Exhibit 10.48

AMENDMENT NO. 3 TO SETTLEMENT TERMS RELATED TO ARBITRATION OF
LICENSE AGREEMENT

          This Amendment No. 3 (“Amendment No. 3”) to Settlement Terms Related
to Arbitration of License Agreement, dated September 15, 1993, as previously
amended by Amendments No. 1 and No. 2 thereto (collectively referred to as the
“Settlement Agreement”), is dated as of December 20, 2002, and is by and between
Monsanto Company, a Delaware Corporation (“Monsanto”) and Martek Biosciences
Boulder Corporation, a Delaware corporation, formerly known as OmegaTech, Inc.
(“Martek Boulder”). Monsanto and Martek Boulder are referred to herein
collectively as the “Parties” and individually as a “Party”. Capitalized terms
used herein but not defined herein shall have the meanings ascribed to such
terms in the Settlement Agreement.

          WHEREAS, the Settlement Agreement between Pharmacia Corporation, on
behalf of Monsanto, and OmegaTech. Inc. terminated, cancelled and superseded
that certain License Agreement dated September 15, 1993 between Merck & Co.,
Inc. (the predecessor in interest of Pharmacia Corporation and Monsanto) and
OmegaTech, Inc.;

          WHEREAS, Amendment No. 1 to the Settlement Agreement dated May 10,
2000, between Monsanto and Martek Boulder (which was then known as OmegaTech,
Inc.) terminated the Parties’ mutual obligations pursuant to Section 16 of the
Settlement Agreement effective as of October 2001;

          WHEREAS, Amendment No. 2 to the Settlement Agreement dated August 13,
2002, between Monsanto and Martek Boulder resolved certain outstanding disputes
and claims relative to amounts payable and attorney’s fees pursuant to the
arbitration;

          WHEREAS, the Parties now desire, and have determined it is in their
respective and mutual best interests, to satisfy and discharge certain of their
obligations in the Settlement Agreement and to amend certain of their remaining
obligations as provided herein;

          NOW, THEREFORE, in consideration of the mutual covenants, commitments
and agreements contained herein, and for other good and valuable consideration
the receipt and sufficiency of which is hereby acknowledged, the Parties,
intending to be legally bound hereby agree to amend the Settlement Agreement and
otherwise agree as follows:

          1. Satisfaction of Sections 1 through 4 of the Settlement Agreement.
On or before the earlier of the tenth day following the effective date hereof or
December 30, 2002, Martek Biosciences Corporation, the parent corporation to
Martek Boulder (“Martek Parent”), shall pay to Monsanto by wire transfer of
immediately available funds pursuant to Monsanto’s instructions Five Hundred
Thousand Dollars ($500,000.00) (the “First Payment”) and deliver to Monsanto a
duly executed Promissory Note (in the form attached hereto as Exhibit 1) in the
principal amount of Three Million Two Hundred Fifty Thousand Dollars
($3,250,000.00). The payments evidenced by said promissory note are referred to
herein collectively as the “Note

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Payments” and individually as a “Note Payment”. Payment of the First Payment and
the Note Payments shall constitute full and complete satisfaction of Martek
Boulder’s past, present and future obligations pursuant to Paragraphs 1 through
4 of the Settlement Agreement. No amounts that would otherwise be due under
Section 1 of the Settlement Agreement, including any amounts which have accrued
in the period from July 1, 2002 to the present, shall accrue or otherwise become
due provided that, as a condition precedent thereto, Martek Parent makes the
First Payment and the Note Payments hereunder. Upon Monsanto’s receipt of the
final Note Payment, Paragraphs 1 through 4 of the Settlement Agreement shall be
satisfied and discharged and shall have no further force or effect and shall be
deleted in their entirety from the Settlement Agreement. Without limiting the
generality of the foregoing, upon the deletion of said Paragraphs 1 through 4.
Monsanto agrees to waive and hereby does waive (i) its rights to receive any
further Annual Payments for Human Application Products under the Settlement
Agreement; (ii) its rights to receive any further Annual Payments for any Animal
Application Products under the Settlement Agreement; and (iii) any other
payments described in Sections 1 through 4 of the Settlement Agreement.

          2. Sections 10 and 11. Sections 10 and 11 of the Settlement Agreement
are hereby deleted in their entirety and replaced with the following:

            10. (a) For five (5) years after the date of the Settlement
Agreement (i.e., until May 10, 2005) Monsanto shall not commercialize or license
others to commercialize any Animal Application Product containing LC PUFAs.    
              (b) For live (5) years after the date of the Settlement Agreement
(i.e., until May 10, 2005) Monsanto shall not commercialize or license others to
commercialize any Human Application Product containing LC PUFAs, unless such
Human Application Product is produced using algal source LC PUFAs purchased from
Martek Boulder.                   (c) For seven (7) years after the date of the
Settlement Agreement (i.e., until May 10. 2007) Monsanto shall not commercialize
or license others to commercialize any Human Application Product or any Animal
Application Product containing algal source LC PUFAS, unless such Product is
produced using algal source LC PUFAs purchased from Martek Boulder.

               In the event that Monsanto breaches any of the foregoing
provisions in this Section 2 of this Amendment No. 3, Martek Boulder shall have
the right to pursue all remedies available at law or equity, including but not
limited to injunctive relief.

          3. Technology Transfer Obligations. Notwithstanding anything to the
contrary contained in this Amendment No. 3, Paragraphs 6 and 7 of the Settlement
Agreement remain in full force and effect subject only to the following:

               (a) Monsanto represents and warrants to Martek Boulder that,
except as set forth on Schedule 1 to this Amendment No. 3, to Monsanto’s actual
knowledge, Monsanto has fully complied with and there exists no current breach
of its obligations under Sections 6 and 7 of the Settlement Agreement;

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               (b) Martek Boulder represents and warrants to Monsanto that,
except as set forth on Schedule 1 to this Amendment No. 3, to Martek Boulder’s
actual knowledge, Monsanto has fully complied with and there exists no current
breach of Monsanto’s obligations under Sections 6 and 7 of the Settlement
Agreement.

               Each of the parties hereby forever and fully releases the other
from any and all claims, losses, liabilities and expenses (including attorneys’
fees and disbursements) arising out of or in connection with the matters
described on Schedule 1 attached hereto and incorporated herein by reference.

          4. Surviving Sections. Sections 20 and 21 of the Settlement Agreement
are hereby deleted in their entirety. Except to the extent modified or amended
by this Amendment No. 3, Sections 5, 8 through 15 inclusive, Sections 18 and 19
and Sections 22 through 33 inclusive, of the Settlement Agreement shall remain
in full force and effect until May 11, 2007, and all other obligations, duties,
liabilities and responsibilities of the Parties to each other under the
Settlement Agreement are satisfied and discharged. For the avoidance of doubt,
breach of any Section of the Settlement Agreement by a party prior to the
expiration of such Section shall not be forgiven, tolled, or otherwise
discharged as a result of such expiration, and shall in no way impinge on a
party’s rights and remedies for such breach, which rights shall survive such
expiration unless otherwise waived or discharged by a party. Upon Monsanto’s
receipt of the Note Payments, Sections 1 through 4 inclusive of the Settlement
Agreement shall be deleted in their entirety, without further action by the
panics.

          5. Assignment. In addition to the assignment rights set forth in
Section 26 of the Settlement Agreement. Martek Boulder may assign its rights and
obligations under the Settlement Agreement and the amendments thereto to Martek
Parent. Section 12(b) of the Settlement Agreement is modified to read as
follows: “OMEGATECH shall mean Martek Biosciences Boulder Corporation and its
permitted successors and assigns.”

          6. Opposition Proceedings. Monsanto has withdrawn from EU Opposition
Case No. 0515460, and represents that it will take no further action in
furtherance or support of the Opposition.

          7. Counterparts: Facsimile Signatures. This Agreement may he executed
in any number of counterparts, each of which shall be deemed an original and all
of which together shall constitute one and the same instrument. For purposes of
this Agreement, a document (or signature page thereto) signed and transmitted by
facsimile machine or telecopier is to be treated as an original document. The
signature of any party thereon, for purposes hereof, is to be considered as an
original signature, and the document transmitted is to be considered to have the
same binding effect as an original signature on an original document.

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          IN WITNESS WHEREOF, the Parties have caused this Amendment No. 3 to
the Settlement Agreement to be executed by their respective authorized
representatives to be effective as of the day and date first above written.

For the purposes of Section 1 of this Amendment No. 3, Martek Parent is a party
hereto. In addition, Martek Parent is an intended third-party beneficiary to
this Amendment No. 3.

“MARTEK PARENT”

MARTEK BIOSCIENCES CORPORATION

By: /s/ Henry Linsert Jr.
Name: Henry Linsert Jr.
Title: CEO

“MARTEK BOULDER”

MARTEK BIOSCIENCES BOULDER CORPORATION

By: /s/ Henry Linsert Jr.
Name: Henry Linsert Jr.
Title: CEO

“MONSANTO”

MONSANTO COMPANY

By: /s/ Cherye P. Morley
Name: C. Morley
Title: Pres. Animal Ag Group

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PROMISSORY NOTE

          December 20, 2002       $3,250,000.00

          FOR VALUE RECEIVED, the undersigned, Martek Biosciences Corporation, a
Delaware corporation (“Martek”), hereby promises to pay to the order of Monsanto
Company, a Delaware corporation (“Monsanto”), in lawful money of the United
States of America the principal amount of $3,250,000, without any interest
calculated thereon.

          This Note is the promissory note referred to in Amendment No. 3 to
Settlement Terms Related to Arbitration of License Agreement, dated as of the
date hereof, among Monsanto, Martek Boulder Biosciences Corporation, a Delaware
corporation formerly known as OmegaTech, Inc. and a wholly-owned subsidiary of
Martek, and Martek, for purposes of Section 1 of such amendment.

          1. Payment of Principal. Martek shall pay the principal amount then
outstanding to the holder of this Note in immediately available funds by wire
transfer pursuant to Section 9 as follows:

            (a) On or before August 1, 2003, Martek shall pay to the holder of
this Note $1,000,000; and               (b) On or before the 364th day following
the date of this Note set forth above, Martek shall pay to the holder of this
Note $2,250,000.

          2. Prepayments. Martek may, at any time and from time to time without
premium or penalty, prepay all of the outstanding principal amount of the Note.
A prepayment of less than all of the principal amount of the Note shall not
relieve Martek of its obligation to make the scheduled payment on the Note set
forth in Section 1 above.

          3. Events of Default. For purposes of this Note, an Event of Default
shall be deemed to have occurred if:

            (a) Martek fails to pay when due the full amount of any principal
payment; or               (b) Martek makes an assignment for the benefits of
creditors or admits in writing its inability to pay its debts generally as they
become due; or an order, judgment or decree is entered adjudicating Martek
bankrupt or insolvent; or any order of relief with respect to Martek is entered
under the Federal Bankruptcy Code; or Martek petitions or applies to any
tribunal for the appointment of a custodian, trustee, receiver or liquidator of
Martek, or of any bankruptcy,

 

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  reorganization, arrangement, insolvency, readjustment of debt, dissolution or
liquidation law of any jurisdiction; or any such petition or application is
filed, or any such proceeding is commenced, against Martek and either (i) Martek
by any act indicates its approval thereof, consent thereto or acquiescence
therein or (ii) such petition, application or proceeding is not dismissed within
60 days.

          4. Consequences of Events of Default.

            (a) If an Event of Default of the type described in Section 3(a) has
occurred and continued for 5 days, the holder of the Note may declare all or any
portion of the outstanding principal amount of the Note due and payable and
demand immediate payment of all or any portion of the outstanding principal
amount of the Note.               (b) If an Event of Default of the type
described in Section 3(b) has occurred, the aggregate principal amount of the
Note shall become immediately due and payable without any action on the part of
the holder of the Note, and Martek shall immediately pay to the holder of the
Note all amounts due and payable with respect to the Note.               (c) The
holder of the Note shall also have any other rights which such holder may have
been afforded under any contract or agreement at any time and any other rights
which such holder may have pursuant to applicable law.               (d) Time is
of the essence of this Note. Martek hereby waives diligence, presentment,
protest and demand and notice of protest and demand, dishonor and nonpayment of
this Note, and expressly agrees that this Note, or any payment hereunder, may be
extended from time to time and that the holder hereof may accept security for
this Note or release security for this Note, all without in any way affecting
the liability of Martek hereunder.               (e) If any Event of Default
shall occur and shall not have been waived in writing by Monsanto, the
outstanding principal balance of this Note shall bear interest from and after
the occurrence of such Event of Default at the per annum rate of fifteen percent
(15%) until the principal balance of the Note is paid in full.

          5. Amendment and Waiver. Except as otherwise expressly provided
herein, the provisions of the Note may be amended and Martek may take any action
herein prohibited, or omit to perform any act herein required to be performed by
it, only if Martek has obtained the written consent of the holder of the Note.
Martek acknowledges and agrees that any delay or course of dealing on the part
of the holder hereof in exercising any rights hereunder will not operate as a
waiver of such rights.

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          6. Assignment. This Note shall be freely assignable by Monsanto in
whole or in part, and shall inure to the benefit of its successors and assigns.
Martek obligations hereunder shall be binding upon its successors and assigns;
provided that no assignment (including by operation of law or otherwise) shall
relieve Martek from its obligations hereunder, which shall remain the primary
obligations of Martek.

          7. Replacement. Upon receipt of evidence reasonably satisfactory to
Martek (provided, that an affidavit of Monsanto shall be deemed satisfactory) of
the loss, theft, destruction or mutilation of this Note, and in the ease of any
such loss, theft or destruction, upon receipt of an indemnity reasonably
satisfactory to Martek (it being understood that an unsecured indemnity by
Monsanto shall be deemed satisfactory), or in the case of any such mutilation,
upon surrender of this Note, Martek shall execute and deliver in lieu of this
Note a new promissory note of like tenor and dated as of the date hereof.

          8. Cancellation. After all principal and other amounts at any time
owed on this Note has been paid in full, this Note shall be surrendered to
Martek for cancellation and shall not be reissued.

          9. Place of Payment. Payments of principal are to be delivered via
wire transfer to Monsanto. Wire transfer information will be provided to Martek
by Monsanto.

          10. Costs and Expenses. In the event that any payment of principal due
under this Note shall not be paid when due, whether by reason of acceleration,
termination or otherwise, and this Note is place in the hands of an attorney or
attorneys for collection or for foreclosure of any agreement, document or
instrument securing payment hereof or for representation of the holder of this
Note in connection with bankruptcy or insolvency proceedings relating thereto,
Martek promises to pay, in addition to all other amounts due on this Note, all
costs and expenses of such collection, foreclosure and representation,
including, without limitation, reasonable attorneys’ fees, expert witness fees
and all other costs and expenses paid or incurred by the holder of this Note in
connection therewith (whether or not litigation shall be commenced in aid
thereof).

          11. Governing Law. This Note is made under and governed by the
internal law of the State of Delaware without regard to conflict of law rules.

* * * * *

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IN WITNESS WHEREOF, Martek has executed and delivered this Note as of the date
above first written.

  MARTEK BIOSCIENCES CORPORATION

  By: /s/ Henry Linsert Jr.
Name: Henry Linsert Jr.
Title: Chief Executive Officer

      STATE OF MARYLAND   )   ) ss. COUNTY OF HOWARD   )

     On this 20th day of December, 2002, before me appeared Henry Linsert Jr.,
to me personally known, who, being by me duly sworn, did say that he or she is
the CEO of Martek Biosciences Corporation, a corporation of the State of
Delaware, and that said instrument was signed in behalf of said corporation
pursuant to due authority and said Henry Linsert Jr. acknowledged said
instrument to the free act and deed of said corporation.

     IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official
seal in the County and State aforesaid, the day and year first written above.

  /s/ Dianna L. Brown
Notary Public

         
My term expires:
  Dianna L. Brown, Notary Public  
 
  Baltimore County  
 
  State of Maryland  
 
  My Commission Expires July 1, 2006  

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