Exhibit 10.3

EXECUTION VERSION

INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT

between

VERENIUM CORPORATION,

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Trustee,

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Collateral Agent

and

the Joined Secured Parties from time to time party hereto

September 1, 2009

Table of Contents

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Table of Contents

(continued)

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Table of Contents

(continued)

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INDEX TO EXHIBITS

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INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT

THIS INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT (the “ Agreement ”), dated as of September 1, 2009, is made by and among VERENIUM CORPORATION (the “ Company ”), WELLS FARGO BANK, NATIONAL ASSOCIATION, as trustee for the holders of the notes (the “ 9% Noteholders ”) issued under the Indenture described below (in such capacity, herein the “ Trustee ”), the Joined 8% Noteholders (as defined herein), and WELLS FARGO BANK, NATIONAL ASSOCIATION, in its capacity as collateral agent hereunder (in such capacity, the “ Collateral Agent ”) for the Secured Parties (as defined below).

RECITALS

On September 1, 2009, the Company issued $12,816,450 principal amount of its 9.00% convertible senior secured notes due 2027 (the “ 9% Notes ”) pursuant to the terms of that certain Indenture dated September 1, 2009 between the Company and the Trustee (the “ Indenture ”). Pursuant to the Indenture, the Trustee is authorized to enter into this Agreement on behalf of the Noteholders and to bind them to the terms hereof. Pursuant to the Indenture, the obligations, indebtedness and liability of the Company arising under the terms thereof and under the 9% Notes, are required to be secured by the Collateral (as hereafter defined).

On February 27, 2008, the Company issued $71 million principal amount of those certain 8% senior convertible notes, which notes were amended and restated on July 1, 2009 (as so amended and as may be further amended, supplemented or otherwise modified from time to time, the “ 8% Notes ”). As of the date hereof, approximately $16.2 million principal amount of the 8% Notes remains outstanding. Pursuant to the terms of the 8% Notes, the obligations, indebtedness and liability of the Company arising under the terms thereof are required to be secured on an equal and ratable basis with the obligations, indebtedness and liability of the Company arising under the Indenture and the 9% Notes, and under certain other secured Permitted Indebtedness (as defined in the 8% Notes).

The Company and the Secured Parties have agreed that obligations of the Company under and in respect of the Indenture and the 9% Notes are to be secured on a pari passu basis with the obligations of the Company under and in respect of the 8% Notes and under and in respect of other Permitted Secured Indebtedness.

From time to time after the date hereof, the Company may incur Permitted Secured Indebtedness (as defined below) that is secured on either a priority basis or a pari passu basis with the obligations of the Company under and in respect of the 8% Notes, the Indenture and the 9% Notes.

The parties hereto desire to enter into this Agreement in order to: (i) provide for the appointment by the Secured Parties of Wells Fargo Bank, National Association as the collateral agent acting for the benefit of the Secured Parties; (ii) set forth certain responsibilities and obligations of the Collateral Agent; (iii) set forth certain responsibilities and obligations of the Company with respect to the Collateral; and (iv) establish among the Secured Parties their respective rights with respect to certain payments that may be received by the Collateral Agent in respect of the Collateral.

1.

NOW, THEREFORE , in consideration of the premises and the mutual covenants herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE 1

Definitions

Section 1.1 Definitions. The following terms, as used herein, have the following meanings:

“ 8% Note ” shall have the meaning specified in the recitals to this Agreement.

“ 8% Noteholders ” means any holder of an 8% Note.

“ 9% Note ” shall have the meaning specified in the recitals to this Agreement.

“ 9% Noteholders ” means any holder of a 9% Note.

“ Affiliate ” of any specified Person means (i) any other Person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified Person, (ii) any Person who is a director or officer (a) of such Person, (b) of any Subsidiary of such Person or (c) of any Person described in clause (i) above and (iii) any beneficial owner of shares representing 5% or more of the total voting power of the Voting Stock (on a fully diluted basis) of the Company or of rights or warrants to purchase such Voting Stock (whether or not currently exercisable) and any Person who would be an Affiliate of any such beneficial owner pursuant to clauses (i) and (ii). For the purposes of this definition, “control” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

“ Agreement ” shall have the meaning specified in the preamble to this Agreement.

“ Business Day ” means a means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed.

“ Collateral ” means the property from time to time subject to the Liens created by the Collateral Documents.

“ Collateral Account ” means any segregated account under the sole control of the Collateral Agent that is free from all other Liens, and includes all cash and cash equivalents received by the Collateral Agent from asset dispositions of Collateral, recovery events, foreclosures on or sales of Collateral, or any other awards or proceeds pursuant to the Collateral Documents, including earnings, revenues, rents, issues, profits and income from the Collateral received pursuant to the Collateral Documents, and interest earned thereon.

“ Collateral Agent ” shall have the meaning specified in the preamble to this Agreement.

2.

“ Collateral Documents ” means collectively, this Agreement, the Security Agreement, all UCC financing statements required by the Security Agreement to be filed with respect to the security interests in personal property and fixtures created pursuant thereto and each other security agreement or other documentation executed and delivered to secure any of the Obligations.

“ Company ” shall have the meaning specified in the preamble to this Agreement.

“ Consent ” shall mean, with respect to consent required hereunder, the written consent of the applicable holders of such Debt Instrument as certified by the applicable Representative for such Debt Instrument.

“ Debt Instruments ” means (i) the Indenture and the 9% Notes, (ii) the Joined 8% Notes, and (iii) the Permitted Secured Indebtedness Documents.

“ Default ” means any event or condition which upon notice, lapse of time or both would constitute an Event of Default.

“ Designated Priority Indebtedness ” means Permitted Secured Indebtedness in an aggregate principal amount at anytime outstanding not to exceed $50,000,000, which shall be (i) evidenced by Permitted Senior Indebtedness Documents that identify such Permitted Secured Indebtedness as being Designated Priority Indebtedness for purposes of this Agreement and (ii) identified to the Collateral Agent through delivery of an Officer’s Certificate.

“ Dollars ” means lawful currency of the United States of America.

“ Effective Date ” means the date hereof except that the grant of security interest in Section 2.1 of the Security Agreement shall be effective to grant the security interest to the Collateral Agent in the Collateral to secure the Obligations in favor of any particular Secured Party only as of the date such Secured Party or its Representative shall have executed this Agreement or a Joinder Supplement.

“ Event of Default ” means the occurrence of any “Event of Default” or any similar event that is defined or identified in any Debt Instrument.

“ Financing Documents ” means the Indenture, the 9% Notes, the Joined 8% Notes, the Permitted Secured Indebtedness Documents, the Collateral Documents, this Agreement and all other documents executed and delivered pursuant to the terms of the foregoing.

“ Funded Obligations ” means, at any time of determination and with respect to any obligations under any Debt Instrument, the aggregate amount owed at such time (whether or not then due) under such Debt Instrument in respect of principal, interest and Premium (to the extent the applicable party is entitled to Premium under such Debt Instrument and calculated as if such Debt Instrument were repaid on the date of the determination of Funded Obligations if the Premium is not otherwise already due thereunder as of such date of determination).

“ Governmental Authority ” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency,

3.

authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaini