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 21 Erie Street, Cambridge, MA
021394260 ("MBX") (MBX and ADM Sub are collectively the "Parties" and each is a
"Party").
RECITALS
WHEREAS, MBX and ADM Sub entered into that certain Technology Alliance and
Option Agreement dated as of November 4, 2004 (the "Agreement"); and
WHEREAS, MBX and ADM Sub now desire to modify the terms of the Agreement as
set forth herein.
NOW, THEREFORE, in consideration of the recitals and the mutual covenants
and promises contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties hereto
do hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 DEFINITIONS. Capitalized terms used but not defined herein shall have
the meaning ascribed to them in the Agreement.
ARTICLE 2
AMENDMENTS AND ADDITIONS TO TERMS
2.1 AMENDMENT TO ARTICLE 1. Article 1 of the Agreement is hereby amended by
deleting the existing definition for "Fermentation Performance Parameters" and
replacing it with the following text:
"FERMENTATION PERFORMANCE PARAMETERS" means the various parameters for
production of PHA Cell Paste through fermentation at the * scale as set
forth on AMENDED EXHIBIT B.
2.2 AMENDMENT OF SECTION 3.1. The Agreement is hereby amended by deleting
the existing Section 3.1 in its entirety and replacing it with the following
text:
"3.1 GOAL OF TECHNOLOGY ALLIANCE PROGRAM. The goal of the Technology
Alliance Program is to (i) produce PHA Cell Paste, in a fermenter having a
capacity of approximately *, and at ADM Sub's option then in a fermenter
having a capacity of approximately *, in all cases, in a manner and with
results that meet the applicable Fermentation Performance Parameters; (ii)
demonstrate recovery of PHA Material in a manner and with results that meet
the Recovery Performance Parameters (the items listed in the foregoing
"(i)" and "(ii)" collectively are the "Technical Aspects of the Goal"); and
(iii) based upon the results of (i) and (ii) above, have ADM Sub develop
and the TAC agree upon a completed master plan for Construction of the ADM
Sub Manufacturing Facility, including without limitation, surveys,
blueprints, and engineering studies, which master plan shall be organized
into a detailed, multiphase process for undertaking and completing
Construction of the ADM Sub Manufacturing Facility and which shall have a
project budget with projected detailed expenditures provided for each phase
of the Construction process, all of which shall be, in form and substance,
suitable for ADM Sub's management and board of directors to make a
determination to approve the expenditures for the ADM Sub Manufacturing
Facility as and to the extent required by ADM Sub's corporate governance
polices and procedures (the "ADM Sub Construction Master Plan and Budget")
(collectively the "Goal"). Successful completion of the Goal is intended to
confirm the potential economics of producing PHA Material at commercial
scale as part of a long-term commercial alliance."
2.3 ADDITION OF SECTION 3.2.4.1. The Agreement is hereby amended by adding
the following Section 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
2
methods for promptly accounting for the total Tolling Expenses on a monthly
basis and making such payments as are necessary in order to give effect to
the equal sharing of the Tolling Expenses. Notwithstanding the foregoing:
(i) MBX shall be solely responsible for the operating expenses (including
its internal costs and the costs of the Toll Producer but excluding the
related equipment and capital expenses) until (y) the earlier of TAC's
determination that the recovery of PHA Material during a Recovery Campaign
was achieved in a manner and with results that met the Recovery Performance
Parameters as defined in Amended Exhibit E on any one of the three
specified compositions, or ADM Sub's payment of the milestone payment set
forth in Section 5.1 related to the Recovery Performance Parameters, and
(z) ADM's receipt of a letter from the U.S. Drug Enforcement Administration
advising that polyhydroxyalkanoate containing gamma-hydroybutyric acid as
part of the polymer chain will not be regulated as a controlled substance
under the Controlled Substances Act and any Drug Enforcement Administration
regulations, (ii) ADM shall not be obligated to pay in excess of * of
Tolling Expenses hereunder; (iii) ADM shall not be obligated to pay in
excess of * of the equipment and capital expenses comprising the Tolling
Expenses hereunder; and (iv) ADM shall not be responsible for any Tolling
Expenses incurred after the end of the term of this Agreement as set forth
in Section 8.1, except as otherwise provided under the Commercial Alliance
Agreements, if applicable. In the event ADM terminates this Agreement or
decides not to exercise the Option, then MBX shall pay ADM an amount equal
to one half of the depreciated book value of any removable assets (i.e.,
not fixtures) that are listed on the Consignment Agreement or any Addendum
to Consignment Agreement (as such agreement and such addendum are
referenced in the Tolling Agreement), the purchase price for which was
funded equally by the Parties. MBX agrees to provide ADM with equal access
to the facility of the Toll Producer as and to the extent such access is
made available to MBX and its designees under the Tolling Agreement. The
PHA Material produced in connection with the Initial Recovery Services
shall be part of the Technology Alliance Output or Marketing Material as
determined under Section 3.3, and, in the event it is sold by MBX, all
revenues generated by such sales shall be applied against Tolling Expenses
before such expenses are allocated for payment by the Parties. The Parties
agree to work together to determine the costs (capital expenditures and
operating costs) to use ADM's Vitamin C facility for pilot sourcing of PHA
Material in the event ADM exercises the Option; provided, however, nothing
herein shall preclude ADM from utilizing all or any portion of the Vitamin
C facility for other uses."
2.4 AMENDMENT OF SECTION 3.3. The Agreement is hereby amended by deleting
the existing Section 3.3 in its entirety and replacing it with the following
text:
"3.3 OUTPUT FROM TECHNOLOGY ALLIANCE PROGRAM. ADM Sub will use
Commercially Reasonable Efforts to produce PHA Cell Paste in such amounts
as result from the operations set forth in the Technology Alliance Plan
until it has satisfied the Fermentation Performance Parameters (the
"Technology Alliance Output") and such additional amounts thereafter as the
Parties may agree to in
3
writing (the "Marketing Material") for use by MBX in developing the market
for PHA Material. The Technology Alliance Output and the Marketing Material
will be made available by ADM Sub to MBX as set forth in this Section 3.3."
2.5 AMENDMENT OF SECTION 3.3.1. The Agreement is hereby amended by deleting
the existing Section 3.3.1 in its entirety and replacing it with the following
text:
"3.3.1 ANALYSIS OF TECHNOLOGY ALLIANCE OUTPUT. MBX will use the
Technology Alliance Output to demonstrate recovery of PHA Material in
accordance with Section 3.2.4 and the Technology Alliance Plan, and ADM
shall provide the Technology Alliance Output to MBX as MBX may require to
perform such recovery demonstration, including the Initial Recovery
Services. Further, the Technology Alliance Output will be used by the
Parties to perform such evaluation and analysis as is necessary or useful
in determining whether the Parties have achieved the Goal. Without limiting
the foregoing statement, the Technology Alliance Output will be evaluated
and analyzed by the Parties, in accordance with the procedures and methods
set forth in the Technology Alliance Plan, to determine whether the
Technology Alliance Output meets the Fermentation Performance Parameters
and whether PHA Material recovered from the Technology Alliance Output
meets the Recovery Performance Parameters."
2.6 AMENDMENT OF SECTION 3.3.2. The Agreement is hereby amended by deleting
the existing Section 3.3.2 in its entirety and replacing it with the following
text:
"3.3.2 PURCHASE OF TECHNOLOGY ALLIANCE OUTPUT BY MBX; COST SHARING FOR
MARKETING MATERIAL. MBX shall have the right, but not the obligation, to
purchase the Technology Alliance Output that is not required to perform the
recovery demonstration described in Section 3.3.1 above from ADM Sub at a
price of * of PHA Material contained within the PHA Cell Paste, on a one
hundred percent (100%) purity basis; provided such price shall be reduced
to * at such times as ADM is responsible for equally sharing the Tolling
Expenses (including the operating expenses) pursuant to Section 3.2.4.1.
MBX shall purchase the Marketing Material, irrespective of whether the
Marketing Material meets the applicable specifications or not, at fifty
percent (50%) ADM Sub's Manufacturing Cost, F.O.B. Decatur, Illinois. MBX
may exercise this purchase option at any time, and from time-to-time,
during the Technology Alliance Program and up to thirty (30) days after the
expiration or termination of the Technology Alliance Program, by written
notice to ADM Sub, stating its desire to purchase, the quantity to be
purchased (up to the total amount that is then available) and shipping and
delivery instructions. ADM Sub shall invoice MBX for amounts so purchased
no sooner than at the time of delivery and the purchase price for amounts
ordered and delivered in accordance herewith shall be payable by MBX within
thirty (30) days of receipt of an invoice from ADM Sub by wire transfer of
immediately available funds to an account in the United States designated
by ADM Sub. Technology Alliance Output and Marketing Material purchased
hereunder shall be purchased "as is," without warranty of any kind other
than that the Technology Alliance Output and Marketing Material shall have
4
been stored and handled, from the time of production until the delivery to
MBX, in accordance with the requirements of the Technology Alliance Plan or
as otherwise agreed by the Parties. Technology Alliance Output and
Marketing Material purchased by MBX shall be used by MBX for performing its
obligations pursuant to this Agreement and for market development
activities benefiting the Parties and the potential Commercial Alliance
between them. Technology Alliance Output that is not purchased by MBX shall
be used by ADM Sub solely for internal research and development purposes,
or if not so used, ADM Sub shall either store (for later sale to MBX or the
Joint Sales Company or for later use by ADM Sub solely for internal
research purposes) or dispose of the unused Technology Alliance Output, at
ADM Sub's option."
2.7 AMENDMENT OF SECTION 4.3. The Agreement is hereby amended by deleting
the existing Section 4.3 in its entirety and replacing it with the following
text:
"4.3 GRANT OF OPTION. MBX hereby grants to ADM Sub the right and
option to enter into a commercial alliance for the further research,
development, manufacture, use, sale and importation of the PHA Material and
PHA Formulations on the terms and conditions set forth in the Commercial
Alliance Agreements (the "Option"). The Option shall be exercisable by ADM
Sub at any time after Effective Date and until thirty (30) days after the
expiration of the term of this Agreement, by written notice to MBX;
provided, however, that, in either case, the Option shall not be
exercisable if and for so long as ADM Sub is in breach of this Agreement.
Following the exercise of the Option, the Parties shall promptly execute
and deliver the Commercial Alliance Agreements in accordance with this
Agreement."
2.8 AMENDMENT OF SECTION 5.1. The Agreement is hereby amended by deleting
the existing Section 5.1 in its entirety and replacing it with the following
text:
"5.1 PAYMENTS. Within ten (10) days after the Effective Date, ADM Sub
shall pay to MBX the amount of three million dollars ($3,000,000) as a
non-refundable, non-creditable upfront payment. Within ten (10) days
following the TAC's determination that the production of PHA Cell Paste in
a fermenter having a capacity of approximately * was achieved in a manner
and with results that met the applicable Fermentation Performance
Parameters, ADM Sub shall pay to MBX the amount of five hundred thousand
dollars ($500,000) as a non-refundable, non-creditable milestone payment.
Within ten (10) days following the TAC's determination that the recovery of
PHA Material was achieved in a manner and with results that met the
Recovery Performance Parameters, ADM Sub shall pay to MBX the amount of
five hundred thousand dollars ($500,000) as a non-refundable,
non-creditable milestone payment. Within ten (10) days following the first
to occur of: (i) the achievement of the Goal and (ii) the exercise of the
Option by ADM Sub, ADM Sub shall pay to MBX the amount of one million
dollars ($1,000,000) as a non-refundable, non-creditable milestone payment.
Anything herein to the contrary notwithstanding, in the event that ADM Sub
desires to exercise the Option in
5
accordance with Section 4.3, the above-described upfront payment and the
three (3) milestone payments, to the extent not already paid, shall be due
and payable in full as a pre-condition to the exercise of the Option.
Amounts due under this Section 5.1 shall be payable by wire transfer of
immediately available funds to an MBX bank account in accordance with
instructions to be provided to ADM Sub by MBX."
2.9 AMENDMENT OF SECTION 5.2. The Agreement is hereby amended by deleting
the existing Section 5.2 in its entirety and replacing it with the following
text:
"5.2 OTHER EXPENSES. Except as provided in Section 5.1, Section
3.2.4.1 and Section 3.3.2, each Party shall bear its own costs and expenses
incurred in performing under this Agreement."
2.10 AMENDMENT OF EXHIBITS. The Agreement is hereby amended by deleting the
existing Exhibit B and replacing it with the text set forth in Amended Exhibit B
attached hereto, by deleting existing Exhibit D and replacing it with the text
set forth in Amended Exhibit D attached hereto, and by deleting the existing
Exhibit E and replacing it with the text set forth in Amended Exhibit E attached
hereto.
ARTICLE 3
CONFIRMATION OF TERMS
3.1 CONFIRMATION OF TERMS. This Amendment shall be a part of the Agreement
and shall be governed in accordance with the terms and conditions set forth
therein, as the same are amended hereby, including without limitation, the terms
and conditions set forth in Article XI of the Agreement, entitled
"Miscellaneous." The Parties hereby agree and acknowledge that, except as
expressly set forth herein, the Agreement shall remain in full force and effect
in accordance with its terms.
6
IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be
executed by their duly authorized representatives as of the day and year above
written.
ADM POLYMER CORPORATION
By: /s/ Xxxx X. Xxxx
------------------------------------
Name: Xxxx X. Xxxx
Title: President
METABOLIX, INC.
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
7
