA
Formulation and that MBX makes no representation or warranty as to such freedom
to operate; provided, however, that except to the extent recently allowed US
Patent Application US 2003/0236358 (published December 25, 2003) is valid,
enforceable and applicable, this exception shall not apply to the formulations
listed on Schedule 8.2.1 as "Core Formulations"; (iii) with respect to such of
the Technology and Patent Rights that are Controlled by MBX and that include or
claim a method producing PHA Material through the use of engineered microbial
cell lines, MBX believes that *, (iv) with respect to such of the Technology and
Patent Rights that are Controlled by MBX and that include or claim the
manufacture, use or sale of *; and (v) with respect to patent applications that
are included within the MBX Patent Rights, MBX only makes the representations
and warranties set forth in items 8.2.1(a), (c), (d), (e), (f), (g), (j), (k),
(l), (m) and (n). MBX DOES NOT MAKE ANY OTHER REPRESENTATION OR WARRANTY
WHATSOEVER CONCERNING THE MBX PATENT RIGHTS, THE MBX TECHNOLOGY OR ITS RIGHTS
THEREIN. MBX HEREBY SPECIFICALLY DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR
IMPLIED, INCLUDING BUT NOT LIMITED TO, IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE.

          8.2.2 ADM SUB REPRESENTATIONS. Except as otherwise disclosed on
Schedule 8.2.2 attached hereto and incorporated herein by reference, ADM Sub
represents and warrants, as of the Effective Date, that: (a) ADM Sub possesses
the full legal right, authority and power to enter into this Agreement and to
grant the licenses to the Joint Sales Company as set forth herein, and that no
consent or approval is required in connection therewith; (b) to ADM Sub's
Knowledge, the ADM Sub Patent Rights that, to ADM Sub's Knowledge, have specific
application within the Field, are valid and enforceable within the Field, and
ADM Sub has no Knowledge of any current or threatened claim by a Third Party
that any of the ADM Sub Patent Rights that, to ADM Sub's Knowledge, have
specific application within the Field, are invalid or unenforceable within the
Field or would infringe a Third Party's Patent Rights if practiced in the Field;
(c) there is no existing or, to ADM Sub's Knowledge, threatened litigation
concerning the ownership or use within the Field of the ADM Sub Technology or
ADM Sub Patent Rights that, to ADM Sub's Knowledge, have specific application
within the Field; (d) all ADM Sub Patent Rights that have been prosecuted by ADM
Sub (directly or through legal counsel) have been prosecuted in good faith; (e)
to the Knowledge of ADM Sub, all ADM Sub Patent Rights that have been prosecuted
by a Third Party (directly or through legal counsel) have been prosecuted in
good faith; (f) ADM Sub has not sold, transferred, granted any licenses, or
otherwise conveyed any rights in or to the ADM Sub Technology or ADM Sub Patent
Rights that, to ADM Sub's Knowledge, have specific application within the Field,
which sale, transfer, license or conveyance would prevent ADM Sub from granting
the rights and licenses granted herein; (g) ADM Sub shall not Knowingly provide
any false or misleading information to MBX in connection with the Technology
Transfer or the performance of the Commercial Alliance; (h) ADM Sub has
disclosed to MBX any information, which, to ADM Sub's Knowledge, identifies
significant health or safety risks associated with the production or recovery of
PHA Material or PHA Formulations; (i) to its Knowledge, ADM Sub can fulfill its
obligations hereunder without violating, infringing or misappropriating any
rights, including any contract, statutory or intellectual property rights or any
confidentiality rights of any Third Party; (j) ADM Sub has no Knowledge of any
existing or threatened acts by any Third Party that would infringe the ADM

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                                       35



Sub Technology or the ADM Sub Patent Rights that, to ADM Sub's Knowledge, have
specific application within the Field; (k) ADM Sub has no Knowledge of any prior
art that would render unpatentable those ADM Sub Patent Rights that, to ADM
Sub's Knowledge, have specific application within the Field, (l) the ADM Sub
Patent Rights include all of the patents and patent applications which ADM Sub
Controls which would be infringed by the research, development, manufacture,
use, sale or importation of PHA Material and PHA Formulations; provided, that if
any such patents or patent applications are not encompassed within the
definition of the term "ADM Sub Patent Rights", such definition shall be
construed as if such patents or patent applications were so included, (m) ADM
Sub has provided MBX with true copies of the agreements listed on Schedule 8.2.2
and that these agreements are all the agreements that are currently effective or
that are entered into but that are to become effective after the Effective Date
that ADM Sub or its Affiliates have entered into with Third Parties pursuant to
which: (1) ADM Sub or its Affiliates have granted to a Third Party the right to
practice within the Field the ADM Sub Patent Rights that, to ADM Sub's
Knowledge, have a specific application within the Field, (2) a Third Party
granted to ADM Sub or its Affiliates the right to practice such Third Party's
intellectual property rights specifically within the Field, (3) ADM Sub or its
Affiliates and a Third Party have or shall conduct activities relating to the
production or sale of PHA Material or PHA Formulations, or (4) ADM Sub or its
Affiliates shall have transferred or conveyed a cell line intended to produce
PHA Material to a Third Party, (n) Schedule 8.2.2 contains a summary description
of all agreements to which ADM Sub or its Affiliates are a party concerning the
manufacture, distribution or sale of polyhydroxyalkanoates or concerning the
license of Technology or Patent Rights concerning the manufacture, distribution
or sale of polyhydroxyalkanoates, (o) except as summarized in Schedule 8.2.2,
neither ADM Sub nor its Affiliates is currently negotiating any agreements or
arrangements with Third Parties that contemplate the licensing, research,
manufacture or other production of polyhydroxyalkanoates; (p) Schedule 8.2.2
contains a complete list of all written opinions of counsel ADM Sub has received
concerning the patentability or enforceability of any ADM Sub Patent Rights or
Patent Rights Controlled by any Third Party that, to ADM Sub's Knowledge, have
specific application within the Field, and (q) Schedule 8.2.2 contains a
complete list of all written notices ADM Sub has received from any Third Parties
alleging that ADM Sub is or may be infringing a Third Party's patent or other
intellectual property right within the Field; (r) Schedule 8.2.2 contains a
complete list of all written notices ADM Sub has provided to any Third Party
alleging that such Third Party is or may be infringing ADM Sub Technology or ADM
Sub Patent Rights within the Field. Anything herein to the contrary
notwithstanding, ADM Sub shall only be required to provide copies to MBX of
those material transfer agreements entered into with Third Parties pursuant to
which ADM Sub or its Affiliates shall have transferred or conveyed a cell line
intended to produce PHA Material or that do not provide that ADM Sub will own,
or have an option to take an exclusive license to inventions that relate to the
manufacture, use or sale of PHA Material that are made in connection with the
work done pursuant to the material transfer agreement. Anything herein to the
contrary notwithstanding, the Parties hereby agree and acknowledge as follows:
with respect to patent applications that are included within the ADM Sub Patent
Rights, ADM only makes the representations and warranties set forth in items
8.2.2(a), (c), (d), (e), (f), (g), (j), (k), (l), (m) and (n). ADM SUB DOES NOT
MAKE ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER CONCERNING THE ADM SUB
PATENT RIGHTS, THE ADM SUB TECHNOLOGY OR ITS RIGHTS THEREIN. ADM SUB HEREBY
SPECIFICALLY DISCLAIMS ALL OTHER WARRANTIES, EXPRESS

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OR IMPLIED, INCLUDING BUT NOT LIMITED TO, IMPLIED WARRANTIES OF MERCHANTABILITY
AND FITNESS FOR A PARTICULAR PURPOSE.

     8.3 RECORDS. ADM Sub and MBX shall maintain records with respect to the
Commercial Alliance in sufficient detail and in a good scientific manner
appropriate to support patent filings, which shall be complete and accurate and
shall fully and properly reflect all work done and results achieved in the
performance of the Commercial Alliance. All such records shall be retained for
at least five (5) years after the termination of this Agreement, or for such
longer period as may be required by applicable law. Each of MBX and ADM Sub
shall have the right, during normal business hours and upon reasonable notice,
to inspect and copy any such records that are maintained in accordance with this
Section 8.3.

     8.4 EXCLUSIVITY. Except as otherwise provided herein, during the Exclusive
Period, neither ADM Sub nor MBX shall, directly or through one or more
Affiliates or agents, discuss, negotiate or establish, business operations,
agreements or transactions with any Third Party concerning or relating to *,
including without limitation any business operation, agreement or transaction
that would have as a purpose, the research, development, manufacture, use, sale
or importation of *. Notwithstanding the foregoing, MBX shall at all times be
permitted to: (i) conduct Pilot Activities in the manner and to the extent set
forth in Section 4.4, (ii) communicate with and, with the approval of the
Steering Committee, establish arrangements with Strategic Alliance Partners in
the manner and to the extent set forth in Section 5.2.1, (iii) performing its
obligations concerning formulation activities in the manner and to the extent
set forth in Section 4.3 (provided that the Joint Sales Company shall have the
sole and exclusive right to grant any licenses of intellectual property rights
required for a Third Party to provide the formulation services described in
Section 4.3, if applicable), and both MBX and ADM Sub shall at all times be
permitted to (iv) conduct research and development efforts in the manner and to
the extent set forth in Section 4.4.1; and (v) in-license or otherwise acquire
rights to Technology in the manner and to the extent set forth in Section 4.4.4
(the activities listed in the foregoing clauses (i) through (v) inclusive are
the "Permitted Activities") and provided further that, for avoidance of doubt,
MBX shall not grant any right or license to any MBX Technology for use within
the Field to any Person other than to carry out any of the Permitted Activities.
For the avoidance of doubt, at any time when MBX or ADM Sub purchases PHA Cell
Paste, PHA Material or PHA Formulations from the Joint Sales Company, MBX or ADM
Sub, as the case may be, shall be free to use such PHA Cell Paste, PHA Material
or PHA Formulations to the same extent as a Third Party customer that would
purchase such material.

     8.5 PROHIBITION ON SOLICITATION. No Party nor any of its Affiliates shall,
during the period commencing on the Effective Date and continuing until the
expiration or termination of this Agreement and two (2) years thereafter,
specifically solicit any person who is employed by the other Party or its
Affiliates and who was involved in the Commercial Alliance during the Term of
this Agreement, whether such person is solicited to be hired as an employee or
consultant, unless authorized in writing by the other Party. The Parties
acknowledge that generally listing a position for hire in a newspaper, trade
journal or similar publication shall not constitute a specific solicitation in
violation of the terms of this provision. The Parties further acknowledge for
the avoidance of doubt that this Section only applies to those persons that
remain employees of a Party and not to former employees of a Party.

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                                    ARTICLE 9
                               GRANT OF JV OPTION

     9.1 GRANT OF JV OPTION. MBX hereby grants to ADM Sub the right and option
to enter into a commercial joint venture for the further manufacture and sale of
the PHA Material on the terms and conditions set forth in this Article 9 (the
"JV Option").

          9.1.1 JV OPTION MECHANICS. If, at any time during the Term, either ADM
Sub or MBX reasonably determines that within two (2) years, the Joint Sales
Company would likely be able to sell, on a consistent and on-going basis, more
than fifty thousand (50,000) tons of PHA Material (including, without
limitation, PHA Material that is contained within PHA Formulations) per twelve
(12) month period, then either ADM Sub or MBX may prepare and deliver a written
proposal (the "Expansion Proposal") to the other such Party to form a separate
entity joint venture or to expand the scope of the Joint Sales Company (in
either case, the "Joint Venture Entity") with a goal and purpose of expanding
the manufacturing capacity and PHA Material sales to in excess of seventy
thousand (70,000) tons per year (the "Joint Venture"). The Expansion Proposal
shall merely be a proposal to expand manufacturing capacity and PHA Material
sales through the Joint Venture Entity as set forth herein; the specific manner
and method of accomplishing any such expansion shall be left to the Joint
Venture Entity in the event ADM Sub exercises the JV Option. Upon receipt of an
Expansion Proposal, ADM Sub shall have a period of one hundred twenty (120) days
during which it shall decide whether or not, in its sole discretion, to exercise
the JV Option. During such period, ADM Sub and MBX shall, in good faith, share
information relating to the market for PHA Material and other matters relevant
to the exercise of the JV Option. If ADM Sub decides to exercise the JV Option,
then ADM Sub and MBX shall promptly proceed to prepare, execute and deliver
documents, and take such other actions as are reasonably necessary, to form a
Joint Venture Entity and commence the Joint Venture on the terms and conditions
set forth in this Article 9. If ADM Sub does not exercise the JV Option within
such period, then the JV Option shall expire (subject to the revival of the JV
Option pursuant to Section 9.8) and the other consequences set forth in Section
9.8 shall be given full force and effect. For avoidance of doubt, at any time
during the Term, the Parties shall be permitted to negotiate temporary or
permanent increases to the annual capacity limit in the licenses granted in
Sections 7.2 and 7.3 above, which increases shall be given effect, if at all, in
one or more written amendments to this Agreement.

     9.2 FORMATION OF JV ENTITY. If ADM Sub exercises the JV Option in
accordance with Section 9.1.1 and the Parties determine to form a new separate
entity, ADM Sub and MBX shall form a new entity under the laws of the State of
Delaware, to serve as the Joint Venture Entity and to own and operate the Joint
Venture.

          9.2.1 JV ASSETS. All assets that are owned by ADM Sub and MBX, that
are solely dedicated to the activities of the Commercial Alliance as of the date
the JV Option is exercised, and that may reasonably be divested from ADM Sub or
MBX, as applicable, without undue liability, including without limitation, tax
liability, shall promptly be transferred to the JV Entity as requested by the JV
Entity, along with any other assets as MBX and ADM Sub agree

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shall be transferred to the JV Entity, on terms and conditions to be agreed upon
by ADM Sub, MBX and the JV Entity.

          9.2.2 OTHER ASSETS. Ownership of those assets of ADM Sub and MBX that
have been dedicated in part to the activities of the Commercial Alliance,
including without limitation, the ADM Sub Manufacturing Facility and the MBX
Formulation Facility, shall be retained by ADM Sub or MBX, as applicable,
provided however, that such assets shall be dedicated to the Joint Venture, as
and to the extent the Joint Venture Entity shall desire, on terms consistent
with those established during the Commercial Phase, including without limitation
the price payable to ADM Sub or MBX for such manufacturing or formulation
services. The Joint Venture Entity shall purchase PHA Material from ADM Sub, in
an amount to be determined by ADM Sub and the Joint Venture Entity; provided,
however, that the Joint Venture Entity shall not purchase any PHA Material from
any other source (with the exception of pilot-scale production quantities)
without the prior consent of ADM Sub during any period unless and until the
Joint Venture Entity has purchased all of ADM Sub's output of the PHA Material
from the ADM Sub Manufacturing Facility (and including any amounts then in
inventory at the ADM Sub Manufacturing Facility). In addition, the Joint Venture
Entity shall determine whether additional supplies of PHA Material in addition
to that produced by the ADM Sub Manufacturing Facility shall be acquired from
ADM Sub or from a Third Party; provided, however, that ADM Sub shall have the
right and option to expand the manufacturing capacity at the ADM Sub
Manufacturing Facility to a design capacity of up to one hundred and fifty
thousand (150,000) tons per year, and the Joint Venture Entity will purchase
such supply from ADM Sub, if the projected profitability of the Joint Venture
Entity would be the same or greater than if it acquired such additional supply
from another source. If the Joint Venture Entity is to obtain such additional
supply from ADM Sub, then ADM Sub will finance an expansion of the ADM Sub
Manufacturing Facility, and MBX will reimburse ADM Sub for fifty percent (50%)
of such reasonable expenditures, from preferential dividends or otherwise, plus
an annual rate of interest equal to ADM's long term average borrowing rate plus
1.25%.

     9.3 EXPANSION; FUTURE INVESTMENTS. Except as otherwise expressly provided
in this Agreement, the manner of expansion of manufacturing capacity and PHA
Material sales shall be determined by the Joint Venture Entity. Subject to the
provisions in Section 9.2.1 and 9.2.2, future investments in the Joint Venture
activities, including without limitation, the acquisition of additional
equipment, facilities and personnel, shall be made by the Joint Venture Entity
and not ADM, ADM Sub or MBX on an individual basis, so that the Joint Venture
Entity shall become an independently-financeable entity that the owners may
sell, sell equity in to Third Parties or otherwise exploit in whatever
reasonable fashion they may determine. In the event the Joint Venture Entity is
unable to obtain necessary independent financing, then ADM Sub and MBX shall
equally finance the Joint Venture Entity subject to certain limits, terms and
conditions to be determined upon the formation of the Joint Venture Entity. In
the event ADM Sub, on the one hand, or MBX, on the other hand, is financially
incapable of committing to provide an equal share of the financing, then none of
them shall have an obligation to provide such financing, such failure to finance
shall not constitute a breach of any obligation or otherwise alter the
respective rights of the Parties and the Parties shall diligently pursue
alternative financing or other means to accomplish the goal of the Joint Venture
as set forth in Section 9.1.1.

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     9.4 CONTRACTS; LICENSES. The operations and assets of the Joint Sales
Company will be dedicated or transferred to the Joint Venture Entity in
accordance with the foregoing requirements of this Article 9, and ADM Sub and
MBX hereby consent to the same. In keeping with the foregoing, the Joint Sales
Company shall assign such of the Commercial Alliance Agreements to the Joint
Venture Entity as are reasonably necessary or useful for the Joint Venture
Entity to conduct the Joint Venture. ADM Sub and MBX shall take, or cause the
Joint Sales Company to take, such actions as are required to comply with and
give effect to this Article 9. ADM Sub and MBX shall also grant such licenses,
and provide such services, on commercially reasonable terms in light of the
licenses and services that ADM Sub and MBX provided to the Joint Sales Company,
as are reasonably necessary to enable the Joint Venture Entity to conduct the
business of the Joint Venture on the terms set forth herein. Without limiting
the foregoing, ADM Sub and MBX shall grant to the Joint Venture Entity exclusive
licenses of similar scope as the licenses each granted herein to the Joint Sales
Company but without the limitation on production volume.

     9.5 OWNERSHIP; RETURN ON INVESTMENT. ADM Sub and MBX shall each own fifty
percent (50%) of the total equity of the Joint Venture Entity. In keeping with
the foregoing, capital contributions, profit distributions and control of
management and operations of the Joint Venture Entity shall be shared equally by
ADM Sub and MBX; provided, however, the Ledger Account shall continue in the
manner set forth in the Operating Agreement, and all profit distributions by the
Joint Venture Entity shall be made to ADM Sub until such time as the Ledger
Account is reduced to zero. The agreements or other documents governing the
distributions of profit from the Joint Venture Entity will provide for periodic
preferential distributions in order to maintain equal investments by both ADM
Sub and MBX.

     9.6 MANAGEMENT. ADM Sub and MBX intend for the Joint Venture Entity to be
managed by a steering committee or board of directors, on which they have equal
representation, in a manner that is similar to that provided herein for
management of the Commercial Alliance by the Steering Committee. The overriding
principle for such management will be equal representation and cooperative
decision-making in the best interest of the long term profitability of the Joint
Venture Entity, and not on the basis of ADM Sub's or MBX's separate commercial
goals and interests.

     9.7 TRANSFER OF INTEREST. If either MBX or ADM Sub desires to transfer its
ownership interest in the Joint Venture Entity to a Third Party (the Party
desiring to so transfer shall be the "Offeror Party" and the other such Party
shall be the "Offeree Party"), then the Offeror Party shall first offer to the
Offeree Party the opportunity to negotiate towards a purchase of such ownership
interest and, if the Offeree Party accepts such offer, then the Offeror Party
and the Offeree Party shall negotiate in good faith towards a purchase of such
ownership interest on such terms as each, in its sole discretion, shall
determine to be acceptable. In the event that the Offeror Party and the Offeree
Party have not completed a purchase and sale transaction for such ownership
interest within sixty (60) days after the initial offer, then the Offeror Party
shall be free to transfer its ownership interest in the Joint Venture Entity to
a Third Party without restriction or obligation hereunder; provided, however,
any such transfer shall be on terms and conditions no less favorable than the
terms and conditions the Offeror Party last proposed to the Offeree Party. Both
ADM Sub and MBX shall have the right to transfer their respective

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ownership interest in the Joint Venture Entity to a Third Party who acquires all
or substantially all of the assets or equity interest of ADM Sub or MBX without
having to comply with the foregoing right of first negotiation; provided,
however, that such Party's successor in interest shall be bound by such right of
first negotiation.

     9.8 ADM SUB DECLINES JV OPTION. If ADM Sub does not exercise the JV Option
as set forth herein, MBX shall have a period of twenty four (24) months
following the expiration of the JV Option during which it shall be free to
commence the establishment of manufacturing capacity for PHA Material outside of
the Commercial Alliance that is comparable to or greater than the manufacturing
capacity of the ADM Sub Manufacturing Facility, including without limitation,
commencing construction of its own manufacturing facility for PHA Material or by
entering into a legally binding agreement with a Third Party to jointly
manufacture PHA Material with such Third Party; provided however, that MBX shall
not be permitted to commence the manufacture or sale of PHA Material outside of
the Commercial Alliance unless and until the Ledger Account has been repaid so
that the balance thereof is less than ten million dollars ($10,000,000) as
further described in Section 9.8.2.

          9.8.1 SUSPENSION OF EXCLUSIVITY. If ADM Sub does not exercise the JV
Option and if MBX is able to commence the establishment of manufacturing
capacity for PHA Material outside of the Commercial Alliance within a
twenty-four (24) month period as set forth in Section 9.8 above, then, upon that
date, this Agreement shall be automatically amended such that Section 8.4 shall
be deleted in its entirety. However, if MBX fails to commence the establishment
of manufacturing capacity for PHA Material outside of the Commercial Alliance
within a twenty-four (24) month period as set forth in Section 9.8 above, then,
upon the expiration of that period, the JV Option shall reset, the suspension of
Section 8.4 shall terminate and Section 8.4 shall again be binding on the
Parties in accordance with its terms, and this Agreement shall continue as if
the Expansion Proposal had never been made.

          9.8.2 PAY-DOWN OF LEDGER ACCOUNT. During the Term, MBX shall not be
permitted, directly or through its Affiliates, agents or any Third Party, to
manufacture or have made any PHA Material and PHA Formulations, other than in
connection with Pilot Activities or through the Joint Sales Company as part of
the Commercial Alliance, unless and until the restrictions provided in Section
8.4 have been suspended or terminated in accordance with Section 9.8.1 and the
Ledger Account has been repaid (including without limitation, directly by MBX to
ADM Sub in one or more payments) so that the balance thereof is less than ten
million dollars ($10,000,000) when calculated in the manner provided for in the
Operating Agreement. In the event that the restrictions provided in Section 8.4
have been so suspended or terminated and the Ledger Account has been repaid so
that the balance is less than ten million dollars ($10,000,000) as described in
this Section 9.8.2, this Agreement shall, as of such date, be automatically
amended such that the licenses granted under Section 7.2.1, 7.2.2 and 7.3.2
convert from exclusive licenses to non-exclusive licenses.

          9.8.3 WIND-DOWN OF JOINT SALES COMPANY. Promptly after the Ledger
Account is paid down and the licenses are converted to non-exclusive licenses as
set forth in Section 9.8.2 above, the Parties will discuss in good faith
alternative arrangements for developing and serving the global marketplace for
PHA Material and PHA Formulations, including sustaining the

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operation of the Joint Sales Company. At anytime following the conversion of the
licenses, the Parties may mutually agree to trigger, or any one of them may by
ninety (90) days prior written notice to the other Parties may trigger, the
dissolution and winding down of the Joint Sales Company and the liquidation of
its assets, in accordance with the Operating Agreement. Upon such winding-down
of the Joint Sales Company, MBX shall grant a license to ADM Sub as described in
Section 9.8.4. For avoidance of doubt, once the conversion of the licenses from
exclusive to non-exclusive described in Section 9.8.2 occurs, anything herein to
the contrary notwithstanding, MBX shall be free to exploit the MBX Technology
and MBX Patent Rights in any manner it shall determine in its sole discretion,
including without limitation by manufacturing and selling PHA Material and PHA
Formulations.

          9.8.4 GRANT OF LICENSE. If, as described in Section 9.8.3, the Parties
or any one of them triggers the dissolution and winding down of the Joint Sales
Company, then, effective upon such date, MBX shall grant to ADM Sub a
royalty-bearing, non-exclusive, perpetual, irrevocable license, with Limited
Sublicense Right, under MBX's right, title and interest in and to the MBX
Technology and the MBX Patent Rights, solely to make, have made, use, offer for
sale, sell, have sold and import PHA Material and PHA Formulations for use in
the Field worldwide and this Agreement shall terminate. The foregoing license
shall be limited such that ADM Sub shall only be permitted to make and have made
the amount of PHA Material (including PHA Material contained within PHA
Formulations) permitted under the then-current license under Section 7.2.2
during each consecutive period of twelve (12) months during the term of the
license. During the Royalty Term, ADM Sub will pay to MBX a royalty equal to:
(i) * on all sales or other conveyances of PHA Patented Material (including,
without limitation, PHA Material that is contained within PHA Formulations), on
a one hundred percent (100%) purity basis; and (ii) * on all sales or other
conveyances of PHA Know-How Material (including, without limitation, PHA
Material that is contained within PHA Formulations), on a one hundred percent
(100%) purity basis. During the Supplemental Royalty Term, ADM Sub will pay to
MBX a royalty equal to * on all sales or other conveyances of PHA Supplemental
Know-How Material (including, without limitation, PHA Material that is contained
within PHA Formulations), on a one hundred percent (100%) purity basis. In the
event more than one royalty applies to the manufacture, use, sale or importation
of a particular product, then the highest royalty shall be the only applicable
royalty hereunder. Provided, however, that any such royalty shall be reduced by
the amount of royalties payable to any Third Party under a license required to
obtain freedom to practice the MBX Technology and/or MBX Patent Rights for the
manufacture, use or sale of PHA Material within the Field provided that MBX
breached an obligation under Section 8.2.1 to disclose: (i) the existence of
such Third Party's intellectual property rights in such Technology, or (ii)
claims by such Third Party that any of the MBX Patent Rights are invalid or
unenforceable, or that the practice of any of the MBX Patent Rights would
constitute an infringement or misappropriation of such Third Party's
intellectual property rights (such royalty reduction right is "Third Party IP
Royalty Offset"). The royalty shall be payable within thirty (30) days following
the end of each Calendar Quarter during the term of the applicable license for
sales or other conveyances that occur during such Calendar Quarter. Amounts due
under this Section 9.8.3 shall be payable by wire transfer of immediately
available funds to an MBX bank account in accordance with instructions to be
provided to the ADM Sub by MBX. Any amounts that are not paid when due hereunder
shall accrue interest at the rate of four percent (4%) per annum in excess of
the one year London Interbank Offered Rate (LIBOR)

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then most recently published in THE WALL STREET JOURNAL. The right to demand and
receive the interest provided hereunder shall be in addition to any other rights
available to MBX hereunder or at law.

                                   ARTICLE 10
                              TERM AND TERMINATION

     10.1. TERM. This Agreement shall commence as of the Effective Date and
shall expire upon the first to occur of: (i) the expiration or termination of
the last Valid Claim within the Patent Rights granted by the United States
Patent and Trademark Office and claiming MBX Technology or Alliance Technology
and (ii) the exercise of the JV Option by ADM Sub and the Parties have taken all
necessary actions to implement the Joint Venture pursuant to Article 9, unless
terminated in accordance with this Article 10 prior to such date (the "Term").

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     10.2 TERMINATION. This Agreement may be terminated at any time by either
Party as follows:

          10.2.1 TERMINATION FOR BREACH. In the event that MBX materially
defaults on any material obligation hereunder or under any other Commercial
Alliance Agreement (including an "Adverse Act" as defined in the Operating
Agreement), or materially breaches any material term herein or therein to be
performed or observed, then ADM Sub shall have the right to terminate this
Agreement: (a) by giving thirty (30) days prior written notice to MBX in the
case of a breach of any payment term, and (b) by giving ninety (90) days prior
written notice to MBX in the case of any other breach; provided, however, that
in the case of a default or breach capable of being cured, if MBX shall cure the
said default or breach within such notice period after said notice shall have
been given, then said notice shall not be effective and the Agreement shall
continue in full force and effect. In the event that ADM Sub materially defaults
on any material obligation hereunder or under any other Commercial Alliance
Agreement (including an "Adverse Act" as defined in the Operating Agreement), or
materially breaches any material term herein or therein to be performed or
observed, then MBX shall have the right to terminate this Agreement: (a) by
giving thirty (30) days prior written notice to ADM Sub in the case of a breach
of any payment term, and (b) by giving ninety (90) days prior written notice to
ADM Sub in the case of any other breach; provided, however, that in the case of
a default or breach capable of being cured, if ADM Sub shall cure the said
default or breach within such notice period after said notice shall have been
given, then said notice shall not be effective and the Agreement shall continue
in full force and effect. In the event that MBX commits a breach of this
Agreement by granting a license under the MBX Technology to a Third Party in
violation of the terms of the license granted to ADM Sub under Section 7.2.1 or
to the Joint Sales Company under Section 7.2.2, and such breach remains uncured
for sixty (60) days following notice from ADM Sub, then such breach (a "Section
7 Breach") shall trigger certain additional rights for ADM Sub as set forth in
Section 10.5.

          10.2.2 ADM SUB TERMINATION DUE TO CHANGED CIRCUMSTANCES. In the event
that, based upon a change in circumstances beyond the reasonable control of ADM
and ADM Sub, the projected financial return from the Commercial Alliance is
deemed by ADM Sub to be either too uncertain or inadequate, ADM Sub shall have
the right to terminate this Agreement upon thirty (30) days prior written notice
to MBX. The Parties acknowledge that, without limitation, a Third Party
challenge to the validity or enforceability of the MBX Patent Rights or MBX
Technology, the emergence of a third party's superior technology, an increase in
the projected cost required to Construct the ADM Sub Manufacturing Facility or
to manufacture PHA Material and/or PHA Formulations, a decrease in the projected
sales volume of PHA Material and/or PHA Formulations, and a decrease in the
projected sales price of PHA Material and/or PHA Formulations are all examples
of a change in circumstances beyond the reasonable control of ADM and ADM Sub.

          10.2.3 MUTUAL AGREEMENT. MBX and ADM Sub may, at any time during the
Term, terminate this Agreement by written agreement with such consequences as
they shall provide therein.

          10.2.4 MBX TERMINATION DUE TO CHANGED CIRCUMSTANCES. Commencing upon
ADM Sub declining the JV Option and continuing unless and until such time as the
JV Option resets pursuant to Section 9.8.5, in the event that based upon a
change in circumstances during

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this period beyond the reasonable control of MBX, the projected financial return
from the Commercial Alliance is deemed by MBX to be either too uncertain or
inadequate, MBX shall have the right to terminate this Agreement upon thirty
(30) days prior written notice to ADM Sub.

     10.3 GENERAL CONSEQUENCES OF TERMINATION OR EXPIRATION; GRANT OF LICENSES.

          10.3.1 CONSEQUENCES OF TERMINATION OR EXPIRATION. Upon the termination
or expiration of the Agreement, the following shall occur:

               (a)  MBX shall immediately cease using, and shall promptly return
                    to ADM Sub, all ADM Technology, except to the extent MBX has
                    a license to practice such Technology under this Article 10;

               (b)  ADM Sub shall immediately cease using, and shall promptly
                    return to MBX all MBX Technology, except to the extent ADM
                    Sub has a license to practice such Technology under this
                    Article 10;

               (c)  the Joint Sales Company shall immediately cease using all
                    MBX Technology and all ADM Technology, and shall promptly
                    return to MBX all MBX Technology and to ADM Sub all ADM
                    Technology;

               (d)  the license granted to MBX pursuant to Section 7.3.1 shall
                    immediately terminate;

               (e)  the license granted to ADM Sub pursuant to Section 7.2.1
                    shall immediately terminate;

               (f)  the licenses granted to the Joint Sales Company pursuant to
                    Section 7.2.2 and Section 7.3.2 shall immediately terminate;

               (g)  each Party shall promptly pay to the other any amounts due
                    and payable hereunder as of the effective date of
                    termination or expiration;

               (h)  subject to those rights and obligations of the Parties that
                    survive termination or expiration by their terms or pursuant
                    to Section 10.6, this Agreement shall terminate and be of no
                    further force or effect; and

               (i)  the other Commercial Alliance Agreements shall terminate
                    with the effects set forth therein, including without
                    limitation, that the Joint Sales Company shall be dissolved
                    and wind up its operations in accordance with the Operating
                    Agreement.

     10.4 SPECIFIC CONSEQUENCES OF TERMINATION BY MBX.

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                                       45



          10.4.1. TERMINATION DUE TO ADM SUB BREACH Upon a termination of this
Agreement by MBX pursuant to Section 10.2.1, the following shall occur as of the
effective date of termination.

               (a) MANUFACTURING OBLIGATION. In the event the effective date of
termination occurred during the Construction Phase, ADM Sub shall provide
fermentation services to produce PHA Cell Paste in up to * fermentors for a
period of * at the Manufacturing Cost (as such term is defined in the ADM Sub
Manufacturing Agreement), plus depreciation on assets to the extent used to
perform such manufacturing calculated on a ten-year straight-line basis, but
otherwise pursuant to the terms and conditions set forth in the ADM Sub
Manufacturing Agreement. In the event the effective date of termination occurred
during the Commercial Phase, ADM Sub would for a period of three and one-half
years, at MBX's election, to be exercised once at the time MBX places it first
purchase order, (i) provide fermentation services to produce PHA Cell Paste in
up to * fermentors at the Manufacturing Cost, plus depreciation on assets to the
extent used to perform such manufacturing calculated on a ten-year straight-line
basis; or (ii) manufacture PHA Material in the ADM Sub Manufacturing Facility
(subject to the limitations of such facility as of the time of termination) at
Manufacturing Cost, plus depreciation on assets to the extent used to perform
such manufacturing calculated on a ten-year straight-line basis, in either case,
otherwise pursuant to the terms and conditions set forth in the ADM Sub
Manufacturing Agreement.

               (b) GRANT OF LICENSES. Upon the effective date of termination by
MBX, ADM Sub hereby grants to MBX the following licenses: (i) an exclusive,
fully sublicenseable, *, perpetual, irrevocable license, under all intellectual
property rights Controlled by ADM Sub and claiming or covering Alliance
Technology to research, develop, make, have made, use, offer for sale, sell,
have sold and import PHA-Related Material, produced by any means or methods, for
any and all uses and (ii) a non-exclusive, fully sublicenseable, *, perpetual,
irrevocable license, under all intellectual property rights Controlled by ADM
Sub and claiming or covering ADM Sub Background Technology to research, develop,
make, have made, use, offer for sale, sell, have sold and import PHA-Related
Material, produced by any means or methods, for any and all uses.

          10.4.2 TERMINATION DUE TO CHANGED CIRCUMSTANCES.

               (a) GRANT OF LICENSE. Upon a termination of this Agreement by MBX
pursuant to Section 10.2.4, MBX hereby grants to ADM Sub a royalty-bearing,
non-exclusive, perpetual, irrevocable license, with Limited Sublicense Right,
under MBX's right, title and interest in and to the MBX Technology and the MBX
Patent Rights, solely to make, have made, use, offer for sale, sell, have sold
and import PHA Material and PHA Formulations for use in the Field worldwide. The
foregoing license shall be limited such that ADM Sub shall only be permitted to
make and have made the amount of PHA Material (including PHA Material contained
within PHA Formulations) permitted under the then-current license under Section
7.2.2 during each consecutive period of twelve (12) months during the term of
the license. During the Royalty Term, ADM Sub will pay to MBX a royalty equal
to: (i) * on all sales or other conveyances of PHA Patented Material (including,
without limitation, PHA Material that is contained within PHA Formulations), on
a one hundred percent (100%) purity basis; and (ii) *

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                                       46



on all sales or other conveyances of PHA Know-How Material (including, without
limitation, PHA Material that is contained within PHA Formulations), on a one
hundred percent (100%) purity basis. During the Supplemental Royalty Term, ADM
Sub will pay to MBX a royalty equal to * on all sales or other conveyances of
PHA Supplemental Know-How Material (including, without limitation, PHA Material
that is contained within PHA Formulations), on a one hundred percent (100%)
purity basis. In the event more than one royalty applies to the manufacture,
use, sale or importation of a particular product, then the highest royalty shall
be the only applicable royalty hereunder. Provided, however, that any such
royalty shall be subject to Third Party IP Royalty Offset. The royalty shall be
payable within thirty (30) days following the end of each Calendar Quarter
during the term of the applicable license for sales or other conveyances that
occur during such Calendar Quarter. Amounts due under this Section 10.4.2 shall
be payable by wire transfer of immediately available funds to an MBX bank
account in accordance with instructions to be provided to the ADM Sub by MBX.
Any amounts that are not paid when due hereunder shall accrue interest at the
rate of four percent (4%) per annum in excess of the one year London Interbank
Offered Rate (LIBOR) then most recently published in THE WALL STREET JOURNAL.
The right to demand and receive the interest provided hereunder shall be in
addition to any other rights available to MBX hereunder or at law.

     10.5 SPECIFIC CONSEQUENCES OF TERMINATION BY ADM SUB.

          10.5.1 TERMINATION DUE TO CHANGED CIRCUMSTANCES. Upon a termination of
this Agreement by ADM Sub pursuant to Section 10.2.2, the following shall occur
as of the effective date of termination.

               (a) MANUFACTURING OBLIGATION. In the event the effective date of
termination occurred during the Construction Phase, ADM Sub shall provide
fermentation services to produce PHA Cell Paste in up to * fermentors for a
period of * at the Manufacturing Cost, plus depreciation on assets in the ADM
Sub Manufacturing Facility that are not allocated to other uses calculated on a
ten-year straight-line basis, *, but otherwise pursuant to the terms and
conditions of the ADM Sub Manufacturing Agreement. In the event the effective
date of termination occurred during the Commercial Phase, ADM Sub would for a
period of three and one-half (3.5) years, at MBX's election, to be exercised
once at the time MBX places it first purchase order, (i) provide fermentation
services to produce PHA Cell Paste in up to * fermentors at the Manufacturing
Cost, plus depreciation on assets in the ADM Sub Manufacturing Facility that are
not allocated to other uses calculated on a ten-year straight-line basis, *; or
(ii) manufacture PHA Material in the ADM Sub Manufacturing Facility (subject to
the limitations of such facility as of the time of termination) at Manufacturing
Cost, plus depreciation on assets in the ADM Sub Manufacturing Facility that are
not allocated to other uses calculated on a ten-year straight-line basis, *, in
either case, otherwise under the terms set forth in the ADM Sub Manufacturing
Agreement.

               (b) GRANT OF LICENSE. Upon the effective date of termination by
ADM Sub, ADM Sub hereby grants to MBX a fully sublicenseable, *, perpetual,
irrevocable license, under all intellectual property rights Controlled by ADM
Sub and claiming or covering Alliance Technology to research, develop, make,
have made, use, offer for sale, sell, have sold and import PHA-Related Material,
produced by any means or methods, for any and all uses. Such license

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                                       47



shall be exclusive in the field of PHA-Related Material for a period of ten (10)
years from the date of grant, and non-exclusive thereafter.

          10.5.2 TERMINATION DUE TO MBX BREACH

               (a) Upon the effective date of termination by ADM Sub for a
Section 7 Breach, MBX hereby grants to ADM Sub a non-exclusive, *, perpetual,
irrevocable license, with Limited Sublicense Right, under MBX's right, title and
interest in and to the MBX Technology, the MBX Patent Rights and the Joint
Alliance Technology, solely to make, have made, use, offer for sale, sell, have
sold and import PHA Material and PHA Formulations for use in the Field
worldwide, without any limitation on production volume.

               (b) Upon the effective date of termination by ADM Sub under
Section 10.2.1 for any reason other than a Section 7 Breach, MBX hereby grants
to ADM Sub a royalty-bearing, non-exclusive, perpetual, irrevocable license,
with Limited Sublicense Right, under MBX's right, title and interest in and to
the MBX Technology and the MBX Patent Rights, solely to make, have made, use,
offer for sale, sell, have sold and import PHA Material and PHA Formulations for
use in the Field worldwide. The foregoing license shall be limited such that ADM
Sub shall only be permitted to make and have made a maximum of * (or such
greater amount if the then-current license under Section 7.2.2 has been
expanded) of PHA Material (including PHA Material contained within PHA
Formulations) during each consecutive period of twelve (12) months during the
term of the license. During the Royalty Term, ADM Sub will pay to MBX a royalty
equal to: (i) * on all sales or other conveyances of PHA Patented Material
(including, without limitation, PHA Material that is contained within PHA
Formulations), on a one hundred percent (100%) purity basis; and (ii) * on all
sales or other conveyances of PHA Know-How Material (including, without
limitation, PHA Material that is contained within PHA Formulations), on a one
hundred percent (100%) purity basis. During the Supplemental Royalty Term, ADM
Sub will pay to MBX a royalty equal to * on all sales or other conveyances of
PHA Supplemental Know-How Material (including, without limitation, PHA Material
that is contained within PHA Formulations), on a one hundred percent (100%)
purity basis. In the event more than one royalty applies to the manufacture,
use, sale or importation of a particular product, then the highest royalty shall
be the only applicable royalty hereunder. Provided, however, that any such
royalty shall be subject to Third Party IP Royalty Offset. The royalty shall be
payable within thirty (30) days following the end of each Calendar Quarter
during the term of the applicable license for sales or other conveyances that
occur during such Calendar Quarter. Amounts due under this Section 10.5.2 shall
be payable by wire transfer of immediately available funds to an MBX bank
account in accordance with instructions to be provided to the ADM Sub by MBX.
Any amounts that are not paid when due hereunder shall accrue interest at the
rate of four percent (4%) per annum in excess of the one year London Interbank
Offered Rate (LIBOR) then most recently published in THE WALL STREET JOURNAL.
The right to demand and receive the interest provided hereunder shall be in
addition to any other rights available to MBX hereunder or at law.

     10.6 RIGHTS UPON BANKRUPTCY.

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                                       48



               (a) In the event ADM Sub files for protection under Chapter 11 of
the U.S. Bankruptcy Code, and ADM Sub, directly or indirectly in connection with
such proceedings, rejects this Agreement as an executory contract (or on similar
grounds), then ADM Sub shall and hereby does agree to perform the following
obligations:

                    (i) In the event the effective date of rejection occurred
during the Construction Phase, ADM Sub shall provide fermentation services to
produce PHA Cell Paste in up to * fermentors for a period of * at the
Manufacturing Cost (as such term is defined in the ADM Sub Manufacturing
Agreement), plus depreciation on assets to the extent used to perform such
manufacturing calculated on a ten-year straight-line basis, but otherwise
pursuant to the terms and conditions set forth in the ADM Sub Manufacturing
Agreement. In the event the effective date of termination occurred during the
Commercial Phase, ADM Sub would for a period of three and one-half (3.5) years,
at MBX's election, to be exercised once at the time MBX places it first purchase
order, (i) provide fermentation services to produce PHA Cell Paste in up to *
fermentors at the Manufacturing Cost, plus depreciation on assets to the extent
used to perform such manufacturing calculated on a ten-year straight-line basis;
or (ii) manufacture PHA Material in the ADM Sub Manufacturing Facility (subject
to the limitations of such facility as of the time of termination) at
Manufacturing Cost, plus depreciation on assets to the extent used to perform
such manufacturing calculated on a ten-year straight-line basis, in either case,
otherwise pursuant to the terms and conditions set forth in the ADM Sub
Manufacturing Agreement.

                    (ii) Upon the effective date of rejection by MBX, ADM Sub
hereby grants to MBX the following licenses: (i) an exclusive, fully
sublicenseable, *, perpetual, irrevocable license, under all intellectual
property rights Controlled by ADM Sub and claiming or covering Alliance
Technology to research, develop, make, have made, use, offer for sale, sell,
have sold and import PHA-Related Material, produced by any means or methods, for
any and all uses and (ii) a non-exclusive, fully sublicenseable, fully paid-up,
royalty-free, perpetual, irrevocable license, under all intellectual property
rights Controlled by ADM Sub and claiming or covering ADM Sub Background
Technology to research, develop, make, have made, use, offer for sale, sell,
have sold and import PHA-Related Material, produced by any means or methods, for
any and all uses.

               (b) In the event MBX files for protection under Chapter 11 of the
U.S. Bankruptcy Code, and MBX, directly or indirectly in connection with such
proceedings, rejects this Agreement as an executory contract (or on similar
grounds), then, effective as of the effective date of such rejection, MBX shall
and hereby does grant to ADM Sub a royalty-bearing, non-exclusive, perpetual,
irrevocable license, with Limited Sublicense Right, under MBX's right, title and
interest in and to the MBX Technology and the MBX Patent Rights, solely to make,
have made, use, offer for sale, sell, have sold and import PHA Material and PHA
Formulations for use in the Field worldwide. The foregoing license shall be
limited such that ADM Sub shall only be permitted to make and have made a
maximum of one hundred fifty thousand (150,000) tons (or such greater amount if
the then-current license under Section 7.2.2 has been expanded) of PHA Material
(including PHA Material contained within PHA Formulations) during each
consecutive period of twelve (12) months during the term of the license. During
the Royalty Term, ADM Sub will pay to MBX a royalty equal to: (i) * on all sales
or other conveyances of PHA Patented Material (including, without limitation,
PHA Material that is contained within PHA Formulations), on a one hundred
percent (100%) purity basis; and (ii) * on all sales or other conveyances of PHA
Know-How Material (including, without limitation, PHA

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                                       49



Material that is contained within PHA Formulations), on a one hundred percent
(100%) purity basis. During the Supplemental Royalty Term, ADM Sub will pay to
MBX a royalty equal to * on all sales or other conveyances of PHA Supplemental
Know-How Material (including, without limitation, PHA Material that is contained
within PHA Formulations), on a one hundred percent (100%) purity basis. In the
event more than one royalty applies to the manufacture, use, sale or importation
of a particular product, then the highest royalty shall be the only applicable
royalty hereunder. Provided, however, that any such royalty shall be subject to
Third Party IP Royalty Offset. The royalty shall be payable within thirty (30)
days following the end of each Calendar Quarter during the term of the
applicable license for sales or other conveyances that occur during such
Calendar Quarter. Amounts due under this Section 10.5.2 shall be payable by wire
transfer of immediately available funds to an MBX bank account in accordance
with instructions to be provided to the ADM Sub by MBX. Any amounts that are not
paid when due hereunder shall accrue interest at the rate of four percent (4%)
per annum in excess of the one year London Interbank Offered Rate (LIBOR) then
most recently published in THE WALL STREET JOURNAL. The right to demand and
receive the interest provided hereunder shall be in addition to any other rights
available to MBX hereunder or at law.

     10.7 SURVIVING PROVISIONS; RESERVATION OF RIGHTS. Termination or expiration
of this Agreement for any reason, and the implementation or exercise of the
consequences of termination as set forth in Sections 10.3, 10.4, 10.5, or 10.6
shall be without prejudice to any rights and obligations of the Parties that
have accrued as of the Effective Date of termination and:

               (a) the rights and obligations of the Parties provided in
Articles 1, 8, 11, 12, 13 and 14, Sections 7.1, 7.5, 7.6, 9.8.4, 10.3, 10.4,
10.5, or 10.6 and 10.7 and any other provision which would reasonably be
expected to survive termination in accordance with the terms of this Agreement,
all of which shall survive such termination; and

               (b) any other rights or remedies provided at law or equity which
either Party may otherwise have against the other.

                                   ARTICLE 11
                                 PATENT MATTERS

     11.1 PATENT COMMITTEE. ADM Sub and MBX shall each appoint two (2)
representatives to serve on a patent committee (the "Patent Committee") to
administer and coordinate certain activities described in this Article 11. ADM
Sub and MBX may replace their respective representatives on the Patent Committee
from time to time during the Term, at their sole discretion, by notice to the
other Party.

          11.1.1 MEETINGS. The Patent Committee shall meet as frequently and at
such times as its members shall determine.

          11.1.2 MINUTES. A secretary for the Patent Committee shall be
appointed by its members to keep accurate minutes of the deliberations of the
Patent Committee recording all

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proposed decisions and all actions recommended or taken. Copies of such minutes
shall be made available to the Steering Committee as it shall request.

          11.1.3 EXPENSES. MBX and ADM Sub shall each bear all expenses of their
respective representatives to the Patent Committee related to their
participation on the Patent Committee and attendance at Patent Committee
meetings.

          11.1.4 REPORTS. The Patent Committee shall produce such reports for
the Steering Committee as the Steering Committee shall request from
time-to-time.

     11.2 PATENT FILING, PROSECUTION AND MAINTENANCE.

          11.2.1 ADM SUB PATENT RIGHTS. ADM Sub shall have the sole right and
authority to file, prosecute and maintain the ADM Sub Patent Rights during the
Term at its own expense and using patent counsel of its own choosing. ADM Sub
represents that it will continue to file, prosecute and maintain the ADM Sub
Patent Rights in accordance with reasonable commercial practices during the
Term.

          11.2.2 MBX PATENT RIGHTS. MBX shall have the sole right and authority
to file, prosecute and maintain the MBX Patent Rights during the Term at its own
expense and using patent counsel of its own choosing. MBX represents that it
will continue to file, prosecute and maintain the MBX Patent Rights in
accordance with reasonable commercial practices during the Term.

          11.2.3 JOINT ALLIANCE TECHNOLOGY. ADM Sub and MBX, acting through the
Patent Committee, will file, prosecute and maintain Patent Rights claiming Joint
Alliance Technology in accordance with this Section 11.2.3 with the primary goal
of maximizing the commercial potential of the PHA Material and PHA Formulations
in a commercially reasonable manner. During the Term, the cost of such
activities shall be borne by the Joint Sales Company, and thereafter it shall be
shared equally by ADM Sub and MBX, except as otherwise set forth herein. ADM Sub
and MBX, acting through the Patent Committee and patent attorneys or agents
agreed upon by the Patent Committee, shall prepare, file, prosecute and maintain
all Patent Rights relating to Joint Alliance Technology. If either ADM Sub or
MBX decides to withdraw from the continued prosecution of any Patent Rights on
Joint Alliance Technology, such Party shall so inform the other Party at least
thirty (30) days prior to the effective date of such decision and the other
Party shall have the right, through patent attorneys or agents of its choice, to
assume the cost and responsibility for the continued prosecution of such Patent
Rights. Promptly after the effective date of the decision to withdraw, the
withdrawing Party shall assign its right, title and interest in and to such
Patent Rights to the other Party. Notwithstanding such assignment, such Patent
Rights will continue to be subject to the licenses granted herein to the extent
applicable.

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     11.3 INFRINGEMENT AND DEFENSE.

          11.3.1 ACTUAL OR THREATENED INFRINGEMENT. In the event either ADM Sub
or MBX becomes aware of any possible infringement or unauthorized possession,
knowledge or use of any Technology, which is the subject matter of this
Agreement, in the Field (collectively, an "Infringement"), that Party shall
promptly notify the other Party and provide it with available details. ADM Sub
hereby reserves the exclusive right (but not obligation) to take whatever action
it deems appropriate to prevent or terminate any third party infringement of ADM
Sub Patent Rights claiming the ADM Sub Technology. MBX hereby reserves the
exclusive right (but not obligation) to take whatever action it deems
appropriate to prevent or terminate any third party infringement of MBX Patent
Rights claiming the MBX Technology. Notwithstanding the foregoing, during the
term, if either ADM Sub or MBX (the "Defending Party") decides to take any
action to prevent or terminate any Third Party infringement of its Patent Rights
within the Field, it shall first give notice to the other Party (the "Neutral
Party") and, if the Neutral Party can produce a written legal opinion of an
independent patent attorney concluding that there is a reasonable likelihood
that such Third Party could, in good faith, in connection with such action,
allege that a claim or claims within Patent Rights Controlled by the Neutral
Party are invalid or unenforceable, then the Defending Party shall not take such
action against such Third Party without the prior, written consent of the
Neutral Party. ADM Sub and MBX, sharing expenses equally and acting through
patent attorneys or agents agreed upon by them, shall take whatever action they
shall agree upon to prevent or terminate any third party infringement of Patent
Rights relating to Joint Alliance Technology; provided, however, that if the
Parties cannot agree, MBX shall have the right to make the final determination
with respect to third party infringement within the Field. In all cases, all
decisions by a Party pursuant to this Section 11.2 shall be made in good faith
and in the best interest of the Commercial Alliance.

          11.3.2 DEFENSE OF CLAIMS. In the event that any action, suit or
proceeding is brought against any Party based on its actions in performance of
the Commercial Alliance and alleging the infringement of the Technology or
intellectual property rights of a Third Party, the Parties shall cooperate with
each other in the defense of any such suit, action or proceeding. The Parties
will give each other prompt written notice of the commencement of any such suit,
action or proceeding or claim of infringement and will furnish each other with a
copy of each communication relating to the alleged infringement. Each Party
shall cooperate in the defense of such actions. If as a consequence of such
action, suit or proceeding by a Third Party, a prohibition, restriction or other
condition is imposed upon one or both of the Parties, the Parties shall examine
and discuss in good faith the consequences of such prohibition or restriction or
other conditions on this Agreement and on possible modifications hereto.

                                   ARTICLE 12
                                 INDEMNIFICATION

     12.1 INDEMNIFICATION BY MBX. During the course of, and upon and after
termination of this Agreement for any reason whatsoever, MBX and its Affiliates
shall indemnify, defend and hold ADM Sub, its Affiliates and their respective
directors, officers and employees (collectively, "ADM Sub Indemnitees") harmless
against any claims (including without limitation claims for product liability,
personal injury or death, or property damage), liability, damage, loss, cost or
expense (including reasonable attorneys' fees) incurred by any of them, to

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the extent resulting from: (i) the * of MBX, or any of its Affiliates, or their
employees, representatives or agents; or (ii) MBX's *. Notwithstanding anything
to the contrary, this provision shall not apply to any claims or suits to the
extent attributable to the negligence or willful misconduct of an ADM Sub
Indemnitee or a breach of any Commercial Alliance Agreement by ADM Sub.

     12.2 INDEMNIFICATION BY ADM SUB. During the course of, and upon and after
termination of this Agreement for any reason whatsoever, ADM Sub and its
Affiliates shall, jointly and severally, indemnify, defend and hold MBX, its
Affiliates and their respective directors, officers and employees (collectively,
"MBX Indemnitees") harmless against any claims (including without limitation
claims for product liability, personal injury or death, or property damage),
liability, damage, loss, cost or expense (including reasonable attorneys' fees)
incurred by any of them, to the extent resulting from: (i) the * of ADM Sub, or
any of its Affiliates, or their employees, representatives or agents; or (ii)
ADM Sub's *. Notwithstanding anything to the contrary, this provision shall not
apply to any claims or suits to the extent attributable to the negligence or
willful misconduct of an MBX Indemnitee or a breach of any Commercial Alliance
Agreement by MBX.

     12.3 CONDITIONS TO INDEMNIFICATION. A Party seeking indemnification under
this Article 10 (the "Indemnified Party") shall give prompt notice of the claim
to the other Party (the "Indemnifying Party") and, provided that the
Indemnifying Party is not contesting the indemnity obligation, shall permit the
Indemnifying Party to control any litigation relating to such claim and
disposition of any such claim, provided that the Indemnifying Party shall act
reasonably and in good faith with respect to all matters relating to the
settlement or disposition of any claim as the settlement or disposition relates
to Parties being indemnified under this Article 10 and provided, further, that
the Indemnifying Party shall not settle or otherwise resolve any claim without
prior notice to the Indemnified Party and the consent of the Indemnified Party
(which consent shall not be unreasonably withheld, conditioned or delayed) if
such settlement involves anything other than the payment of money by the
Indemnifying Party. The Indemnified Party shall cooperate with the Indemnifying
Party in its defense of any claim for which indemnification is sought under this
Article 12 and shall have the right to be present in person or through counsel
at all legal proceedings giving rise to the right of indemnification.

     12.4 ATTRIBUTION. For purposes of this Article 12, except as provided
below: (i) none of the Joint Sales Company, MBX or MBX's Affiliates (or their
respective employees) shall be deemed to be an employee, agent or representative
of ADM or ADM Sub, (ii) none of the Joint Sales Company, ADM Sub or ADM Sub's
Affiliates (or their respective employees) shall be deemed to be an employee,
agent or representative of MBX, (iii) none of MBX or ADM Sub or their respective
Affiliates (or their respective employees) shall be deemed to be an employee,
agent or representative of the Joint Sales Company; and, notwithstanding (i),
(ii) and (iii) above, an employee of ADM, ADM Sub or MBX providing services to
the Joint Sales Company on substantially a full-time basis, pursuant either to
the ADM Sub Services Agreement or the MBX Services Agreement, shall be deemed to
be an agent or representative of the Joint Sales Company.

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                                   ARTICLE 13
                                 CONFIDENTIALITY

     13.1 CONFIDENTIALITY OBLIGATIONS. MBX, ADM Sub and the Joint Sales Company
each recognize that the other Party's Confidential Information and Proprietary
Materials constitute highly valuable and proprietary confidential information.
Each of MBX, ADM Sub and the Joint Sales Company agrees that it will keep
confidential, and will cause its employees, consultants, agents and Affiliates
to keep confidential, all Confidential Information and Proprietary Materials of
the other Parties. MBX, ADM Sub, the Joint Sales Company and their respective
employees, consultants, agents or Affiliates shall not use Confidential
Information or Proprietary Materials of any other Party for any purpose
whatsoever except as expressly permitted in this Agreement. MBX and Joint Sales
Company acknowledge that the corn costs that constitute a portion of the
Manufacturing Cost shall constitute ADM Sub Confidential Information.

     13.2 LIMITED DISCLOSURE. MBX, ADM Sub and the Joint Sales Company each
agree that any disclosure of another Party's Confidential Information or any
transfer of another Party's Proprietary Materials to any employee, consultants
or agents of MBX, ADM Sub, or the Joint Sales Company or any of their respective
Affiliates, shall be made only if and to the extent necessary to carry out its
rights and responsibilities under this Agreement and shall be limited to the
maximum extent possible consistent with such rights and responsibilities. MBX,
ADM Sub and the Joint Sales Company each further agree that any disclosure of
another Party's Confidential Information or any transfer of another Party's
Proprietary Materials as permitted by the preceding sentence shall only be made
to such of the recipient Party's employees, consultants, agents and Affiliates
who are bound by written confidentiality obligations to maintain the
confidentiality thereof and not to use such Confidential Information or
Proprietary Materials except as expressly permitted by this Agreement. MBX, ADM
Sub and the Joint Sales Company each further agree not to disclose or transfer
the other Party's Confidential Information or Proprietary Materials to any third
parties under any circumstance without the prior written approval from the
relevant other Party (such approval not to be unreasonably withheld), except as
otherwise required by law, or except as otherwise expressly permitted by this
Agreement. Each Party shall take such action, and shall cause its Affiliates to
take such action, to preserve the confidentiality of the other Party's
Confidential Information and Proprietary Materials as it would customarily take
to preserve the confidentiality of its own Confidential Information and
Proprietary Materials, and in no event, less than reasonable care. Each Party,
upon the request of another Party, will return all of such other Party's
Proprietary Information and Confidential Materials disclosed or transferred to
it pursuant to this Agreement which does not constitute Joint Program
Technology, including all copies and extracts of documents and all
manifestations in whatever form, within two (2) months of the request or, within
two (2) weeks of the termination or expiration of this Agreement; provided,
however, that a Party may retain Confidential Information and Proprietary
Materials of the other Party relating to any license which survives such
termination and one copy of all other Confidential Information may be retained
in its legal files solely for the purpose of monitoring compliance with this
Article 13.

     13.3 EMPLOYEES AND CONSULTANTS. MBX, ADM Sub, and the Joint Sales Company
each hereby represent that all of its employees, consultants and agents to such
Party or its

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Affiliates, participating in the activities of the Commercial Alliance who shall
have access to the Confidential Information or Proprietary Materials of the
other Party are bound by written obligations to maintain such information in
confidence and not to use such information except as expressly permitted herein
and to assign any inventions or discoveries made in connection with such
activities to MBX, ADM Sub or the Joint Sales Company as applicable. Each Party
agrees to be held responsible for the confidentiality obligations to which its
employees, consultants and agents (and those of its Affiliates) are obligated.

     13.4 PUBLICITY. No Party may publicly disclose the existence or terms of
this Agreement without the prior written consent of the other Parties; provided,
however, that any Party may make such a disclosure: (a) to the extent required
by law (including the filing of a redacted copy of the Agreement as an exhibit
to a legally required filing) or by the requirements of any nationally
recognized securities exchange, quotation system or over-the-counter market on
which such Party has its securities listed or traded, and (b) to any investors
(including without limitation, entities interested in acquiring the stock or
assets of such Party or merging with or into such Party), prospective investors,
lenders, other potential financing sources, prospective customers and
prospective strategic marketing partners who are obligated to keep such
information confidential. In the event that such disclosure is required as
aforesaid, the disclosing Party shall make reasonable efforts to provide the
other Party with reasonable notice prior to such disclosure and to coordinate
with the other Party with respect to the wording and timing of any such
disclosure. The Parties will from time to time mutually agree on the wording of
press releases publicizing the Commercial Alliance. Once such press release or
any other written statement is approved for disclosure by both Parties, either
Party may make subsequent public disclosure of the contents of such statement,
but no more than the contents of such statement, without the further approval of
the other Party.

     13.6 TERM. The obligations and restrictions set forth in this Article 13
shall survive the termination or expiration of this Agreement for a period of
twenty (20) years.

                                   ARTICLE 14
                                  MISCELLANEOUS

     14.1 NO ASSIGNMENT; CHANGE OF CONTROL. No Party shall sell, transfer or
permit any transfer of, in whole or in part, this Agreement without prior
written consent of the other Parties, which consent may be withheld for any
reason. The merger or acquisition of MBX by, with or into a third party shall
not be deemed to effect an assignment of this Agreement by MBX and this
Agreement shall be binding upon and inure to the benefit of such third party, or
new entity, in the case of a merger or similar transaction in which MBX does not
continue as the same corporate entity and shall continue to bind and inure to
the benefit of MBX in the case of an acquisition or similar transaction in which
MBX survives as the same corporate entity. ADM Sub shall not enter into any
merger, acquisition or similar transaction without the prior, written consent of
MBX. Nothing herein shall restrict ADM from entering into a merger or
acquisition of ADM by, with or into a Third Party and no such transaction shall
be deemed to effect an assignment of this Agreement by ADM Sub and this
Agreement shall be binding upon and inure to the benefit of such Third Party, or
new entity, in the case of a merger or similar transaction in which ADM does not
continue as the same corporate entity and shall continue to bind and inure to
the benefit of ADM Sub in the case of an acquisition or similar transaction in
which ADM

*    CONFIDENTIAL TREATMENT REQUESTED


                                       55



survives as a the same corporate entity. Any purported assignment or transfer in
violation of this provision shall be null and void. In the event that, at
anytime *, MBX receives a bona fide offer from a Third Party to acquire all, or
a majority, of the outstanding shares of voting equity of MBX (such an
acquisition is hereinafter an "Acquisition Transaction"), MBX shall provide
notice to ADM Sub of the proposed Acquisition Transaction at least * from ADM
Sub to enter into an Acquisition Transaction with ADM Sub (such an agreement is
a "No-Shop Agreement"). Such notice will set forth the *. ADM Sub shall not,
directly or indirectly, contact such proposing party without MBX's prior written
consent, provided however, that if such proposing party contacts ADM Sub without
direct or indirect prompting or solicitation by ADM Sub, then nothing in this
Section 14.1 shall restrict ADM Sub's ability to communicate with such proposing
party. In the event that the * period, or thereafter at anytime before MBX has
entered into a No-Shop Agreement *, MBX will provide notice to ADM Sub of the
terms of such modified bona fide offer, including the same level of detail and
information as is required to be included in the original notice, at least forty
eight (48) hours (which forty eight (48) hour period must include at least one
(1) full business day) prior to entering into a No-Shop Agreement. For avoidance
of doubt, provided that MBX has complied with the foregoing notice requirements,
MBX shall have no obligation to provide any additional notice to ADM Sub of
changes to the terms of an offer after MBX has entered into a No-Shop Agreement
with respect to such transaction. Notwithstanding the foregoing, if MBX *, the
foregoing notice requirements shall not apply, and *.

     14.2 SUCCESSORS. In the event of a permitted assignment, this Agreement
shall be binding upon, and inure to the benefit of, all the Parties and their
respective successors and legal assigns.

     14.3 DISPUTE RESOLUTION. Any dispute or claim arising out of or relating to
this Agreement or any other Commercial Alliance Agreement, or a breach hereof or
thereof, shall be resolved in accordance with this Section 14.3. Except with
respect to any dispute as to whether ADM Sub properly exercised its rights to
terminate pursuant to Section 10.2.2, during the course of resolving any such
dispute, the Parties shall continue to perform their obligations hereunder and
under the other Commercial Alliance Agreements (including by making payment of
any undisputed portion of any payment obligation that is the subject of a
dispute hereunder or thereunder). Notwithstanding the foregoing, the obligation
of the Parties to continue to perform hereunder and under the other Commercial
Alliance Agreements during the resolution of disputes shall not require a Party
to perform obligations (other any undisputed portion of any payment obligation)
where such performance is rendered impossible, or would otherwise not maintain
or increase the likelihood that the Parties will achieve the purpose and goal of
the Commercial Alliance as set forth in Section 2.1, because of circumstances
created by or directly related to the dispute itself.

          14.3.1 GOOD FAITH CONSULTATION. In the event of a dispute between the
Parties, the Parties shall attempt in good faith to settle such dispute through
mutual consultation. If, after such consultation, the dispute cannot be
resolved, the Parties shall wait for not less than sixty (60) days after the
dispute arises and at the end of such period meet for a second consultation. If
the dispute is not resolved after the second consultation, the matter shall be
referred to the

*    CONFIDENTIAL TREATMENT REQUESTED


                                       56



President of ADM Sub and the Chief Executive Officer of MBX (together, the
"Senior Executives") for resolution in accordance with Section 14.4.2.

          14.3.2 SENIOR EXECUTIVES. The Senior Executives shall diligently
attempt to resolve the dispute, including, if they deem it necessary, meeting
directly in order to provide full consideration of the dispute. If the Senior
Executives are unable to resolve the dispute within sixty (60) additional days
after the second consultation then the dispute shall be referred to arbitration.

          14.3.3 ARBITRATION. Any arbitration to be conducted hereunder shall be
brought and conducted in accordance with the following provisions:

               (1)  The arbitration shall be held in Chicago, Illinois if
                    initiated by MBX and in Boston, Massachusetts if initiated
                    by ADM Sub.

               (2)  The arbitration shall be conducted by three (3) arbitrators
                    in accordance with the commercial arbitration rules of the
                    American Arbitration Association. Each of ADM Sub and MBX,
                    upon notice to the other Party, shall appoint one
                    arbitrator. The two arbitrators appointed by such Parties
                    shall appoint a third arbitrator. The arbitrators shall be
                    lawyers who will have substantial patent law or patent
                    litigation experience and substantial commercial law or
                    commercial litigation experience. The arbitrators shall be
                    instructed to follow federal precedents, laws and
                    evidentiary rules that would be applicable to litigation in
                    the Federal Court of the jurisdiction in which the
                    arbitration is held, except for those issues which involve
                    patent issues, in which case the arbitrators shall be
                    instructed to follow federal precedents, laws and
                    evidentiary rules that would be applicable to litigation in
                    the Federal Circuit Court of Appeals.

               (3)  The arbitration shall be conducted in English, and all
                    written submissions shall be in English.

               (4)  ADM Sub and MBX agree that the decision of the arbitrators
                    shall be final and binding on the Parties. The decision of
                    the arbitrators shall be carried out voluntarily and without
                    delay.

               (5)  The fees and expenses of the arbitrators shall be shared
                    equally by ADM Sub and MBX. ADM Sub and MBX will bear its
                    own costs and expenses, including without limitation, its
                    own legal fees and expert witness fees. Notwithstanding the
                    foregoing, ADM Sub and MBX agree to be bound by and obey any
                    order of the arbitrators relating to either Party being
                    liable for any such costs, including without limitation, the
                    legal fees of the other Party.

*    CONFIDENTIAL TREATMENT REQUESTED


                                       57



          14.3.4 EQUITABLE RELIEF. Nothing in this Agreement shall prevent or
limit ADM Sub's or MBX's right to file and prosecute in any court of competent
jurisdiction an action to seek injunctive relief to prevent or stay a breach of
this Agreement or any action necessary to enforce the award of the arbitrators.

          14.3.5 BUSINESS ISSUE DEADLOCKS. In the event an issue relating to the
conduct of the business of the Commercial Alliance comes before the Steering
Committee or the conduct of the business of the Joint Sales Company comes before
the Board of the Joint Sales Company, and such business decision is not governed
by the terms of the Commercial Alliance Agreements, but rather is specifically
or by omission left to the business judgment of the Steering Committee or the
Board, and the Steering Committee or Board, acting in accordance with Section
3.1.3 in the case of the Steering Committee, and acting in accordance with the
Operating Agreement in the case of the Board, is unable to reach a decision on
how (or whether) to address or resolve such business issue, then provisions set
forth in Sections 14.3.1 and 14.3.2 shall apply, but the provisions set forth in
Section 14.3.3 shall not apply. During such time as the Ledger Account is less
than ten million dollars ($10,000,000), in the event that the Parties do not
reach a resolution of such a business dispute as provided in Section 14.3.1 or
14.3.2, then the provisions set forth in Section 14.3.3 shall apply, but the
arbitrators' decision shall be rendered as follows: At the conclusion of the
arbitration hearings, each party shall submit a proposed resolution of the
business dispute to the arbitrators. The arbitrators shall choose among the
proposed resolutions and adopt one as the arbitrators' decision, and shall
render that decision as the arbitrators' final determination. The arbitrators do
not have discretion to render any decision other than one submitted by one of
the Parties. For the avoidance of doubt, whether a Party has met the decision
making standards set forth in 3.1.3 shall not be subject to this Section, but
shall be treated as a dispute subject to the provisions of Sections 14.3.1,
14.3.2 and 14.3.3.

     14.4 GOVERNING LAW. Except as specifically otherwise provided herein, this
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware.

     14.5 FORCE MAJEURE. In the event of the intervention of a force majeure,
which term shall include, without limitation, acts of God, strikes, labor
disturbances, lockouts, riots, epidemics, quarantines, wars or conditions of
war, actions, inactions or regulations of any government, fires, acts of
terrorists, insurrections, embargoes or trade restrictions, or any other reasons
beyond a Party's reasonable control, the Party affected by the force majeure
shall use Commercially Reasonable Efforts to comply with the Agreement. In the
case that such Commercially Reasonable Efforts fail or are futile, such Party
shall not be responsible for delays or a failure to perform under this Agreement
caused by a force majeure. Provided, however, that any payment obligations of a
Party shall not be affected or excused by such force majeure. If a Party's delay
or failure to perform continues for more than one hundred twenty (120) days, the
other Party may terminate this Agreement. In the event that either Party shall
incur a delay in delivery or performance for a reason permitted by this Article,
that Party shall notify the other Party within five (5) days from the date of
the actual occurrence of the cause for such delay

*    CONFIDENTIAL TREATMENT REQUESTED


                                       58



     14.6 NOTICES. All notices, requests and other communication hereunder shall
be in writing and sent by facsimile with confirmation sent by courier requiring
acknowledgment of receipt by the respective Parties as follows:

          To MBX:       Metabolix Corporation
                        21 Erie Street
                        Cambridge, MA 02139-4260
                        Attn: President and CEO

          With copy to: Goodwin Procter
                        Exchange Place
                        53 State Street
                        Boston, MA 02109
                        Attn: Christopher J. Denn, Esq.

          To ADM Sub:   ADM Polymer Corporation
                        4666 Faries Parkway
                        Decatur, IL 62526
                        Attn: President

          With copy to: Archer-Daniels-Midland Company
                        4666 Faries Parkway
                        Decatur, IL 62526
                        Attn: General Counsel

          To JSC:       ADM / Metabolix Sales Company, LLC
                        21 Erie Street
                        Cambridge, MA 02139-4260

          With a copy to: ADM Sub, at the address set forth above, and
                          MBX, at the address set forth above

Either Party may change the registered address to which such notice should be
sent by giving written notice to the other Party.

     14.7 INTEGRATION; ENTIRE AGREEMENT. This Agreement contains the entire
agreement of the Parties with regard to the subject matter contained herein and
supersedes all prior written and oral agreements, understandings and
negotiations, with regard to such subject matter.

     14.8 AMENDMENTS. This Agreement, including this provision, may not be
amended without a written instrument signed by duly authorized representatives
of all Parties.

     14.9 SEVERABILITY. In the event that any part of this Agreement is
adjudicated to be invalid or unenforceable because it contravenes any applicable
law or regulation, the Parties shall perform this Agreement in accordance with
their original intentions as set forth herein,

*    CONFIDENTIAL TREATMENT REQUESTED


                                       59



corresponding as closely as possible to the invalid or unenforceable part
insofar as it is still valid under such law or regulation and reflects the
original intention of the Parties. The validity of the remaining permissible
portions of this Agreement shall remain unaffected thereby.

     14.10 WAIVER/CUMULATIVE RIGHTS. No failure by any Party to insist upon the
strict performance of any covenant, duty, agreement or condition of this
Agreement or to exercise any right or remedy upon a breach thereof shall
constitute a waiver of any such breach or any other covenant, duty, agreement or
condition. All rights and remedies which a Party may have hereunder or by
operation of law are cumulative, and the pursuit of one right or remedy shall
not be deemed an election to waive or renounce any other right or remedy.

     14.11 NO JOINT VENTURE OR PARTNERSHIP RELATIONSHIP. Nothing contained in or
relating to this Agreement is or shall be deemed to constitute a joint venture,
partnership or agency relationship between any of the Parties hereto and no
Party shall have any authority to act for or to assume any obligation or
responsibility on behalf of the other Party

     14.12 FURTHER ASSURANCES. Each Party shall duly execute and deliver, or
cause to be duly executed and delivered, such further instruments and do and
cause to be done such further acts and things, including without limitation the
filing of such assignments, agreements, documents and instruments, as may be
necessary or as the other Party may reasonably request in connection with this
Agreement or to carry out more effectively the provisions and purposes hereof,
or to better assure and confirm unto such other Party its rights and remedies
under this Agreement.

     14.13 CONSTRUCTION. Except where the context otherwise requires, wherever
used the singular shall include the plural, the plural the singular, the use of
any gender shall be applicable to all genders, the word "or" is used in the
inclusive sense and the word "any" shall mean any one item, or all items, in a
referenced category. The captions of this Agreement are for convenience of
reference only and in no way define, describe, extend, or limit the scope or
intent of this Agreement or the intent of any provision contained in this
Agreement. The language of this Agreement shall be deemed to be the language
mutually chosen by the Parties and no rule of strict construction shall be
applied against either Party hereto.

     14.14 ACKNOWLEDGMENT. The Parties hereby acknowledge that all licenses
granted herein are, for the purposes of Section 365(n) of Title 11 of the U.S.
Code, licenses of rights to intellectual property as defined in said Title 11.

     14.14 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of which,
taken together, shall constitute one and the same instrument.

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
by their duly authorized representatives as of the day and year above written.

*    CONFIDENTIAL TREATMENT REQUESTED


                                       60



                                        ADM POLYMER CORPORATION


                                        By: /s/ John D. Rice
                                            ------------------------------------
                                        Name: John D. Rice
                                        Title: President


                                        METABOLIX, INC.


                                        By: /s/ James J. Barber
                                            ------------------------------------
                                        Name: James J. Barber
                                        Title: President and CEO


                                        ADM/ METABOLIX SALES
                                        COMPANY, LLC


                                        By: /s/ John D. Rice
                                            ------------------------------------
                                        Name: John D. Rice
                                        Title: Director


                                        By: /s/ James J. Barber
                                            ------------------------------------
                                        Name: James J. Barber
                                        Title: Director

*    CONFIDENTIAL TREATMENT REQUESTED


                                       61



WHENEVER CONFIDENTIAL INFORMATION IS OMITTED HEREIN (SUCH OMISSIONS ARE DENOTED
BY AN ASTERISK*), SUCH CONFIDENTIAL INFORMATION HAS BEEN SUBMITTED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.

                               OPERATING AGREEMENT

                                       OF

                       ADM / METABOLIX SALES COMPANY, LLC

                                 BY AND BETWEEN

                             ADM POLYMER CORPORATION

                                        &

                                 METABOLIX INC.

*    CONFIDENTIAL TREATMENT REQUESTED



                                TABLE OF CONTENTS

OPERATING AGREEMENT                                                            1

BY AND BETWEEN                                                                 1

ADM POLYMER CORPORATION                                                        1

METABOLIX INC.                                                                 1

TABLE OF CONTENTS                                                              I

OPERATING AGREEMENT                                                            1

SECTION 1: THE JOINT SALES COMPANY                                             1

   1.1   FORMATION                                                             1
   1.2   NAME                                                                  1
   1.3   PURPOSE; POWERS                                                       1
   1.4   PRINCIPAL PLACE OF BUSINESS                                           2
   1.5   TERM                                                                  2
   1.6   FILINGS; AGENT FOR SERVICE OF PROCESS                                 2
   1.7   TITLE TO PROPERTY                                                     3
   1.8   PAYMENTS OF INDIVIDUAL OBLIGATIONS                                    3
   1.9   INDEPENDENT ACTIVITIES; TRANSACTIONS WITH AFFILIATES                  3
   1.10  DEFINITIONS                                                           4

SECTION 2: MEMBERS' CAPITAL CONTRIBUTIONS                                     17

   2.1   ORIGINAL CAPITAL CONTRIBUTIONS                                       17
   2.2   CONTRIBUTIONS                                                        17
   2.3   ADDITIONAL CAPITAL CONTRIBUTIONS                                     17

SECTION 3: ALLOCATIONS                                                        18

   3.1   PROFITS                                                              18
   3.2   LOSSES                                                               18
   3.3   SPECIAL ALLOCATIONS                                                  18
   3.4   CURATIVE ALLOCATIONS                                                 20
   3.5   LOSS LIMITATION                                                      20
   3.6   OTHER ALLOCATION RULES                                               20
   3.7   TAX ALLOCATIONS: CODE SECTION 704(c)                                 21

SECTION 4: DISTRIBUTIONS                                                      21

   4.1   NET CASH FLOW                                                        21
   4.4   LIMITATIONS ON DISTRIBUTIONS                                         22

SECTION 5: MANAGEMENT                                                         22

   5.1   DIRECTORS; BOARD OF DIRECTORS                                        22
   5.2   MEETINGS OF THE BOARD OF DIRECTORS                                   23
   5.3   BOARD OF DIRECTORS POWERS                                            24
   5.4   DUTIES AND OBLIGATIONS OF THE BOARD OF DIRECTORS                     27
   5.5   REIMBURSEMENTS                                                       27
   5.6   INDEMNIFICATION OF THE DIRECTORS AND OFFICERS                        28
   5.7   APPOINTMENT OF OFFICERS, AGENTS AND REPRESENTATIVES:                 28

*    CONFIDENTIAL TREATMENT REQUESTED


                                        i



SECTION 6: ROLE OF MEMBERS                                                    31

   6.1   RIGHTS OR POWERS                                                     31
   6.2   VOTING RIGHTS                                                        31
   6.3   REQUIRED MEMBER CONSENTS                                             31
   6.5   WITHDRAWAL/RESIGNATION                                               33
   6.6   MEMBER COMPENSATION                                                  33
   6.7   MEMBERS LIABILITY                                                    33
   6.8   PARTITION                                                            33
   6.9   CONFIDENTIALITY                                                      34
   6.10  TRANSACTIONS BETWEEN A MEMBER AND THE JOINT SALES COMPANY            34
   6.11  OTHER INSTRUMENTS                                                    34
   6.12  NUMBER OF MEMBERS                                                    34
   6.13  EQUALIZATION PAYMENTS                                                34

SECTION 7: REPRESENTATIONS AND WARRANTIES                                     35

   7.1   IN GENERAL                                                           35
   7.2   REPRESENTATIONS AND WARRANTIES                                       35

SECTION 8: ACCOUNTING, BOOKS AND RECORDS                                      36

   8.1   ACCOUNTING, BOOKS AND RECORDS                                        36
   8.2   REPORTS                                                              37
   8.3   TAX MATTERS                                                          38

SECTION 9: AMENDMENTS                                                         39

   9.1   AMENDMENTS                                                           39

SECTION 10: TRANSFERS                                                         40

   10.1  RESTRICTIONS ON TRANSFERS                                            40
   10.2  PERMITTED TRANSFERS                                                  40
   10.3  CONDITIONS TO PERMITTED TRANSFERS                                    40
   10.4  [RESERVED]                                                           41
   10.5  PROHIBITED TRANSFERS                                                 41
   10.6  TAX TERMINATION RESTRICTIONS                                         41
   10.7  RIGHTS OF UNADMITTED ASSIGNEES                                       42
   10.8  ADMISSION OF SUBSTITUTED MEMBERS                                     42
   10.9  REPRESENTATIONS REGARDING TRANSFERS; LEGEND                          43
   10.10 DISTRIBUTIONS AND ALLOCATIONS IN RESPECT OF TRANSFERRED UNITS        44

SECTION 11: ADVERSE ACT                                                       45

   11.1  REMEDIES                                                             45

SECTION 12: DISSOLUTION AND WINDING UP                                        46

   12.1  DISSOLUTION EVENTS                                                   46
   12.2  WINDING UP                                                           47
   12.3  COMPLIANCE WITH CERTAIN REQUIREMENTS OF REGULATIONS; DEFICIT
            CAPITAL ACCOUNTS                                                  48
   12.4  DEEMED DISTRIBUTION AND RECONTRIBUTION                               48
   12.5  RIGHTS OF MEMBERS                                                    49
   12.6  NOTICE OF DISSOLUTION/TERMINATION                                    49
   12.7  ALLOCATIONS DURING PERIOD OF LIQUIDATION                             49
   12.8  CHARACTER OF LIQUIDATING DISTRIBUTIONS                               49
   12.9  THE LIQUIDATOR                                                       50
   12.10 FORM OF LIQUIDATING DISTRIBUTIONS                                    50

SECTION 13: MISCELLANEOUS                                                     50

*    CONFIDENTIAL TREATMENT REQUESTED


                                       ii



   13.1  NOTICES                                                              50
   13.2  BINDING EFFECT                                                       52
   13.3  CONSTRUCTION                                                         52
   13.4  TIME                                                                 52
   13.5  HEADINGS                                                             52
   13.6  SEVERABILITY                                                         52
   13.7  INCORPORATION BY REFERENCE                                           52
   13.8  VARIATION OF TERMS                                                   53
   13.9  GOVERNING LAW                                                        53
   13.10 COUNTERPART EXECUTION                                                53

*    CONFIDENTIAL TREATMENT REQUESTED


                                       iii



                               OPERATING AGREEMENT

                                       OF

                       ADM / METABOLIX SALES COMPANY, LLC

     This OPERATING AGREEMENT is entered into and shall be effective as of the
14th day of July, 2006, by and between the Persons who are identified as Members
on Exhibit A attached hereto and who have executed a counterpart of this
Agreement as Members pursuant to the provisions of the Act, on the following
terms and conditions:

                       SECTION 1: THE JOINT SALES COMPANY

          1.1 FORMATION.

     The Members hereby agree to form the Joint Sales Company as a limited
liability company under and pursuant to the provisions of the Act and upon the
terms and conditions set forth in this Agreement. The fact that the Certificate
is on file in the office of the Secretary of State, State of Delaware, shall
constitute notice that the Joint Sales Company is a limited liability company.
Simultaneously with the execution of this Agreement and the formation of the
Joint Sales Company, each of the Members shall be admitted as a member of the
Joint Sales Company. The rights and liabilities of the Members shall be as
provided under the Act, the Certificate and this Operating Agreement.

          1.2 NAME.

     The name of the Joint Sales Company shall be ADM / Metabolix Sales Company,
LLC and all business of the Joint Sales Company shall be conducted in such name.
The Board of Directors may change the name of the Joint Sales Company upon ten
(10) Business Days' notice to the Members.

          1.3 PURPOSE; POWERS.

     (a) The purposes of the Joint Sales Company are (i) to operate the
Business, (ii) to make such additional investments and engage in such additional
activities as the Members may approve pursuant to the terms and conditions of
this Operating Agreement, and (iii) to engage in any and all activities related
or incidental to the purposes set forth in clauses (i) and (ii).

     (b) The Joint Sales Company has the power to do any and all acts necessary,
appropriate, proper, advisable, incidental or convenient to or in furtherance of
the purposes of

*    CONFIDENTIAL TREATMENT REQUESTED



the Joint Sales Company set forth in this Section 1.3 and has, without
limitation, any and all powers that may be exercised on behalf of the Joint
Sales Company by the Board of Directors pursuant to Section 5 hereof.

          1.4 PRINCIPAL PLACE OF BUSINESS.

     The principal place of business of the Joint Sales Company shall be at 21
Erie Street, Cambridge, MA 02139. The Board of Directors may change the
principal place of business of the Joint Sales Company to any other place within
or without the State of Delaware upon ten (10) Business Days notice to the
Members. The registered office of the Joint Sales Company in the State of
Delaware initially is located at c/o The Corporation Trust Company, Corporation
Trust Center, 1209 Orange Street, Wilmington, Delaware 19801.

          1.5 TERM.

     The term of the Joint Sales Company shall commence on the date the
certificate of formation of the Joint Sales Company as such term is described in
the Act (the "Certificate") is filed in the office of the Secretary of State of
the State of Delaware in accordance with the Act and shall continue until the
winding up and liquidation of the Joint Sales Company and its business is
completed following a Dissolution Event, as provided in Section 12 hereof. Prior
to the time that the Certificate is filed, no Person shall represent to third
parties the existence of the Joint Sales Company or hold himself out as a Member
or Director.

          1.6 FILINGS; AGENT FOR SERVICE OF PROCESS.

     (a) The Directors are hereby severally authorized to and at least one of
them shall cause the Certificate to be filed in the office of the Secretary of
State of the State of Delaware in accordance with the Act. The Board of
Directors shall take any and all other actions reasonably necessary to perfect
and maintain the status of the Joint Sales Company as a limited liability
company under the laws of the State of Delaware, including the preparation and
filing of such amendments to the Certificate and such other assumed name
certificates, documents, instruments and publications as may be required by law,
including, without limitation, action to reflect:

          (i)  a change in the Joint Sales Company name; or

          (ii) a correction of false or erroneous statements in the Certificate
          or the desire of the Members to make a change in any statement therein
          in order that it shall accurately represent the agreement among the
          Members.

     (b) The Members and the Board of Directors shall execute and cause to be
filed original or amended certificates and shall take any and all other actions
as may be reasonably necessary to perfect and maintain the status of the Joint
Sales Company as a limited liability company or similar type of entity under the
laws of any other jurisdictions in which the Joint Sales Company engages in
business.

*    CONFIDENTIAL TREATMENT REQUESTED


                                       2



     (c) The registered agent for service of process on the Joint Sales Company
in the State of Delaware shall be The Corporation Trust Company, or any
successor as appointed by the Members in accordance with the Act.

     (d) Upon the dissolution and completion of the winding up and liquidation
of the Joint Sales Company in accordance with Section 12, the Board of Directors
shall promptly execute and cause to be filed a certificate of cancellation in
accordance with the Act and the laws of any other jurisdictions in which the
Board of Directors deems such filing necessary or advisable.

          1.7 TITLE TO PROPERTY.

     All Property owned by the Joint Sales Company shall be owned by the Joint
Sales Company as an entity and no Member shall have any ownership interest in
such Property in its individual name, and each Member's interest in the Joint
Sales Company shall be personal property for all purposes. At all times after
the Effective Date, the Joint Sales Company shall hold title to all of its
Property in the name of the Joint Sales Company and not in the name of any
Member.

          1.8 PAYMENTS OF INDIVIDUAL OBLIGATIONS.

     Except as expressly set forth in the Commercial Alliance Agreements, the
Joint Sales Company's credit and assets shall be used solely for the benefit of
the Joint Sales Company, and no asset of the Joint Sales Company shall be
Transferred or encumbered for, or in payment of, any individual obligation of
any Member without the unanimous consent of the Members.

          1.9 INDEPENDENT ACTIVITIES; TRANSACTIONS WITH AFFILIATES.

     (a) Each Director shall be required to devote such time to the affairs of
the Joint Sales Company as may be necessary to manage and operate the Joint
Sales Company, and shall be free to serve any other Person or enterprise in any
capacity that such Director may deem appropriate in his, her or its discretion.

     (b) Insofar as permitted by applicable law and except as otherwise provided
in the Commercial Alliance Agreements, neither this Agreement nor any activity
undertaken pursuant hereto shall prevent any Member or Director or their
Affiliates from engaging in whatever activities they choose, whether the same
are competitive with the Joint Sales Company or otherwise, and any such
activities may be undertaken without having or incurring any obligation to offer
any interest in such activities to the Joint Sales Company or any Member, or
require any Member or Director to permit the Joint Sales Company or any other
Director or Member or its Affiliates to participate in any such activities, and
as a material part of the consideration for the execution of this Agreement by
each Member, each Member hereby waives, relinquishes, and renounces any such
right or claim of participation.

     (c) To the extent permitted by applicable law and subject to the provisions
of the Commercial Alliance Agreements, the Board of Directors is hereby
authorized to cause the

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Joint Sales Company to purchase Property from, sell Property to or otherwise
deal with any Member or Director, acting on its own behalf, or any Affiliate of
any Member or Director; PROVIDED that, except as set forth in Section 6.10
hereof, any such purchase, sale or other transaction shall be made on terms and
conditions which are no less favorable to the Joint Sales Company than if the
sale, purchase or other transaction had been made with an independent third
party.

          1.10 DEFINITIONS.

     Capitalized words and phrases used in this Agreement have the following
meanings:

     "ACT" means the Delaware Limited Liability Company Act, 6 Del. C.
section 18-101, et seq., as amended from time to time (or any corresponding
provisions of succeeding law).

     "ADDITIONAL CAPITAL CONTRIBUTIONS" means, with respect to each Member, the
Capital Contributions made by such Member pursuant to Section 2.3 hereof. In the
event Units are Transferred in accordance with the terms of this Agreement, the
transferee shall succeed to the Additional Capital Contributions of the
transferor to the extent they relate to the Transferred Units.

     "ADJUSTED CAPITAL ACCOUNT DEFICIT" means, with respect to any Member, the
deficit balance, if any, in such Member's Capital Account as of the end of the
relevant Allocation Year, after giving effect to the following adjustments:

               (i) Credit to such Capital Account any amounts which such Member
          is deemed to be obligated to restore pursuant to the penultimate
          sentences in Sections 1.704-2(g)(1) and 1.704-2(i)(5) of the
          Regulations; and

               (ii) Debit to such Capital Account the items described in
          Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and
          1.704-1(b)(2)(ii)(d)(6) of the Regulations.

The foregoing definition of Adjusted Capital Account Deficit is intended to
comply with the provisions of Section 1.704-1(b)(2)(ii)(d) of the Regulations
and shall be interpreted consistently therewith.

     "ADM POLYMER CORPORATION" means ADM Polymer Corporation.

     "ADM POLYMER CORPORATION MANUFACTURING AGREEMENT" means the Manufacturing
Agreement by and between ADM Polymer Corporation and the Joint Sales Company
entered into simultaneously herewith.

     "ADM POLYMER CORPORATION MANUFACTURING FACILITY" means the facility to be
constructed by ADM Polymer Corporation, pursuant to the Commercial Alliance
Agreement, to manufacture PHA Material pursuant to the ADM Polymer Corporation
Manufacturing Agreement.

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     "ADM POLYMER CORPORATION MARGIN" has the meaning assigned to the term
"Manufacturing Margin" in the ADM Polymer Corporation Manufacturing Agreement.

     "ADM POLYMER CORPORATION SERVICES AGREEMENT" means the agreement entitled
ADM Polymer Corporation Services Agreement entered into simultaneously herewith
between ADM Polymer Corporation and the Joint Sales Company pursuant to which
ADM Polymer Corporation shall provide the Joint Sales Company with certain
specified services, all for the Joint Sales Company's Business.

     "ADVERSE ACT" means, with respect to any Member, any of the following:

               (i) A failure of such Member to make any Capital Contribution
          required pursuant to any provision of this Agreement;

               (ii) A material breach of any Commercial Alliance Agreement by
          such Member resulting in the termination of such Commercial Alliance
          Agreement by another party thereto;

               (iii) A Transfer of all or any portion of such Member's Units
          except as expressly permitted or required by this Agreement; and

               (iv) Any dissolution or liquidation of a Member, unless
          substantially all assets of the Member (including, without limitation,
          this Agreement and all rights hereunder) are transferred or are to be
          transferred to a Wholly Owned Affiliate of such Member.

     An "ADVERSE MEMBER" is any Member with respect to whom an Adverse Act has
occurred.

     "AFFILIATE" of a Person means any other Person that, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such Person. "Control" and, with correlative
meanings, the terms "controlled by" and "under common control with" shall mean
the power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of voting securities, by contract,
resolution, regulation, or otherwise.

     "AGREEMENT" or "OPERATING AGREEMENT" means this Operating Agreement
including all Exhibits and Schedules attached hereto, as amended from time to
time. Words such as "herein," "hereinafter," "hereof," "hereto" and "hereunder"
refer to this Agreement as a whole, unless the context otherwise requires.

     "ALLOCATION YEAR" means (i) the period commencing on the Effective Date and
ending on December 31, 2006, (ii) any subsequent twelve (12) month period
commencing on January 1 and ending on December 31 or (iii) any portion of the
period described in clauses (i)

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or (ii) for which the Joint Sales Company is required to allocate Profits,
Losses and other items of Joint Sales Company income, gain, loss or deduction
pursuant to Section 3 hereof.

     "AVAILABLE CASH" means on any date the amount of cash held by the Joint
Sales Company less all expenses of the Joint Sales Company less all other cash
requirements of the Joint Sales Company, as reasonably determined by the
unanimous decision of the Board of Directors.

     "BOARD OF DIRECTORS" has the meaning set forth in Section 5.1(a) hereof.

     "BUSINESS" means (i) the business of operating, managing, and/or developing
the manufacture, marketing and sale of PHA Material and PHA Formulations
worldwide, consistent with the terms of the Commercial Alliance Agreements, and
(ii) any other business that the Members may unanimously approve.

     "BUSINESS DAY" means a day of the year on which banks are not required or
authorized to close in New York, New York.

     "CAPITAL ACCOUNT" means, with respect to any Member, the Capital Account
maintained for such Member in accordance with the following provisions:

               (i) To each Member's Capital Account there shall be credited (A)
          such Member's Capital Contributions, (B) such Member's distributive
          share of Profits and any items in the nature of income or gain which
          are specially allocated pursuant to Section 3.3 or Section 3.4 hereof,
          and (C) the amount of any Joint Sales Company liabilities assumed by
          such Member or which are secured by any Property distributed to such
          Member. The principal amount of a promissory note which is not readily
          traded on an established securities market and which is contributed to
          the Joint Sales Company by the maker of the note (or a Member related
          to the maker of the note within the meaning of Regulations Section
          1.704-1(b)(2)(ii)(c)) shall not be included in the Capital Account of
          any Member until the Joint Sales Company makes a taxable disposition
          of the note or until (and to the extent) principal payments are made
          on the note, all in accordance with Regulations Section
          1.704-1(b)(2)(iv)(d)(2);

               (ii) To each Member's Capital Account there shall be debited (A)
          the amount of money and the Gross Asset Value of any Property
          distributed to such Member pursuant to any provision of this
          Agreement, (B) such Member's distributive share of Losses and any
          items in the nature of expenses or losses which are specially
          allocated pursuant to Section 3.3 or Section 3.4 hereof, and (C) the
          amount of any liabilities of such Member assumed by the Joint Sales
          Company or which are secured by any Property contributed by such
          Member to the Joint Sales Company;

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               (iii) In the event Units are Transferred in accordance with the
          terms of this Agreement, the transferee shall succeed to the Capital
          Account of the transferor to the extent it relates to the Transferred
          Units; and

               (iv) In determining the amount of any liability for purposes of
          subparagraphs (i) and (ii) above there shall be taken into account
          Code Section 752(c) and any other applicable provisions of the Code
          and Regulations.

     The foregoing provisions and the other provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to comply with
Regulations Section 1.704-1(b), and shall be interpreted and applied in a manner
consistent with such Regulations. In the event the Board of Directors shall
determine that it is prudent to modify the manner in which the Capital Accounts,
or any debits or credits thereto (including, without limitation, debits or
credits relating to liabilities which are secured by contributed or distributed
property or which are assumed by the Joint Sales Company or any Members), are
computed in order to comply with such Regulations, the Board of Directors by a
unanimous decision may make such modification, provided that it is not likely to
have a material effect on the amounts distributed to any Person pursuant to
Section 12 hereof upon the dissolution of the Joint Sales Company. The Board of
Directors by a unanimous decision also shall (i) make any adjustments that are
necessary or appropriate to maintain equality between the Capital Accounts of
the Members and the amount of capital reflected on the Joint Sales Company's
balance sheet, as computed for book purposes, in accordance with Regulations
Section 1.704-1(b)(2)(iv)(q), and (ii) make any appropriate modifications in the
event unanticipated events might otherwise cause this Agreement not to comply
with Regulations Section 1.704-1(b).

     "CAPITAL CONTRIBUTIONS" means, with respect to any Member, the amount of
money and the initial Gross Asset Value of any Property (other than money)
contributed to the Joint Sales Company with respect to the Units in the Joint
Sales Company held or purchased by such Member, including Additional Capital
Contributions.

     "CERTIFICATE" means the certificate of formation filed with the Secretary
of State of the State of Delaware on the date hereof pursuant to the Act to form
the Company, as originally executed and amended, modified, supplemented or
restated from time to time, as the context requires.

     "CERTIFICATE OF CANCELLATION" means a certificate filed in accordance with
6 Del. C. section 18-203.

     "CHAIRMAN" means the Chairman of the Board of Directors of the Company.

     "CODE" means the United States Internal Revenue Code of 1986, as amended
from time to time.

     "COMMERCIAL ALLIANCE AGREEMENT" means the Commercial Alliance Agreement by
and between ADM Polymer Corporation, MBX and the Joint Sales Company, entered
into simultaneously herewith.

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     "COMMERCIAL ALLIANCE AGREEMENTS" means this Agreement, the Commercial
Alliance Agreement, the ADM Polymer Corporation Manufacturing Agreement, the MBX
Formulation Agreement, the ADM Polymer Corporation Service Agreement, the MBX
Service Agreement and the Loan and Security Agreement.

     "COMPANY MINIMUM GAIN" has the same meaning as the term "Company Minimum
Gain" in Section 1.704-2(d) of the Regulations.

     "CONSTRUCT" shall have the meaning set forth in the Commercial Alliance
Agreement.

     "DAMAGES" shall have the meaning set forth in Section 11.1 hereof.

     "DEBT" means (i) any indebtedness for borrowed money or the deferred
purchase price of property as evidenced by a note, bonds, or other instruments,
(ii) obligations as lessee under capital leases, (iii) obligations secured by
any mortgage, pledge, security interest, encumbrance, lien or charge of any kind
existing on any asset owned or held by the Company whether or not the Company
has assumed or become liable for the obligations secured thereby, (iv) any
obligation under any interest rate swap agreement, (v) accounts payable and (vi)
obligations under direct or indirect guarantees of (including obligations
(contingent or otherwise) to assure a creditor against loss in respect of)
indebtedness or obligations of the kinds referred to in clauses (i), (ii),
(iii), (iv) and (v), above provided that Debt shall not include obligations in
respect of any accounts payable that are incurred in the ordinary course of the
Company's business and are not delinquent or are being contested in good faith
by appropriate proceedings.

     "DEFENDANT" shall have the meaning set forth in Section 12.11(b)(ii)
hereof.

     "DEPRECIATION" means, for each Allocation Year, an amount equal to the
depreciation, amortization, or other cost recovery deduction allowable for
federal income tax purposes with respect to an asset for such Allocation Year,
except that (x) with respect to any asset whose Gross Asset Value differs from
its adjusted tax basis for United States federal income tax purposes and which
difference is being eliminated by use of the "remedial method" defined by
section 1.704-3(d) of the Regulations, Depreciation for such Allocation Year
shall be the amount of book basis recovered for such Allocation Year under the
rules prescribed by section 1.704-3(d)(2) of the Regulations and (y) with
respect to any other asset whose Gross Asset Value differs from its adjusted
basis for federal income tax purposes at the beginning of such Allocation Year,
Depreciation shall be an amount which bears the same ratio to such beginning
Gross Asset Value as the federal income tax depreciation, amortization, or other
cost recovery deduction for such Allocation Year bears to such beginning
adjusted tax basis; PROVIDED, HOWEVER, that if the adjusted basis for federal
income tax purposes of an asset at the beginning of such Allocation Year is
zero, Depreciation shall be determined with reference to such beginning Gross
Asset Value using any reasonable method selected by the Board of Directors.

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     "DIRECTOR" means any of the individuals elected by the Members to serve on
the Board of Directors and "DIRECTORS" means all of such individuals. Directors
shall be "managers" within the meaning of the Act.

     "DISSOLUTION EVENT" shall have the meaning set forth in Section 12.1
hereof.

     "EFFECTIVE DATE" means the date first set forth above as the effective date
hereof.

     "ELECTION NOTICE" shall have the meaning set forth in Section 11.2(a)
hereof.

     "ELECTION PERIOD" shall have the meaning set forth in Section 11.2(b)
hereof.

     "EQUALIZATION DATE" means the first Business Day after the First Commercial
Sale that the Ledger Account is reduced to zero.

     "EQUALIZATION DISTRIBUTION DATE" means a date not more than thirty (30)
days following the end of each Fiscal Quarter during the Equalization Period.

     "EQUALIZATION PAYMENT" means on any Equalization Distribution Date on which
both MBX and ADM Polymer Corporation (or a Wholly Owned Affiliate of MBX or ADM
Polymer Corporation) are Members of the Joint Sales Company, an amount equal to
the following (without duplication):

               (i)  with respect to MBX, the sum of (a) the amount, if any, by
                    which payments to ADM Polymer Corporation of ADM Polymer
                    Corporation Margin under the ADM Polymer Corporation
                    Manufacturing Agreement during the Equalization Period
                    exceed the sum of royalty payments to MBX under the
                    Commercial Alliance Agreement, payments to MBX pursuant to
                    Section 4.3.6 of the Commercial Alliance Agreement, and MBX
                    Margin under the MBX Formulation Agreement, plus (b) MBX
                    Equalization Payments relating to prior Equalization Periods
                    that were not paid on account of insufficient Available
                    Cash, if any; and

               (ii) with respect to ADM Polymer Corporation, the sum of (a) the
                    amount, if any, by which the sum of royalty payments to MBX
                    under the Commercial Alliance Agreement, payments to MBX
                    pursuant to Section 4.3.6 of the Commercial Alliance
                    Agreement, and MBX Margin under the MBX Formulation
                    Agreement exceed payments to ADM Polymer Corporation of ADM
                    Polymer Corporation Margin under the ADM Polymer Corporation
                    Manufacturing Agreement during the Equalization Period, plus
                    (b) ADM Polymer Corporation's Equalization Payments relating
                    to prior Equalization Periods that were not paid on account
                    of insufficient Available Cash, if any.

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     Amounts payable as Equalization Payments shall be treated as guaranteed
payments within the meaning of Code Section 707(c), shall be considered an
expense of the Joint Sales Company for income tax purposes and an expense or
capital item for financial reporting purposes, as the case may be, and shall not
be considered a distribution of money that would reduce the Capital Account of
the Member to which such distribution is made. In the event Equalization
Payments are due and owing to MBX and ADM Polymer Corporation on any
Equalization Payment Date that there is insufficient Available Cash to pay all
then owing Equalization Payments, Equalization Payments shall be made to MBX and
ADM Polymer Corporation pro rata based on the amount each is owed, respectively,
as a percentage of the total amount owed to both of MBX and ADM Polymer
Corporation.

     "EQUALIZATION PERIOD" means in the case of (i) the first Equalization
Payment, the period from the Equalization Date to the Business Day immediately
preceding the first Equalization Distribution Date, or (ii) in the case of any
subsequent Equalization Payment, the period from the last Equalization
Distribution Date through the Business Day immediately preceding the pending
Equalization Distribution Date.

     "FIRM OFFER" shall have the meaning set forth in Section 10.4(a) hereof.

     "FIRST COMMERCIAL SALE" shall have the meaning set forth in the Commercial
Alliance Agreement.

     "FISCAL QUARTER" means (i) the period commencing on the Effective Date and
ending on September 30, 2006, (ii) any subsequent three-month period commencing
on each of July 1, October 1, January 1 and April 1 and ending on the last date
before the next such date and (iii) the period commencing on the immediately
preceding January 1, April 1, July 1, or October 1, as the case may be, and
ending on the date on which all Property is distributed to the Members pursuant
to Section 12 hereof.

     "FISCAL YEAR" means (i) the period commencing on the Effective Date and
ending on December 31, 2006, (ii) any subsequent twelve-month period commencing
on January 1st and ending on December 31st and (iii) the period commencing on
the immediately preceding January 1st and ending on the date on which all
Property is distributed to the Members pursuant to Section 12 hereof; provided,
however, that the Fiscal Year shall meet the requirements of Code Section 706.

     "GAAP" means generally accepted accounting principles in effect in the
United States of America from time to time.

     "GROSS ASSET VALUE" means with respect to any asset, the asset's adjusted
basis for federal income tax purposes, except as follows:

               (i) The initial Gross Asset Value of any asset contributed by a
          Member to the Company shall be the gross fair market value of such
          asset, as determined by the Board of Directors PROVIDED that the
          initial Gross Asset

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          Values of the assets contributed to the Company pursuant to Section
          2.1 hereof shall be as set forth in such section;

               (ii) The Gross Asset Values of all Company assets shall be
          adjusted to equal their respective gross fair market values (taking
          Code Section 7701(g) into account), as determined by the Board of
          Directors as of the following times: (A) the acquisition of an
          additional interest in the Company by any new or existing Member in
          exchange for more than a de minimis Capital Contribution; (B) the
          distribution by the Company to a Member of more than a de minimis
          amount of Company property as consideration for an interest in the
          Company; and (C) the liquidation of the Company within the meaning of
          Regulations Section 1.704-1(b)(2)(ii)(g), PROVIDED that an adjustment
          described in clauses (A) and (B) of this paragraph shall be made only
          if the Board of Directors reasonably determines that such adjustment
          is necessary to reflect the relative economic interests of the Members
          in the Company;

               (iii) The Gross Asset Value of any item of Company assets
          distributed to any Member shall be adjusted to equal the gross fair
          market value (taking Code Section 7701(g) into account) of such asset
          on the date of distribution as determined by the Board of Directors;
          and

               (iv) The Gross Asset Values of Company assets shall be increased
          (or decreased) to reflect any adjustments to the adjusted basis of
          such assets pursuant to Code Section 734(b) or Code Section 743(b),
          but only to the extent that such adjustments are taken into account in
          determining Capital Accounts pursuant to Regulations Section
          1.704-1(b)(2)(iv)(m) and subparagraph (vi) of the definition of
          "PROFITS" and "LOSSES" or Section 3.3(c) hereof; provided, however,
          that Gross Asset Values shall not be adjusted pursuant to this
          subparagraph (iv) to the extent that an adjustment pursuant to
          subparagraph (ii) is required in connection with a transaction that
          would otherwise result in an adjustment pursuant to this subparagraph
          (iv).

If the Gross Asset Value of an asset has been determined or adjusted pursuant to
subparagraph (ii) or (iv), such Gross Asset Value shall thereafter be adjusted
by the Depreciation taken into account with respect to such asset, for purposes
of computing Profits and Losses.

     "JOINT SALES COMPANY" means the limited liability company formed pursuant
to this Agreement and the Certificate and the limited liability company
continuing the business of this Joint Sales Company in the event of dissolution
of the Joint Sales Company as herein provided.

     "LEDGER ACCOUNT" means with respect to ADM Polymer Corporation, the Ledger
Account maintained for the purpose of determining certain rights and obligations
of ADM Polymer Corporation, MBX and the Joint Sales Company pursuant to this
Agreement and the other Commercial Alliance Agreements, all in accordance with
the following provisions:

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               (i) To ADM Polymer Corporation's Ledger Account there shall be
          credited (A) the cost incurred by ADM Polymer Corporation to Construct
          the ADM Polymer Corporation Manufacturing Facility, as approved by the
          Steering Committee pursuant to Section 4.2.5 of the Commercial
          Alliance Agreement, (B) other capital expenditures funded by ADM
          Polymer Corporation and approved for application as a credit against
          the Ledger Account by the Steering Committee, and (C) any negative Net
          Cash Flow funded by ADM Polymer Corporation;

               (ii) To ADM Polymer Corporation's Ledger Account there shall be
          debited (A) the cost incurred by MBX to Construct the MBX Formulation
          Facility, as approved by the Steering Committee pursuant to Section
          4.3.5 of the Commercial Alliance Agreement, (B) other capital
          expenditures funded by MBX and approved for application as a debit
          against the Ledger Account by the Steering Committee, and (C) Net Cash
          Flow distributed to ADM Polymer Corporation pursuant to Section 4.1.

     "LETTER OF INTENT" means a binding or non-binding letter of intent between
a Seller and a Third-Party Transferee regarding the sale of Offered Units
entered into after the Offer Period.

     "LICENSE FEE" has the meaning assigned to the term "License Fee" in the
Commercial Alliance Agreement.

     "LIQUIDATION PERIOD" has the meaning set forth in Section 12.7 hereof.

     "LIQUIDATOR" has the meaning set forth in Section 12.9(a) hereof.

     "LOAN AND SECURITY AGREEMENT" means the Loan and Security Agreement by and
between ADM Polymer Corporation and the Joint Sales Company entered into
simultaneously herewith.

     "LOSSES" has the meaning set forth in the definition of "PROFITS" and
"LOSSES."

     "MARKETING AND SALES MANAGER" means the Marketing and Sales Manager of the
Joint Sales Company.

     "MBX FORMULATION AGREEMENT" means the Formulation Agreement by and between
MBX and the Joint Sales Company entered into simultaneously herewith.

     "MBX FORMULATION FACILITY" means the facility constructed by MBX, pursuant
to the Commercial Alliance Agreement, to produce PHA Formulations pursuant to
the MBX Formulation Agreement

     "MBX MARGIN" has the meaning assigned to the term "Formulation Margin" in
the MBX Formulation Agreement.

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     "MEMBER" means any Person (i) who is referred to as such on Exhibit A to
this Agreement, or who has become a substituted Member pursuant to the terms of
this Agreement and (ii) who has not ceased to be a Member. "Members" means all
such Persons.

     "MEMBER NONRECOURSE DEBT" has the same meaning as the term "Member
nonrecourse debt" in Section 1.704-2(b)(4) of the Regulations.

     "MEMBER NONRECOURSE DEBT MINIMUM GAIN" means an amount, with respect to
each Member Nonrecourse Debt, equal to the Company Minimum Gain that would
result if such Member Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Section 1.704-2(i)(3) of the Regulations.

     "MEMBER NONRECOURSE DEDUCTIONS" has the same meaning as the term "Member
nonrecourse deductions" in Sections 1.704-2(i)(1) and 1.704-2(i)(2) of the
Regulations.

     "MBX" means Metabolix, Inc.

     "MBX SERVICES AGREEMENT" means an agreement entitled MBX Services Agreement
between MBX and the Joint Sales Company entered into simultaneously herewith.

     "NET CASH FLOW" means the gross cash proceeds of the Joint Sales Company
less the portion thereof used to pay or establish reserves for all Joint Sales
Company expenses, debt payments, capital improvements, replacements, and
contingencies, all as determined by a unanimous vote of the Board of Directors.
"NET CASH FLOW" shall not be reduced by depreciation, amortization, cost
recovery deductions, or similar allowances, but shall be increased by any
reductions of reserves previously established pursuant to the first sentence of
this definition.

     "NONRECOURSE DEDUCTIONS" has the meaning set forth in Section 1.704-2(b)(1)
of the Regulations.

     "NONRECOURSE LIABILITY" has the meaning set forth in Section 1.704-2(b)(3)
of the Regulations.

     "OFFEREE" shall have the meaning set forth in Section 10.4 hereof.

     "OFFEROR" shall have the meaning set forth in Section 10.4(b) hereof.

     "OFFER NOTICE" shall have the meaning set forth in Section 10.4(a) hereof.

     "OFFER PERIOD" shall have the meaning set forth in Section 10.4(d) hereof.

     "OFFER PRICE" shall have the meaning set forth in Section 10.4(c) hereof.

     "OFFERED UNITS" shall have the meaning set forth in Section 10.4 hereof.

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     "OFFICERS" means the Marketing and Sales Manager, the Assistant Marketing
and Sales Manager, the Treasurer and the Secretary together with such other
officers of the Joint Sales Company the Board of Directors may designate. An
"Officer" means one of the above.

     "PARENT" means with respect to a Member, any Person "controlling" such
Member and not "controlled" by any other Person, as such terms within quotation
marks are defined within the definition of Affiliate herein.

     "PERCENTAGE INTEREST" means, with respect to any Member as of any date, the
ratio (expressed as a percentage) of the number of Units held by such Member on
such date to the aggregate Units held by all Members on such date. The
Percentage Interest of each Member immediately after the Effective Date is set
forth in Section 2.1 hereof.

     "PERMITTED TRANSFER" has the meaning set forth in Section 10.2 hereof.

     "PERSON" means any individual, partnership (whether general or limited),
limited liability company, corporation, trust, estate, association, nominee or
other entity.

     "PHA FORMULATIONS" shall have the meaning set forth in the Commercial
Alliance Agreement.

     "PHA MATERIAL" shall have the meaning set forth in the Commercial Alliance
Agreement.

     "PRELIMINARY NEGOTIATIONS" shall mean all negotiations between a Seller and
a Third-Party Transferee occurring prior to the time that the Seller and
Third-Party Transferee have entered into a Letter of Intent.

     "PROFITS" and "LOSSES" mean, for each Allocation Year, an amount equal to
the Joint Sales Company's taxable income or loss, as the case may be, for such
Allocation Year, determined in accordance with Code Section 703(a) (for this
purpose, all items of income, gain, loss, or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in taxable
income or loss), with the following adjustments (without duplication):

               (i) Any income of the Joint Sales Company that is exempt from
          federal income tax and not otherwise taken into account in computing
          Profits or Losses pursuant to this definition of "PROFITS" and
          "LOSSES" shall be added to such taxable income or loss;

               (ii) Any expenditures of the Joint Sales Company described in
          Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B)
          expenditures pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and
          not otherwise taken into account in computing Profits or Losses
          pursuant to this definition of "Profits" and "Losses" shall be
          subtracted from such taxable income or loss;

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               (iii) In the event the Gross Asset Value of any Joint Sales
          Company asset is adjusted pursuant to subparagraphs (ii) or (iii) of
          the definition of Gross Asset Value, the amount of such adjustment
          shall be treated as an item of gain (if the adjustment increases the
          Gross Asset Value of the asset) or an item of loss (if the adjustment
          decreases the Gross Asset Value of the asset) from the disposition of
          such asset and shall be taken into account for purposes of computing
          Profits or Losses;

               (iv) Gain or loss resulting from any disposition of Property with
          respect to which gain or loss is recognized for federal income tax
          purposes shall be computed by reference to the Gross Asset Value of
          the Property disposed of, notwithstanding that the adjusted tax basis
          of such Property differs from its Gross Asset Value;

               (v) In lieu of the depreciation, amortization, and other cost
          recovery deductions taken into account in computing such taxable
          income or loss, there shall be taken into account Depreciation for
          such Allocation Year, computed in accordance with the definition of
          Depreciation;

               (vi) To the extent an adjustment to the adjusted tax basis of any
          Joint Sales Company asset pursuant to Code Section 734(b) is required,
          pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(4), to be taken
          into account in determining Capital Accounts as a result of a
          distribution other than in liquidation of a Member's interest in the
          Joint Sales Company, the amount of such adjustment shall be treated as
          an item of gain (if the adjustment increases the basis of the asset)
          or loss (if the adjustment decreases such basis) from the disposition
          of such asset and shall be taken into account for purposes of
          computing Profits or Losses; and

               (vii) Notwithstanding any other provision of this definition, any
          items which are specially allocated pursuant to Section 3.3 or Section
          3.4 hereof shall not be taken into account in computing Profits or
          Losses.

     The amounts of the items of Joint Sales Company income, gain, loss or
deduction available to be specially allocated pursuant to Sections 3.3 and 3.4
hereof shall be determined by applying rules analogous to those set forth in
subparagraphs (i) through (vi) above.

     "PROMISSORY NOTE" means the Promissory Note made by the Joint Sales Company
to the order of ADM Polymer Corporation entered into simultaneously herewith.

     "PROPERTY" means all real and personal property acquired by the Joint Sales
Company, including cash, and any improvements thereto, and shall include both
tangible and intangible property.

     "PURCHASE OFFER" shall have the meaning set forth in Section 10.4(b)
hereof.

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     "PURCHASER" shall have the meaning set forth in Section 10.4(a) hereof.

     "RECONSTITUTION PERIOD" has the meaning set forth in Section 12.1(b)
hereof.

     "REGULATIONS" means the Income Tax Regulations, including Temporary
Regulations, promulgated under the Code, as such regulations are amended from
time to time.

     "REGULATORY ALLOCATIONS" has the meaning set forth in Section 3.4 hereof.

     "SECRETARY" means the Secretary of the Joint Sales Company.

     "SELLER" shall have the meaning set forth in Section 10.4 hereof.

     "SECURITIES ACT" means the Securities Act of 1933, as amended.

     "STEERING COMMITTEE" shall have the meaning set forth in the Commercial
Alliance Agreement.

     "TAX MATTERS MEMBER" has the meaning set forth in Section 8.3(a) hereof.

     "TECHNOLOGY ALLIANCE AGREEMENT" means the Technology Alliance Agreement by
and between ADM Polymer Corporation and MBX entered into November 3, 2004.

     "TECHNOLOGY MANAGER" means the Technology Manager of the Joint Sales
Company.

     "THIRD-PARTY TRANSFEREE" shall have the meaning set forth in Section
10.4(i) hereof.

     "TRANSFER" means, as a noun, any voluntary or involuntary transfer, sale,
pledge or hypothecation or other disposition and, as a verb, voluntarily or
involuntarily to transfer, sell, pledge or hypothecate or otherwise dispose of.

     "TRANSFER OFFER" shall have the meaning set forth in Section 10.4(c)
hereof.

     "TREASURER" means the Treasurer of the Joint Sales Company.

     "UNITS" or "UNIT" means an ownership interest in the Joint Sales Company
represented by a certificate in the form of Exhibit B attached hereto and
bearing the legend required by Section 10.9 hereof, representing a Capital
Contribution of *, including the Voting Percentage noted on the certificate
therefor as well as any and all benefits to which the holder of such Units may
be entitled as provided in this Agreement, together with all obligations of such
Person to comply with the terms and provisions of this Agreement.

     "UNSOLICITED OFFER" shall have the meaning set forth in Section 10.4(b)
hereof.

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     "VOTING PERCENTAGE" means the percentage set opposite each Member's name in
Section 2.1, and unless otherwise explicitly set forth herein to the contrary,
any matters requiring the Members to vote, approve, or take any other action
shall be determined by a majority in Voting Percentage of the Members.

     "WHOLLY OWNED AFFILIATE" of any Person means (i) an Affiliate of such
Person, one hundred percent (100%) of the voting stock or beneficial ownership
of which is owned by such Person, either directly or indirectly; (ii) an
Affiliate of such Person, and such Affiliate owns one hundred percent (100%) of
the voting stock or beneficial ownership of such Person, either directly or
indirectly; or (iii) an Affiliate of such Person, where a Person owns one
hundred percent (100%) of the voting stock or beneficial ownership of such
Affiliate and such Person, either directly or indirectly.

                    SECTION 2: MEMBERS' CAPITAL CONTRIBUTIONS

          2.1 ORIGINAL CAPITAL CONTRIBUTIONS.

     The name, address, original Capital Contribution, and initial Percentage
Interest of each of the Members is as follows:

                                Original Capital         Percentage     Voting
Names and Address                 Contribution            Interest    Percentage
- -----------------------   ----------------------------   ----------   ----------
Metabolix Inc.            The property described             50%          50%
21 Erie Street            in Exhibit A attached hereto
Cambridge, MA 02139

ADM Polymer Corporation   The property described             50%          50%
4666 Faries Parkway       in Exhibit A attached hereto
Decatur, Illinois 62526

          2.2 CONTRIBUTIONS.

          Pursuant to Section 2.1 hereof, each Member agrees to contribute to
the Joint Sales Company on the date hereof, the amount of money or the property
set opposite such Member's name on the attached Exhibit A.

          2.3 ADDITIONAL CAPITAL CONTRIBUTIONS.

          A Member may make Additional Capital Contributions only with the
written consent of all Members, in which event the Joint Sales Company shall
issue to the contributing Member additional Units of an amount to be unanimously
agreed by the Members.

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                             SECTION 3: ALLOCATIONS

          3.1 PROFITS.

          After giving effect to the special allocations set forth in Sections
3.3 and 3.4, Profits for any Allocation Year on or prior to the Equalization
Date shall be allocated to ADM Polymer Corporation, and Profits for any
Allocation Year after the Equalization Date shall be allocated to the Members in
proportion to their Percentage Interests.

          3.2 LOSSES.

          After giving effect to the special allocations set forth in Sections
3.3 and 3.4 and subject to Section 3.5, Losses for any Allocation Year on or
prior to the Equalization Date shall be allocated to ADM Polymer Corporation,
and Losses for any Allocation Year after the Equalization Date shall be
allocated to the Members in proportion to their Percentage Interests.

          3.3 SPECIAL ALLOCATIONS.

          The following special allocations shall be made in the following
order:

          (a) MINIMUM GAIN CHARGEBACK. Except as otherwise provided in Section
1.704-2(f) of the Regulations, notwithstanding any other provision of this
Section 3, if there is a net decrease in Company Minimum Gain during any
Allocation Year, each Member shall be specially allocated items of Joint Sales
Company income and gain for such Allocation Year (and, if necessary, subsequent
Allocation Years) in an amount equal to such Member's share of the net decrease
in Company Minimum Gain, determined in accordance with Regulations Section
1.704-2(g). Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be allocated to each Member
pursuant thereto. The items to be so allocated shall be determined in accordance
with sections 1.704-2(f) (6) and 1.704-2(j) (2) of the Regulations. This Section
3.3(a) is intended to comply with the minimum gain chargeback requirement in
Section 1.704-2(f) of the Regulations and shall be interpreted consistently
therewith.

          (b) MEMBER MINIMUM GAIN CHARGEBACK. Except as otherwise provided in
Section 1.704-2(i) (4) of the Regulations, notwithstanding any other provision
of this Section 3, if there is a net decrease in Member Nonrecourse Debt Minimum
Gain attributable to a Member Nonrecourse Debt during any Allocation Year, each
Member who has a share of the Member Nonrecourse Debt Minimum Gain attributable
to such Member Nonrecourse Debt, determined in accordance with Section
1.704-2(i) (5) of the Regulations, shall be specially allocated items of Joint
Sales Company income and gain for such Allocation Year (and, if necessary,
subsequent Allocation Years) in an amount equal to such Member's share of the
net decrease in Member Nonrecourse Debt, determined in accordance with
Regulations Section 1.704-2(i) (4). Allocations pursuant to the previous
sentence shall be made in proportion to the respective amounts required to be
allocated to each Member pursuant thereto. The items to be so allocated shall be
determined in accordance with Sections 1.704-2(i) (4) and 1.704-2(j) (2) of the
Regulations. This Section 3.3(b) is intended to comply with the minimum gain

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chargeback requirement in Section 1.704-2(i) (4) of the Regulations and shall be
interpreted consistently therewith.

          (c) QUALIFIED INCOME OFFSET. In the event any Member unexpectedly
receives any adjustments, allocations, or distributions described in Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6) of
the Regulations, items of Joint Sales Company income and gain shall be specially
allocated to such Member in an amount and manner sufficient to eliminate, to the
extent required by the Regulations, the Adjusted Capital Account Deficit of the
Member as quickly as possible, provided that an allocation pursuant to this
Section 3.3(c) shall be made only if and to the extent that the Member would
have an Adjusted Capital Account Deficit after all other allocations provided
for in this Section 3 have been tentatively made as if this Section 3.3(c) were
not in the Agreement.

          (d) GROSS INCOME ALLOCATION. In the event any Member has a deficit
Capital Account at the end of any Allocation Year which is in excess of the sum
of (i) the amount such Member is obligated to restore pursuant to the
penultimate sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5),
each such Member shall be specially allocated items of Joint Sales Company
income and gain in the amount of such excess as quickly as possible, provided
that an allocation pursuant to this Section 3.3(d) shall be made only if and to
the extent that such Member would have a deficit Capital Account in excess of
such sum after all other allocations provided for in this Section 3 have been
made as if Section 3.3(c) and this Section 3.3(d) were not in the Agreement.

          (e) NONRECOURSE DEDUCTIONS. Nonrecourse Deductions for any Allocation
Year shall be specially allocated to the Members in proportion to their
respective Percentage Interests.

          (f) MEMBER NONRECOURSE DEDUCTIONS. Any Member Nonrecourse Deductions
for any Allocation Year shall be specially allocated to the Member who bears the
economic risk of loss with respect to the Member Nonrecourse Debt to which such
Member Nonrecourse Deductions are attributable in accordance with Regulations
Section 1.704-2(i)(1).

          (g) SECTION 754 ADJUSTMENTS. To the extent an adjustment to the
adjusted tax basis of any Joint Sales Company asset, pursuant to Code Section
734(b) or Code Section 743(b) is required, pursuant to Regulations Section
1.704-1(b)(2)(iv)(m)(2) or 1.704-1(b)(2)(iv)(m)(4), to be taken into account in
determining Capital Accounts as the result of a distribution to a Member in
complete liquidation of such Member's interest in the Joint Sales Company, the
amount of such adjustment to Capital Accounts shall be treated as an item of
gain (if the adjustment increases the basis of the asset) or loss (if the
adjustment decreases such basis) and such gain or loss shall be specially
allocated to the Members in accordance with their interests in the Joint Sales
Company in the event Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or to
the Member to whom such distribution was made in the event Regulations Section
1.704-1(b)(2)(iv)(m)(4) applies.

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          3.4 CURATIVE ALLOCATIONS.

          The allocations set forth in Sections 3.3(a), 3.3(b), 3.3(c), 3.3(d),
3.3(e), 3.3(f), 3.3(g) and 3.5 (the "REGULATORY ALLOCATIONS") are intended to
comply with certain requirements of the Regulations. It is the intent of the
Members that, to the extent possible, all Regulatory Allocations shall be offset
either with other Regulatory Allocations or with special allocations of other
items of Joint Sales Company income, gain, loss or deduction pursuant to this
Section 3.4. Therefore, notwithstanding any other provision of this Section 3
(other than the Regulatory Allocations), the Board of Directors may make with
the unanimous approval of the Board of Directors such offsetting special
allocations of Joint Sales Company income, gain, loss or deduction in whatever
manner it determines appropriate so that, after such offsetting allocations are
made, each Member's Capital Account balance is, to the extent possible, equal to
the Capital Account balance such Member would have had if the Regulatory
Allocations were not part of the Agreement and all Joint Sales Company items
were allocated pursuant to Sections 3.1 and 3.2.

          3.5 LOSS LIMITATION.

          Losses allocated pursuant to Section 3.2 hereof shall not exceed the
maximum amount of Losses that can be allocated without causing any Member to
have an Adjusted Capital Account Deficit at the end of any Allocation Year. In
the event some but not all of the Members would have Adjusted Capital Account
Deficits as a consequence of an allocation of Losses pursuant to Section 3.2
hereof, the limitation set forth in this Section 3.5 shall be applied on a
Member by Member basis and Losses not allocable to any Member as a result of
such limitation shall be allocated to the other Members in accordance with the
positive balances in such Member's Capital Accounts so as to allocate the
maximum permissible Losses to each Member under Section 1.704-1(b)(2)(ii)(d) of
the Regulations.

          3.6 OTHER ALLOCATION RULES.

          (a) For purposes of determining the Profits, Losses, or any other
items allocable to any period, Profits, Losses, and any such other items shall
be determined on a daily, monthly, or other basis, as determined by the Board of
Directors using any permissible method under Code Section 706 and the
Regulations thereunder.

          (b) The Members are aware of the income tax consequences of the
allocations made by this Section 3 and hereby agree to be bound by the
provisions of this Section 3 in reporting their shares of Joint Sales Company
income and loss for income tax purposes.

          (c) Solely for purposes of determining a Member's proportionate share
of the "excess nonrecourse liabilities" of the Joint Sales Company within the
meaning of Regulations Section 1.752-3(a) (3), the Members' interests in Joint
Sales Company profits are in proportion to their Percentage Interests.

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          To the extent permitted by Section 1.704-2(h) (3) of the Regulations,
the Directors shall endeavor to treat distributions of Net Cash Flow as having
been made from the proceeds of a Nonrecourse Liability or a Member Nonrecourse
Debt only to the extent that such distributions would not cause or increase an
Adjusted Capital Account Deficit for any Member.

          3.7 TAX ALLOCATIONS: CODE SECTION 704(c).

          In accordance with Code Section 704(c) and the Regulations thereunder,
income, gain, loss, and deduction with respect to any Property contributed to
the capital of the Joint Sales Company shall, solely for tax purposes, be
allocated among the Members so as to take account of any variation between the
adjusted basis of such Property to the Joint Sales Company for federal income
tax purposes and its initial Gross Asset Value (computed in accordance with the
definition of Gross Asset Value) using the remedial method to the Regulations
under Code Section 704(c).

          In the event the Gross Asset Value of any Joint Sales Company asset is
adjusted pursuant to subparagraph (ii) of the definition of Gross Asset Value,
subsequent allocations of income, gain, loss, and deduction with respect to such
asset shall take account of any variation between the adjusted basis of such
asset for federal income tax purposes and its Gross Asset Value in the same
manner as under Code Section 704(c) and the Regulations thereunder.

          Any elections or other decisions relating to such allocations shall be
made by the Board of Directors in any manner that reasonably reflects the
purpose and intention of this Agreement. Allocations pursuant to this Section
3.6 are solely for purposes of federal, state, and local taxes and shall not
affect, or in any way be taken into account in computing, any Member's Capital
Account or share of Profits, Losses, other items, or distributions pursuant to
any provision of this Agreement.

                            SECTION 4: DISTRIBUTIONS

          4.1 NET CASH FLOW.

          Except as otherwise provided in Section 12 hereof, on or prior to the
Equalization Date, Net Cash Flow, if any, shall be distributed not later than
the thirtieth day after the end of each Fiscal Quarter to ADM Polymer
Corporation. Except as otherwise provided in Section 12 hereof or by the Board
of Directors, after the Equalization Date, Net Cash Flow, if any, shall be
distributed not later than the thirtieth day after the end of each Fiscal
Quarter to the Members following the Equalization Payments, if any, described in
Section 6.13 hereof, in proportion to their Percentage Interests.

          4.2 AMOUNTS WITHHELD.

          All amounts withheld pursuant to the Code or any provision of any
state, local or foreign tax law with respect to any payment, distribution or
allocation to the Joint Sales Company or the Members shall be treated as amounts
paid or distributed, as the case may be,

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to the Members with respect to which such amount was withheld pursuant to this
Section 4.2 for all purposes under this Agreement. The Joint Sales Company is
authorized to withhold from payments and distributions, or with respect to
allocations to the Members, and to pay over to any federal, state and local
government or any foreign government, any amounts required to be so withheld
pursuant to the Code or any provisions of any other federal, state or local law
or any foreign law, and shall allocate any such amounts to the Members with
respect to which such amount was withheld.

          4.3 [RESERVED]

          4.4 LIMITATIONS ON DISTRIBUTIONS.

          (a) The Joint Sales Company shall make no distributions to the Members
except (i) as provided in this Section 4 and Section 12 hereof, or (ii) as
agreed to by all of the Members.

          (b) A Member may not receive a distribution from the Joint Sales
Company to the extent that, such distribution would violate Sections 18-607 or
18-804 of the Act.

                              SECTION 5: MANAGEMENT

          5.1 DIRECTORS; BOARD OF DIRECTORS.

          (a) The management of the Joint Sales Company shall be vested in the
Board of Directors (the "BOARD OF DIRECTORS") designated by the Members as
provided in Section 5.1(c) hereof.

          (b) The number of Directors on the Board of Directors shall be four
(4). The initial Directors of the Joint Sales Company shall be as set forth on
Exhibit C hereto.

          (c) A Director shall remain in office until removed by the Member
designating such Director. MBX shall designate two (2) Directors, and ADM
Polymer Corporation shall designate two (2) Directors. Members shall designate
Directors with respect to any Director other than the initial Directors listed
on Exhibit C hereto, by delivering to the Joint Sales Company their written
statement designating their Director or Directors and setting forth such
Director's or Directors' business address and telephone number. The Members, by
signing this Agreement, hereby designate the Persons identified on Exhibit C
hereto as Directors of the Joint Sales Company until their successors are
designated, each such Director being deemed designated by the Member set forth
opposite such Director indicated on Exhibit C hereto.

          (d) A Director may be removed at any time, with or without cause, by
the written notice of the Member that designated such Director, delivered to the
Joint Sales Company, demanding such removal and designating the Person who shall
fill the position of the removed Director.

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          (e) If any Director dies, resigns or is otherwise unable to serve as
such or is removed from office by the Member that designated such Director, the
appropriate Member shall promptly designate a successor to such Director. A
Director chosen to fill a vacancy shall be designated by the Member whose
previously designated Director shall have been removed or shall have resigned.

          (f) Each Director shall have one (1) vote. Except as otherwise
provided in this Agreement, the Board of Directors shall act by the affirmative
vote of a majority of a quorum.

          (g) Each Director shall perform his duties as a Director in good
faith, in a manner he reasonably believes to be in the best interests of the
Joint Sales Company, and with such care as an ordinarily prudent person in a
like position would use under similar circumstances. A person who so performs
his duties shall not have any liability by reason of being or having been a
Director of the Joint Sales Company.

          (h) The Board of Directors shall have the power to delegate authority
to such committees of Directors, Officers, employees, agents and representatives
of the Joint Sales Company as it may from time to time deem appropriate in
accordance with Section 5.7 below. Any delegation of authority to take any
action must be approved in the same manner as would be required for the Board of
Directors to approve such action directly.

          (i) A Director shall not be liable under a judgment, decree or order
of court, or in any other manner, for a debt, obligation or liability of the
Joint Sales Company.

          (j) The Chairman shall be a Director and shall hold office for a
period of one Fiscal Year. The Chairman shall be appointed on an alternating
basis, first as directed in writing by ADM Polymer Corporation, and then as
directed in writing by MBX. The Chairman may be removed at any time, with or
without cause, by the written notice of the Member that designated such
Chairman, delivered to the Joint Sales Company, demanding such removal and
designating the Person who shall fill the position of the removed Chairman. The
duties of the Chairman shall be to direct meetings of the Board of Directors.
The initial Chairman shall be as indicated on Exhibit C hereto.

     5.2 MEETINGS OF THE BOARD OF DIRECTORS.

          (a) The Board of Directors shall hold regular meetings no less
frequently than once every Fiscal Quarter and shall establish meeting times,
dates and places and requisite notice requirements (not shorter than those
provided in Section 5.2(b)) and adopt rules or procedures consistent with the
terms of this Agreement. Unless otherwise approved by the Board of Directors,
each regular meeting of the Board of Directors will be held at a location
specified on an alternating basis first, by those Directors designated by ADM
Polymer Corporation, next by those Directors designated by MBX, etc. for the
convenience of the Directors specifying the location. If the Directors
designated by a Member and having the right to specify the location do not so
specify, the meeting will be held at the Joint Sales

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Company's principal place of business. At such meetings the Board of Directors
shall transact such business as may properly be brought before the meeting,
whether or not notice of such meeting referenced the action taken at such
meeting. At all meetings of the Board of Directors, the participation of at
least one Director appointed by each of ADM Polymer Corporation and MBX shall
constitute a quorum. Each Director shall have one vote on all matters before the
Board of Directors; provided, however, that the Director appointed by each of
ADM Polymer Corporation and MBX present at any meeting shall have the authority
to cast the votes of any of such Party's appointed Directors who are absent from
the meeting. The act of a majority of the Directors present at any meeting at
which a quorum is present shall be the act of the Board of Directors, unless by
express provision of the Act, or of this Agreement, a different vote is
required, in which case such express provision shall govern and control. In the
absence of a quorum, a majority of the Directors present at any meeting may,
without notice other than announcement at the meeting, adjourn such meeting from
time to time until a quorum is present. A Director may appoint in writing an
alternate to act in such Director's absence at any meetings of the Board of
Directors.

          (b) Special meetings of the Board of Directors may be called by any
Director. Notice of each such meeting shall be given to each Director on the
Board of Directors by telephone, telecopy, telegram, or similar method, or sent
by first-class mail (in each case, notice shall be given at least three (3)
weeks before the time of the meeting, unless a longer notice period is
established by the Board of Directors). Each such notice shall state (i) the
time, date, place (which shall be at the principal office of a Member other than
the Member who designated the Director calling such meeting unless otherwise
agreed to by all Directors) or other means of conducting such meeting and (ii)
the purpose of the meeting to be so held. No actions other than those specified
in the notice may be considered at any special meeting unless unanimously
approved by the Directors. Any Director may waive notice of any meeting in
writing before, at, or after such meeting. The attendance of a Director at a
meeting shall constitute a waiver of notice of such meeting, except when a
Director attends a meeting for the express purpose of objecting, and does in
fact object, to the transaction of any business on grounds that the meeting was
not properly called.

          (c) Any action required to be taken at a meeting of the Board of
Directors, or any action that may be taken at a meeting of the Board of
Directors, may be taken at a meeting held by means of conference telephone or
other communications equipment by means of which all persons participating in
the meeting can hear each other. Participation in such a meeting shall
constitute presence in person at such meeting.

          (d) Notwithstanding anything to the contrary in this Section 5.2, the
Board of Directors may take without a meeting any action that may be taken by
the Board of Directors under this Agreement if such action is approved by the
unanimous written consent of the Directors.

     5.3 BOARD OF DIRECTORS POWERS.

          (a) Except as otherwise provided in this Agreement, all powers to
control and manage the Business and affairs of the Joint Sales Company shall be
exclusively vested in

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the Board of Directors and the Board of Directors may exercise all powers of the
Joint Sales Company and do all such lawful acts as are not by statute, the
Certificate or this Agreement directed or required to be exercised or done by
the Members and in so doing shall have the right and authority to take all
actions which the Board of Directors deems necessary, useful or appropriate for
the management and conduct of the Business, including exercising the following
specific rights and powers:

                    (i) Conduct its business, carry on its operations and have
          and exercise the powers granted by the Act in any state, territory,
          district or possession of the United States, or in any foreign country
          which may be necessary or convenient to effect any or all of the
          purposes for which it is organized;

                    (ii) Acquire by purchase, lease, or otherwise any real or
          personal property which may be necessary, convenient, or incidental to
          the accomplishment of the purposes of the Joint Sales Company;

                    (iii) Operate, maintain, finance, improve, construct, own,
          grant operations with respect to, sell, convey, assign, mortgage, and
          lease any real estate and any personal property necessary, convenient,
          or incidental to the accomplishment of the purposes of the Joint Sales
          Company;

                    (iv) Execute (but not to the exclusion of any Officer having
          such power) any and all agreements, contracts, documents,
          certifications, and instruments necessary or convenient in connection
          with the management, maintenance, and operation of the Business, or in
          connection with managing the affairs of the Joint Sales Company,
          including, executing amendments to this Agreement and the Certificate
          in accordance with the terms of this Agreement, both as Directors and,
          if required, as attorney-in-fact for the Members pursuant to any power
          of attorney granted by the Members to the Directors. Simultaneously
          with the execution of this Agreement, one or more of the Directors
          shall execute the Commercial Alliance Agreements on behalf of the
          Joint Sales Company;

                    (v) Borrow money and issue evidences of indebtedness
          necessary, convenient, or incidental to the accomplishment of the
          purposes of the Joint Sales Company, and secure the same by mortgage,
          pledge, or other lien on any Joint Sales Company assets;

                    (vi) Execute, in furtherance of any or all of the purposes
          of the Joint Sales Company, any deed, lease, mortgage, deed of trust,
          mortgage note, promissory note, bill of sale, contract, or other
          instrument purporting to convey or encumber any or all of the Joint
          Sales Company assets;

                    (vii) Prepay in whole or in part, refinance, recast,
          increase, modify, or extend any liabilities affecting the assets of
          the Joint Sales Company

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          and in connection therewith execute any extensions or renewals of
          encumbrances on any or all of such assets;

                    (viii) Manage and distribute funds to the Members by way of
          cash income, return of capital, or otherwise, all in accordance with
          the provisions of this Agreement, and perform all matters in
          furtherance of the objectives of the Joint Sales Company or this
          Agreement;

                    (ix) Contract on behalf of the Joint Sales Company for the
          employment and services or employees and/or independent contractors,
          such as lawyers and accountants, and delegate to such Persons the duty
          to manage or supervise any of the assets or operations of the Joint
          Sales Company;

                    (x) Engage in any kind of activity and perform and carry out
          contracts of any kind (including contracts of insurance covering risks
          to Joint Sales Company assets and Director liability) necessary or
          incidental to, or in connection with, the accomplishment of the
          purposes of the Joint Sales Company, as may be lawfully carried on or
          performed by a limited liability company under the laws of each state
          in which the Joint Sales Company is then formed or qualified;

                    (xi) Take, or refrain from taking, all actions, not
          expressly proscribed or limited by this Agreement, as may be necessary
          or appropriate to accomplish the purposes of the Joint Sales Company;

                    (xii) Institute, prosecute, defend, settle, compromise, and
          dismiss lawsuits or other judicial or administrative proceedings
          brought on or in behalf of, or against, the Joint Sales Company, the
          Members or any Director in connection with activities arising out of,
          connected with, or incidental to this Agreement, and to engage counsel
          or others in connection therewith;

                    (xiii) Purchase, take, receive, subscribe for or otherwise
          acquire, own, hold, vote, use, employ, sell, mortgage, lend, pledge,
          or otherwise dispose of, and otherwise use and deal in and with,
          shares or other interests in or obligations of domestic or foreign
          corporations, associations, general or limited partnerships, other
          limited liability companies, or individuals or direct or indirect
          obligations of the United States or of any government, state,
          territory, government district or municipality or of any
          instrumentality of any of them;

                    (xiv) Indemnify a Member or Director or former Member or
          Director, and to make any other indemnification that is authorized by
          this Agreement in accordance with the Act; provided the Board of
          Directors unanimously agrees on such indemnification.

          (b) The Board of Directors shall appoint and/or approve the Officers
in accordance with Section 5.7 and will establish policies and guidelines for
the hiring of

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employees to permit the Joint Sales Company to act as an operating company with
respect to its Business. The Board of Directors may adopt appropriate management
incentive plans and employee benefit plans. The Officers of the Joint Sales
Company shall be responsible for conducting, in the name of, and on behalf of,
the Joint Sales Company, the day-to-day business and affairs of the Joint Sales
Company.

     5.4 DUTIES AND OBLIGATIONS OF THE BOARD OF DIRECTORS.

          (a) The Board of Directors shall cause the Joint Sales Company to
conduct its business and operations separate and apart from that of any Member
or Director or any of its Affiliates, including, without limitation, (i)
segregating Joint Sales Company assets and not allowing funds or other assets of
the Joint Sales Company to be commingled with the funds or other assets of, held
by, or registered in the name of, any Member or Director or any of its
Affiliates, (ii) maintaining books and financial records of the Joint Sales
Company separate from the books and financial records of any Member or Director
and its Affiliates, and observing all Joint Sales Company procedures and
formalities, including, without limitation, maintaining minutes of Joint Sales
Company meetings and acting on behalf of the Joint Sales Company only pursuant
to due authorization of the Members, (iii) causing the Joint Sales Company to
pay its liabilities from assets of the Joint Sales Company, and (iv) causing the
Joint Sales Company to conduct its dealings with third parties in its own name
and as a separate and independent entity.

          (b) The Board of Directors shall take all actions which may be
necessary or appropriate (i) for the continuation of the Joint Sales Company's
valid existence as a limited liability company under the laws of the State of
Delaware and of each other jurisdiction in which such existence is necessary to
protect the limited liability of the Members or to enable the Joint Sales
Company to conduct the business in which it is engaged and (ii) for the
accomplishment of the Joint Sales Company's purposes, including the acquisition,
development, maintenance, preservation, and operation of Property in accordance
with the provisions of this Agreement and applicable laws and regulations.

          (c) It is expressly agreed by the Members that no Director shall be
liable to the Joint Sales Company or any Member for such Director's good faith
reliance on any provision of this Agreement.

     5.5 REIMBURSEMENTS.

          Except as otherwise provided in a Commercial Alliance Agreement, the
Members and Directors shall be reimbursed for certain expenditures as provided
herein. The Joint Sales Company shall reimburse the Members and Directors for
all expenses incurred and paid by any of them in the organization of the Joint
Sales Company and as authorized by the Joint Sales Company, in the conduct of
the Business, including, but not limited to, expenses of maintaining an office,
telephones, travel, office equipment and secretarial and other personnel as may
reasonably be attributable to the Joint Sales Company. Each Member that is party
to any contract or agreement with the Joint Sales Company (including but not
limited to the Commercial Alliance Agreements) shall be reimbursed amounts
specified or reimbursable

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thereunder pursuant to the terms thereof. Such expenses shall not include any
expenses incurred in connection with a Member's or Directors' exercise of its
rights as a Member or a Director apart from the authorized conduct of the
Business. The unanimous determination of the Board of Directors as to which
expenses are allocated to and reimbursed as a result of the Joint Sales
Company's activities or business and the amount of such expenses shall be
conclusive. Except as otherwise expressly provided herein, such reimbursement
shall be treated as expenses of the Joint Sales Company and shall not be deemed
to constitute distributions to any Member of profit, loss or capital of the
Joint Sales Company.

     5.6 INDEMNIFICATION OF THE DIRECTORS AND OFFICERS.

          (a) Unless otherwise provided in Section 5.6(d) hereof, the Joint
Sales Company, its receiver, or its trustee (in the case of its receiver or
trustee, to the extent of the Property) shall indemnify, save harmless, and pay
all judgments and claims against any Director or Officer relating to any
liability or damage incurred by reason *.

          (b) Unless otherwise provided in Section 5.6(d) hereof, in the event
of any *.

          (c) Unless otherwise provided in Section 5.6(d) hereof, the Joint
Sales Company shall *.

          (d) Notwithstanding the provisions of Sections 5.6(a), 5.6(b) and
5.6(c) above, such Sections shall be enforced only to the maximum extent
permitted by law and no Director or Officer shall be indemnified from any
liability for the fraud, intentional misconduct, gross negligence or a knowing
violation of the law which was material to the cause of action.

          (e) The obligations of the Joint Sales Company set forth in this
Section 5.6 are expressly intended to create third party beneficiary rights of
each of the Directors or Officers and any Member is authorized, on behalf of the
Joint Sales Company, to give written confirmation to any Director or Officer of
the existence and extent of the Joint Sales Company's obligations to such
Director or Officer hereunder.

     5.7 APPOINTMENT OF OFFICERS, AGENTS AND REPRESENTATIVES:

          (a) The Board of Directors shall appoint and remove persons from the
following offices, where indicated as directed by the appropriate Member:

                    (i) The Marketing and Sales Manager. The Marketing and Sales
          Manager shall be appointed as directed by MBX, subject to the approval
          of the Board of Directors. The Marketing and Sales Manager may be
          removed by the Board of Directors, only at the direction of MBX, and
          may be removed with or without cause. The duties of the Marketing and
          Sales Manager shall be to coordinate and manage the day to day
          Business of the Joint Sales Company as it relates to the marketing and
          sale of the Products. He shall consult

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          frequently and work closely with the Board of Directors to ensure that
          the Board of Directors is aware and approves of all significant
          actions taken by the Marketing and Sales Manager. The Marketing and
          Sales Manager shall not be a "manager" within the meaning of the Act;

                    (ii) The Assistant Marketing and Sales Manager. The
          Assistant Marketing and Sales Manager shall be appointed as directed
          by ADM Polymer Corporation, subject to the approval of the Board of
          Directors. The Assistant Marketing and Sales manager may be removed by
          the Board of Directors, only at the direction of ADM Polymer
          Corporation, and may be removed with or without cause. The duties of
          the Assistant Marketing and Sales manager shall be to assist the
          Marketing and Sales Manager in coordinating and managing the day to
          day Business of the Joint Sales Company as it relates to the marketing
          and sales of the Products. The Assistant Marketing and Sales Manager
          shall not be a "manager" within the meaning of the Act.

                    (iii) The Treasurer. The Treasurer shall be appointed as
          directed by ADM Polymer Corporation, subject to the approval of the
          Board of Directors. The Treasurer may be removed by the Board of
          Directors, only at the direction of ADM Polymer Corporation, and may
          be removed with or without cause. The Treasurer shall have custody of
          the Joint Sales Company's funds and shall keep full and accurate
          accounts of receipts and disbursements in books belonging to the Joint
          Sales Company and shall deposit or cause to be deposited moneys or
          other valuable effects in the name and to the credit of the Joint
          Sales Company in such depositories as may be designated by the Board
          of Directors. The Treasurer shall also maintain adequate records of
          all assets, liabilities, and transactions of the Joint Sales Company
          and shall see that adequate audits thereof are currently and regularly
          made. The Treasurer shall have such other powers and perform such
          other duties that generally are incident to the position of a
          treasurer of a corporation or as may from time to time be assigned to
          him or her by the Board of Directors.

                    (iv) The Secretary. The Secretary shall be appointed as
          directed first by ADM, subject to the approval of the Board of
          Directors, to serve commencing on the Effective Date and continuing to
          and including December 31 of the year of appointment. The Secretary
          shall thereafter be appointed to serve for a calendar year on an
          alternating basis as directed by MBX or ADM, commencing with MBX,
          subject to the approval of the Board of Directors. The Secretary may
          be removed by the Board of Directors, only at the direction of the
          Member making the appointment, and may be removed with or without
          cause. The Secretary shall attend meetings of the Board of Directors
          and meetings of the Members and record all votes and minutes of all
          such proceedings in a book kept for such purpose. He or she shall have
          all such further powers and duties as generally are incident to the
          position of a secretary

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          of a corporation or as may from time to time be assigned to him or her
          by the Board of Directors.

                    (v) Such other Officers as the Board of Directors deems
          necessary or desirable, upon such terms as the Board of Directors
          deems appropriate; provided, however, that such Officers may only be
          removed by the Board of Directors.

          (b) The Board of Directors or the Officers may appoint such agents and
representatives as they deem necessary or desirable, upon such terms as they
deem appropriate.

          (c) Except with respect to any matter as to which the Board of
Directors has authorized or directed an Officer, each Officer shall be under a
fiduciary duty to conduct the affairs of the Joint Sales Company in the best
interests of the Joint Sales Company, including the safekeeping and use of all
of the Property and the use thereof for the exclusive benefit of the Joint Sales
Company.

          (d) Except as otherwise provided in a Commercial Alliance Agreement,
the Joint Sales Company shall not enter into any contract without having the
written approval of both an Officer appointed by ADM Polymer Corporation and an
Officer appointed by MBX. Notwithstanding any other provision of this Agreement,
except as set forth in the Commercial Alliance Agreements, no action may be
taken by the Joint Sales Company (whether by the Officers, or otherwise) in
connection with any of the following matters without the unanimous approval of
the Board of Directors:

                    (i) Any grant or conveyance of any exclusive rights to any
          third party;

                    (ii) Any agreement to a voluntary restriction on the Joint
          Sales Company's Business;

                    (iii) Any contract to sell the Products or purchase
          materials for a term in excess of one (1) year;

                    (iv) Any activity that is inconsistent with a budget or
          business plan that has been adopted by the Board of Directors; or

                    (v) Any price incentives or rebates offered in connection
          with the sale of Products.

          (e) Each Member hereby agrees that the Joint Sales Company shall be
permitted to use any counsel regularly employed by any Member (including without
limitation the inside counsel of a Member) with respect to any issue arising
under any Transaction Document and the transactions contemplated hereby and
thereby; provided, however, that such issue does not involve any actual or
potential conflict of interest (i) between, the Members or their respective
Affiliates, a Member or its Affiliates and the Joint Sales Company, or any

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                                       30


Member and an Affiliate of a Member, or (ii) for the proposed counsel. Such
counsel will certify in writing as to the absence of such conflict for such
proposed counsel if requested to do so by any Member; and provided, further that
this Section 5.7(e) shall not, without the written consent of a Member,
constitute a prospective waiver by such Member of its right to allege the
existence of an actual or potential ethical conflict of interest with respect to
such proposed counsel.

                           SECTION 6: ROLE OF MEMBERS

     6.1 RIGHTS OR POWERS.

          The Members shall not have any right or power directly to take part in
the management or control of the Joint Sales Company or its business and affairs
or to act for or bind the Joint Sales Company in any way. Notwithstanding the
foregoing, the Members have all the rights and powers specifically set forth in
this Agreement and, to the extent not inconsistent with this Agreement, in the
Act. The Members shall exercise such rights and powers through the Steering
Committee subject to the terms and conditions set forth in the Commercial
Alliance Agreements.

     6.2 VOTING RIGHTS.

          No Member has any voting right except with respect to those matters
specifically reserved for a Member vote which are set forth in this Agreement
and as required in the Act.

     6.3 REQUIRED MEMBER CONSENTS.

               Notwithstanding any other provision of this Agreement, except as
set forth in the Commercial Alliance Agreements, no action may be taken by the
Joint Sales Company (whether by the Board of Directors, the Officers or
otherwise) in connection with any of the following matters without the unanimous
consent of the Members, acting through the Steering Committee:

          (a) Any activity that is not consistent with the purposes of the Joint
Sales Company as set forth in Section 1.3 hereof;

          (b) Any act in contravention of this Agreement or any Commercial
Alliance Agreement to which the Joint Sales Company is a party;

          (c) Confession of a judgment against the Joint Sales Company in an
amount in excess of $200,000;

          (d) A material change in the Business;

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          (e) Any sale of assets by the Joint Sales Company, other than sales of
inventory in the ordinary course of business, involving total consideration in
excess of $200,000;

          (f) Any transaction by the Joint Sales Company involving the
incurrence, creation, assumption, guarantee or suffering by the Joint Sales
Company of any indebtedness in excess of $200,000 in principal amount, or the
issuance of any equity or any equity-based security by the Joint Sales Company;

          (g) Any expenditure, investment or acquisition involving total
consideration in excess of $200,000, other than the acquisition of raw materials
or products for sale in the ordinary course of business;

          (h) Any transaction between the Joint Sales Company and any Member,
Director or Affiliate of a Member;

          (i) Any transaction to liquidate or dissolve the Joint Sales Company;

          (j) Any transaction by the Joint Sales Company to merge or consolidate
with another entity;

          (k) Any transaction to sell or license any intellectual property owned
or licensed by the Joint Sales Company;

          (l) Adopting or implementing any business plan or budget intended to
represent a detailed statement of expected income, expenses and other
expenditures or receipts on behalf of the Joint Sales Company or any
Wholly-Owned Affiliate;

          (m) Any amendment and/or restatement of this Agreement or the
Certificate and/or any amendment and/or restatement of the governing documents
of any Wholly-Owned Affiliate of the Joint Sales Company;

          (n) The formation, dissolution, liquidation, merger or consolidation
of any Wholly-Owned Affiliate of the Joint Sales Company;

          (o) Issuing or committing to issue, or repurchasing or redeeming of or
committing to repurchase or redeem any Units or other equity interest that may
hereafter be created (collectively, "Equity Interests"), options to acquire
Equity Interests or any other rights relative to or in any way related to any
Equity Interests of the Joint Sales Company or any Wholly-Owned Affiliate of the
Joint Sales Company;

          (p) Causing the Joint Sales Company or any Wholly Owned Affiliate of
the Joint Sales Company to distribute any cash or property to any Member,
provided, however, that the distributions required by Sections 4.1 and 6.13
shall be made in accordance with such Sections;

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          (q) Any action requiring the unanimous consent of the Steering
Committee in the Commercial Alliance Agreements.

          The restrictions above shall not apply to actions or transactions
specifically contemplated by an agreement that is entered into on, as of or
prior to the Effective Date, by MBX or ADM Polymer Corporation, or their
respective Affiliates, with the Joint Sales Company, including but not limited
to the Commercial Alliance Agreements, or is entered into by both MBX and ADM
Polymer Corporation or their respective Affiliates at any time.

     6.4  [RESERVED]

     6.5  WITHDRAWAL/RESIGNATION.

          Except as otherwise provided in Sections 4 and 12 hereof, no Member
shall demand or receive a return on or of its Capital Contributions or withdraw
from the Joint Sales Company without the consent of all Members. Except as
otherwise provided in the Act or this Agreement, upon resignation, any resigning
Member is entitled to receive only the distribution to which it is entitled
under this Agreement, and if no specific provision of this Agreement calls for a
distribution or payment upon such resignation, then no payment or distribution
shall be due or owing. Under circumstances requiring a return of any Capital
Contributions, no Member has the right to receive Property other than cash
except as may be specifically provided herein.

     6.6  MEMBER COMPENSATION.

          No Member shall receive any interest, salary or drawing with respect
to its Capital Contributions or its Capital Account or for services rendered on
behalf of the Joint Sales Company, or otherwise, in its capacity as a Member,
except as otherwise provided in this Agreement.

     6.7  MEMBERS LIABILITY.

          No Member shall be liable under a judgment, decree or order of a
court, or in any other manner for the Debts or any other obligations or
liabilities of the Joint Sales Company. A Member shall be liable only to make
its Capital Contributions and shall not be required to restore a deficit balance
in its Capital Account or to lend any funds to the Joint Sales Company or, after
its Capital Contributions have been made, to make any additional contributions,
assessments or payments to the Joint Sales Company, provided that a Member may
be required to repay distributions made to it as provided in Section 18-607 of
the Act. The Directors shall not have any personal liability for the repayment
of any Capital Contributions of any Member.

     6.8  PARTITION.

          While the Joint Sales Company remains in existence or is continued,
each Member agrees and waives its rights to have any Property partitioned, or to
file a complaint or

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to institute any suit, action or proceeding at law or in equity to have any
Property partitioned, and each Member, on behalf of itself, its successors and
its assigns hereby waives any such right.

     6.9  CONFIDENTIALITY.

          Each Member covenants to comply with the terms and conditions of all
confidentiality agreements between and among ADM Polymer Corporation, MBX and
their respective Affiliates whether presently in existence or entered into after
the Effective Date and a breach of any such confidentiality agreement shall
constitute a breach of this Agreement.

     6.10 TRANSACTIONS BETWEEN A MEMBER AND THE JOINT SALES COMPANY.

          Except as otherwise provided by applicable law, any Member may, but
shall not be obligated to, lend money to the Joint Sales Company, act as surety
for the Joint Sales Company and transact other business with the Joint Sales
Company and has the same rights and obligations when transacting business with
the Joint Sales Company as a person or entity who is not a Member. A Member, any
Affiliate thereof or an employee, stockholder, agent, director or officer of a
Member or any Affiliate thereof, may also be an employee or be retained as an
agent of the Joint Sales Company. The existence of these relationships and
acting in such capacities will not result in the Member being deemed to be
participating in the control of the business of the Joint Sales Company or
otherwise affect the limited liability of the Member.

     6.11 OTHER INSTRUMENTS.

          Each Member hereby agrees to execute and deliver to the Joint Sales
Company within five (5) days after receipt of a written request therefor, such
other and further documents and instruments, statements of interest and
holdings, designations, powers of attorney and other instruments and to take
such other action as the Board of Directors deems necessary, useful or
appropriate to comply with any laws, rules or regulations as may be necessary to
enable the Joint Sales Company to fulfill its responsibilities under this
Agreement.

     6.12 NUMBER OF MEMBERS.

          Unless the Members shall unanimously agree to the contrary, there
shall at no time be more than two (2) Members of the Joint Sales Company.

     6.13 EQUALIZATION PAYMENTS.

          On each Equalization Distribution Date, the Joint Sales Company shall
pay to each Member, to the extent of all Available Cash, an amount equal to each
such Member's Equalization Payment, if any. Equalization Payments shall be
treated for income tax purposes as "guaranteed payments" within the meaning of
Code Section 707(c) and, whether or not paid, shall not affect any Member's
Capital Account balance.

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                    SECTION 7: REPRESENTATIONS AND WARRANTIES

     7.1  IN GENERAL.

          As of the date hereof, each of the Members hereby makes each of the
representations and warranties applicable to such Member as set forth in Section
7.2 hereof, and such warranties and representations shall survive the execution
of this Agreement.

     7.2  REPRESENTATIONS AND WARRANTIES.

               Each Member hereby represents and warrants that:

          (a) Due Incorporation or Formation; Authorization of Agreement. Such
Member is a corporation duly organized or a partnership or limited liability
company duly formed, validly existing, and in good standing under the laws of
the jurisdiction of its incorporation or formation and has the corporate,
partnership, or company power and authority to own its property and carry on its
business as owned and carried on at the date hereof and as contemplated hereby.
Such Member is duly licensed or qualified to do business and in good standing in
each of the jurisdictions in which the failure to be so licensed or qualified
would have a material adverse effect on its financial condition or its ability
to perform its obligations hereunder. Such Member has the corporate, partnership
or company power and authority to execute and deliver this Agreement and to
perform its obligations hereunder and the execution, delivery, and performance
of this Agreement has been duly authorized by all necessary corporate,
partnership, or company action. This Agreement constitutes the legal, valid, and
binding obligation of such Member.

          (b) No Conflict with Restrictions; No Default. Neither the execution,
delivery, and performance of this Agreement nor the consummation by such Member
of the transactions contemplated hereby (i) will conflict with, violate, or
result in a breach of any of the terms, conditions, or provisions of any law,
regulation, order, writ, injunction, decree, determination, or award of any
court, any governmental department, board, agency, or instrumentality, domestic
or foreign, or any arbitrator, applicable to such Member, its Parent, or any of
its Affiliates, (ii) will conflict with, violate, result in a breach of, or
constitute a default under any of the terms, conditions, or provisions of the
articles of incorporation, bylaws, partnership agreement or operating agreement
of such Member, its Parent, or any of its Affiliates or of any material
agreement or instrument to which such Member, its Parent, or any of its
Affiliates is a party or by which such Member, its Parent, or any of its
Affiliates is or may be bound or to which any of its material properties or
assets is subject, (iii) will conflict with, violate, result in a breach of,
constitute a default under (whether with notice or lapse of time or both),
accelerate or permit the acceleration of the performance required by, give to
others any material interests or rights, or require any consent, authorization,
or approval under any indenture, mortgage, lease agreement, or instrument to
which such Member, its Parent, or any of its Affiliates is a party or by which
such Member, its Parent, or any of its Affiliates is or may be bound, or (iv)
will result in the creation or imposition of any lien upon any of the material
properties or assets of such Member, its Parent, or any of its Affiliates.

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          (c) Governmental Authorizations. Any registration, declaration, or
filing with, or consent, approval, license, permit, or other authorization or
order by, any governmental or regulatory authority, domestic or foreign, that is
required in connection with the valid execution, delivery, acceptance and
performance by such Member under this Agreement or the consummation by such
Member of any transaction contemplated hereby has been completed, made, or
obtained on or before the Effective Date.

          (d) Litigation. There are no actions, suits, proceedings, or
investigations pending or, to the knowledge of such Member or any of its
Affiliates, threatened against or affecting such Member or any of its Affiliates
or any of their properties, assets, or businesses in any court or before or by
any governmental department, board, agency, or instrumentality, domestic or
foreign, or any arbitrator which could, if adversely determined (or, in the case
of an investigation could lead to any action, suit, or proceeding, which if
adversely determined could) reasonably be expected to materially impair such
Member's ability to perform its obligations under this Agreement or to have a
material adverse effect on the consolidated financial condition of such Member;
and such Member or any of its Affiliates has not received any currently
effective notice of any default, and such Member or any of its Affiliates is not
in default, under any applicable order, writ, injunction, decree, permit,
determination, or award of any court, any governmental department, board,
agency, or instrumentality, domestic or foreign, or any arbitrator which could
reasonably be expected to materially impair such Member's ability to perform its
obligations under this Agreement or to have a material adverse effect on the
consolidated financial condition of such Member.

          (e) Investment Company Act; Public Utility Holding Company Act.
Neither such Member nor any of its Affiliates is, nor will the Joint Sales
Company as a result of such Member holding an interest therein be, an
"investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940. Neither such Member nor any of its Affiliates
is, nor will the Joint Sales Company as a result of such Member holding an
Interest therein be, a "holding company," "an affiliate of a holding company,"
or a "subsidiary of a holding company" as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935.

          (f) Investigation. Such Member is acquiring its Units based upon its
own investigation, and the exercise by such Member of its rights and the
performance of its obligations under this Agreement will be based upon its own
investigation, analysis, and expertise. Such Member's acquisition of its Units
is being made for its own account for investment, and not with a view to the
sale or distribution thereof. Such Member is a sophisticated investor possessing
an expertise in analyzing the benefits and risks associated with acquiring
investments that are similar to the acquisition of its Units.

                    SECTION 8: ACCOUNTING, BOOKS AND RECORDS

     8.1  ACCOUNTING, BOOKS AND RECORDS.

          (a) The Joint Sales Company shall keep on site at its principal place
of business each of the following:

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                    (i) Separate books of account for the Joint Sales Company
          which shall show a true and accurate record of all costs and expenses
          incurred, all charges made, all credits made and received, and all
          income derived in connection with the conduct of the Joint Sales
          Company and the operation of the Business in accordance with this
          Agreement;

                    (ii) current list of the full name and last known business,
          residence, or mailing address of each Member, Director, and Officer,
          both past and present;

                    (iii) copy of the Certificate and all amendments thereto,
          together with executed copies of any powers of attorney pursuant to
          which any amendment has been executed;

                    (iv) Copies of the Joint Sales Company's federal, state, and
          local income tax returns and reports, if any, for the three (3) most
          recent years;

                    (v) Copies of this Agreement;

                    (vi) Any written consents obtained from Members pursuant to
          Section 6.3(e) hereof regarding action taken by Members without a
          meeting; and

                    (vii) Any written consents obtained from the Directors
          pursuant to Section 5.2(d) hereof regarding action taken by the
          Directors without a meeting, and minutes of meetings of the Board of
          Directors.

          (b) The Joint Sales Company shall use the accrual method of accounting
in preparation of its financial reports and for tax purposes and shall keep its
books and records accordingly. Any Member or its designated representative has
the right to have reasonable access to and inspect and copy the contents of such
books or records and shall also have reasonable access during normal business
hours to such additional financial information, documents, books and records.
The rights granted to a Member pursuant to this Section 8.1 are expressly
subject to compliance by such Member with the safety, security and
confidentiality procedures and guidelines of the Joint Sales Company, as such
procedures and guidelines may be established from time to time.

     8.2  REPORTS.

          (a) IN GENERAL. The Treasurer shall be responsible for causing the
preparation of financial reports of the Joint Sales Company and the coordination
of financial matters of the Joint Sales Company with the Joint Sales Company's
accountants.

          (b) PERIODIC AND OTHER REPORTS. The Joint Sales Company shall cause to
be delivered to each Member the financial statements listed in clauses (i) and
(ii) below, prepared,

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in each case (other than with respect to Member's Capital Accounts, which shall
be prepared in accordance with this Agreement) in accordance with GAAP
consistently applied (and, if required by any Member or its Affiliates for
purposes of reporting under the Securities Exchange Act of 1934, Regulation
S-X), and such other reports as any Member may reasonably request from time to
time; PROVIDED that, if the Board of Directors so determines within thirty (30)
days thereof, such other reports shall be provided at such requesting Member's
sole cost and expense. The monthly and quarterly financial statements referred
to in clause (ii) below may be subject to normal year-end audit adjustments.

                    (i) As soon as practicable following the end of each Fiscal
          Year (and in any event not later than ninety (90) days after the end
          of such Fiscal Year) and at such time as distributions are made to the
          Members pursuant to Section 12 hereof following the occurrence of a
          Dissolution Event, a balance sheet of the Joint Sales Company as of
          the end of such Fiscal Year and the related statements of operations,
          Members' Capital Accounts and changes therein, and cash flows for such
          Fiscal Year, together with appropriate notes to such financial
          statements and supporting schedules, all of which shall be audited and
          certified by the Joint Sales Company's accountants, and in each case,
          to the extent the Joint Sales Company was in existence, setting forth
          in comparative form the corresponding figures for the immediately
          preceding Fiscal Year end (in the case of the balance sheet) and the
          two (2) immediately preceding Fiscal Years (in the case of the
          statements).

                    (ii) As soon as practicable following the end of each of the
          first three Fiscal Quarters of each Fiscal Year (and in any event not
          later than forty five (45) days after the end of each such Fiscal
          Quarter), a balance sheet of the Joint Sales Company as of the end of
          such Fiscal Quarter and the related statements of operations and cash
          flows for such Fiscal Quarter and for the Fiscal Year to date, in each
          case, to the extent the Joint Sales Company was in existence, setting
          forth in comparative form the corresponding figures for the prior
          Fiscal Year's Fiscal Quarter and the interim period corresponding to
          the Fiscal Quarter and the interim period just completed.

          The quarterly or monthly statements described in clause (ii) above
shall be accompanied by a written certification of the Treasurer of the Joint
Sales Company that such statements have been prepared in accordance with GAAP
consistently applied or this Agreement, as the case may be.

     8.3  TAX MATTERS.

          (a) TAX ELECTIONS. It is the intention of the parties hereto that the
relationships created by this Agreement will, for federal, state, and local
income tax purposes, be treated as a partnership and no Member nor the Tax
Matters Member shall take any action inconsistent with the Joint Sales Company's
status as a partnership for federal, state, or local income tax purposes without
the consent of all Members. The Board of Directors by a unanimous vote shall,
without any further consent of the Members being required (except as

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specifically required herein), make any and all elections for federal, state,
local, and foreign tax purposes including, without limitation, any election, if
permitted by applicable law: (i) to adjust the basis of Property pursuant to
Code Sections 754, 734(b) and 743(b), or comparable provisions of state, local
or foreign law, in connection with Transfers of Units and Joint Sales Company
distributions; (ii) with the consent of all of the Members, to extend the
statute of limitations for assessment of tax deficiencies against the Members
with respect to adjustments to the Joint Sales Company's federal, state, local
or foreign tax returns; and (iii) to the extent provided in Code Sections 6221
through 6231 and similar provisions of federal, state, local, or foreign law, to
represent the Joint Sales Company and the Members before taxing authorities or
courts of competent jurisdiction in tax matters affecting the Joint Sales
Company or the Members in their capacities as Members, and to file any tax
returns and execute any agreements or other documents relating to or affecting
such tax matters, including agreements or other documents that bind the Members
with respect to such tax matters or otherwise affect the rights of the Joint
Sales Company and the Members. ADM Polymer Corporation is specifically
authorized to act as the "TAX MATTERS MEMBER" under Section 6231 of the Code and
in any similar capacity under state or local law.

          (b) TAX INFORMATION. Necessary tax information shall be delivered to
each Member as soon as practicable after the end of each Fiscal Year of the
Joint Sales Company but not later than five (5) months after the end of each
Fiscal Year.

          (c) REIMBURSEMENTS. Notwithstanding anything to the contrary in this
Agreement, the Tax Matters Member shall be reimbursed for all reasonable
expenses incurred by it in connection with its service as Tax Matters Member.
Such reimbursements shall not affect the Capital Account of the Tax Matters
Member.

                              SECTION 9: AMENDMENTS

     9.1  AMENDMENTS.

          (a) Amendments to this Agreement may be proposed by any Director or
any Member. Following such proposal, the Board of Directors shall submit to the
Members a verbatim statement of any proposed amendment, providing that counsel
for the Joint Sales Company shall have approved of the same in writing as to
form, and the Board of Directors shall include in any such submission a
recommendation as to the proposed amendment. The Board of Directors shall seek
the written vote of the Members on the proposed amendment or shall call a
meeting to vote thereon and to transact any other business that it may deem
appropriate. A proposed amendment shall be adopted and be effective as an
amendment hereto if it receives the unanimous approval of the Members in
accordance with Section 6.4 hereof.

          (b) Notwithstanding Section 9.1(a) hereof, this Agreement shall not be
amended without the consent of each Member adversely affected if such amendment
would (i) modify the limited liability of a Member, or (ii) alter the interest
of such Member in Profits, Losses, other items, or any Joint Sales Company
distributions.

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                              SECTION 10: TRANSFERS

     10.1 RESTRICTIONS ON TRANSFERS.

          Except as otherwise permitted by this Agreement, no Member shall (i)
Transfer directly or indirectly all or any portion of its Units, or (ii) pledge
or otherwise encumber all or any part of its Units as security for the payment
of a Debt.

     10.2 PERMITTED TRANSFERS.

          Subject to the conditions and restrictions set forth in Sections 10.3
and 10.6 hereof, a Member may at any time Transfer all (but not less than all)
of its Units to (a) the other Member or an Affiliate of the other Member, or (b)
the transferor's trustee to whom such Units are transferred involuntarily by
operation of law, (any such Transfer being referred to in this Agreement as a
"Permitted Transfer").

     10.3 CONDITIONS TO PERMITTED TRANSFERS.

               A Transfer shall not be treated as a Permitted Transfer under
Section 10.2 hereof unless and until the following conditions are satisfied:

          (a) Except in the case of a Transfer involuntarily by operation of
law, the transferor and transferee shall execute and deliver to the Joint Sales
Company such documents and instruments of conveyance as may be necessary or
appropriate in the opinion of counsel to the Joint Sales Company to effect such
Transfer. In the case of a Transfer of Units involuntarily by operation of law,
the Transfer shall be confirmed by presentation to the Joint Sales Company of
legal evidence of such Transfer, in form and substance satisfactory to counsel
to the Joint Sales Company. In all cases, the Joint Sales Company shall be
reimbursed by the transferor and/or transferee for all costs and expenses that
it reasonably incurs in connection with such Transfer.

          (b) The transferor and transferee shall furnish the Joint Sales
Company with the transferee's taxpayer identification number, sufficient
information to determine the transferee's initial tax basis in the Units
transferred, and any other information reasonably necessary to permit the Joint
Sales Company to file all required federal and state tax returns and other
legally required information statements or returns. Without limiting the
generality of the foregoing, the Joint Sales Company shall not be required to
make any distribution otherwise provided for in this Agreement with respect to
any transferred Units until it has received such information.

          (c) Except in the case of a Transfer of Units involuntarily by
operation of law, either (a) such Units shall be registered under the Securities
Act, and any applicable state securities laws, or (b) the transferor shall
provide to the Joint Sales Company and the other Member an opinion of counsel,
which opinion and counsel shall be reasonably satisfactory to the Board of
Directors, to the effect that such Transfer is exempt from all applicable

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registration requirements and that such Transfer will not violate any applicable
laws regulating the Transfer of securities.

          (d) Except in the case of a Transfer of Units involuntarily by
operation of law, the transferor shall provide to the Joint Sales Company and
the other Member an opinion of counsel, which opinion and counsel shall be
reasonably satisfactory to the Board of Directors, to the effect that such
Transfer will not cause the Joint Sales Company to be deemed to be an
"investment company" under the Investment Company Act of 1940.

     10.4 [RESERVED]

     10.5 PROHIBITED TRANSFERS.

          Any purported Transfer of Units that is not a Permitted Transfer shall
be null and void and of no force or effect whatever; provided that, if the Joint
Sales Company is required to recognize a Transfer that is not a Permitted
Transfer (or if the Members, in their sole discretion, unanimously agree to
recognize a Transfer that is not a Permitted Transfer), the Units Transferred
shall be strictly limited to the transferor's rights to allocations and
distributions as provided by this Agreement with respect to the transferred
Units, which allocations and distributions may be applied (without limiting any
other legal or equitable rights of the Joint Sales Company) to satisfy any
debts, obligations, or liabilities for damages that the transferor or transferee
of such Interest may have to the Joint Sales Company.

          In the case of a Transfer or attempted Transfer of Units that is not a
Permitted Transfer, the parties engaging or attempting to engage in such
Transfer shall be liable to indemnify and hold harmless the Joint Sales Company
and the other Members from all cost, liability, and damage that any of such
indemnified Members may incur (including, without limitation, incremental tax
liabilities, lawyers' fees and expenses) as a result of such Transfer or
attempted Transfer and efforts to enforce the indemnity granted hereby.

     10.6 TAX TERMINATION RESTRICTIONS.

          (a) Notwithstanding any other provision of this Section 10, except in
the case of a Transfer of Units involuntarily by operation of law and except as
otherwise provided in this Section 10.6, no Transfer of Units shall be permitted
if, in the opinion of the Joint Sales Company's tax counsel, (i) such Transfer
would more likely than not terminate the Joint Sales Company for federal income
tax purposes under Section 708(b)(1)(B) of the Code (a "Technical Termination")
and (ii) any Technical Termination caused by such Transfer would be
disadvantageous to the Joint Sales Company.

          (b) Prior to the effective date of any Transfer, the Joint Sales
Company may obtain and deliver to the transferor a written opinion from the
Joint Sales Company's tax counsel stating that the proposed Transfer would cause
a Technical Termination and explaining how such Technical Termination would be
disadvantageous to the Joint Sales Company (a

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"Termination Opinion"). If the Joint Sales Company fails to provide a
Termination Opinion prior to the effective date, the Transfer of such Offered
Units will not be prohibited by this Section 10.6, but shall remain subject to
any and all requirements of the remaining provisions of this Section 10.

          (c) If the Joint Sales Company provides a Termination Opinion to the
transferor prior to such effective date, the Board of Directors by a unanimous
decision shall have the right to restructure the proposed Transfer so that a
Technical Termination will not result therefrom. To restructure the Transfer,
the Board of Directors shall prior to the effective date of the transfer,
provide a written explanation to the transferor explaining any and all necessary
changes required by the Board of Directors so that a Technical Termination will
be avoided if the proposed Transfer is ultimately consummated. For the avoidance
of doubt, the Board of Directors shall only be entitled to make changes
necessary to avoid a Technical Termination, and shall not have the right to
restructure any proposed Transfer in any other way or for any other purpose.

     10.7 RIGHTS OF UNADMITTED ASSIGNEES.

          A Person who acquires Units but who is not admitted as a substituted
Member pursuant to Section 10.8 hereof shall be entitled only to allocations and
distributions with respect to such Units in accordance with this Agreement, and
shall have no right to any information or accounting of the affairs of the Joint
Sales Company, shall not be entitled to inspect the books or records of the
Joint Sales Company, shall not be entitled to designate any Directors and shall
not have any of the other rights of a Member under the Act or this Agreement.

     10.8 ADMISSION OF SUBSTITUTED MEMBERS.

          Subject to the other provisions of this Section 10, a transferee of
Units may be admitted to the Joint Sales Company as a substituted Member only
upon satisfaction of the conditions set forth in this Section 10.8:

          (a) The Units with respect to which the transferee is being admitted
were acquired by means of a Permitted Transfer;

          (b) The transferee of Units (other than, with respect to clauses (i)
and (ii) below, a transferee that was a Member prior to the Transfer) shall, by
written instrument in form and substance reasonably satisfactory to the Board of
Directors (and, in the case of clause (iii) below, the transferor Member), (i)
make representations and warranties to the nontransferring Member equivalent to
those set forth in Section 7, (ii) accept and adopt the terms and provisions of
this Agreement, including this Section 10, and (iii) assume the obligations of
the transferor Member under this Agreement with respect to the transferred
Units. The transferor Member shall be released from all such assumed obligations
except (x) those obligations or liabilities of the transferor Member arising out
of a breach of this Agreement, (y) in the case of a Transfer to any Person other
than a Member or any of its Affiliates, those obligations or liabilities of the
transferor Member based on events occurring,

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arising or maturing prior to the date of Transfer, and (z) in the case of a
Transfer to any of its Affiliates, any Capital Contribution of the transferor
Member under this Agreement;

          (c) The transferee pays or reimburses the Joint Sales Company for all
reasonable legal, filing, accounting and publication costs that the Joint Sales
Company incurs in connection with the admission of the transferee as a Member
with respect to the Transferred Units; and

          (d) Except in the case of a Transfer involuntarily by operation of
law, if required by the Board of Directors, the transferee (other than a
transferee that was a Member prior to the Transfer) shall deliver to the Joint
Sales Company evidence of the authority of such Person to become a Member and to
be bound by all of the terms and conditions of this Agreement, and the
transferee and transferor shall each execute and deliver such other instruments
as the Board of Directors reasonably deems necessary or appropriate to effect,
and as a condition to, such Transfer, including amendments to the Certificate or
any other instrument filed with the State of Delaware or any other state or
governmental authority.

     10.9 REPRESENTATIONS REGARDING TRANSFERS; LEGEND.

          (a) Each Member hereby covenants and agrees with the Joint Sales
Company for the benefit of the Joint Sales Company and all Members, that (i) it
is not currently making a market in Units and will not in the future make a
market in Units, (ii) it will not Transfer its Units on an established
securities market, a secondary market (or the substantial equivalent thereof)
within the meaning of Code Section 7704(b) (and any Regulations, proposed
Regulations, revenue rulings, or other official pronouncements of the Internal
Revenue Service or Treasury Department that may be promulgated or published
thereunder), and (iii) in the event such Regulations, revenue rulings, or other
pronouncements treat any or all arrangements which facilitate the selling of
Joint Sales Company interests and which are commonly referred to as "matching
services" as being a secondary market or substantial equivalent thereof, it will
not Transfer any Units through a matching service that is not approved in
advance by the Joint Sales Company. Each Member further agrees that it will not
Transfer any Units to any Person unless such Person agrees to be bound by this
Section 10.9(a) and to Transfer such Units only to Persons who agree to be
similarly bound.

          (b) Each Member hereby represents and warrants to the Joint Sales
Company and the Members that such Member's acquisition of Units hereunder is
made as principal for such Member's own account and not for resale or
distribution of such Units. Each Member further hereby agrees that the following
legend may be placed upon any counterpart of this Agreement, the Certificate, or
any other document or instrument evidencing ownership of Units:

                    The Company Units represented by this document have not been
               registered under any securities laws and the transferability of
               such Units is restricted. Such Units may not be sold, assigned,
               or transferred, nor will any assignee, vendee, transferee, or
               endorsee thereof be recognized as

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               having acquired any such Units by the issuer for any purposes,
               unless (1) a registration statement under the Securities Act of
               1933, as amended, with respect to such Units shall then be in
               effect and such transfer has been qualified under all applicable
               state securities laws, or (2) the availability of an exemption
               from such registration and qualification shall be established to
               the satisfaction of counsel to the Joint Sales Company.

                    The Units represented by this document are subject to
               further restriction as to their sale, transfer, hypothecation, or
               assignment as set forth in the Operating Agreement of the issuer
               and agreed to by each Member. Said restriction provides, among
               other things, that no Units may be transferred without first
               offering such Units to the other Member.

     10.10 DISTRIBUTIONS AND ALLOCATIONS IN RESPECT OF TRANSFERRED UNITS.

          If any Units are Transferred during any Allocation Year in compliance
with the provisions of this Section 10, Profits, Losses, each item thereof, and
all other items attributable to the Transferred Units for such Allocation Year
shall be divided and allocated between the transferor and the transferee by
taking into account their varying Percentage Interests during the Fiscal Year in
accordance with Code Section 706(d), using any conventions permitted by law and
selected by the Board of Directors. All distributions on or before the date of
such Transfer shall be made to the transferor, and all distributions thereafter
shall be made to the transferee. Solely for purposes of making such allocations
and distributions, the Joint Sales Company shall recognize such Transfer not
later than the end of the calendar month during which it is given notice of such
Transfer, provided that, if the Joint Sales Company is given notice of a
Transfer at least ten (10) Business Days prior to the Transfer, the Joint Sales
Company shall recognize such Transfer as of the date of such Transfer, and
provided further that if the Joint Sales Company does not receive a notice
stating the date such Units were transferred and such other information as the
Board of Directors may reasonably require within thirty (30) days after the end
of the Allocation Year during which the Transfer occurs, then all such items
shall be allocated, and all distributions shall be made to the Person who,
according to the books and records of the Joint Sales Company, was the owner of
the Units on the last day of such Allocation Year. Neither the Joint Sales
Company nor any Director shall incur any liability for making allocations and
distributions in accordance with the provisions of this Section 10.10, whether
or not any Director or the Joint Sales Company has knowledge of any Transfer of
ownership of any Units.

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                             SECTION 11: ADVERSE ACT

     11.1 REMEDIES.

          (a) If an Adverse Act has occurred or is continuing with respect to
any Member, the non-Adverse Member may elect to cause the dissolution, winding
up and liquidation of the Joint Sales Company pursuant to Section 12.

          The foregoing remedy shall not be deemed to be exclusive, and, subject
to the requirements of this Section 11.1(a) regarding the timing of the election
of such remedies, selection or resort to any thereof shall not preclude
selection or resort to the others.

          The election of a remedy specified above may be exercised by notice
given to the Adverse Member (A) in case of an Adverse Act specified in clause
(i) of the definition of the term "Adverse Act" in Section 1.10, within ninety
(90) days after the occurrence of such Adverse Act or (B) in the case of any
other Adverse Act with respect to which such remedy is available, within ninety
(90) days after the Member making such election obtains actual knowledge of the
occurrence of such Adverse Act, including, if applicable, that any cure period
has expired.

          Except as provided in Section 11.1(b), the failure to elect the remedy
with respect to the subject Adverse Act within the time periods provided in the
preceding paragraph shall be conclusively presumed to be a waiver of the
remedies provided in this Section 11 with respect to the subject Adverse Act.

          The resort to any remedy pursuant to this Section 11.1(a) shall not
for any purpose be deemed to be a waiver of any remedy not described in this
Section 11.1(a) and otherwise available hereunder or under applicable law.

          (b) If the Joint Sales Company is dissolved pursuant to Section
12.1(a) at any time as a result of a Dissolution Event that occurs prior to a
remedy having been elected pursuant to Section 11.1(a) with respect to any
Adverse Member, the time periods for such election shall thereupon expire and
the Board of Directors shall deduct from any amounts to be paid to such Adverse
Member pursuant to Section 12.2 that amount which it unanimously estimates to be
reasonably sufficient to compensate the Joint Sales Company and the non-Adverse
Member for Damages incurred as a result of the Adverse Act (subject to the
limitations of Section 11.1(a)) and shall pay the same to the non-Adverse Member
on behalf of the Adverse Member.

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                     SECTION 12: DISSOLUTION AND WINDING UP

     12.1 DISSOLUTION EVENTS.

          (a) DISSOLUTION. The Joint Sales Company shall dissolve and shall
commence winding up and liquidating upon the first to occur of any of the
following (each a "DISSOLUTION EVENT"):

                    (i) The unanimous vote of the Members to dissolve, wind up,
          and liquidate the Joint Sales Company;

                    (ii) A judicial determination that an event has occurred
          that makes it unlawful, impossible or impractical to carry on the
          Business;

                    (iii) The election of the non-Adverse Member pursuant to
          Section 11.1(a);

                    (iv) The termination or expiration of the Commercial
          Alliance Agreement;

                    (v) The election of a Member to dissolve the Joint Sales
          Company pursuant to Section 9.8.3 of the Commercial Alliance
          Agreement.

          The Members hereby agree that, notwithstanding any provision of the
Act, the Joint Sales Company shall not dissolve prior to the occurrence of a
Dissolution Event.

          (b) RECONSTITUTION. If it is determined, by a court of competent
jurisdiction, that the Joint Sales Company has dissolved prior to the occurrence
of a Dissolution Event, then within an additional ninety (90) days after such
determination (the "RECONSTITUTION PERIOD"), either Member may elect to
reconstitute the Joint Sales Company and continue its business on the same terms
and conditions set forth in this Agreement by forming a new limited liability
company on terms identical to those set forth in this Agreement. Unless such an
election is made within the Reconstitution Period, the Joint Sales Company shall
liquidate and wind up its affairs in accordance with Section 12.2 hereof. If
such an election is made within the Reconstitution Period, then:

                    (i) The reconstituted limited liability company shall
          continue until the occurrence of a Dissolution Event as provided in
          this Section 12.1(a);

                    (ii) Unless otherwise agreed to by a majority in Percentage
          Interests of the Members, the Certificate and this Agreement shall
          automatically constitute the Certificate and Agreement of such new
          Joint Sales Company. All of the assets and liabilities of the
          dissolved Joint Sales Company shall be deemed to have been
          automatically assigned, assumed, conveyed and transferred to the new
          Joint Sales Company. No bond, collateral, assumption or

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          release of any Member's or the Joint Sales Company's liabilities shall
          be required;

PROVIDED that the right of the Members to select successor Directors and to
reconstitute and continue the Business shall not exist and may not be exercised
unless the Joint Sales Company has received an opinion of counsel that the
exercise of the right would not result in the loss of limited liability of any
Member and neither the Joint Sales Company nor the reconstituted limited
liability company would cease to be treated as a partnership for federal income
tax purposes upon the exercise of such right to continue.

     12.2 WINDING UP.

          Upon the occurrence of (i) a Dissolution Event or (ii) the
determination by a court of competent jurisdiction that the Joint Sales Company
has dissolved prior to the occurrence of a Dissolution Event (unless the Joint
Sales Company is reconstituted pursuant to Section 12.1(b) hereof), the Joint
Sales Company shall continue solely for the purposes of winding up its affairs
in an orderly manner, liquidating its assets, and satisfying the claims of its
creditors and Members, and no Member shall take any action that is inconsistent
with, or not necessary to or appropriate for, the winding up of the Joint Sales
Company's business and affairs, PROVIDED that all covenants contained in this
Agreement and obligations provided for in this Agreement shall continue to be
fully binding upon the Members until such time as the Property has been
distributed pursuant to this Section 12.2 and the Certificate has been canceled
pursuant to the Act. The Liquidator shall be responsible for overseeing the
winding up and dissolution of the Joint Sales Company, which winding up and
dissolution shall be completed within ninety (90) days of the occurrence of the
Dissolution Event and within ninety (90) days after the last day on which the
Joint Sales Company may be reconstituted pursuant to Section 12.1(b) hereof, as
applicable. The Liquidator shall take full account of the Joint Sales Company's
liabilities and Property and shall cause the Property or the proceeds from the
sale thereof (as determined pursuant to Section 12.10 hereof), to the extent
sufficient therefor, to be applied and distributed, to the maximum extent
permitted by law, in the following order:

          (a) First, to creditors (including Members and Directors who are
creditors, to the extent otherwise permitted by law) in satisfaction of all of
the Joint Sales Company's Debts and other liabilities (whether by payment or the
making of reasonable provision for payment thereof), other than liabilities for
which reasonable provision for payment has been made and liabilities for
distribution to members under Section 18-601 or 18-604 of the Act;

          (b) Second, to ADM Polymer Corporation until the Ledger Account is
repaid;

          (c) Third, to the Members in amounts equal to any Equalization
Payments then due and owing to the Members;

          (d) Fourth, to the Members in accordance with the positive balance in
their Capital Accounts, after giving effect to all contributions, distributions
and allocations for all periods;

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          (e) The balance, if any, to the Members in accordance with their
respective Percentage Interests.

          No Member or Director shall receive additional compensation for any
services performed pursuant to this Section 12.

     12.3 COMPLIANCE WITH CERTAIN REQUIREMENTS OF REGULATIONS; DEFICIT CAPITAL
     ACCOUNTS.

          In the event the Joint Sales Company is "liquidated" within the
meaning of Regulations Section 1.704-1(b) (2) (ii) (g), distributions shall be
made pursuant to this Section 12 to the Members who have positive Capital
Accounts in compliance with Regulations Section 1.704-1(b) (2) (ii) (b) (2). If
any Member has a deficit balance in his Capital Account (after giving effect to
all contributions, distributions and allocations for all Allocation Years,
including the Allocation Year during which such liquidation occurs), such Member
shall have no obligation to make any contribution to the capital of the Joint
Sales Company with respect to such deficit, and such deficit shall not be
considered a debt owed to the Joint Sales Company or to any other Person for any
purpose whatsoever. In the discretion of the Liquidator, a pro rata portion of
the distributions that would otherwise be made to the Members pursuant to this
Section 12 may be:

          (a) Distributed to a trust established for the benefit of the Members
for the purposes of liquidating Joint Sales Company assets, collecting amounts
owed to the Joint Sales Company, and paying any contingent or unforeseen
liabilities or obligations of the Joint Sales Company. The assets of any such
trust shall be distributed to the Members from time to time, in the reasonable
discretion of the Liquidator, in the same proportions as the amount distributed
to such trust by the Joint Sales Company would otherwise have been distributed
to the Members pursuant to Section 12.2 hereof; or

          (b) Withheld to provide a reasonable reserve for Joint Sales Company
liabilities (contingent or otherwise) and to reflect the unrealized portion of
any installment obligations owed to the Joint Sales Company, provided that such
withheld amounts shall be distributed to the Members as soon as practicable.

     12.4 DEEMED DISTRIBUTION AND RECONTRIBUTION.

          Notwithstanding any other provision of this Section 12, in the event
the Joint Sales Company is liquidated within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g) but no Dissolution Event has occurred, the Property shall
not be liquidated, the Joint Sales Company's Debts and other Liabilities shall
not be paid or discharged, and the Joint Sales Company's affairs shall not be
wound up. Instead, solely for federal income tax purposes, the Joint Sales
Company shall be deemed to have contributed all its Property and liabilities to
a new limited liability company in exchange for an interest in such new company
and, and immediately thereafter, the Joint Sales Company will be deemed to
liquidate by distributing interests in the new company to the Members.

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     12.5 RIGHTS OF MEMBERS.

          Except as otherwise provided in this Agreement, each Member shall look
solely to the Joint Sales Company's Property for the return of its Capital
Contribution and has no right or power to demand or receive Property other than
cash from the Joint Sales Company. If the assets of the Joint Sales Company
remaining after payment or discharge of the debts or liabilities of the Joint
Sales Company are insufficient to return such Capital Contribution, the Members
shall have no recourse against the Joint Sales Company or any other Member or
Director.

     12.6 NOTICE OF DISSOLUTION/TERMINATION.

          (a) In the event a Dissolution Event occurs or an event occurs that
would, but for provisions of Section 12.1, result in a dissolution of the Joint
Sales Company, the Board of Directors shall, within thirty (30) days thereafter,
provide written notice thereof to each of the Members and to all other parties
with whom the Joint Sales Company regularly conducts business (as determined in
the discretion of the Board of Directors) and shall publish notice thereof in a
newspaper of general circulation in each place in which the Joint Sales Company
regularly conducts business (as determined in the discretion of the Board of
Directors).

          (b) Upon completion of the distribution of the Joint Sales Company's
Property as provided in this Section 12, the Joint Sales Company shall be
terminated, and the Liquidator shall cause the filing of the Certificate of
Cancellation pursuant to Section 18-203 of the Act and shall take all such other
actions as may be necessary to terminate the Joint Sales Company.

     12.7 ALLOCATIONS DURING PERIOD OF LIQUIDATION.

          During the period commencing on the first day of the Fiscal Year
during which a Dissolution Event occurs and ending on the date on which all of
the assets of the Joint Sales Company have been distributed to the Members
pursuant to Section 12.2 hereof (the "LIQUIDATION PERIOD"), the Members shall
continue to share Profits, Losses, gain, loss and other items of Joint Sales
Company income, gain, loss or deduction in the manner provided in Section 3
hereof, but no distributions shall be made pursuant to Section 4 hereof.

     12.8 CHARACTER OF LIQUIDATING DISTRIBUTIONS.

          All payments made in liquidation of the interest of a Member in the
Joint Sales Company shall be made in exchange for the interest of such Member in
Property pursuant to Section 736(b)(1) of the Code, including the interest of
such Member in Joint Sales Company goodwill.

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     12.9 THE LIQUIDATOR.

          (a) DEFINITION. The "LIQUIDATOR" shall mean a Person appointed by the
unanimous decision of the Board of Directors to oversee the liquidation of the
Joint Sales Company.

          (b) FEES. The Joint Sales Company is authorized to pay a reasonable
fee to the Liquidator for its services performed pursuant to this Section 12 and
to reimburse the Liquidator for its reasonable costs and expenses incurred in
performing those services.

          (c) INDEMNIFICATION. The Joint Sales Company shall indemnify, save
harmless, and pay all judgments and claims against such Liquidator or any
officers, directors, agents or employees of the Liquidator relating to any
liability or damage incurred by reason of any act performed or omitted to be
performed by the Liquidator, or any officers, directors, agents or employees of
the Liquidator in connection with the liquidation of the Joint Sales Company,
including reasonable attorneys' fees incurred by the Liquidator, officer,
director, agent or employee in connection with the defense of any action based
on any such act or omission, which attorneys' fees may be paid as incurred,
except to the extent such liability or damage is caused by the fraud,
intentional misconduct of, or a knowing violation of the laws by the Liquidator
which was material to the cause of action.

     12.10 FORM OF LIQUIDATING DISTRIBUTIONS.

          For purposes of making distributions required by Section 12.2 hereof,
the Liquidator shall abide by any resolutions, plan or decision approved by the
unanimous vote of the Board of Directors as to whether to distribute all or any
portion of the Property in-kind or to sell all or any portion of the Property
and distribute the proceeds therefrom. In the absence of any such resolutions,
plan or decision, the Liquidator may determine in its reasonable discretion
whether to distribute all or any portion of the Property in-kind or to sell all
or any portion of the Property and distribute the proceeds therefrom.

                            SECTION 13: MISCELLANEOUS

     13.1 NOTICES.

          Any notice, payment, demand, or communication required or permitted to
be given by any provision of this Agreement shall be in writing and shall be
deemed to have been delivered, given, and received for all purposes (i) if
delivered personally to the Person or to an officer of the Person to whom the
same is directed, or (ii) when the same is actually received, if sent either by
registered or certified mail, postage and charges prepaid, or by facsimile, if
such facsimile is followed by a hard copy of the facsimile communication sent
promptly thereafter by registered or certified mail, postage and charges
prepaid, addressed as follows, or to such other address as such Person may from
time to time specify by notice to the Members and Directors:

*    CONFIDENTIAL TREATMENT REQUESTED


                                       50



          (a) If to the Joint Sales Company:

              ADM / Metabolix Sales Company, LLC
              21 Erie Street
              Cambridge, MA 02139-4260

              With a copy to:

              ADM Polymer Corporation, at the address set forth below, and MBX,
              at the address set forth below

          (b) If to the Directors, to the address set forth in Exhibit C hereto
with respect to the initial Directors, and thereafter in the notices provided to
the Joint Sales Company by the Members designating substitute Directors;

          (c) If to ADM Polymer Corporation:

              Archer-Daniels-Midland Company
              4666 Faries Parkway
              Decatur, Illinois 62526
              Attn:  President
              Telephone: (217) 451-5200
              Facsimile: (217) 451-4181

              With a copy to:

              Archer-Daniels-Midland Company
              4666 Faries Parkway
              Decatur, Illinois 62526
              Attn:  General Counsel
              Telephone: (217) 424-6183
              Facsimile: (217) 424-6196

          (d) If to MBX:

              Metabolix Inc.
              21 Erie Street
              Cambridge, Massachusetts 02139-4260
              Attn:  President and CEO
              Telephone: (617) 492-0505
              Facsimile: (617) 4921996

              With a copy to:
              Goodwin Procter

*    CONFIDENTIAL TREATMENT REQUESTED


                                       51



              Exchange Place
              53 State Street
              Boston, MA 02109
              Attn:  Christopher J. Denn, Esq

     13.2 BINDING EFFECT.

          Except as otherwise provided in this Agreement, every covenant, term,
and provision of this Agreement shall be binding upon and inure to the benefit
of the Members and their respective successors, transferees, and assigns.

     13.3 CONSTRUCTION.

          Every covenant, term, and provision of this Agreement shall be
construed simply according to its fair meaning and not strictly for or against
any Member.

     13.4 TIME.

          In computing any period of time pursuant to this Agreement, the day of
the act, event or default from which the designated period of time begins to run
shall not be included, but the time shall begin to run on the next succeeding
day. The last day of the period so computed shall be included, unless it is a
Saturday, Sunday or legal holiday, in which event the period shall run until the
end of the next day which is not a Saturday, Sunday or legal holiday.

     13.5 HEADINGS.

          Section and other headings contained in this Agreement are for
reference purposes only and are not intended to describe, interpret, define, or
limit the scope, extent, or intent of this Agreement or any provision hereof.

     13.6 SEVERABILITY.

          Except as otherwise provided in the succeeding sentence, every
provision of this Agreement is intended to be severable, and, if any term or
provision of this Agreement is illegal or invalid for any reason whatsoever,
such illegality or invalidity shall not affect the validity or legality of the
remainder of this Agreement. The preceding sentence of this Section 13.6 shall
be of no force or effect if the consequence of enforcing the remainder of this
Agreement without such illegal or invalid term or provision would be to cause
any Member to lose the material benefit of its economic bargain.

     13.7 INCORPORATION BY REFERENCE.

          Every exhibit, schedule, and other appendix attached to this Agreement
and referred to herein is not incorporated in this Agreement by reference unless
this Agreement expressly otherwise provides.

*    CONFIDENTIAL TREATMENT REQUESTED


                                       52



     13.8 VARIATION OF TERMS.

          All terms and any variations thereof shall be deemed to refer to
masculine, feminine, or neuter, singular or plural, as the identity of the
Person or Persons may require.

     13.9 GOVERNING LAW.

          The laws of the State of Delaware shall govern the validity of this
Agreement, the construction of its terms, and the interpretation of the rights
and duties arising hereunder.

     13.10 COUNTERPART EXECUTION.

          This Agreement may be executed in any number of counterparts with the
same effect as if all of the Members had signed the same document. All
counterparts shall be construed together and shall constitute one agreement.

                      [SIGNATURES FOLLOW ON SEPARATE PAGES]

*    CONFIDENTIAL TREATMENT REQUESTED


                                       53



     IN WITNESS WHEREOF, the parties have executed and entered into this
Operating Agreement of the Joint Sales Company as of the day first above set
forth.

                                        METABOLIX INC.


                                        By: /s/ James J. Barber
                                            ----------------------------------
                                        Name: James J. Barber
                                        Title: President and CEO


                                        ADM POLYMER CORPORATION


                                        By: /s/ John D. Rice
                                            ----------------------------------
                                        Name: John D. Rice
                                        Title: President

*    CONFIDENTIAL TREATMENT REQUESTED


                                       54



                                                                    Exhibit 10.8

[METOBOLIX LOGO]                         21 Erie Street
WHERE NATURE PERFORMS(TM)                Cambridge, Massachusetts 02139-4260 USA
                                         Tel: 617.492.0505 - Fax: 617-492-1996
                                         Web: www.metabolix.com

                                   September 18, 2006

James J. Barber
c/o Metabolix, Inc.
21 Erie Street
Cambridge, MA  02139

     Re:  AMENDED AND RESTATED EMPLOYMENT AGREEMENT

Dear Jim:

     This letter is to confirm our understanding with respect to your employment
by Metabolix, Inc. (the "Company"). The terms and conditions agreed to in this
letter are hereinafter referred to as the "Agreement". In consideration of the
mutual promises and covenants contained in this Agreement, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
mutually acknowledged, we have agreed as follows:

     1.   EMPLOYMENT.

          (a)  GENERAL. The Company will employ you, and you will be employed by
     the Company, as the President and Chief Executive Officer of the Company,
     reporting to and serving on the Board of Directors (the "Board"), and you
     shall have the responsibilities, duty and authority commensurate with that
     position. You will also perform such other and/or different services for
     the Company as may be assigned to you from time to time by the Board. You
     agree that if your employment hereunder ends for any reason, you will
     tender your resignation to the Board.

          (b)  DEVOTION TO DUTIES. While you are employed hereunder, you will
     use your best efforts, skills and abilities to perform faithfully all
     duties assigned to you pursuant to this Agreement and will devote your full
     business time and energies to the business and affairs of the Company.
     While you are employed hereunder, you will not undertake any other
     employment from any person or entity without the prior written consent of
     the Company.

     2.   EMPLOYMENT AT WILL. Your employment hereunder will be on an "at-will"
basis and may be terminated by the Company or by you at any time for any reason
or for no reason.

     3.   COMPENSATION.

          (a)  BASE SALARY. While you are employed hereunder, the Company will
     pay you a base salary at the annual rate of $19,583.00 per month
     (annualized at $235,000.00) (the "Base Salary"). This Base Salary is
     effective January 1, 2005, and may be subject to



James J. Barber
September 18, 2006
Page 2

     upward (but not downward) adjustment from time to time in the discretion of
     the Company and will be adjusted higher by the Board to levels comparable
     for similar companies as determined by the Board in its sole discretion in
     the event that there is a public offering. The Company will deduct from
     each monthly salary payment all amounts required to be deducted or withheld
     under applicable law or under any employee benefit plan in which you
     participate.

          (b)  BONUSES. In addition to the foregoing, the Company on or before
     December 31, 2006, will establish a formalized bonus scheme and pay you an
     annual bonus (a "Bonus") in an amount to be determined by the Company's
     Compensation Committee. The amount will be based on several criteria,
     including the financial condition of the Company and its overall
     performance for the year, but will be strongly influenced by your
     contributions toward the achievement of established corporate goals and
     objectives, as well as other contributions that add recognizable value to
     the Company. The present target for executive bonuses is 50% of Base Salary
     (the "Target Bonus"). This Target Bonus will be subject to revision from
     time to time by the Compensation Committee. In order to receive an annual
     bonus, you must be employed at the time of a timely payment, which will be
     paid on or before March 15 of the year following the year in which it is
     earned.

          (c)  EQUITY COMPENSATION. The Company has granted to you pursuant to
     the Metabolix, Inc. 2005 Stock Plan the following Options:1/

               (i)    Grant of 243,235 incentive stock options at the exercise
          price of $1.50, the fair market value at the date of grant. 44,000 of
          such shares shall vest as of the grant date. Subject to your continued
          employment and Section 4 of this Agreement, the remainder will vest in
          equal increments on a quarterly basis over a four year period as
          though vesting had begun on January 1, 2005.

               (ii)   Grant of 51,333 options at the exercise price of $1.50,
          the fair market value at the date of grant. Vesting of this option
          shall occur only if:

                      (A)   the Company, prior to June 30, 2006: (I) completes
               an initial public offering with proceeds of at least $40 million
               and a price per share of at least $8.00 (an "IPO"), or (II) signs
               a definitive agreement for the merger or sale of the Company that
               provides for liquidity in the form of cash or readily-marketable
               securities in exchange for all of the Company's outstanding
               shares, provided that in the event the IPO is delayed by the
               Company's Board of Directors so that it can negotiate a merger or
               sale of the Company, the Board will make an appropriate extension
               of such date; and

- ----------
(1)  Options granted prior to the execution of this Agreement and not identified
here shall continue to vest in accordance with their terms.



James J. Barber
September 18, 2006
Page 3

                      (B)   in the period prior to the occurrence of such
               contingency event the Company has not raised capital: (I) through
               a sale of shares on terms that are less favorable to the Company
               than the terms of the 2004 offering, or (II) through an offering
               solely to existing investors.

          The foregoing conditions were not met and, accordingly, the options
          described in this clause (ii) have expired.

               (iii)  Grant of 51,333 options at the exercise price of $1.50,
          fair market value at the date of grant. Vesting of this option shall
          occur only if

                      (A)   the Company, prior to December 31, 2007: (I)
               completes an IPO, or (II) signs a definitive agreement for the
               merger or sale of the Company that provides for liquidity in the
               form of cash or readily-marketable securities in exchange for all
               of the Company's outstanding shares, and

                      (B)   in the period prior to the occurrence of such
               contingency event the Company has not raised capital: (I) through
               a sale of shares on terms that are less favorable to the Company
               than the terms of the 2004 offering, or (II) through an offering
               solely to existing investors.

          For avoidance of doubt, if the option described in Section 3(c)(ii)
          above vests, this option shall vest as well. If vesting occurs, it
          shall occur as follows: 50% of such shares will vest upon occurrence
          of the contingency event, and, subject to your continued employment
          and Section 4 of this Agreement, the remainder will vest in equal
          increments on a quarterly basis over a four year period as if the
          vesting had commenced January 1, 2005.

               (iv)   Grant of 51,334 options at the exercise price of $1.50,
          the fair market value at the time of grant. Vesting of this option
          shall occur only if

                      (A)   ADM Polymer Corporation, or an affiliate, exercises
               the Option as defined in the Technology Alliance and Option
               Agreement by and between ADM Polymer Corporation and Metabolix,
               Inc., and

                      (B)   in the period prior to the occurrence of such
               contingency event the Company has not raised capital: (I) through
               a sale of shares on terms that are less favorable to the Company
               than the terms of the 2004 offering, or (II) through an offering
               solely to existing investors.

          If vesting occurs, it shall occur as follows: 50% of such shares will
          vest upon occurrence of the contingency event, and, subject to your
          continued employment and Section 4 of this Agreement, the remainder
          will vest in equal increments on a



James J. Barber
September 18, 2006
Page 4

          quarterly basis over a four year period as if the vesting had
          commenced January 1, 2005.

          The parties acknowledge and agree that the foregoing contingency event
          has occurred.

               (v)    The Company, in the Board's sole discretion, may from time
     to time grant to you stock options, restricted stock or other forms of
     equity compensation pursuant to the Metabolix, Inc. 2005 Stock Plan or any
     other authorized stock plan in effect at the time.

          (d)  VACATION. You will be entitled to paid vacation and paid
     holidays, accrued and used in accordance with the Company's policies as
     currently in effect. All vacation days will be taken at times mutually
     agreed by you and the Company and will be subject to the business needs of
     the Company.

          (e)  FRINGE BENEFITS. You will be entitled to participate in employee
     benefit plans which the Company provides or may establish for the benefit
     of its senior executives generally (for example, group life, disability,
     medical, dental and other insurance, retirement, pension, profit-sharing
     and similar plans) (collectively, the "Fringe Benefits"). Your eligibility
     to participate in the Fringe Benefits and receive benefits thereunder will
     be subject to the plan documents governing such Fringe Benefits. Nothing
     contained herein will require the Company to establish or maintain any
     Fringe Benefits.

          (f)  LOAN FORGIVENESS. Pursuant to your prior employment agreement
     with the Company dated November 28, 1999, the Company provided you with a
     loan of $75,000. In exchange for your covenants hereunder, the Company has
     forgiven that loan, effective as of December 14, 2005.

     4.   TERMINATION.

          (a)  GENERAL. As an at-will employee, your employment may be
     terminated at any time for any reason or for no reason. Upon termination,
     unless otherwise specifically provided herein, you shall be eligible only
     to receive (i) the portion of your Base Salary as has accrued prior to such
     termination and has not yet been paid, (ii) an amount equal to the value of
     your accrued unused vacation days, and (iii) reimbursement for expenses
     properly incurred by you on behalf of the Company prior to such termination
     if such expenses are properly documented in accordance with Company policy
     and practice and submitted for reimbursement within thirty (30) days of the
     termination date (collectively, the "Accrued Obligations"). Such amounts
     will be paid promptly after termination in accordance with applicable law.

          (b)  TERMINATION WITHOUT CAUSE OR WITH GOOD REASON. Except as provided
     in Section 4(c) hereof, in the event that your employment is terminated by
     the Company without Cause or by you with Good Reason (each, as defined
     below), in addition to the



James J. Barber
September 18, 2006
Page 5

     Accrued Obligations, and contingent on your provision of a timely and
     complete release of claims against the Company, you shall be entitled to
     receive continuation of your Base Salary in effect at the time of
     termination for the period of twelve (12) months following the termination.
     To the extent required by Section 409A of the Internal Revenue Code of
     1986, as amended (the "Code"), the first installment of such Base Salary in
     the amount of six (6) months' Base Salary shall be payable on the first
     business day following the six (6) month anniversary of the effective date
     of termination, and the remainder shall be payable in accordance with the
     Company's regular payroll procedures thereafter. If Section 409A of the
     Code is not then applicable, such Base Salary continuation shall commence
     immediately from the date of termination. In addition, should the award of
     a Bonus have become customary, you shall be entitled to a payment equal to
     the average of the Bonuses paid to you (if any) in the two years preceding
     the termination, to be paid (A) on the first business day following the six
     (6) month anniversary of the effective date of termination, to the extent
     required by Section 409A of the Code, or (B) if Section 409A of the Code is
     not then applicable, within thirty (30) days following the termination. In
     addition to the foregoing, you shall be entitled to receive payment of
     COBRA premiums to maintain medical and dental benefits, if any, in effect
     at the time of termination for the period of twelve (12) months following
     the termination.

          (c)  TERMINATION WITHOUT CAUSE OR WITH GOOD REASON BEFORE OR AFTER A
     CHANGE OF CONTROL.

               (i)    In the event that your employment is terminated by the
     Company without Cause or by you for Good Reason (each, as defined below)
     within the twenty-four (24) month period immediately following or the two
     month period immediately prior to a Change of Control (as defined below),
     in addition to the Accrued Obligations, and contingent on your provision of
     a timely release of claims against the Company, you shall be entitled to
     receive:

                      (A)   continuation of your Base Salary in effect at the
     time of termination for the period of twelve (12) months following the
     termination. To the extent required by Section 409A of the Code, the first
     installment of such Base Salary in the amount of six (6) months' Base
     Salary shall be payable on the first business day following the six (6)
     month anniversary of the effective date of termination, and the remainder
     shall be payable in accordance with the Company's regular payroll
     procedures thereafter. If Section 409A of the Code is not then applicable,
     such Base Salary continuation shall commence immediately from the date of
     termination.

                      (B)   In addition, should the award of a Bonus have become
     customary, you shall be entitled to a payment equal to the average of the
     Bonuses paid to you (if any) in the two years preceding the termination, to
     be paid (A) on the first business day following the six (6) month
     anniversary of the effective date of termination, to the extent required by
     Section 409A of the Code, or (B) if Section 409A of the Code is not then
     applicable, within thirty (30) days following the termination.



James J. Barber
September 18, 2006
Page 6

                      (C)   continued payment of COBRA premiums to maintain
     medical and dental benefits, if any, in effect at the time of termination
     for the period of twelve (12) months following the termination; and

                      (D)   full vesting of all options and restricted stock
     granted to you under the Metabolix Inc. 1995 Stock Plan, the Metabolix Inc.
     2005 Stock Plan or any authorized successor stock plan provided that the
     conditions to vesting other than the passage of time have been satisfied.

               (ii)   You agree that the payments and benefits hereunder, and
     under all other contracts, arrangements or programs that apply to you (the
     "Company Payments"), shall be reduced to an amount that is one dollar less
     than the amount that would trigger an excise tax under Section 4999 of the
     Code, as determined in good faith by the Company's independent public
     accountants, PROVIDED, HOWEVER, that the reduction shall occur only if the
     reduced Company Payments received by you (after taking into account further
     reductions for applicable federal, state and local income, social security
     and other taxes) would be greater than the unreduced Company Payments to be
     received by you minus (i) the excise tax payable with respect to such
     Company Payments under Section 4999 of the Code; and (ii) all applicable
     federal, state and local income, social security and other taxes on such
     Company Payments. You and the Company agree to cooperate in good faith with
     each other in connection with any administrative or judicial proceedings
     concerning the existence or amount of golden parachute penalties with
     respect to payments or benefits that you receive.

          (d)  "CAUSE". As used herein, "Cause" shall be defined as (i) your
     conviction for, or plea of nolo contendere, to a felony or a crime
     involving moral turpitude, (ii) your commission of a material act of
     personal dishonesty or a breach of fiduciary duty involving personal profit
     in connection with your employment by the Company, (iii) your commission of
     an act which the Board of Directors shall reasonably have found to have
     involved willful misconduct or gross negligence on your part in the conduct
     of your duties under this Agreement, (iv) your habitual absenteeism, (v)
     your material breach of any material provision of this Agreement continuing
     for thirty days after your receipt of written notice thereof from the
     Company, or (vi) the willful and continued failure by you to perform
     substantially your duties with the Company (other than any such failure
     resulting from your incapacity due to physical or mental illness).

          (e)  "CHANGE OF CONTROL". As used herein, a "Change of Control" shall
     occur or be deemed to have occurred only upon any one or more of the
     following events:

               (i)    a merger or consolidation of the Company other than a
          merger or consolidation which would result in the voting securities of
          the Company outstanding immediately prior thereto continuing to
          represent (either by remaining outstanding or by being converted into
          voting securities of the surviving entity or the parent of such
          corporation) at least fifty percent (50%) of



James J. Barber
September 18, 2006
Page 7

          the total voting power represented by the voting securities of the
          Company or such surviving entity or parent of such corporation
          outstanding immediately after such merger or consolidation;

               (ii)   the sale or disposition by the Company of all or
          substantially all of the Company' s assets; or

               (iii)  any one person, entity or group, who is not a shareholder
          at time of execution of this Agreement, acquires ownership of capital
          stock of the Company that, together with the capital stock of the
          Company already held by such person, entity or group, constitutes more
          than 50% of the total fair market value or total voting power of the
          capital stock of the Company; provided, however, if any one person,
          entity or group is considered to own more than 50% of the total fair
          market value or total voting power of the capital stock of the
          Company, the acquisition of additional capital stock by the same
          person, entity or group shall not be deemed to be a Change of Control,
          and further provided that the foregoing shall not be deemed a Change
          of Control if the average stock price paid for each share of stock
          held by the person, entity or group is less than $8.00/share (provided
          that such price shall be adjusted as appropriate to reflect any stock
          dividend, stock split, or recapitalization of the Company after the
          date of this agreement).

          (f)  "Good Reason" shall be defined as, in the absence of a cure by
     the Company within 30 days after written notice by you to the Board, a (i)
     a change in title of President and Chief Executive Officer, (ii) a material
     diminution of responsibilities, duties or powers, (iii) a reduction in Base
     Salary, Target Bonus, vacation or other benefits, except that benefits need
     only be substantially equivalent, or (iv) a requirement that you relocate
     your principal place of employment to (or that you travel more than 50 days
     in any calendar year to the Company's principal place of business in) a
     location more than 50 miles from its current location in Cambridge,
     Massachusetts, PROVIDED THAT you must provide the Company with at least
     thirty (30) days advance written notice of your intent to terminate your
     employment hereunder and an opportunity to cure.

     5.   NONCOMPETITION, NONDISCLOSURE AND INVENTIONS OBLIGATIONS. Your
Employee Noncompetition, Nondisclosure and Inventions Agreement dated November
28, 1999, shall continue in full force and effect in accordance with its terms.

     6.   DISCLOSURE TO FUTURE EMPLOYERS. You will provide, and the Company, in
its discretion, may similarly provide, a copy of the covenants contained in The
Employee Noncompetition, Nondisclosure and Inventions Agreement to any business
or enterprise which you may, directly or indirectly, own, manage, operate,
finance, join, control or in which you may participate in the ownership,
management, operation, financing, or control, or with which you may be connected
as an officer, director, employee, partner, principal, agent, representative,
consultant or otherwise.



James J. Barber
September 18, 2006
Page 8

     7.   REPRESENTATIONS. You hereby represent and warrant to the Company that
you understand this Agreement, that you enter into this Agreement voluntarily
and that your employment under this Agreement will not conflict with any legal
duty owed by you to any other party.

     8.   GENERAL.

          (a)  NOTICES. All notices, requests, consents and other communications
     hereunder which are required to be provided, or which the sender elects to
     provide, in writing, will be addressed to the receiving party's address set
     forth above or to such other address as a party may designate by notice
     hereunder, and will be either (i) delivered by hand, (ii) sent by overnight
     courier, or (iii) sent by registered or certified mail, return receipt
     requested, postage prepaid. All notices, requests, consents and other
     communications hereunder will be deemed to have been given either (i) if by
     hand, at the time of the delivery thereof to the receiving party at the
     address of such party set forth above, (ii) if sent by overnight courier,
     on the next business day following the day such notice is delivered to the
     courier service, or (iii) if sent by registered or certified mail, on the
     fifth business day following the day such mailing is made.

          (b)  ENTIRE AGREEMENT. This Agreement, together with any Stock Option
     Agreements executed by you and the Company (either prior to or in
     conjunction with this Agreement), the Employee Noncompetition,
     Nondisclosure and Inventions Agreement and the other agreements
     specifically referred to herein, embodies the entire agreement and
     understanding between the parties hereto with respect to the subject matter
     hereof and supersedes all prior oral or written agreements and
     understandings relating to the subject matter hereof, including without
     limitation the Employment Agreement between you and the Company dated
     December 14, 2005. No statement, representation, warranty, covenant or
     agreement of any kind not expressly set forth in this Agreement will
     affect, or be used to interpret, change or restrict, the express terms and
     provisions of this Agreement.

          (c)  MODIFICATIONS AND AMENDMENTS. The terms and provisions of this
     Agreement may be modified or amended only by written agreement executed by
     the parties hereto.

          (d)  WAIVERS AND CONSENTS. The terms and provisions of this Agreement
     may be waived, or consent for the departure therefrom granted, only by
     written document executed by the party entitled to the benefits of such
     terms or provisions. No such waiver or consent will be deemed to be or will
     constitute a waiver or consent with respect to any other terms or
     provisions of this Agreement, whether or not similar. Each such waiver or
     consent will be effective only in the specific instance and for the purpose
     for which it was given, and will not constitute a continuing waiver or
     consent.

          (e)  ASSIGNMENT. The Company may assign its rights and obligations
     hereunder to any person or entity that succeeds to all or substantially all
     of the Company's business or that aspect of the Company's business in which
     you are principally involved or to any



James J. Barber
September 18, 2006
Page 9

     Company Affiliate. You may not assign your rights and obligations under
     this Agreement without the prior written consent of the Company and any
     such attempted assignment by you without the prior written consent of the
     Company will be void.

          (f)  GOVERNING LAW. This Agreement and the rights and obligations of
     the parties hereunder will be construed in accordance with and governed by
     the law of Massachusetts, without giving effect to the conflict of law
     principles thereof.

          (g)  JURISDICTION, VENUE AND SERVICE OF PROCESS. Any legal action or
     proceeding with respect to this Agreement will be brought in the courts of
     Massachusetts or of the United States of America for THE District of
     Massachusetts. By execution and delivery of this Agreement, each of the
     parties hereto accepts for itself and in respect of its property, generally
     and unconditionally, the exclusive jurisdiction of the aforesaid courts.

          (h)  SEVERABILITY. The parties intend this Agreement to be enforced as
     written. However, if any portion or provision of this Agreement is to any
     extent declared illegal or unenforceable by a duly authorized court having
     jurisdiction, then the remainder of this Agreement, or the application of
     such portion or provision in circumstances other than those as to which it
     is so declared illegal or unenforceable, will not be affected thereby, and
     each portion and provision of this Agreement will be valid and enforceable
     to the fullest extent permitted by law.

          (i)  HEADINGS AND CAPTIONS. The headings and captions of the various
     subdivisions of this Agreement are for convenience of reference only and
     will in no way modify or affect the meaning or construction of any of the
     terms or provisions hereof.

          (j)  ACKNOWLEDGMENTS. You hereby acknowledge and recognize that the
     enforcement of any of the provisions in this Agreement and the
     Noncompetition, Nondisclosure and Inventions Agreement may potentially
     interfere with your ability to pursue a proper livelihood. You represent
     that you are knowledgeable about the business of the Company and further
     represent that you are capable of pursuing a career in other industries
     other than the field of noncompetition as set forth in the Noncompetition,
     Nondisclosure and Inventions Agreement to earn a proper livelihood. You
     recognize and agree that the enforcement of the Noncompetition,
     Nondisclosure and Inventions Agreement is necessary to ensure the
     preservation, protection and continuity of the business, trade secrets and
     goodwill of the Company. You agree that, due to the proprietary nature of
     the Company's business, the restrictions set forth in the Noncompetition,
     Nondisclosure and Inventions Agreement are reasonable as to time and scope.

          (k)  TAXES. All payments required to be made by the Company to you
     under this Agreement shall be subject to the withholding of such amounts
     for taxes and other payroll deductions as the Company may reasonably
     determine it should withhold pursuant to any applicable law or regulation.
     To the extent applicable, it is intended that this Agreement comply with
     the provisions of Section 409A of the Code, and this Agreement shall be
     construed and applied in a manner consistent with this intent. In the



James J. Barber
September 18, 2006
Page 10

     event that any severance payments or benefits hereunder are determined by
     the Company to be in the nature of nonqualified deferred compensation
     payments, you and the Company hereby agree to take such actions as may be
     mutually agreed to ensure that such payments or benefits comply with the
     applicable provisions of Section 409A of the Code and the official guidance
     issued thereunder. Notwithstanding the foregoing, the Company does not
     guarantee the tax treatment or tax consequences associated with any payment
     or benefit arising under this Agreement.

          (l)  COUNTERPARTS. This Agreement may be executed in two or more
     counterparts, and by different parties hereto on separate counterparts,
     each of which will be deemed an original, but all of which together will
     constitute one and the same instrument.

     If the foregoing accurately sets forth our agreement, please so indicate by
signing and returning to us the enclosed copy of this Agreement.

                                         Very truly yours,

                                         Metabolix, Inc.


                                         By:. /s/ Thomas G. Auchincloss, Jr.
                                             -----------------------------------
                                         Name: Thomas G. Auchincloss, Jr.
                                         Title: CFO

ACCEPTED AND APPROVED:

/s/ James J. Barber                       9/19/06
- ----------------------------             -------------
James J. Barber                          Date



                                                                    Exhibit 10.9

[METABOLIX LOGO]                         21 Erie Street
WHERE NATURE PERFORMS(TM)                Cambridge, Massachusetts 02139-4260 USA
                                         Tel: 617.492.0505 - Fax: 617-492-1996
                                         Web: www.metabolix.com


                                  September 18, 2006

Thomas G. Auchincloss, Jr.
c/o Metabolix, Inc.
21 Erie Street
Cambridge, MA  02139

     Re: AMENDED AND RESTATED EMPLOYMENT AGREEMENT

Dear Tom:

     This letter is to confirm our understanding with respect to your employment
by Metabolix, Inc. (the "Company"). The terms and conditions agreed to in this
letter are hereinafter referred to as the "Agreement". This Agreement amends and
restates your Employment Agreement dated January 10, 2006. In consideration of
the mutual promises and covenants contained in this Agreement, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
mutually acknowledged, we have agreed as follows:

     1.   EMPLOYMENT.

          (a)  GENERAL. The Company will employ you, and you will be employed by
     the Company, as the Chief Financial Officer and Vice President, Finance and
     Corporate Development of the Company, reporting to the Chief Executive
     Officer, and you shall have the responsibilities, duty and authority
     commensurate with that position. You will also perform such other and/or
     different services for the Company as may be assigned to you from time to
     time. You agree that if your employment hereunder ends for any reason, you
     will tender your resignation to the Company.

          (b)  DEVOTION TO DUTIES. While you are employed hereunder, you will
     use your best efforts, skills and abilities to perform faithfully all
     duties assigned to you pursuant to this Agreement and will devote your full
     business time and energies to the business and affairs of the Company.
     While you are employed hereunder, you will not undertake any other
     employment from any person or entity without the prior written consent of
     the Company.

     2.   EMPLOYMENT AT WILL. Your employment hereunder will be on an "at-will"
basis and may be terminated by the Company or by you at any time for any reason
or for no reason.

     3.   COMPENSATION.

          (a)  BASE SALARY. While you are employed hereunder, the Company will
     pay you a base salary at the annual rate of $16,666.66 per month
     (annualized at $200,000.00) (the



Thomas G. Auchincloss, Jr.
September 18, 2006
Page 2

     "Base Salary"). This Base Salary is effective July 1, 2006, and may be
     subject to upward (but not downward) adjustment from time to time in the
     discretion of the Company. The Company will deduct from each monthly salary
     payment all amounts required to be deducted or withheld under applicable
     law or under any employee benefit plan in which you participate.

          (b)  BONUSES. In addition to the foregoing, the Company on or before
     December 31, 2006, will establish a formalized bonus scheme and pay you an
     annual bonus (a "Bonus") in an amount to be determined by the Company's
     Compensation Committee. The amount will be based on several criteria,
     including the financial condition of the Company and its overall
     performance for the year, but will be strongly influenced by your
     contributions toward the achievement of established corporate goals and
     objectives, as well as other contributions that add recognizable value to
     the Company. The present target for executive bonuses is 50% of Base Salary
     (the "Target Bonus"). This Target Bonus will be subject to revision from
     time to time by the Compensation Committee. In order to receive an annual
     bonus, you must be employed at the time of a timely payment, which will be
     paid on or before March 15 of the year following the year in which it is
     earned.

          (c)  EQUITY COMPENSATION. The Company, in the Board's sole discretion,
     may from time to time grant to you stock options, restricted stock or other
     forms of equity compensation pursuant to the Metabolix, Inc. 2005 Stock
     Plan or any other authorized stock plan in effect at the time.

          (d)  VACATION. You will be entitled to paid vacation and paid
     holidays, accrued and used in accordance with the Company's policies as
     currently in effect. All vacation days will be taken at times mutually
     agreed by you and the Company and will be subject to the business needs of
     the Company.

          (e)  FRINGE BENEFITS. You will be entitled to participate in employee
     benefit plans which the Company provides or may establish for the benefit
     of its senior executives generally (for example, group life, disability,
     medical, dental and other insurance, retirement, pension, profit-sharing
     and similar plans) (collectively, the "Fringe Benefits"). Your eligibility
     to participate in the Fringe Benefits and receive benefits thereunder will
     be subject to the plan documents governing such Fringe Benefits. Nothing
     contained herein will require the Company to establish or maintain any
     Fringe Benefits.

     4.   TERMINATION.

          (a)  GENERAL. As an at-will employee, your employment may be
     terminated at any time for any reason or for no reason. Upon termination,
     unless otherwise specifically provided herein, you shall be eligible only
     to receive (i) the portion of your Base Salary as has accrued prior to such
     termination and has not yet been paid, (ii) an amount equal to the value of
     your accrued unused vacation days, and (iii) reimbursement for expenses
     properly incurred by you on behalf of the Company prior to such termination
     if such expenses are properly documented in accordance with Company policy
     and practice and submitted for



Thomas G. Auchincloss, Jr.
September 18, 2006
Page 3

     reimbursement within thirty (30) days of the termination date
     (collectively, the "Accrued Obligations"). Such amounts will be paid
     promptly after termination in accordance with applicable law.

          (b)  TERMINATION WITHOUT CAUSE OR WITH GOOD REASON. Except as provided
     in Section 4(c) hereof, in the event that your employment is terminated by
     the Company without Cause or by you with Good Reason (each, as defined
     below), in addition to the Accrued Obligations, and contingent on your
     provision of a timely and complete release of claims against the Company,
     you shall be entitled to receive continuation of your Base Salary in effect
     at the time of termination for the period of twelve (12) months following
     the termination. To the extent required by Section 409A of the Internal
     Revenue Code of 1986, as amended (the "Code"), the first installment of
     such Base Salary in the amount of six (6) months' Base Salary shall be
     payable on the first business day following the six (6) month anniversary
     of the effective date of termination, and the remainder shall be payable in
     accordance with the Company's regular payroll procedures thereafter. If
     Section 409A of the Code is not then applicable, such Base Salary
     continuation shall commence immediately from the date of termination. In
     addition, should the award of a Bonus have become customary, you shall be
     entitled to a payment equal to the average of the Bonuses paid to you (if
     any) in the two years preceding the termination, to be paid (A) on the
     first business day following the six (6) month anniversary of the effective
     date of termination, to the extent required by Section 409A of the Code, or
     (B) if Section 409A of the Code is not then applicable, within thirty (30)
     days following the termination. In addition to the foregoing, you shall be
     entitled to receive payment of COBRA premiums to maintain medical and
     dental benefits, if any, in effect at the time of termination for the
     period of twelve (12) months following the termination.

          (c)  TERMINATION WITHOUT CAUSE OR WITH GOOD REASON BEFORE OR AFTER A
     CHANGE OF CONTROL.

               (i)    In the event that your employment is terminated by the
     Company without Cause or by you for Good Reason (each, as defined below)
     within the twenty-four (24) month period immediately following or the two
     month period immediately prior to a Change of Control (as defined below),
     in addition to the Accrued Obligations, and contingent on your provision of
     a timely release of claims against the Company, you shall be entitled to
     receive:

                      (A)   continuation of your Base Salary in effect at the
     time of termination for the period of twelve (12) months following the
     termination. To the extent required by Section 409A of the Code, the first
     installment of such Base Salary in the amount of six (6) months' Base
     Salary shall be payable on the first business day following the six (6)
     month anniversary of the effective date of termination, and the remainder
     shall be payable in accordance with the Company's regular payroll
     procedures thereafter. If Section 409A of the Code is not then applicable,
     such Base Salary continuation shall commence immediately from the date of
     termination.



Thomas G. Auchincloss, Jr.
September 18, 2006
Page 4

                      (B)   In addition, should the award of a Bonus have become
     customary, you shall be entitled to a payment equal to the average of the
     Bonuses paid to you (if any) in the two years preceding the termination, to
     be paid (A) on the first business day following the six (6) month
     anniversary of the effective date of termination, to the extent required by
     Section 409A of the Code, or (B) if Section 409A of the Code is not then
     applicable, within thirty (30) days following the termination.

                      (C)   continued payment of COBRA premiums to maintain
     medical and dental benefits, if any, in effect at the time of termination
     for the period of twelve (12) months following the termination; and

                      (D)   full vesting of all options and restricted stock
     granted to you under the Metabolix Inc. 1995 Stock Plan, the Metabolix Inc.
     2005 Stock Plan or any authorized successor stock plan provided that the
     conditions to vesting other than the passage of time have been satisfied.

               (ii)   You agree that the payments and benefits hereunder, and
     under all other contracts, arrangements or programs that apply to you (the
     "Company Payments"), shall be reduced to an amount that is one dollar less
     than the amount that would trigger an excise tax under Section 4999 of the
     Code, as determined in good faith by the Company's independent public
     accountants, PROVIDED, HOWEVER, that the reduction shall occur only if the
     reduced Company Payments received by you (after taking into account further
     reductions for applicable federal, state and local income, social security
     and other taxes) would be greater than the unreduced Company Payments to be
     received by you minus (i) the excise tax payable with respect to such
     Company Payments under Section 4999 of the Code; and (ii) all applicable
     federal, state and local income, social security and other taxes on such
     Company Payments. You and the Company agree to cooperate in good faith with
     each other in connection with any administrative or judicial proceedings
     concerning the existence or amount of golden parachute penalties with
     respect to payments or benefits that you receive.

          (d)  "CAUSE". As used herein, "Cause" shall be defined as (i) your
     conviction for, or plea of nolo contendere, to a felony or a crime
     involving moral turpitude, (ii) your commission of a material act of
     personal dishonesty or a breach of fiduciary duty involving personal profit
     in connection with your employment by the Company, (iii) your commission of
     an act which the Board of Directors shall reasonably have found to have
     involved willful misconduct or gross negligence on your part in the conduct
     of your duties under this Agreement, (iv) your habitual absenteeism, (v)
     your material breach of any material provision of this Agreement continuing
     for thirty days after your receipt of written notice thereof from the
     Company, or (vi) the willful and continued failure by you to perform
     substantially your duties with the Company (other than any such failure
     resulting from your incapacity due to physical or mental illness).

          (e)  "CHANGE OF CONTROL". As used herein, a "Change of Control" shall
     occur or be deemed to have occurred only upon any one or more of the
     following events:



Thomas G. Auchincloss, Jr.
September 18, 2006
Page 5

               (i)    a merger or consolidation of the Company other than a
          merger or consolidation which would result in the voting securities of
          the Company outstanding immediately prior thereto continuing to
          represent (either by remaining outstanding or by being converted into
          voting securities of the surviving entity or the parent of such
          corporation) at least fifty percent (50%) of the total voting power
          represented by the voting securities of the Company or such surviving
          entity or parent of such corporation outstanding immediately after
          such merger or consolidation;

               (ii)   the sale or disposition by the Company of all or
          substantially all of the Company's assets; or

               (iii)  any one person, entity or group, who is not a shareholder
          at time of execution of this Agreement, acquires ownership of capital
          stock of the Company that, together with the capital stock of the
          Company already held by such person, entity or group, constitutes more
          than 50% of the total fair market value or total voting power of the
          capital stock of the Company; provided, however, if any one person,
          entity or group is considered to own more than 50% of the total fair
          market value or total voting power of the capital stock of the
          Company, the acquisition of additional capital stock by the same
          person, entity or group shall not be deemed to be a Change of Control,
          and further provided that the foregoing shall not be deemed a Change
          of Control if the average stock price paid for each share of stock
          held by the person, entity or group is less than $8.00/share (provided
          that such price shall be adjusted as appropriate to reflect any stock
          dividend, stock split, or recapitalization of the Company after the
          date of this agreement).

          (f)  "Good Reason" shall be defined as, in the absence of a cure by
     the Company within 30 days after written notice by you to the Board, a (i)
     a change in title of Chief Financial Officer and Vice President, Finance
     and Corporate Development, (ii) a material diminution of responsibilities,
     duties or powers, (iii) a reduction in Base Salary, Target Bonus, vacation
     or other benefits, except that benefits need only be substantially
     equivalent, or (iv) a requirement that you relocate your principal place of
     employment to (or that you travel more than 50 days in any calendar year to
     the Company's principal place of business in) a location more than 50 miles
     from its current location in Cambridge, Massachusetts, PROVIDED THAT you
     must provide the Company with at least thirty (30) days advance written
     notice of your intent to terminate your employment hereunder and an
     opportunity to cure.

     5.   NONCOMPETITION, NONDISCLOSURE AND INVENTIONS OBLIGATIONS. Your
Employee Noncompetition, Nondisclosure and Inventions Agreement dated May 12,
2005, shall continue in full force and effect in accordance with its terms.



Thomas G. Auchincloss, Jr.
September 18, 2006
Page 6

     6.   DISCLOSURE TO FUTURE EMPLOYERS. You will provide, and the Company, in
its discretion, may similarly provide, a copy of the covenants contained in The
Employee Noncompetition, Nondisclosure and Inventions Agreement to any business
or enterprise which you may, directly or indirectly, own, manage, operate,
finance, join, control or in which you may participate in the ownership,
management, operation, financing, or control, or with which you may be connected
as an officer, director, employee, partner, principal, agent, representative,
consultant or otherwise.

     7.   REPRESENTATIONS. You hereby represent and warrant to the Company that
you understand this Agreement, that you enter into this Agreement voluntarily
and that your employment under this Agreement will not conflict with any legal
duty owed by you to any other party.

     8.   GENERAL.

          (a)  NOTICES. All notices, requests, consents and other communications
     hereunder which are required to be provided, or which the sender elects to
     provide, in writing, will be addressed to the receiving party's address set
     forth above or to such other address as a party may designate by notice
     hereunder, and will be either (i) delivered by hand, (ii) sent by overnight
     courier, or (iii) sent by registered or certified mail, return receipt
     requested, postage prepaid. All notices, requests, consents and other
     communications hereunder will be deemed to have been given either (i) if by
     hand, at the time of the delivery thereof to the receiving party at the
     address of such party set forth above, (ii) if sent by overnight courier,
     on the next business day following the day such notice is delivered to the
     courier service, or (iii) if sent by registered or certified mail, on the
     fifth business day following the day such mailing is made.

          (b)  ENTIRE AGREEMENT. This Agreement, together with any Stock Option
     Agreements executed by you and the Company (either prior to or in
     conjunction with this Agreement), the Employee Noncompetition,
     Nondisclosure and Inventions Agreement and the other agreements
     specifically referred to herein, embodies the entire agreement and
     understanding between the parties hereto with respect to the subject matter
     hereof and supersedes all prior oral or written agreements and
     understandings relating to the subject matter hereof, including without
     limitation the Employment Agreement between you and the Company dated
     January 10, 2006. No statement, representation, warranty, covenant or
     agreement of any kind not expressly set forth in this Agreement will
     affect, or be used to interpret, change or restrict, the express terms and
     provisions of this Agreement.

          (c)  MODIFICATIONS AND AMENDMENTS. The terms and provisions of this
     Agreement may be modified or amended only by written agreement executed by
     the parties hereto.

          (d)  WAIVERS AND CONSENTS. The terms and provisions of this Agreement
     may be waived, or consent for the departure therefrom granted, only by
     written document executed by the party entitled to the benefits of such
     terms or provisions. No such waiver or consent



Thomas G. Auchincloss, Jr.
September 18, 2006
Page 7

     will be deemed to be or will constitute a waiver or consent with respect to
     any other terms or provisions of this Agreement, whether or not similar.
     Each such waiver or consent will be effective only in the specific instance
     and for the purpose for which it was given, and will not constitute a
     continuing waiver or consent.

          (e)  ASSIGNMENT. The Company may assign its rights and obligations
     hereunder to any person or entity that succeeds to all or substantially all
     of the Company's business or that aspect of the Company's business in which
     you are principally involved or to any Company Affiliate. You may not
     assign your rights and obligations under this Agreement without the prior
     written consent of the Company and any such attempted assignment by you
     without the prior written consent of the Company will be void.

          (f)  GOVERNING LAW. This Agreement and the rights and obligations of
     the parties hereunder will be construed in accordance with and governed by
     the law of Massachusetts, without giving effect to the conflict of law
     principles thereof.

          (g)  JURISDICTION, VENUE AND SERVICE OF PROCESS. Any legal action or
     proceeding with respect to this Agreement will be brought in the courts of
     Massachusetts or of the United States of America for the District of
     Massachusetts. By execution and delivery of this Agreement, each of the
     parties hereto accepts for itself and in respect of its property, generally
     and unconditionally, the exclusive jurisdiction of the aforesaid courts.

          (h)  SEVERABILITY. The parties intend this Agreement to be enforced as
     written. However, if any portion or provision of this Agreement is to any
     extent declared illegal or unenforceable by a duly authorized court having
     jurisdiction, then the remainder of this Agreement, or the application of
     such portion or provision in circumstances other than those as to which it
     is so declared illegal or unenforceable, will not be affected thereby, and
     each portion and provision of this Agreement will be valid and enforceable
     to the fullest extent permitted by law.

          (i)  HEADINGS AND CAPTIONS. The headings and captions of the various
     subdivisions of this Agreement are for convenience of reference only and
     will in no way modify or affect the meaning or construction of any of the
     terms or provisions hereof.

          (j)  ACKNOWLEDGMENTS. You hereby acknowledge and recognize that the
     enforcement of any of the provisions in this Agreement and the
     Noncompetition, Nondisclosure and Inventions Agreement may potentially
     interfere with your ability to pursue a proper livelihood. You represent
     that you are knowledgeable about the business of the Company and further
     represent that you are capable of pursuing a career in other industries
     other than the field of noncompetition as set forth in the Noncompetition,
     Nondisclosure and Inventions Agreement to earn a proper livelihood. You
     recognize and agree that the enforcement of the Noncompetition,
     Nondisclosure and Inventions Agreement is necessary to ensure the
     preservation, protection and continuity of the business, trade secrets and
     goodwill of the Company. You agree that, due to the proprietary nature of
     the



Thomas G. Auchincloss, Jr.
September 18, 2006
Page 8

     Company's business, the restrictions set forth in the Noncompetition,
     Nondisclosure and Inventions Agreement are reasonable as to time and scope.

          (k)  TAXES. All payments required to be made by the Company to you
     under this Agreement shall be subject to the withholding of such amounts
     for taxes and other payroll deductions as the Company may reasonably
     determine it should withhold pursuant to any applicable law or regulation.
     To the extent applicable, it is intended that this Agreement comply with
     the provisions of Section 409A of the Code, and this Agreement shall be
     construed and applied in a manner consistent with this intent. In the event
     that any severance payments or benefits hereunder are determined by the
     Company to be in the nature of nonqualified deferred compensation payments,
     you and the Company hereby agree to take such actions as may be mutually
     agreed to ensure that such payments or benefits comply with the applicable
     provisions of Section 409A of the Code and the official guidance issued
     thereunder. Notwithstanding the foregoing, the Company does not guarantee
     the tax treatment or tax consequences associated with any payment or
     benefit arising under this Agreement.

          (l)  COUNTERPARTS. This Agreement may be executed in two or more
     counterparts, and by different parties hereto on separate counterparts,
     each of which will be deemed an original, but all of which together will
     constitute one and the same instrument.

     If the foregoing accurately sets forth our agreement, please so indicate by
signing and returning to us the enclosed copy of this Agreement.

                                           Very truly yours,

                                           Metabolix, Inc.


                                           By: /s/ James J. Barber
                                              ----------------------------------
                                           Name: James J. Barber
                                           Title: President & CEO

ACCEPTED AND APPROVED:

/s/ Thomas G. Auchincloss, Jr.              9/22/06
- -------------------------------            ---------------
Thomas G. Auchincloss, Jr.                 Date



                                                                   Exhibit 10.10

[METABOLIX LOGO]                         21 Erie Street
WHERE NATURE PERFORMS(TM)                Cambridge, Massachusetts 02139-4260 USA
                                         Tel: 617.492.0505 . Fax: 617-492-1996
                                         Web: www.metabolix.com


                                  September 18, 2006

Johan van Walsem
c/o Metabolix, Inc.
21 Erie Street
Cambridge, MA  02139

     Re:  AMENDED AND RESTATED EMPLOYMENT AGREEMENT

Dear Johan:

     This letter is to confirm our understanding with respect to your employment
by Metabolix, Inc. (the "Company"). The terms and conditions agreed to in this
letter are hereinafter referred to as the "Agreement". This Agreement amends and
restates your Employment Agreement dated May 1, 2006. In consideration of the
mutual promises and covenants contained in this Agreement, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
mutually acknowledged, we have agreed as follows:

     1.   EMPLOYMENT.

          (a)  GENERAL. The Company will employ you, and you will be employed by
     the Company, as the Vice President, Manufacturing, Development and
     Operations of the Company, reporting to the Chief Executive Officer, and
     you shall have the responsibilities, duty and authority commensurate with
     that position. You will also perform such other and/or different services
     for the Company as may be assigned to you from time to time. You agree that
     if your employment hereunder ends for any reason, you will tender your
     resignation to the Company.

          (b)  DEVOTION TO DUTIES. While you are employed hereunder, you will
     use your best efforts, skills and abilities to perform faithfully all
     duties assigned to you pursuant to this Agreement and will devote your full
     business time and energies to the business and affairs of the Company.
     While you are employed hereunder, you will not undertake any other
     employment from any person or entity without the prior written consent of
     the Company.

     2.   EMPLOYMENT AT WILL. Your employment hereunder will be on an "at-will"
basis and may be terminated by the Company or by you at any time for any reason
or for no reason.

     3.   COMPENSATION.

          (a)  BASE SALARY. While you are employed hereunder, the Company will
     pay you a base salary at the annual rate of $16,666.66 per month
     (annualized at $200,000.00) (the



Johan van Walsem
September 18, 2006
Page 2

     "Base Salary"). This Base Salary is effective July 1, 2006, and may be
     subject to upward (but not downward) adjustment from time to time in the
     discretion of the Company. The Company will deduct from each monthly salary
     payment all amounts required to be deducted or withheld under applicable
     law or under any employee benefit plan in which you participate.

          (b)  BONUSES. In addition to the foregoing, the Company on or before
     December 31, 2006, will establish a formalized bonus scheme and pay you an
     annual bonus (a "Bonus") in an amount to be determined by the Company's
     Compensation Committee. The amount will be based on several criteria,
     including the financial condition of the Company and its overall
     performance for the year, but will be strongly influenced by your
     contributions toward the achievement of established corporate goals and
     objectives, as well as other contributions that add recognizable value to
     the Company. The present target for executive bonuses is 50% of Base Salary
     (the "Target Bonus"). This Target Bonus will be subject to revision from
     time to time by the Compensation Committee. In order to receive an annual
     bonus, you must be employed at the time of a timely payment, which will be
     paid on or before March 15 of the year following the year in which it is
     earned.

          (c)  EQUITY COMPENSATION. The Company, in the Board's sole discretion,
     may from time to time grant to you stock options, restricted stock or other
     forms of equity compensation pursuant to the Metabolix, Inc. 2005 Stock
     Plan or any other authorized stock plan in effect at the time.

          (d)  VACATION. You will be entitled to paid vacation and paid
     holidays, accrued and used in accordance with the Company's policies as
     currently in effect. All vacation days will be taken at times mutually
     agreed by you and the Company and will be subject to the business needs of
     the Company.

          (e)  FRINGE BENEFITS. You will be entitled to participate in employee
     benefit plans which the Company provides or may establish for the benefit
     of its senior executives generally (for example, group life, disability,
     medical, dental and other insurance, retirement, pension, profit-sharing
     and similar plans) (collectively, the "Fringe Benefits"). Your eligibility
     to participate in the Fringe Benefits and receive benefits thereunder will
     be subject to the plan documents governing such Fringe Benefits. Nothing
     contained herein will require the Company to establish or maintain any
     Fringe Benefits.

     4.   TERMINATION.

          (a)  GENERAL. As an at-will employee, your employment may be
     terminated at any time for any reason or for no reason. Upon termination,
     unless otherwise specifically provided herein, you shall be eligible only
     to receive (i) the portion of your Base Salary as has accrued prior to such
     termination and has not yet been paid, (ii) an amount equal to the value of
     your accrued unused vacation days, and (iii) reimbursement for expenses
     properly incurred by you on behalf of the Company prior to such termination
     if such expenses are properly documented in accordance with Company policy
     and practice and submitted for



Johan van Walsem
September 18, 2006
Page 3

     reimbursement within thirty (30) days of the termination date
     (collectively, the "Accrued Obligations"). Such amounts will be paid
     promptly after termination in accordance with applicable law.

          (b)  TERMINATION WITHOUT CAUSE OR WITH GOOD REASON. Except as provided
     in Section 4(c) hereof, in the event that your employment is terminated by
     the Company without Cause or by you with Good Reason (each, as defined
     below), in addition to the Accrued Obligations, and contingent on your
     provision of a timely and complete release of claims against the Company,
     you shall be entitled to receive continuation of your Base Salary in effect
     at the time of termination for the period of twelve (12) months following
     the termination. To the extent required by Section 409A of the Internal
     Revenue Code of 1986, as amended (the "Code"), the first installment of
     such Base Salary in the amount of six (6) months' Base Salary shall be
     payable on the first business day following the six (6) month anniversary
     of the effective date of termination, and the remainder shall be payable in
     accordance with the Company's regular payroll procedures thereafter. If
     Section 409A of the Code is not then applicable, such Base Salary
     continuation shall commence immediately from the date of termination. In
     addition, should the award of a Bonus have become customary, you shall be
     entitled to a payment equal to the average of the Bonuses paid to you (if
     any) in the two years preceding the termination, to be paid (A) on the
     first business day following the six (6) month anniversary of the effective
     date of termination, to the extent required by Section 409A of the Code, or
     (B) if Section 409A of the Code is not then applicable, within thirty (30)
     days following the termination. In addition to the foregoing, you shall be
     entitled to receive payment of COBRA premiums to maintain medical and
     dental benefits, if any, in effect at the time of termination for the
     period of twelve (12) months following the termination.

          (c)  TERMINATION WITHOUT CAUSE OR WITH GOOD REASON BEFORE OR AFTER A
     CHANGE OF CONTROL.

               (i)   In the event that your employment is terminated by the
     Company without Cause or by you for Good Reason (each, as defined below)
     within the twenty-four (24) month period immediately following or the two
     month period immediately prior to a Change of Control (as defined below),
     in addition to the Accrued Obligations, and contingent on your provision of
     a timely release of claims against the Company, you shall be entitled to
     receive:

                         (A) continuation of your Base Salary in effect at the
     time of termination for the period of twelve (12) months following the
     termination. To the extent required by Section 409A of the Code, the first
     installment of such Base Salary in the amount of six (6) months' Base
     Salary shall be payable on the first business day following the six (6)
     month anniversary of the effective date of termination, and the remainder
     shall be payable in accordance with the Company's regular payroll
     procedures thereafter. If Section 409A of the Code is not then applicable,
     such Base Salary continuation shall commence immediately from the date of
     termination.



Johan van Walsem
September 18, 2006
Page 4

                         (B) In addition, should the award of a Bonus have
     become customary, you shall be entitled to a payment equal to the average
     of the Bonuses paid to you (if any) in the two years preceding the
     termination, to be paid (A) on the first business day following the six (6)
     month anniversary of the effective date of termination, to the extent
     required by Section 409A of the Code, or (B) if Section 409A of the Code is
     not then applicable, within thirty (30) days following the termination.

                         (C) continued payment of COBRA premiums to maintain
     medical and dental benefits, if any, in effect at the time of termination
     for the period of twelve (12) months following the termination; and

                         (D) full vesting of all options and restricted stock
     granted to you under the Metabolix Inc. 1995 Stock Plan, the Metabolix Inc.
     2005 Stock Plan or any authorized successor stock plan provided that the
     conditions to vesting other than the passage of time have been satisfied.

               (ii)  You agree that the payments and benefits hereunder, and
     under all other contracts, arrangements or programs that apply to you (the
     "Company Payments"), shall be reduced to an amount that is one dollar less
     than the amount that would trigger an excise tax under Section 4999 of the
     Code, as determined in good faith by the Company's independent public
     accountants, PROVIDED, HOWEVER, that the reduction shall occur only if the
     reduced Company Payments received by you (after taking into account further
     reductions for applicable federal, state and local income, social security
     and other taxes) would be greater than the unreduced Company Payments to be
     received by you minus (i) the excise tax payable with respect to such
     Company Payments under Section 4999 of the Code; and (ii) all applicable
     federal, state and local income, social security and other taxes on such
     Company Payments. You and the Company agree to cooperate in good faith with
     each other in connection with any administrative or judicial proceedings
     concerning the existence or amount of golden parachute penalties with
     respect to payments or benefits that you receive.

          (d)  "CAUSE". As used herein, "Cause" shall be defined as (i) your
     conviction for, or plea of nolo contendere, to a felony or a crime
     involving moral turpitude, (ii) your commission of a material act of
     personal dishonesty or a breach of fiduciary duty involving personal profit
     in connection with your employment by the Company, (iii) your commission of
     an act which the Board of Directors shall reasonably have found to have
     involved willful misconduct or gross negligence on your part in the conduct
     of your duties under this Agreement, (iv) your habitual absenteeism, (v)
     your material breach of any material provision of this Agreement continuing
     for thirty days after your receipt of written notice thereof from the
     Company, or (vi) the willful and continued failure by you to perform
     substantially your duties with the Company (other than any such failure
     resulting from your incapacity due to physical or mental illness).

          (e)  "CHANGE OF CONTROL". As used herein, a "Change of Control" shall
     occur or be deemed to have occurred only upon any one or more of the
     following events:



Johan van Walsem
September 18, 2006
Page 5

               (i)   a merger or consolidation of the Company other than a
          merger or consolidation which would result in the voting securities of
          the Company outstanding immediately prior thereto continuing to
          represent (either by remaining outstanding or by being converted into
          voting securities of the surviving entity or the parent of such
          corporation) at least fifty percent (50%) of the total voting power
          represented by the voting securities of the Company or such surviving
          entity or parent of such corporation outstanding immediately after
          such merger or consolidation;

               (ii)  the sale or disposition by the Company of all or
          substantially all of the Company's assets; or

               (iii) any one person, entity or group, who is not a shareholder
          at time of execution of this Agreement, acquires ownership of capital
          stock of the Company that, together with the capital stock of the
          Company already held by such person, entity or group, constitutes more
          than 50% of the total fair market value or total voting power of the
          capital stock of the Company; provided, however, if any one person,
          entity or group is considered to own more than 50% of the total fair
          market value or total voting power of the capital stock of the
          Company, the acquisition of additional capital stock by the same
          person, entity or group shall not be deemed to be a Change of Control,
          and further provided that the foregoing shall not be deemed a Change
          of Control if the average stock price paid for each share of stock
          held by the person, entity or group is less than $8.00/share (provided
          that such price shall be adjusted as appropriate to reflect any stock
          dividend, stock split, or recapitalization of the Company after the
          date of this agreement).

          (f)  "Good Reason" shall be defined as, in the absence of a cure by
     the Company within 30 days after written notice by you to the Board, a (i)
     a change in title of Vice President, Manufacturing, Development and
     Operations, (ii) a material diminution of responsibilities, duties or
     powers, (iii) a reduction in Base Salary, Target Bonus, vacation or other
     benefits, except that benefits need only be substantially equivalent, or
     (iv) a requirement that you relocate your principal place of employment to
     (or that you travel more than 50 days in any calendar year to the Company's
     principal place of business in) a location more than 50 miles from its
     current location in Cambridge, Massachusetts, PROVIDED THAT you must
     provide the Company with at least thirty (30) days advance written notice
     of your intent to terminate your employment hereunder and an opportunity to
     cure.

     5.   NONCOMPETITION, NONDISCLOSURE AND INVENTIONS OBLIGATIONS. Your
Employee Noncompetition, Nondisclosure and Inventions Agreement dated September
25, 2001, as amended May 1, 2006, shall continue in full force and effect in
accordance with its terms.



Johan van Walsem
September 18, 2006
Page 6

     6.   DISCLOSURE TO FUTURE EMPLOYERS. You will provide, and the Company, in
its discretion, may similarly provide, a copy of the covenants contained in The
Employee Noncompetition, Nondisclosure and Inventions Agreement to any business
or enterprise which you may, directly or indirectly, own, manage, operate,
finance, join, control or in which you may participate in the ownership,
management, operation, financing, or control, or with which you may be connected
as an officer, director, employee, partner, principal, agent, representative,
consultant or otherwise.

     7.   REPRESENTATIONS. You hereby represent and warrant to the Company that
you understand this Agreement, that you enter into this Agreement voluntarily
and that your employment under this Agreement will not conflict with any legal
duty owed by you to any other party.

     8.   GENERAL.

          (a)  NOTICES. All notices, requests, consents and other communications
     hereunder which are required to be provided, or which the sender elects to
     provide, in writing, will be addressed to the receiving party's address set
     forth above or to such other address as a party may designate by notice
     hereunder, and will be either (i) delivered by hand, (ii) sent by overnight
     courier, or (iii) sent by registered or certified mail, return receipt
     requested, postage prepaid. All notices, requests, consents and other
     communications hereunder will be deemed to have been given either (i) if by
     hand, at the time of the delivery thereof to the receiving party at the
     address of such party set forth above, (ii) if sent by overnight courier,
     on the next business day following the day such notice is delivered to the
     courier service, or (iii) if sent by registered or certified mail, on the
     fifth business day following the day such mailing is made.

          (b)  ENTIRE AGREEMENT. This Agreement, together with any Stock Option
     Agreements executed by you and the Company (either prior to or in
     conjunction with this Agreement), the Employee Noncompetition,
     Nondisclosure and Inventions Agreement and the other agreements
     specifically referred to herein, embodies the entire agreement and
     understanding between the parties hereto with respect to the subject matter
     hereof and supersedes all prior oral or written agreements and
     understandings relating to the subject matter hereof, including without
     limitation the Employment Agreement between you and the Company dated May
     1, 2006. No statement, representation, warranty, covenant or agreement of
     any kind not expressly set forth in this Agreement will affect, or be used
     to interpret, change or restrict, the express terms and provisions of this
     Agreement.

          (c)  MODIFICATIONS AND AMENDMENTS. The terms and provisions of this
     Agreement may be modified or amended only by written agreement executed by
     the parties hereto.

          (d)  WAIVERS AND CONSENTS. The terms and provisions of this Agreement
     may be waived, or consent for the departure therefrom granted, only by
     written document executed by the party entitled to the benefits of such
     terms or provisions. No such waiver or consent



Johan van Walsem
September 18, 2006
Page 7

     will be deemed to be or will constitute a waiver or consent with respect to
     any other terms or provisions of this Agreement, whether or not similar.
     Each such waiver or consent will be effective only in the specific instance
     and for the purpose for which it was given, and will not constitute a
     continuing waiver or consent.

          (e)  ASSIGNMENT. The Company may assign its rights and obligations
     hereunder to any person or entity that succeeds to all or substantially all
     of the Company's business or that aspect of the Company's business in which
     you are principally involved or to any Company Affiliate. You may not
     assign your rights and obligations under this Agreement without the prior
     written consent of the Company and any such attempted assignment by you
     without the prior written consent of the Company will be void.

          (f)  GOVERNING LAW. This Agreement and the rights and obligations of
     the parties hereunder will be construed in accordance with and governed by
     the law of Massachusetts, without giving effect to the conflict of law
     principles thereof.

          (g)  JURISDICTION, VENUE AND SERVICE OF PROCESS. Any legal action or
     proceeding with respect to this Agreement will be brought in the courts of
     Massachusetts or of the United States of America for the District of
     Massachusetts. By execution and delivery of this Agreement, each of the
     parties hereto accepts for itself and in respect of its property, generally
     and unconditionally, the exclusive jurisdiction of the aforesaid courts.

          (h)  SEVERABILITY. The parties intend this Agreement to be enforced as
     written. However, if any portion or provision of this Agreement is to any
     extent declared illegal or unenforceable by a duly authorized court having
     jurisdiction, then the remainder of this Agreement, or the application of
     such portion or provision in circumstances other than those as to which it
     is so declared illegal or unenforceable, will not be affected thereby, and
     each portion and provision of this Agreement will be valid and enforceable
     to the fullest extent permitted by law.

          (i)  HEADINGS AND CAPTIONS. The headings and captions of the various
     subdivisions of this Agreement are for convenience of reference only and
     will in no way modify or affect the meaning or construction of any of the
     terms or provisions hereof.

          (j)  ACKNOWLEDGMENTS. You represent that you are knowledgeable about
     the business of the Company and further represent that you are capable of
     pursuing a career in other industries other than the Field (as defined in
     the Noncompetition, Nondisclosure and Inventions Agreement) to earn a
     proper livelihood. You recognize and agree that the enforcement of the
     Noncompetition, Nondisclosure and Inventions Agreement is necessary to
     ensure the preservation, protection and continuity of the business, trade
     secrets and goodwill of the Company. You agree that, due to the proprietary
     nature of the Company's business, the restrictions set forth in the
     Noncompetition, Nondisclosure and Inventions Agreement are reasonable as to
     time and scope.



Johan van Walsem
September 18, 2006
Page 8

          (k)  TAXES. All payments required to be made by the Company to you
     under this Agreement shall be subject to the withholding of such amounts
     for taxes and other payroll deductions as the Company may reasonably
     determine it should withhold pursuant to any applicable law or regulation.
     To the extent applicable, it is intended that this Agreement comply with
     the provisions of Section 409A of the Code, and this Agreement shall be
     construed and applied in a manner consistent with this intent. In the event
     that any severance payments or benefits hereunder are determined by the
     Company to be in the nature of nonqualified deferred compensation payments,
     you and the Company hereby agree to take such actions as may be mutually
     agreed to ensure that such payments or benefits comply with the applicable
     provisions of Section 409A of the Code and the official guidance issued
     thereunder. Notwithstanding the foregoing, the Company does not guarantee
     the tax treatment or tax consequences associated with any payment or
     benefit arising under this Agreement.

          (l)  COUNTERPARTS. This Agreement may be executed in two or more
     counterparts, and by different parties hereto on separate counterparts,
     each of which will be deemed an original, but all of which together will
     constitute one and the same instrument.

     If the foregoing accurately sets forth our agreement, please so indicate by
signing and returning to us the enclosed copy of this Agreement.

                                         Very truly yours,

                                         Metabolix, Inc.


                                         By: /s/ James J. Barber
                                            ------------------------------------
                                         Name: James J. Barber
                                         Title: President & CEO


ACCEPTED AND APPROVED:

/s/ Johan Van Walsem                     9/21/06
- -----------------------------            ------------------
Johan van Walsem                         Date



                                                                   Exhibit 10.11

[METABOLIX LOGO]                         21 Erie Street
WHERE NATURE PERFORMS(TM)                Cambridge, Massachusetts 02139-4260 USA
                                         Tel: 617.492.0505 - Fax: 617-492-1996
                                         Web: www.metabolix.com

                                   September 18, 2006

Robert C. Findlen
c/o Metabolix, Inc.
21 Erie Street
Cambridge, MA  02139

          Re:  AMENDED AND RESTATED EMPLOYMENT AGREEMENT

Dear Bob:

     This letter is to confirm our understanding with respect to your employment
by Metabolix, Inc. (the "Company"). The terms and conditions agreed to in this
letter are hereinafter referred to as the "Agreement". This Agreement amends and
restates your Employment Agreement dated June 13, 2006. In consideration of the
mutual promises and covenants contained in this Agreement, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
mutually acknowledged, we have agreed as follows:

     1.   EMPLOYMENT.

          (a)  GENERAL. The Company will employ you, and you will be employed by
     the Company, as the Vice President, Marketing, of the Company, reporting to
     the Chief Executive Officer, and you shall have the responsibilities, duty
     and authority commensurate with that position. You will also perform such
     other and/or different services for the Company as may be assigned to you
     from time to time. You agree that if your employment hereunder ends for any
     reason, you will tender your resignation to the Company.

          (b)  DEVOTION TO DUTIES. While you are employed hereunder, you will
     use your best efforts, skills and abilities to perform faithfully all
     duties assigned to you pursuant to this Agreement and will devote your full
     business time and energies to the business and affairs of the Company.
     While you are employed hereunder, you will not undertake any other
     employment from any person or entity without the prior written consent of
     the Company.

     2.   EMPLOYMENT AT WILL. Your employment hereunder will be on an "at-will"
basis and may be terminated by the Company or by you at any time for any reason
or for no reason.

     3.   COMPENSATION.

          (a)  BASE SALARY. While you are employed hereunder, the Company will
     pay you a base salary at the annual rate of $16,666.67 per month
     (annualized at $200,000.00) (the



Robert C. Findlen
September 18, 2006
Page 2

     "Base Salary"). This Base Salary is effective June 13, 2006, and may be
     subject to upward (but not downward) adjustment from time to time in the
     discretion of the Company. The Company will deduct from each monthly salary
     payment all amounts required to be deducted or withheld under applicable
     law or under any employee benefit plan in which you participate.

          (b)  BONUSES.

               (i)   In addition to the Base Salary, the Company shall pay you a
     signing bonus of $60,000.00, payable in two installments. The first
     installment of $20,000.00 shall be payable at the same time as your first
     paycheck after commencement of your employment. The second installment of
     $40,000.00 shall be payable on March 31, 2007, provided that you remain in
     the employment of the Company on that date.

               (ii)  In addition to the foregoing, the Company on or before
     December 31, 2006, will establish a formalized bonus scheme and pay you an
     annual bonus (a "Bonus") in an amount to be determined by the Company's
     Compensation Committee. The amount will be based on several criteria,
     including the financial condition of the Company and its overall
     performance for the year, but will be strongly influenced by your
     contributions toward the achievement of established corporate goals and
     objectives, as well as other contributions that add recognizable value to
     the Company. The present target for executive bonuses is 50% of Base Salary
     (the "Target Bonus"). This Target Bonus will be subject to revision from
     time to time by the Compensation Committee. In order to receive an annual
     bonus, you must be employed at the time of a timely payment, which will be
     paid on or before March 15 of the year following the year in which it is
     earned.

          (c)  EQUITY COMPENSATION. The Company, in the Board's sole discretion,
     may from time to time grant to you stock options, restricted stock or other
     forms of equity compensation pursuant to the Metabolix, Inc. 2005 Stock
     Plan or any other authorized stock plan in effect at the time.

          (d)  VACATION. You will be entitled to paid vacation and paid
     holidays, accrued and used in accordance with the Company's policies as
     currently in effect. All vacation days will be taken at times mutually
     agreed by you and the Company and will be subject to the business needs of
     the Company.

          (e)  FRINGE BENEFITS. You will be entitled to participate in employee
     benefit plans which the Company provides or may establish for the benefit
     of its senior executives generally (for example, group life, disability,
     medical, dental and other insurance, retirement, pension, profit-sharing
     and similar plans) (collectively, the "Fringe Benefits"). Your eligibility
     to participate in the Fringe Benefits and receive benefits thereunder will
     be subject to the plan documents governing such Fringe Benefits. Nothing
     contained herein will require the Company to establish or maintain any
     Fringe Benefits.



Robert C. Findlen
September 18, 2006
Page 3

          (f)  RELOCATION. In addition to the above, the Company will reimburse
     you, upon submission of satisfactory documentation, for the following
     relocation expenses to the extent reasonable and customary and actually
     incurred by you:

     -    Two house hunting trips;
     -    Double-living expenses for up to three (3) months;
     -    Closing costs on the sale of your current home, including broker's
          fees; and
     -    Expenses for moving your household goods from your current residence
          to the Boston area.

     4.   TERMINATION.

          (a)  GENERAL. As an at-will employee, your employment may be
     terminated at any time for any reason or for no reason. Upon termination,
     unless otherwise specifically provided herein, you shall be eligible only
     to receive (i) the portion of your Base Salary as has accrued prior to such
     termination and has not yet been paid, (ii) an amount equal to the value of
     your accrued unused vacation days, and (iii) reimbursement for expenses
     properly incurred by you on behalf of the Company prior to such termination
     if such expenses are properly documented in accordance with Company policy
     and practice and submitted for reimbursement within thirty (30) days of the
     termination date (collectively, the "Accrued Obligations"). Such amounts
     will be paid promptly after termination in accordance with applicable law.

          (b)  TERMINATION WITHOUT CAUSE OR WITH GOOD REASON. Except as provided
     in Section 4(c) hereof, in the event that your employment is terminated by
     the Company without Cause or by you with Good Reason (each, as defined
     below), in addition to the Accrued Obligations, and contingent on your
     provision of a timely and complete release of claims against the Company,
     you shall be entitled to receive continuation of your Base Salary in effect
     at the time of termination for the period of twelve (12) months following
     the termination. To the extent required by Section 409A of the Internal
     Revenue Code of 1986, as amended (the "Code"), the first installment of
     such Base Salary in the amount of six (6) months' Base Salary shall be
     payable on the first business day following the six (6) month anniversary
     of the effective date of termination, and the remainder shall be payable in
     accordance with the Company's regular payroll procedures thereafter. If
     Section 409A of the Code is not then applicable, such Base Salary
     continuation shall commence immediately from the date of termination. In
     addition, should the award of a Bonus have become customary, you shall be
     entitled to a payment equal to the average of the Bonuses paid to you (if
     any) in the two years preceding the termination, to be paid (A) on the
     first business day following the six (6) month anniversary of the effective
     date of termination, to the extent required by Section 409A of the Code, or
     (B) if Section 409A of the Code is not then applicable, within thirty (30)
     days following the termination. In addition to the foregoing, you shall be
     entitled to receive payment of COBRA premiums to maintain medical and
     dental benefits, if any, in effect at the time of termination for the
     period of twelve (12) months following the termination.



Robert C. Findlen
September 18, 2006
Page 4

          (c)  TERMINATION WITHOUT CAUSE OR WITH GOOD REASON BEFORE OR AFTER A
     CHANGE OF CONTROL.

               (i)   In the event that your employment is terminated by the
     Company without Cause or by you for Good Reason (each, as defined below)
     within the twenty-four (24) month period immediately following or the two
     month period immediately prior to a Change of Control (as defined below),
     in addition to the Accrued Obligations, and contingent on your provision of
     a timely release of claims against the Company, you shall be entitled to
     receive:

                         (A) continuation of your Base Salary in effect at the
     time of termination for the period of twelve (12) months following the
     termination. To the extent required by Section 409A of the Code, the first
     installment of such Base Salary in the amount of six (6) months' Base
     Salary shall be payable on the first business day following the six (6)
     month anniversary of the effective date of termination, and the remainder
     shall be payable in accordance with the Company's regular payroll
     procedures thereafter. If Section 409A of the Code is not then applicable,
     such Base Salary continuation shall commence immediately from the date of
     termination.

                         (B) In addition, should the award of a Bonus have
     become customary, you shall be entitled to a payment equal to the average
     of the Bonuses paid to you (if any) in the two years preceding the
     termination, to be paid (A) on the first business day following the six (6)
     month anniversary of the effective date of termination, to the extent
     required by Section 409A of the Code, or (B) if Section 409A of the Code is
     not then applicable, within thirty (30) days following the termination.

                         (C) continued payment of COBRA premiums to maintain
     medical and dental benefits, if any, in effect at the time of termination
     for the period of twelve (12) months following the termination; and

                         (D) full vesting of all options and restricted stock
     granted to you under the Metabolix Inc. 1995 Stock Plan, the Metabolix Inc.
     2005 Stock Plan or any authorized successor stock plan provided that the
     conditions to vesting other than the passage of time have been satisfied.

               (ii)  You agree that the payments and benefits hereunder, and
     under all other contracts, arrangements or programs that apply to you (the
     "Company Payments"), shall be reduced to an amount that is one dollar less
     than the amount that would trigger an excise tax under Section 4999 of the
     Code, as determined in good faith by the Company's independent public
     accountants, PROVIDED, HOWEVER, that the reduction shall occur only if the
     reduced Company Payments received by you (after taking into account further
     reductions for applicable federal, state and local income, social security
     and other taxes) would be greater than the unreduced Company Payments to be
     received by you minus (i) the excise tax payable with respect to such
     Company Payments under Section 4999 of the Code; and (ii) all applicable
     federal, state and local income, social security and other



Robert C. Findlen
September 18, 2006
Page 5

     taxes on such Company Payments. You and the Company agree to cooperate in
     good faith with each other in connection with any administrative or
     judicial proceedings concerning the existence or amount of golden parachute
     penalties with respect to payments or benefits that you receive.

          (d)  "CAUSE". As used herein, "Cause" shall be defined as (i) your
     conviction for, or plea of nolo contendere, to a felony or a crime
     involving moral turpitude, (ii) your commission of a material act of
     personal dishonesty or a breach of fiduciary duty involving personal profit
     in connection with your employment by the Company, (iii) your commission of
     an act which the Board of Directors shall reasonably have found to have
     involved willful misconduct or gross negligence on your part in the conduct
     of your duties under this Agreement, (iv) your habitual absenteeism, (v)
     your material breach of any material provision of this Agreement continuing
     for thirty days after your receipt of written notice thereof from the
     Company, or (vi) the willful and continued failure by you to perform
     substantially your duties with the Company (other than any such failure
     resulting from your incapacity due to physical or mental illness).

          (e)  "CHANGE OF CONTROL". As used herein, a "Change of Control" shall
     occur or be deemed to have occurred only upon any one or more of the
     following events:

               (i)   a merger or consolidation of the Company other than a
          merger or consolidation which would result in the voting securities of
          the Company outstanding immediately prior thereto continuing to
          represent (either by remaining outstanding or by being converted into
          voting securities of the surviving entity or the parent of such
          corporation) at least fifty percent (50%) of the total voting power
          represented by the voting securities of the Company or such surviving
          entity or parent of such corporation outstanding immediately after
          such merger or consolidation;

               (ii)  the sale or disposition by the Company of all or
          substantially all of the Company's assets; or

               (iii) any one person, entity or group, who is not a shareholder
          at time of execution of this Agreement, acquires ownership of capital
          stock of the Company that, together with the capital stock of the
          Company already held by such person, entity or group, constitutes more
          than 50% of the total fair market value or total voting power of the
          capital stock of the Company; provided, however, if any one person,
          entity or group is considered to own more than 50% of the total fair
          market value or total voting power of the capital stock of the
          Company, the acquisition of additional capital stock by the same
          person, entity or group shall not be deemed to be a Change of Control,
          and further provided that the foregoing shall not be deemed a Change
          of Control if the average stock price paid for each share of stock
          held by the person, entity or group is less than $8.00/share (provided
          that such price shall be adjusted as appropriate to reflect any stock



Robert C. Findlen
September 18, 2006
Page 6

          dividend, stock split, or recapitalization of the Company after the
          date of this agreement).

          (f)  "Good Reason" shall be defined as, in the absence of a cure by
     the Company within 30 days after written notice by you to the Board, a (i)
     a change in title of Vice President, Marketing,, (ii) a material diminution
     of responsibilities, duties or powers, (iii) a reduction in Base Salary,
     Target Bonus, vacation or other benefits, except that benefits need only be
     substantially equivalent, or (iv) a requirement that you relocate your
     principal place of employment to (or that you travel more than 50 days in
     any calendar year to the Company's principal place of business in) a
     location more than 50 miles from its current location in Cambridge,
     Massachusetts, PROVIDED THAT you must provide the Company with at least
     thirty (30) days advance written notice of your intent to terminate your
     employment hereunder and an opportunity to cure.

     5.   NONCOMPETITION, CONFIDENTIALITY AND INVENTIONS OBLIGATIONS. Your
Employee Noncompetition, Confidentiality and Inventions Agreement dated June 13,
2006, shall continue in full force and effect in accordance with its terms.

     6.   DISCLOSURE TO FUTURE EMPLOYERS. You will provide, and the Company, in
its discretion, may similarly provide, a copy of the covenants contained in The
Employee Noncompetition, Confidentiality and Inventions Agreement to any
business or enterprise which you may, directly or indirectly, own, manage,
operate, finance, join, control or in which you may participate in the
ownership, management, operation, financing, or control, or with which you may
be connected as an officer, director, employee, partner, principal, agent,
representative, consultant or otherwise.

     7.   REPRESENTATIONS. You hereby represent and warrant to the Company that
you understand this Agreement, that you enter into this Agreement voluntarily
and that your employment under this Agreement will not conflict with any legal
duty owed by you to any other party.

     8.   GENERAL.

          (a)  NOTICES. All notices, requests, consents and other communications
     hereunder which are required to be provided, or which the sender elects to
     provide, in writing, will be addressed to the receiving party's address set
     forth above or to such other address as a party may designate by notice
     hereunder, and will be either (i) delivered by hand, (ii) sent by overnight
     courier, or (iii) sent by registered or certified mail, return receipt
     requested, postage prepaid. All notices, requests, consents and other
     communications hereunder will be deemed to have been given either (i) if by
     hand, at the time of the delivery thereof to the receiving party at the
     address of such party set forth above, (ii) if sent by overnight courier,
     on the next business day following the day such notice is delivered to the
     courier service, or (iii) if sent by registered or certified mail, on the
     fifth business day following the day such mailing is made.



Robert C. Findlen
September 18, 2006
Page 7

          (b)  ENTIRE AGREEMENT. This Agreement, together with any Stock Option
     Agreements executed by you and the Company (either prior to or in
     conjunction with this Agreement), the Employee Noncompetition,
     Confidentiality and Inventions Agreement and the other agreements
     specifically referred to herein, embodies the entire agreement and
     understanding between the parties hereto with respect to the subject matter
     hereof and supersedes all prior oral or written agreements and
     understandings relating to the subject matter hereof, including without
     limitation the Employment Agreement between you and the Company dated June
     13, 2006. No statement, representation, warranty, covenant or agreement of
     any kind not expressly set forth in this Agreement will affect, or be used
     to interpret, change or restrict, the express terms and provisions of this
     Agreement.

          (c)  MODIFICATIONS AND AMENDMENTS. The terms and provisions of this
     Agreement may be modified or amended only by written agreement executed by
     the parties hereto.

          (d)  WAIVERS AND CONSENTS. The terms and provisions of this Agreement
     may be waived, or consent for the departure therefrom granted, only by
     written document executed by the party entitled to the benefits of such
     terms or provisions. No such waiver or consent will be deemed to be or will
     constitute a waiver or consent with respect to any other terms or
     provisions of this Agreement, whether or not similar. Each such waiver or
     consent will be effective only in the specific instance and for the purpose
     for which it was given, and will not constitute a continuing waiver or
     consent.

          (e)  ASSIGNMENT. The Company may assign its rights and obligations
     hereunder to any person or entity that succeeds to all or substantially all
     of the Company's business or that aspect of the Company's business in which
     you are principally involved or to any Company Affiliate. You may not
     assign your rights and obligations under this Agreement without the prior
     written consent of the Company and any such attempted assignment by you
     without the prior written consent of the Company will be void.

          (f)  GOVERNING LAW. This Agreement and the rights and obligations of
     the parties hereunder will be construed in accordance with and governed by
     the law of Massachusetts, without giving effect to the conflict of law
     principles thereof.

          (g)  JURISDICTION, VENUE AND SERVICE OF PROCESS. Any legal action or
     proceeding with respect to this Agreement will be brought in the courts of
     Massachusetts or of the United States of America for THE District of
     Massachusetts. By execution and delivery of this Agreement, each of the
     parties hereto accepts for itself and in respect of its property, generally
     and unconditionally, the exclusive jurisdiction of the aforesaid courts.

          (h)  SEVERABILITY. The parties intend this Agreement to be enforced as
     written. However, if any portion or provision of this Agreement is to any
     extent declared illegal or unenforceable by a duly authorized court having
     jurisdiction, then the remainder of this Agreement, or the application of
     such portion or provision in circumstances other than those as to which it
     is so declared illegal or unenforceable, will not be affected thereby, and
     each



Robert C. Findlen
September 18, 2006
Page 8

     portion and provision of this Agreement will be valid and enforceable to
     the fullest extent permitted by law.

          (i)  HEADINGS AND CAPTIONS. The headings and captions of the various
     subdivisions of this Agreement are for convenience of reference only and
     will in no way modify or affect the meaning or construction of any of the
     terms or provisions hereof.

          (j)  ACKNOWLEDGMENTS. You hereby acknowledge and recognize that the
     enforcement of any of the provisions in this Agreement and the
     Noncompetition, Nondisclosure and Inventions Agreement may potentially
     interfere with your ability to pursue a proper livelihood. You represent
     that you are knowledgeable about the business of the Company and further
     represent that you are capable of pursuing a career in other industries
     other than the Field (as defined in the Noncompetition, Confidentiality and
     Inventions Agreement) to earn a proper livelihood. You recognize and agree
     that the enforcement of the Noncompetition, Nondisclosure and Inventions
     Agreement is necessary to ensure the preservation, protection and
     continuity of the business, trade secrets and goodwill of the Company. You
     agree that, due to the proprietary nature of the Company's business, the
     restrictions set forth in the Noncompetition, Confidentiality and
     Inventions Agreement are reasonable as to time and scope.

          (k)  TAXES. All payments required to be made by the Company to you
     under this Agreement shall be subject to the withholding of such amounts
     for taxes and other payroll deductions as the Company may reasonably
     determine it should withhold pursuant to any applicable law or regulation.
     To the extent applicable, it is intended that this Agreement comply with
     the provisions of Section 409A of the Code, and this Agreement shall be
     construed and applied in a manner consistent with this intent. In the event
     that any severance payments or benefits hereunder are determined by the
     Company to be in the nature of nonqualified deferred compensation payments,
     you and the Company hereby agree to take such actions as may be mutually
     agreed to ensure that such payments or benefits comply with the applicable
     provisions of Section 409A of the Code and the official guidance issued
     thereunder. Notwithstanding the foregoing, the Company does not guarantee
     the tax treatment or tax consequences associated with any payment or
     benefit arising under this Agreement.

          (l)  COUNTERPARTS. This Agreement may be executed in two or more
     counterparts, and by different parties hereto on separate counterparts,
     each of which will be deemed an original, but all of which together will
     constitute one and the same instrument.



Robert C. Findlen
September 18, 2006
Page 9

     If the foregoing accurately sets forth our agreement, please so indicate by
signing and returning to us the enclosed copy of this Agreement.

                                         Very truly yours,

                                         Metabolix, Inc.


                                         By: /s/ James J. Barber
                                             -----------------------------------
                                         Name: James J. Barber
                                         Title: President & CEO


ACCEPTED AND APPROVED:

/s/ Robert C. Findlen                    9/22/06
- -----------------------------            ------------------
Robert C. Findlen                        Date



                                                                   Exhibit 10.12

                                 METABOLIX, INC.

         EMPLOYEE NONCOMPETITION, NONDISCLOSURE AND INVENTIONS AGREEMENT

     The undersigned in consideration and as a condition of my employment and
continued employment or, to the extent already employed on the date hereof, my
continued employment, by Metabolix, Inc. (the "Company"), a corporation
organized under the laws of the Commonwealth of Massachusetts, does hereby agree
with the Company as follows:

1. NON-COMPETITION. During my employment by the Company, I will devote my full
time and best efforts to the business of the Company and I further agree that
during my employment by the Company and for a period of two (2) years
thereafter, I will not directly or indirectly: (i) alone or as a partner, joint
venturer, consultant, officer, director, employee, agent, independent contractor
or stockholder of any company or business organization, engage in any business
activity [which is or may be directly or indirectly in competition with the
products or services being developed, manufactured, marketed, distributed,
planned, sold or otherwise provided by the Company or which is in any way
directly or indirectly detrimental to the business of the Company] [in the Field
(as hereinafter defined]; provided, however, that the record or beneficial
ownership by me of 1% or less of the outstanding publicly traded capital stock
of any such company or business organization shall not be deemed, in and of
itself, to be in violation of this Section 1, provided that I am not a partner,
joint venturer, officer, director, employee, agent, independent contractor or
consultant of such company or business organization; or (ii) employ, or
knowingly permit any company or business organization by which I am employed or
which is directly or indirectly controlled by me to employ, any person who is
employed by the Company, or is an agent, representative or consultant of the
Company[, at any time during my employment or during the period of two (2) years
thereafter] [within the three (3) month period before and after the termination
of my employment], or in any manner seek to solicit or induce any such person to
leave his or her employment with the Company or assist in the recruitment of any
such person. [For purposes of this section, "Field" is defined as methods of
production, application and use of polyhydroxyalkanoates, their derivatives and
other technology developed by the Company.]

2. NONDISCLOSURE. I will not, whether during or after the termination of my
employment, reveal to any person, association, company, entity or other
organization any of the trade secrets or confidential information concerning the
organization, research and development activities, marketing plans and
strategies, business or finances, of the Company or of any third party to whom
the Company is under an obligation of confidentiality (including but not limited
to trade secrets or confidential information respecting inventions, products,
research and development activities, designs, methods, know-how, techniques,
processes, plans and proposals) except as may be required in the ordinary course
of performing my duties as an employee of the Company or except as may be in the
public domain through no fault of mine, and I shall keep secret all matters
entrusted to me and shall not use any such information in any manner which may
injure or cause loss whether directly or indirectly to the Company.



     Further, I agree that, during my employment I shall not make, use or permit
to be used any notes, memoranda, drawings, specification, programs, data, lab
results, lab notes, formulas, codes or other materials of any nature relating to
any matter within the scope of the business of the Company or concerning any of
its dealings or affairs otherwise than for the benefit of the Company. I further
agree that I shall not, after the termination of my employment, use or permit to
be used any such notes, memoranda, drawings, specification, programs, data, lab
results, lab notes, formulas, codes or other materials, it being agreed that all
of the foregoing are and shall be confidential information or trade secrets of
the Company and shall be and remain the sole and exclusive property of the
Company, and immediately upon the termination of my employment I shall deliver
all of the foregoing, and all copies thereof, to the Company, at its main
office.

3. INVENTIONS AND DEVELOPMENTS. If at any time or times during my employment I
(either alone or with others) make, conceive, discover, reduce to practice or
become possessed of any invention, modification, discovery, design, development,
improvement, process, formula, cell code, data, technique, know-how, trade
secret, work of authorship or intellectual property right whatsoever or any
interest therein (whether or not patentable or registrable under copyright or
similar statutes or subject to analogous protection), including but not limited
to any of the foregoing which relate to the metabolic engineering of
polyhydroxyalkanoates (all of the foregoing called "Inventions" and any of the
foregoing called an "Invention") that (a) relates to the business of the Company
or any of the products or services being developed, manufactured or sold by the
Company or which may be conveniently used in connection therewith, or (b)
results from tasks assigned to me by the Company, or (c) results from the use of
premises owned, leased or contracted for by the Company, such Inventions and the
benefits thereof shall immediately become the sole and absolute property of the
Company and its assigns, as works made for hire or otherwise, and I shall
promptly disclose to the Company (or any persons designated by it) each such
Invention and hereby assign to the Company any rights I may have or acquire in
the Inventions and benefits and/or rights resulting therefrom to the Company
without compensation and shall communicate, without cost or delay, and without
publishing the same all available information relating thereto (with all
necessary plans and models) to the Company.

     I will also promptly disclose to the Company (or any persons designated by
it), and the Company hereby agrees to receive all such disclosures in
confidence, any other invention, modification, discovery, design, development,
improvement, process, formula, code, data, technique, know-how, trade secret,
work of authorship or intellectual property right whatsoever or any interest
therein (whether or not patentable or registrable under copyright or similar
statutes) made, conceived, discovered, reduced to practice or possessed by me
(either alone or with others) at any time or times during my employment, for the
purposes of determining whether they constitute "Inventions" as defined herein.

     Upon disclosure of each Invention to the Company, during my employment and
at any time thereafter I will, at the request and cost of the Company, sign,
execute, make and do all such deeds, documents, acts and things as the Company
and its duly authorized agents may reasonably require:

(a) to apply for, obtain and vest in the name of the Company alone (or as the
Company otherwise directs) and to defend, enforce and maintain any patents,
patent applications, copyrights, or other


                                        2



analogous protection in any country throughout the world and when so obtained or
vested to renew and restore the same; and

(b) to defend any opposition proceedings in respect of such applications and any
opposition proceedings or petitions or applications for revocation of such
letters patent, copyrights or other analogous protection.

     If the Company is unable, after reasonable effort, to secure my signature
on any such letters patent, copyrights or other analogous protection to an
Invention, whether because of my physical or mental incapacity or for any other
reason whatsoever, I hereby irrevocably designate and appoint the Company and
its duly authorized officers and agents as my agent and attorney-in-fact, to act
for and in my behalf and stead to execute and file any such application or
applications and to do all other lawfully permitted acts to further the
prosecution and issuance of letters patent, copyright or other analogous
protection thereon with the same legal force and effect as if executed by me.

4. I represent that the inventions identified in the pages, if any, attached
hereto comprise all the inventions which I have made or conceived prior to my
employment by the Company, which inventions are excluded from this Agreement. I
understand that it is only necessary to list the title of such inventions and
the purposes thereof, but not the details of the invention itself. IF THERE ARE
ANY SUCH INVENTIONS TO BE EXCLUDED, THE UNDERSIGNED SHOULD INITIAL HERE.
OTHERWISE IT WILL BE DEEMED THAT THERE ARE NO SUCH EXCLUSIONS. _____.

The parties acknowledge that pages ___ through ____ attached hereto are the only
pages attached in response to this Section 4.

5. Except as provided in the next paragraph of this Section 5, I represent that
my performance of the terms of this Agreement, and my performance of my duties
as an employee of the Company, does not and will not breach any agreement to
which I am bound, including without limitation any agreement to keep in
confidence proprietary information acquired by me in confidence or in trust
prior to my employment by the Company. I have not entered into, and I agree that
I will not enter into, any agreement, either written or oral, in conflict
herewith.

If the representations set forth in the preceding paragraph are inapplicable, I
have attached hereto a copy of each agreement, if any, which presently affects
my compliance with the terms of this Agreement. (Such copy specifies the other
contracting party or employer, the date of such agreement, the date of
termination of any employment.) IF THERE ARE ANY SUCH AGREEMENTS, THE
UNDERSIGNED SHOULD INITIAL HERE. OTHERWISE IT WILL BE DEEMED THAT THERE ARE NO
SUCH AGREEMENTS. _____.

The parties acknowledge that pages ___ through ____ attached hereto are the only
pages attached in response to this Section 5.

6. Miscellaneous. I agree that any breach of this Agreement by me will cause
irreparable damage to the Company, and that in the event of such breach the
Company shall have, in addition to any and all remedies of law, the right to an
injunction, specific performance or other equitable relief to prevent the
violation of my obligations hereunder.


                                        3



7. I understand that this Agreement does not create an obligation on the Company
or any other person to continue my employment.

8. Any amendment to or modification of this Agreement, and any waiver of any
provision hereof, shall be in writing and shall be signed by the parties hereto.
Any waiver by the Company of a breach of any provision of this Agreement shall
not operate or be construed as a waiver of any subsequent breach hereof.

9. I hereby agree that each provision herein shall be treated as a separate and
independent clause, and the unenforceability of any one clause shall in no way
impair the enforceability of any of the other clauses herein. Moreover, if any
one or more of the provisions contained in this Agreement shall for any reason
be held to be excessively broad as to scope, activity or subject so as to be
unenforceable at law, such provision or provisions shall be construed by the
appropriate judicial body by limiting and reducing it or them, so as to be
enforceable to the maximum extent compatible with the applicable law as it shall
then appear. I hereby further agree that the language of all parts of this
Agreement shall in all cases be construed as a whole according to its fair
meaning and not strictly for or against any of the parties.

10. No claim of mine against the Company shall serve as a defense against the
Company's enforcement of any provision of this Agreement.

11. Except as otherwise provided in Section 1, my obligations under this
Agreement shall survive the termination of my employment, regardless of the
manner of such termination, and shall be binding upon my heirs, executors,
administrators and legal representatives.

11. The term "Company" shall include Metabolix, Inc., a corporation organized
under the laws of the Commonwealth of Massachusetts, and any of its
subsidiaries, divisions, or affiliates. The Company shall have the right to
assign this Agreement to its successors and assigns, and all covenants and
agreements hereunder shall inure to the benefit of and be enforceable by such
successors and assigns.

12. This Agreement shall be deemed to be made and entered into in the
Commonwealth of Massachusetts, and shall in all respects be interpreted,
enforced and governed under the internal and domestic laws of such Commonwealth
without giving effect to the principles of conflict of law of such Commonwealth.

IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the ____
day of ____________, 200__.


                                        ----------------------------------------
                                        Signature

                                        Name:
                                              ----------------------------------
                                        Address:
                                                 -------------------------------
                                        ----------------------------------------


                                        4



Agreed to and Accepted :

METABOLIX, INC.

By:
    ---------------------------------
Title:


                                       5



                                                                   Exhibit 10.13

                                 METABOLIX, INC.

        EMPLOYEE NONCOMPETITION, CONFIDENTIALITY AND INVENTIONS AGREEMENT

     The undersigned ______________________________________________ [print
name], in consideration and as a condition of my employment and continued
employment by Metabolix, Inc. (the "Company"), a Delaware corporation, does
hereby agree with the Company as follows:

1. NONCOMPETITION AND NONSOLICITATION. During my employment by the Company and
for a period of two (2) years thereafter, I will not directly or indirectly: (i)
alone or as a partner, joint venturer, consultant, officer, director, employee,
agent, independent contractor or stockholder of any company or business
organization, engage in any business activity which is directly or indirectly in
competition with the products or services being developed, manufactured,
marketed, distributed, planned, sold or otherwise provided by the Company or
which is in any way directly or indirectly detrimental to the business of the
Company; provided, however, that the record or beneficial ownership by me of 1%
or less of the outstanding publicly traded capital stock of any such company or
business organization shall not be deemed, in and of itself, to be in violation
of this Section 1; or (ii) employ, or knowingly permit any company or business
organization by which I am employed or which is directly or indirectly
controlled by me to employ, any person who is employed by the Company, or is an
agent, representative or consultant of the Company, or in any manner seek to
solicit or induce any such person to leave his or her employment with the
Company or assist in the recruitment of any such person; or (iii) directly or
indirectly solicit the business of any customer of the Company (other than on
behalf of the Company); [provided, that if the Company has multiple groups or
divisions engaged in separate lines of business, the foregoing shall apply only
to customers of any group or division in which I am employed;] nor shall I
directly or indirectly induce any customer, supplier, vendor, consultant or
independent contractor of the Company to terminate or negatively alter his, her
or its relationship with the Company.

2. CONFIDENTIALITY. I will not at any time, whether during or after the
termination of my employment, reveal to any person, association, company, entity
or other organization any of the trade secrets or confidential information of
the Company or of any third party to whom the Company is under an obligation of
confidentiality (including but not limited to trade secrets or confidential
information respecting inventions, products, research and development
activities, designs, methods, know-how, techniques, processes, plans and
proposals, marketing and selling, business plans, budgets and unpublished
financial statements, licenses, prices and costs, suppliers and customers)
except as may be required in the ordinary course of performing my duties as an
employee of the Company. Further, I shall not use any such information except as
required in the performance of my duties for the Company. Without limiting the
generality of the foregoing, I shall not use any such information for my
personal benefit or in any manner which may injure or cause loss, whether
directly or indirectly, to the Company.

     Further, I agree that, during my employment I shall not make, use or permit
to be used any notes, memoranda, drawings, specification, programs, data, lab
results, lab notes, formulas,



codes or other materials of any nature relating to any matter within the scope
of the business of the Company or concerning any of its dealings or affairs
otherwise than for the benefit of the Company. I further agree that I shall not,
after the termination of my employment, use or permit to be used any such
materials, it being agreed that all of the foregoing are and shall be
confidential information or trade secrets of the Company and shall be and remain
the sole and exclusive property of the Company, and immediately upon the
termination of my employment I shall deliver all of the foregoing, and all
copies thereof, to the Company. [The restrictions set forth in this Section 2
will not apply to information which I can establish was known to me prior to my
employment with the Company or which is generally known now or in the future to
the public or in the trade, unless such knowledge results from an unauthorized
disclosure by me, but these exceptions will not affect the application of any
other provision of this Agreement to such information in accordance with the
terms of such provision.]

3. INVENTIONS AND INTELLECTUAL PROPERTY. If at any time or times during my
employment I (either alone or with others) make, conceive, discover, reduce to
practice or become possessed of any Intellectual Property, as hereinafter
defined, such Intellectual Property shall be the sole and absolute property of
the Company, as works made for hire or otherwise, and I hereby assign to the
Company all of my rights in such Intellectual Property. For purposes hereof,
"Intellectual Property" shall mean any invention, modification, discovery,
design, development, improvement, process, formula, code, data, technique,
know-how, trade secret, work of authorship or intellectual property right
whatsoever or any interest therein (whether or not patentable or registrable
under copyright or similar statutes) that (a) relates to the field of metabolic
engineering of polyhydroxyalkanoates or any other business of the Company or any
of the products or services being developed, manufactured or sold by the Company
or which may be useful in connection therewith, or (b) results from tasks
assigned to me by the Company, or (c) results from the use of facilities owned,
leased or contracted for by the Company.

     I shall promptly disclose to the Company (or any persons designated by it)
all such Intellectual Property and any information relating thereto. I shall
also promptly disclose to the Company, and the Company hereby agrees to receive
all such disclosures in confidence, any other invention, modification,
discovery, design, development, improvement, process, formula, code, data,
technique, know-how, trade secret, work of authorship or intellectual property
right whatsoever or any interest therein (whether or not patentable or
registrable under copyright or similar statutes) made, conceived, discovered,
reduced to practice or possessed by me (either alone or with others) at any time
or times during my employment, for the purposes of determining whether they
constitute "Intellectual Property" as defined above.

     During my employment and at any time thereafter I will, at the request and
cost of the Company, sign, execute, make and do all such deeds, documents, acts
and things as the Company and its duly authorized agents may reasonably require
to apply for, obtain and vest in the name of the Company alone (or as the
Company otherwise directs) and to defend, enforce and maintain any patents,
patent applications, copyrights, or other analogous protection with respect to
the Intellectual Property in any country throughout the world.


                                        2



     If the Company is unable, after reasonable effort [within five (5) calendar
days written request], to secure my signature on any such application or other
document relating to any Intellectual Property, whether because of my physical
or mental incapacity or for any other reason whatsoever, I hereby irrevocably
designate and appoint the Company and its duly authorized officers and agents as
my agent and attorney-in-fact, to act for and in my behalf and stead to execute
and file any such application(s) or document(s) and to do all other lawfully
permitted acts to further the prosecution and issuance of letters patent,
copyright or other analogous protection thereon with the same legal force and
effect as if executed by me.

4. Prior Inventions. I represent that the inventions identified in the pages, if
any, attached hereto comprise all the inventions which I have made or conceived
prior to my employment by the Company, which inventions are excluded from this
Agreement. I understand that it is only necessary to list the title of such
inventions and the purposes thereof, but not the details of the invention
itself.

IF THERE ARE ANY SUCH INVENTIONS TO BE EXCLUDED, THE UNDERSIGNED SHOULD INITIAL
HERE. OTHERWISE IT WILL BE DEEMED THAT THERE ARE NO SUCH EXCLUSIONS. _____.

The parties acknowledge that pages ___ through ____ attached hereto are the only
pages attached in response to this Section 4.

5. No Conflict. Except as provided in the next paragraph of this Section 5, I
represent that my performance of the terms of this Agreement, and my performance
of my duties as an employee of the Company, does not and will not breach any
agreement to which I am bound, including without limitation any agreement to
keep in confidence proprietary information acquired by me in confidence or in
trust prior to my employment by the Company. I have not entered into, and I
agree that I will not enter into, any agreement, either written or oral, in
conflict herewith. During my employment by the Company, I will not improperly
use or disclose any confidential information or trade secrets, if any, of any
former employer or any other person to whom I have an obligation of
confidentiality, and I will not bring onto the premises of the Company any
unpublished documents or any property belonging to any former employer or any
other person to whom I have an obligation of confidentiality unless consented to
in writing by that former employer or person. I will use in the performance of
my duties only information which is generally known and used by persons with
training and experience comparable to my own, which is common knowledge in the
industry or otherwise legally in the public domain, or which is otherwise
provided or developed by the Company.

I have attached hereto a copy of each agreement, if any, which presently affects
my compliance with the terms of this Agreement. IF THERE ARE ANY SUCH
AGREEMENTS, THE UNDERSIGNED SHOULD INITIAL HERE. OTHERWISE IT WILL BE DEEMED
THAT THERE ARE NO SUCH EXCLUSIONS. _____.

The parties acknowledge that pages ___ through ____ attached hereto are the only
pages attached in response to this Section 5.

6. Specific Performance. I agree that any breach of this Agreement by me will
cause irreparable damage to the Company, and that in the event of such breach
the Company shall have, in


                                        3



addition to any and all remedies of law, the right to an injunction, specific
performance or other equitable relief to prevent the violation of my obligations
hereunder.

7. No Employment Obligation. I understand that this Agreement does not create an
obligation on the Company or any other person to continue my employment.

8. Amendments. Any amendment to or modification of this Agreement, and any
waiver of any provision hereof, shall be in writing and shall be signed by the
parties hereto. Any waiver by the Company of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any subsequent breach
hereof.

9. Severability. I hereby agree that each provision herein shall be treated as a
separate and independent clause, and the unenforceability of any one clause
shall in no way impair the enforceability of any of the other clauses herein.
Moreover, if any one or more of the provisions contained in this Agreement shall
for any reason be held to be excessively broad as to scope, activity or subject
so as to be unenforceable at law, such provision or provisions shall be
construed by the appropriate judicial body by limiting and reducing it or them,
so as to be enforceable to the maximum extent compatible with the applicable law
as it shall then appear. I hereby further agree that the language of all parts
of this Agreement shall in all cases be construed as a whole according to its
fair meaning and not strictly for or against any of the parties. No claim of
mine against the Company shall serve as a defense against the Company's
enforcement of any provision of this Agreement.

10. Survival. Except as otherwise provided in Section 1, my obligations under
this Agreement shall survive the termination of my employment, regardless of the
manner of such termination, and shall be binding upon my heirs, executors,
administrators and legal representatives.

11. Successors. The term "Company" shall include Metabolix, Inc., a Delaware
corporation, and any of its subsidiaries, divisions, or affiliates. The Company
shall have the right to assign this Agreement to its successors and assigns, and
all covenants and agreements hereunder shall inure to the benefit of and be
enforceable by such successors and assigns[provided, however, that in the event
of such an assignment to a company or entity that is engaged in more than one
line of business, the covenant against competition set forth in Section 1(i)
above shall apply only with respect to business activities which are directly or
indirectly in competition with the division or group of the successor entity
which includes the Company or its assets].

12. Governing Law. This Agreement shall be deemed to be made and entered into in
the Commonwealth of Massachusetts, and shall in all respects be interpreted,
enforced and governed under the internal and domestic laws of such Commonwealth
without giving effect to the principles of conflict of law of such Commonwealth.

EXECUTED as of the ____ day of ____________, 200__.


                                        ----------------------------------------
                                        Signature


                                        4



                                        Name:
                                              ----------------------------------
                                        Address:
                                                 -------------------------------
                                        ----------------------------------------

Accepted and Agreed:

METABOLIX, INC.

By:
    ---------------------------------
Title:


                                        5



                                                                   Exhibit 10.14

                            INDEMNIFICATION AGREEMENT

     This Agreement made and entered into this ____ day of ______, 2006 (the
"AGREEMENT"), by and between Metabolix, Inc., a Delaware corporation (the
"COMPANY," which term shall include, where appropriate, any Entity (as
hereinafter defined) controlled, directly or indirectly, by the Company) and
____________ (the "INDEMNITEE"):

     WHEREAS, it is essential to the Company that it be able to retain and
attract as directors and officers the most capable persons available;

     WHEREAS, increased corporate litigation has subjected directors and
officers to litigation risks and expenses, and the limitations on the
availability of directors and officers liability insurance have made it
increasingly difficult for the Company to attract and retain such persons;

     WHEREAS, the Company's Amended and Restated By-laws (the "BY-LAWS") require
it to indemnify its directors and officers to the fullest extent permitted by
law and permit it to make other indemnification arrangements and agreements;

     WHEREAS, the Company desires to provide Indemnitee with specific
contractual assurance of Indemnitee's rights to full indemnification against
litigation risks and expenses (regardless, among other things, of any amendment
to or revocation of the Company's Second Amended and Restated Certificate of
Incorporation (the "CERTIFICATE OF INCORPORATION") or By-laws or any change in
the ownership of the Company or the composition of its Board of Directors);

     WHEREAS, the Company intends that this Agreement provide Indemnitee with
greater protection than that which is provided by the Company's By-laws; and

     WHEREAS, Indemnitee is relying upon the rights afforded under this
Agreement in becoming or continuing as a director or officer of the Company.

     NOW, THEREFORE, in consideration of the promises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:

     1.   DEFINITIONS.

          (a)  "CORPORATE STATUS" describes the status of a person who is
               serving or has served (i) as a director of the Company, (ii) as
               an officer of the Company, (iii) in any capacity with respect to
               any employee benefit plan of the Company, or (iv) as a director,
               partner, trustee, officer, employee, or agent of any other Entity
               at the request of the Company. For purposes of subsection (iv) of
               this Section 1(a), if Indemnitee is serving or has served as a
               director, partner, trustee, officer, employee or agent of a
               Subsidiary, Indemnitee shall be deemed to be serving at the
               request of the Company.



          (b)  "ENTITY" shall mean any corporation, partnership, limited
               liability company, joint venture, trust, foundation, association,
               organization or other legal entity.

          (c)  "ENTERPRISE" shall mean the Company and any other corporation,
               partnership, joint venture, trust, employee benefit plan or other
               enterprise of which Indemnitee is or was serving at the request
               of the Company as a director, officer, employee, agent or
               fiduciary.

          (d)  "EXPENSES" shall mean all fees, costs and expenses incurred by
               Indemnitee in connection with any Proceeding (as defined below),
               including, without limitation, attorneys' fees, disbursements and
               retainers (including, without limitation, any such fees,
               disbursements and retainers incurred by Indemnitee pursuant to
               Sections 13 and 14(c) of this Agreement), fees and disbursements
               of expert witnesses, private investigators and professional
               advisors (including, without limitation, accountants and
               investment bankers), court costs, transcript costs, fees of
               experts, travel expenses, duplicating, printing and binding
               costs, telephone and fax transmission charges, postage, delivery
               services, secretarial services, and other disbursements and
               expenses.

          (e)  "INDEMNIFIABLE AMOUNTS" shall have the meaning ascribed to that
               term in Section 3 below.

          (f)  "LIABILITIES" shall mean judgments, damages, liabilities, losses,
               penalties, excise taxes, fines and amounts paid in settlement.

          (g)  "PROCEEDING" shall mean any threatened, pending or completed
               claim, action, suit, arbitration, alternate dispute resolution
               process, investigation, administrative hearing, appeal, or any
               other proceeding, whether civil, criminal, administrative,
               arbitrative or investigative, whether formal or informal,
               including a proceeding initiated by Indemnitee pursuant to
               Section 13 of this Agreement to enforce Indemnitee's rights
               hereunder.

          (h)  "SUBSIDIARY" shall mean any corporation, partnership, limited
               liability company, joint venture, trust or other Entity of which
               the Company owns (either directly or through or together with
               another Subsidiary of the Company) either (i) a general partner,
               managing member or other similar interest or (ii) (A) 50% or more
               of the voting power of the voting capital equity interests of
               such corporation, partnership, limited liability company, joint
               venture or other Entity, or (B) 50% or more of the outstanding
               voting capital stock or other voting equity interests of such
               corporation, partnership, limited liability company, joint
               venture or other Entity.

     2.   SERVICES OF INDEMNITEE. In consideration of the Company's covenants
and commitments hereunder, Indemnitee agrees to serve or continue to serve as a
director or officer of the Company. However, this Agreement shall not impose any
obligation on Indemnitee or the

                                        2


Company to continue Indemnitee's service to the Company beyond any period
otherwise required by law or by other agreements or commitments of the parties,
if any. Indemnitee may at any time and for any reason resign from such position
(subject to any other contractual obligation or any obligation imposed by
operation of law), upon which event the Company shall have no obligation under
this Agreement to continue Indemnitee in such position. Notwithstanding the
forgoing, this Agreement shall continue in force after Indemnitee has ceased to
serve as a director or officer of the Company.

     3.   INDEMNITY IN THIRD-PARTY PROCEEDINGS. The Company shall indemnify
Indemnitee in accordance with the provisions of this Section 3 if Indemnitee is,
or is threatened to be made, by reason of Indemnitee's Corporate Status, a party
to or a participant in any Proceeding, other than a Proceeding by or in the
right of the Company to procure a judgment in its favor. Pursuant to this
Section 3, Indemnitee shall be indemnified against all Expenses and Liabilities
actually and reasonably incurred by Indemnitee or on his behalf in connection
with such Proceeding or any claim, issue or matter therein (indemnifiable
Expenses and Liabilities collectively referred herein as "INDEMNIFIABLE
AMOUNTS"), if Indemnitee acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Company and, in
the case of a criminal Proceeding, had not reasonable cause to believe that his
conduct was unlawful. Indemnitee shall not enter into any settlement in
connection with a Proceeding without the consent of the Company, which shall not
be unreasonably held or delayed.

     4.   INDEMNITY IN PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY. The
Company shall indemnify Indemnitee in accordance with the provisions of this
Section 4 if Indemnitee is, or is threatened to be made, by reason of
Indemnitee's Corporate Status, a party to or a participant in any Proceeding by
or in the right of the Company to procure a judgment in its favor. Pursuant to
this Section 4, Indemnitee shall be indemnified against all Expenses actually
and reasonably incurred by him or on his behalf in connection with such
Proceeding or any claim, issue or matter therein, if Indemnitee acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the Company. No indemnification for Expenses shall be made under
this Section 4 in respect of any claim, issue or matter as to which Indemnitee
shall have been finally adjudged by a court to be liable to the Company, unless
and only to the extent that the Delaware Court of Chancery (the "DELAWARE
CHANCERY COURT") or any court in which the Proceeding was brought shall
determine upon application that, despite the adjudication of liability, but in
view of all the circumstances of the case, Indemnitee is fairly and reasonably
entitled to indemnification for such Expenses as the Delaware Chancery Court or
such other court shall deem proper.

     5.   INDEMNIFICATION FOR EXPENSES OF A PARTY WHO IS WHOLLY OR PARTLY
SUCCESSFUL. If Indemnitee is not wholly successful in such Proceeding but is
successful, on the merits or otherwise, as to one or more but less than all
claims, issues or matters in such Proceeding, the Company shall indemnify
Indemnitee against: (a) all Expenses reasonably incurred by Indemnitee or on
Indemnitee's behalf in connection with each successfully resolved claim, issue
or matter; and (b) any claim, issue or matter related to any such successfully
resolved claim, issue or matter. For purposes of this Agreement, the termination
of any claim, issue or matter in such a Proceeding by dismissal, with or without
prejudice, by reason of settlement, judgment, order or otherwise, shall be
deemed to be a successful result as to such claim, issue or matter.

                                        3


     6.   PROCEDURE FOR PAYMENT OF INDEMNIFIABLE AMOUNTS. Indemnitee shall
submit to the Company a written request specifying the Indemnifiable Amounts for
which Indemnitee seeks payment under Sections 3, 4 or 5 of this Agreement and
the basis for the claim. The Company shall pay such Indemnifiable Amounts to
Indemnitee promptly upon receipt of its request. At the request of the Company,
Indemnitee shall furnish such documentation and information as are reasonably
available to Indemnitee and necessary to establish that Indemnitee is entitled
to indemnification hereunder.

     7.   INDEMNIFICATION FOR EXPENSES OF A WITNESS. Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee is, by reason of his
Corporate Status, a witness in any Proceeding to which Indemnitee is not a
party, he shall be indemnified against all Expenses actually and reasonably
incurred by him or on his behalf in connection therewith.

     8.   EFFECT OF CERTAIN RESOLUTIONS. Neither the settlement or termination
of any Proceeding nor the failure of the Company to award indemnification or to
determine that indemnification is payable shall create a presumption that
Indemnitee is not entitled to indemnification hereunder. In addition, the
termination of any proceeding by judgment, order, settlement, conviction, or
upon a plea of NOLO CONTENDERE or its equivalent shall not create a presumption
that Indemnitee did not act in good faith and in a manner which Indemnitee
reasonably believed to be in or not opposed to the best interests of the Company
or, with respect to any criminal Proceeding, had reasonable cause to believe
that Indemnitee's action was unlawful.

     9.   EXCLUSIONS. Notwithstanding any provision in this Agreement to the
contrary, the Company shall not be obligated under this Agreement to make any
indemnity in connection with any claim made against Indemnitee:

          (a)  for which payment has actually been made to or on behalf of
               Indemnitee under any insurance policy or other indemnity
               provision, except with respect to any excess beyond the amount
               paid under any insurance policy or other indemnity provisions;

          (b)  for an accounting of profits made from the purchase and sale (or
               sale and purchase) by Indemnitee of securities of the Company
               within the meaning of Section 16(b) of the Securities Exchange
               Act of 1934, as amended, or similar provisions of state statutory
               law or common law; or

          (c)  for which payment is prohibited by applicable law.

     10.  AGREEMENT TO ADVANCE EXPENSES; UNDERTAKING. The Company shall advance
all Expenses incurred by or on behalf of Indemnitee in connection with any
Proceeding, including a Proceeding by or in the right of the Company, in which
Indemnitee is involved by reason of such Indemnitee's Corporate Status within
ten (10) calendar days after the receipt by the Company of a written statement
from Indemnitee requesting such advance or advances from time to time, whether
prior to or after final disposition of such Proceeding. Advances shall be
unsecured and interest free. Advances shall be made without regard to
Indemnitee's ability to

                                        4


repay the expenses and without regard to Indemnitee's ultimate entitlement to
indemnification under the other provisions of this Agreement. To the extent
required by Delaware law, Indemnitee hereby undertakes to repay any and all of
the amount of indemnifiable Expenses paid to Indemnitee if it is finally
determined by a court of competent jurisdiction that Indemnitee is not entitled
under this Agreement to indemnification with respect to such Expenses. This
undertaking is an unlimited general obligation of Indemnitee.

     11.  PROCEDURE FOR ADVANCE PAYMENT OF EXPENSES. Indemnitee shall submit to
the Company a written request specifying the Expenses for which Indemnitee seeks
an advancement under Section 10 of this Agreement, together with documentation
evidencing that Indemnitee has incurred such Expenses (which shall include
invoices received by Indemnitee in connection with such Expenses but, in the
case of invoices in connection with legal services, any reference to legal work
performed or to expenditures made that would cause Indemnitee to waive any
privilege accorded by applicable law shall not be included with the invoice).
Advances under Section 10 shall be made no later than ten (10) calendar days
after the Company's receipt of such request. If a claim for advancement of
Expenses hereunder by Indemnitee is not paid in full by the Company within ten
(10) calendar days after receipt by the Company of documentation of Expenses and
the required undertaking, Indemnitee may at any time thereafter bring suit
against the Company to recover the unpaid amount of the claim and if successful
in whole or in part, Indemnitee shall also be entitled to be paid the expenses
of prosecuting such claim. The burden of proving that Indemnitee is not entitled
to an advancement of expenses shall be on the Company.

     12.  PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS.

          (a)  In making a determination required to be made under Delaware law
               with respect to entitlement to indemnification hereunder, the
               person, persons or entity making such determination shall presume
               that Indemnitee is entitled to indemnification under this
               Agreement if Indemnitee has submitted a request for
               indemnification in accordance with Section 6 of this Agreement,
               and the Company shall have the burden of proof to overcome that
               presumption in connection with the making of any determination
               contrary to that presumption. Neither the failure of the Company
               or of any person, persons or entity to have made a determination
               prior to the commencement of any action pursuant to this
               Agreement that indemnification is proper in the circumstances
               because Indemnitee has met the applicable standard of conduct,
               nor an actual determination by the Company or by any person,
               persons or entity that Indemnitee has not met such applicable
               standard of conduct, shall be a defense to the action or create a
               presumption that Indemnitee has not met the applicable standard
               of conduct.

          (b)  The termination of any Proceeding or of any claim, issue or
               matter therein, by judgment, order, settlement or conviction, or
               upon a plea of NOLO CONTENDERE or its equivalent, shall not
               (except as otherwise expressly provided in this Agreement) of
               itself adversely affect the right of

                                        5


               Indemnitee to indemnification or create a presumption that
               Indemnitee did not act in good faith and in a manner which he
               reasonably believed to be in or not opposed to the best interests
               of the Company or, with respect to any criminal Proceeding, that
               Indemnitee had reasonable cause to believe that his conduct was
               unlawful.

          (c)  For purposes of any determination of good faith, Indemnitee shall
               be deemed to have acted in good faith if Indemnitee's action is
               based on the records or books of account of the Enterprise,
               including financial statements, or on information supplied to
               Indemnitee by the officers of the Enterprise in the course of
               their duties, or on the advice of legal counsel for the
               Enterprise or the Board of Directors or counsel selected by any
               committee of the Board of Directors or on information or records
               given or reports made to the Enterprise by an independent
               certified public accountant or by an appraiser, investment banker
               or other expert selected with reasonable care by the Company or
               the Board of Directors or any committee of the Board of
               Directors. The provisions of this Section 12(c) shall not be
               deemed to be exclusive or to limit in any way the other
               circumstances in which the Indemnitee may be deemed to have met
               the applicable standard of conduct set forth in this Agreement.

          (d)  The knowledge and/or actions, or failure to act, of any director,
               officer, agent or employee of the Enterprise shall not be imputed
               to Indemnitee for purposes of determining the right to
               indemnification under this Agreement.

     13.  REMEDIES OF INDEMNITEE.

          (a)  RIGHT TO PETITION COURT. In the event that Indemnitee makes a
               request for payment of Indemnifiable Amounts under Sections 3, 4
               and 5 above or a request for an advancement of Expenses under
               Sections 10 and 11 above and the Company fails to make such
               payment or advancement in a timely manner pursuant to the terms
               of this Agreement, Indemnitee may petition the Delaware Chancery
               Court to enforce the Company's obligations under this Agreement.

          (b)  BURDEN OF PROOF. In any judicial proceeding brought under Section
               13(a) above, the Company shall have the burden of proving that
               Indemnitee is not entitled to payment of Indemnifiable Amounts
               hereunder.

          (c)  EXPENSES. The Company agrees to reimburse Indemnitee in full for
               any Expenses incurred by Indemnitee in connection with
               investigating, preparing for, litigating, defending or settling
               any action brought by Indemnitee under Section 13(a) above, or in
               connection with any claim or counterclaim brought by the Company
               in connection therewith, if Indemnitee is successful in whole or
               in part in connection with any such action.

                                        6


          (d)  FAILURE TO ACT NOT A DEFENSE. The failure of the Company
               (including its Board of Directors or any committee thereof,
               independent legal counsel, or stockholders) to make a
               determination concerning the permissibility of the payment of
               Indemnifiable Amounts or the advancement of indemnifiable
               Expenses under this Agreement shall not be a defense in any
               action brought under Section 13(a) above, and shall not create a
               presumption that such payment or advancement is not permissible.

     14.  DEFENSE OF THE UNDERLYING PROCEEDING.

          (a)  NOTICE BY INDEMNITEE. Indemnitee agrees to notify the Company
               promptly upon being served with any summons, citation, subpoena,
               complaint, indictment, information, or other document relating to
               any Proceeding which may result in the payment of Indemnifiable
               Amounts or the advancement of Expenses hereunder; PROVIDED,
               HOWEVER, that the failure to give any such notice shall not
               disqualify Indemnitee from the right, or otherwise affect in any
               manner any right of Indemnitee, to receive payments of
               Indemnifiable Amounts or advancements of Expenses unless the
               Company's ability to defend in such Proceeding is materially and
               adversely prejudiced thereby.

          (b)  DEFENSE BY COMPANY. Subject to the provisions of the last
               sentence of this Section 14(b) and of Section 14(c) below, the
               Company shall have the right to defend Indemnitee in any
               Proceeding which may give rise to the payment of Indemnifiable
               Amounts hereunder; PROVIDED, HOWEVER, that the Company shall
               notify Indemnitee of any such decision to defend within thirty
               (30) calendar days of receipt of notice of any such Proceeding
               under Section 14(a) above. The Company shall not, without the
               prior written consent of Indemnitee, consent to the entry of any
               judgment against Indemnitee or enter into any settlement or
               compromise which (i) includes an admission of fault of Indemnitee
               or (ii) does not include, as an unconditional term thereof, the
               full release of Indemnitee from all liability in respect of such
               Proceeding, which release shall be in form and substance
               reasonably satisfactory to Indemnitee. This Section 14(b) shall
               not apply to a Proceeding brought by Indemnitee under Section
               13(a) above or pursuant to Section 22 below.

          (c)  INDEMNITEE'S RIGHT TO COUNSEL. Notwithstanding the provisions of
               Section 14(b) above, if in a Proceeding to which Indemnitee is a
               party by reason of Indemnitee's Corporate Status, (i) Indemnitee
               reasonably concludes that he or she may have separate defenses or
               counterclaims to assert with respect to any issue which may not
               be consistent with the position of other defendants in such
               Proceeding, (ii) a conflict of interest or potential conflict of
               interest exists between Indemnitee and the Company, or (iii) if
               the Company fails to assume the defense of such proceeding in a
               timely manner, Indemnitee shall be entitled to be represented by
               a separate legal counsel of Indemnitee's choice at the expense of
               the Company. In

                                        7


               addition, if the Company fails to comply with any of its
               obligations under this Agreement or in the event that the Company
               or any other person takes any action to declare this Agreement
               void or unenforceable, or institutes any action, suit or
               proceeding to deny or to recover from Indemnitee the benefits
               intended to be provided to Indemnitee hereunder, Indemnitee shall
               have the right to retain a counsel of Indemnitee's choice, at the
               expense of the Company, to represent Indemnitee in connection
               with any such matter.

     15.  REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to Indemnitee as follows:

          (a)  AUTHORITY. The Company has all necessary power and authority to
               enter into, and be bound by the terms of, this Agreement, and the
               execution, delivery and performance of the undertakings
               contemplated by this Agreement have been duly authorized by the
               Company.

          (b)  ENFORCEABILITY. This Agreement, when executed and delivered by
               the Company in accordance with the provisions hereof, shall be a
               legal, valid and binding obligation of the Company, enforceable
               against the Company in accordance with its terms, except as such
               enforceability may be limited by applicable bankruptcy,
               insolvency, moratorium, reorganization or similar laws affecting
               the enforcement of creditors' rights generally.

     16.  INSURANCE. The Company shall, from time to time, make the good faith
determination whether or not it is practicable for the Company to obtain and
maintain a policy or policies of insurance with a reputable insurance company
providing the Indemnitee with coverage for losses from wrongful acts. For so
long as Indemnitee shall remain a director or officer of the Company and with
respect to any such prior service, in all policies of director and officer
liability insurance, Indemnitee shall be named as an insured in such a manner as
to provide Indemnitee the same rights and benefits as are accorded to the most
favorably insured of the Company's officers and directors. Notwithstanding the
foregoing, the Company shall have no obligation to obtain or maintain such
insurance. The Company shall promptly notify Indemnitee of any good faith
determination not to provide such coverage.

     17.  CONTRACT RIGHTS NOT EXCLUSIVE. The rights to payment of Indemnifiable
Amounts and advancement of indemnifiable Expenses provided by this Agreement
shall be in addition to, but not exclusive of, any other rights which Indemnitee
may have at any time under applicable law, the Company's Certificate of
Incorporation or By-laws, or any other agreement, vote of stockholders or
directors (or a committee of directors), or otherwise, both as to action in
Indemnitee's official capacity and as to action in any other capacity as a
result of Indemnitee's serving as a director or officer of the Company.

     18.  SUCCESSORS. This Agreement shall be (a) binding upon all successors
and assigns of the Company (including any transferee of all or a substantial
portion of the business, stock and/or assets of the Company and any direct or
indirect successor by merger or consolidation

                                        8


or otherwise by operation of law) and (b) binding on and shall inure to the
benefit of the heirs, personal representatives, executors and administrators of
Indemnitee. This Agreement shall continue for the benefit of Indemnitee and such
heirs, personal representatives, executors and administrators after Indemnitee
has ceased to have Corporate Status.

     19.  SUBROGATION. In the event of any payment of Indemnifiable Amounts
under this Agreement, the Company shall be subrogated to the extent of such
payment to all of the rights of contribution or recovery of Indemnitee against
other persons, and Indemnitee shall take, at the request of the Company, all
reasonable action necessary to secure such rights, including the execution of
such documents as are necessary to enable the Company to bring suit to enforce
such rights.

     20.  CHANGE IN LAW. To the extent that a change in Delaware law (whether by
statute or judicial decision) shall permit broader indemnification or
advancement of expenses than is provided under the terms of the By-laws and this
Agreement, Indemnitee shall be entitled to such broader indemnification and
advancements, and this Agreement shall be deemed to be amended to such extent.

     21.  SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Agreement, or any clause thereof,
shall be determined by a court of competent jurisdiction to be illegal, invalid
or unenforceable, in whole or in part, such provision or clause shall be limited
or modified in its application to the minimum extent necessary to make such
provision or clause valid, legal and enforceable, and the remaining provisions
and clauses of this Agreement shall remain fully enforceable and binding on the
parties.

     22.  INDEMNITEE AS PLAINTIFF. Except as provided in Section 13(c) of this
Agreement and in the next sentence, Indemnitee shall not be entitled to payment
of Indemnifiable Amounts or advancement of indemnifiable Expenses with respect
to any Proceeding brought by Indemnitee against the Company, any Entity which it
controls, any director or officer thereof, or any third party, unless the Board
of Directors of the Company has consented to the initiation of such Proceeding.
This Section 22 shall not apply to counterclaims or affirmative defenses
asserted by Indemnitee in an action brought against Indemnitee.

     23.  MODIFICATIONS AND WAIVER. Except as provided in Section 20 above with
respect to changes in Delaware law which broaden the right of Indemnitee to be
indemnified by the Company, no supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by each of the parties
hereto. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provisions of this Agreement (whether or
not similar), nor shall such waiver constitute a continuing waiver.

     24.  GENERAL NOTICES. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given (a) when delivered by hand, (b) when transmitted by facsimile and
receipt is acknowledged, or (c) if mailed by certified

                                        9


or registered mail with postage prepaid, on the third business day after the
date on which it is so mailed:

          (i)   If to Indemnitee, to:
               ___________________________
               ___________________________
               ___________________________
               ___________________________

          (ii)  If to the Company, to:

               Metabolix, Inc.
               21 Erie Street
               Cambridge, Massachusetts 02139
               Attention:  General Counsel

or to such other address as may have been furnished in the same manner by any
party to the others.

          25.  GOVERNING LAW; CONSENT TO JURISDICTION; SERVICE OF PROCESS. This
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware without regard to its rules of conflict of laws. Each of the
Company and the Indemnitee hereby irrevocably and unconditionally consents to
submit to the exclusive jurisdiction of the Delaware Chancery Court and the
courts of the United States of America located in the State of Delaware (the
"DELAWARE COURTS") for any litigation arising out of or relating to this
Agreement and the transactions contemplated hereby (and agrees not to commence
any litigation relating thereto except in such courts), waives any objection to
the laying of venue of any such litigation in the Delaware Courts and agrees not
to plead or claim in any Delaware Court that such litigation brought therein has
been brought in an inconvenient forum. Each of the parties hereto agrees, (a) to
the extent such party is not otherwise subject to service of process in the
State of Delaware, to appoint and maintain an agent in the State of Delaware as
such party's agent for acceptance of legal process, and (b) that service of
process may also be made on such party by prepaid certified mail with a proof of
mailing receipt validated by the United States Postal Service constituting
evidence of valid service. Service made pursuant to (a) or (b) above shall have
the same legal force and effect as if served upon such party personally within
the State of Delaware. For purposes of implementing the parties' agreement to
appoint and maintain an agent for service of process in the State of Delaware,
each such party does hereby appoint The Corporation Trust Company, 1209 Orange
Street, Wilmington, New Castle County, Delaware 19801, as such agent and each
such party hereby agrees to complete all actions necessary for such appointment.

                            [signature page follows]

                                       10


     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.

                                         METABOLIX, INC.


                                         By:
                                            ------------------------------------
                                            Name:
                                            Title:


                                         INDEMNITEE


                                         ---------------------------------------
                                            [Name]



WHENEVER CONFIDENTIAL INFORMATION IS OMITTED HEREIN (SUCH OMISSIONS ARE DENOTED
BY AN ASTERISK*), SUCH CONFIDENTIAL INFORMATION HAS BEEN SUBMITTED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT

                                LICENSE AGREEMENT

     This Agreement is made and entered into this 1st day of October, 1999, (the
"Effective Date") by and between METABOLIX, Inc. a corporation duly organized
and existing under the laws of the State of Delaware and having its principal
office at 303 Third Street, Cambridge, Massachusetts 02142 (hereinafter referred
to as "METABOLIX"), and TEPHA, Inc., a corporation duly organized under the laws
of the State of Delaware and having its principal office at 303 Third Street,
Cambridge, Massachusetts 02142 (hereinafter referred to as "TEPHA").

                                   WITNESSETH

     WHEREAS, METABOLIX, is the owner of the METABOLIX PATENT RIGHTS (as later
defined herein), and related technology, and has the right to grant licenses
under said METABOLIX PATENT RIGHTS;

     WHEREAS, METABOLIX is the licensee from the Massachusetts Institute of
Technology (hereinafter referred to as "MIT") of the MIT PATENT RIGHTS (as later
defined herein), and has the right to grant sublicenses under said MIT PATENT
RIGHTS;

     WHEREAS, METABOLIX desires to have the PATENT RIGHTS commercialized in the
FIELD OF USE, and is willing to grant a license thereunder; and

     WHEREAS, LICENSEE desires to obtain a license under the PATENT RIGHTS upon
the terms and conditions hereinafter set forth.

     NOW THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto agree as follows:

*    CONFIDENTIAL TREATMENT REQUESTED



1.   DEFINITIONS

     For the purposes of this Agreement, the following words and phrases shall
have the following meanings:

     1.1. "TEPHA" and "METABOLIX" shall include "AFFILIATES" defined as a
          related company of TEPHA or METABOLIX, respectively, the voting stock
          of which is directly or indirectly at least fifty percent (50%) owned
          and controlled by TEPHA or METABOLIX, respectively, an organization
          which directly or indirectly controls more than fifty percent (50%) of
          the voting stock of TEPHA or METABOLIX, respectively, and an
          organization the majority ownership of which is directly or indirectly
          common to the ownership of TEPHA or METABOLIX, respectively.

     1.2. "PATENT RIGHTS" shall mean all of the following METABOLIX and MIT
          intellectual property, respectively, the "METABOLIX PATENT RIGHTS" and
          the MIT PATENT RIGHTS":

          1.2.1. the United States patents listed in Appendix A;

          1.2.2. the United States patent applications listed in Appendix A and
                 United States patent applications filed after the EFFECTIVE
                 DATE on IMPROVEMENTS, and divisionals, continuations and claims
                 of continuation-in-part applications which shall be directed to
                 subject matter specifically described in such patent
                 applications, and the resulting patents;

          1.2.3. any patents resulting from reissues or reexaminations of the
                 United States patents described in 1.2.1 and 1.2.2 above;

          1.2.4. the Foreign patents listed in Appendix A;

          1.2.5. the Foreign patent applications listed in Appendix A, and
                 divisionals, continuations and claims of continuation-in-part
                 applications which shall be directed to subject matter
                 specifically described in such Foreign patent applications, and
                 the resulting patents;

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          1.2.6. Foreign patent applications filed after the EFFECTIVE DATE on
                 any patent application in 1.2.2 and divisionals, continuations
                 and claims of continuation-in-part applications which shall be
                 directed to subject matter specifically described in such
                 patent applications, and the resulting patents; and

          1.2.7. any Foreign patents, resulting from equivalent Foreign
                 procedures to United States reissues and reexaminations, of the
                 Foreign patents described in 1.2.4, 1.2.5 and 1.2.6 above.

     1.3. A "LICENSED PRODUCT" shall mean any product or part thereof which:

          1.3.1. is covered in whole or in part by an issued, unexpired valid
                 claim or a pending claim contained in the PATENT RIGHTS in the
                 country in which any such product or part thereof is made, used
                 or sold; or

          1.3.2. is manufactured by using a process or is employed to practice a
                 process which is covered in whole or in part by an issued,
                 unexpired valid claim or a pending claim contained in the
                 PATENT RIGHTS in the country in which a LICENSED PROCESS is
                 used or in which such product or part thereof is used or sold.

     1.4. A "LICENSED PROCESS" shall mean any process which:

          1.4.1. is covered in whole or in part by an issued, unexpired valid
                 claim or a pending claim contained in the PATENT RIGHTS in the
                 country in which such process is used or in which the LICENSED
                 PRODUCT made thereby is used or sold.

     1.5. "NET SALES" shall mean TEPHA's and its sublicensees' billings for
          LICENSED PRODUCTS and LICENSED PROCESSES produced hereunder less the
          sum of the following:

          1.5.1. discounts allowed in amounts customary in the trade;

          1.5.2. sales, tariff duties and/or use taxes directly imposed and with
                 reference to particular sales;

          1.5.3. outbound transportation prepaid or allowed; and

          1.5.4. amounts allowed or credited on returns.

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     No deduction shall be made for commissions paid to individuals whether they
     be with independent sales agencies or regularly employed by TEPHA and on
     its payroll, or for cost of collections. LICENSED PRODUCTS shall be
     considered "sold" when invoiced. "NET SALES" shall not include LICENSED
     PRODUCTS sold for clinical testing, research or development purposes. If a
     LICENSED PRODUCT or LICENSED PROCESS shall be distributed or invoiced for a
     discounted price substantially lower than customary in the trade or
     distributed at no cost to AFFILIATES of TEPHA or otherwise, NET SALES shall
     be based on the customary amount billed for such LICENSED PRODUCTS or
     LICENSED PROCESSES.

     Where the LICENSED PRODUCT is a combination product consisting of polymer
     whose composition or manufacture is covered by the PATENT RIGHTS plus other
     materials (such as a growth factor, but not, for example, filler materials)
     that are not covered by the PATENT RIGHTS, then "NET SALES" shall mean the
     NET SALES of the full product multiplied by the fully loaded manufacturing
     cost of the polymer divided by the total fully loaded manufacturing cost of
     the total combination material. When the LICENSED PRODUCT consists of a
     combination product consisting of a component made from the polymer, plus
     other components, then "NET SALES" shall mean NET SALES of the total
     product multiplied by the fully loaded manufacturing cost of the polymer
     component divided by the fully loaded manufacturing cost of the total
     product. By "fully loaded" is meant the cost of goods sold plus overhead
     allocated to production and sale thereof.

     1.6. "FIELD OF USE" shall mean IN VIVO human and veterinary medical use of
          polymers falling within the PATENT RIGHTS, including, without
          limitation, tissue engineering, implantables, medical devices, drug
          delivery and contrast agents, but excluding medical disposables,
          surgical drapes and trays, nutritional and all other diagnostic uses.
          and excluding transgenic plant crop production of polymers.
          "IMPROVEMENT" shall mean an invention conceived and/or reduced to
          practice during the two-year period after the EFFECTIVE DATE and
          dominated by the claims of the PATENT RIGHTS listed on Appendix A and
          owned or CONTROLLED by METABOLIX or TEPHA (excluding any preexisting
          IMPROVEMENT owned or CONTROLLED by any entity as of the

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                                       4



          date it becomes a successor or permitted assignee of METABOLIX or
          TEPHA under Article 11).

     1.7. "KNOW-HOW" shall mean technical, manufacturing, regulatory and other
          information, methods, specifications, samples, processes, procedures,
          formulations, test data, protocols, and trade secrets owned or
          CONTROLLED by METABOLIX or TEPHA during the two-year period after the
          EFFECTIVE DATE and relating to the PATENT RIGHTS or to the
          development, manufacture or use of any LICENSED PRODUCTS or LICENSED
          PROCESSES (excluding any preexisting KNOW-HOW owned or CONTROLLED by
          any entity as of the date it becomes a successor or permitted assignee
          of METABOLIX or TEPHA under Article 11).

     1.8. "CONTROL" shall mean with respect to any IMPROVEMENTS or KNOW-HOW, the
          possession of the ability to grant a license or sublicense with
          respect thereto as provided for herein.

     1.9. "FDA" shall mean the United States Food and Drug Administration or any
          successor agency thereof.

2.   GRANT

     2.1. Subject to the terms and conditions of this Agreement, METABOLIX
          hereby grants to TEPHA the worldwide right and license in the FIELD OF
          USE to make, have made, use, lease, sell, offer for sale and import
          the LICENSED PRODUCTS and to practice the LICENSED PROCESSES until the
          expiration of the last to expire of the PATENT RIGHTS, unless this
          Agreement shall be sooner terminated according to the terms hereof.

     2.2  Under the terms of its license with MIT, METABOLIX has agreed that any
          sublicenses granted by it shall provide that the obligations to MIT of
          articles 2, 5, 7, 8, 9, 10, 12, 13 and 15 of its license with MIT
          shall be binding upon the sublicensee as if it were a party to that
          license agreement. METABOLIX further has agreed to attach copies of
          these articles to sublicense agreements, and a copy thereof is
          attached hereto as Appendix C. To the extent of any conflict between

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                                       5



          the terms of this Agreement and Appendix C, as to the MIT PATENT
          RIGHTS only, the terms of Appendix C shall prevail.

     2.3  In order to establish a period of exclusivity for TEPHA, METABOLIX
          hereby agrees that it shall not grant any other license to make, have
          made, use, lease, sell, offer for sale or import LICENSED PRODUCTS or
          to utilize LICENSED PROCESSES in the FIELD OF USE and shall not
          practice under the PATENT RIGHTS for its own purposes in the FIELD OF
          USE during the term of this Agreement; provided, however, MIT has
          reserved the right to practice under the MIT PATENT RIGHTS for its own
          noncommercial research purposes.

     2.4  Within six (6) months after the EFFECTIVE DATE, METABOLIX shall
          disclose to TEPHA in writing all METABOLIX-CONTROLLED KNOW-HOW not
          previously disclosed. During the two-year period after the EFFECTIVE
          DATE, each party shall also promptly disclose to the other in writing
          on an ongoing basis all additional KNOW-HOW and IMPROVEMENTS. Subject
          to Article 13 (Confidentiality), METABOLIX grants TEPHA the exclusive
          right and license to use METABOLIX KNOW-HOW and METABOLIX IMPROVEMENTS
          in connection with its license hereunder to the PATENT RIGHTS in the
          FIELD OF USE until termination or expiration of this Agreement;
          provided, however, after expiration of this Agreement, TEPHA shall
          retain a perpetual, royalty-free, non-exclusive license to the
          METABOLIX KNOW-HOW. Subject to Article 13 (Confidentiality) and
          mutually agreed upon royalty and other terms, TEPHA grants METABOLIX
          the exclusive right and license to use TEPHA KNOW-HOW and TEPHA
          IMPROVEMENTS in connection with the PATENT RIGHTS outside the FIELD OF
          USE until the last to expire of any patent rights covering the TEPHA
          IMPROVEMENTS; provided, however, after expiration of this Agreement,
          METABOLIX shall retain a perpetual, royalty-free, non-exclusive
          license to the METABOLIX KNOW-HOW.

     2.5  TEPHA shall have the right to enter into sublicensing agreements for
          the rights, privileges and licenses granted hereunder. Upon any
          termination of this

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                                       6



          Agreement, sublicensees' rights shall also terminate, subject to
          Paragraph 14.6 hereof.

     2.6  TEPHA agrees to incorporate terms and conditions substantively similar
          to Articles 1, 2, 5, 7.1, 8, 9, 10, 11, 12, 13, 14.5, 14.6, and 16 of
          this Agreement into its sublicense agreements, that are sufficient to
          enable TEPHA to comply with this Agreement.

     2.7  TEPHA agrees to forward to METABOLIX a copy of any and all sublicense
          agreements promptly upon execution by the parties.

     2.8  TEPHA shall not receive from sublicensees anything of value in lieu of
          cash payments in consideration for any sublicense under this
          Agreement, without the express prior written permission of METABOLIX.

     2.9  Nothing in this Agreement shall be construed to confer any rights upon
          TEPHA by implication, estoppel or otherwise as to any technology or
          patent rights of METABOLIX, MIT or any other entity other than the
          PATENT RIGHTS, regardless of whether such patent rights shall be
          dominant or subordinate to any PATENT RIGHTS.

3.   DUE DILIGENCE

     3.1. TEPHA shall use diligent efforts to bring one or more LICENSED
          PRODUCTS or LICENSED PROCESSES to market through a thorough, vigorous
          and diligent program for exploitation of the PATENT RIGHTS and shall
          continue active, diligent development and marketing efforts for one or
          more LICENSED PRODUCTS or LICENSED PROCESSES throughout the term of
          this Agreement.

     3.2. In addition:

          3.2.1. TEPHA shall raise in connection with the PATENT RIGHTS and
                 allocated for expenditure for efforts under Paragraphs 3.1 and
                 3.2, a cumulative total of investment capital and/or research
                 and development funds of: * from the Effective Date. Such
                 cumulative investment capital and/or research and development
                 funds shall include funds invested or

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                                       7



                 expended by a joint venture in which TEPHA owns at least a
                 thirty-three percent (33%) interest provided that such funds
                 are used substantially for the development and marketing of
                 LICENSED PRODUCTS and LICENSED PROCESSES.

          3.2.2. TEPHA shall use commercially reasonable efforts to promptly and
                 diligently generate data and perform tests and studies
                 sufficient to file, and shall file, an application for approval
                 by the FDA of a first LICENSED PRODUCT *.

          3.2.3. TEPHA shall obtain FDA approval of such first LICENSED PRODUCT
                 *.

          3.2.4. TEPHA shall keep METABOLIX informed of progress in its efforts
                 to develop and commercialize LICENSED PRODUCTS and PROCESSES.
                 METABOLIX shall have the right to contact a representative of
                 TEPHA periodically by telephone to discuss TEPHA's progress
                 with the development of LICENSED PRODUCTS and PROCESSES and
                 sales of such LICENSED PRODUCTS and PROCESSES once launched. In
                 addition, on or before March 1 of each year after the EFFECTIVE
                 DATE until the first commercial sale of a LICENSED PRODUCT,
                 TEPHA shall make a written annual summary report to METABOLIX
                 covering the preceding year ending December 31, regarding the
                 progress toward commercial use of LICENSED PRODUCTS and
                 PROCESSES. All information disclosed by TEPHA to METABOLOX
                 under this provision shall be deemed the Confidential
                 Information (as further discussed in Paragraph 13.1) of TEPHA.

     3.3. TEPHA's failure to perform in accordance with Paragraphs 3.1 and 3.2
          above shall be grounds for METABOLIX to terminate this Agreement
          pursuant to Paragraph 14.3 hereof; provided, however, as to Paragraphs
          3.2.2 and 3.2.3, if during the cure period provided in Paragraph 14.3,
          TEPHA shall demonstrate to the reasonable satisfaction of METABOLIX
          that TEPHA shall have expended good faith and diligent efforts using
          reasonable resources to meet the milestone(s)

*    CONFIDENTIAL TREATMENT REQUESTED


                                       8



          and that circumstances beyond TEPHA'S control precluded TEPHA from
          performing in accordance with Paragraph 3.2.2 or 3.2.3, then the time
          for performance of such milestone(s) shall be extended for an
          additional period of six (6) months, or such other period as may be
          mutually agreed.

4.   ROYALTIES

     4.1. For the rights, privileges and license granted hereunder, TEPHA shall
          pay royalties to METABOLIX in the manner hereinafter provided until
          the expiration of the last to expire of the PATENT RIGHTS or until
          this Agreement shall earlier be terminated:

          4.1.1. A License Issue Fee of *, which said License Issue Fee shall be
                 deemed earned and due in three parts: * in investment capital
                 and/or research and development funds in connection with the
                 PATENT RIGHTS; * due upon the raising by TEPHA of *
                 (cumulatively) in investment capital and/or research and
                 development funds in connection with the PATENT RIGHTS; and *
                 due upon the raising by TEPHA of * (cumulatively) in investment
                 capital and/or research and development funds in connection
                 with the PATENT RIGHTS; provided, however, the full amount of
                 the License Issue Fee shall be due on the third anniversary of
                 the Effective Date, whether or not TEPHA shall have raised such
                 investment capital and/or research and development funds.

          4.1.2. Milestone payments as follows: * due on filing for approval of
                 the first LICENSED PRODUCT; and * due on FDA approval of the
                 first LICENSED PRODUCT.

          4.1.3. License Maintenance Fees of * per year payable on January 1,
                 2003 and on each subsequent January 1 during the term of this
                 Agreement; provided, however, License *.

          4.1.4. Running Royalties of * of NET SALES of LICENSED PRODUCTS and
                 LICENSED PROCESSES by TEPHA and its sublicensees .

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                                       9



          4.1.5. A * share of gross sublicensing revenue (including sublicense
                 issue fees, milestone payments, license maintenance fees and
                 similar consideration but excluding sublicensing revenue from
                 NET SALES covered in Paragraph 4.1.4 above) received by
                 LICENSEE.

     4.2. All payments due hereunder shall be paid in full, without deduction of
          taxes or other fees which may be imposed by any government, except as
          otherwise provided in Paragraph 1.5.2.

     4.3. No multiple royalties shall be payable because any LICENSED PRODUCT,
          its manufacture, use, lease or sale are or shall be covered by more
          than one PATENT RIGHTS patent application or PATENT RIGHTS patent
          licensed under this Agreement.

     4.4. Royalty payments shall be paid in the United States dollars in
          Cambridge, Massachusetts, or at such other place as METABOLIX may
          reasonably designate consistent with the laws and regulations
          controlling in any foreign country. If any current conversion shall be
          required in connection with the payment of royalties hereunder, such
          conversion shall be made by using the exchange rate prevailing at the
          Chase Manhattan Bank (N.A.) on the last business day of the calendar
          quarterly reporting period to which such royalty payments relate.

     4.5. To the extent that TEPHA shall obtain subsequent to the EFFECTIVE DATE
          licenses to third party patents or other intellectual property that
          are necessary to manufacture or sell LICENSED PRODUCTS or LICENSED
          PROCESSES in the FIELD OF USE, TEPHA may deduct from the Running
          Royalty due to METABOLIX under Paragraph 4.1.4, * of the Running
          Royalties due on such third party patents or intellectual property up
          to an amount equal to * of the Running Royalties due hereunder.

5.   REPORTS AND RECORDS

     5.1. TEPHA shall keep full, true and accurate books of account containing
          all particulars that may be necessary for the purpose of showing the
          amounts payable

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                                       10



          to METABOLIX hereunder. Said books of account shall be kept at TEPHA's
          principal place of business or the principal place of business of the
          appropriate division of TEPHA to which this Agreement relates. Said
          books and the supporting data shall be open at all reasonable times
          for three (3) years following the end of the calendar year to which
          they pertain, to the inspection of METABOLIX or its agents for the
          purpose of verifying TEPHA's royalty statement or compliance in other
          respect with this Agreement. Should such inspection lead to the
          discovery of a greater than Ten Percent (10%) discrepancy in reporting
          to METABOLIX' detriment, TEPHA agrees to pay the full cost of such
          inspection.

     5.2. TEPHA shall deliver to METABOLIX true and accurate reports, giving
          such particulars of the business conducted by TEPHA and its
          sublicensees under this Agreement as shall be pertinent to diligence
          under Article 3 and royalty accounting hereunder: before the first
          commercial sale of a LICENSED PRODUCT or LICENSED PROCESS, annually,
          on January 31 of each year; and after the first commercial sale of a
          LICENSED PRODUCT or LICENSED PROCESS, quarterly, within sixty (60)
          days after March 31, June 30, September 30 and December 31, of each
          year. These reports shall include at least the following:

          5.2.1. number and total billings of LICENSED PRODUCTS falling solely
                 within the METABOLIX PATENT RIGHTS manufactured, used or sold
                 by TEPHA and its sublicensees;

          5.2.2. number and total billings for LICENSED PRODUCTS falling solely
                 within the MIT PATENT RIGHTS manufactured, used or sold by
                 TEPHA and its sublicensees;

          5.2.3. number and total billings for LICENSED PRODUCTS falling within
                 both the METABOLIX PATENT RIGHTS and the MIT PATENT RIGHTS
                 manufactured, used or sold by TEPHA and its sublicensees;

          5.2.4. accounting for all LICENSED PROCESSES used or sold by TEPHA and
                 its sublicensees, along with a verification as to each LICENSED

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                 PROCESS stating whether it shall fall solely within the
                 METABOLIX PATENT RIGHTS, solely within the MIT PATENT RIGHTS or
                 both within the METABOLIX PATENT RIGHTS and the MIT PATENTS
                 RIGHTS.;

          5.2.5. deductions applicable as provided in Paragraph 1.5;

          5.2.6. Running Royalties due under Paragraph 4.1.4.;

          5.2.7. royalties due on payments from sublicensees under paragraph
                 4.1.5.;

          5.2.8. total royalties due; and

          5.2.9. names and addresses of all sublicensees of TEPHA.

          TEPHA shall endeavor to obtain similar information from its
          sublicensees and shall provide such information which is obtained to
          METABOLIX.

     5.3. With each such report submitted, TEPHA shall pay to METABOLIX the
          royalties due and payable under this Agreement. If no royalties shall
          be due, TEPHA shall so report.

     5.4. On or before the ninetieth (90th) day following the close of TEPHA's
          fiscal year, TEPHA shall provide METABOLIX with TEPHA's certified
          financial statements for the preceding fiscal year including, at a
          minimum, a balance sheet and an operating statement.

     5.5. The amounts due under Articles 4 and 6 shall, if overdue, bear
          interest until payment a per annum rate * in effect at the Chase
          Manhattan Bank (N.A.) on the due date. The payment of such interest
          shall not foreclose METABOLIX from exercising any other rights it may
          have as a consequence of the lateness of any payment.

6.   PATENT PROSECUTION

     6.1. Throughout the term of this Agreement, TEPHA, at its own expense,
          shall file, prosecute and maintain those METABOLIX PATENT RIGHTS
          listed on Appendix B in METABOLIX' name; provided, however, METABOLIX
          shall be entitled to review and comment upon in a timely manner all
          actions undertaken in

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          the prosecution of all patents and applications. TEPHA agrees to seek
          strong, broad claims in the best interest of METABOLIX and shall not
          abandon the subject matter of any substantive claim without the prior
          written permission of METABOLIX, such permission not to be
          unreasonably withheld. If TEPHA shall elect not to file, prosecute, or
          maintain any such METABOLIX PATENT RIGHT, TEPHA shall so notify
          METABOLIX in writing with at least thirty (30) days notice prior to
          any filing, action, payment or the like being due, in which event
          METABOLIX shall have the right to file, prosecute, or maintain such
          METABOLIX PATENT RIGHT, and TEPHA shall have no further license rights
          as to such METABOLIX PATENT RIGHT application or patent under this
          Agreement.

     6.2. Payment of all out-of-pocket fees and costs relating to the filing,
          prosecution, and maintenance of those METABOLIX PATENT RIGHTS listed
          on Appendix B shall be the responsibility of TEPHA, whether such fees
          and costs were incurred before or after the Effective Date of this
          Agreement. Payment for out-of-pocket costs incurred by METABOLIX prior
          to the Effective Date shall be made in three parts:

          6.2.1. Twenty-Five Percent (25%) on or before a date six (6) months
                 from the Effective Date of this Agreement;

          6.2.2. Twenty-Five Percent (25%) on or before a date nine (9) months
                 from the Effective Date of this Agreement;

          6.2.3. The remaining Fifty Percent (50%) on or before a date fifteen
                 (15) months from the Effective Date of this Agreement.

7.   INFRINGEMENT

     7.1. Each party shall inform the other promptly in writing of any alleged
          infringement of the PATENT RIGHTS by a third party and of any
          available evidence thereof.

     7.2. During the term of this Agreement, TEPHA shall have the right, but
          shall not be obligated, to prosecute at its own expense all
          infringements of the PATENT

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                                       13



          RIGHTS in the FIELD OF USE and, in furtherance of such right,
          METABOLIX hereby agrees that TEPHA may join METABOLIX as a party
          plaintiff in any such suit, without expense to METABOLIX. The total
          cost of any such infringement action commenced solely by TEPHA shall
          be borne by TEPHA. In the event that TEPHA shall have exercised its
          right to bring an action, TEPHA shall be responsible for defending
          against any counterclaims alleging invalidity or unenforceability of a
          PATENT RIGHT and for prosecuting the action through to settlement or
          other final disposition. In the event that TEPHA shall undertake the
          enforcement of the PATENT RIGHTS in the FIELD OF USE by litigation,
          TEPHA may withhold up to * of the Running Royalties otherwise
          thereafter due to METABOLIX under Section 4.1.4 and apply the same
          toward reimbursement of up to * of TEPHA'S expenses, including
          reasonable attorneys' fees, in connection therewith.

     7.3. If within six (6) months after having been notified of any alleged
          infringement, TEPHA shall have been unsuccessful in persuading the
          alleged infringer to desist and shall not have brought and shall not
          be diligently prosecuting an infringement action, or if TEPHA shall
          notify METABOLIX at any time prior thereto of its intention not to
          bring suit against any alleged infringer, then, and in those events,
          only, METABOLIX shall have the right, but shall not be obligated, to
          prosecute at its own expense any infringement of the PATENTS RIGHTS in
          the FIELD of USE. In furtherance of such right, TEPHA hereby agrees
          that METABOLIX may include TEPHA as a party plaintiff in any such
          suit, without expense to TEPHA. The total cost of any such
          infringement action commenced or defended solely by METABOLIX shall be
          borne by METABOLIX, and METABOLIX shall be responsible for defending
          against any counterclaims alleging invalidity or unenforceability of a
          PATENT RIGHT.

     7.4. Any recovery of damages by the prosecuting party for any such suit
          shall be applied first in satisfaction of any unreimbursed expenses
          and legal fees of such party relating to the suit, and next toward
          reimbursement of METABOLIX for any royalties past due or withheld and
          applied pursuant to Paragraph 7.2, if applicable.

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                                       14



          The balance remaining from any such recovery shall be divided with *
          to the non-prosecuting party and any remaining balance to the
          prosecuting party.

     7.5. In the event of the institution of any suit by a third party against
          METABOLIX, TEPHA or its sublicensees for patent infringment involving
          the PATENT RIGHTS in the FIELD OF USE, the party sued shall promptly
          notify the other party in writing. TEPHA shall have the right, but not
          the obligation, to defend such suit at its own expense. If TEPHA shall
          elect not to defend, TEPHA shall promptly notify METABOLIX. METABOLIX
          shall have the right, but not the obligation, to defend such suit at
          its expense.

     7.6. If TEPHA shall exercise its rights pursuant to Section 7.5 to defend
          the PATENT RIGHTS, then * of TEPHA'S Running Royalty obligation in
          Section 4.1.4 during the pendency of defense in the proceeding shall
          be held in an interest-bearing escrow account by TEPHA until a final
          decision shall be rendered by a court or administrative tribunal of
          competent jurisdiction from which no appeal can be or is taken
          provided that:

          7.6.1. If the enforceability of all material claims in such PATENT
                 RIGHT claiming the LICENSED PRODUCT or PROCESS is upheld by a
                 court or other legal or administrative tribunal from which no
                 appeal is or can be taken, then the amount of Running Royalties
                 withheld during the period of escrow, plus all accrued
                 interest, shall be promptly paid to METABOLIX; or

          7.6.2. If one or more claims in such PATENT RIGHT covering the
                 LICENSED PRODUCT or PROCESS shall be held to be invalid or
                 otherwise unenforceable by a court or other legal or
                 administrative tribunal in any country from which no appeal is
                 or can be taken or the scope thereof is modified and, as a
                 result such PATENT RIGHT no longer offers substantial
                 protection to a LICENSED PRODUCT or PROCESS in such country,
                 then the amount of Running Royalties withheld during the period
                 of escrow shall not be owed to METABOLIX; TEPHA shall be
                 entitled to all payments and accrued interest in the escrow
                 account; and the Running

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                 Royalties otherwise payable shall be abated in their entirety
                 with respect to NET SALES of LICENSED PRODUCTS covered only by
                 such PATENT RIGHT in the country in which such claims were so
                 held invalid or unenforceable or so modified.

     7.7. In any suit as either party may institute to enforce or defend the
          PATENT RIGHTS pursuant to this Agreement, the other party hereto
          shall, at the request and expense of the party initiating such suit,
          cooperate in all respects and, to the extent possible, have its
          employees testify when requested and make available relevant records,
          papers, information, samples, specimens and the like. The parties
          shall keep one another informed of the status of and of their
          respective activities regarding any litigation or settlement thereof
          concerning the PATENT RIGHTS in the FIELD of USE or LICENSED PRODUCTS
          or PROCESSES ; provided, however, that no settlement or consent
          judgement or other voluntary final disposition of any suit defended or
          action brought by a party pursuant to this Article 7 may be entered
          into without the consent of the other party, such consent not to be
          unreasonably withheld or delayed. As to the MIT PATENT RIGHTS, no
          settlement, consent judgement or other voluntary final disposition of
          the suit may be entered into without the consent of MIT which consent
          shall not unreasonably be withheld. TEPHA shall indemnify MIT against
          any order for costs that may be made against MIT in proceedings
          commenced and defended solely by TEPHA.

     7.8. TEPHA, during the period of this Agreement, shall have the sole right
          in accordance with the terms and conditions herein to sublicense any
          alleged infringer for future use of the PATENT RIGHTS in the FIELD OF
          USE.

8.   PRODUCT LIABILITY

     8.1. TEPHA shall at all times during the term of this Agreement and
          thereafter, indemnify, defend and hold METABOLIX and MIT, their
          directors, trustees, officers, employees and affiliates, harmless
          against all claims and expenses,

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          arising out of the death of or injury to any person or persons or out
          of any damage to property and against any other claim, proceeding,
          demand, expense and liability of any kind whatsoever resulting from or
          relating to the production, manufacture, sale, use, lease, consumption
          or advertisement of the LICENSED PRODUCTS and/or LICENSED PROCESS(es)
          *.

     8.2. Prior to the first use of a LICENSED PRODUCT for humans, TEPHA shall
          obtain and carry in full force and effect commercial, general
          liability insurance, including product liability insurance, which
          shall protect TEPHA, METABOLIX, and MIT with respect to events covered
          by Paragraph 8.1 above. Such insurance shall be written by a reputable
          insurance company authorized to do business in the Commonwealth of
          Massachusetts, shall list METABOLIX and MIT as additional named
          insureds thereunder, shall be endorsed to include product liability
          coverage and shall require thirty (30) days written notice to be given
          to METABOLIX and MIT prior to any cancellation or material change
          thereof. The limits of such insurance shall not be less than * per
          occurrence with an aggregate of * for personal injury including death;
          and * per occurrence with an aggregate of * for property damage. TEPHA
          shall provide METABOLIX with Certificates of Insurance evidencing the
          same.

     8.3. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER
          PARTY, NOR MIT, NOR THEIR RESPECTIVE DIRECTORS, TRUSTEES, OFFICERS,
          EMPLOYEES, AND AFFILIATES MAKE ANY REPRESENTATIONS OR EXTEND ANY
          WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT
          LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
          PURPOSE, VALIDITY OF PATENT RIGHTS CLAIMS, ISSUED OR PENDING, AND THE
          ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE.
          NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED AS A REPRESENTATION MADE
          OR WARRANTY GIVEN BY EITHER PARTY OR BY MIT THAT THE PRACTICE OF THE
          LICENSES GRANTED HEREUNDER SHALL NOT

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          INFRINGE THE PATENT RIGHTS OR OTHER INTELLECTUAL OR PROPRIETARY RIGHTS
          OF ANY THIRD PARTY. * TEPHA, MIT OR THEIR RESPECTIVE DIRECTORS,
          TRUSTEES, OFFICERS, EMPLOYEES AND AFFILIATES BE LIABLE FOR INCIDENTAL
          OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING ECONOMIC DAMAGE OR
          INJURY TO PROPERTY AND LOST PROFITS, REGARDLESS OF WHETHER SUCH PARTY
          SHALL OR M.I.T. BE ADVISED, SHALL HAVE OTHER REASON TO KNOW, OR IN
          FACT SHALL KNOW OF THE POSSIBILITY OF THE FOREGOING.

9.   EXPORT CONTROLS

     9.1. TEPHA acknowledges that it is subject to United States laws and
          regulations controlling the export of technical data, computer
          software, laboratory prototypes and other commodities (including the
          Arms Export Control Act, as amended and the United States Department
          of Commerce Export Administration Regulations). The transfer of such
          items may require a license from the cognizant agency of the United
          States Government and/or written assurances by TEPHA that TEPHA shall
          not export data or commodities to certain foreign countries without
          prior approval of such agency. METABOLIX neither represents that a
          license shall not be required nor that, if required, it shall be
          issued.

10.  NON-USE OF NAMES

     10.1. Except as required by law or in raising funding, neither party shall
           use the names or trademarks of the other, nor of MIT, nor any
           adaptation thereof, nor the names of any of the other party's or
           MIT's employees, in any advertising, promotional or sales literature
           without prior written consent obtained from such party, or MIT, or
           said employee, in each case, such consent not to be unreasonably
           withheld, except that TEPHA may state that it is licensed by
           METABOLIX, or MIT, as

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                                       18



          applicable, under one or more of the patents and/or applications
          comprising the METABOLIX PATENT RIGHTS, or the MIT PATENT RIGHTS,
          respectively. TEPHA may, however, use the name of any employee of
          METABOLIX who is a consultant or member of an advisory board of TEPHA,
          with their permission, and provided, also, that their affiliation with
          METABOLIX is identified.

11.  ASSIGNMENT

     11.1. Except as expressly provided in Article 2, neither party shall
           directly or indirectly sell, transfer, assign, or delegate in whole
           or in part this Agreement, or any rights, duties, obligations or
           liabilities under this Agreement (collectively "assign"), by
           operation of law or otherwise without the prior written consent of
           the other party, such consent not to be unreasonably withheld or
           delayed; provided, however, so long as the assignee shall not be a
           competitor of the other party, either party shall have the right to
           assign all of its rights, duties, obligations and liabilities under
           this Agreement to any AFFILIATE or in connection with any sale,
           merger, consolidation, recapitalization or reorganization involving
           in each case the sale of all or substantially all of the capital
           stock of the party or the assets of such party to which this
           Agreement relates. This Agreement shall inure to the benefit of and
           be binding upon the permitted successors and assigns of METABOLIX and
           TEPHA.

12.  DISPUTE RESOLUTION

     12.1. Except for the right of either party to apply to a court of competent
           jurisdiction for a temporary restraining order, a preliminary
           injunction or other equitable relief to preserve the status quo or to
           prevent irreparable harm, and except for any dispute relating to
           patent validity or infringement, any and all claims, disputes or
           controversies arising under, out of or in connection with the
           Agreement, shall be mediated in good faith. The party raising such
           dispute shall promptly advise the other party of such claim, dispute
           or controversy in a writing which describes in

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                                       19



           reasonable detail the nature of such dispute. If the parties by their
           senior management representatives shall be unable to resolve the
           dispute within thirty (30) days, then by no later than forty (40)
           business days after the recipient has received such notice of
           dispute, each party shall have selected for itself a representative
           who shall have the authority to bind such party, and shall
           additionally have advised the other party in writing of the name and
           title of such representative. By no later than sixty (60) business
           days after the date of such notice of dispute, such representatives
           shall schedule a date for a mediation hearing with the Cambridge
           Dispute Settlement Center or Endispute Inc. in Cambridge,
           Massachusetts. The parties shall enter into good faith mediation and
           shall share the costs equally. If the representatives of the parties
           have not been able to resolve the dispute within thirty (30) business
           days after such mediation hearing, the parties shall have the right
           to pursue any other remedies legally available to resolve such
           dispute in either the Courts of the Commonwealth of Massachusetts, or
           in the United States District Court for the District of
           Massachusetts, to whose jurisdiction for such purposes METABOLIX and
           TEPHA each hereby irrevocably consents and submits.

     12.2. Notwithstanding the foregoing, nothing in this Article shall be
           construed to waive any rights or timely performance of any oblations
           under this Agreement.

13.  CONFIDENTIALTIY

     13.1. Both METABOLIX and TEPHA agree that all information disclosed to the
           other party shall be deemed "Confidential Information" of the
           disclosing party. In particular, "Confidential Information" shall be
           deemed to include, but not be limited to, KNOW-HOW, trade secrets,
           information, ideas, inventions, materials, samples, processes,
           procedures, methods, formulations, protocols, packaging designs and
           materials, test data, future development plans, "Product" launch
           date, technological know-how and engineering, manufacturing,
           regulatory, marketing,

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           servicing, sales, or financial matters relating to the disclosing
           party and its business.

     13.2. During the term of this Agreement and thereafter each party shall
           maintain all Confidential Information in confidence and shall not
           disclose any Confidential Information to any third party or use any
           such information for any unauthorized purpose. Each party may use
           such Confidential Information only to the extent required to
           accomplish the purposes of this Agreement. Both parties shall take
           precautions as each normally takes with its own confidential and
           proprietary information to prevent disclosure to third parties, but
           no less than reasonable precautions.

     13.3. Both parties agree that, notwithstanding the above, the obligations
           of confidentiality and nonuse shall not apply to:

          13.3.1. Information that at the time of disclosure is, or thereafter
                  becomes, generally known or available to the public, through
                  no wrongful act or failure to act on the part of the receiving
                  party;

          13.3.2. Information that was known by or in the possession of the
                  receiving party at the time of receiving such information from
                  the disclosing party, as evidenced by written records;

          13.3.3. Information obtained by the receiving party from a third-party
                  source who is not breaching a commitment of confidentiality to
                  the disclosing party by revealing such information to the
                  receiving party;

          13.3.4. Information that is developed independently by the receiving
                  party without use of confidential information of the other
                  party, as evidenced by written records;

          13.3.5. Information that is the subject of a granted written
                  permission to disclose that is issued by the disclosing party
                  to the other party;

          13.3.6. Information that is required to be disclosed pursuant to the
                  law, by request of the FDA or other government authority or
                  for medical or safety reasons, but only to the extent required
                  to be disclosed by the FDA or other government authority; or

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          13.3.7. Information provided to consultants, subcontractors or agents
                  for purposes consistent with this Agreement pursuant to a
                  non-disclosure agreement with said parties.

     13.4. Both Parties shall make diligent efforts to ensure that all
           employees, consultants, agents and subcontractors who may have access
           to Confidential Information of the other party, and any other third
           parties who might have access to Confidential Information, shall sign
           nondisclosure agreements consistent with the terms set forth in this
           Section. No Confidential Information shall be disclosed to any
           employees, subcontractors, agents, consultants or third parties who
           do not have a need to receive such information for the purposes of
           this Agreement.

14.  TERMINATION

     14.1. If TEPHA shall cease to carry on its business, this Agreement shall
           terminate upon notice by METABOLIX, except as provided in Article 11
           (Assignment).

     14.2. Should TEPHA fail to make any payment whatsoever due and payable to
           METABOLIX hereunder, METABOLIX shall have the right to terminate this
           Agreement effective on sixty (60) days' notice, unless TEPHA shall
           make all such payments to METABOLIX, within said sixty (60) day
           period. Upon the expiration of the sixty (60) day period, if TEPHA
           shall not have made all such payments to METABOLIX, the rights,
           privileges and license granted hereunder shall automatically
           terminate.

     14.3. Upon any material breach or default of this Agreement by TEPHA, other
           than those occurrences set out in Paragraphs 14.1 and 14.2
           hereinabove, which shall always take precedence in that order over
           any material breach or default referred to in this Paragraph 14.3,
           METABOLIX shall have the right to terminate this Agreement and the
           rights, privileges and license granted hereunder effective on one
           hundred and twenty (120) days' notice to TEPHA. Such termination
           shall become automatically effective unless TEPHA shall have cured
           any such material breach or default prior to the expiration of the
           one hundred and twenty (120) day

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           period. Upon any material breach or default of this Agreement by
           METABOLIX, TEPHA shall have the right to terminate this Agreement and
           the rights, privileges and license granted hereunder effective on one
           hundred and twenty (120) days' notice to METABOLIX. Such termination
           shall become automatically effective unless METABOLIX shall have
           cured any such material breach or default prior to the expiration of
           the one hundred and twenty (120) day period.

     14.4. TEPHA shall have the right to terminate this Agreement at any time on
           six (6) months' notice to METABOLIX, and upon payment of all amounts
           due METABOLIX through the effective date of the termination.

     14.5. Upon termination of this Agreement for any reason, nothing herein
           shall be construed to release either party from any obligation that
           matured prior to the effective date of such termination; and Articles
           1, 8, 9, 10, 12, 13, 14.5, 14.6, and 16 shall survive any such
           termination. TEPHA and any sublicensee thereof may, however, after
           the effective date of such termination, sell all LICENSED PRODUCTS in
           inventory, and complete LICENSED PRODUCTS in the process of
           manufacture at the time of such termination and sell the same,
           provided that TEPHA shall pay to METABOLIX the Running Royalties
           thereon as required by Article 4 of this Agreement and shall submit
           the reports required by Article 5 hereof on the sales of LICENSED
           PRODUCTS.

     14.6. Upon termination of this Agreement for any reason, any sublicense not
           then in default shall continue in full force and effect except that
           METABOLIX shall be substituted in place of the TEPHA, and METABOLIX
           shall have no obligations under such sublicense beyond their
           obligations herein.

     14.7. Upon termination of this AGREEMENT for any reason (except expiration
           or termination by TEPHA for breach by METABOLIX under Paragraph
           14.3), TEPHA shall, grant and hereby grants METABOLIX a nonexclusive
           license, with the right to sublicense, to all information then in
           TEPHA's possession relevant to the commercialization of LICENSED
           PRODUCTS and/or LICENSED PROCESSES, including, but not limited to,
           KNOW-HOW and

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           IMPROVEMENTS owned or controlled by TEPHA as of the effective date of
           termination (whether such know-how and improvements shall be owned or
           CONTROLLED by TEPHA during the two-year period after the EFFECTIVE
           DATE or at any time during the term of this Agreement), research
           results, toxicology data, assays, preclinical data, prototypes,
           manufacturing processes including cell lines and unused, unexpired
           amounts of LICENSED PRODUCTS, clinical results, regulatory
           submissions, suppliers and customer lists. In such event TEPHA shall
           receive a royalty equal to * of the gross amount of consideration, if
           any, subsequently received by METABOLIX with respect to the LICENSED
           PRODUCTS and LICENSED PROCESSES].

15.  PAYMENTS, NOTICES AND OTHER COMMUNICATIONS

     15.1. Any payment, notice or other communication pursuant to this Agreement
           shall be sufficiently made or given on the date of mailing if sent to
           such party by certified first class mail, postage prepaid, return
           receipt requested addressed to it at its address below or as it shall
           designate by written notice given to the other party:

     In the case of METABOLIX:
     President
     METABOLIX, Inc.
     303 Third Street
     Cambridge, Massachusetts 02142

     In the case of TEPHA:
     President
     TEPHA, Inc.
     303 Third Street
     Cambridge, Massachusetts 02142

16.  MISCELLANEOUS PROVISIONS

     16.1. This Agreement shall be construed, governed, interpreted and applied
           in accordance with the laws of the Commonwealth of Massachusetts,
           U.S.A., except

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           that questions affecting the construction and effect of any patent
           shall be determined by the law of the country in which the patent was
           granted.

     16.2. The parties hereto acknowledge that this Agreement sets forth the
           entire Agreement and understanding of the parties hereto as to the
           subject matter hereof, and shall not be subject to any change or
           modification except by the execution of a written instrument
           subscribed to by the parties hereto.

     16.3. The provisions of this Agreement are severable, and in the event that
           any provisions of this Agreement shall be determined to be invalid or
           unenforceable under any controlling body of the law, such invalidity
           or unenforceability shall not in any way affect the validity or
           enforceability of the remaining provisions hereof.

     16.4. The failure of either party to assert a right hereunder or to insist
           upon compliance with any term or condition of this Agreement shall
           not constitute a waiver of that right or excuse a similar subsequent
           failure to perform any such term or condition by the other party.

     16.5. TEPHA agrees to mark the LICENSED PRODUCTS sold in the United States
           with all applicable United States patent numbers. All LICENSED
           PRODUCTS shipped to or sold in other countries shall be marked in
           such a manner as to conform with the patent laws and practice of the
           country of manufacture or sale.

     IN WITNESS WHEREOF, the parties have duly executed this Agreement the day
and year set forth below.

METABOLIX, INC.


By:    /s/ Edward M. Muller
       ------------------------------
Name:  Edward M. Muller
Title: President
Date:  10/1/99

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TEPHA, INC.


By:    /s/ Simon F. Williams
       ------------------------------
Name:  Simon F. Williams
Title: President
Date:  October 1, 1999

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                                       26



WHENEVER CONFIDENTIAL INFORMATION IS OMITTED HEREIN (SUCH OMISSIONS ARE DENOTED
BY AN ASTERISK*), SUCH CONFIDENTIAL INFORMATION HAS BEEN SUBMITTED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.

                                LICENSE AGREEMENT

     This Agreement is made and entered into this 9th day of September, 2003
(the "Effective Date") by and between Metabolix, Inc., a corporation duly
organized and existing under the laws of the State of Delaware and having its
principal office at 303 Third Street, Cambridge, Massachusetts 02142
(hereinafter referred to as "Metabolix"), and Tepha, Inc., a corporation duly
organized and existing under the laws of the State of Delaware and having its
principal office at 303 Third Street, Cambridge, Massachusetts 02142
(hereinafter referred to as "Tepha").

     WHEREAS, Metabolix is the assignee from Monsanto Company ("Monsanto") of
all right, title and interest in the Patent Rights, Biological Materials and
Know-How (all as defined herein);

     WHEREAS, Metabolix wishes to grant, and Tepha wishes to receive, license
rights to the Patent Rights, Biological Materials and Know-How; and

     WHEREAS, the grant of such license rights is subject to the prior written
approval of Monsanto, which has been obtained, and a copy of which is attached
as Appendix D for reference only.

     NOW THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto agree as follows:

1.   DEFINITIONS.

     1.1.  "Patent Rights" shall mean: (i) the U.S. and foreign patent
           applications and patents set forth in Appendix A, and the inventions
           described and/or claimed therein, and all other patent rights
           assigned to Metabolix by Monsanto not relating to plant crop
           production of PHAs shall be added to Appendix A by amendment; (ii)
           any divisionals, continuations and continuation-in-part applications
           which shall be directed to subject matter specifically described in
           such patent applications; (iii) the resulting U.S. and foreign
           patents; (iv) any reissues, reexaminations or extensions of such
           patents; and (v) all foreign counterparts of the above patent
           applications and patents. For the avoidance of doubt, the Patent
           Rights do not include any of the Zeneca Limited patent rights
           licensed to Metabolix by Monsanto in the Patent Sub-License Agreement
           dated May 14, 2001.

     1.2.  "Biological Materials" shall mean the biological materials set forth
           in Appendix B, and all Progeny and Unmodified Derivatives of those
           materials, but excluding Modifications. "Progeny" shall mean an
           unmodified descendant from the Biological Materials, such as virus
           from virus, cell from cell, or organism from organism. "Unmodified
           Derivatives" shall mean substances created by Tepha which constitute
           an unmodified functional subunit or product expressed by the
           Biological Material(s), (some examples include: subclones of
           unmodified cell

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           lines, purified or fractionated subsets of the Biological
           Material(s), proteins expressed by DNA/RNA supplied by Metabolix, or
           monoclonal antibodies secreted by a hybridoma cell line).

     1.3.  "Modifications" shall mean substances created by Tepha that
           contain/incorporate Biological Material(s).

     1.4.  "Know-How" shall mean the know-how set forth in Appendix C.

     1.5.  "Field" shall mean IN VIVO human and veterinary medical use of
           polymers falling within the Patent Rights, including, without
           limitation, tissue engineering, cell therapy, implantables, medical
           devices, wound sealants, prescription and non-prescription drug
           delivery, and contrast agents, but excluding (i) medical disposables,
           surgical drapes and trays, sanitary products, barrier contraceptives,
           nutritional and all other diagnostic uses and (ii) transgenic plant
           crop production of polymers. For the purpose of clarity, it is agreed
           and understood that, notwithstanding anything in the prior sentence
           to the contrary, diagnostic systems and/or devices used to monitor
           the IN VIVO use of a Licensed Product shall be included within the
           Field. For the purpose of determining whether a use falls within the
           Field, the parties shall apply the following guidelines: (x)
           regulation of a use by the U.S. Food and Drug Administration or other
           regulatory body shall be indicative but not presumptive that a use is
           an IN VIVO use, and (y) uses marketed only to physicians shall
           primarily fall within the Field, and (z) uses marketed directly only
           to consumers shall primarily fall outside the Field.

     1.6.  "Net Sales shall mean Tepha's billings for the use, sale, lease or
           other disposition of Licensed Products and Licensed Processes, and
           the fair market value of noncash consideration, less:

           1.6.1  discounts allowed in amounts customary in the trade;

           1.6.2  sales, tariff duties and/or use taxes directly imposed and
                  with reference to particular sales;

           1.6.3  outbound transportation prepaid or allowed; and

           1.6.4  amounts allowed or credited on returns.

     No deduction shall be made for commissions paid to individuals whether they
     be with independent sales agencies or regularly employed by Licensee and on
     its payroll, or for cost of collections. Licensed Products shall be
     considered "sold" when invoiced. "Net Sales" shall not include Licensed
     Products sold for clinical testing, research or development. If a Licensed
     Product or Licensed Process shall otherwise be distributed or invoiced for
     a discounted price substantially lower than customary in the trade or
     distributed at no cost to Tepha Affiliates or otherwise, Net Sales shall be
     based on the customary amount billed for such Licensed Products or Licensed
     Processes.

     Where the Licensed Product is a combination product consisting of material
     whose composition or manufacture is covered by the Patent Rights ("Patented
     Material") plus other materials (such as a growth factor, but not, for
     example, filler materials) that are not

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                                        2



     covered by the Patent Rights, then "Net Sales" shall mean the Net Sales of
     the full product multiplied by the fully loaded manufacturing cost of the
     Patented Material divided by the total fully loaded manufacturing cost of
     the total combination product. When the Licensed Product consists of a
     combination product consisting of a component made from the Patented
     Material plus other components, then "Net Sales" shall mean Net Sales of
     the total product multiplied by the fully loaded manufacturing cost of the
     Patented Material component divided by the fully loaded manufacturing cost
     of the total product. By "fully loaded" is meant the cost of goods sold
     plus overhead allocated to production and sale thereof.

     1.7.  "Tepha" and "Metabolix" shall include "Affiliates." "Affiliates"
           shall mean a related company of Tepha or Metabolix, respectively, the
           voting stock of which is directly or indirectly at least fifty
           percent (50%) owned and controlled by Tepha or Metabolix, an
           organization which directly or indirectly controls more than fifty
           percent (50%) of the voting stock of Tepha or Metabolix, and an
           organization the majority ownership of which is directly or
           indirectly common to the ownership of Tepha or Metabolix.

     1.8.  "Licensed Process" means any process which is covered in whole or in
           part by an issued, unexpired valid claim or a pending claim contained
           in the Patent Rights in the country in which such process is used or
           in which the Licensed Product made thereby is used or sold.

     1.9.  "Licensed Product" means any product or part thereof which: (i) is
           covered in whole or in part by an issued, unexpired valid claim or a
           pending claim contained in the Patent Rights in the country in which
           any such product or part thereof is made, used or sold; or (ii) is
           manufactured by using a process or is employed to practice a process
           which is covered in whole or in part by an issued unexpired valid
           claim or a pending claim contained in the Patent Rights in the
           country in which a Licensed Process is used or in which such product
           or part thereof is used or sold.

2.   LICENSE GRANT AND OWNERSHIP

     2.1.  NONEXCLUSIVE LICENSE. Subject to the terms and conditions of this
           Agreement, Metabolix hereby grants to Tepha the worldwide,
           nonexclusive right and license, with the right to sublicense, in the
           Field: (i) under the Patent Rights to make, have made, use, lease,
           sell, offer for sale and import the Licensed Products and to practice
           the Licensed Processes until the expiration of the last to expire of
           the Patent Rights, unless this Agreement shall be sooner terminated
           according to the terms hereof; (ii) to make, have made, use, lease,
           sell, offer for sale, import and create Modifications of the
           Biological Materials; and (iii) to use Know-How.

     2.2.  EXCLUSIVE LICENSE. Subject to the terms and conditions of this
           Agreement, Metabolix hereby grants to Tepha the worldwide,
           royalty-free, exclusive right and license, with the right to
           sublicense, in the Field to make, have made, use, lease, sell, offer
           for sale and import Modifications.

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                                        3



     2.3.  DELIVERY. Tepha shall have thirty (30) days after the Effective Date
           to review and make copies of the Know-How and Biological Materials.
           Metabolix makes no representations regarding the viability of any of
           the Biological Materials. After thirty (30) days from the Effective
           Date, any request to review or make copies of the Know-How or
           Biological Materials shall be at Metabolix's discretion.

     2.4.  OWNERSHIP OF MODIFICATIONS. Tepha hereby assigns to Metabolix all of
           its right, title and interest in and to the Modifications, including
           any and all intellectual property rights therein. Tepha also agrees
           to promptly execute all assignments and patent applications, and
           similar documents as reasonably requested by Metabolix. If Metabolix
           shall be unable to obtain Tepha's execution of such documents for any
           reason, Tepha hereby irrevocably appoints Metabolix and its agents as
           Tepha's agents and attorneys-in-fact to execute such documents with
           the same legal effect as if Tepha shall have executed them.

     2.5.  RIGHT TO SUBLICENSE. Tepha's right to sublicense in Paragraphs 2.1
           and 2.2 is subject to Metabolix' prior written approval during the
           period that Metabolix requires Monsanto's approval to sublicense.
           Tepha agrees to insert a provision in each sublicense that Metabolix
           is a third party beneficiary of the sublicense as to the sublicensed
           Patent Rights, with the right to enforce the applicable terms thereof
           in the event Tepha does not enforce its rights.

     2.6.  NO OTHER RIGHTS. Nothing in this Agreement shall be construed to
           confer any rights upon Tepha by implication, estoppel or otherwise
           beyond the express licenses granted by Metabolix or as to any
           technology or patent rights of Metabolix or any other entity other
           than the Patent Rights, Biological Materials and Know-How.

     2.7.  MONSANTO RIGHTS. Monsanto retains certain rights to Patent Rights as
           collateral in the event of default by Metabolix under a Security
           Agreement between Monsanto and Metabolix dated May 12, 2001, and this
           Agreement is subject to Monsanto's rights therein. Monsanto has
           granted its approval of this Agreement in the letter attached as
           Appendix D; however, Monsanto retains all of its rights during the
           remaining term of the Security Agreement, including without
           limitation its rights to Patent Rights as collateral, and in the
           event Tepha exercises its right to sublicense third parties, such
           sublicenses shall also be subject to such Monsanto's rights.

3.   ROYALTIES

     3.1.  LICENSE ISSUE FEE. In partial consideration for the license rights
           granted herein, Tepha shall pay Metabolix a License Issue Fee of *
           which shall be deemed earned and due as follows: * on the Effective
           Date, and * on each of the six-month, twelve-month and
           eighteenth-month anniversaries of the Effective Date; provided,
           however, the balance of the full amount of such License Issue Fee
           shall be due upon the raising by Tepha of * (cumulatively) after the
           Effective Date in investment capital and/or research and development
           funds in connection with the

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                                        4



           Patent Rights, Biological Materials and Know-How, and payment shall
           be made within thirty (30) days thereafter.

     3.2   RUNNING ROYALTIES. In partial consideration for the license rights
           granted herein, Tepha shall pay Metabolix running royalties of * of
           Net Sales by Tepha ("Running Royalty"); provided, however, the
           maximum cumulative Running Royalties due on particular Net Sales of
           any Licensed Product or Licensed Process payable by Tepha to
           Metabolix for any quarter under (i) this Agreement, and (ii) the
           sublicense from Metabolix to Tepha to certain Massachusetts Institute
           of Technology patent rights dated October 1, 1999, as amended, shall
           be * of such Net Sales, subject to any deductions permitted under
           Paragraph 3.7.

     3.3   SUBLICENSE REVENUE. Tepha shall pay Metabolix a * share of gross
           sublicensing revenue, including sublicense issue fees, milestone
           payments, license maintenance fees, royalties on net sales, and
           similar consideration, and including, for the avoidance of doubt, the
           fair market value of any sublicense rights granted in a multi-part
           transaction, but excluding research and development funding received
           by Tepha; provided, however, the maximum cumulative share of gross
           sublicensing revenue in regard to a particular sublicense payable by
           Tepha to Metabolix for any quarter under (i) this Agreement, and (ii)
           the sublicense from Metabolix to Tepha to certain Massachusetts
           Institute of Technology patent rights dated October 1, 1999, as
           amended, shall be * of such gross sublicensing revenue. For purposes
           herein, sublicensees' net sales shall have a parallel meaning to the
           definition of Tepha's Net Sales in Paragraph 1.6.

     3.4   PAYMENTS IN FULL. All payments due hereunder shall be paid in full,
           without deduction of taxes or other fees which may be imposed by any
           government, except as otherwise provided in Paragraph 1.6.2.

     3.5   NO MULTIPLE ROYALTIES. No multiple Running Royalties shall be payable
           because any Licensed Product or Licensed Process, its manufacture,
           use, sale or importation are or shall be covered by more than one
           patent application or patent licensed under this Agreement.

     3.6   PAYMENT. Royalty payments shall be paid in the United States dollars
           in Cambridge, Massachusetts, or at such other place as Metabolix may
           reasonably designate consistent with the laws and regulations
           controlling in any foreign country. If any currency conversion shall
           be required in connection with the payment of royalties hereunder,
           such conversion shall be made by using the exchange rate published in
           the Wall Street Journal on the last business day of the calendar
           quarterly reporting period to which such royalty payments relate.

     3.7   THIRD PARTY LICENSES. To the extent that Tepha has executed or shall
           obtain subsequent to the Effective Date licenses to third party
           patents or other intellectual property that are necessary to
           manufacture or sell Licensed Products or Licensed Processes in the
           Field, Tepha may deduct from the Running Royalty due to Metabolix
           under Paragraph 3.2, * of the running royalties due on such third

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                                        5



           party patents or intellectual property up to an amount equal to * of
           the Running Royalties due hereunder.

     3.8   APPLICATION OF CREDITS. Any credits against Running Royalties
           permitted under this Agreement may be applied by Tepha, cumulatively,
           up to * the Running Royalties otherwise due in the respective
           quarterly accounting period; provided, Tepha may carry over unused
           credits to subsequent quarterly accounting periods. Notwithstanding
           the applicability of credits under one or more Paragraphs of this
           Agreement, the minimum Running Royalties due from Tepha shall be * of
           the Running Royalties otherwise payable, subject to the maximum set
           forth in Paragraph 3.2.

4.   PATENT PROSECUTION

     4.1.  PATENT PROSECUTION. Throughout the term of this Agreement, Metabolix,
           at its own expense, shall file, prosecute and maintain the Patent
           Rights. If Metabolix shall elect not to file, prosecute or maintain
           any Patent Right, Metabolix shall notify Tepha in writing with at
           least thirty (30) days notice prior to any filing, action, payment or
           the like being due, in which event Tepha shall have the right to
           file, prosecute or maintain such Patent Right, at Tepha's expense in
           Metabolix' name. Metabolix agrees to execute, and agrees to use
           reasonable efforts to ensure that its employees shall execute, all
           documents necessary to perfect filing, advance prosecution and/or
           effect issue of any patents upon any such applications. After notice
           of such election by Metabolix, Tepha shall have no further royalty
           obligations under Paragraphs 3.2 and 3.3 with respect to such patents
           or applications.

5.   RECORDS AND PAYMENTS

     5.1.  RECORDS AND AUDIT. Tepha shall keep true and accurate books of
           account containing all particulars that may be necessary for the
           purpose of showing the amounts payable to Metabolix hereunder. Said
           books of account shall be kept at Tepha's principal place of business
           and shall be open at all reasonable times for three (3) years
           following the end of the calendar year to which they pertain, to the
           inspection of Metabolix or its agents for the purpose of verifying
           Tepha's royalty statements or compliance in other respect with this
           Agreement. Should such inspection lead to the discovery of a greater
           than Ten Percent (10%) discrepancy in reporting to Metabolix's
           detriment, Tepha agrees to pay the cost of such inspection.

     5.2.  REPORTS AND PAYMENTS. Within thirty (30) days after the end of each
           calendar quarter during the term of this Agreement, Tepha shall send
           to Metabolix a report showing the Net Sales of the Licensed Products
           and Licensed Processes, including calculation of deductions, and
           sublicensing gross revenue for such quarter and shall pay the
           appropriate royalties to Metabolix.

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                                        6



     5.3.  INTEREST. The amounts due under Articles 3 shall, if overdue, bear
           interest until payment at a per annum rate * above * in effect at
           Fleet Bank, or its successors, on the due date. The payment of such
           interest shall not foreclose Metabolix from exercising any other
           rights it may have as a consequence of the lateness of any payment.

6.   DUE DILIGENCE

     6.1.  DILIGENT EFFORTS. Tepha shall use diligent efforts to bring one or
           more Licensed Products or Licensed Processes to market through a
           thorough, vigorous and diligent program for exploitation of the
           Patent Rights and shall continue active, diligent development and
           marketing efforts for one or more Licensed Products or Licensed
           Processes throughout the term of this Agreement

     6.2.  GOVERNMENTAL APPROVALS AND MARKETING OF LICENSED PRODUCTS. Tepha or
           its designees shall be responsible for obtaining all necessary
           governmental approvals for the development, production, distribution,
           sale and use of any Licensed Product, at Tepha's, or its designees',
           expense, including, without limitation, any safety studies. Tepha or
           its designees shall have sole responsibility for any warning labels,
           packaging and instructions as to the use of Licensed Products and for
           the quality control for any Licensed Product.

7.   INFRINGEMENT

     7.1.  NOTICE. Tepha and Metabolix shall each inform the other promptly in
           writing of any alleged or threatened infringement of the Patent
           Rights by a third party and of any available evidence thereof.

     7.2.  PURSUIT OF INFRINGERS. During the term of this Agreement, Tepha shall
           have the right, but shall not be obligated, to prosecute at its own
           expense all infringements of the Patent Rights by a third party in
           the Field by litigation or settlement discussions and, in furtherance
           of such right, Metabolix agrees that Tepha may join Metabolix as a
           party plaintiff in any such suit, without expense to Metabolix. The
           total cost of any such infringement action commenced solely by Tepha
           shall be borne by Tepha. In the event that Tepha shall have exercised
           its right to bring an action, Tepha shall be responsible for
           defending against any counterclaims alleging invalidity or
           unenforceability of a Patent Right and for prosecuting the action
           through to settlement or other final disposition. In the event that
           Tepha shall undertake the enforcement of the Patent Rights in the
           Field by litigation, Tepha may withhold up to * of the Running
           Royalties otherwise thereafter due to Metabolix under Paragraph 3.2
           and apply the same toward reimbursement of up to * of Tepha's
           expenses, including reasonable attorneys' fees, in connection
           therewith.

     7.3.  If within six (6) months after having been notified of any alleged
           infringement, Tepha shall have been unsuccessful in persuading the
           alleged infringer to desist and shall not have brought and shall not
           be diligently prosecuting an infringement

*    CONFIDENTIAL TREATMENT REQUESTED


                                        7



           action, or if Tepha shall notify Metabolix at any time prior thereto
           of its intention not to bring suit against any alleged infringer,
           then, and in those events, only, Metabolix shall have the right, but
           shall not be obligated, to prosecute at its own expense any
           infringement of the Patent Rights in the Field. In furtherance of
           such right, Tepha hereby agrees that Metabolix may include Tepha as a
           party plaintiff in any such suit, without expense to Tepha. The total
           cost of any such infringement action commenced or defended solely by
           Metabolix shall be borne by Metabolix, and Metabolix shall be
           responsible for defending against any counterclaims alleging
           invalidity or unenforceability of a Patent Right.

     7.4.  Any recovery of damages by the prosecuting party for any such suit
           shall be applied first in satisfaction of any unreimbursed expenses
           and legal fees of such party relating to the suit, and next toward
           reimbursement of Metabolix for any royalties past due or withheld and
           applied pursuant to Paragraph 7.2, if applicable. The balance
           remaining from any such recovery shall be divided with * to the
           non-prosecuting party and any remaining balance to the prosecuting
           party.

     7.5.  In the event of the institution of any suit by a third party against
           Metabolix, Tepha or its sublicensees for patent infringement
           involving the Patent Rights in the Field, the party sued shall
           promptly notify the other party in writing. Tepha shall have the
           right, but not the obligation, to defend such suit at its own
           expense. If Tepha shall elect not to defend, Tepha shall promptly
           notify Metabolix. Metabolix shall have the right, but not the
           obligation, to defend such suit at its expense.

     7.6.  If Tepha shall exercise its rights pursuant to Section 7.5 to defend
           the Patent Rights, then * of Tepha's Running Royalty obligation in
           Paragraph 3.2 during the pendency of defense in the proceeding shall
           be held in an interest-bearing escrow account by Tepha until a final
           decision shall be rendered by a court or administrative tribunal of
           competent jurisdiction from which no appeal can be or is taken
           provided that:

           7.6.1  If the enforceability of all material claims in such Patent
                  Right claiming the Licensed Product or Licensed Process is
                  upheld by a court of other legal or administrative tribunal
                  from which no appeal is or can be taken, then the amount of
                  Running Royalties withheld during the period of escrow, plus
                  all accrued interest, shall be promptly paid to Metabolix; or

           7.6.2  If one or more claims in such Patent Right covering the
                  Licensed Product or Licensed Process shall be held to be
                  invalid or otherwise unenforceable by a court or other legal
                  or administrative tribunal in any country from which no appeal
                  is or can be taken or the scope thereof is modified and, as a
                  result such Patent Right no longer offers substantial
                  protection to a Licensed Product or Licensed Process in such
                  country, then the amount of Running Royalties withheld during
                  the period of escrow shall not be owed to Metabolix; Tepha
                  shall be entitled to all payments and accrued interest in the
                  escrow account; and the Running Royalties otherwise payable
                  shall

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                                        8



                  be abated in their entirety with respect to Net Sales of
                  Licensed Products or Licensed Processes covered only by such
                  Patent Right in the country in which such claims were so held
                  invalid or unenforceable or so modified.

     7.7.  In any suit as either party may institute to enforce or defend the
           Patent Rights pursuant to this Agreement, the other party hereto
           shall, at the request and expense of the party initiating such suit,
           cooperate in all respects and, to the extent possible, have its
           employees testify when requested and make available relevant records,
           papers, information, samples, specimens and the like. The parties
           shall keep one another informed of the status of and of their
           respective activities regarding any litigation or settlement thereof
           concerning the Patent Rights in the Field or Licensed Products or
           Licensed Processes; provided, however, that no settlement or consent
           judgement or other voluntary final disposition of any suit defended
           or action brought by a party pursuant to this Article 7 may be
           entered into without the consent of the other party, such consent not
           to be unreasonably withheld or delayed.

     7.8.  Tepha, during the period of this Agreement, shall have the sole right
           in accordance with the terms and conditions herein to sublicense any
           alleged infringer for future use of the Patent Rights in the Field.

8.   PRODUCT LIABILITY

     8.1.  INDEMNIFICATION. Tepha shall at all times during the term of this
           Agreement and thereafter, indemnify, defend and hold Metabolix and
           Monsanto, their directors, officers, employees and Affiliates,
           harmless against all claims and expenses, arising out of the death of
           or injury to any person or persons or out of any damage to property
           and against any other claim, proceeding, demand, expense and
           liability of any kind whatsoever resulting from or relating to the
           production, manufacture, sale, use, lease, consumption or
           advertisement of the Licensed Products and/or Licensed Process(es) *.

     8.2.  INSURANCE. Prior to the first use of a Licensed Product for humans,
           Tepha shall obtain and carry in full force and effect commercial,
           general liability insurance, including product liability insurance,
           which shall protect Tepha, Metabolix and Monsanto with respect to
           events covered by Paragraph 8.1 above. Such insurance shall be
           written by a reputable insurance company authorized to do business in
           the Commonwealth of Massachusetts, shall list Metabolix and Monsanto
           as additional named insured thereunder, shall be endorsed to include
           product liability coverage and shall require thirty (30) days written
           notice to be given to Metabolix prior to any cancellation or material
           change thereof. The limits of such insurance shall not be less than *
           per occurrence with an aggregate of * for personal injury including
           death; and * per occurrence with an aggregate of * for property
           damage. Tepha shall provide Metabolix with Certificates of Insurance
           evidencing the same. Tepha shall maintain such commercial general
           liability insurance during the period that any Licensed Product or
           Licensed Process is being used, distributed or sold and for six (6)
           years thereafter.

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                                        9



9.   WARRANTIES AND DISCLAIMER

     9.1.  Metabolix warranty. Metabolix represents and warrants to Tepha that
           Metabolix *.

     9.2.  DISCLAIMER. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT: NEITHER
           PARTY, NOR THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES AND
           AFFILIATES MAKE ANY REPRESENTATIONS OR EXTEND ANY WARRANTIES OF ANY
           KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO
           WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
           VALIDITY OF PATENT RIGHTS CLAIMS, ISSUED OR PENDING, AND THE ABSENCE
           OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE. NOTHING IN
           THIS AGREEMENT SHALL BE CONSTRUED AS A REPRESENTATION MADE OR
           WARRANTY GIVEN BY EITHER PARTY OR BY MONSANTO THAT THE PRACTICE OF
           THE LICENSES GRANTED HEREUNDER SHALL NOT INFRINGE THE PATENT RIGHTS
           OR OTHER INTELLECTUAL OR PROPRIETARY RIGHTS OF ANY THIRD PARTY.

10.  LIMITATION OF LIABILITY

     10.1. NO CONSEQUENTIAL DAMAGES. *, IN NO EVENT SHALL METABOLIX, TEPHA, OR
           THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES AND AFFILIATES BE
           LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING
           ECONOMIC DAMAGE OR INJURY TO PROPERTY AND LOST PROFITS, REGARDLESS OF
           WHETHER SUCH PARTY SHALL BE ADVISED, SHALL HAVE OTHER REASON TO KNOW,
           OR IN FACT SHALL KNOW OF THE POSSIBILITY OF THE FOREGOING.

11.  EXPORT CONTROLS

     11.1. Tepha acknowledges that it is subject to United States laws and
           regulations controlling the export of technical data, computer
           software, laboratory prototypes and other commodities (including the
           Arms Export Control Act, as amended and the United States Department
           of Commerce Export Administration Regulations). The transfer of such
           items may require a license from the cognizant agency of the United
           States Government and/or written assurances by Tepha that Tepha shall
           not export data or commodities to certain foreign countries without
           prior approval of such agency. Metabolix neither represents that a
           license shall not be required nor that, if required, it shall be
           issued.

12.  NON-USE OF NAMES

     12.1. Except as required by law or in raising funding, neither party shall
           use the names or trademarks of the other, nor any adaptation thereof,
           nor the names of any of the

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           other party's employees, in any advertising, promotional or sales
           literature without prior written consent obtained from such party, or
           said employee, in each case, such consent not to be unreasonably
           withheld, except that Tepha may state that it is licensed by
           Metabolix, under one or more of the patents and/or applications
           comprising the Patent Rights. Tepha may, however, use the name of any
           employee of Metabolix who is a consultant or member of an advisory
           board of Tepha, with their permission, and provided, also, that their
           affiliation with Metabolix is identified.

13.  DISPUTE RESOLUTION

     13.1. Except for the right of either party to apply to a court of competent
           jurisdiction for a temporary restraining order, a preliminary
           injunction or other equitable relief to preserve the status quo or to
           prevent irreparable harm, and except for any dispute relating to
           patent validity or infringement, any and all claims, disputes or
           controversies arising under, out of or in connection with the
           Agreement, shall be mediated in good faith. The party raising such
           dispute shall promptly advise the other party of such claim, dispute
           or controversy in a writing which describes in reasonable detail the
           nature of such dispute. If the parties by their senior management
           representatives shall be unable to resolve the dispute within thirty
           (30) days, then by no later than forty (40) business days after the
           recipient has received such notice of dispute, each party shall have
           selected for itself a representative who shall have the authority to
           bind such party, and shall additionally have advised the other party
           in writing of the name and title of such representative. By no later
           than sixty (60) business days after the date of such notice of
           dispute, such representatives shall schedule a date for a mediation
           hearing with the Cambridge Dispute Settlement Center or Endispute
           Inc. in Cambridge, Massachusetts or another mutually agreeable
           mediator. The parties shall enter into good faith mediation and shall
           share the costs equally. If the representatives of the parties have
           not been able to resolve the dispute within thirty (30) business days
           after such mediation hearing, the parties shall have the right to
           pursue any other remedies legally available to resolve such dispute
           in either the Courts of the Commonwealth of Massachusetts, or in the
           United States District Court for the District of Massachusetts, to
           whose jurisdiction for such purposes Metabolix and Tepha each hereby
           irrevocably consents and submits.

     13.2. Notwithstanding the foregoing, nothing in this Article shall be
           construed to waive any rights or timely performance of any
           obligations under this Agreement.

14.  CONFIDENTIALITY

     14.1. CONFIDENTIAL INFORMATION. Both Metabolix and TEPHA agree that all
           confidential information disclosed to the other party shall be deemed
           "Confidential Information" of the disclosing party. In particular,
           "Confidential Information" shall be deemed to include, but not be
           limited to, Know-How, Biological Materials, trade secrets,
           information, ideas, inventions, materials, samples, processes,
           procedures, methods, formulations, protocols, packaging designs and

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           materials, test data, future development plans, "Product" launch
           date, technological know-how and engineering, manufacturing,
           regulatory, marketing, servicing, sales, or financial matters
           relating to the disclosing party and its business.

     14.2. NONDISCLOSURE AND NONUSE. During the term and thereafter each
           receiving party: (i) shall maintain all Confidential Information in
           confidence; (ii) shall not disclose any Confidential Information to
           any third party without prior written consent of the disclosing party
           except that the receiving party may disclose in connection with
           consultants, subcontractors or agents or raising funding and
           technical development activities for purposes consistent with this
           Agreement pursuant to a written non-disclosure agreement with said
           parties, having terms of nondisclosure and nonuse at least as
           restrictive as those set forth herein; and (iii) shall use such
           Confidential Information only to the extent required to accomplish
           the purposes of this Agreement. A receiving party may disclose
           Confidential Information that is required to be disclosed pursuant to
           the law, by request of the FDA or other government authority or for
           medical or safety reasons, but only to the extent required to be
           disclosed by the FDA or other government authority. Both parties
           shall take precautions as each normally takes with its own
           confidential and proprietary information to prevent disclosure to
           third parties, but no less than reasonable precautions.

     14.3. EXCEPTIONS. Both parties agree that, notwithstanding the above, the
           obligations of confidentiality and nonuse shall not apply to:

           14.3.1 Information that at the time of disclosure is, or thereafter
                  becomes, generally known to the public, through no wrongful
                  act or failure to act on the part of the receiving party;

           14.3.2 Information that was known by or in the possession of the
                  receiving party at the time of receiving such information from
                  the disclosing party, as evidenced by written records;

           14.3.3 Information obtained by the receiving party from a third party
                  who is not breaching a commitment of confidentiality to the
                  disclosing party by revealing such information to the
                  receiving party, as evidenced by written records; or

           14.3.4 Information that is developed independently by the receiving
                  party without use of confidential information of the other
                  party, as evidenced by written records.

     14.4. Both Parties shall make diligent efforts to ensure that all
           employees, consultants, agents and subcontractors who may have access
           to Confidential Information of the other party, and any other third
           parties who might have access to Confidential Information, shall sign
           nondisclosure agreements consistent with the terms set forth in this
           Paragraph. No Confidential Information shall be disclosed to any
           employees, subcontractors, agents, consultants or third parties who
           do not have a need to receive such information for the purposes of
           this Agreement.

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15.  TERMINATION

     15.1. TERMINATION BY METABOLIX. If Tepha shall cease to carry on its
           business, this Agreement shall terminate effective upon notice by
           Metabolix.

     15.2. TERMINATION FOR NONPAYMENT. Should Tepha fail to make any payment
           whatsoever due and payable to Metabolix hereunder, Metabolix shall
           have the right to terminate this Agreement effective on sixty (60)
           days' notice, unless Tepha shall make all such payments to Metabolix,
           within said sixty (60) day period. Upon the expiration of the sixty
           (60) day period, if Tepha shall not have made all such payments to
           Metabolix, the rights, privileges and license granted hereunder shall
           automatically terminate.

     15.3. TERMINATION FOR MATERIAL BREACH. Upon any material breach or default
           of this Agreement by Tepha, other than those occurrences set out in
           Paragraphs 15.1 and 15.2 hereinabove, which shall always take
           precedence in that order over any material breach or default referred
           to in this Paragraph 15.3, Metabolix shall have the right to
           terminate this Agreement and the rights, privileges and license
           granted hereunder effective on one hundred and twenty (120) days'
           notice to Tepha. Such termination shall become automatically
           effective unless Tepha shall have cured any such material breach or
           default prior to the expiration of the one hundred and twenty (120)
           day period. Upon any material breach or default of this Agreement by
           Metabolix, Tepha shall have the right to terminate this Agreement and
           the rights, privileges and license granted hereunder effective on one
           hundred and twenty (120) days' notice to Metabolix. Such termination
           shall become automatically effective unless Metabolix shall have
           cured any such material breach or default prior to the expiration of
           the one hundred and twenty (120) day period.

     15.4. TERMINATION BY TEPHA. Tepha shall have the right to terminate this
           Agreement at any time on six (6) months' notice to Metabolix, and
           upon payment of all amounts due Metabolix through the effective date
           of termination.

     15.5. DEFINITION OF EXPIRATION. For purposes of this Agreement, the term
           "expiration" shall mean expiration of the last to expire of the
           Patent Rights, and the co-terminus expiration of this Agreement,
           subject to the surviving licenses and provisions. The term
           "termination" shall mean termination of this Agreement prior to
           expiration in accordance with this Article 15.

     15.6. EFFECTS OF TERMINATION. Upon expiration or termination of this
           Agreement for any reason: (i) nothing herein shall be construed to
           release either party from any obligation that matured prior to
           expiration or the effective date of termination; (ii) Articles 1,
           2.4, 5.1 (for three (3) years), 7.1 (as to any infringement action
           instituted prior to termination), 8, 10, 13, 14, 16.4, 16.5, 16.6 and
           17 shall survive expiration or any termination; (iii) for a period of
           six (6) months after the effective date of termination, Tepha and its
           sublicensees may sell Licensed Products in inventory, and complete
           Licensed Products in the process of

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           manufacture at the time of such termination and sell the same,
           provided that Tepha shall pay the Running Royalties thereon as
           required by Article 3 of this Agreement and shall submit the reports
           required by Article 5 hereof on the sales of Licensed Products; (iv)
           if requested, each party shall immediately return all Confidential
           Information to the disclosing party and shall cease and refrain from
           any further use of such Confidential Information; (v) upon
           termination of this Agreement for any reason, any sublicense not then
           in default shall continue in full force and effect except that
           Metabolix shall be substituted in place of the Tepha, and Metabolix
           shall have no obligations under such sublicense beyond their
           obligations herein; (vi) upon termination (as defined in Paragraph
           15.5), if requested by Metabolix, Tepha shall return all Biological
           Materials and Know-How; and (vii) after expiration of this Agreement
           (as defined in Paragraph15.5), Tepha shall retain a perpetual,
           irrevocable, royalty-free, non-exclusive, transferable, worldwide
           license in the Field, with the right to sublicense, to use the
           Know-How.

     15.7. LICENSE TO METABOLIX. Upon termination of this Agreement for any
           reason (except expiration or termination by Tepha for breach by
           Metabolix under Paragraph 15.3), Tepha shall, grant and hereby grants
           Metabolix a nonexclusive license, with the right to sublicense, to
           all information then in Tepha's possession relevant to the
           commercialization of Licensed Products and/or Licensed Processes,
           including, but not limited to, research results, toxicology data,
           assays, preclinical data, prototypes, manufacturing processes
           including cell lines and unused, unexpired amounts of Licensed
           Products, clinical results, regulatory submissions, suppliers and
           customer lists. In such event Tepha shall receive a royalty equal to
           * of the gross amount of consideration, if any, subsequently received
           by Metabolix with respect to the Licensed Products and Licensed
           Processes.

16.  GENERAL

     16.1. INTEGRATED AGREEMENT. This Agreement (including its Appendices, which
           are incorporated herein by reference) constitutes the complete and
           exclusive statement of the agreement between the parties, and
           supersedes all prior agreements, proposals, negotiations and
           communications between the parties, both oral and written, regarding
           the subject matter hereof.

     16.2. WAIVER OR AMENDMENT. No waiver, alteration or amendment of any of the
           provisions of this Agreement shall be binding unless made in writing
           and signed by each of the parties hereto.

     16.3. NOTICES. Any payment, notice or other communication pursuant to this
           Agreement shall be sufficiently made or given on the date of mailing
           if sent to such party by certified first class mail, postage prepaid,
           return receipt requested addressed to it at its address below or as
           it shall designate by written notice given to the other party.

     If to Metabolix:

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           Metabolix, Inc.
           303 Third Street
           Cambridge, MA 02142
           Attn: President
           Fax: 617-492-1996

     If to Tepha:

           Tepha, Inc.
           303 Third Street
           Cambridge, MA 02142
           Attn: President
           Fax: 617-492-1996

     All such notices, if properly addressed, shall be effective when received.

     16.4. GOVERNING LAW. This Agreement shall be construed, governed,
           interpreted and applied in accordance with the laws of the
           Commonwealth of Massachusetts, without regard to conflict of laws
           principles, and as necessary the laws of the United States of
           America, except that questions affecting the construction and effect
           of any patent shall be determined by the law of the country in which
           the patent was granted. Each party agrees that venue for any dispute
           arising under this Agreement shall be Boston, Massachusetts, and
           waives any objection it has or may have in the future with respect to
           such venue.

     16.5. FAILURE TO EXERCISE REMEDY. If either party fails to enforce any term
           of this Agreement or fails to exercise any remedy, such failure to
           enforce or exercise on that occasion shall not prevent enforcement or
           exercise on any other occasion.

     16.6. NON-EXCLUSIVE RIGHTS. The rights and remedies of the parties provided
           in this Agreement shall not be exclusive and are in addition to any
           other rights and remedies available at law or in equity.

     16.7. ASSIGNMENT. Except as expressly provided in Article 2, neither party
           shall directly or indirectly sell, transfer, assign or delegate in
           whole or in part this Agreement, or any rights, duties, obligations
           or liabilities under this Agreement (collectively "assign"), by
           operation of law or otherwise, without the prior written consent of
           the other party, such consent not to be unreasonably withheld or
           delayed; provided, however, so long as the assignee shall not be a
           competitor of the other party, either party shall have the right to
           assign without consent all of its rights, duties, obligations and
           liabilities under this Agreement to any Affiliate or in connection
           with any sale, merger, consolidation, recapitalization or
           reorganization involving in each case the sale of all the capital
           stock of the party or all or substantially all of the assets of such
           party to which this Agreement relates. Subject to the foregoing, this
           Agreement shall inure to the benefit of and be binding upon the
           permitted successors and assigns of Metabolix and Tepha.

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     16.8. INDEPENDENT CONTRACTORS. The parties agree that in the performance of
           this Agreement they are and shall be independent contractors. Nothing
           herein shall be construed to constitute either party as the agent of
           the other party for any purpose whatsoever, and neither party shall
           bind or attempt to bind the other party to any contract or the
           performance of any obligation or represent to any third party that it
           has any right to enter into any binding obligation on the other
           party's behalf.

     16.9. SEVERABILITY. The provisions of this Agreement are severable, and in
           the event that any provisions of this Agreement shall be determined
           to be invalid or unenforceable under any controlling body of the law,
           such invalidity or unenforceability shall not in any way affect the
           validity or enforceability of the remaining provisions hereof.

     16.10. COUNTERPARTS. This Agreement may be executed in one or more
           counterparts, each of which when executed shall be deemed to be an
           original but all of which taken together shall constitute one and the
           same agreement.

     16.11. PATENT MARKING. Tepha shall apply the patent marking notices
           required by the law of any country where Licensed Products are made,
           used, sold or imported.

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                                       16



     IN WITNESS WHEREOF, the parties have duly executed this Agreement the day
and year set forth below.

Metabolix, Inc.                         Tepha, Inc.


By: /s/ Oliver P. Peoples               By: /s/ Simon F. Williams
    ---------------------------------       ------------------------------------
Name: Oliver P. Peoples                 Name: Simon F. Williams
Title: Vice President R & D             Title: President
Date: September 9, 2003                 Date: September 9, 2003

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                                       17



WHENEVER CONFIDENTIAL INFORMATION IS OMITTED HEREIN (SUCH OMISSIONS ARE DENOTED
BY AN ASTERISK*), SUCH CONFIDENTIAL INFORMATION HAS BEEN SUBMITTED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.

                    TECHNOLOGY ALLIANCE AND OPTION AGREEMENT

     This Technology Alliance and Option Agreement (the "Agreement") dated as of
November 4, 2004 (the "Effective Date") is by and between ADM Polymer
Corporation, a corporation duly incorporated and validly existing under the laws
of the State of Delaware, with headquarters located at 4666 Faries Parkway,
Decatur, IL 62526 ("ADM Sub"), and Metabolix, Inc., a corporation duly
incorporated and validly existing under the laws of the State of Delaware, with
headquarters located at 21 Erie Street, Cambridge, MA 02139-4260 ("MBX") (MBX
and ADM Sub are collectively the "Parties" and each is a "Party").

                                    RECITALS

     WHEREAS, MBX has developed technology relating to the fermentation,
recovery and formulation of PHA Material (as defined below) and possesses
patents, trade secrets and other intellectual property rights in relation
thereto;

     WHEREAS, MBX is seeking a collaborator to participate, in the continued
commercialization of the PHA Material;

     WHEREAS, ADM Sub has capabilities and resources relating to the
fermentation of PHA Materials and desires to employ the MBX technology in
commercial scale reactors too confirm performance parameters and potential
manufacturing economics;

     WHEREAS, ADM Sub is a wholly owned subsidiary of Archer-Daniels-Midland
Company ("ADM"); and

     WHEREAS, ADM Sub and MBX desire to enter into an agreement under which the
two Parties would cooperate in the preparation of certain hatches of PHA
Material and under which MBX would grant to ADM Sub the option to enter into a
commercial alliance to further commercialize the PHA Material, all on the terms
and conditions set forth herein.

     NOW, THEREFORE, in consideration of the recitals and the mutual covenants
and promises contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties hereto
do hereby agree as follows.

                                    ARTICLE 1
                                   DEFINITIONS

     "ADM SUB BACKGROUND TECHNOLOGY" means any Technology used by ADM Sub, or
provided by ADM Sub for use, in the Technology Alliance Program that is
Controlled by ADM Sub: (a) as of the Effective Date, or (b) developed, conceived
or reduced to practice solely by employees of, or consultants to, ADM Sub or its
Affiliates in the conduct of activities outside the Technology Alliance Program,
without the material use of any MBA Technology or Program Technology.

*    CONFIDENTIAL TREATMENT REQUESTED



     "ADM SUB CONSTRUCTION MASTER PLAN AND BUDGET" shall have the meaning set
forth in Section 3.1.

     "ADM SUB MANUFACTURING FACILITY" means an ADM Sub facility designed to
produce, through microbial fermentation, approximately fifty thousand (50,000)
tons of PHA Material, having an acceptable level of purity, during each twelve
(12) month period, on an ongoing basis through a stable and robust operation,
over a period of years.

     "ADM SUB PATENT RIGHTS" means any Patent Rights Controlled by ADM Sub and
claiming or covering the ADM Sub Technology.

     "ADM SUB PROGRAM TECHNOLOGY" means any Technology developed, conceived or
reduced to practice solely by employees of, or consultants to, ADM Sub or its
Affiliates (alone or jointly with a third party) during the course of
performance of the Technology Alliance Program, with or without the material use
of any MBX Technology or Program Technology. Nothing in this definition shall be
construed as conveying any rights on ADM Sub to practice any MBX Technology
after the Term.

     "ADM SUB PROPRIETARY MATERIALS" means any Proprietary Materials Controlled
by ADM Sub and used by ADM Sub, provided by ADM Sub for use, or necessary or
useful in the Technology Alliance Program.

     "ADM SUB TECHNOLOGY" means, collectively, ADM Sub Proprietary Materials,
ADM Sub Background Technology and ADM Sub Program Technology.

     "AFFILIATE" of a Person means any other Person that directly, or indirectly
through one or more intermediaries, controls, is controlled by or is under
common control with such Person. "Control" and, with correlative meanings, the
terms "controlled by" and "under common control with" shall mean the power to
direct or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities, by contract, resolution, regulation
or otherwise. Tepha, Inc. is hereby deemed not to be an Affiliate of MBX.

     "COMMERCIAL ALLIANCE" shall have the meaning set forth in the Commercial
Alliance Agreement.

     "COMMERCIAL ALLIANCE AGREEMENTS" means the agreements titled "Commercial
Alliance Agreement," "Manufacturing Agreement," "Formulation Agreement,"
"Operating Agreement," "ADM Sub Services Agreement," "MBX Services Agreement,"
and "Loan and Security Agreement" attached hereto as EXHIBIT A to be executed
and delivered by the parties indicated therein upon the exercise of the Option
by ADM Sub in accordance with the terms of this Agreement.

     "COMMERCIALLY REASONABLE EFFORTS" shall mean, with respect to the efforts
to be applied by a Party in performing a referenced obligation hereunder, the
amount and quality of effort and resources that would be applied by a reasonable
manager or management team at a corporation having comparable expertise and
assets as such Party, to accomplish a task or to perform an obligation having
comparable relative importance to the success or failure of a commercial
enterprise that is comparable to the Commercial Alliance. For purposes of this
definition, a

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                                       2



commercial enterprise would be comparable to the Commercial Alliance if it poses
similar anticipated technical and business risks or challenges and similar
anticipated Financial return to the Parties as measured at the time of the
expenditure of the effort. When ADM Sub has an obligation to use "Commercially
Reasonable Efforts" herein, the following shall apply: (i) the term
"Commercially Reasonable Efforts" shall be defined as it is in this definition
but by reference to ADM Sub and ADM as if they were a single entity and (ii) in
determining whether ADM Sub has satisfied its obligation, the efforts applied by
and ADM Sub and ADM shall both be taken fully into account.

     "CONFIDENTIAL INFORMATION" means: (a) all tangible embodiments of
Technology produced or discovered by a Party, or jointly by one or more Parties
under the Technology Alliance Program, and all information concerning the terms
of this Agreement, and (b) with respect to a Party (the "Receiving Party"), all
information, Technology and Proprietary Materials which are disclosed by another
Party (the "Disclosing Party") to the Receiving Party hereunder or to any of its
employees, consultants, or Affiliates; except to the extent that the
information, (i) as of the date of disclosure is demonstrably known to the
Receiving Party or its Affiliates, as shown by written documentation, other than
by virtue of a prior confidential disclosure to such Party or its Affiliates;
(ii) as of the date of disclosure is in, or subsequently enters, the public
domain, through no fault or omission of the Receiving Party, or any of its
Affiliates; (iii) is obtained from a third party having a lawful right to make
such disclosure free from any obligation of confidentiality to the Disclosing
Party; or (iv) is independently developed by or for the Receiving Party without
reference to or reliance upon any Confidential Information of the Disclosing
Party as demonstrated by competent written records.

     "CONSTRUCTION" AND "CONSTRUCT" shall mean, in respect to a building, the
activities, and their performance, that are usual and appropriate to create a
completed facility that: (i) is in all material respects in compliance with all
material safety, health, zoning, environmental and other regulations and laws
applicable to it whether such applicability is based on its location, physical
dimensions and attributes, its intended uses or otherwise and (ii) is designed
to enable and support state-of-the-art operations pertaining to its intended
purpose. The terms "Construction" and "Construct" shall include the following
activities and their performance with respect to a facility: planning,
designing, engineering, construction, procurement, equipping and acquiring the
necessary permits.

     "CONSTRUCTION COSTS" are those costs and expenses that are included in the
ADM Sub Construction Master Plan and Budget as approved by the TAC in accordance
with Section 3.2.5 to the extent actually incurred by ADM Sub in the
Construction of the ADM Sub Manufacturing Facility.

     "CONTROL" OR "CONTROLLED" means (a) with respect to Technology (other than
Proprietary Materials) or Patent Rights, the possession by a Party of the
ability to grant a license or sublicense to such Technology or Patent Rights as
provided herein without violating the terms of any agreement or arrangement
between such Party and any third party, and (b) with respect to Proprietary
Materials, the possession by a Party of the ability to supply such Proprietary
Materials to the other Party for use as provided herein without violating the
terms of any agreement or arrangement between the supplying Party and any third
party.

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                                       3



     "EFFECTIVE DATE" means the date first above written.

     "FERMENTATION PERFORMANCE PARAMETERS" means the various parameters for
production of PHA Cell Paste through fermentation at the * scale and the * scale
as set forth on EXHIBIT B.

     "FIELD" means the research, development, manufacture, use, sale and
importation of PHA Material and PHA Formulations; provided that the Field shall
not include any uses that are within the "Field of Use" as that term is defined
in the License Agreement by and between MBX and Tepha, Inc. dated October 1,
1999.

     "GOAL" shall have the meaning set forth in Section 3.1.

     "JOINT PROGRAM TECHNOLOGY" means Technology developed, conceived or reduced
to practice jointly by employees of, or consultants to, the Parties (with or
without a third party) during the course of performance of the Technology
Alliance Program. Nothing in this definition shall be construed as conveying any
rights on ADM or ADM Sub to practice any MBX Technology after the Term. Nothing
in this definition shall be construed as conveying any rights on MBX to practice
any ADM Sub Technology after the term.

     "JOINT SALES COMPANY" shall have the meaning set forth in the Commercial
Alliance Agreement.

     "KNOWLEDGE" means, with respect to MBX, the actual knowledge and awareness,
without the requirement of investigation, of any of the following four (4)
members of MBX management: President and CEO, Chief Scientific Officer, Chief
Financial Officer and Director of Manufacturing and Development, without the
requirement of investigation, and, with respect to ADM Sub, the actual knowledge
and awareness, without the requirement of investigation, of any of the following
nine (9) members of ADM management: Senior Vice President (Corn Processing and
Food Specialties) (John D. Rice), President of Natural Health & Nutrition
Division (Steven J. Furcich), Assistant Controller (Marc A. Sanner), Corporate
Counsel Intellectual Property (Brian R. Leslie), Senior Attorney (Bradley E.
Riley), Senior Vice President Venture Research (Mark G. Matlock), Vice President
Technology Assessment (Terry A. Stoa), President of ADM Research Division
(Thomas P. Binder), and Vice President of Research, Molecular Biology -
Fermentation (Leif P. Solheim).

     "MANUFACTURING COST" shall mean the costs incurred by ADM Sub in
manufacturing and packaging the Marketing Material as specified in EXHIBIT C,
calculated and payable in the manner set forth in this Agreement.

     "MARKETING MATERIAL" shall have the meaning set forth in Section 3.3.

     "MBX APPLICATIONS PATENT RIGHTS" means any Patent Rights Controlled by MBX
that claim or cover specific uses, within the Field, of PHA Materials or PHA
Formulations.

     "MBX BACKGROUND TECHNOLOGY" means any Technology used by MBX, or provided
by MBX for use, in the Technology Alliance Program that is Controlled by MBX:
(a) as of the Effective Date, or (b) developed, conceived or reduced to practice
solely by employees of, or

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                                       4



consultants to, MBX or its Affiliates in the conduct of activities outside the
Technology Alliance Program, without the material use of any ADM Sub Technology
or Program Technology.

     "MBX PATENT RIGHTS" means any Patent Rights Controlled by MBX and claiming
or covering the MBX Technology, including without limitation the MBX
Applications Patent Rights.

     "MBX PROGRAM TECHNOLOGY" means any Technology developed; conceived or
reduced to practice solely by employees of, or consultants to, MBX or its
Affiliates (alone or jointly with a third party) during the course of
performance of the Technology Alliance Program, with or without the material use
of any ADM Sub Technology or Program Technology.

     "MBX PROPRIETARY MATERIALS" means any Proprietary Materials Controlled by
MBX and used by MBX, provided by MBX for use, or necessary or useful in the
Technology Alliance Program. MBX Proprietary Materials shall include, without
limitation, all PHA Material and PHA Formulations supplied as samples to ADM
Sub, all cell lines (including all master stocks and working stock whether
prepared by ADM Sub or MBX) and all fermentation media, supplied by MBX to ADM
Sub, and all progeny, derivatives and mutated forms developed therefrom.

     "MBX TECHNOLOGY" means, collectively, MBX Proprietary Materials, MBX
Background Technology and MBX Program Technology.

     "OPTION" shall have the meaning set forth in Section 4.3 hereof.

     "PATENT RIGHTS" means the rights and interests in and to issued patents and
pending patent applications (which for purposes of this Agreement shall be
deemed to include certificates of inventions and applications for certificates
of invention and priority rights) in any country, including all provisional
applications, substitutions, continuations, continuations-in-part, divisionals,
and renewals, all letters patent granted thereon, and all reissues,
reexaminations and extensions thereof Controlled by a Party.

     "PERMITTED ACTIVITIES" shall have the meaning set forth in Section 6.1.

     "PERSON" means any individual, partnership (whether general or limited),
limited liability company, corporation, trust, estate, association, nominee or
other entity.

     "PHA CELL PASTE" means the paste, containing the PHA Material, recovered
from whole fermentation broth and meeting the specifications set forth in
EXHIBIT D.

     "PHA FORMULATIONS" means PHA Material that has been processed by blending
different types of PHA Material together with other polymers and/or with other
additives, including nucleants, clarifiers, flow modifiers, plasticizers, flame
retardants and heat stabilizers.

     "PHA KNOW-HOW MATERIAL" means PHA Material, the manufacture, use, sale or
importation of which is accomplished or performed with the use of the MBX
Technology or Joint Program Technology.

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                                       5



     "PHA MATERIAL" means the following forms of polyhydroxyalkanoate: *, when
produced by any means other than via Plants, and any other forms of
polyhydroxyalkanoate, produced by any means other than via Plants, that are
substitutable by any customer with one or more of the above substances, are
generally technically and commercially feasible in the marketplace, and have a
potential adverse affect on the sales or profitability of the Joint Sales
Company in a material way. For avoidance of doubt, any PHB copolymers having at
least fifty percent (50%) of the *, when produced by any means other than via
Plants, are hereby deemed to be included in the definition of PHA Material.

     "PHA PATENTED MATERIAL" means PHA Material, the manufacture, use, sale or
importation of which within or into the United States by a Person other than
MBX, absent the licenses granted herein, would infringe a Valid Claim of the MBX
Patent Rights or a Valid Claim within Patent Rights claiming or covering any
Technology within the Joint Program Technology.

     "PHA RELATED MATERIALS" means any polymer material consisting of one or
more hydroxyacids of the general formula: *

     "PHA SUPPLEMENTAL KNOW HOW MATERIAL" means PHA Material, the manufacture,
use, sale or importation of which is accomplished or performed with the use of a
cell Line Controlled by MBX and delivered by MBX to ADM Sub at any time during
the Term.

     "PLANTS" shall mean photosynthetic organisms when not raised through
fermentation, but in any case excluding * For avoidance of doubt, * is included
within the definition of Plants.

     "PROGRAM TECHNOLOGY" means ADM Sub Program Technology, Joint Program
Technology and MBX Program Technology.

     "PROPRIETARY MATERIALS" means any tangible chemical, biological or physical
research materials that are furnished by or on behalf of one Party to the other
Party (the "Receiving Party") in connection with this Agreement, regardless of
whether such materials are specifically designated as proprietary by the
transferring Party, except to the extent that the materials, (i) are already in
the possession of the Receiving Party or its Affiliates, as shown by written
documentation, other than by virtue of a prior delivery of such materials to the
Receiving Party or its Affiliates from the other Party or one of its Affiliates
subject to confidentiality obligations; (ii) as of the date of disclosure is in
the public domain (without restriction on use or availability), or subsequently
enters the public domain (without restriction on use or availability) through no
fault or omission of the Receiving Party or any of its Affiliates; (iii) is
obtained from a third party having a lawful right to provide such material free
from any restriction on use; or (iv) is independently developed by or for the
Receiving Party without reference to or reliance upon any Proprietary Materials
of the Disclosing Party as demonstrated by clear and convincing evidence.

     "RECOVERY PERFORMANCE PARAMETERS" shall mean the various parameters for
performance of recovery of PHA Material from PHA Cell Paste as set forth on
EXHIBIT E.

     "ROYALTY TERM" means that period commencing upon the * and continuing until
the later of the expiration or termination of * from the Effective Date.

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     "SENIOR EXECUTIVES" shall have the meaning set forth in Section 11.3.1.

     "SUPPLEMENTAL ROYALTY TERM" means that period commencing upon the delivery
by MBX to ADM or ADM Sub of a cell line Controlled by MBX used in the production
or manufacture of PHA Supplemental Know How Material and ending upon the * to
occur of (i) the *, and (ii) * from the date of such delivery.

     "TECHNICAL ASPECTS OF THE GOAL" shall have the meaning set forth in Section
3.1.

     "TECHNOLOGY" means and includes all inventions, discoveries, improvements,
trade secrets, know-how and proprietary methods and Proprietary Materials,
whether or not patentable.

     "TECHNOLOGY ALLIANCE COMMITTEE" or "TAC" shall have the meaning set forth
in Section 2.1.

     "TECHNOLOGY ALLIANCE OUTPUT" shall have the meaning set forth in Section
3.3.

     "TECHNOLOGY ALLIANCE PLAN" shall mean the detailed plan for conducting the
Technology Alliance Program attached hereto as EXHIBIT F, subject to such
additions and amendments as the TAC shall determine in accordance with Section
2.1.1.

     "TECHNOLOGY ALLIANCE PROGRAM" shall mean the research, development and
evaluative activities to be conducts by the Parties as set forth herein, and in
the Technology Alliance Plan.

     "TECHNOLOGY TRANSFER" shall have the meaning set forth in Section 3.2.2.

     "THIRD PARTY IP ROYALTY OFFSET" shall have the meaning set forth in Section
8.4.2(b).

     "VALID CLAIM" means a claim within a patent application or patent that has
not been abandoned or finally determined to be unenforceable or invalid by a
court or administrative agency with competent jurisdiction where all appeal
rights have been exhausted or expired.

                                    ARTICLE 2
                    ADMINISTRATION OF THE TECHNOLOGY ALLIANCE

     2.1 TECHNOLOGY ALLIANCE COMMITTEE. MBX and ADM Sub shall establish a
Technology Alliance Committee (the "Technology Alliance Committee" or "TAC") to
plan and oversee the execution of the Technology Alliance Program.

          2.1.1 RESPONSIBILITIES OF TAC. The TAC shall review and oversee the
progress of the Technology Alliance Program and recommend necessary amendments
to the Technology Alliance Plan prior to its initial implementation and also
during the conduct of the Technology Alliance Program. The TAC shall review and
approve the ADM Sub Construction Master Plan and Budget.

          2.1.2 MEMBERSHIP OF TAC. Each Party shall appoint three (3) members to
the TAC one of which shall be designated as its "Co-Chair." Each Party shall
have the right at any

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time to substitute individuals, on a permanent or temporary basis, for any of
its previously designated representatives to the TAC, including its Co-Chair, by
giving written notice thereof to the other Party. Initial designees of ADM Sub
and MBX to the TAC shall be as set forth on Exhibit G.

     2.2 MEETINGS.

          2.2.1 SCHEDULE OF MEETINGS. The TAC shall establish a schedule of
times for its meetings, taking into account, without limitation, the planning
needs of the Technology Alliance Program. The TAC shall meet monthly unless
otherwise agreed upon by the Parties. Meetings shall also be convened upon the
determination of either or both of the Co-Chairs of the TAC by written notice
(including notice via e-mail) thereof to their respective members that a meeting
is required to discuss or resolve any matter or matters with respect to the
Technology Alliance Program. Meetings shall alternate between the respective
offices of the Parties or another mutually agreed upon location; provided,
however, that the Parties may mutually agree to meet by teleconference or video
conference or may act by a written, memorandum signed by the Co-Chairs of the
TAC.

          2.2.2 QUORUM; VOTING; DECISIONS. At each meeting of the TAC, the
participation of at least one member designated by each of the Parties shall
constitute a quorum. Each TAC member shall have one vote on all matters before
the TAC; provided, however, that the member or members of each of the Parties
present at any meeting shall have the authority to cast the votes of any of such
Party's members who are absent from the meeting. All decisions of the TAC shall
be made by majority vote of all of the members, with at least one representative
from each of the Parties voting with the majority. Whenever any action by the
TAC is called for hereunder during a time period in which a meeting is not
scheduled, the Co-Chairs shall cause the TAC to take the action in the requested
time period by calling a special meeting or by action without a formal meeting
by written memorandum signed by both Co-Chairs of the TAC. Representatives of
each Party or of its Affiliates, in addition to the members of the TAC, may
attend meetings as non-voting observers at the invitation of either Party with
prior notice to the other Party. In the event that the TAC is unable to resolve
any matter before it, such matter shall be resolved as set forth in Section 11.3
hereof.

          2.2.3 MINUTES. A secretary shall be appointed to keep accurate minutes
of the deliberations of the TAC recording all proposed decisions and all actions
recommended or taken. Drafts of such minutes shall be delivered to the Co-Chairs
of the TAC within a reasonable period of time not to exceed five (5) days after
a TAC meeting. Draft minutes shall be edited by the Parties and shall be issued
in final form within a reasonable time not to exceed ten (10) days after the
meeting only with their approval and agreement as evidenced by their signatures
on the minutes.

          2.2.4 EXPENSES. MBX and ADM Sub shall each bear all expenses of their
respective TAC members related to their participation on the TAC and attendance
at TAC meetings.

     2.3 DECISION-MAKING RESPONSIBILITIES. The TAC shall be solely responsible
for making all decisions relating to planning and overseeing the execution of
the Technology

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                                       8



Alliance Program that are not specifically reserved to a Party hereunder. All
such decisions shall be made in good faith with he objective, using Commercially
Reasonable Efforts, of achieving the Goal.

                                    ARTICLE 3
                           TECHNOLOGY ALLIANCE PROGRAM

     3.1 GOAL OF TECHNOLOGY ALLIANCE PROGRAM. The goal of the Technology
Alliance Program is to (i) produce PHA Cell Paste, first in a fermenter having a
capacity of approximately * and then in a fermenter having a capacity of
approximately *, in both cases, in a manner and with results that meet the
applicable Fermentation Performance Parameters; (ii) demonstrate recovery of PHA
Material in a manner and with results that meet the Recovery Performance
Parameters (the items listed in the foregoing "(i)" and "(ii)" collectively are
the "Technical Aspects of the Goal"); and (iii) based upon the results of (i)
and (ii) above, have ADM Sub develop and the TAC agree upon a completed master
plan for Construction of the ADM Sub Manufacturing Facility, including without
limitation, surveys, blueprints, and engineering studies, which master plan
shall be organized into a detailed, multiphase process for undertaking and
completing Construction of the ADM Sub Manufacturing Facility and which shall
have a project budget with projected detailed expenditures provided for each
phase of the Construction process, all of which shall be in form and substance,
suitable for ADM Sub's management and board of directors to make a determination
to approve the expenditures for the ADM Sub Manufacturing Facility as and to the
extent required by ADM Sub's corporate governance polices and procedures (the
"ADM Sub Construction Master Plan and Budget") (collectively the "Goal").
Successful completion of the Goal is intended to confirm the potential economics
of producing PHA Material at commercial scale as part of a long-term commercial
alliance.

     3.2 CONDUCT OF TECHNOLOGY ALLIANCE PROGRAM. The Parties shall use
Commercially Reasonable Efforts to perform their respective obligations under
the Technology Alliance Program, in accordance with the provisions herein and
the provisions set forth in the Technology Alliance Plan, including without
limitation, the timelines for performance.

          3.2.1 CERTAIN MUTUAL REPRESENTATIONS. The Parties hereby represent and
warrant to each other as follows: (i) it shall use Commercially Reasonable
Efforts to perform its obligations under the Technology Alliance Plan in
accordance with high scientific and engineering principles and procedures, and
that it shall perform such obligations in compliance in all material respects
with all requirements of applicable laws, rules, and regulations, (ii) it shall
use Commercially Reasonable Efforts to achieve the objectives of the Technology
Alliance Program efficiently and expeditiously and (iii) it shall proceed
diligently with the Technology Alliance Program using Commercially Reasonable
Efforts, including allocating time, effort, equipment, and skilled personnel to
attempt to complete the Technology Alliance Program and achieve the Goal
successfully and promptly.

          3.2.2 TECHNOLOGY TRANSFER. Promptly upon execution of this Agreement,
but in mo event later than three (3) months from the Effective Date, MBX and ADM
Sub shall use Commercially Reasonable Efforts to conduct a transfer of MBX
Technology to ADM Sub: (i) as set forth in the Technology Alliance Plan and (ii)
as and

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to the extent reasonably necessary to enable ADM Sub to produce PHA Cell Paste
(the "Technology Transfer"). MBX and ADM Sub shall each devote Commercially
Reasonable Efforts, including devoting personnel and other resources, to
complete the Technology Transfer in accordance with the requirements, including
without limitation the schedule set forth in the Technology Alliance Plan;
provided, MBX shall have no obligation to transfer any Proprietary Materials or
Technology that MBX does not Control as part of the Technology Transfer. ADM Sub
acknowledges that some of the MBX Technology that will be transferred to ADM Sub
is in the form of trade secrets. In an effort to ensure the maximum continued
protection of MBX's rights in such trade secrets, and in keeping with Article 7
hereof ADM Sub covenants that it will provide access to the MBX Technology only
to employees of ADM and ADM Sub who have a need to have access to such MBX
Technology in order to complete the Technology Transfer and perform ADM Sub's
obligations under the Technology Alliance Plan. MBX acknowledges that some of
the ADM Sub Technology that may be transferred to MBX is in the form of trade
secrets. In an effort to ensure e maximum continued protection of ADM Sub's
rights in such trade secrets, and in keeping with Article 7 hereof, MBX
covenants that it will provide access to the ADM Sub Technology only to
employees of MBX who have a need to have access to such ADM Sub Technology in
order to perform MBX's obligations under the Technology Alliance Plan.

          3.2.3 FERMENTATION OPERATION. ADM Sub shall use Commercially
Reasonable Efforts, including making available personnel, plant, equipment and
other resources, to produce the PHA Cell Paste in the quantities, form and
condition set forth in the Technology Alliance Plan. Such resources shall be
made available for the Technology Alliance Program in the manner and to the
extent set forth herein and in the Technology Alliance Plan, with the purpose of
achieving the Goal. MBX shall have reasonable access to that portion, of the
facilities at which such production operations are conducted as is reasonably
necessary to observe and participate in such operations. MBX acknowledges that
the personnel, plant, equipment and other resources utilized in producing the
PHA Cell Paste will not be dedicated to such purpose solely, and ADM Sub will
put such resources to other uses during the Technology Alliance Program, in a
manner consistent with ADM Sub's ability to perform its obligations as described
herein and in the Technology Alliance Plan. At the request of either Party, the
TAC will, within ten (10) days after such request, determine whether the Parties
have, as of that date; successfully produced PHA Cell Paste, in a fomenter
having a capacity of approximately *, in a manner and with results that meet the
applicable Fermentation Performance Parameters.

          3.2.4 RECOVERY OPERATION. MBX shall use Commercially Reasonable
Efforts, including making available personnel, plant, equipment and other
resources, to demonstrate recovery of PHA Material as set forth in the
Technology Alliance Plan. Such resources shall be made available for the
Technology Alliance Program in the manner and to the extent set forth herein and
in the Technology Alliance Plan, with the purpose of achieving the Goal. ADM and
ADM Sub shall have reasonable access to that portion of the MBX facilities, or
facilities of third panics, at which such production operations are conducted as
is reasonably necessary to observe and participate in such operations. ADM Sub
acknowledges that the personnel, plant, equipment and other resources utilized
to perform the recovery of PHA Material will not be dedicated to such purpose
solely, and MBX will put such resources to other uses during the Technology
Alliance Program, in a manner consistent with MBX's ability to perform its
obligations as

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                                       10



described herein and in the Technology Alliance Plan. At the request of either
Party, the TAC will, within ten (10) days after such request, determine whether
the Parties have, as of that date, successfully demonstrated the recovery of PHA
Material in a manner and with results that meet the Recovery Performance
Parameters.

          3.2.5 ADM SUB CONSTRUCTION MASTER PLAN AND BUDGET. ADM Sub shall
prepare the ADM Sub Construction Master Plan and Budget, with the assistance of
MBX and in consultation with any Third Party Consultants as shall be approved by
the TAC. After the completion of the ADM Sub Construction Master Plan and
Budget, the TAC will promptly conduct a complete review of such document, and
shall designate and approve those items or categories of costs and expenses
provided in such documents as Construction Costs and shall indicate whether and
why certain items or categories of costs and expenses do not qualify as
Construction Costs, in whole or in part, and whether such costs and expenses
could so qualify under other circumstances, for example, if more information
were provided as the necessity and reasonableness of the particular costs and
expenses or the features or facilities to which such costs and expenses relate.
After such review and approval process is completed by the TAC, in the event ADM
Sub desires to strike the Option, ADM Sub shall seek all approvals and
authorizations required under its corporate governance policies and practices to
authorize the Construction of the ADM Sub Manufacturing Facility including the
authorization to expend the amounts provided for in the ADM Sub Construction
Master Plan and Budget.

     3.3 OUTPUT FROM TECHNOLOGY ALLIANCE PROGRAM. ADM Sub will use Commercially
Reasonable Efforts to produce PHA Cell Paste in such amounts as result from the
operations set forth in the Technology Alliance Plan (the "Technology Alliance
Output") and such additional amounts as the Parties may agree to in writing (the
"Marketing Material") for use by MBX in developing the market for PHA Material.
The Technology Alliance Output and the Marketing Material will be made available
by ADM Sub to MBX as set forth in this Section 3.3.

          3.3.1 ANALYSIS OF TECHNOLOGY ALLIANCE OUTPUT. MBX will use the
Technology Alliance Output to demonstrate recovery of PHA Material in accordance
with Section 3.2.4 and the Technology Alliance Plan. Further, the Technology
Alliance Output will be used by the Parties to perform such evaluation and
analysis as is necessary or useful in determining whether the Parties have
achieved the Goal. Without limiting the foregoing statement, the Technology
Alliance Output will be evaluated and analyzed by the Parties, in accordance
with the procedures and methods set forth in the Technology Alliance Plan, to
determine whether the Technology Alliance Output meets the Fermentation
Performance Parameters and the Recovery Performance Parameters.

          3.3.2 PURCHASE OF TECHNOLOGY ALLIANCE OUTPUT BY MBX. MBX shall have
the right, but not the obligation, to purchase the Technology Alliance Output
from ADM Sub at a price of * of PHA Material contained within the PHA Cell
Paste, on a one hundred percent (100%) purity basis, and the right and
obligation to purchase the Marketing Material manufactured in accordance with
the applicable agreement between the Parties, from ADM Sub, at ADM Sub's
Manufacturing Cost, F.O.B. Decatur, Illinois. MBX may exercise this purchase
option at any time, and from time-to-time, during the Technology Alliance
Program and up to thirty (30) days after the expiration or termination of the
Technology Alliance Program, by written notice to ADM Sub, stating its desire to
purchase, the quantity to be purchased (up to the

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total amount that is then available) and shipping and delivery instructions. ADM
Sub shall invoice MBX for amounts so purchased no sooner than at the time of
delivery and the purchase price for amounts ordered and delivered in accordance
herewith shall be payable by MBX within thirty (30) days of receipt of an
invoice from ADM Sub by wire transfer of immediately available fluids to an
account in the United States designated by ADM Sub. Technology Alliance Output
and Marketing Material purchased hereunder shall be purchased "as is," without
warranty of any kind other than that the Technology Alliance Output and
Marketing Material shall have been stored and handled, from the time of
production until the delivery to MBX, in accordance with the requirements of the
Technology Alliance Plan or as otherwise agreed by the Parties. Technology
Alliance Output and Marketing Material purchased by MBX shall be used by MBX for
performing its obligations pursuant to this Agreement and for market development
activities benefiting the Parties and the potential Commercial Alliance between
them. Technology Alliance Output that is not purchased by MBX shall be used by
ADM Sub solely for internal research and development purposes, or if not soused,
ADM Sub shall either store (for later sale to MBX or the Joint Sales Company or
for later use by ADM Sub solely for internal research purposes) or dispose of
the unused Technology Alliance Output, at ADM Sub's option.

     3.4 REPORTING REQUIREMENTS. Within ten (10) days after the end of each
month during the term of the Technology Alliance Program, or as otherwise agreed
to by the Parties, the Parties shall provide each other with a written progress
report which shall describe the activities that have been performed to date in
connection with the Technology Alliance Program, including without limitation,
an evaluation of the work performed in relation to the Goal of the Technology
Alliance Program, and will provide such other information as may be required by
the Technology Alliance Plan or reasonably requested by MBX or ADM Sub.

     3.5 RECORDS. ADM Sub and MBX shall maintain records with respect to the
Technology Alliance Program in sufficient detail and in a good scientific manner
appropriate to support patent filings, which shall be complete and accurate and
shall fully and properly reflect all work done and results achieved in the
performance of the Technology Alliance Program. All such records shall be
retained for at least five (5) years after the termination of this Agreement, or
for such longer period as may be required by applicable law. Each of ADM Sub and
MBX shall have the right, during normal business hours and upon reasonable
notice, to inspect and copy any such records that are maintained hereunder.

                                    ARTICLE 4
                              INTELLECTUAL PROPERTY

     4.1 OWNERSHIP.

          4.1.1 BACKGROUND TECHNOLOGY, PROPRIETARY MATERIALS. Subject to the
rights and licenses granted herein, ADM Sub shall own all right, title and
interest in and to any: (i) ADM Sub Background Technology, (ii) ADM Sub Program
Technology and (iii) ADM Sub Proprietary Materials. Subject to the rights and
licenses granted herein, MBX shall own all right, title and interest in and to
any: (x) MBX Background Technology, (y) MBX Program Technology and (z) MBX
Proprietary Materials.

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          4.1.2 JOINT OWNERSHIP. MBX and ADM Sub shall jointly own all Joint
Program Technology. ADM Sub hereby grants to MBX a perpetual, *, exclusive,
fully-sublicenseable license to ADM Sub's rights in Joint Program Technology for
the research, development, manufacture, use, sale and importation of PHA Related
Material produced via Plants. MBX hereby grants to ADM Sub a perpetual, *,
exclusive, fully-sublicenseable license to MBX's rights in Joint Program
Technology for use in all fields that are part of ADM's and its Affiliates'
commercial activities at any time during the tern of this Technology Alliance
Agreement, but excluding: (i) uses that are within the Field, (ii) uses that are
within the term "Field of Use" as that term is defined in the License Agreement
by and between MBX and Tepha, Inc. dated October 1, 1999 and (iii) any and all
uses of PHA Related Material produced via Plants. Subject to the rights,
licenses and obligations set forth herein, MBX and ADM Sub hereby agree that
they shall each have the right to assign, sell, license or otherwise convey
their rights in the Joint Program Technology without notice to or consent of the
other Party and without any obligation to share the proceeds of such activity
with the other Party, or otherwise to account to the other Party in connection
with such activities. In all other respects, the rights of the Parties as joint
owners shall be determined by the laws of the United States of America and the
State of Delaware.

          4.1.3 DISCLOSURE. MBX and ADM Sub shall each promptly disclose to the
other, in writing, the making, conception or reduction to practice of any
Program Technology.

     4.2 LICENSE GRANTS.

          4.2.1 LICENSE GRANTS BY MBX. Subject to the terms and conditions act
forth herein, MBX hereby grants to ADM Sub a *, non-exclusive license, without
the right to assign or sublicense, under MBX's right, title and interest in and
to the MBX Technology and the MBX Patent Rights, solely to perform its
obligations under the Technology Alliance Plan during the term of this
Agreement. ADM Sub acknowledges that certain of the MBX Patent Rights and MSX
Technology are Controlled by MBX pursuant and subject to that certain License
Agreement dated July 15, 1993 by and between MBX and Massachusetts Institute of
Technology as amended, the MIT License"). The license granted herein to ADM Sub
is subject to certain rights retained by MIT in the MIT License and ADM Sub
further agrees that the obligations to MIT set forth in Articles 2, 5, 7, 8, 9,
10, 12, 13 and 15 (copies of said articles am attached hereto as Exhibit H) are
binding upon ADM Sub as if it were a Party to the MIT License.

          4.2.2 GRANTS BY ADM SUB. Subject to the terms and conditions set forth
herein, ADM Sub hereby grants to MBX a *, non-exclusive license, without the
right to assign or sublicense, under ADM Sub's right, title and interest in and
to the ADM Sub Technology and the ADM Sub Patent Rights, solely to perform its
obligations under the Technology Alliance Plan during the term of this
Agreement.

     4.3 GRANT OF OPTION. MBX hereby grants to ADM Sub the might and option to
enter into a commercial alliance for the further research, development,
manufacture, use, sale and importation of the PHA Material and PHA Formulations
on the terms and conditions set forth in the Commercial Alliance Agreements (the
"Option"). The Option shall be exercisable by ADM Sub as follows: (i) at any
time after the Technical Aspects of the Goal have been achieved and until thirty
(30) days after the expiration of the term of this Agreement, by written notice
to

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                                       13



MBX or (ii) at any time after the Fermentation Performance Parameters applicable
to fermentation in a * fermenter have been met and until thirty (30) days after
the expiration of the term of this Agreement, by written notice to MBX;
provided, however, that, in either case, the Option shall not be exercisable if
and for so long as ADM Sub is in breach of this Agreement. Following the
exercise of the Option, the Parties shall promptly execute and deliver the
Commercial Alliance Agreements in accordance with this Agreement.

     4.4 NO IMPLIED RIGHTS. The Parties hereby agree and acknowledge that no
rights or licenses under their respective intellectual property rights are
granted hereunder, by implication, estoppel or otherwise, by either of them,
except as expressly set forth in Section 4.1, Section 4.2 and Section 4.3.

     4.5 REPRESENTATIONS AND WARRANTIES.

          4.5.1 MBX REPRESENTATIONS. Except as otherwise disclosed on Schedule
4.5.1 attached hereto and incorporated herein by reference, MBX represents and
warrants, as of the Effective Date, that: (a) MBX possesses the full legal
right; authority and power to enter into this Agreement and to grant the license
to ADM Sub as set forth herein, and that no consent or approval is required in
connection therewith; (b) to MBX's Knowledge, the MBX Patent Rights are valid
and enforceable within the Field, and MBX has no Knowledge of any current or
threatened claim by a third party that any of the MBX Patent Rights are invalid
or unenforceable within the Field or that practicing any of the MBX Patent
Rights or MBX Technology within the Field would infringe a third party's Patent
Rights; (c) there is no existing or, to MBX's Knowledge, threatened litigation
concerning the ownership or use within the Field of the MBX Technology or MBX
Patent Rights; (d) all MBX Patent Rights that have been prosecuted by MBX
(directly or through legal counsel) have been prosecuted in good faith; (e) to
the Knowledge of MBX, all MBX Patent Rights that have been prosecuted by a third
party (directly or through legal counsel) have been prosecuted in good faith;
(f) MBX has not sold, transferred, granted any licenses, or otherwise conveyed
any rights in or to the MBX Technology or MBX Patent Rights that would prevent
MBX from granting the rights and licenses granted herein; (g) MBX shall not
Knowingly provide any false or misleading information to ADM Sub in connection
with the Technology Transfer or the performance of the Technical Alliance
Program; (h) MBX has disclosed to ADM Sub any information, which, to MBX's
Knowledge, identifies significant health or safety risks associated with the
production or recovery of PHA Material or PHA Formulations; (i) to its
Knowledge, MBX can fulfill its obligations hereunder without violating,
infringing or misappropriating any rights, including any contract, statutory or
intellectual property rights or any confidentiality rights of any third party;
(j) MBX has no Knowledge of any existing or threatened acts by any third party
that would infringe the MBX Technology or the MBX Patent Rights; (k) MBX has no
Knowledge of any prior art that would render the MBX Patent Rights unpatentable;
(l) the MBX Patent Rights include all of the patents and patent applications
which MBX Controls which would be infringed by the research, development,
manufacture, use, sale or importation of PHA Material and PHA Formulations;
provided, that if any such patents or patent applications are not encompassed
within the definition of the term "MBX Patent Rights", such definition shall be
construed as if such patents or patent applications were so included; (m) MBX
has provided ADM Sub with true copies of the agreements listed on Schedule 4.5.1
and that these agreements are all the agreements that are currently effective,
or entered into but effective after the Effective Date, that MBX or its

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Affiliates has entered into with third parties pursuant to which: (1) MBX or its
Affiliates has granted to a third party the right to practice the MBX Patent
Rights in the Field, (2) a Third Party granted to MBX or its Affiliates the
right to practice such third party's intellectual property rights within the
Field, (3) MBX or its Affiliates and a third party have or shall conduct
activities relating to the production or sale of PHA Material or PHA
Formulations, (4) MBX or its Affiliates shall have transferred or conveyed a
cell line intended to produce PHA Material to a third party, or (5) either party
shall manufacture, distribute or sell polyhydroxyalkanoates or concerning the
license of Technology or Patent Rights concerning the manufacture, distribution
or sale of polyhydroxyalkanoates, (n) Schedule 4.5.1 contains a complete list,
as of the Effective Date, of any written opinions of counsel MBX has received
concerning the patentability or enforceability of any MBX Patent Rights or
Patent Rights Controlled by any Third Party; (o) Schedule 4.5.1 contains a
complete list of all written notices MBX has received from any third parties
alleging that MBX is or maybe infringing a third party's patent or other
intellectual property right; and (p) Schedule 4.5.1 contains a complete list of
all written notices MBX has provided to any Third Party alleging that such Third
Party is or may be infringing MBX Technology or MBX Patent Rights. Anything
herein to the contrary notwithstanding, MBX shall only be required to provide
copies to ADM Sub of those material transfer agreements entered into with Third
Parties pursuant to which MBX or its Affiliates shall have transferred or
conveyed a cell line intended to produce PHA Material or that does not conform
in all material respects with the form of material transfer agreement attached
hereto to Schedule 4.5.1. Anything herein to the contrary notwithstanding, the
Parties hereby agree and acknowledge as follows: (i) with respect to such of the
Technology and Patent Rights that are Controlled by MBX and that include or
claim processes or methods ("Methods IP") of manufacturing, processing or using
compositions of matter, it is acknowledged that MBX may not have, or be able to
license to ADM Sub or the Joint Sales Company hereunder, the freedom to practice
such Methods IP with respect to compositions that are owned or controlled by
Third Parties and that MBX makes no representation or warranty as to such
freedom to operate; (ii) with respect to such of the Technology and Patent
Rights that are Controlled by MBX and that include or claim compositions of
matter of PHA Formulations ("Formulations IP"), it is acknowledged that MBX may
not have, or be able to license to AIM Sub or the Joint Sales Company hereunder,
the fight to make, use or sell PHA Formulations that are claimed by such
Formulations IP to the extent that a Third Party owns or controls the right to
manufacture, use or sell a component, ingredient or combination that is included
within a particular PHA Formulation and that MBX makes no representation or
warranty as to such freedom to operate; provided, however, that except to the
extent recently allowed US Patent Application US 2003/0236358 (published
December 25, 2003) is valid, enforceable and applicable, this exception shall
not apply to the formulations listed on Schedule 4.5.1 as "Core Formulations";
(iii) with respect to such of the Technology and Patent Rights that are
Controlled by MBX and that include or claim a method producing PHA Material
through the use of engineered microbial cell lines, MBX believes that *, (iv)
with respect to such of the Technology and Patent Rights that are Controlled by
MBX and that include or claim the manufacture, use or sale of *; and (v) with
respect to patent applications that are included within the MBX Patent Rights,
MBX only makes the representations and warranties set forth in items 4.5.1(a),
(c), (d), (e), (f), (g), (j), (k), (I), (m) and (n). MBX DOES NOT MAKE ANY OTHER
REPRESENTATION OR WARRANTY WHATSOEVER CONCERNING THE MBX PATENT RIGHTS, THE MBX
TECHNOLOGY OR ITS RIGHTS THEREIN. MBX HEREBY SPECIFICALLY DISCLAIMS ALL OTHER
WARRANTIES, EXPRESS OR

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IMPLIED, INCLUDING BUT NOT LIMITED TO, IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE.

          4.5.2 ADM SUB REPRESENTATIONS. Except as otherwise disclosed on
Schedule 4.5.2 attached hereto and incorporated herein by reference, ADM Sub
represents and warrants, as of the Effective Date, that: (a) ADM Sub possesses
the full legal right, authority and power to enter into this Agreement and to
grant the license to MBX as set forth herein, and that no consent or approval is
required in connection therewith; (b) to ADM Sub's Knowledge, the ADM Sub Patent
Rights that, to ADM Sub's Knowledge, have specific application within the Field,
are valid and enforceable within the Field, and ADM Sub has no Knowledge of any
current or threatened claim by a third party that any of the ADM Sub Patent
Rights that, to ADM Sub's Knowledge, have specific application within the Field,
are invalid or unenforceable within the Field or would infringe a third party's
Patent Rights if practiced in the Field; (c) there is no existing or, to ADM
Sub's Knowledge, threatened litigation concerning the ownership or use within
the Field of the ADM Sub Technology or ADM Sub Patent Rights than to ADM Sub's
Knowledge, have specific application within the Field; (d) all ADM Sub Patent
Rights that have been prosecuted by ADM or its Affiliates (directly or through
legal counsel) have been prosecuted in good faith; (e) to the Knowledge of ADM
Sub, all ADM Sub Patent Rights that have been prosecuted by a third party
(directly or through legal counsel) have been prosecuted in good faith; (f)
neither ADM Sub nor any of its Affiliates have sold, transferred, granted any
licenses, or otherwise conveyed any rights in or to the ADM Sub Technology or
ADM Sub Patent Rights that, to ADM Sub's Knowledge, have specific application
within the Field, which sale, transfer, license or conveyance would prevent ADM
Sub from granting the rights and licenses granted herein; (g) ADM Sub shall not
Knowingly provide any false or misleading information to MBX in connection with
the Technology Transfer or the performance of the Technical Alliance Program;
(h) ADM Sub has disclosed to MBX any information, which, to ADM Sub's Knowledge,
identifies significant health or safety risks associated with the production or
recovery of PHA Material or PHA Formulations; (i) to its Knowledge, ADM Sub can
fulfill its obligations hereunder without violating, infringing or
misappropriating any rights, including any contract, statutory or intellectual
property rights or any confidentiality rights of any third party; (j) ADM Sub
has no Knowledge of any existing or threatened acts by any third party that
would infringe the ADM Sub Technology or the ADM Sub Patent Rights that, to ADM
Sub's Knowledge, have specific application within the Field; (k) ADM Sub has no
Knowledge of any prior art that would render unpatentable those ADM Sub Patent
Rights that, to ADM Sub's Knowledge, have specific application within the Field,
(l) the ADM Sub Patent Rights include all of the patents and patent applications
which ADM Sub Controls which would be infringed by the research, development,
manufacture, use, sale or importation of PHA Material and PHA Formulations;
provided, that if any such patents or patent applications are not encompassed
within the definition of the term "ADM Sub Patent Rights", such definition shall
be construed as if such patents or patent applications were so included, (m) ADM
Sub has provided MBX with true copies of the agreements listed on Schedule 4.5.2
and that these agreements are all the agreements that are currently effective,
or entered into bat effective after the Effective Date, that ADM Sub or its
Affiliates has entered into with third parties pursuant to which: (1) ADM Sub or
its Affiliates has granted to a third party the right to practice within the
Field the ADM Sub Patent Rights that, to ADM Sub's Knowledge have specific
application within the Field, (2) a Third Party granted to ADM Sub or its
Affiliates the right to practice such third party's intellectual property rights
specifically within the Field, (3) ADM Sub or its

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                                       16



Affiliates and a third party have or shall conduct activities relating to the
production or sale of PHA Material or PHA Formulations, (4) ADM Sub or its
Affiliates shall have transferred or conveyed a cell line intended to produce
PHA Material to a third party, or (5) either party shall manufacture, distribute
or sell polyhydroxyalkanoates or concerning the license of Technology or Patent
Rights concerning the manufacture, distribution or sale of
polyhydroxyalkanoates, (n) Schedule 4.5.2 contains a complete list, as of the
Effective Date, of any written opinions of counsel ADM Sub or its Affiliates
have received concerning the patentability or enforceability of any ADM Sub
Patent Rights or Patent Rights Controlled by any Third Party that, to ADM Sub's
Knowledge, have specific application within the Field; (o) Schedule 4.5.2
contains a complete list of all written notices ADM Sub has received from any
third parties alleging that ADM Sub or its Affiliates is or may be infringing a
third party's patent or other intellectual property right within the Field; and
(p) Schedule 4.5.2 contains a complete list of all written notices ADM Sub or
its Affiliates has provided to any Third Party alleging that such Third Party is
or may be infringing ADM Sub Technology or ADAM Sub Patent Rights within the
Field. Anything herein to the contrary notwithstanding, ADM Sub shall only be
required to provide copies to MBX of those material transfer agreements entered
into with Third Parties pursuant to which ADM Sub or its Affiliates shall have
transfer red or conveyed a cell line intended to produce PHA Material or that do
not provide that ADM Sub will own, or have an option to take an exclusive
license to inventions that relate to the manufacture, use or sale of PHA
Material that are made in connection with the work done pursuant to the material
transfer agreement. Anything herein to the contrary notwithstanding, the Parties
hereby agree and acknowledge as follows: with respect to patent applications
that are included within the ADM Sub Patent Rights, ADM only makes the
representations and warranties set forth in items 4.5.2(a), (c), (d), (e), (f),
(g), (j), (k), (1), (m) and (n). ADM SUB DOES NOT MAKE ANY OTHER REPRESENTATION
OR WARRANTY WHATSOEVER CONCERNING THE ADM SUB PATENT RIGHTS, THE ADM SUB
TECHNOLOGY OR ITS RIGHTS THEREIN. ADM SUB HEREBY SPECIFICALLY DISCLAIMS ALL
OTHER WARRANTIES, EXPRESS OR BELIED, INCLUDING BUT NOT LIMITED TO, IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

                                    ARTICLE 5
                                    PAYMENTS

     5.1 PAYMENTS. Within ten (10) days after the Effective Date, ADM Sub shall
pay to MBX the amount of three million dollars ($3,000,000) as a non-refundable;
non-creditable upfront payment. Within ten (10) days following the TAC's
determination that (i) the production of PHA Cell Paste in a fermenter having a
capacity of approximately * was in a manner and with results that met the
applicable Fermentation Performance Parameters, and (ii) the recovery of PHA
Material was in a manner and with results that met the Recovery Performance
Parameters, ADM Sub shall pay to MBX the amount of one million dollars
($1,000,000) as a non refundable, non-creditable milestone payment. Within ten
(10) days following the first to occur of: (i) the achievement of the Goal and
(ii) the exercise of the Option by ADM Sub, ADM Sub shall pay to MBX the amount
of one million dollars ($1,000,000) as a non refundable, non-creditable
milestone payment. Anything herein to the contrary notwithstanding, in the event
that ADM Sub desires to exercise the Option in accordance with Section 4.3, the
above-described upfront payment and the two (2) milestone payments, to the

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                                       17



extent not already paid, shall be due and payable in full as a pre-condition to
the exercise of the Option. Amounts due under this Section 5.1 shall be payable
by wire transfer of immediately available funds to an MBX bank account in
accordance with instructions to be provided to ADM Sub by MBX.

     5.2 OTHER EXPENSES. Except as provided in Section 5.1, each Party shall
bear its own costs and expenses incurred in performing under this Agreement.

                                    ARTICLE 6
                                   EXCLUSIVITY

     6.1 EXCLUSIVITY. During the term of this Agreement, and for a period of
thirty (30) days thereafter, ADM Sub and MBX shall not, directly or through one
or more Affiliates or agents, discuss, negotiate or establish, business
operations, agreements or transactions with any third party concerning or
relating to *, including without limitation any business operation, agreement or
transaction that would have as a purpose, the manufacture, use, sale or
importation of *. Notwithstanding the foregoing, MBX shall at all times be
permitted to engage in the following activities: (i) communicate with and supply
PHA Material and PHA Formulations to potential and actual customers or marketing
partners from the PHA Material to be produced by ADM Sub and MBX hereunder, (ii)
establish fermentation, recovery and formulation capacity, directly or through
third party service providers, to produce, sell and convey pilot scale
quantities of PHA Material for market development purposes, to supply MBX
customers or to satisfy certain obligations of MBX hereunder, (iii) discuss,
negotiate or establish strategic marketing alliances, (iv) in-license or
otherwise acquire rights to Technology that may be useful in connection with the
activities of the Parties hereunder, or under the Commercial Alliance
Agreements, provided that such Technology is made available for use in
connection with such activities (the activities listed in the foregoing clauses
(i) through (iv) inclusive are the "Permitted Activities") and provided further
that, for avoidance of doubt, MBX shall not grant any right or license to any
MBX Technology for use within the Field to any Person other than to carry out
any of the Permitted Activities. MBX shall provide written notice to ADM Sub
describing any Permitted Activities that it plans to undertake and shall provide
ADM Sub with a reasonable opportunity to provide continents thereon to MSX.
Promptly upon ADM Sub exercising the Option hereunder, MBX shall assign to the
Joint Sales Company (and the Joint Sales Company shall assume) any and all
agreements entered into within the Permitted Activities concerning the supply of
PHA Material and PHA Formulations, any strategic marketing alliances and any
licenses to MBX Technology. Any amounts received by MBX in connection with any
strategic marketing alliance or in connection with any license to MBX Technology
in the Field permitted within the Permitted Activities shall be used solely to
further develop the MBX Technology within the Field.

*    CONFIDENTIAL TREATMENT REQUESTED


                                       18



                                   ARTICLE 7
                     TREATMENT OF CONFIDENTIAL INFORMATION;
                           PUBLICITY; NON-SOLICITATION

     7.1 CONFIDENTIALITY OBLIGATIONS. MBX and ADM Sub each recognize that the
other Parties' Confidential Information and Proprietary Materials constitute
highly valuable and proprietary confidential information. Each of MBX and ADM
Sub agrees that it will keep confidential, and will cause its employees,
consultants, and Affiliates to keep confidential, all Confidential Information
and Proprietary Materials of the other Parties. The Party and their respective
employees, consultants or Affiliates, shall not use any Confidential Information
or Proprietary Materials of any other Party for any purpose whatsoever except as
expressly permitted in this Agreement. MBX acknowledges that the corn costs that
constitute a portion of the Manufacturing Cost shall constitute ADM Sub
Confidential Information.

     7.2 LIMITED DISCLOSURE. MBX and ADM Sub each agree that any disclosure of
any other Party's Confidential Information or any transfer of any other Party's
Proprietary Materials to any officer or employee of any other Party or any of
its Affiliates shall be made only if and to the extent necessary to carry out
its rights and responsibilities under this Agreement and shall be limited to the
maximum extent possible consistent with such rights and responsibilities. MBX
and ADM Sub each further agree that any disclosure of another Party's
Confidential Information or any transfer of another Party's Proprietary
Materials as permitted by the preceding sentence shall only be made to such of
the recipient Party's officers, employees aid Affiliates who are bound by
written confidentiality obligations to maintain the confidentiality thereof and
not to use such Confidential Information or Proprietary Materials except as
expressly permitted by this Agreement. MBX and ADM Sub each further agree not to
disclose or transfer any other Party's Confidential information or Proprietary
Materials to any third parties under any circumstance without the prior written
approval from the relevant other Party (such approval not to be unreasonably
withheld), except as otherwise required by law, or except as otherwise expressly
permitted by this Agreement. Each Party shall take such action, and shall cause
its Affiliates to take such action, to preserve the confidentiality of the other
Parties' Confidential Information and Proprietary Materials as it would
customarily take to preserve the confidentiality of its own Confidential
Information and Proprietary Materials, and in no event, less than reasonable
care. Each Party, upon the request of any other Party, will return all the
Proprietary Information and Confidential Materials disclosed or transferred to
it by such other Party pursuant to this Agreement which does not constitute
Joint Program Technology, including all copies and extracts of documents and all
manifestations in whatever form, within two (2) months of the request or, within
two (2) weeks of the termination or expiration of this Agreement; provided,
however, that a Party may retain Confidential Information, and Proprietary
Materials of another Party relating to any license which survives such
termination and one copy of all other Confidential Information may be retained
in its legal files solely for the purpose of monitoring compliance with this
Article 7.

     7.3 EMPLOYEES AND CONSULTANTS. MBX and ADM Sub each hereby represent that
all of its employees, and any consultants to such Party or its Affiliates,
participating in the activities of the Technology Alliance Program who shall
have access to the Confidential Information or Proprietary Materials of the
other Party are bound by written obligations to maintain such information in
confidence and not to use such information except as expressly permitted herein

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                                       19



mid to assign any inventions or discoveries made in connection with such
activities to MBX or ADM Sub as applicable. Each Party agrees to be held
responsible for the confidentiality obligations to which its employees and
consultants (and those of its Affiliates) are obligated.

     7.4 PUBLICITY. Neither Party may publicly disclose the existence or terms
of this Agreement without the prior written consent of the other Party;
provided, however, that either Party may make such a disclosure: (a) to the
extent required by law (including the fling of a redacted copy of the Agreement
as an exhibit to a legally required filing) or by the requirements of any
nationally recognized securities exchange, quotation system or over-the-counter
market on which such Party has its securities listed or traded, and (b) to any
investors (including without limitation, entities interested in acquiring the
stock or assets of such Party or merging with or into such Party), prospective
investors, lenders, other potential financing sources, prospective customers and
prospective strategic marketing partners who are obligated to keep such
information confidential. In the event that such disclosure is required as
aforesaid, the disclosing Party shall make Commercially Reasonable Efforts to
provide the other Party with reasonable notice prior to such disclosure and to
coordinate with the other Party with respect to the wording and timing of any
such disclosure. The Parties, prior to the execution of this Agreement, will
mutually agree on the wording of a press release publicizing the Technology
Alliance which shall be attached hereto as Exhibit I. Once such press release or
any other written statement is approved for disclosure by both Parties, either
Party may make subsequent public disclosure of the contents of such statement,
but no more than the contents of such statement, without the further approval of
the other Party.

     7.5 PROHIBITION ON SOLICITATION. Neither Party nor its Affiliates shall,
during the period commencing on the Effective Date and continuing until the
expiration or termination of this Agreement and two (2) years thereafter,
specifically solicit any person who is employed by the other Party or its
Affiliates and who was involved in the Technology Alliance Program during the
term of this Agreement, whether such person is solicited to be hired as an
employee or consultant, unless authorized in writing by the other Party. The
Parties acknowledge that generally listing a position for hire in a newspaper,
trade journal or similar publication shall not constitute a specific
solicitation in violation of the terms of this provision. The Parties also
acknowledge that specifically soliciting any person who was formerly employed by
the other Party or its Affiliates is not in violation of the terms of this
provision. The Parties further acknowledge for the avoidance of doubt that this
Section only applies to those persons that remain employees of a Party and not
to former employees of a Party.

     7.6 TERM. The obligations and restrictions set forth in this Article 7
shall survive the termination or expiration of this Agreement for a period of
twenty (20) years.

                                   ARTICLE 8
                              TERM AND TERMINATION

     8.1 TERM. This Agreement shall commence as of the Effective Date and shall
expire upon the first to occur of (i) fifteen (15) months following the
completion of the initial fermentation run by ADM Sub in a fermenter having a
capacity of approximately *, (ii) eighteen (18) months following the completion
of MBX's obligations in connection with the Technology

*    CONFIDENTIAL TREATMENT REQUESTED


                                       20



Transfer as specified under the Technology Alliance Plan, (iii) the second
anniversary of the Effective Date, unless terminated in accordance with this
Article 8 prior to such date, and (iv) the execution of the Commercial Alliance
Agreement.

     8.2 TERMINATION BY EITHER PARTY. This Agreement may be terminated at any
time by either Party in the event that the other Party materially defaults on
any material obligation hereunder or materially breaches any material term of
this Agreement to be performed or observed: (a) by giving one (1) month prior
written notice to the defaulting Party in the case of a breach of any payment
term of this Agreement, and (b) by giving two (2) months prior written notice to
the defaulting Party in the case of any other breach; provided, however, that in
the case of a default or breach capable of being cured, if said defaulting Party
shall cure the said default or breach within such notice period after said
notice shall have been given, then said notice shall not be effective and this
Agreement shall continue in full force and effect.

     8.3 AT WILL TERMINATION BY ADM SUB. ADM Sub shall have the right to
terminate this Agreement at any time upon not less than one (1) month prior
written notice to MBX.

     8.4 CONSEQUENCES OF TERMINATION OR EXPIRATION; GRANT OF LICENSES. Upon the
termination or expiration of the Agreement, the following shall occur:

          8.4.1 CONSEQUENCES OF TERMINATION OR EXPIRATION.

               (a)  MBX shall immediately cease using, and shall promptly return
                    to ADM Sub, all ADM Sub Technology, except to the extent MBX
                    has a license to practice such Technology under Section 8.4;

               (b)  ADM Sub shall immediately cease using, and shall promptly
                    return to MBX all MBX Technology, except to the extent ADM
                    Sub has a license to practice such Technology under Section
                    8.4;

               (c)  the license granted to ADM Sub pursuant to Section 4.2.1
                    shall immediately terminate;

               (d)  the license granted to MBX pursuant to Section 4.2.2 shall
                    immediately terminate;

               (e)  each Party shall promptly pay to the other any amounts due
                    and payable hereunder as of the effective date of
                    termination or expiration; and

               (f)  subject to those rights and obligations of the Parties that
                    survive termination or expiration by their terms or pursuant
                    to Section 8.5, this Agreement shall terminate and be of no
                    further force or effect.

          8.4.2 RIGHTS UPON ADM SUB TERMINATION.

               (a)  In the event ADM Sub terminates this Agreement pursuant to
                    Section 8.3, or ADM Sub does not Exercise the Option after
                    the

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                                       21



                    Technical Aspects of the Goal have been achieved, then ADM
                    Sub shall and hereby does grant to MINX a
                    fully-sublicenseable, *, perpetual, irrevocable,
                    non-exclusive license under all intellectual property rights
                    Controlled by ADM Sub and claiming or covering Program
                    Technology, to research, develop, manufacture, use, sell and
                    import PHA-Related Material, produced using any means or
                    methods, for any rand all uses.

               (b)  In the event ADM Sub terminates this Agreement pursuant to
                    Section 8.2, then MBX shall and hereby does grant to ADM Sub
                    a fully-sublicenseable, *, perpetual, irrevocable (unless
                    the terms of the license are breached), non-exclusive
                    license under all intellectual property rights Controlled by
                    MBX and claiming or covering Program Technology and MBX
                    Background Technology to research, develop, manufacture,
                    use, sell and import PHA Material and PHA Formulations for
                    use in the Field. The foregoing license shall be limited
                    such that ADM Sub shall be permitted to make a maximum of *
                    of PHA Materials during each consecutive period of twelve
                    (12) months during the term of the license on a * basis and
                    ADM Sub shall have the right to make up to an additional *
                    of PHA Material during each consecutive period of twelve
                    (12) months during the term of the license subject to
                    payment to MBX of a royalty (i) during the Royalty Term
                    equal to: (y) * on all sales or other conveyances of PHA
                    Patented Material (including, without limitation, PHA
                    Material that is contained within PHA Formulations), on a
                    one hundred percent (100%) purity basis; and (z) * on all
                    sales or other conveyances of PHA Know How Material
                    (including, without limitation, PHA Material that is
                    contained within PHA Formulations), on a one hundred percent
                    (100%) purity basis; and (ii) during the Supplemental
                    Royalty Term equal to * on all sales or other conveyances of
                    PHA Supplemental Know How Material (including, without
                    limitation, PHA Material that is contained within PHA
                    Formulations), on a one hundred percent (100%) purity basis.
                    Provided, however, that any such royalty shall be reduced by
                    the amount of royalties payable to any Third Party under a
                    license required to obtain freedom to practice the MBX
                    Technology and/or MBX Patent Rights for the manufacture, use
                    or sale of PHA Material within the Field provided that MBX
                    breached an obligation under Section 4.5.1 to disclose: (i)
                    the existence of such Third Party's intellectual property
                    rights in such Technology, or (ii) claims by such Third
                    Party that any of the MBX Patent Rights are invalid or
                    unenforceable, or that the practice of any of the MBX Patent
                    Rights would constitute an infringement or misappropriation
                    of such Third Party's intellectual property rights (such
                    royalty reduction right is "Third Party IP Royalty Offset").
                    Such royalty shall be payable within thirty (30) days
                    following the end of each

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                                       22



                    calendar quarter for sales or conveyances that occur during
                    such calendar quarter. Amounts due under this Section
                    8.4.2(b) shall be payable by wire transfer of immediately
                    available funds to an MBX bank account in accordance with
                    instructions to be provided to ADM Sub by MBX. Any amounts
                    that are not paid when due hereunder shall accrue interest
                    at the rate of four percent (4%) per annum in excess of the
                    one year London Interbank Offered Rate (LIBOR) then most
                    recently published in THE WALL STREET JOURNAL. The right to
                    demand and receive the interest provided hereunder shall be
                    in addition to any other rights available to MBX hereunder
                    or at law. ADM Sub shall maintain records with respect to
                    the sale or conveyance of PHA Material under this license in
                    sufficient detail to enable MBX to verify the accuracy of
                    the royalty payments made hereunder by ADM Sub. Such records
                    shall be retained for at least five (5) years after the
                    relevant (late of sale or conveyance. MBX shall have the
                    right, during normal business hours and upon reasonable
                    notice, to have an independent third party accounting firm
                    (subject to a mutually agreeable confidentiality agreement)
                    inspect and copy any such records that are maintained in
                    accordance with this Section 8.4.2(b). ADM Sub may terminate
                    this license at any time without any further obligation by
                    providing MBX with written notice thereof. In addition, in
                    the event ADM Sub terminates this Agreement pursuant to
                    Section 8.2, MBX shall promptly destroy any derivatives and
                    mutated forms constituting MBX Proprietary Materials
                    invented by ADM Sub, and provide ADM Sub with a
                    certification signed by an officer of MBX that MBX has
                    complied with this provision.

          8.4.3 RIGHTS UPON MBX TERMINATION. In the event MBX terminates this
Agreement pursuant to Section 8.2, then ADM Sub shall and hereby does grant to
MBX: (i) a fully-sublicenseable, *, perpetual, irrevocable, exclusive license
under all intellectual property rights Controlled by ADM Sub and claiming or
covering Program Technology, to research, develop, manufacture, use, sell and
import PHA Related Material, produced using any means or methods, for any and
all uses, and (ii) a fully-sublicenseable, *, perpetual, irrevocable,
non-exclusive license under all ADM Sub Background Technology, to research,
develop, manufacture, use, sell and import PHA-Related Material, produced using
any means or methods, for any and all uses.

          8.4.4 RIGHTS UPON BANKRUPTCY.

               (a)  In the event ADM Sub files for protection under Chapter 11
                    of the U.S. Bankruptcy Code, and ADM Sub, directly or
                    indirectly in connection with such proceedings, rejects this
                    Agreement as an executory contract (or on similar grounds),
                    then ADM Sub shall and hereby does grant to MBX: (i) a
                    fully-sublicenseable, *, perpetual, irrevocable, exclusive
                    license under all intellectual

*    CONFIDENTIAL TREATMENT REQUESTED


                                       23



                    property rights Controlled by ADM Sub and claiming or
                    covering Program Technology, to research, develop,
                    manufacture, use, sell and import PHA-Related Material,
                    produced using any means or methods, for any and all uses,
                    and (ii) a fully-sublicenseable, *, perpetual, irrevocable,
                    non exclusive license under all ADM Sub Background
                    Technology, to research, develop, manufacture, use, sell and
                    import PHA-Related Material, produced using any means or
                    methods, for any and all uses.

               (b)  In the event MBX files for protection under Chapter 11 of
                    the U.S. Bankruptcy Code, and MBX, directly or indirectly in
                    connection with such proceedings, rejects this Agreement as
                    an executory contract (or on similar grounds), then MBX
                    shall and hereby does grant to ADM Sub a
                    fully-sublicenseable, *, perpetual, irrevocable (unless the
                    terms of the license are breached), nonexclusive license
                    under all intellectual property rights Controlled by MBX and
                    claiming or covering Program Technology and MBX Background
                    Technology to research, develop, manufacture, use, sell and
                    import PHA Material and PHA Formulations for use in the
                    Field. The foregoing license shall be limited such that ADM
                    Sub shall be permitted to make a maximum of * of PHA
                    Materials during each consecutive period of twelve (12)
                    months during the term of the license on a * basis and ADM
                    Sub shall have the right to make up to an additional * of
                    PHA Material during each consecutive period of twelve (12)
                    months during the term of the license subject to payment to
                    MBX of a royalty (i) during the Royalty Term equal to: (y) *
                    on all sales or other conveyances of PHA Patented Material
                    (including, without limitation, PHA Material that is
                    contained within PHA Formulations), on a one hundred percent
                    (1.00%) purity basis; and (z) * on all sale or other
                    conveyances of PDA Know-How Material (including, without
                    limitation, PHA Material that is contained within PHA
                    Formulations), on a one hundred percent (100%) purity basis;
                    and (ii) during the Supplemental Royalty Term equal to * on
                    all sales or other conveyances of PHA Supplemental Know-How
                    Material (including, without limitation, PHA Material that
                    is contained within PHA Formulations), on a one hundred
                    percent (100%) purity basis. Provided, however, that any
                    such royalty shall be subject to Third Party IP Royalty
                    Offset. Such royalty shall be payable within thirty (30)
                    days following the end of each calendar quarter for sales or
                    conveyances that occur during such calendar quarter. Amounts
                    due under this Section 8.4.4(b) shall be payable by wire
                    transfer of immediately available funds to an MBX bank
                    account in accordance with instructions to be provided to
                    ADM Sub by MBX. Any amounts that are not paid when due
                    hereunder shall accrue interest at the rate of four percent
                    (4%) per annum in excess of the one year London Interbank
                    Offered Rate (LIBOR) then most recently

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                                       24



                    published in THE WALL STREET JOURNAL. The right to demand
                    and receive the interest provided hereunder shall be in
                    addition to any other rights available to MBX hereunder or
                    at law. ADM Sub shall maintain records with respect to the
                    sale or conveyance of PHA Material under this license in
                    sufficient detail to enable MBX to verify the accuracy of
                    the royalty payments made hereunder by ADM Sub. Such records
                    shall be retained for at least five (5) years after the
                    relevant date of sale or conveyance. MBX shall have the
                    right, during normal business hours and upon reasonable
                    notice, to have an independent third party accounting firm
                    (subject to a mutually agreeable confidentiality agreement)
                    inspect and copy any such records that are maintained in
                    accordance with this Section 8.4.4(b). ADM Sub may terminate
                    this license at any time without any further obligation by
                    providing MBX with written notice thereof.

     8.5 SURVIVING PROVISIONS; RESERVATION OF RIGHTS. Termination or expiration
of this Agreement for any reason shall be without prejudice to any rights and
obligations of the Parties that have accrued as of the Effective Date of
termination and:

          (a) the rights and obligations of the Parties provided hi Section 8.4,
and Articles 1, 4, 6, 7, 9, 10 and 11 and any other provision which would
reasonably be expected to survive termination in accordance with the terms of
this Agreement, all of which shall survive such termination for the period of
time set forth in each such provision, or indefinitely if no such time is
specified; and

          (b) any other rights or remedies provided at law or equity which
either Party may otherwise have against the other.

                                    ARTICLE 9
                                 PATENT MATTERS

     9.1 PATENT FILING, PROSECUTION AND MAINTENANCE.

          9.1.1 ADM SUB PATENT RIGHTS. ADM Sub shall have the sole right and
authority to file, prosecute and maintain the ADM Sub Patent Rights during the
term of this Agreement at its own expense and using patent counsel of its own
choosing. ADM Sub represents that it will continue to file, prosecute and
maintain the ADM-Sub Patent Rights in accordance with reasonable commercial
practices during the term of this Agreement.

          9.1.2 MBX PATENT RIGHTS. MBX shall have the sole right and authority
to file, prosecute and maintain the MBX Patent Rights during the term at its own
expense and using patent counsel of its own choosing. MBX represents that it
will continue to file, prosecute and maintain the MBX Patent Rights in
accordance with reasonable commercial practices during the term of this
Agreement.

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                                       25



          9.1.3 ABANDONMENT. If either Party decides to withdraw from the
continued prosecution of any Patent Rights on Technology that is at that time
subject to a license hereunder, such Party shall so inform the other Party at
least thirty (30) days prior to the effective date of such decision and the
other Party shall have the right, through patent attorneys or agents of its
choice, to assume responsibility for the continued prosecution of such Patent
Rights. Promptly after the effective date of the decision to withdraw, the
withdrawing Party shall assign its right, title and interest in and to such
Patent Rights to the other Party. Notwithstanding such assignment, such Patent
Rights will continue to be subject to any licenses granted herein to the extent
necessary in carrying out the Commercial Alliance.

          9.1.4 JOINT PROGRAM TECHNOLOGY. The Parties will file, prosecute and
maintain Patent Rights claiming Joint Program Technology in accordance with this
Section 9.1.4 with the primary goal of maximizing the commercial potential of
the PHA Material in a commercially reasonable manner. The Parties, sharing
expenses equally and acting through patent attorneys or agents agreed upon by
the Parties, shall prepare, file, prosecute and maintain all Patent Rights
relating to Joint Program Technology. If either Party decides to withdraw from
the continued prosecution of any Patent Rights on Joint Program Technology, such
Party shall so inform the other Party at least thirty (30) days prior to the
effective date of such decision and the other Party shall have the right,
through patent attorneys or agents of its choice, to assume responsibility for
the continued prosecution of such Patent Rights. Promptly after the effective
date of the decision to withdraw, the withdrawing Party shall assign its right,
title and interest in and to such Patent Rights to the other Party.
Notwithstanding such assignment, such Patent Rights will continue to be subject
to the licenses granted herein to the extent applicable.

     9.2 INFRINGEMENT AND DEFENSE.

          9.2.1 ACTUAL OR THREATENED INFRINGEMENT. In the event either Party
becomes aware of any possible infringement or unauthorized possession, knowledge
or use of any Technology, which is the subject matter of this Agreement, in the
Field (collectively, an "Infringement"), that Party shall promptly notify the
other Party and provide it with available details. ADM Sub hereby reserves the
exclusive right (but not obligation) to take whatever action it deems
appropriate to prevent or terminate any third party infringement of ADM Sub
Patent Rights claiming the ADM Sub Technology, at ADM Sub's cost. MBX hereby
reserves the exclusive right (but not obligation) to take whatever action it
deems appropriate to prevent or terminate any third party infringement of MBX
Patent Rights claiming the MBX Technology, at MBX's cost. Notwithstanding the
foregoing, during the term, if either Party (the "Defending Party") decides to
take any action to prevent or terminate any third party infringement of its
Patent Rights within the Field, it shall first give notice to the other Party
(the "Neutral Party") and, if the Neutral Party can produce a written legal
opinion of an independent patent attorney concluding that there is a reasonable
likelihood that such third party could, in good faith, in connection with such
action, allege that a claim or claims within Patent Rights Controlled by the
Neutral Party are invalid or unenforceable, then the Defending Party shall not
take such action against such third party without the prior, written consent of
the Neutral Party. The Parties, sharing expenses equally and acting through
patent attorneys or agents agreed upon by the Parties, shall take whatever
action they shall agree upon to prevent or terminate any third party
infringement of Patent Rights relating to Joint Program Technology, provided,
however, that if the Parties cannot agree, MBX shall have the right to make the
final determination with respect

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                                       26



to third party infringement within the Field. In all cases, all decisions by a
Party pursuant to this Section 9.2 shall be made in good faith and in the best
interest of the Technology Alliance Program.

          9.2.2 DEFENSE OF CLAIMS. In the event that any action, suit or
proceeding is brought against either Party based on its actions in performance
of the Technology Alliance Program and alleging the infringement of the
Technology or intellectual property rights of a third party, the Parties shall
cooperate with each other in the defense of any such suit, action or proceeding.
The Parties will give each other prompt written notice of the commencement of
any such suit, action or proceeding or claim of infringement and will furnish
each other with a copy of each communication relating to the alleged
infringement. Each Party shall cooperate in the defense of such actions. If as a
consequence of such action, suit or proceeding by a third party, a prohibition,
restriction or other condition is imposed upon one or both of the Parties, the
Parties shall examine and discuss in good faith the consequences of such
prohibition or restriction or other conditions on this Agreement and on possible
modifications hereto.

                                   ARTICLE 10
                                 INDEMNIFICATION

     10.1 INDEMNIFICATION BY MBX. During the course of, and upon and after
termination of this Agreement for any reason whatsoever, MBX and its Affiliates
shall indemnify, defend and hold ADM Sub, its Affiliates and their respective
directors, officers and employees (collectively, "ADM Sub Indemnitees") harmless
against any claims (including without limitation claims for product liability,
personal injury or death, or property damage), liability, damage, loss, cost or
expense (including reasonable attorneys' fees) incurred by any of them, to the
extent resulting from: (i) the * of MBX, or any of its Affiliates, or their
respective employees, representatives or agents; or (ii) MBX's *.
Notwithstanding anything to the contrary, this provision shall not apply to any
claims or suits to the extent attributable to the negligence or willful
misconduct of air ADM Sub Indemnitee or a breach of this Agreement by ADM Sub.

     10.2 INDEMNIFICATION BY ADM SUB. During the course of, and upon and after
termination of this Agreement for any reason whatsoever, ADM Sub and its
Affiliates shall indemnify, defend and hold MBX, its Affiliates and their
respective directors, officers and employees (collectively, "MBX Indemnitees")
harmless against any claims (including without limitation claims for product
liability, personal injury or death, or property damage), liability, damage,
loss, cost or expense (including reasonable attorneys' fees) incurred by any of
them, to the extent resulting from: (i) the * of ADM Sub, or any of its
Affiliates, or their respective employees, representatives or agents; or (ii)
ADM Sub's *. Notwithstanding anything to the contrary, this provision shall not
apply to any claims or suits to the extent attributable to the negligence or
willful misconduct of an MBX Indemnitee or a breach of this Agreement by MBX.

     10.3 CONDITIONS TO INDEMNIFICATION. A Party seeking indemnification under
this Article 10 (the "Indemnified Party') shall give prompt notice of the claim
to the other Party (the "Indemnifying Party) and, provided that the Indemnifying
Party is not contesting the indemnity obligation, shall permit the Indemnifying
Party to control any litigation relating to such claim and disposition of any
such claim, provided that the Indemnifying Party shall act reasonably and

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                                       27



in good faith with respect to all matters relating to the settlement or
disposition of any claim as the settlement or disposition relates to Parties
being indemnified under this Article 10 and provided, further, that the
Indemnifying Party shall not settle or otherwise resolve any claim without prior
notice to the Indemnified Party and the consent of the Indemnified Party (which
consent shall not be unreasonably withheld, conditioned or delayed) if such
settlement involves anything other than the payment of money by the Indemnifying
Party. The Indemnified Party shall cooperate with the Indemnifying Party in its
defense of any claim for which indemnification is sought under this Article 10
and shall have the right to be present hi person or through counsel at all legal
proceedings giving rise to the right of indemnification.

                                   ARTICLE 11
                                  MISCELLANEOUS

     11.1 NO ASSIGNMENT. No Party shall sell, transfer or permit any transfer
of, in whole or in part, this Agreement without prior written consent of the
other Parties, which consent may be withheld for any reason. The merger or
acquisition of MBX by, with or into a third party shall not be deemed to effect
an assignment of this Agreement by MBX and this Agreement shall be binding upon
and inure to the benefit of such third party, or new entity, in the case of a
merger or similar transaction in which MBX does not continue as the same
corporate entity and shall continue to bind and inure to the benefit of MBX in
the case of an acquisition or similar transaction in which MBX survives as the
same corporate entity. ADM Sub shall not enter into any merger, acquisition or
similar transaction without the prior, written consent of MBX. Nothing herein
shall restrict ADM from entering into a merger or acquisition of ADM by, with or
into a third party and no such transaction shall he deemed to effect an
assignment of this Agreement by ADM Sub and this Agreement shall be binding upon
and inure to the benefit of such third party, or new entity, in the case of a
merger or similar transaction in which ADM does not continue as the same
corporate entity and shall continue to bind and inure to the benefit of ADM Sub
in the case of an acquisition or similar transaction in which ADM survives as a
the same corporate entity. Any purported assignment or transfer in violation of
this provision shall be null and void. In the event that, at anytime *, MBX
receives a bona fide offer from a third party to acquire all, or a majority, of
the outstanding shares of voting equity of MBX (such an acquisition is
hereinafter an "Acquisition Transaction"), MBX shall provide notice to ADM Sub
of the proposed Acquisition Transaction at least * from ADM Sub to enter into an
Acquisition Transaction with ADM Sub (such an agreement is a "No-Shop
Agreement"). Such notice will set forth the *. ADM Sub shall not, directly or
indirectly, contact such proposing party without MBX's prior written consent,
provided however, that if such proposing party contacts ADM Sub without direct
or indirect prompting or solicitation by ADM Sub, then nothing in this Section
11.1 shall restrict ADM Sub's ability to communicate with such proposing party.
In the event that the * period, or thereafter at anytime before MBX has entered
into a No-Shop Agreement *, MBX will provide notice to ADM Sub of the terms of
such modified bona fide offer, including the same level of detail and
information as is required to be included in the original notice, at least forty
eight (48) hours (which forty eight (48) hour period must include at least one
(1) full business day) prior to entering into a No-Shop Agreement. For avoidance
of doubt, provided that MBX has complied with the foregoing notice requirements,
MBX shall have no obligation to provide any additional notice to ADM Sub of
changes to the tens of an offer after MBX has entered into a No-Shop Agreement
with respect to such transaction.

*    CONFIDENTIAL TREATMENT REQUESTED


                                       28



Notwithstanding the foregoing, if MBX *, the foregoing notice requirements shall
not apply, and *.

     11.2 SUCCESSORS. In the event of a permitted assignment, this Agreement
shall be binding upon, and inure to the benefit of, all the Parties and their
respective successors and legal assigns.

     11.3 DISPUTE RESOLUTION. Any dispute or claim arising out of or relating to
this Agreement, or breach thereof shall be resolved in accordance with this
Section 11.3. During the course of resolving any such dispute, the Parties shall
continue to perform their obligations hereunder (including by making payment of
the undisputed portion of any payment obligation that is the subject of a
dispute hereunder or thereunder). Notwithstanding the foregoing, the obligation
of the Parties to continue to perform hereunder during the resolution of
disputes shall not require a Party to perform obligations (other than any
undisputed portion of any payment obligations) where such performance is
rendered impossible, or would otherwise not maintain or increase the likelihood
that the Parties will achieve the purpose and Goal of the Technology Alliance,
because of circumstances created by or directly related to the dispute itself.

          11.3.1 GOOD FAITH CONSULTATION. In the event of a dispute between the
Parties, the Parties shall attempt in good faith to settle such dispute through
mutual consultation. If, after such consultation, the dispute cannot be
resolved, the Parties shall wait for not less than sixty (60) days after the
dispute arises and at the end of such period meet for a second consultation. If
the dispute is not resolved after the second consultation, the matter shall be
referred to the Senior Vice President (Corn Processing and Food Specialties) of
ADM Sub and the Chief Executive Officer of MBX (together, the "Senior
Executives") for resolution in accordance with Section 11.3.2.

          11.3.2 SENIOR EXECUTIVES. The Senior Executives shall diligently
attempt to resolve the dispute, including, if they deem it necessary, meeting
directly in order to provide full consideration of the dispute. If the Senior
Executives are unable to resolve the dispute within sixty (60) additional days
after the second consultation then the dispute shall be referred to arbitration.

          11.3.3 ARBITRATION. Any arbitration to be conducted hereunder shall be
brought and conducted in accordance with the following provisions:

               (1)  The arbitration shall be held in Chicago, Illinois if
                    initiated by MBX and in Boston, Massachusetts if initiated
                    by ADM Sub.

               (2)  The arbitration shall be conducted by three (3) arbitrators
                    in accordance with the commercial arbitration rules of the
                    American Arbitration Association. Each Party, upon notice to
                    the other Party, shall appoint one arbitrator. The two
                    arbitrators appointed by the Parties shall appoint a third
                    arbitrator. The arbitrators shall be lawyers who will have
                    substantial patent law or patent litigation experience and
                    substantial commercial law or commercial litigation
                    experience. The arbitrators shall be instructed to follow

*    CONFIDENTIAL TREATMENT REQUESTED


                                       29



                    federal precedents, laws and evidentiary rules that would be
                    applicable to litigation in the Federal Court of the
                    jurisdiction in which the arbitration is held, except for
                    those issues which involve patent issues, in which case the
                    arbitrators shall be instructed to follow federal
                    precedents, laws and evidentiary rules that would be
                    applicable to litigation in the Federal Circuit Court of
                    Appeals.

               (3)  The arbitration shall be conducted in English, and all
                    written submissions shall be in English.

               (4)  The Parties agree that the decision of the arbitrators shall
                    be final and binding on the Parties. The decision of the
                    arbitrators shall be carried out voluntarily and without
                    delay.

               (5)  The fees and expenses of the arbitrators shall be shared
                    equally by the Parties. Each Party will bear its own costs
                    and expenses, including without limitation, its own legal
                    fees and expert witness fees. Notwithstanding the foregoing,
                    the Parties agree to be bound by and obey any order of the
                    arbitrators relating to one Party being liable for any such
                    costs, including without limitation, the legal fees of the
                    other Party.

          11.3.4 EQUITABLE RELIEF. Nothing in this Agreement shall prevent or
limit a Party's right to file and prosecute an action to seek injunctive relief
to prevent or stay a breach of this Agreement or any action necessary to enforce
the award of the arbitrators.

     11.4 GOVERNING LAW. Except as specifically otherwise provided herein, this
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware.

     11.5 FORCE MAJEURE. In the event of the intervention of a force majeure,
which term shall include, without limitation, acts of God, strikes, labor
disturbances, lockouts, riots, epidemics, quarantines, wars or conditions of
war, actions, inactions or regulations of any government, fires, acts of
terrorists, insurrections, embargoes or trade restrictions, or any other reasons
beyond a Party's reasonable control, the Party affected by the force majeure
shall use Commercially Reasonable Efforts to comply with the Agreement. In the
case that such Commercially Reasonable Efforts fail or are futile, such Party
shall not be responsible for delays or a failure to perform under this Agreement
caused by a force majeure. Provided, however, that any payment obligations of a
Party shall not be affected or excused by such force majeure. If a Party's delay
or failure to perform continues for more than one hundred twenty (120) days, the
other Party may terminate this Agreement. In the event that either Party shall
incur a delay in delivery or performance for a reason permitted by this Article,
that Party shall notify the other Party within five (5) days from the date of
the actual occurrence of the cause for such delay.

     11.6 NOTICES. All notices, requests and other communication hereunder shall
be in writing and sent by facsimile with confirmation sent by courier requiring
acknowledgment of receipt by the respective Parties as follows:

*    CONFIDENTIAL TREATMENT REQUESTED


                                       30



          To MBX:         Metabolix Corporation
                          21 Erie Street
                          Cambridge, MA 02139-4260
                          Attn: President and CEO

          With copy to:   Mintz Levin Cohn Ferris Glovsky and Popeo PC
                          One Financial Center
                          Boston, MA 02111
                          Attn: Christopher J. Denn, Esq.

          To ADM Sub:     ADM Polymer Corporation
                          4666 Faries Parkway
                          Decatur, IL 62526
                          Attn: President

          With copy to:   Asher-Daniels-Midland Company
                          4666 Faries Parkway
                          Decatur, IL 62526
                          Attn: General Counsel

Either Party may change the registered address to which such notice should be
sent by giving written notice to the other Party.

     11.7 INTEGRATION; ENTIRE AGREEMENT. This Agreement contains the entire
agreement of the Parties with regard to the subject matter contained herein and
supersedes all prior written and oral agreements, understandings and
negotiations, with regard to such subject matter.

     11.8 AMENDMENTS. This Agreement, including this provision, may not be
amended without a written instrument signed by duly authorized representatives
of both Parties.

     11.9 SEVERABILITY. In the event that any part of this Agreement is
adjudicated to be invalid or unenforceable because it contravenes any applicable
law or regulation, the Parties shall perform this Agreement in accordance with
their original intentions as set forth herein, corresponding as closely as
possible to the invalid or unenforceable part insofar as it is still valid under
such law or regulation and reflects the original intention of the Parties. The
validity of the remaining permissible portions of this Agreement shall remain
unaffected thereby.

     11.10 WAIVER/CUMULATIVE RIGHTS. No failure by any Party to insist upon the
strict performance of any covenant, duty, agreement or condition of this
Agreement or to exercise any right or remedy upon a breach thereof shall
constitute a waiver of any such breach or any other covenant, duty, agreement or
condition. All rights and remedies which a Party may have hereunder or by
operation of law are cumulative, and the pursuit of one right or remedy shall
not be deemed an election to waive or renounce any other right or remedy.

     11.11 NO JOINT VENTURE OR PARTNERSHIP RELATIONSHIP. Nothing contained in or
relating to this Agreement is or shall be deemed to constitute a joint venture,
partnership or agency relationship between any of the Parties hereto and no
Party shall have any authority to act for or to assume any obligation or
responsibility on behalf of the other Party.

*    CONFIDENTIAL TREATMENT REQUESTED


                                       31



     11.12 FURTHER ASSURANCES. Each Party shall duly execute and deliver, or
cause to be duly executed and delivered, such further instruments and do and
cause to be done such further acts and things, including without limitation the
filing of such assignments, agreements, documents and instruments, as may be
necessary or as the other Party may reasonably request in connection with this
Agreement or to carry out more effectively the provisions and purposes hereof,
or to better assure and confirm unto such other Party its rights and remedies
under thus Agreement.

     11.13 CONSTRUCTION. Except where the context otherwise requires, wherever
used the singular shall include the plural, the plural the singular, the use of
any gender shall be applicable to all genders, the word "or" is used in the
inclusive sense and the word "any" shall mean any one item, or all items, in a
referenced category. The captions of this Agreement are for convenience of
reference only and in no way define, describe, extend, or limit the scope or
intent of this Agreement or the intent of any provision contained in this
Agreement. The language of this Agreement shall be deemed to be the language
mutually chosen by the Parties and no rule of strict construction shall be
applied against either Party hereto.

     11.14 ACKNOWLEDGMENT. The Parties hereby acknowledge that all licenses
granted herein are, for the purposes of Section 365(n) of Title 11 of the U.S.
Code, licenses of rights to intellectual property as defined in said Title 11.

     11.15 COUNTERPARTS. This Agreement may he executed in any number of
counterparts, each of which shall be deemed to be an original, and all of which,
taken together, shall constitute one and the same instrument.

*    CONFIDENTIAL TREATMENT REQUESTED


                                       32



     IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year above
written.

                                        ADM POLYMER CORPORATION


                                        By: /s/ John D. Rice
                                            ------------------------------------
                                        Name: John D. Rice
                                        Title: President


                                        METABOLIX, INC.


                                        By: /s/ James J. Barber
                                            ------------------------------------
                                        Name: James J. Barber
                                        Title: President

*    CONFIDENTIAL TREATMENT REQUESTED


                                       33



WHENEVER CONFIDENTIAL INFORMATION IS OMITTED HEREIN (SUCH OMISSIONS ARE DENOTED
BY AN ASTERISK*), SUCH CONFIDENTIAL INFORMATION HAS BEEN SUBMITTED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.

                               FIRST AMENDMENT TO
                    TECHNOLOGY ALLIANCE AND OPTION AGREEMENT

     This First Amendment to Technology Alliance and Option Agreement (this
"Amendment") dated as of September 8, 2005 (the "Effective Date") is by and
between ADM Polymer Corporation, a corporation duly incorporated and validly
existing under the laws of the State of Delaware, with headquarters located at
4666 Faries Parkway, Decatur, IL 62526 ("ADM Sub"), and Metabolix, Inc., a
corporation duly incorporated and validly existing under the laws of the State
of Delaware, with headquarters located at 21 Erie Street, Cambridge, MA
021394260 ("MBX") (MBX and ADM Sub are collectively the "Parties" and each is a
"Party").

                                    RECITALS

     WHEREAS, MBX and ADM Sub entered into that certain Technology Alliance and
Option Agreement dated as of November 4, 2004 (the "Agreement"); and

     WHEREAS, MBX and ADM Sub now desire to modify the terms of the Agreement as
set forth herein.

     NOW, THEREFORE, in consideration of the recitals and the mutual covenants
and promises contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties hereto
do hereby agree as follows:

                                    ARTICLE 1
                                   DEFINITIONS

     1.1 DEFINITIONS. Capitalized terms used but not defined herein shall have
the meaning ascribed to them in the Agreement.

                                   ARTICLE 2
                        AMENDMENTS AND ADDITIONS TO TERMS

     2.1 AMENDMENT TO ARTICLE 1. Article 1 of the Agreement is hereby amended by
deleting the existing definition for "Fermentation Performance Parameters" and
replacing it with the following text:

          "FERMENTATION PERFORMANCE PARAMETERS" means the various parameters for
     production of PHA Cell Paste through fermentation at the * scale as set
     forth on AMENDED EXHIBIT B.



     2.2 AMENDMENT OF SECTION 3.1. The Agreement is hereby amended by deleting
the existing Section 3.1 in its entirety and replacing it with the following
text:

          "3.1 GOAL OF TECHNOLOGY ALLIANCE PROGRAM. The goal of the Technology
     Alliance Program is to (i) produce PHA Cell Paste, in a fermenter having a
     capacity of approximately *, and at ADM Sub's option then in a fermenter
     having a capacity of approximately *, in all cases, in a manner and with
     results that meet the applicable Fermentation Performance Parameters; (ii)
     demonstrate recovery of PHA Material in a manner and with results that meet
     the Recovery Performance Parameters (the items listed in the foregoing
     "(i)" and "(ii)" collectively are the "Technical Aspects of the Goal"); and
     (iii) based upon the results of (i) and (ii) above, have ADM Sub develop
     and the TAC agree upon a completed master plan for Construction of the ADM
     Sub Manufacturing Facility, including without limitation, surveys,
     blueprints, and engineering studies, which master plan shall be organized
     into a detailed, multiphase process for undertaking and completing
     Construction of the ADM Sub Manufacturing Facility and which shall have a
     project budget with projected detailed expenditures provided for each phase
     of the Construction process, all of which shall be, in form and substance,
     suitable for ADM Sub's management and board of directors to make a
     determination to approve the expenditures for the ADM Sub Manufacturing
     Facility as and to the extent required by ADM Sub's corporate governance
     polices and procedures (the "ADM Sub Construction Master Plan and Budget")
     (collectively the "Goal"). Successful completion of the Goal is intended to
     confirm the potential economics of producing PHA Material at commercial
     scale as part of a long-term commercial alliance."

     2.3 ADDITION OF SECTION 3.2.4.1. The Agreement is hereby amended by adding
the following Section 3.2.4.1:

          "3.2.4.1 INITIAL RECOVERY OPERATIONS. The Parties hereby agree that
     MBX will enter into an agreement to obtain access to toll recovery
     services, from a Third Party (the "Toll Producer") on substantially the
     terms set forth in the tolling agreement attached hereto as Schedule A (the
     "Tolling Agreement"). These recovery services are anticipated to last until
     approximately March of 2006 and to result in the recovery of up to
     approximately thirty five (35) metric tons of PHA Material (the "Initial
     Recovery Services"). Except as specifically set forth herein, the Parties'
     rights and obligations with respect to the Initial Recovery Services and
     the PHA Material produced in connection therewith shall be governed by the
     Agreement as activities conducted under Section 3.2.4. Responsibility for
     the fees charged by the Toll Producer under the Tolling Agreement for the
     Initial Recovery Services, related equipment and capital expenses, and the
     reasonable out-of-pocket expenses of the Parties in performing technical
     support or auditing of the Initial Recovery Services, including, for
     example, travel and lodging expenses, but excluding, salary and benefits
     paid or payable to employees or representatives of the Parties
     participating in such activities (collectively, "Tolling Expenses") shall
     be shared equally by the Parties, subject to the limitations set forth
     herein. The Parties shall, determine reasonable


                                        2



     methods for promptly accounting for the total Tolling Expenses on a monthly
     basis and making such payments as are necessary in order to give effect to
     the equal sharing of the Tolling Expenses. Notwithstanding the foregoing:
     (i) MBX shall be solely responsible for the operating expenses (including
     its internal costs and the costs of the Toll Producer but excluding the
     related equipment and capital expenses) until (y) the earlier of TAC's
     determination that the recovery of PHA Material during a Recovery Campaign
     was achieved in a manner and with results that met the Recovery Performance
     Parameters as defined in Amended Exhibit E on any one of the three
     specified compositions, or ADM Sub's payment of the milestone payment set
     forth in Section 5.1 related to the Recovery Performance Parameters, and
     (z) ADM's receipt of a letter from the U.S. Drug Enforcement Administration
     advising that polyhydroxyalkanoate containing gamma-hydroybutyric acid as
     part of the polymer chain will not be regulated as a controlled substance
     under the Controlled Substances Act and any Drug Enforcement Administration
     regulations, (ii) ADM shall not be obligated to pay in excess of * of
     Tolling Expenses hereunder; (iii) ADM shall not be obligated to pay in
     excess of * of the equipment and capital expenses comprising the Tolling
     Expenses hereunder; and (iv) ADM shall not be responsible for any Tolling
     Expenses incurred after the end of the term of this Agreement as set forth
     in Section 8.1, except as otherwise provided under the Commercial Alliance
     Agreements, if applicable. In the event ADM terminates this Agreement or
     decides not to exercise the Option, then MBX shall pay ADM an amount equal
     to one half of the depreciated book value of any removable assets (i.e.,
     not fixtures) that are listed on the Consignment Agreement or any Addendum
     to Consignment Agreement (as such agreement and such addendum are
     referenced in the Tolling Agreement), the purchase price for which was
     funded equally by the Parties. MBX agrees to provide ADM with equal access
     to the facility of the Toll Producer as and to the extent such access is
     made available to MBX and its designees under the Tolling Agreement. The
     PHA Material produced in connection with the Initial Recovery Services
     shall be part of the Technology Alliance Output or Marketing Material as
     determined under Section 3.3, and, in the event it is sold by MBX, all
     revenues generated by such sales shall be applied against Tolling Expenses
     before such expenses are allocated for payment by the Parties. The Parties
     agree to work together to determine the costs (capital expenditures and
     operating costs) to use ADM's Vitamin C facility for pilot sourcing of PHA
     Material in the event ADM exercises the Option; provided, however, nothing
     herein shall preclude ADM from utilizing all or any portion of the Vitamin
     C facility for other uses."

     2.4 AMENDMENT OF SECTION 3.3. The Agreement is hereby amended by deleting
the existing Section 3.3 in its entirety and replacing it with the following
text:

          "3.3 OUTPUT FROM TECHNOLOGY ALLIANCE PROGRAM. ADM Sub will use
     Commercially Reasonable Efforts to produce PHA Cell Paste in such amounts
     as result from the operations set forth in the Technology Alliance Plan
     until it has satisfied the Fermentation Performance Parameters (the
     "Technology Alliance Output") and such additional amounts thereafter as the
     Parties may agree to in


                                        3



     writing (the "Marketing Material") for use by MBX in developing the market
     for PHA Material. The Technology Alliance Output and the Marketing Material
     will be made available by ADM Sub to MBX as set forth in this Section 3.3."

     2.5 AMENDMENT OF SECTION 3.3.1. The Agreement is hereby amended by deleting
the existing Section 3.3.1 in its entirety and replacing it with the following
text:

          "3.3.1 ANALYSIS OF TECHNOLOGY ALLIANCE OUTPUT. MBX will use the
     Technology Alliance Output to demonstrate recovery of PHA Material in
     accordance with Section 3.2.4 and the Technology Alliance Plan, and ADM
     shall provide the Technology Alliance Output to MBX as MBX may require to
     perform such recovery demonstration, including the Initial Recovery
     Services. Further, the Technology Alliance Output will be used by the
     Parties to perform such evaluation and analysis as is necessary or useful
     in determining whether the Parties have achieved the Goal. Without limiting
     the foregoing statement, the Technology Alliance Output will be evaluated
     and analyzed by the Parties, in accordance with the procedures and methods
     set forth in the Technology Alliance Plan, to determine whether the
     Technology Alliance Output meets the Fermentation Performance Parameters
     and whether PHA Material recovered from the Technology Alliance Output
     meets the Recovery Performance Parameters."

     2.6 AMENDMENT OF SECTION 3.3.2. The Agreement is hereby amended by deleting
the existing Section 3.3.2 in its entirety and replacing it with the following
text:

          "3.3.2 PURCHASE OF TECHNOLOGY ALLIANCE OUTPUT BY MBX; COST SHARING FOR
     MARKETING MATERIAL. MBX shall have the right, but not the obligation, to
     purchase the Technology Alliance Output that is not required to perform the
     recovery demonstration described in Section 3.3.1 above from ADM Sub at a
     price of * of PHA Material contained within the PHA Cell Paste, on a one
     hundred percent (100%) purity basis; provided such price shall be reduced
     to * at such times as ADM is responsible for equally sharing the Tolling
     Expenses (including the operating expenses) pursuant to Section 3.2.4.1.
     MBX shall purchase the Marketing Material, irrespective of whether the
     Marketing Material meets the applicable specifications or not, at fifty
     percent (50%) ADM Sub's Manufacturing Cost, F.O.B. Decatur, Illinois. MBX
     may exercise this purchase option at any time, and from time-to-time,
     during the Technology Alliance Program and up to thirty (30) days after the
     expiration or termination of the Technology Alliance Program, by written
     notice to ADM Sub, stating its desire to purchase, the quantity to be
     purchased (up to the total amount that is then available) and shipping and
     delivery instructions. ADM Sub shall invoice MBX for amounts so purchased
     no sooner than at the time of delivery and the purchase price for amounts
     ordered and delivered in accordance herewith shall be payable by MBX within
     thirty (30) days of receipt of an invoice from ADM Sub by wire transfer of
     immediately available funds to an account in the United States designated
     by ADM Sub. Technology Alliance Output and Marketing Material purchased
     hereunder shall be purchased "as is," without warranty of any kind other
     than that the Technology Alliance Output and Marketing Material shall have


                                        4



     been stored and handled, from the time of production until the delivery to
     MBX, in accordance with the requirements of the Technology Alliance Plan or
     as otherwise agreed by the Parties. Technology Alliance Output and
     Marketing Material purchased by MBX shall be used by MBX for performing its
     obligations pursuant to this Agreement and for market development
     activities benefiting the Parties and the potential Commercial Alliance
     between them. Technology Alliance Output that is not purchased by MBX shall
     be used by ADM Sub solely for internal research and development purposes,
     or if not so used, ADM Sub shall either store (for later sale to MBX or the
     Joint Sales Company or for later use by ADM Sub solely for internal
     research purposes) or dispose of the unused Technology Alliance Output, at
     ADM Sub's option."

     2.7 AMENDMENT OF SECTION 4.3. The Agreement is hereby amended by deleting
the existing Section 4.3 in its entirety and replacing it with the following
text:

          "4.3 GRANT OF OPTION. MBX hereby grants to ADM Sub the right and
     option to enter into a commercial alliance for the further research,
     development, manufacture, use, sale and importation of the PHA Material and
     PHA Formulations on the terms and conditions set forth in the Commercial
     Alliance Agreements (the "Option"). The Option shall be exercisable by ADM
     Sub at any time after Effective Date and until thirty (30) days after the
     expiration of the term of this Agreement, by written notice to MBX;
     provided, however, that, in either case, the Option shall not be
     exercisable if and for so long as ADM Sub is in breach of this Agreement.
     Following the exercise of the Option, the Parties shall promptly execute
     and deliver the Commercial Alliance Agreements in accordance with this
     Agreement."

     2.8 AMENDMENT OF SECTION 5.1. The Agreement is hereby amended by deleting
the existing Section 5.1 in its entirety and replacing it with the following
text:

          "5.1 PAYMENTS. Within ten (10) days after the Effective Date, ADM Sub
     shall pay to MBX the amount of three million dollars ($3,000,000) as a
     non-refundable, non-creditable upfront payment. Within ten (10) days
     following the TAC's determination that the production of PHA Cell Paste in
     a fermenter having a capacity of approximately * was achieved in a manner
     and with results that met the applicable Fermentation Performance
     Parameters, ADM Sub shall pay to MBX the amount of five hundred thousand
     dollars ($500,000) as a non-refundable, non-creditable milestone payment.
     Within ten (10) days following the TAC's determination that the recovery of
     PHA Material was achieved in a manner and with results that met the
     Recovery Performance Parameters, ADM Sub shall pay to MBX the amount of
     five hundred thousand dollars ($500,000) as a non-refundable,
     non-creditable milestone payment. Within ten (10) days following the first
     to occur of: (i) the achievement of the Goal and (ii) the exercise of the
     Option by ADM Sub, ADM Sub shall pay to MBX the amount of one million
     dollars ($1,000,000) as a non-refundable, non-creditable milestone payment.
     Anything herein to the contrary notwithstanding, in the event that ADM Sub
     desires to exercise the Option in


                                        5



     accordance with Section 4.3, the above-described upfront payment and the
     three (3) milestone payments, to the extent not already paid, shall be due
     and payable in full as a pre-condition to the exercise of the Option.
     Amounts due under this Section 5.1 shall be payable by wire transfer of
     immediately available funds to an MBX bank account in accordance with
     instructions to be provided to ADM Sub by MBX."

     2.9 AMENDMENT OF SECTION 5.2. The Agreement is hereby amended by deleting
the existing Section 5.2 in its entirety and replacing it with the following
text:

          "5.2 OTHER EXPENSES. Except as provided in Section 5.1, Section
     3.2.4.1 and Section 3.3.2, each Party shall bear its own costs and expenses
     incurred in performing under this Agreement."

     2.10 AMENDMENT OF EXHIBITS. The Agreement is hereby amended by deleting the
existing Exhibit B and replacing it with the text set forth in Amended Exhibit B
attached hereto, by deleting existing Exhibit D and replacing it with the text
set forth in Amended Exhibit D attached hereto, and by deleting the existing
Exhibit E and replacing it with the text set forth in Amended Exhibit E attached
hereto.

                                   ARTICLE 3
                              CONFIRMATION OF TERMS

     3.1 CONFIRMATION OF TERMS. This Amendment shall be a part of the Agreement
and shall be governed in accordance with the terms and conditions set forth
therein, as the same are amended hereby, including without limitation, the terms
and conditions set forth in Article XI of the Agreement, entitled
"Miscellaneous." The Parties hereby agree and acknowledge that, except as
expressly set forth herein, the Agreement shall remain in full force and effect
in accordance with its terms.


                                        6



     IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be
executed by their duly authorized representatives as of the day and year above
written.

                                        ADM POLYMER CORPORATION


                                        By: /s/ John D. Rice
                                            ------------------------------------
                                        Name: John D. Rice
                                        Title: President


                                        METABOLIX, INC.


                                        By: /s/ James J. Barber
                                            ------------------------------------
                                        Name: James J. Barber
                                        Title: President


                                        7

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Exhibit 23.2


CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

        We hereby consent to the use in this Amendment No. 3 to the Registration Statement on Form S-1 of our report dated June 26, 2006, except for the information presented in footnote 15 for which the date is July 25, 2006, relating to the financial statements of Metabolix, Inc., which appears in such Amendment No. 3 to the Registration Statement. We also consent to the references to us under the headings "Experts" and "Selected Financial Data" in such Amendment No. 3 to the Registration Statement.

/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
October 20, 2006



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Exhibit 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM