EXHIBIT 10.22
WHENEVER CONFIDENTIAL INFORMATION IS OMITTED HEREIN (SUCH OMISSIONS ARE DENOTED
BY AN ASTERISK*), SUCH CONFIDENTIAL INFORMATION HAS BEEN SUBMITTED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
FIRST AMENDMENT TO
TECHNOLOGY ALLIANCE AND OPTION AGREEMENT
This First Amendment to Technology Alliance and Option Agreement
(this "Amendment") dated as of September 8, 2005 (the "Effective Date") is by
and between ADM Polymer Corporation, a corporation duly incorporated and
validly existing under the laws of the State of Delaware, with headquarters
located at 0000 Xxxxxx Xxxxxxx, Xxxxxxx, XX 00000 ("ADM Sub"), and Metabolix,
Inc., a corporation duly incorporated and validly existing under the laws of
the State of Delaware, with headquarters located at 00 Xxxx Xxxxxx,
Xxxxxxxxx, XX 00000-0000 ("MBX") (MBX and ADM Sub are collectively the
"Parties" and each is a "Party").
RECITALS
WHEREAS, MBX and ADM Sub entered into that certain Technology Alliance
and Option Agreement dated as of November 4, 2004 (the "Agreement"); and
WHEREAS, MBX and ADM Sub now desire to modify the terms of the
Agreement as set forth herein.
NOW, THEREFORE, in consideration of the recitals and the mutual
covenants and promises contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties hereto do hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 DEFINITIONS. Capitalized terms used but not defined herein shall
have the meaning ascribed to them in the Agreement.
ARTICLE 2
AMENDMENTS AND ADDITIONS TO TERMS
2.1 AMENDMENT TO ARTICLE 1. Article 1 of the Agreement is hereby
amended by deleting the existing definition for "Fermentation Performance
Parameters" and replacing it with the following text:
"FERMENTATION PERFORMANCE PARAMETERS" means the various
parameters for production of PHA Cell Paste through fermentation at the
* scale as set forth on AMENDED EXHIBIT B.
* CONFIDENTIAL TREATMENT REQUESTED
2.2 AMENDMENT OF SECTION 3.1. The Agreement is hereby amended by
deleting the existing Section 3.1 in its entirety and replacing it with the
following text:
"3.1 GOAL OF TECHNOLOGY ALLIANCE PROGRAM. The goal of
the Technology Alliance Program is to (i) produce PHA Cell Paste, in a
fermenter having a capacity of approximately *, and at ADM Sub's option
then in a fermenter having a capacity of approximately *, in all cases,
in a manner and with results that meet the applicable Fermentation
Performance Parameters; (ii) demonstrate recovery of PHA Material in a
manner and with results that meet the Recovery Performance Parameters
(the items listed in the foregoing "(i)" and "(ii)" collectively are
the "Technical Aspects of the Goal"); and (iii) based upon the results
of (i) and (ii) above, have ADM Sub develop and the TAC agree upon a
completed master plan for Construction of the ADM Sub Manufacturing
Facility, including without limitation, surveys, blueprints, and
engineering studies, which master plan shall be organized into a
detailed, multiphase process for undertaking and completing
Construction of the ADM Sub Manufacturing Facility and which shall have
a project budget with projected detailed expenditures provided for each
phase of the Construction process, all of which shall be, in form and
substance, suitable for ADM Sub's management and board of directors to
make a determination to approve the expenditures for the ADM Sub
Manufacturing Facility as and to the extent required by ADM Sub's
corporate governance polices and procedures (the "ADM Sub Construction
Master Plan and Budget") (collectively the "Goal"). Successful
completion of the Goal is intended to confirm the potential economics
of producing PHA Material at commercial scale as part of a long-term
commercial alliance."
2.3 ADDITION OF SECTION 3.2.4.1. The Agreement is hereby amended by
adding the following Section 0.0.0.0:
"3.2.4.1 INITIAL RECOVERY OPERATIONS. The Parties hereby agree
that MBX will enter into an agreement to obtain access to toll recovery
services, from a Third Party (the "Toll Producer") on substantially the
terms set forth in the tolling agreement attached hereto as Schedule A
(the "Tolling Agreement"). These recovery services are anticipated to
last until approximately March of 2006 and to result in the recovery of
up to approximately thirty five (35) metric tons of PHA Material (the
"Initial Recovery Services"). Except as specifically set forth herein,
the Parties' rights and obligations with respect to the Initial
Recovery Services and the PHA Material produced in connection therewith
shall be governed by the Agreement as activities conducted under
Section 3.2.4. Responsibility for the fees charged by the Toll Producer
under the Tolling Agreement for the Initial Recovery Services, related
equipment and capital expenses, and the reasonable out-of-pocket
expenses of the Parties in performing technical support or auditing of
the Initial Recovery Services, including, for example, travel and
lodging expenses, but excluding, salary and benefits paid or payable to
employees or representatives of the Parties participating in such
activities (collectively, "Tolling Expenses") shall be shared equally
by the Parties, subject to the limitations set forth herein. The
Parties shall, determine reasonable
* CONFIDENTIAL TREATMENT REQUESTED
methods for promptly accounting for the total Tolling Expenses on a
monthly basis and making such payments as are necessary in order to
give effect to the equal sharing of the Tolling Expenses.
Notwithstanding the foregoing: (i) MBX shall be solely responsible for
the operating expenses (including its internal costs and the costs of
the Toll Producer but excluding the related equipment and capital
expenses) until (y) the earlier of TAC's determination that the
recovery of PHA Material during a Recovery Campaign was achieved in a
manner and with results that met the Recovery Performance Parameters as
defined in Amended Exhibit E on any one of the three specified
compositions, or ADM Sub's payment of the milestone payment set forth
in Section 5.1 related to the Recovery Performance Parameters, and (z)
ADM's receipt of a letter from the U.S. Drug Enforcement Administration
advising that polyhydroxyalkanoate containing gamma-hydroybutyric acid
as part of the polymer chain will not be regulated as a controlled
substance under the Controlled Substances Act and any Drug Enforcement
Administration regulations, (ii) ADM shall not be obligated to pay in
excess of * of Tolling Expenses hereunder; (iii) ADM shall not be
obligated to pay in excess of * of the equipment and capital expenses
comprising the Tolling Expenses hereunder; and (iv) ADM shall not be
responsible for any Tolling Expenses incurred after the end of the term
of this Agreement as set forth in Section 8.1, except as otherwise
provided under the Commercial Alliance Agreements, if applicable. In
the event ADM terminates this Agreement or decides not to exercise the
Option, then MBX shall pay ADM an amount equal to one half of the
depreciated book value of any removable assets (i.e., not fixtures)
that are listed on the Consignment Agreement or any Addendum to
Consignment Agreement (as such agreement and such addendum are
referenced in the Tolling Agreement), the purchase price for which was
funded equally by the Parties. MBX agrees to provide ADM with equal
access to the facility of the Toll Producer as and to the extent such
access is made available to MBX and its designees under the Tolling
Agreement. The PHA Material produced in connection with the Initial
Recovery Services shall be part of the Technology Alliance Output or
Marketing Material as determined under Section 3.3, and, in the event
it is sold by MBX, all revenues generated by such sales shall be
applied against Tolling Expenses before such expenses are allocated for
payment by the Parties. The Parties agree to work together to determine
the costs (capital expenditures and operating costs) to use ADM's
Vitamin C facility for pilot sourcing of PHA Material in the event ADM
exercises the Option; PROVIDED, HOWEVER, nothing herein shall preclude
ADM from utilizing all or any portion of the Vitamin C facility for
other uses."
2.4 AMENDMENT OF SECTION 3.3. The Agreement is hereby amended by
deleting the existing Section 3.3 in its entirety and replacing it with the
following text:
"3.3 OUTPUT FROM TECHNOLOGY ALLIANCE PROGRAM. ADM Sub
will use Commercially Reasonable Efforts to produce PHA Cell Paste in
such amounts as result from the operations set forth in the Technology
Alliance Plan until it has satisfied the Fermentation Performance
Parameters (the "Technology Alliance Output") and such additional
amounts thereafter as the Parties may agree to in
* CONFIDENTIAL TREATMENT REQUESTED
writing (the "Marketing Material") for use by MBX in developing the
market for PHA Material. The Technology Alliance Output and the
Marketing Material will be made available by ADM Sub to MBX as set
forth in this Section 3.3."
2.5 AMENDMENT OF SECTION 3.3.1. The Agreement is hereby amended by
deleting the existing Section 3.3.1 in its entirety and replacing it with the
following text:
"3.3.1 ANALYSIS OF TECHNOLOGY ALLIANCE OUTPUT. MBX
will use the Technology Alliance Output to demonstrate recovery of PHA
Material in accordance with Section 3.2.4 and the Technology Alliance
Plan, and ADM shall provide the Technology Alliance Output to MBX as
MBX may require to perform such recovery demonstration, including the
Initial Recovery Services. Further, the Technology Alliance Output will
be used by the Parties to perform such evaluation and analysis as is
necessary or useful in determining whether the Parties have achieved
the Goal. Without limiting the foregoing statement, the Technology
Alliance Output will be evaluated and analyzed by the Parties, in
accordance with the procedures and methods set forth in the Technology
Alliance Plan, to determine whether the Technology Alliance Output
meets the Fermentation Performance Parameters and whether PHA Material
recovered from the Technology Alliance Output meets the Recovery
Performance Parameters."
2.6 AMENDMENT OF SECTION 3.3.2. The Agreement is hereby amended by
deleting the existing Section 3.3.2 in its entirety and replacing it with the
following text:
"3.3.2 PURCHASE OF TECHNOLOGY ALLIANCE OUTPUT BY MBX;
COST SHARING FOR MARKETING MATERIAL. MBX shall have the right, but not
the obligation, to purchase the Technology Alliance Output that is not
required to perform the recovery demonstration described in Section
3.3.1 above from ADM Sub at a price of * of PHA Material contained
within the PHA Cell Paste, on a one hundred percent (100%) purity
basis; provided such price shall be reduced to * at such times as ADM
is responsible for equally sharing the Tolling Expenses (including the
operating expenses) pursuant to Section 3.2.4.1. MBX shall purchase the
Marketing Material, irrespective of whether the Marketing Material
meets the applicable specifications or not, at fifty percent (50%) ADM
Sub's Manufacturing Cost, F.O.B. Decatur, Illinois. MBX may exercise
this purchase option at any time, and from time-to-time, during the
Technology Alliance Program and up to thirty (30) days after the
expiration or termination of the Technology Alliance Program, by
written notice to ADM Sub, stating its desire to purchase, the quantity
to be purchased (up to the total amount that is then available) and
shipping and delivery instructions. ADM Sub shall invoice MBX for
amounts so purchased no sooner than at the time of delivery and the
purchase price for amounts ordered and delivered in accordance herewith
shall be payable by MBX within thirty (30) days of receipt of an
invoice from ADM Sub by wire transfer of immediately available funds to
an account in the United States designated by ADM Sub. Technology
Alliance Output and Marketing Material purchased hereunder shall be
purchased "as is," without warranty of any kind other than that the
Technology Alliance Output and Marketing Material shall have
* CONFIDENTIAL TREATMENT REQUESTED
been stored and handled, from the time of production until the delivery
to MBX, in accordance with the requirements of the Technology Alliance
Plan or as otherwise agreed by the Parties. Technology Alliance Output
and Marketing Material purchased by MBX shall be used by MBX for
performing its obligations pursuant to this Agreement and for market
development activities benefiting the Parties and the potential
Commercial Alliance between them. Technology Alliance Output that is
not purchased by MBX shall be used by ADM Sub solely for internal
research and development purposes, or if not so used, ADM Sub shall
either store (for later sale to MBX or the Joint Sales Company or for
later use by ADM Sub solely for internal research purposes) or dispose
of the unused Technology Alliance Output, at ADM Sub's option."
2.7 AMENDMENT OF SECTION 4.3. The Agreement is hereby amended by
deleting the existing Section 4.3 in its entirety and replacing it with the
following text:
"4.3 GRANT OF OPTION. MBX hereby grants to ADM Sub the right
and option to enter into a commercial alliance for the further
research, development, manufacture, use, sale and importation of the
PHA Material and PHA Formulations on the terms and conditions set forth
in the Commercial Alliance Agreements (the "Option"). The Option shall
be exercisable by ADM Sub at any time after Effective Date and until
thirty (30) days after the expiration of the term of this Agreement, by
written notice to MBX; PROVIDED, HOWEVER, that, in either case, the
Option shall not be exercisable if and for so long as ADM Sub is in
breach of this Agreement. Following the exercise of the Option, the
Parties shall promptly execute and deliver the Commercial Alliance
Agreements in accordance with this Agreement."
2.8 AMENDMENT OF SECTION 5.1. The Agreement is hereby amended by
deleting the existing Section 5.1 in its entirety and replacing it with the
following text:
"5.1 PAYMENTS. Within ten (10) days after the Effective Date,
ADM Sub shall pay to MBX the amount of * as a non-refundable,
non-creditable upfront payment. Within ten (10) days following the
TAC's determination that the production of PHA Cell Paste in a
fermenter having a capacity of approximately * was achieved in a manner
and with results that met the applicable Fermentation Performance
Parameters, ADM Sub shall pay to MBX the amount of * as a
non-refundable, non-creditable milestone payment. Within ten (10) days
following the TAC's determination that the recovery of PHA Material was
achieved in a manner and with results that met the Recovery Performance
Parameters, ADM Sub shall pay to MBX the amount of * as a
non-refundable, non-creditable milestone payment. Within ten (10) days
following the first to occur of: (i) the achievement of the Goal and
(ii) the exercise of the Option by ADM Sub, ADM Sub shall pay to MBX
the amount of * as a non-refundable, non-creditable milestone payment.
Anything herein to the contrary notwithstanding, in the event that ADM
Sub desires to exercise the Option in accordance with Section 4.3, the
above-described upfront payment and the three (3) milestone payments,
to the extent not already paid, shall be due and
* CONFIDENTIAL TREATMENT REQUESTED
payable in full as a pre-condition to the exercise of the Option.
Amounts due under this Section 5.1 shall be payable by wire transfer of
immediately available funds to an MBX bank account in accordance with
instructions to be provided to ADM Sub by MBX."
2.9 AMENDMENT OF SECTION 5.2. The Agreement is hereby amended by
deleting the existing Section 5.2 in its entirety and replacing it with the
following text:
"5.2 OTHER EXPENSES. Except as provided in Section 5.1,
Section 3.2.4.1 and Section 3.3.2, each Party shall bear its own costs
and expenses incurred in performing under this Agreement."
2.10 AMENDMENT OF EXHIBITS. The Agreement is hereby amended by deleting
the existing Exhibit B and replacing it with the text set forth in Amended
Exhibit B attached hereto, by deleting existing Exhibit D and replacing it with
the text set forth in Amended Exhibit D attached hereto, and by deleting the
existing Exhibit E and replacing it with the text set forth in Amended Exhibit E
attached hereto.
ARTICLE 3
CONFIRMATION OF TERMS
3.1 CONFIRMATION OF TERMS. This Amendment shall be a part of the
Agreement and shall be governed in accordance with the terms and conditions set
forth therein, as the same are amended hereby, including without limitation, the
terms and conditions set forth in Article XI of the Agreement, entitled
"Miscellaneous." The Parties hereby agree and acknowledge that, except as
expressly set forth herein, the Agreement shall remain in full force and effect
in accordance with its terms.
* CONFIDENTIAL TREATMENT REQUESTED
IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be
executed by their duly authorized representatives as of the day and year above
written.
ADM POLYMER CORPORATION
By: /s/ XXXX X. XXXX
------------------------------------
Name: Xxxx X. Xxxx
Title: President
METABOLIX, INC.
By: /s/ XXXXX X. XXXXXX
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
* CONFIDENTIAL TREATMENT REQUESTED
