<PAGE>

                                                                   EXHIBIT 10.36

CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. ss.ss. 200.80(b)(4), 200.83 AND 240.24b-2


                       LIMITED LIABILITY COMPANY AGREEMENT

                                       of

                                NEW VENTURE LLC


                              --------------------

ARTICLE 9 OF THIS LIMITED LIABILITY COMPANY AGREEMENT LIMITS THE TRANSFER OR
HYPOTHECATION OF THE INTERESTS REPRESENTED HEREBY (THE "INTERESTS").

                              --------------------

THE INTERESTS REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER THE
SECURITIES ACT OR AN OPINION OF LEGAL COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED.

THE INTERESTS ARE BEING OFFERED AND SOLD UNDER THE EXEMPTION PROVIDED BY SECTION
4(2) OF THE SECURITIES ACT.

THERE IS NO OBLIGATION ON THE ISSUER TO REGISTER THE INTERESTS UNDER THE
SECURITIES ACT. A PURCHASER OF ANY INTEREST MUST BE PREPARED TO BEAR THE
ECONOMIC RISK OF THE INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

                              --------------------

THE INTERESTS REPRESENTED HEREBY HAVE NOT BEEN REVIEWED OR APPROVED BY THE
SECURITIES ADMINISTRATORS OF ANY STATES OR OTHER JURISDICTIONS NOR HAVE THEY
BEEN QUALIFIED OR REGISTERED UNDER THE APPLICABLE SECURITIES LAWS OF ANY STATES
OR OTHER JURISDICTIONS AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS
FROM THE QUALIFICATION OR REGISTRATION REQUIREMENTS OF SUCH LAWS. THEREFORE, A
PURCHASER OF ANY INTEREST WILL NOT BE ABLE TO RESELL IT UNLESS THE INTEREST IS
QUALIFIED OR REGISTERED UNDER THE APPLICABLE STATE SECURITIES LAWS OR LAWS OF
OTHER JURISDICTIONS OR UNLESS AN EXEMPTION FROM SUCH QUALIFICATION OR
REGISTRATION IS AVAILABLE.
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                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

ARTICLE 1 Definitions........................................................ 1

ARTICLE 2 Offices and Statutory Agent........................................ 8

           2.1     Registered Office and Statutory Agent..................... 8
           2.2     Principal Executive Office................................ 8
           2.3     Business.................................................. 8

ARTICLE 3 Company Members; Classes; Voting Rights; Meetings of Members....... 9

           3.1     Members................................................... 9
           3.2     Voting Rights............................................. 9
           3.3     Place of Meetings......................................... 9
           3.4     Meetings of Members; Notice of Meetings................... 9
           3.5     Quorum....................................................10
           3.6     Waiver of Notice..........................................10
           3.7     Action by Members Without a Meeting.......................11
           3.8     Members May Participate in Other Activities;
                   Limitations...............................................11

ARTICLE 4 Management.........................................................12

           4.1     Board of Directors........................................12
           4.2     Number, Classes and Qualifications of Directors...........13
           4.3     Election and Removal of Directors.........................13
           4.4     Vacancies, Resignations, Replacements.....................14
           4.5     Initial Directors.........................................14
           4.6     Proprietary Invention and Non-Disclosure Agreements;
                   Directors May Otherwise Engage in Activities Which
                   Compete With the Company..................................14

ARTICLE 5 Meetings of Board of Directors.....................................14

           5.1     Place of Meetings.........................................14
           5.2     Meetings of Directors.....................................15
           5.3     Quorum; Alternates; Participation in Meetings By
                   Conference Telephone Permitted; Vote Required for
                   Action; Confidentiality...................................15
           5.4     Waiver of Notice; Consent to Meeting......................18
           5.5     Action by Board of Directors Without a Meeting............19
           5.6     Committees and Subcommittees..............................19
           5.7     Chairman..................................................19
           5.8     Minutes of Meetings of the Board of Directors.............19
           5.9     Confidentiality...........................................21

ARTICLE 6 Officers...........................................................20

           6.1     General...................................................20
           6.2     Appointment and Removal...................................20

                                      -i-
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           6.3     President.................................................20
           6.4     Secretary.................................................20
           6.5     Treasurer.................................................22

ARTICLE 7 Capital Contributions..............................................20

           7.1     Initial Capital Contributions.............................20
           7.2     Additional Capital Contributions..........................21
           7.3     Dow Member Required Capital Contributions.................22
           7.4     Withdrawal or Reduction of Capital Contributions..........23
           7.5     No Interest on Capital Contributions......................25
           7.6     Capital Accounts..........................................23
           7.7     Loans by Members to the Company...........................24

ARTICLE 8 Allocation of Profits and Losses; Distributions; Tax and
          Accounting Matters.................................................25

           8.1     Allocations...............................................25
           8.2     Distributions.............................................28
           8.3     Accounting Matters........................................29
           8.4     Tax Status and Returns....................................27
           8.5     754 Election..............................................28
           8.6     Tax Matters Partner.......................................28

ARTICLE 9 Restrictions on Transfer...........................................28

           9.1     Transfer of Interests.....................................28
           9.2     Consent Necessary to Transfer.............................28
           9.3     Conditions of Transfer....................................29
           9.4     Admission of Substitute Member............................29
           9.5     Effect of Transfer without Approval.......................29
           9.6     Liability for Breach......................................29
           9.7     Transfer Permitted Without Consent........................32

ARTICLE 10 Term, Termination and Dissolution.................................30

           10.1    Term......................................................30
           10.2    Termination...............................................30
           10.3    Dissolution...............................................34
           10.4    Liquidation...............................................32
           10.5    Liabilities...............................................32
           10.6    Settling of Accounts......................................32
           10.7    Distribution of Proceeds..................................35
           10.8    Certificate of Cancellation...............................33

ARTICLE 11 Limitation of Liability/Indemnification...........................33

           11.1    Limited Liability.........................................33
           11.2    Indemnification between the Members.......................33
           11.3    Indemnification:  Proceeding Other Than by Company........33
           11.4    Indemnification:  Proceeding by Company...................34

                                      -ii-
<PAGE>

           11.5    Mandatory Advancement of Expenses.........................34
           11.6    Effect and Continuation...................................34
           11.7    Insurance and Other Financial Arrangements................35
           11.8    Notice of Indemnification and Advancement.................36
           11.9    Repeal or Modification....................................36

ARTICLE 12 Inspection of Company Records; Annual and Other Reports...........36

           12.1    Records to be Kept........................................36
           12.2    Inspection of Company Records.............................36
           12.3    Annual, Quarterly and Monthly Reports.....................37

ARTICLE 13 Defaults and Remedies.............................................40

           13.1    Defaults..................................................40
           13.2    Remedies..................................................37
           13.3    No Waiver.................................................37

ARTICLE 14 Certain Operating Provisions......................................38

           14.1    Budget and Forecast.......................................38
           14.2    Project Approval Process..................................38
           14.3    Preferred Supplier........................................39
           14.4    Services..................................................40

ARTICLE 15 DISPUTE RESOLUTION................................................41

           15.1    Informal Dispute Resolution...............................41
           15.2    Arbitration...............................................44

ARTICLE 16 CONFIDENTIALITY...................................................45

           16.1    Confidentiality...........................................45

ARTICLE 17 Miscellaneous.....................................................46

           17.1    Technology Fee Payments...................................46
           17.2    Dow Development Costs.....................................43
           17.3    [***].....................................................43
           17.4    Infringement Claims.......................................47
           17.5    Amendments................................................44
           17.6    Nature of Membership Interest; Agreement Is Binding
                   Upon Successors...........................................44
           17.7    Representation of Shares of Companies or Interests in
                   Other Entities............................................44
           17.8    Seal......................................................48
           17.9    Mutual Representations....................................48
           17.10   Non-Competition...........................................45
           17.11   Entire Agreement..........................................46
           17.12   Third Parties.............................................46
           17.13   Governing Law.............................................46
           17.14   Counterparts..............................................46
           17.15   Titles and Subtitles; Form of Pronouns; Construction
                   and Definitions...........................................50
           17.16   Delaware Limited Liability Company Act Prevails...........50


*CONFIDENTIAL TREATMENT REQUESTED

                                     -iii-
<PAGE>

           17.17   Export Controls...........................................47
           17.18   Severability..............................................47
           17.19   Publicity.................................................47
           17.20   Publication...............................................51
           17.21   Costs.....................................................51
           17.22   Insurance.................................................47
           17.23   Notices...................................................47

                                      -iv-
<PAGE>

                       LIMITED LIABILITY COMPANY AGREEMENT

                                       of

                                NEW VENTURE LLC


     THIS LIMITED LIABILITY COMPANY AGREEMENT is made and entered into as of
 the 29th day of June, 2000 by and between the parties listed on the signature
                                  page hereof,

                              W I T N E S S E T H:

         WHEREAS, the parties hereto now desire to adopt and approve a limited
liability company agreement for New Venture LLC (the "Company") to more
particularly provide for their respective rights, powers, duties and obligations
as Members (as defined below), and the management, operations and activities of
the Company which will include, but not be limited to, marketing, product
application development including formulation, technical services and technical
selling; and

         WHEREAS, as soon as practicable following execution of this Agreement,
a certificate of formation (the "Certificate") for the Company shall be filed
with the Delaware Secretary of State.

         NOW, THEREFORE, the Members by this Agreement set forth the limited
liability company agreement for the Company under the Delaware Limited Liability
Company Act (6 Del.C. ss. 18-101 et seq., the "Act") upon the following terms
and conditions:

                                   ARTICLE 1

                                  Definitions

         Capitalized terms used in this Agreement without other definition
shall, unless expressly stated otherwise, have the meanings specified in this
Article 1.

         "Adjusted Capital Account Balance" means each Member's Capital Account,
increased by the amount of such Member's unconditional obligation to contribute
capital to the Company and such Member's share of "minimum gain" and "partner
nonrecourse debt minimum gain" as such terms are defined in section 1.704-2 of
the Income Tax Regulations.

         "Adjustment Factor" means a cost of living adjustment based on [***].

         "Affiliates" means any corporation, firm, limited liability company,
partnership or other entity that directly or indirectly is controlled by a Party
to this Agreement. Control for this purpose means ownership, directly or through
one or more affiliated entities, of more than 50 percent (50%) of the shares of
stock entitled to vote for the election of directors in the case of a
corporation, or more than 50 percent (50%) of the equity interests in the case
of any other type of

*CONFIDENTIAL TREATMENT REQUESTED

                                 -Page 1 of 48-
<PAGE>

legal entity, or any other arrangement whereby a Party controls or has the right
to control the board of directors or equivalent governing body of a corporation
or other entity.

         "Agreement" means this Limited Liability Company Agreement, as
originally executed and as amended, modified or supplemented from time to time.
Words such as "herein," "hereinafter," "hereof," "hereto," "hereby" and
"hereunder," when used with reference to this Agreement, refer to this Agreement
as a whole, unless the context otherwise requires.

         "Agreement Term" means the term of this Agreement as defined in Section
10.1.

         "Applicable Preferred Supplier" means the Dow Member with respect to,
and the Diversa Member with respect to [***].

         "Approved Business" means research and development in the Approved
Fields (including by means of contracting with a Member who is a Preferred
Supplier with respect thereto), the commercialization and exploitation of the
products of such research and development (including by means of contracting
with a Member who is a Preferred Supplier with respect thereto), in each case on
a world-wide basis, and all things necessary, convenient or desirable in
connection with the foregoing. Without limiting the foregoing, the Approved
Business shall include the right and obligation of the Company to perform under
the Preferred Supplier provisions hereof, and to exploit the Intellectual
Property which is the subject of the LLC License to the fullest extent possible,
except as otherwise expressly provided for herein or in such LLC License.

         "Approved Fields" shall mean:

                  [***] "Exclusive Fields" defined as the development and
         commercialization of industrial enzymes in the following product areas:

                           [***]

*CONFIDENTIAL TREATMENT REQUESTED

                                 -Page 2 of 48-
<PAGE>

                           [***]    [***], but excluding projects involving
                                    [***] (the "Excluded Projects"). Provided
                                    further, the Board of Directors must in good
                                    faith, consistent with their fiduciary
                                    duties to the Company, vote for or against
                                    such projects taking into account the same
                                    types of business and economic factors as
                                    considered by the Board of Directors in
                                    approving or disapproving other projects. In
                                    the event one Member believes the other
                                    Member's designated Director(s) did not take
                                    into account the same type of factors, that
                                    Member may seek recourse through the Dispute
                                    Resolution provisions contained in Article
                                    15 herein, and the twelve (12) month period
                                    for approval will be suspended during such
                                    dispute resolution and will resume once such
                                    dispute resolution is completed.

                  (b) "Limited Exclusive Fields" defined as the development and
         commercialization of industrial enzymes in the following product
         areas:

                           (i)      [***]; provided, however, the Board of
                                    Directors must in good faith, consistent
                                    with their fiduciary duties to the Company,
                                    vote for or against such projects taking
                                    into account the same types of business and
                                    economic factors as considered by the Board
                                    of Directors in approving or disapproving
                                    other projects. In the event that the Board
                                    of Directors has approved the required [***]
                                    projects for any of these fields, then that
                                    field becomes an Exclusive Field and it is
                                    subject to those provisions. In the event
                                    one Member believes the other Member's
                                    designated Director(s) did not take into
                                    account the same type of factors, that
                                    Member may seek recourse through the Dispute
                                    Resolution provisions contained in Article
                                    15 herein, and the twenty-four (24) month
                                    period for approval will be suspended during
                                    such dispute


*CONFIDENTIAL TREATMENT REQUESTED

                                 -Page 3 of 48-
<PAGE>

                                    resolution and will resume once such dispute
                                    resolution is completed; and

                           (ii)     any other industrial enzyme project
                                    identified by the Company to the extent of
                                    the product opportunities described in such
                                    projects, (excluding any project in the
                                    [***] field (the "Excluded Field") and any
                                    Excluded Project), provided that such
                                    projects become Approved Projects.

         "Approved Project" means the projects approved by the Board of
Directors as more fully described in Section 14.2.

         "Bankruptcy Event" means, with respect to any Person, such Person: (i)
making an assignment for the benefit of creditors; (ii) filing a voluntary
petition for bankruptcy; (iii) being adjudged bankrupt or insolvent, or having
an order for relief entered against such Person, in any bankruptcy or insolvency
proceeding; (iv) filing a petition or answer seeking for such Person any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any statute, law or regulation; (v) filing an answer or
other pleading admitting or failing to contest the material allegations of a
petition filed against such Person in proceedings of the foregoing nature; (vi)
seeking, consenting to, or acquiescing in the appointment of a trustee, receiver
or liquidator of such Person or of all or any substantial portion of the assets
of such Person.

         "Board of Directors" means the Board of Directors of the Company as
defined in Section 4.1 hereof.

         "Budget" means a statement setting forth the estimated receipts and
expenditures (capital, operating and other) of the Company for the period
covered by such statement, prepared in accordance with a format approved by the
Board of Directors and approved by the Board of Directors in the manner provided
for herein

         "Business Activities" means any business, action, purpose or activity
relating to the Approved Business undertaken by the Company or any officer,
employee, director or other Person acting for or on behalf of the Company.

         "Business Day" means a day, other than a Saturday or Sunday, during
which banks and similar financial institutions in San Diego, California are
generally open for business.

         "Capital Account" has the meaning provided for in Section 7.6.

         "Capital Contributions" means the contributions made by the Members to
the Company pursuant to Sections 7.1 or 7.2 hereof and, in the case of all the
Members, the aggregate of all such Capital Contributions.

         "Capital Transaction" means the sale, exchange or voluntary or
involuntary disposition of Company assets, in a single transaction or series of
related transactions, having a gross fair market value in excess of [***].

*CONFIDENTIAL TREATMENT REQUESTED

                                 -Page 4 of 48-
<PAGE>

         "CDA" means the Confidentiality and Transfer Agreement among the
Company, the Dow Member and the Diversa Member entered into as of the date of
this Agreement.

         "Change of Control" shall mean any of the following transactions
involving a Third Party: (a) a merger or consolidation of either Member which
results in the voting securities of such Member outstanding immediately prior
thereto ceasing to represent more than 50% of the combined voting power of the
surviving entity immediately after such merger or consolidation; (b) the sale of
all or substantially all of the assets of either Member; (c) the sale of
substantially all the assets relevant to the Approved Business, or (d) any one
person (other than the Member, any trustee or other fiduciary holding securities
under an employee benefit plan of the Member, or any corporation owned directly
or indirectly by the stockholders of the Member, in substantially the same
proportion as their ownership of stock of the Member), together with any of such
person's "affiliates" or "associates", as such terms are used in the Securities
Exchange Act of 1934, as amended, becoming the beneficial owner of more than 50%
of the combined voting power of the outstanding securities of a Member or by
contract or otherwise having the right to control the board of directors or
equivalent governing body of such Member or the ability to cause the direction
of management of such Member.

         "Code" means the United States Internal Revenue Code of 1986, as
amended, or any corresponding provision or provisions of any succeeding law.

         "Confidential Information" means all information, know-how, scientific,
technical, or non-technical data, samples, materials, business plans, and
marketing and sales information disclosed by one Member to the other, whether
disclosed or provided in oral, written (including but not limited to electronic,
facsimile, paper or other means), graphic, photographic or any other form,
except to the extent that such information:

         (a) as of the date of disclosure is known to the receiving Member as
shown by written documentation, other than by virtue of a prior confidential
disclosure from the disclosing Member to the receiving Member;

         (b) as of the date of disclosure is in, or subsequently enters, the
public domain through no fault or omission of the receiving Member;

         (c) as of the date of disclosure or thereafter is obtained from a Third
Party free from any obligation of confidentiality; or

         (d) as of the date of disclosure or thereafter is developed by the
receiving Member independent of the disclosure by the disclosing Member as
evidenced by written documentation.

         "Development Agreement" means the Industrial Enzymes Development
Agreement entered into between the Company and the Dow Member as of the date of
this Agreement whereby the Dow Member provides [***] services to the Company as
a Preferred Supplier, the form of which is attached hereto as Schedule 10.

*CONFIDENTIAL TREATMENT REQUESTED

                                 -Page 5 of 48-
<PAGE>

         "Director" means a Person who is elected as a Director of the Company
pursuant to Section 4.3 or 4.4.

         "Diversa Member" means Diversa Corporation, a Delaware corporation.

         "Dow Development Costs" means the cost of Dow Member FTEs at [***] per
FTE per year, (which dollar amount shall be adjusted annually according to the
Adjustment Factor but not to an amount less than [***]) relating to [***] for
any Approved Project with respect to which the Dow Member is acting as the
Preferred Supplier, as supported by actual records of the scientist or other
professional reflecting the time performing the work.

         "Dow Member" means The Dow Chemical Company, a Delaware corporation.

         "Dow Member FTE" means the equivalent of one full year of work on a
full time basis by a scientist or other professional possessing skills and
experience necessary to carry out the development activities by the Dow Member
contemplated by the Industrial Enzyme Development Agreement between the Company
and the Dow Member determined in accordance with the Dow Member's normal
policies and procedures.

         "Environmental Laws" mean all federal, state and local laws,
ordinances, rules and regulations, as amended from time to time, and all federal
and state court decisions, consent decrees and orders interpreting or enforcing
any of the foregoing, in any way relating to or regulating human health or
safety, or industrial hygiene or environmental conditions, or protection of the
environment, or pollution or contamination of the air, soil, surface water or
groundwater, and includes, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, 42 USC section 9601 et seq.,
the Resource Conservation and Recovery Act, 42 USC section 6901 et seq., the
Clean Water Act, 33 USC section 1251 et seq. and the Endangered Species Act, 16
USC et seq.

         "Environmental Matters" means any act or matter with respect to which
one or more Environmental Laws apply.

         "Expenses" means all cash expenditures of the Company of any kind or
nature, excluding, however, any and all distributions made to the Members as
provided for in Section 8.2 hereof.

         "Enzyme" means an enzyme or enzymes, and genes encoding them, either ex
vivo or in vivo related to a particular project provided to the Dow Member by
the Company under the Development Agreement or the Diversa Member under the CDA.

         "Forecast" shall have the meaning provided for in Section 14.1 hereof.
An example of the format of the Forecast approved by the Board of Directors is
attached hereto as Exhibit A.

         "FTE" means the equivalent of one full year of work on a full time
basis by a scientist or other professional possessing skills and experience
necessary to carry out the R&D Program by

*CONFIDENTIAL TREATMENT REQUESTED

                                 -Page 6 of 48-
<PAGE>

the Diversa Member as defined in the IE R&D Agreement determined in accordance
with the Diversa Member's normal policies and procedures.

         "GAAP" means U.S. generally accepted accounting principles.

         "IE R&D Agreement" means the Industrial Enzymes Research Agreement
entered into between the Company and the Diversa Member as of the date of this
Agreement whereby the Diversa Member provides enzyme research services to the
Company as a Preferred Supplier, the form of which is attached hereto as
Schedule 5.

         "Income Tax Regulations" means the regulations of the United States
Treasury Department promulgated under the Code, as the same may be amended from
time to time.

         "Initial Term" means the period of time from the date of this Agreement
until five (5) years thereafter.

         "Intellectual Property" means all patents, copyrights, trademarks,
trade names, service marks or logos, and all applications therefore or
registrations thereof, as well as all trade secrets, industrial property rights,
technical information, management information systems, drawings, designs,
processes and quality control data and all similar materials recording or
evidencing proprietary expertise or information owned by a Member in the
Approved Fields or jointly owned by the Members in the Approved Fields, and all
licenses or sublicenses of any of the foregoing granted to a Member or one or
more of their Affiliates in the Approved Fields from any Third Party (to the
extent such licenses permit the sublicense thereof to the Company on
commercially reasonable terms), or all licenses or sublicenses of any of the
foregoing granted to the Company in the Approved Fields.

         "LLC License" means the license agreement relating to Intellectual
Property which is referenced in Schedule 3 and others that may exist in the
future.

         "Majority in Interest" means the Members holding more than fifty
percent (50%) of the Percentage Interests of all Members entitled to vote on a
matter.

         "Manufacturing Agreement" means the Contract Manufacturing Agreement
entered into between the Company and the Dow Member as of the date of this
Agreement whereby the Dow Member provides manufacturing services to the Company
as a Preferred Supplier, the form of which is attached hereto as Schedule 6.

         "Member" has the meaning provided for in Section 3.1.

         "Membership Interest" means the ownership interest of a Member in the
Company, including a Member's right to share in the Company's items of income,
gain, loss, deduction, credits and similar items, and the right to receive
distributions from the Company, as well as a Member's rights to vote and
otherwise participate in the operation or affairs of the Company as provided for
herein and under the Act.

                                 -Page 7 of 48-
<PAGE>

         "Net Cash Flow" means the excess, if any, of (i) Revenues and the
amount of any decrease in Reserves over (ii) Expenses and the amount of any
increase in Reserves.

         "Percentage Interest" means, for each Member, the percentage set forth
opposite its name on Schedule 1 attached hereto.

         "Person" means any general partnership, limited partnership, joint
venture, association, corporation, limited liability company, trust or other
entity and, where the contexts so permits or requires, a natural person.

         "Preferred Supplier" shall mean the Member which is the Applicable
Preferred Supplier for the relevant Preferred Supplier Area.

         "Preferred Supplier Area" shall mean each of the areas of [***].

         "Revenues" means cash receipts of any sort obtained by the Company
(other than those attributable to Capital Contributions and the amount of any
indebtedness of the Company).

         "Reserve" means a reserve established by the Board of Directors for
working capital and for the reasonably anticipated fees, costs and Expenses of
the Company, in an amount established from time to time by the Board of
Directors as provided for herein. The amount of the initial Reserve shall be and
shall be adjusted, if necessary, upon completion of the initial Budget.

         "Third Party " means any Person other than the Dow Member or the
Diversa Member or their respective Affiliates.

                                   ARTICLE 2

                           Offices and Statutory Agent

         2.1 Registered Office and Statutory Agent. The registered office and
statutory agent in Delaware required by the Act shall be as set forth in the
Certificate until such time as the registered office or statutory agent is
changed in accordance with the Act.

         2.2 Principal Executive Office. The principal executive office for the
transaction of the business of the Company may be fixed by the Board of
Directors at any place within the United States of America, whether within or
without the State of Delaware. Unless and until changed by the Board of
Directors as provided for herein, the principal executive office of the Company
shall be located at 10665 Sorrento Valley Road, San Diego, California.

         2.3 Business. The Company may carry on any lawful business, purpose or
activity relating to the Approved Business which is permitted to be carried on
by a limited liability company under the Act.

*CONFIDENTIAL TREATMENT REQUESTED

                                 -Page 8 of 48-
<PAGE>

                                   ARTICLE 3

          Company Members; Classes; Voting Rights; Meetings of Members

         3.1 Members. Each party to this Agreement shall be a member of the
Company, within the meaning of the Act, until they cease to be a member in
accordance with the provisions of the Act, the Certificate or this Agreement
(the "Members"). The names and addresses of the initial Members (individually an
"initial Member" and collectively the "initial Members") are set forth on
Schedule 1 hereto. Additional Persons may be admitted as Members on the express
terms and conditions expressly set forth herein.

         3.2 Voting Rights

         (a) Except as may otherwise be provided by this Agreement or the Act or
the Certificate, the affirmative vote of a Majority in Interest on a matter
shall constitute the act of the Members.

         (b) The Members shall have the right to change the number of Directors
and elect Directors in accordance with Sections 4.2, 4.3 and 4.4 of this
Agreement, and shall have such other rights to vote and act on the matters and
affairs of the Company as are expressly provided for herein or are required by
the Act to be voted upon by the Members.

         (c) Only Persons whose names are listed as Members on the records of
the Company at the close of business on the Business Day immediately preceding
the day on which notice of the meeting is given or, if such notice is waived, at
the close of business on the Business Day immediately preceding the day on which
the meeting of Members is held (except that the record date for Members entitled
to give consent to action without a meeting shall be determined in accordance
with Section 3.7) shall be entitled to receive notice of and to vote at such
meeting, and such day shall be the record date for such meeting. Any Member
entitled to vote on any matter shall be entitled to cast that number of votes
equal to such Member's Percentage Interest and, other than for elections of a
Director, may cast part of the votes in favor of the matter and refrain from
exercising the remaining votes or vote against the matter, but if the Member
fails to specify the number of votes such Member is exercising affirmatively, it
will be conclusively presumed that the Member's approving vote is with respect
to all votes such Member is entitled to cast. Such vote may be viva voce or by
ballot; provided, however, that all elections for Directors must be by ballot
upon demand made by a Member at any election and before the voting begins.

         3.3 Place of Meetings. All meetings of the Members shall be held at any
place within or without the State of Delaware which may be designated either by
the Board of Directors or by the written consent of all Members entitled to vote
thereat given either before or after the meeting and filed with the secretary.
In the event of any inconsistency in the places designated by the Board of
Directors or the Members as herein provided, or in the absence of any such
designation, Members' meetings shall be held at the principal executive office
of the Company.

         3.4 Meetings of Members; Notice of Meetings. Meetings of the Members
for the purpose of taking any action permitted to be taken by the Members may be
called by any Director, or

                                 -Page 9 of 48-
<PAGE>

by Members holding not less than twenty percent (20%) of the aggregate
Percentage Interests entitled to vote at the meeting. Upon request in writing
that a meeting of Members be called for any proper purpose, the secretary
forthwith shall cause notice to be given to the Members entitled to vote that a
meeting will be held at a time requested by the person or persons calling the
meeting, not less than thirty (30) nor more than sixty (60) days after receipt
of the request unless otherwise agreed to in writing by all Members. Except in
special cases where other express provision is made by statute, notice of such
meetings shall be given personally, in writing, via electronic means or via
facsimile to each Member entitled to vote not less than thirty (30) nor more
than sixty (60) days before the meeting. Such notices shall state:

                  (a) The place, date and hour of the meeting;

                  (b) Those matters which the Directors, at the time of the
         mailing of the notice, intend to present for action by the Members; and

                  (c) The names of the Directors intended at the time of the
         notice to be presented for election, if any.

         3.5 Quorum. The presence at any meeting in person or by proxy of
Members holding more than fifty percent (50%) of the aggregate Percentage
Interests entitled to vote at such meeting shall constitute a quorum for the
transaction of business. The Members present at a duly called or held meeting at
which a quorum is present may continue to transact business until adjournment,
notwithstanding the withdrawal of enough Members to leave less than a quorum, if
any action taken (other than adjournment) is approved by at least a majority of
the votes required to constitute a quorum.

         3.6 Waiver of Notice. The actions of any meeting of Members, however
called and noticed, and wherever held, shall be as valid as if taken at a
meeting duly held after regular call and notice, if a quorum be present either
in person or by proxy, and if, either before or after the meeting, each person
entitled to vote, not present in person or by proxy, signs a written waiver of
notice or a consent to a holding of the meeting, or an approval of the minutes
thereof. The waiver of notice, consent or approval need not specify either the
business to be transacted or the purpose of any regular or special meeting of
Members, except that if action is taken or proposed to be taken for approval of
any of those matters specified in Section 3.2(b) of this Agreement, the waiver
of notice, consent or approval shall state the general nature of such proposal.
All such waivers, consents or approvals shall be filed with the Company records
and made a part of the minutes of the meeting.

         Attendance of a Member at a meeting shall also constitute a waiver of
notice of and presence at such meeting, except when the Member objects, at the
beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened, and except that attendance at a meeting is
not a waiver of any right to object to the consideration of matters required to
be included in the notice but not so included, if such objection is expressly
made at the meeting.

                                -Page 10 of 48-
<PAGE>

         3.7 Action by Members Without a Meeting. Directors may be elected or
removed without a meeting by a consent in writing, setting forth the action so
taken, signed by Members entitled to elect or remove Directors in accordance
with Section 4.3. In addition, a Director may be elected at any time to fill a
vacancy by a written consent signed by Members entitled to elect or remove
Directors in accordance with Section 4.3. Notice of any such election or removal
shall be promptly given to all other Members.

         Any other action which, under any provision of the Act or the
Certificate or this Agreement, may be taken at a meeting of the Members, may be
taken without a meeting, and without notice except as hereinafter set forth, if
a consent in writing, setting forth the action so taken, is signed by Members
having not less than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all Members entitled to vote
thereon were present and voted. All such consents shall be filed with the
secretary of the Company and shall be maintained in the Company's records.

         Unless the consents of all Members entitled to vote have been solicited
in writing:

         (a) Notice of any proposed Member approval of any of the matters set
forth in Section 3.2(b) without a meeting by less than unanimous written consent
shall be given to those Members entitled to vote who have not consented in
writing at least ten (10) days before the consummation of the action authorized
by such approval; and

         (b) Prompt notice shall be given of the taking of any other action
approved by Members without a meeting by less than unanimous written consent to
those Members entitled to vote who have not consented in writing.

         Unless, a record date has been fixed for the determination of Members
entitled to notice of and to give such written consent, the record date for such
determination shall be the day on which the first written consent is given.

         Any Member giving a written consent, or the Member's proxy holders, or
a personal representative of the Member or their respective proxyholders, may
revoke the consent by a writing received by the secretary prior to the time that
written consents of the number of votes required to authorize the proposed
action have been filed with the secretary, but may not do so thereafter. Such
revocation is effective upon its receipt by the secretary or, if there shall be
no person then holding such office, upon its receipt by any other officer or
Director of the Company.

         3.8 Members May Participate in Other Activities; Limitations

         (a) [***]


*CONFIDENTIAL TREATMENT REQUESTED

                                -Page 11 of 48-
<PAGE>

         (b) [***]

         (c) [***]


                                    ARTICLE 4

                                   Management

         4.1 Board of Directors. Subject to the provisions of the Act and any
limitations in the Certificate and this Agreement as to action required to be
authorized or approved by the Members, the business and affairs of the Company
shall be managed and all its powers shall be exercised by the Members, who have
in turn delegated their authority to manage the business and affairs of the
Company and to exercise all of the Company's powers to a committee of Persons
referred to herein as the board of directors of the Company (the "Board of
Directors"). Without prejudice to such general powers, but subject to the same
limitations, it is hereby expressly declared that the Board of Directors shall
have the following powers:

         (a) To conduct, manage and control the business and affairs of the
Company and to make such rules and regulations therefor not inconsistent with
law or with the Certificate or with this Agreement, as the Board of Directors
shall deem to be in the best interests of the Company;

*CONFIDENTIAL TREATMENT REQUESTED

                                -Page 12 of 48-
<PAGE>

         (b) To appoint and remove at pleasure the officers, agents and
employees of the Company, prescribe their duties and fix their compensation;

         (c) To borrow money and incur indebtedness for the purposes of the
Company and to cause to be executed and delivered therefor, in the Company's
name, promissory notes, bonds, debentures, deeds of trust, mortgages, pledges,
hypothecations or other evidences of debt and securities therefor;

         (d) To designate an executive and other committees, each consisting of
two or more Directors, to serve at the pleasure of the Board of Directors, and
to prescribe the manner in which proceedings of such committees shall be
conducted;

         (e) To acquire real and personal property, arrange financing, enter
into contracts and complete all other arrangements needed to effectuate the
business of the Company; and

         (f) To take such other actions, and to exercise such other authority,
as the board of directors of a corporation organized under the laws of the State
of Delaware would take and exercise.

         4.2 Number, Classes and Qualifications of Directors.

         (a) The number of Directors which shall constitute the Board of
Directors shall be not less than four (4) nor more than eight (8). The number of
Directors may be varied from time to time by a vote of the Members, as provided
for in Section 3.2(b) hereof. The initial number of Directors which shall
constitute the Board of Directors shall be six (6). The President of the Company
will be elected to the Board of Directors as a non-voting member.

         (b) A Director need not be a Member of the Company but must be a
natural person who is at least eighteen (18) years of age.

         4.3 Election and Removal of Directors. The Directors shall be elected
as follows:

         (a) At each election of Directors, each Member shall be entitled to
appoint a number of Directors to the Board of Directors equal to one-half (1/2)
of the then-current size of the Board of Directors. The Directors in office
immediately prior to any such election shall be automatically removed, effective
upon the appointment of the new Board of Directors. Upon any reduction in the
size of the Board of Directors, as provided for herein, the Members shall agree
(at the time of such reduction) upon the members of the Board to be removed upon
such reduction in the size of the Board of Directors becoming effective;
provided however, that in the event the Members do not so agree, then a number
of directors equal to one-half (1/2) of each of the Member's previously
appointed Directors (rounded down to the nearest whole number, if applicable)
shall be automatically removed from the Board. Unless otherwise specified by the
Member whose Directors are so removed, such Directors removed shall be so
removed in alphabetical order by reference to their last names.

         (b) Each Member may remove the Director or Directors appointed by such
Member, at any time and from time to time, with or without cause, and without
prior notice; provided

                                -Page 13 of 48-
<PAGE>

however, that notice shall be provided to the other Members of any such removal
as expeditiously as possible after any such removal and, in all events, within
five (5) days thereof.

         4.4 Vacancies, Resignations, Replacements.

         (a) A vacancy shall be deemed to exist in case of the death,
resignation or removal, occurrence of a Bankruptcy Event, mental incompetence
adjudged by a court of competent jurisdiction in any state or country
(including, without limitation, any territory, dependency or possession of the
United States of America), or conviction (or plea of nolo contendere or similar
plea) by any court in any state or country (including, without limitation, any
territory, dependency or possession of the United States of America) of any
felony or any misdemeanor involving moral turpitude of any Director. A vacancy
shall also be deemed to exist if the authorized number of Directors be
increased.

         (b) Any Director may resign effective upon giving thirty (30) days
prior written notice to each Member of the Company, unless the notice specifies
a later time for the effectiveness of such resignation.

         (c) The Member that nominated the Director who is resigning, who is
removed, who died or who is otherwise deemed to have left the Board pursuant to
the provisions of paragraph (a) above is authorized to fill the vacancy and
shall have power to elect a successor to take office when the resignation,
removal or deemed vacancy becomes effective.

         4.5 Initial Directors. Schedule 2 to this Agreement shall be amended as
soon as practicable following the execution of this Agreement to set forth the
names and addresses of the initial Directors. The Initial Directors, listed on
such Schedule 2 shall hold office from and after the date Schedule 2 is so
amended until their removal pursuant to this Agreement or until their respective
successors are elected and qualified pursuant to this Agreement.

         4.6 Proprietary Invention and Non-Disclosure Agreements; Directors May
Otherwise Engage in Activities Which Compete With the Company. Each Director of
the Company must sign a proprietary invention and non-disclosure agreement with
the Company. Except as otherwise expressly provided for in such agreement and
except as expressly provided for in Article 3 hereof, each such Director shall,
either individually or with others, have the right to participate in other
business activities and ventures of every kind, whether or not such other
business activities and ventures compete with the Company. No Director shall be
obligated to offer to the Company any opportunity to participate in any such
other business activity or venture. The Company shall not have any right to any
income or profit derived from any such other business activity or venture of a
Director.

                                   ARTICLE 5

                         Meetings of Board of Directors

         5.1 Place of Meetings. Meetings of the Board of Directors shall be held
at any place within or without the State of Delaware that has been designated
from time to time by the Board

                                -Page 14 of 48-
<PAGE>

of Directors. In the absence of such designation, meetings of the Board of
Directors shall be held at the principal executive office of the Company, except
as provided in Section 5.2.

         5.2 Meetings of Directors. The Board of Directors shall meet quarterly
on the dates determined by the Board of Directors. Meetings of the Board of
Directors for any purpose or purposes may be called at any time by any Director.
Notice of the time and place of meetings shall be delivered personally or by
telephone to each Director, or sent by first-class mail or by electronic mail or
facsimile transmission addressed to him or her at his or her address as it
appears upon the records of the Company. Notice of a meeting of the Board of
Directors shall be given at least thirty (30) days prior to the time of the
holding of the meeting. Any notice given personally or by telephone may be
communicated to either the Director or to a person at the office of the Director
whom the person giving the notice has reason to believe will promptly
communicate it to the Director. Such deposit in the mail, delivery to a common
carrier, transmission by electronic means or delivery, personally or by
telephone, as above provided, shall be due, legal and personal notice to such
Directors. The notice need not specify the purpose of the meeting.

         5.3 Quorum; Alternates; Participation in Meetings By Conference
Telephone Permitted; Vote Required for Action; Confidentiality.

         (a) Except as hereinafter provided, presence of two (2) of the
authorized number of Directors appointed by each of the Dow Member and the
Diversa Member at a meeting of the Board of Directors constitutes a quorum for
the transaction of business. A meeting at which a quorum is initially present
may continue to transact business notwithstanding the withdrawal of one or more
Directors; provided however, that if the total number of Directors is thereby
reduced to a number less than four (4), then in such event the sole business
which may thereafter be taken by the Board of Directors at such meeting shall be
to adjourn such meeting. If the meeting is adjourned for more than twenty-four
(24) hours, notice of any adjournment to another time or place (other than
adjournments until the time fixed for the next regular meeting of the Board of
Directors, as to which no notice is required) shall be given prior to the time
of the adjourned meeting to the Directors who were not present at the time of
the adjournment.

         (b) Each Director may, by written notice given to the chairman, appoint
an alternate to attend and vote at meetings, or at any particular meeting, if
the Director is unable to attend. The presence of an alternate at any meeting
shall be deemed to be presence of the Director at such meeting for all purposes,
and the vote of such alternate shall be deemed to be the vote of the relevant
Director. No Director may retract the vote of any duly appointed alternate on
behalf of such Director after the close of the meeting at which such vote is
made. In the event that the Director who appointed an alternate attends a
meeting, the appointment of such alternate shall be ineffective for such
meeting, and the alternate shall have no right to be present or to participate
in that meeting.

         (c) Directors may participate in a meeting through use of conference
telephone or similar communications equipment, so long as all Directors
participating in such meeting can communicate with and hear one another.

                                -Page 15 of 48-
<PAGE>

         (d) Except as provided in paragraph (e) below, every act or decision
done or made by a majority of the Directors present at a meeting duly held at
which a quorum is present shall be regarded as the act of the Board of
Directors.

         (e) The affirmative vote of a simple majority of the Directors of the
Company entitled to vote on a matter, in which simple majority at least one
Director appointed by the Diversa Member and one Director appointed by the Dow
Member voted in favor of such action, shall be required to take any of the
following actions:

                  (i) approve a voluntary dissolution of the Company;

                  (ii) agree to continue the business of the Company after an
         event of dissolution specified in Section 10.3;

                  (iii) approve a merger, consolidation or other reorganization
         of the Company;

                  (iv) change the authorized number of Directors within the
         range specified in Section 4.2(a);

                  (v) approve any contract or other transaction with a Director
         or officer, including compensation of Directors and officers;

                  (vi) authorize or approve a sale or lease of all or any
         material portion (for purposes hereof, the term "material" shall mean
         having a value of not less than [***]) of the assets of the Company;

                  (vii) admit any additional Members to the Company;

                  (viii) approve indemnification of any Director, Member or
         officer of the Company as authorized by Article 11 of this Agreement;

                  (ix) approve any transactions or agreements with Members or
         their Affiliates;

                  (x) enter into, terminate or amend any transaction or
         agreement entered into pursuant to the Preferred Supplier provisions of
         Section 14.3 hereof;

                  (xi) enter into, amend or terminate any material contract (or
         series of related contracts, which, in the aggregate, are material)
         between the Company and any other Person (unless and until changed by
         the Board of Directors, the term "material" shall mean a contract
         which: (i) has a term in excess of two (2) years and is not terminable
         by the Company, without more than thirty (30) days prior written notice
         and without fee or penalty; (ii) requires payments in excess of [***];
         or (iii) requires or purports to require the Company or any Member to
         indemnify any Person);

*CONFIDENTIAL TREATMENT REQUESTED

                                -Page 16 of 48-
<PAGE>

                  (xii) incur any indebtedness for borrowed money or grant a
         lien or other encumbrance on any asset of the Company to a third party
         except in the case of leases entered into in the ordinary course of
         business;

                  (xiii) lend funds to any Person, or enter into any option,
         short sale, forward, swap, collar, derivative or other, similar,
         financial transaction with any other Person;

                  (xiv) guarantee any obligation of any other Person, or
         indemnify any Person (except as otherwise expressly set forth herein);

                  (xv) create or modify any employee benefit plan (including any
         stock appreciation right, phantom stock or other, similar, plan);

                  (xvi) change the amount of the Company's Reserves;

                  (xvii) approve a Budget or Forecast as provided for in Section
         14.1 hereof, and any amendments or other modifications thereto;

                  (xviii) approve any Project and the material terms and
         conditions of such Project, and any amendment or other modification
         thereto, and any decision to terminate consideration of a proposed
         project as provided for in Section 14.2 hereof;

                  (xix) adopt any field as an Approved Field (other than the
         Exclusive Fields and the Limited Exclusive Fields);

                  (xx) except for matters expressly provided for in the Budget
         or in an approved Project, approve any capital expenditures or other
         expenditures which are material (or any series of related capital or
         other expenditures, which, in the aggregate, are material); provided,
         that for purposes of this clause, the term "material" shall mean [***];

                  (xxi) acquire or approve the acquisition of stock or any other
         equity interest (including via options and convertible debt) in any
         Person;

                  (xxii) approve additional capital contributions and the amount
         thereof other than any capital contribution which is set forth in an
         approved Budget or approved Project;

                  (xxiii) permit the Company to undertake any Business
         Activities other than the Approved Business;

                  (xxiv) change the principal executive offices of the Company;

                  (xxv) change the Company's auditors or accountants;

*CONFIDENTIAL TREATMENT REQUESTED

                                -Page 17 of 48-
<PAGE>

                  (xxvi) implement or change any accounting or tax policy of the
         Company or the Company's tax status as a partnership for income tax
         purposes or make any election relating thereto (except as otherwise
         required by law);

                  (xxvii) implement or modify any policies or procedures of the
         Company relating to Environmental Matters;

                  (xxviii) respond to any judicial or administrative action by
         or against the Company relating to Environmental Matters;

                  (xxix) remove or appoint the president or the secretary of the
         Company;

                  (xxx) enter into or amend any employment, consulting or other,
         similar agreement between the Company and any Person on terms which do
         not permit the Company to terminate such employment, consulting, or
         other similar relationship without notice, without cause and without
         fee, penalty or payment of any kind;

                  (xxxi) sell, exchange, transfer, assign, license or sublicense
         any Intellectual Property other than as expressly provided for in an
         approved Project;

                  (xxxii) extend the Research Term (as defined in the IE R&D
         Agreement) for any period beyond the extended Research Term under the
         IE R&D Agreement described in Section 5.3(f); and

                  (xxxiii) enter into any agreement to do any of the foregoing.

         (f) The affirmative vote of [***] shall be required to extend the
Research Term for the first [***] period after the initial five (5) year
Research Term under the IE R&D Agreement.

         (g) At the end of any extended Research Term under the IE R&D Agreement
described in Section 5.3(f), the Board of Directors will meet to discuss whether
(i) the activities of the Company, the Diversa Member and the Dow Member will
continue under the existing agreements among the parties, (ii) all or a portion
of the activities of the Company, the Diversa Member and the Dow Member will
continue on terms to be agreed by the respective parties, (iii) the Diversa
Member and the Dow Member will negotiate a new agreement, or (iv) the Diversa
Member or the Dow Member will exercise rights under Section 10.2(b).

         5.4 Waiver of Notice; Consent to Meeting. Notice of a meeting need not
be given to any Director who signs a waiver of notice or a consent to holding
the meeting or an approval of the minutes thereof, whether before or after the
meeting, or who attends the meeting without protesting, prior thereto or at its
commencement, the lack of notice to such Director. All such waivers, consents
and approvals shall be filed with the Company's records and made a part of the
minutes of the meeting.

*CONFIDENTIAL TREATMENT REQUESTED

                                -Page 18 of 48-
<PAGE>

         5.5 Action by Board of Directors Without a Meeting. Any action required
or permitted to be taken by the Board of Directors may be taken without a
meeting if all the Directors (or their alternates who have been appointed
pursuant to Section 5.3(b) above) authorized to vote shall individually or
collectively consent in writing to such action. Such written consent or consents
shall be filed with the minutes of the proceedings of the Board of Directors.
Such action by written consent shall have the same force and effect as a
unanimous vote of the Board of Directors.

         5.6 Committees and Subcommittees. The provisions of this Article 5
shall also apply, with necessary changes in points of detail, to committees and
subcommittees of the Board of Directors, if any, and to actions by such
committees or subcommittees (except for the first sentence of Section 5.2 and
Section 5.3(e) in its entirety, which shall not apply, and except that special
meetings of a committee or subcommittee may also be called at any time by any
two members of the committee or subcommittee), unless otherwise provided by this
Agreement or by the resolution of the Board of Directors designating such
committee or subcommittee. For such purpose, references to the Directors
collectively shall be deemed to refer to each such committee or subcommittee,
and references to "Directors" shall be deemed to refer to members of the
committee or subcommittee. Initially, the board shall have one committee: the
Research Management Committee. The respective scope of the duties and
obligations of such committee is set forth on Schedule 4.

         5.7 Chairman. There shall be a chairman of the Board of Directors who
shall preside at each meeting of the Board of Directors. The chairman shall have
the duties and responsibilities of a non-executive chairman of the board of
directors of a corporation; provided, that the chairman shall be entitled only
to the same number of votes as any other Director and shall not be entitled to
cast a tie-breaking vote. The chairman must be a Director and shall serve for a
two-year term. The first chairman shall be appointed by the Dow Member and the
Diversa Member shall appoint the succeeding chairman. Thereafter, the
chairmanship shall alternate each succeeding two-year period between the
appointee of the Dow Member and of the Diversa Member. If a chairman resigns or
is removed before the expiration of such chairman's term, the Member who
appointed such chairman shall have the right to appoint a successor chairman for
the remainder of the original chairman's term. A chairman may be removed or
replaced at any time, without prior notice by the Member who appointed such
chairman; provided however, that such Member shall, as expeditiously as
possible, and in all events within five (5) days, provide written notice to the
other Members of such removal or replacement. Removal or replacement as a
chairman shall not affect a Director's position as a Director; provided however,
that a chairman shall be automatically removed at such time, if any, as they
cease to be a Director. A chairman may resign at any time upon thirty (30) days
prior written notice to all Members. The Dow Member hereby appoints Fernand
Kaufmann as the first chairman of the Board of Directors, and Fernand Kaufmann
is hereby authorized to execute this Agreement, and any ancillary agreements to
which the Company is a party, on behalf of the Company.

         5.8 Minutes of Meetings of the Board of Directors.The Secretary of the
Company will keep the minutes of the meetings of the Board of Directors. The
Secretary will circulate draft minutes to the members of the Board of Directors
within thirty (30) days after the applicable meeting of the Board of Directors.

                                -Page 19 of 48-
<PAGE>

         5.9 Confidentiality. The Members agree that the Board of Directors and
any approved participants shall maintain the confidentiality of all Confidential
Information discussed or provided at the meetings.

                                   ARTICLE 6

                                    Officers

         6.1 General. Subject to the provisions of the Act and the Certificate,
the Board of Directors may determine from time to time to appoint one or more
individuals who shall be termed officers of the Company. Each officer shall hold
his or her respective office at the pleasure of the Board of Directors. Except
as otherwise specifically provided for below, an officer need not be a Member or
Director of the Company, and any number of offices may be held by the same
person. The officers of the Company shall include a president. The Company may
also have, at the discretion of the Board of Directors, such other officers as
may be designated from time to time by the Board of Directors.

         6.2 Appointment and Removal. The officers shall be appointed by the
Board of Directors. Each officer, including an officer elected to fill a
vacancy, shall hold office until his or her successor is elected, except as
otherwise provided by the Act or the Certificate, unless earlier removed
pursuant to this Section 6.2. Any officer may be removed, with or without cause,
and at any time, upon the appropriate vote of the Board of Directors, as
provided for in Article 5.

         6.3 President. The president shall, subject to the oversight and
control of the Board of Directors, be responsible for the direction, performance
and supervision of the Company in accordance with the policies and procedures
established by the Board of Directors, including, without limitation, preparing
budgets and reports relating to the Company's activities, hiring and terminating
employees and consultants of the Company, and negotiating and entering into
agreements with other Persons within the parameters established by the Board of
Directors. The president shall have such further powers and shall perform such
further duties, as may be prescribed for the president by the Board of
Directors.

         6.4 Secretary. The duties of the secretary of the Company shall be
established by the Board of Directors of the Company. The role of secretary will
be filled by an employee of the Diversa Member pursuant to a Services Agreement
between the Company and such Member.

         6.5 Treasurer. The duties of the treasurer of the Company shall be
established by the Board of Directors of the Company. The role of treasurer will
be filled by an employee of the Dow Member pursuant to a Services Agreement
between the Company and such Member.

                                   ARTICLE 7

                              Capital Contributions

         7.1 Initial Capital Contributions. Each Member shall make an initial
Capital

                                -Page 20 of 48-
<PAGE>

Contribution to the Company. The Diversa Member and the Dow Member shall
transfer or otherwise make available to the Company certain intangibles. [***]

         7.2 Additional Capital Contributions.

         (a) The Members anticipate that cash Capital Contributions (in addition
to those provided for in Sections 7.1 and 7.3 hereof) will be required for the
ordinary operating needs of the Company, including, without limitation,
management expenses of the Company and [***]. When such operating needs exist,
the Board of Directors may require the Members to make additional Capital
Contributions in such amounts as the Board of Directors may determine. If the
Board of Directors elects to require additional Capital Contributions (in
addition to those provided for in Sections 7.1 and 7.3 hereof) by existing
Members, it shall offer the right to make such Capital Contributions to the then
existing Members pro rata in accordance with their respective Percentage
Interests. If a Member refuses to make such Capital Contribution because of lack
of corporate authority or otherwise, the provisions of Section 7.2(b) will
apply. [***]

         When such Capital Contributions are to be made in property, rather than
cash, a value for such property shall be established by the Board of Directors.
Upon such a Capital Contribution by any new or existing Members such Member
shall receive a Capital Account credit for each such additional Capital
Contribution at the time and in the amount that such contribution is made. In no
event will any Capital Contribution made or required under this Section 7.2
change the Members' respective Percentage Interests.

         (b) If a Member (the "Noncontributing Member") fails to make any
additional Capital Contribution (in addition to those provided for in Sections
7.1 and 7.3 hereof) under Section 7.2(a), the other Member(s) (the "Contributing
Member") may give the Noncontributing Member notice of such failure. If such
failure continues for thirty (30) days after such notice has been given, the
Contributing Member may elect to take any of the following alternative actions
if it has made all of the Capital Contributions due from it to the Company:

                  (i) The Contributing Member may pursue remedies for such
         failure to contribute pursuant to Article 15; or

                  (ii) The Contributing Member may contribute to the Company the
         cash then due to the Company from the Noncontributing Member, and the
         amount of such cash shall be deemed to be a loan from the Contributing
         Member to the Noncontributing Member (a "Default Loan") and a Capital
         Contribution to the Company, in which case the Noncontributing Member's
         obligation to make such Capital Contribution shall be

*CONFIDENTIAL TREATMENT REQUESTED

                                -Page 21 of 48-
<PAGE>

         deemed satisfied. Any Default Loan shall bear interest at the lesser of
         (A) the maximum rate permitted by applicable law, or (B) the prime rate
         as quoted by Bank of America N.A. plus two percent (2%), and shall be
         due and payable in full (including all accrued interest) within ninety
         (90) days after the Contributing Member contributes the cash then due
         to the Company from the Noncontributing Member. If not sooner repaid,
         the Contributing Member shall have the right to pursue collection of
         the amount owed through litigation or other means consistent with its
         collection practices of past due amounts.

         7.3 Dow Member Required Capital Contributions. The following required
Capital Contributions shall not impact the respective Percentage Interests of
the Members for purposes of the provisions of this Agreement.

         [***]

                  [***]

                  [***]

                  [***]

*CONFIDENTIAL TREATMENT REQUESTED

                                -Page 22 of 48-
<PAGE>

                  [***]

                  [***]

         7.4 Withdrawal or Reduction of Capital Contributions.

         (a) Except as expressly provided in this Agreement, no Member shall
have the right to withdraw from the Company all or any part of its Capital
Contribution.

         (b) A Member, irrespective of the nature of its Capital Contribution,
shall only have the right to demand and receive cash in return for its Capital
Contribution, unless the Members shall have unanimously agreed that such Member
may receive a distribution in kind.

         7.5 No Interest on Capital Contributions. No interest shall be payable
on or with respect to the Capital Contributions or Capital Accounts of Members.

         7.6 Capital Accounts.

         (a) A single Capital Account shall be maintained for each Member
(regardless of the class of interests owned by such Member and regardless of the
time or manner in which such interests were acquired) in accordance with the
capital accounting rules of section 704(b) of the Code, and the regulations
thereunder (including without limitation section 1.704-1(b)(2)(iv) of the Income
Tax Regulations). In general, under such rules, a Member's Capital Account shall
be:

*CONFIDENTIAL TREATMENT REQUESTED

                                -Page 23 of 48-
<PAGE>

                  (i) increased by (A) the amount of money contributed by the
         Member to the Company (including the amount of any Company liabilities
         that are assumed by such Member other than in connection with
         distribution of Company property), (B) the fair market value of
         property contributed by the Member to the Company (net of liabilities
         secured by such contributed property that under section 752 of the Code
         the Company is considered to assume or take subject to), and (C)
         allocations to the Member of Company income and gain (or item thereof),
         including income and gain exempt from tax; and

                  (ii) decreased by (A) the amount of money distributed to the
         Member by the Company (including the amount of such Member's individual
         liabilities that are assumed by the Company other than in connection
         with contribution of property to the Company), (B) the fair market
         value of property distributed to the Member by the Company (net of
         liabilities secured by such distributed property that under section 752
         of the Code such Member is considered to assume or take subject to),
         (C) allocations to the Member of expenditures of the Company not
         deductible in computing its taxable income and not properly chargeable
         to capital account, and (D) allocations to the Member of Company loss
         and deduction (or item thereof).

         (a) Where section 704(c) of the Code applies to Company property or
where Company property is revalued pursuant to paragraph (b)(2)(iv)(f) of
section 1.704-1 of the Income Tax Regulations, each Member's Capital Account
shall be adjusted in accordance with paragraph (b)(2)(iv)(g) of section 1.704-1
and paragraph (d)(2) of section 1.704-3 (in the case of remedial allocations) of
the Income Tax Regulations as to allocations to the Members of depreciation,
depletion, amortization and gain or loss, as computed for book purposes with
respect to such property.

         (b) When Company property is revalued pursuant to paragraph
(b)(2)(iv)(f) of section 1.704-1 of the Income Tax Regulations, or is
distributed in kind (whether in connection with a liquidation and dissolution or
otherwise), the Capital Accounts of the Members shall first be adjusted to
reflect the manner in which the unrealized income, gain, loss and deduction
inherent in such property (that has not been reflected in the Capital Account
previously) would be allocated among the Members if there were a taxable
disposition of such property for the fair market value of such property (taking
into account section 7701(g) of the Code) on the date of distribution.

         (c) The treasurer shall make or cause to be made all necessary
adjustments in each Member's Capital Account as required by the capital
accounting rules of section 704(b) of the Code and the regulations thereunder.

         7.7 Loans by Members to the Company. No Member shall be obligated to
lend money to the Company. No Member may lend money to the Company without the
consent of the Board of Directors. Any loan by a Member to the Company with the
required consent of the Board of Directors shall be separately entered on the
books of the Company as a loan to the Company and not as a Capital Contribution,
shall bear interest at such rate as may be agreed

                                -Page 24 of 48-
<PAGE>

upon by the lending Member and the Board of Directors, and shall be evidenced by
a promissory note duly executed by at least two (2) Directors on behalf of the
Company and delivered to the lending Member.

                                   ARTICLE 8

   Allocation of Profits and Losses; Distributions; Tax and Accounting Matters

         8.1 Allocations. Each Member's distributive share of the Company's
total income, gain, loss, deduction or credit (or items thereof), which total
shall be as shown on the annual federal income tax return prepared by or at the
direction of the treasurer or as finally determined by the United States
Internal Revenue Service or the courts, and as modified by the capital
accounting rules of section 704(b) of the Code and the Income Tax Regulations
thereunder, as implemented by Section 7.6 hereof, as applicable, shall be
determined as follows:

         (a) General Allocation. Except as otherwise provided in this Section
8.1, items of income, gain, loss, deduction and credit shall be allocated among
the Members proportionately in accordance with their Percentage Interests.

         (b) Limitation. Notwithstanding anything in Section 8.1(a) to the
contrary, items of loss and deduction allocated to any Member pursuant to this
Section 8.1 with respect to any taxable year shall not exceed the maximum amount
of such items that can be so allocated to such Member without causing such
Member to have a deficit balance in its Capital Account in excess of the amount
of such Member's obligation, if any, to restore such deficit Capital Account,
computed in accordance with the rules of section 1.704-1(b)(2)(ii)(d) of the
Income Tax Regulations (including such Member's share of "minimum gain" and
"partner nonrecourse debt minimum gain" as provided in sections 1.704-2(g) and
2(i)(5) of the Income Tax Regulations). Any such items of loss or deduction in
excess of the limitation set forth in the preceding sentence shall be allocated
to those Members who would not be subject to such limitation, proportionately in
accordance with their Percentage Interests.

         (c) Allocations With Respect to Property. Solely for tax purposes, in
determining each Member's allocable share of the taxable income or loss of the
Company, depreciation, depletion, amortization and gain or loss with respect to
any contributed property, or with respect to revalued property where the
Company's property is revalued pursuant to paragraph (b)(2)(iv)(f) of section
1.704-1 of the Income Tax Regulations, shall be allocated to the Members under
the traditional with curative method as provided under Section 1.704-3(c) of the
Income Tax Regulations.

         (d) Minimum Gain Chargeback. Notwithstanding anything to the contrary
in this Section 8.1, if there is a net decrease in "Minimum Gain" or "Partner
Nonrecourse Debt Minimum Gain" (as such terms are defined in sections 1.704-2(b)
and 1.704-2(i)(2) of the Income Tax Regulations) during a taxable period of the
Company, then each Member shall be allocated items of income and gain for such
year (and, if necessary, for subsequent years) in the manner provided in section
1.704-2 of the Income Tax Regulations.

                                -Page 25 of 48-
<PAGE>

         (e) Qualified Income Offset. Subject to the provisions of Section
8.1(d), but otherwise notwithstanding anything to the contrary in this Section
8.1, if any Member's Capital Account has a deficit balance in excess of such
Member's obligation to restore its Capital Account balance, computed in
accordance with the rules of paragraph (b)(2)(ii)(d) of section 1.704-1 of the
Income Tax Regulations, then sufficient amounts of income and gain (consisting
of a pro rata portion of each item of Company income, including gross income,
and gain for such year) shall be allocated to such Member in an amount and
manner sufficient to eliminate such deficit as quickly as possible.

         (f) Depreciation Recapture. Solely for tax purposes, a Member's share
of the Company's depreciation recapture recognized for tax purposes upon the
disposition of Company property shall be computed in the manner provided for in
sections 1.704-3(a)(11), 1.1245-1(e) and 1.1250-1(f) of the Income Tax
Regulations. The provisions of this Section 8.1(f) are intended to affect only
the character of the items of gain allocated by the Company to the Members. This
Section 8.1(f) shall not affect the aggregate amount of gain (including gain
characterized under this Section 8.1(f) as depreciation recapture) otherwise
allocable to a Member pursuant to this Section 8.1.

         (g) Change in Percentage Interests. Except as otherwise required by
law, if the Percentage Interests of the Members of the Company are changed
during any taxable year, all items to be allocated to the Members for such
entire taxable year shall be prorated on the basis of the portion of such
taxable year which precedes each such change and the portion of such taxable
year on and after each such change according to the number of days in each such
portion, and the items so allocated for each such portion shall be allocated to
the Members in the manner in which such items are allocated as provided in
Section 8.1(a) during each such portion of the taxable year in question.

         (h) Effect of Special Allocations on Subsequent Allocations. Any
special allocation pursuant to Sections 8.1(b) and (e) hereof shall be taken
into account in computing subsequent allocations of income and gain pursuant to
this Section 8.1 so that the net amount of all such allocations to each Member
shall, to the extent possible, be equal to the net amount that would have been
allocated to each such Member pursuant to the provisions of this Section 8.1 if
such special allocations had not occurred.

         (i) Nonrecourse Debt. Items of deduction and loss attributable to
"partner nonrecourse debt" within the meaning of section 1.704-2(b)(4) of the
Income Tax Regulations shall be allocated to the Members bearing the economic
risk of loss with respect to such debt in accordance with section 1.704-2(i)(1)
of the Income Tax Regulations. Items of deduction and loss attributable to
"nonrecourse debt" of the Company within the meaning of section 1.752-2 of the
Income Tax Regulations shall be allocated to the Members in proportion to their
respective Percentage Interests.

         (j) State and Local Items. Items of income, gain, loss, deduction,
credit and tax preference for state and local income tax purposes shall be
allocated to and among the Members in a manner consistent with the allocation of
such items for federal income tax purposes in accordance with the foregoing
provisions of this Section 8.1.

                                -Page 26 of 48-
<PAGE>

         (k) Special Loss Allocation. All items of loss and deduction relating
to the payments by the Company of the amounts described in Section 7.3(a)(i) and
(ii) shall be allocated to the Dow Member.

         8.2 Distributions.

         (a) Prior to liquidation, and subject to any restrictions under
applicable law (including, without limitation, any obligation to withhold and
remit any amounts to any governmental authority), all Net Cash Flow of the
Company shall be distributed to the Members within ninety (90) days of the end
of the fiscal year of the Company, unless the Board of Directors unanimously
votes to withhold such distribution. In addition, prior to liquidation, and
subject to any restrictions under applicable law, additional amounts (including
the proceeds of any indebtedness, to the extent not inconsistent with law and
any applicable documents relating to such indebtedness) may also be distributed,
with the unanimous approval of the Board of Directors. All such distributions
shall be made in the order and priority set forth in Section 8.2(c) hereof.

         (b) To the extent the Company is required by law to withhold or to make
tax payments on behalf of or with respect to any Member, the Company may
withhold such amounts and make such tax payments as so required. For purposes of
this Agreement, any such payments or withholdings shall be treated as a
distribution to the Member on behalf of whom the withholding or payment was
made.

         (c) The Company shall make all distributions to the Members in
proportion to the Members' relative Percentage Interests.

         8.3 Accounting Matters. The Board of Directors shall cause to be
maintained complete books and records accurately reflecting the accounts,
business and transactions of the Company on a calendar-year basis and using
GAAP, consistently applied, and such cash, accrual, or hybrid method of
accounting as in the judgment of the Board of Directors is most appropriate;
provided, however, that books and records with respect to the Company's Capital
Accounts and allocations of income, gain, loss, deduction or credit (or item
thereof) shall be kept under United States federal income tax accounting
principles as applied to partnerships.

         8.4 Tax Status and Returns.

         (a) Any provision hereof to the contrary notwithstanding, solely for
United States federal income tax purposes, each of the Members hereby recognizes
that the Company will be subject to all provisions of Subchapter K of Chapter 1
of Subtitle A of the Code; provided, however, the filing of U.S. Partnership
Returns of Income shall not be construed to extend the purposes of the Company
or expand the obligations or liabilities of the Members.

         (b) The treasurer shall prepare or cause to be prepared all tax returns
and statements, if any, that must be filed on behalf of the Company with any
taxing authority, and shall make timely filing thereof. Within ninety (90) days
after the end of each calendar year, the treasurer shall prepare or cause to be
prepared and delivered to each Member a report setting forth in

                                -Page 27 of 48-
<PAGE>

reasonable detail the information with respect to the Company during such
calendar year reasonably required to enable each Member to prepare its federal,
state and local income tax returns in accordance with applicable law then
prevailing. In addition, the treasurer will keep the Members informed on a
regular basis of the potential tax liability of the Company as it affects the
Company's financial statements.

         8.5 754 Election. In the event of a distribution of property to a
Member, the death of an individual Member or a transfer of any interest in the
Company permitted under the Act or this Agreement, the Company, upon the written
request of the transferor or transferee, shall file a timely election under
section 754 of the Code and the Income Tax Regulations thereunder to adjust the
basis of the Company's assets under section 734(b) or 743(b) of the Code and a
corresponding election under the applicable provisions of state and local law,
and the person making such request shall pay all costs incurred by the Company
in connection therewith, including reasonable attorneys' and accountants' fees.

         8.6 Tax Matters Partner. The Dow Member shall be the Company's "tax
matters partner" for purposes of subchapter C of chapter 63 of subtitle F of the
Code (dealing with the tax treatment of partnership items), for so long as it is
not the subject of a Bankruptcy Event and is otherwise entitled to act as the
tax matters partner under the Code. The tax matters partner may file a
designation of itself as such with the Internal Revenue Service. The tax matters
partner shall: (i) furnish to each Member affected by an audit of the Company
income tax returns a copy of each such notice or other communication received
from the Internal Revenue Service or applicable state authority; (ii) keep such
Member informed of any administrative or judicial proceeding, as required by
Section 6223(g) of the Code, and (iii) allow such Member an opportunity to
participate in all such administrative and judicial proceedings. The tax matters
partner shall take such action as may be reasonably necessary to constitute such
Member a "notice partner" within the meaning of Section 6231(a)(8) of the Code,
provided that such Member provides the tax matters partner with the information
necessary to take such action.

                                   ARTICLE 9

                            Restrictions on Transfer

         9.1 Transfer of Interests. No Member may sell, assign, transfer or
hypothecate ("Transfer") all of any part of its Membership Interest in the
Company, or any interest therein, except in accordance with the terms and
conditions set forth in this Article 9 or in Article 10.

         9.2 Consent Necessary to Transfer. Except as provided in Section 9.7
below or in Article 10, no Member may Transfer all or any part of such Member's
Membership Interest, or any interest therein, without the prior written approval
of all of the other Members of the Company ("Approval"). In addition, no Member
may Transfer all or any part of such Member's Membership Interest, or any
interest therein, unless such Transfer will not (and, upon request of the Board
of Directors, the transferring Member provides an opinion of counsel in form and
substance reasonably satisfactory to the Board of Directors that such Transfer
will not): (A) violate any applicable federal or state securities laws or
regulations; (B) subject the Company to registration as an investment company or
election as a "business development company" under

                                -Page 28 of 48-
<PAGE>

the Investment Company Act of 1940; (C) require any Member or any affiliate of a
Member to register as an investment adviser under the Investment Advisers Act of
1940; (D) violate any other federal, state or local laws; (E) effect a
termination of the Company under section 708 of the Code; (F) cause the Company
to be treated as an association taxable as a corporation for federal income tax
purposes; (G) cause the Company or any Member to be treated as an ERISA
fiduciary; or (H) otherwise violate this Agreement.

         9.3 Conditions of Transfer. In the event that the other Members have
granted their Approval to the proposed Transfer and the other requirements of
Section 9.2 are met, then one of the members of the Board of Directors shall
execute a written consent to such Transfer. Upon receipt of such written
consent, the transferring Member has a right to Transfer to the proposed
transferee the Membership Interest as to which the Approval has been obtained,
subject to Section 9.4 and the following conditions:

         (a) That such Transfer is consummated within sixty (60) days from the
date of such approval; and

         (b) That such Transfer is made strictly in accordance with the terms of
the proposed Transfer Approved by the other Members and the Board of Directors.

         9.4 Admission of Substitute Member. In the event that Approval of the
Transfer is obtained and the other requirements of Sections 9.2, 9.3 and this
Section 9.4 are met, then the transferee of the Member's Membership Interest
shall be entitled to be admitted to the Company as a substitute Member, and this
Agreement (and all exhibits hereto) shall be amended to reflect such admission,
provided that the following conditions are complied with:

         (a) The transferor and transferee shall have executed and acknowledged
such instruments as the Board of Directors may deem necessary or desirable to
effect the substitution;

         (b) The transferee acknowledges all of the terms and provisions of this
Agreement as the same may have been amended and agrees in writing to be bound by
the same;

         (c) The transferee reimburses the Company for all reasonable expenses
connected with such admission including, but not limited to, legal fees and
costs;

         (d) The filing with the Company, if required by the Board of Directors,
of such proof of the investment intent and financial status of the transferee as
the Board of Directors may request; and

         (e) The transfer complies with all applicable federal and state
securities laws.

         9.5 Effect of Transfer without Approval. Any purported Transfer of all
or any part of a Member's Membership Interest, or any interest therein, which is
not in compliance with this Article 9 shall be void and, except as provided for
in Section 9.6, below, shall be of no effect.

         9.6 Liability for Breach. Notwithstanding anything to the contrary in
this Article 9, any Member purporting to Transfer its Membership Interest, or
any part thereof, in violation of

                                -Page 29 of 48-
<PAGE>

this Article 9 shall be liable to the Company and the other Members for all
liabilities, obligations, damages, losses, costs and expenses (including
reasonable attorneys' fees and court costs) arising as a direct or consequential
result of such noncomplying transfer, attempted transfer or purported transfer,
including specifically, any additional cost or taxes created by non-compliance
with any of the requirements and conditions provided for in Section 9.2.

         9.7 Transfer Permitted Without Consent. Notwithstanding anything to the
contrary provided for herein, a Member may Transfer all but not less than all of
a Member's Membership Interest without Approval to the surviving entity in an
acquisition, merger, reorganization or sale of substantially all the assets of
the Member.

                                   ARTICLE 10

                        Term, Termination and Dissolution

         10.1 Term. The research and development program contemplated by the IE
R&D Agreement shall extend for the duration of the Research Term (as defined in
the IE R&D Agreement). The term of this Agreement shall commence on the date of
this Agreement and shall continue until this Agreement is terminated in
accordance with Section 10.2 or the Company is dissolved and liquidated in
accordance with Sections 10.3 and 10.4.

         10.2 Termination. Notwithstanding Section 10.1, the Company may be
terminated in accordance with this Section 10.2.

         (a) During the term of this Agreement (and as the sole method of
termination during the Initial Term and the [***] period thereafter if the
Research Term is extended under the IE R&D Agreement pursuant to Section
5.3(f)), this Agreement may be terminated or a Member's interest transferred to
a Third Party (as provided below) upon:

                  (i) A material breach of this Agreement by a Member (the
         "Breaching Member") which breach has not, after notice by the other
         Member ("Non-Breaching Member) and a reasonable opportunity for cure
         (the scope of such cure to be conclusively established by the binding
         arbitration provisions of this Agreement), been cured by such Member
         within the time provided for by the Arbitrator. If it is determined by
         the Arbitrator that a material breach did occur and a satisfactory
         remedy cannot be instituted in the opinion of the Non-Breaching Member,
         the Non-Breaching Member has the right to request dissolution of the
         Company pursuant to Section 10.3; or

                  (ii) The occurrence of a Bankruptcy Event with respect to a
         Member ("Bankrupt Member"). In this event, the other Member ("Solvent
         Member") shall have the right to purchase the interest of the Bankrupt
         Member at a negotiated price. If the parties cannot agree to a
         negotiated price, an independent Third Party appraiser selected by the
         Solvent Member, and reasonably acceptable to the Bankrupt Member, can

*CONFIDENTIAL TREATMENT REQUESTED

                                -Page 30 of 48-
<PAGE>

         determine the fair market value purchase price to be paid to the
         Bankrupt Member. The Solvent Member shall also have the option to find
         a Third Party to purchase the entire Company or the Bankrupt Member's
         interest at a negotiated price or a fair market value price determined
         by an independent Third Party appraiser selected by the Solvent Member,
         and reasonably acceptable to the Bankrupt Member, or to dissolve the
         Company pursuant to Section 10.3; and

                  (iii) The occurrence of a Change of Control with respect to a
         Member ("Change of Control Member"). The Change of Control Member will
         provide written notice to the other Member ("Nonaffected Member") of a
         proposed Change of Control. The Nonaffected Member will have sixty (60)
         days after the date of such notice to provide the Change of Control
         Member written notice that it wishes to purchase the interest of the
         Change of Control Member at a negotiated price or at a fair market
         value price as determined by an independent third party appraiser
         selected by the Nonaffected Member, and reasonably acceptable to the
         Change of Control Member or dissolve the Company pursuant to Section
         10.3. If the Nonaffected Member does not provide such written notice to
         the Change of Control Member within such sixty (60) day period, then
         the Nonaffected Member will have no further right under this Section
         10.2(a)(iii), and this Agreement will remain binding upon the
         Nonaffected Member and the Change of Control Member and any
         successor-in-interest to such Change of Control Member in such Change
         of Control.

         (b) During the term of this Agreement, but only after the Initial Term
and the [***] period thereafter if the Research Term is extended under the IE
R&D Agreement pursuant to Section 5.3(f), each Member shall have the right to
initiate the following procedures. This procedure is only available so long as
there are only two (2) Members. The Member initiating these procedures (the
"Selling Member") shall give the other Member (the "Other Member") written
notice that it plans to sell its Membership Interest in the Company, including
the proposed price for such Membership Interest and how such price was
determined. For the sixty (60) day period following such written notice, the
Other Member shall have the first right to purchase the Selling Member's
Membership Interest at the price and on such other principal terms specified in
the notice or at such price and on such other principal terms as are negotiated
in good faith by the Members during such sixty (60) day period. If the Members
reach agreement on price and such other principal terms during such sixty (60)
day period, then they shall proceed to enter into an agreement providing for the
sale of the Selling Member's Membership Interest to the Other Member at the
agreed upon price and principal terms within sixty (60) days after reaching such
agreement. If the Members do not reach agreement on price and such other
principal terms during such sixty (60) day period or the Other Member provides
written notice to the Selling Member that it is not interested in purchasing the
Selling Member's Membership Interest during such period, then the Selling Member
will thereafter be free to sell its Membership Interest to any Third Party at a
price that is no less than the price last offered to the Other Member, and the
Other Member will be deemed to have approved of the Transfer of the Selling
Member's Membership Interest.

*CONFIDENTIAL TREATMENT REQUESTED

                                -Page 31 of 48-
<PAGE>

         10.3 Dissolution. Upon a decision to dissolve the Company by i) a
written consent of the Members holding at least [***] of all the Percentage
Interests of the Company or ii) a decision by one Member to dissolve pursuant to
Section 10.2(a), the Company shall be liquidated pursuant to Section 10.4
through 10.8.

         10.4 Liquidation.

         (a) Upon the occurrence of an event of dissolution as defined in the
Act or in Section 10.3 of this Agreement, the Company shall cease to engage in
any further business, except to the extent necessary to perform existing
obligations, and shall wind up its affairs and liquidate its assets. The Board
of Directors, or if there be no Directors then in office, the Members, shall
appoint a liquidator (who may, but need not, be a Member) who shall have sole
authority and control over the winding up and liquidation of the Company's
business and affairs and shall diligently pursue the winding up and liquidation
of the Company. As soon as practicable after his appointment, the liquidator
shall cause to be filed a statement of intent to dissolve as required by section
18-203 of the Act.

         (b) During the course of liquidation, the Members shall continue to
share profits and losses as provided in Section 8.1 of this Agreement, but there
shall be no cash distributions to the Members until the Distribution Date (as
defined in Section 10.5).

         10.5 Liabilities. Liquidation shall continue until the Company's
affairs are in such condition that there can be a final accounting, showing that
all fixed or liquidated obligations and liabilities of the Company are satisfied
or can be adequately provided for under this Agreement. The assumption or
guarantee in good faith by one or more financially responsible persons shall be
deemed to be an adequate means of providing for such obligations and
liabilities. When the liquidator has determined that there can be a final
accounting, the liquidator shall establish a date (not to be later than the end
of the taxable year of the liquidation, i.e., the time at which the Company
ceases to be a going concern as provided in section 1.704-1(b)(2)(ii)(g) of the
Income Tax Regulations, or, if later, ninety (90) days after the date of such
liquidation) for the distribution of the proceeds of liquidation of the Company
(the "Distribution Date"). The net proceeds of liquidation of the Company shall
be distributed to the Members as provided in Section 10.6 hereof not later than
the Distribution Date.

         10.6 Settling of Accounts. Subject to section 18-804 of the Act, upon
the dissolution and liquidation of the Company, the proceeds of liquidation
shall be applied as follows: (a) first, to pay all expenses of liquidation and
winding up; (b) second, to pay all debts, obligations and liabilities of the
Company, in the order of priority as provided by law, other than debts owing to
the Members or on account of Members' contributions; (c) third, to pay all debts
of the Company owing to a Member; and (d) to establish reasonable reserves for
any remaining contingent or unforeseen liabilities of the Company not otherwise
provided for, which reserves shall be maintained by the liquidator on behalf of
the Company in a regular interest-bearing trust account for a reasonable period
of time as determined by the liquidator. If any excess funds remain in such
reserves at the end of such reasonable time, then such remaining funds shall be
distributed by the Company to the Members pursuant to Section 10.7 hereof.

*CONFIDENTIAL TREATMENT REQUESTED

                                -Page 32 of 48-
<PAGE>

         10.7 Distribution of Proceeds. Subject to section 18-804 of the Act,
upon final liquidation of the Company but not later than the Distribution Date,
the net proceeds of liquidation remaining following the settling of accounts in
accordance with Section 10.6 hereof shall be distributed to the Members in
proportion of their respective Percentage Interests.

         10.8 Certificate of Cancellation. Upon dissolution and liquidation of
the Company, the liquidator shall cause to be executed and filed with the
Secretary of State of the State of Delaware, a certificate of cancellation in
accordance with section 18-203 of the Act.

                                   ARTICLE 11

                     Limitation of Liability/Indemnification

         11.1 Limited Liability. Except as expressly provided herein, neither
the Diversa Member nor the Dow Member will be liable to the other Member or to
the Company with respect to any subject matter of this Agreement under any
contract, negligence, strict liability or other legal or equitable theory for
(i) any special, indirect, incidental, consequential or punitive damages or lost
profits or (ii) cost of procurement of substitute goods, technology or services.

         11.2 Indemnification between the Members. Neither Member shall
indemnify the other Member or its Affiliates, or respective officers, directors,
employees and agents and its respective successors, heirs and assigns
("Indemnitees") for any loss, claim, damage, liability or action except to the
extent resulting from its respective gross negligence or willful wrongdoing.
This paragraph does not limit either Member's other remedies available to it
under the laws.

         (a) Procedure. An Indemnitee that intends to claim indemnification
under this Article 11.2 shall promptly notify the other Member (the
"Indemnitor") in writing of any loss, claim, damage, liability or action in
respect of which the Indemnitee intends to claim such indemnification, and the
Indemnitor shall have the right to participate in, and, to the extent the
Indemnitor so desires, to assume the defense thereof with counsel of its own
choice.

         (b) Limitation of Indemnity. The indemnity agreement in this Article
11.2 shall not apply to amounts paid in settlement of any loss, claim, damage,
liability or action if such settlement is made without the consent of the
Indemnitor, which consent shall not be withheld unreasonably. The failure to
deliver written notice to the Indemnitor within a reasonable time after the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such Indemnitor of any liability to the Indemnitee under
this Article 11.2.

         (c) Cooperation. At the Indemnitor's request, the Indemnitee under this
Article 11.2, and its employees and agents, shall cooperate fully with the
Indemnitor and its legal representatives in the investigation and defense of any
action, claim or liability covered by this indemnification and provide full
information with respect thereto.

         11.3 Indemnification: Proceeding Other Than by Company. The Company
will 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

                                -Page 33 of 48-
<PAGE>

investigative, except an action by or in the right of the Company, by reason of
the fact that he is or was a Director, Member, officer, employee or agent of the
Company, or is or was serving at the request of the Company as a manager,
member, director, officer, employee or agent of another limited liability
company, 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 him in connection with the
action, suit or proceeding if he acted in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, does not, of itself, create a
presumption that the person 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, and that, with respect to any criminal action or proceeding, he had
reasonable cause to believe that his conduct was unlawful.

         11.4 Indemnification: Proceeding by Company. The Company will 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
Company to procure a judgment in its favor by reason of the fact that he is or
was a Director, Member, officer, employee or agent of the Company, or is or was
serving at the request of the Company as a manager, member, director, officer,
employee or agent of another limited liability company, corporation,
partnership, joint venture, trust or other enterprise against expenses,
including amounts paid in settlement and attorneys' fees actually and reasonably
incurred by him in connection with the defense or settlement of the action or
suit if he acted in good faith and in a manner which he reasonably believed to
be in or not opposed to the best interests of the Company. Indemnification may
not be made for any claim, issue or matter as to which such a person has been
adjudged by a court of competent jurisdiction, after exhaustion of all appeals
therefrom, to be liable to the Company or for amounts paid in settlement to the
Company, unless and only to the extent that the court in which the action or
suit was brought or other court of competent jurisdiction determines upon
application that in view of all the circumstances of the case, the person is
fairly and reasonably entitled to indemnity for such expenses as the court deems
proper.

         11.5 Mandatory Advancement of Expenses. The expenses of Directors,
Members and officers incurred in defending a civil or criminal action, suit or
proceeding must be paid by the Company as they are incurred and in advance of
the final disposition of the action, suit or proceeding, upon receipt of an
undertaking by or on behalf of the Director, Member or officer to repay the
amount if it is ultimately determined by a court of competent jurisdiction that
he is not entitled to be indemnified by the Company. The provisions of this
Section 11.5 do not affect any rights to advancement of expenses to which
personnel of the Company other than Directors, Members or officers may be
entitled under any contract or otherwise.

         11.6 Effect and Continuation. The indemnification and advancement of
expenses authorized in or ordered by a court pursuant to Section 11.3 to Section
11.5, inclusive:

         (a) Does not exclude any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under the Certificate
or any limited liability company

                                -Page 34 of 48-
<PAGE>

agreement, vote of Members or disinterested Directors, if any, or otherwise, for
either an action in his official capacity or an action in another capacity while
holding his office, except that indemnification, unless ordered by a court
pursuant to Section 11.4 or for the advancement of expenses made pursuant to
Section 11.5, may not be made to or on behalf of any Member, Director or officer
if a final adjudication establishes that his acts or omissions involved
intentional misconduct, fraud or a knowing violation of the law and was material
to the cause of action.

         (b) Continues for a person who has ceased to be a Member, Director,
officer, employee or agent and inures to the benefit of his heirs, executors and
administrators.

         11.7 Insurance and Other Financial Arrangements.

         (a) The Company may purchase and maintain insurance or make other
financial arrangements on behalf of any person who is or was a Member, Director,
officer, employee or agent of the Company, or is or was serving at the request
of the Company as a manager, Member, director, officer, employee or agent of
another limited liability company, corporation, partnership, joint venture,
trust or other enterprise for any liability asserted against him or her and
liability and expenses incurred by him or her in his or her capacity as a
Director, member, director, officer, employee or agent, or arising out of his or
her status as such, whether or not the Company has the authority to indemnify
him or her against such liability and expenses.

         (b) The other financial arrangements made by the Company pursuant to
Section 11.7(a) may include:

                  (i) The creation of a trust fund;

                  (ii) The establishment of a program of self-insurance;

                  (iii) The securing of its obligation of indemnification by
         granting a security interest or other lien on any assets of the
         Company; or

                  (iv) The establishment of a letter of credit, guaranty or
         surety.

         No financial arrangement made pursuant to this Section 11.7(b) may
provide protection for a person adjudged by a court of competent jurisdiction,
after exhaustion of all appeals therefrom, to be liable for intentional
misconduct, fraud or a knowing violation of law, except with respect to the
advancement of expenses or indemnification ordered by a court.

         (c) In the absence of fraud:

                  (i) The decision of the Company as to the propriety of the
         terms and conditions of any insurance or other financial arrangement
         made pursuant to this Section 11.7 and the choice of the person to
         provide the insurance or other financial arrangement is conclusive; and

                  (ii) The insurance or other financial arrangement:

                                -Page 35 of 48-
<PAGE>

                           (A) Is not void or voidable; and

                           (B) Does not subject any Director or Member approving
                  it to personal liability for his action,

even if a Director or Member approving the insurance or other financial
arrangement is a beneficiary of the insurance or other financial arrangement.

         11.8 Notice of Indemnification and Advancement. Any indemnification of,
or advancement of expenses to, a Director, Member or officer in accordance with
this Article 11, if arising out of a proceeding by or on behalf of the Company,
shall be reported in writing to the Members with or before the notice of the
next Members' meeting.

         11.9 Repeal or Modification. Any repeal or modification of this Article
11 by the Members of the Company shall not adversely affect any right of a
Director, Member or officer of the Company existing hereunder at the time of
such repeal or modification.

                                   ARTICLE 12

             Inspection of Company Records; Annual and Other Reports

         12.1 Records to be Kept. The Company shall keep at its registered
office:

         (a) A current list of the full name and last known business, residence
or mailing address of each Member and Director separately identifying the
Members in alphabetical order and the Directors, if any, in alphabetical order;

         (b) A copy of the filed Certificate and all amendments thereto,
together with executed copies of any powers of attorney pursuant to which any
document has been executed;

         (c) Copies of this Agreement, and all amendments hereto;

         (d) Copies of the Company's federal income tax returns and reports, if
any, for the three most recent years; and

         (e) Copies of any financial statements of the Company for the three
most recent years.

         12.2 Inspection of Company Records. The accounting books and records,
the record of Members, and minutes of proceedings of the Members of this Company
set forth in Section 12.1, shall be open to inspection upon the reasonable
request of any Member at any reasonable time during usual business hours, for a
purpose reasonably related to such Member's interest as a Member. Such
inspection by a Member may be made in person or by agent or attorney, and the
right of inspection includes the right to copy and make extracts.

                                -Page 36 of 48-
<PAGE>

         12.3 Annual, Quarterly and Monthly Reports.

         (a) The Board of Directors shall promptly, and in any event within ten
(10) working days after the end of each month, eight (8) working days after the
end of the first three fiscal quarters and twelve (12) working days after each
fiscal year end deliver or mail to the Members, the monthly, quarterly and
annual, respectively, financial statements of the Company prepared in accordance
with GAAP, consistently applied.

         (b) The income statements and balance sheets referred to in this
Section 12.3 shall be accompanied by the report thereon, if any, of any
independent accountants engaged by the Company or the certificate of an
authorized officer of the Company that such financial statements were prepared
without audit from the books and records of the Company. In addition, the
independent accountants of the Diversa Member shall be entitled to review the
financial statements of the Company and audit the books and records of the
Company for so long as the Diversa Member has an obligation to include the
Company's financial statements with the Diversa Member's financial statements.

                                   ARTICLE 13

                              Defaults and Remedies

         13.1 Defaults. If a Member materially defaults in the performance of
its obligations under this Agreement, and such default is not cured within ten
(10) days after notice of such default is given by a Director to the defaulting
Member for a default that can be cured by the payment of money, or within thirty
(30) days after notice of such default is given by a Director to the defaulting
Member for any other default, then the non-defaulting Members shall have the
rights and remedies described in Section 13.2 hereunder in respect of the
default.

         13.2 Remedies. If a Member fails to perform its obligations under this
Agreement, any other Member shall have, in addition to any rights and remedies
provided hereunder, all such rights and remedies as are provided at law or in
equity.

         13.3 No Waiver. No consent or waiver, express or implied, by a Member
to or of any breach or default by another Member in the performance by such
other Member of its obligations under this Agreement shall constitute a consent
to or waiver of any similar breach or default by any other Member. Failure by a
Member to complain of any act or omission to act by another Member, or to
declare such other Member in default, irrespective of how long such failure
continues, shall not constitute a waiver by such Member of its rights under this
Agreement.

                                -Page 37 of 48-
<PAGE>

                                   ARTICLE 14

                          Certain Operating Provisions

         14.1 Budget and Forecast.

         (a) At least sixty (60) days prior to the beginning of each year during
the term of the Agreement, the president shall cause to be prepared and
submitted to the Board of Directors for their approval a proposed Budget for the
subsequent year; provided however, that the Budget for the first year shall be
prepared and submitted within sixty (60) days following the date of this
Agreement. The president shall also provide the Board of Directors with a
comparison of the mid-year results of the Company's operations versus the Budget
for such six-month period. The president shall implement the approved Budget and
shall be authorized, without the need for further approval by the Members, to
make the expenditures and incur the obligations provided for in such approved
Budget. The Board of Directors may either approve the Budget as provided for
herein, or request that the president cause it to be revised for the Board of
Director's subsequent review and approval. In the event that the Budget for any
year is not approved by the Board of Directors, after subsequent revisions by
the president, then the Budget for the preceding year (exclusive of any items
relating to capital expenditures) shall apply during the subsequent fiscal year;
provided however, that the Board of Directors may amend such Budget to either
increase, reduce or eliminate any specific line item set forth in the preceding
year's budget.

         (b) At least sixty (60) days prior to the beginning of the each year
during the term of the Agreement, the president shall cause to be prepared and
submitted to the Board of Directors for their approval a proposed 5-year
forecast of the Approved Business, including estimates of revenues, expense,
areas of potential research and development, marketing or other plans for
Company products, and an assessment of competitive risks and opportunities for
the Company, all in a format approved by the Board of Directors (the
"Forecast"); provided however, that with respect to the first year of this
Agreement, such Forecast shall be prepared not later than ninety (90) days after
the Effective Date. The Board of Directors may either approve the Forecast as
provided for herein, or request that the president cause it to be revised for
the Board of Director's subsequent review and approval. The Forecast shall have
no binding or preclusive effect upon the Company or the Board of Directors, and
shall not constitute a grant of authority to any Person, including, without
limitation, any officer of the Company, to undertake any action described
therein or expend any funds estimated therein.

         14.2 Project Approval Process

         (a) At any time during the year, the president may propose or cause to
be proposed to the Board of Directors that the Company undertake research and
development, marketing or other activities that are within the scope of the
Approved Business. Any such proposal may also be included in the proposed Budget
for the Company's subsequent year. All such proposals shall be in the format
required by the Board of Directors. An example of such format, approved by the
Board of Directors, is attached hereto as Exhibit B. Any such proposal shall set
forth the material terms and conditions of the proposed project, including,
without limitation, the estimated capital expenditures and other estimated
expenses of the project, capital contribution

                                -Page 38 of 48-
<PAGE>

requirements for the project, income and cash flow projections, whether the
project is anticipated to require any arrangements or agreements pursuant to the
Preferred Supplier provisions of Section 14.3 hereof, a competitive market
analysis of the results of the project, an evaluation of the technical
feasibility of the proposed project, an evaluation of possible intellectual
property bars, an evaluation of environmental, health and safety risks, a high
level research plan, and the number of personnel anticipated to be required to
staff the project (and, if any new personnel are required, the number and type
of personnel so required).

         (b) At the next regularly scheduled meeting of the Board of Directors
which is at least thirty (30) days after the date upon which such proposal has
been provided to the Directors (and except if such proposal is contained within
a proposed budget, in which event the procedures relating to Budget approvals
shall apply), the Board of Directors shall determine whether to proceed with
such project or shall either: (i) terminate further consideration of such
project by the Company; or (ii) request the president, or his or her designee,
to modify the proposed project and submit it for reconsideration by the Board
within thirty (30) days. If such proposed project has been approved by the Board
of Directors (as so approved, an "Approved Project"), then the president shall
thereupon be given the authority to implement such Project on the terms and
conditions specified in the proposal relating to such Project in accord with
respective agreements in Schedules 5, 6 and 10; provided however, that at any
time thereafter, the Board of Directors may, by appropriate vote, amend, modify
or terminate all or any part of such Project not yet implemented by the Company
in accord with respective agreements in Schedules 5, 6 and 10.

         (c) The initial Approved Projects to be undertaken by the Company are
attached hereto as Schedule 5.

         (d) All Approved Projects conducted for research in the Approved Fields
by the Preferred Supplier shall be performed in accordance with the IE R&D
Agreement, attached as Schedule 5. All manufacturing Approved Projects in the
Approved Fields by the Preferred Supplier shall be performed in accordance with
the Contract Manufacturing Agreement, attached as Schedule 6. All development
Approved Projects in the Approved Fields by the Preferred Supplier shall be
performed in accordance with the Industrial Enzymes Development Agreement,
attached as Schedule 10. All discussions and transfer of materials between the
Company and Members shall be in accordance with the CDA, attached as Schedule 7.

         14.3 Preferred Supplier. In the event that the Company approves any
Approved Project which anticipates the use of one or more Preferred Suppliers,
or in any other situation in which the Company requires goods, services or other
capabilities within a Preferred Supplier Area, then in such case the Company
will notify the Applicable Preferred Supplier for such Preferred Supplier Area
of the Company's desire for such goods, services or other capabilities, and
shall request that the Preferred Supplier offer to provide such goods, services
or other capabilities to the Company; provided however, that [***].

*CONFIDENTIAL TREATMENT REQUESTED

                                -Page 39 of 48-
<PAGE>

[***] The Preferred Supplier shall thereupon prepare a proposal in accord with
Schedule 5, 6 or 10 to provide such goods, services or other capabilities, which
proposal shall be on terms which are, in the aggregate, at least as favorable to
the Company as those provided by the Preferred Supplier to unrelated Third
Parties with whom such Preferred Supplier does business for such goods, services
and capabilities; provided however, [***], the Preferred Supplier shall offer to
provide such goods, services or other capabilities on the terms provided in
Schedule 5, 6 or 10, as applicable. [***]. The Company and the Preferred
Supplier shall decide whether or not to move forward with the Approved Project
and jointly determine the specific roles and activities of the Preferred
Supplier. Upon agreement to move forward with the Approved Project, the parties
shall amend Schedule 5, 6 or 10 to reflect the addition of that Approved
Project.

         14.4 Services. The Dow Member and the Diversa Member agree to provide
services to the Company to be listed on Schedule 8 under the terms and
conditions of a Services Agreement, to be attached as Schedule 9, to be entered
into between the Members and the Company.

*CONFIDENTIAL TREATMENT REQUESTED

                                -Page 40 of 48-
<PAGE>

                                   ARTICLE 15

                               DISPUTE RESOLUTION

         15.1 Informal Dispute Resolution.

         (a) Senior Officials. The Members recognize that a bona fide dispute as
to certain matters may from time to time arise under this Agreement which
relates to either Member's rights or obligations. In the event of the occurrence
of such a dispute, either Member may, by written notice to the other Member,
have such dispute referred to the Chief Executive Officer of the Diversa Member
and the Dow Member executive in charge of industrial biotechnology, or their
successors or counterparts, for resolution by good faith negotiations within 60
days after such notice is received at a mutually convenient location or by
telephonic or video conferencing.

         (b) Interim Conduct. If the Members are unable to reach agreement with
respect to a dispute between the Members pursuant to Section 15.1.(a), then such
dispute shall be resolved as described in Section 15.2 below.

         15.2 Arbitration. Any dispute under this Agreement, except one that
arises with respect to determination of the projects or other disputed matters,
which is not settled by mutual consent pursuant to Section 15.1, shall be
finally settled by binding arbitration, conducted in accordance with the
Commercial Arbitration Rules of the American Arbitration Association (or such
rules as are appropriate to the dispute) by three independent, neutral
arbitrators having at least 15 years of experience in the areas of the contested
issues and appointed in accordance with said rules which will involve each
Member selecting one arbitrator and the two arbitrators selecting a third. The
procedures or rules for the arbitration may be modified by mutual consent of the
Members, including having mediation rather than an arbitration conducted. Any
arbitration shall be in English held in Chicago, Illinois. The arbitrators shall
determine what discovery shall be permitted, consistent with the goal of
limiting the cost and time that the Members must expend for discovery; provided,
however, that the arbitrators shall permit such discovery, as they deem
necessary to permit an equitable resolution of the dispute. Any written evidence
originally in a language other than English shall be submitted in English
translation accompanied by the original or a true copy thereof. Except as
otherwise expressly provided in this Agreement, the costs of the arbitration,
including administrative and arbitrator fees, shall be shared equally by the
Members and each Member shall bear its own costs and attorneys' and witness'
fees incurred in connection with the arbitration.

         (a) A disputed performance or suspended performance(s) pending the
resolution of the arbitration must be completed within a reasonable time period
following the final decision of the arbitrators.

         (b) Any arbitration subject to this Article 15 shall be completed
within one year from the filing of notice of a request for such arbitration and
a written decision with reasons therefore provided to the Members. Any decision
shall be deemed confidential and not disclosed to any Third Party. Should a
Member believe that reporting the decision is required by governmental
regulation, then the Members shall mutually agree as to the content of such
report.

                                -Page 41 of 48-
<PAGE>

         (c) Any decision which requires a monetary payment shall require such
payment to be payable in United States dollars, free of any tax or other
deduction.

         (d) The Members agree that the decision shall be the sole, exclusive
and binding remedy between them regarding any and all disputes, controversies,
claims and counterclaims presented to the arbitrators. If a decision is not
complied with by a Member, then any award or decision may be entered in a court
of competent jurisdiction for a judicial recognition of the decision and an
order of enforcement.

                                   ARTICLE 16

                                 CONFIDENTIALITY

         16.1 Confidentiality.

         (a) General. The confidentiality provisions of the CDA will apply to
Confidential Information (as defined therein) of the Members and the Company,
whether provided under this Agreement or other agreements to which the Diversa
Member, the Dow Member and/or the Company are parties. Additionally, the
Confidential Information exchanged specifically under this Agreement shall also
be in accord with the requirements stated in the above definition of
Confidential Information.

         (b) Restricted Access/Return of Information.

                  (i) Disclosure of a Member's Confidential Information to any
         of the officers, employees, consultants or agents of the other Member
         shall be made only if and to the extent necessary to carry out rights
         and responsibilities under this Agreement, shall be limited to the
         maximum extent possible, consistent with such rights and
         responsibilities, and shall only be made to persons who are bound to
         maintain the confidentiality thereof and not to use such Confidential
         Information except as expressly permitted by this Agreement.

                  (ii) Each Member shall use at least the same standard of care,
         but no less than a reasonable standard of care for this industry, as it
         uses to protect its own Confidential Information to ensure that its
         Affiliates, employees, agents, consultants and other representatives do
         not disclose or make any unauthorized use of Confidential Information
         of another Member. Each Member shall promptly notify the other Member
         of any unauthorized use or disclosure of Confidential Information of
         another Member.

                  (iii) Within 60 days following termination or expiration of
         this Agreement, each Member will return to the other Member, or
         destroy, upon the written request of the concerned Member, all
         Confidential Information disclosed to it by the concerned Member
         pursuant to this Agreement, including all copies and extracts of
         documents; provided that a Member may retain Confidential Information
         of another Member relating to any license or right to use Intellectual
         Property that survives such termination and one copy of all other
         Confidential

                                -Page 42 of 48-
<PAGE>

         Information may be retained in confidential and inactive legal archives
         solely for the purpose of establishing the contents thereof and to
         determine the continuing obligations of each Member.

                  (c) Employee Confidentiality Agreements. The Diversa Member
         and the Dow Member each represent that all of its employees and any
         consultants to such Member who shall have access to Confidential
         Information of another Member are bound by agreements to maintain such
         information in confidence and not to use such information except as
         expressly permitted herein. Each Member agrees to enforce
         confidentiality obligations by which its employees and consultants are
         bound.

                                   ARTICLE 17

                                  Miscellaneous

         17.1 Technology Fee Payments. In partial consideration of the Diversa
Member agreeing to enter into and conduct research and development during the
initial [***] term of the IE R&D Agreement, the Dow Member shall make the
following payments to the Diversa Member (collectively the "Technology Fee
Payments"): (i) [***] within [***] days of the date of this Agreement (the
"Exclusivity Fee Payment"); (ii) [***] within [***] days of the date upon which
the Company [***]; (iii) [***] within [***] days of the date upon which the
Company [***]; (iv) [***] within [***] days of the date of this Agreement (the
"Initial Technology Development Fee Payment"); and (v) [***] on each of the
[***] subsequent anniversaries of the date of the IE R&D Agreement
(collectively, the "Subsequent Technology development Fee Payments") (and the
Diversa Member will provide an invoice to the Dow Member with regard to each
such payment no later than [***] days prior to each such anniversary).

         17.2 Dow Development Costs. [***].

         17.3 [***]

*CONFIDENTIAL TREATMENT REQUESTED

                                -Page 43 of 48-
<PAGE>

[***].

         17.4 Infringement Claims. In the event that either Member receives a
written notice of an allegation of possible patent infringement from a third
party or determines that there is such possible infringement based on the use of
an enzyme, material or licensed enzyme, such Member shall, within thirty (30)
days, notify the other Member in writing and provide an explanation of the
circumstances.

         17.5 Amendments.(a) Subject to any contrary provisions of the Act, this
Agreement may be amended only by the affirmative vote of all of the Members. Any
such amendment shall be in writing, duly executed by all the Members.

         (b) Subject to any contrary provisions of the Act, the Certificate may
only be amended by the affirmative vote of all of the Members. Any such
amendment shall be in writing, and shall be executed and filed in accordance
with section 18-202 of the Act.

         17.6 Nature of Membership Interest; Agreement Is Binding Upon
Successors. The interests of Members in the Company constitute their personal
estate. In the event of the death or legal disability of any Member, the
executor, trustee or administrator of such Member shall be bound by the
provisions of this Agreement, including without limitation Sections 9.1 and
10.2. In the case of a Member which is not a natural person, the successor of
such Member shall be bound by the provisions of this Agreement, including
without limitation Sections 9.1 and 10.2.

         17.7 Representation of Shares of Companies or Interests in Other
Entities. Any Director, the president, any vice president or the secretary or
any assistant secretary of this Company is authorized to vote, represent and
exercise on behalf of this Company all rights incident to any and all shares of
any other company or companies, or any interests in any other entity, standing
in the name of this Company. The authority herein granted to said Directors or
officers to vote or represent on behalf of this Company any and all shares held
by this Company in any other company or companies, or any interests in any other
entity, may be exercised either by such Directors or officers in person or by
any other person authorized so to do by proxy or power of attorney duly executed
by said Directors or officers.

         In the event of any inconsistency in the actions taken by a Director,
the president, vice president, secretary, assistant secretary, treasurer or
assistant treasurer with respect to matters described in this Section 17.7, the
decision or action of the chairman shall prevail over the decision or action of
a Director, and the decision or action of a Director shall prevail over any
decision or action of an officer (other than an officer who is also a Director),
and the decision or action of the president shall prevail over that of any other
officer.

*CONFIDENTIAL TREATMENT REQUESTED

                                -Page 44 of 48-
<PAGE>

         17.8 Seal. The Members or Board of Directors may adopt a seal of the
Company in such form as the Members or the Board of Directors (as the case may
be) shall decide.

         17.9 Mutual Representations. The Dow Member and the Diversa Member each
represents and warrants as follows:

         (a) It is a corporation duly organized, validly existing and is in good
standing under the laws of the jurisdiction of its incorporation, is qualified
to do business and in good standing as a foreign corporation in each
jurisdiction in which the performance of its obligations hereunder requires such
qualification and has all requisite power and authority, corporate or otherwise,
to conduct its business as now being conducted, to own, lease and operate its
properties and to execute, deliver and perform this Agreement.

         (b) The execution, delivery and performance by it of this Agreement
have been duly authorized by all necessary corporate action and do not and will
not: (a) require any consent or approval of its stockholders or (b) violate any
provision of any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award presently in effect having applicability to it or
any provision of its charter documents.

         (c) This Agreement is a legal, valid and binding obligation of it,
enforceable against it in accordance with its terms and conditions.

         17.10 Non-Competition. Except as permitted by Section 3.8(b), the Dow
Member, the Diversa Member and their Affiliates agree [***] during the period in
which they are a Member. In addition, except as permitted by Section 3.8(b), (a)
the Breaching Member if this Agreement is terminated under Section 10.2(a)(i),
(b) the Change of Control Member if this Agreement is terminated under Section
10.2(a)(iii), or (c) the Selling Member in the event of a sale of the Selling
Member's Membership Interest under Section 10.2(b), together with such Member's
Affiliates, agree [***], during the [***] period following termination of this
Agreement. The period during which a Member is subject to the limitations
described in the preceding sentences is referred to herein as the "Non-
competition Period." Regardless of the percentage control or ownership, except
as permitted by Section 3.8(b), the Dow Member and the Diversa Member agree
[***]. In addition, [***]. Notwithstanding the foregoing, in no event shall the
Dow Member license to third parties

*CONFIDENTIAL TREATMENT REQUESTED

                                -Page 45 of 48-
<PAGE>

Confidential Information or technology of the Company or the Diversa Member,
except as specifically permitted by the Industrial Enzymes Development Agreement
or the Contract Manufacturing Agreement. However, the Company may license to
third parties in accord with the LLC License.

         17.11 Entire Agreement. This Agreement and the exhibits and schedules
hereto and any side letter agreements entered into by the Members as of the date
of this Agreement relating to potential termination of this Agreement,
constitute the entire agreement between the Members with respect to the subject
matter hereof, and supersede all prior and contemporaneous agreements,
representations, and understandings of the parties. No party hereto shall be
liable or bound to the other in any manner by any warranties, representations or
covenants with respect to the subject matter hereof except as specifically set
forth herein.

         17.12 Third Parties. Nothing in this Agreement, express or implied, is
intended to confer upon any party, other than the parties hereto, and their
respective successors and permitted assigns, any rights, remedies, obligations
or liabilities under or by reason of this Agreement, except as expressly
provided herein. In addition, neither Member can assign this Agreement or the
rights and obligations thereunder to another party without the prior written
consent of the other Member as more further described in Article 9.

         17.13 Governing Law. This Agreement shall be governed by and construed
under the substantive laws of the State of Delaware, without regard to Delaware
choice of law provisions.

         17.14 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, and shall become
effective when there exist copies hereof which, when taken together, bear the
authorized signatures of each of the parties hereto. Only one such counterpart
signed by the party against whom enforceability is sought needs to be produced
to evidence the existence of this Agreement.

         17.15 Titles and Subtitles; Form of Pronouns; Construction and
Definitions. The titles of the sections and paragraphs of this Agreement are for
convenience only and are not to be considered in construing this Agreement. All
pronouns used in this Agreement shall be deemed to include masculine, feminine
and neuter forms, the singular number includes the plural and the plural number
includes the singular. Unless otherwise specified, references to Sections or
Articles are to the Sections or Articles in this Agreement. Unless the context
otherwise requires, the term "including" shall mean "including, without
limitation".

         17.16 Delaware Limited Liability Company Act Prevails. Unless the
context otherwise requires, the general provisions, rules of construction and
definitions contained in the Act and the Delaware General Corporation Law shall
govern the construction of this Agreement; provided, however, that in the event
of any inconsistency between such laws, the provisions of the Act shall prevail.

                                -Page 46 of 48-
<PAGE>

         17.17 Export Controls. This Agreement is made subject to any
restrictions concerning the export of Licensed Products or Research Results (as
such terms are defined in the IE R&D Agreement) or Intellectual Property
(collectively, "Technology") from the United States that may be imposed upon
either Member from time to time by laws or regulations of the United States.
Neither Member will export, directly or indirectly, any Technology to any
country for which the United States government or any agency thereof at the time
of export requires an export license or other governmental approval, without
first obtaining the written consent to do so from the Department of Commerce,
Bureau of Export Administration, or other agency of the United States government
when required by applicable statute or regulation.

         17.18 Severability. If one or more provisions of this Agreement are
held by a proper court to be unenforceable under applicable law, portions of
such provisions, or such provisions in their entirety, to the extent necessary
and permitted by law, shall be severed herefrom, and the balance of this
Agreement shall be enforceable in accordance with its terms.

         17.19 Publicity. Neither Member shall disclose the details of this
Agreement or related agreements to any third party without the prior written
consent of the other Member, provided, however, upon the signing of this
Agreement, the Dow Member and the Diversa Member will jointly develop a public
announcement to disclose the fact that the Members have entered into this
Agreement; and provided further that a Member may make sure disclosure as is
required to comply with applicable laws or regulations (such as disclosure to
the Securities and Exchange Commission) or to comply with a court or
administrative order, provided that the party required to make such disclosure
takes all reasonable and lawful actions to obtain confidential treatment for
such disclosure and, if possible, to minimize the extent of such disclosure and
promptly notifies the other Member regarding such disclosure.

         17.20 Publication. The provisions of the CDA Agreement shall apply with
respect to proposed publications or public disclosure of research results under
this Agreement.

         17.21 Costs. The Members agree to be responsible for their own costs
and expenses related to the formation of preparation and execution of this
Agreement.

         17.22 Insurance. The Members agree that the Board of Directors shall
direct the Company from time to time to purchase adequate, reasonable and
customary personal, property and product liability insurance

         17.23 Notices. Any notice to be given under this Agreement shall be in
writing and shall be deemed given when received and may be sent by mail, express
courier or facsimile to:

If to the Diversa Member:                   If to the Dow Member:

Diversa Corporation                         The Dow Chemical Company
Attn:  President                            Attn:
10665 Sorrento Valley Road                  2030 Dow Center
San Diego, California  92121                Midland, MI  48674
(858) 623-5190(FAX)                         (517) 636-4033 (FAX)

                                -Page 47 of 48-
<PAGE>

         IN WITNESS WHEREOF, the Members hereby execute this Limited Liability
Company Agreement as of June 29, 2000. This Agreement may be signed in
separate counterparts by facsimile.

                                        Diversa Corporation


                                        By  /s/ Jay M. Short
                                           ------------------------------------
                                        Name    Jay M. Short
                                             ----------------------------------
                                        Title   Chief Executive Officer
                                              ---------------------------------


                                        The Dow Chemical Company


                                        By  /s/ G.E. Merszei
                                           ------------------------------------
                                        Name    G.E. Merszei
                                             ----------------------------------
                                        Title   Vice President and Treasurer
                                              ---------------------------------



ACCEPTED AND AGREED

New Venture LLC

By  /s/ Fernand Kaufmann
   --------------------------------------
Name    Fernand Kaufmann
     ------------------------------------
Title  Chairman of the Board of Directors
      -----------------------------------

                                -Page 48 of 48-