Exhibit 10.7
[METABOLIX, Inc. Letterhead]
November 3, 2004
Xxxxxx-Xxxxxxx-Midland-Company
0000 Xxxxxx Xxxxxxx
Xxxxxxx, XX 00000
Ladies and Gentlemen:
This letter is intended to set forth certain understandings between the
undersigned Metabolix, Inc. ("MBX") and Xxxxxx-Xxxxxxx-Midland Company ("ADM")
in connection with the Technology Alliance Agreement (the "Technology Alliance
Agreement") entered into by and between MBX and ADM Polymer Corporation, a
Delaware corporation and wholly-owned subsidiary of ADM ("ADM Sub") and the
Commercial Alliance Agreements to be entered into, if at all, by and among MBX,
ADM Sub and the Joint Sales Company upon completion of the activities described
in the Technology Alliance Agreement. Capitalized terms used but not defined
herein shall have the definitions provided in the Commercial Alliance Agreement.
Under the Technology Alliance Agreement, ADM Sub has certain obligations to
MBX (the "Technology Alliance Obligations"), including without limitation, the
following obligations (which are set forth for informational purposes and are
not to amend the terms set forth in the Technology Alliance Agreement or to
inform the interpretation of such terms): (i) to pay the amounts indicated in
Article 5 and (ii) to provide indemnification as set forth in Article 10. Under
the Commercial Alliance Agreements, ADM Sub has certain obligations to MBX
and/or the Joint Sales Company (the "Commercial Alliance Obligations" and
together with the Technology Alliance Obligations, the "Obligations"), including
without limitation, the following obligations (which are set forth for
informational purposes and are not to amend the terms set forth in the
Commercial Alliance Agreements or to inform the interpretation of such terms):
(i) to provide certain licenses to MBX and the Joint Sales Company to ADM
Technology, which is defined to include Technology Controlled by ADM, (ii) to
construct the ADM Sub Manufacturing Facility, (iii) to make an investment of
capital in the Joint Sales Company; (iv) to provide indemnification as set forth
in Article 12 of the Commercial Alliance Agreement, (v) to manufacture PHA
Material for sale to the Joint Sales Company during the Term, and under certain
circumstances, after the Term for sale to MBX, pursuant to the Manufacturing
Agreement, and (vi) to finance certain cash requirements of the Joint Sales
Company pursuant to the Loan and Security Agreement.
As a condition to the execution and delivery by MBX of the Technology
Alliance Agreement and the Commercial Alliance Agreements, ADM, by signing a
copy of this letter agrees to the following:
1. If ADM Sub materially defaults on any material Obligation, ADM shall
be directly liable to MBX for the performance of such Obligations, and shall
perform such Obligations, upon demand by MBX.
2. The obligations of ADM set forth in this letter are independent of the
Obligations of ADM Sub, and a separate action or actions may be brought and
prosecuted against ADM, whether action is brought against any ADM Sub or whether
such ADM Sub be joined in any such action or actions.
3. ADM waives any right to require MBX to proceed against ADM Sub for
performance of any Obligation after a failure to perform as provided in the
Technology Alliance Agreement or the relevant Commercial Alliance Agreement, as
applicable. With respect only to MBX and its successors and assigns, ADM waives
any defense arising out of the absence, impairment or loss of any right of
reimbursement or subrogation or any other rights against ADM Sub.
4. If ADM Sub is adjudicated bankrupt or files a petition for
reorganization, arrangement, composition or similar relief under any present or
future provision of the United States Bankruptcy Code, or if such a petition is
filed against ADM Sub, and in any such proceeding some or all of any
indebtedness or Obligations are terminated or rejected or any Obligation is
modified or abrogated, or if the Obligations are otherwise avoided for any
reason, ADM agrees that ADM's liability hereunder shall not thereby be affected
or modified and such liability shall continue in full force and effect as if no
such action or proceeding had occurred. This letter agreement shall continue to
be effective or be reinstated, as the case may be, if any payment must be
returned by MBX upon the insolvency, bankruptcy or reorganization of ADM Sub, as
though such payment had not been made.
5. ADM hereby agrees that any breach by it of its obligations under this
letter agreement shall constitute a material breach by ADM Sub of a material
obligation under the Technology Alliance Agreement and Commercial Alliance
Agreements, subject to all applicable cure provisions.
6. ADM agrees to pay reasonable attorneys' fees and all other costs and
expenses which may be incurred by MBX in the enforcement of this letter
agreement except those costs and expenses that may be incurred by MBX in an
action arising out of the breach by ADM Sub of an Obligation, which action MBX
brings directly against ADM, without having first taken action against ADM Sub
and obtained a final judgment where all appeal rights have been exhausted or
expired. No terms or provisions of this letter agreement may be changed, waived,
revoked or amended without ADM's and MBX's prior written consent. Should any
provision of this letter agreement be determined by a court of competent
jurisdiction to be unenforceable, all of the other provisions shall remain
effective. This letter agreement embodies the entire agreement among the parties
hereto with respect to the matters set forth herein, and supersedes all prior
agreements among the parties with respect to the matters set forth herein. No
course of prior dealing among the parties, no usage of trade, and no parol or
extrinsic evidence of any nature shall be used to supplement, modify or vary any
of the terms hereof.
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7. ADM represents and warrants to MBX that (i) ADM has taken all
necessary and appropriate action to authorize the execution, delivery and
performance of this letter agreement, and (ii) this letter agreement constitutes
a valid and binding obligation, enforceable against ADM in accordance with its
terms. ADM further hereby represents, warrants and covenants that it shall not
convey or transfer any of its ownership interest in ADM Sub, or allow ADM Sub to
issue any securities of ADM Sub, including without limitation, equity
securities, securities that are convertible into equity securities, or any
option or right to purchase or receive any of the foregoing, to any other person
or entity, such that ADM would own less than: (i) fifty one percent (51%) of the
total equity interest of ADM Sub or (ii) fifty one percent (51%) of the total
voting rights of each class of equity securities of ADM Sub. ADM acknowledges
that it is an Affiliate of ADM Sub for the purposes of the Technology Alliance
Agreement and the Commercial Alliance Agreements and it agrees to be bound by
those restrictions and obligations that are imposed upon Affiliates of ADM Sub
under those agreements, including without limitation, the obligations and
restrictions set forth in Articles 6 and 7 of the Technology Alliance Agreement
and Articles 8 and 13 of the Commercial Alliance Agreement.
Except as expressly provided in this Agreement with respect to the Joint
Sales Company: (i) the provisions of this letter are for the benefit of the
parties hereto and not for any other person; and (ii) this letter shall not
provide any third person with any remedy, claim, reimbursement, claim of action
or other right in excess of those existing without reference to this letter.
[Intentionally Blank]
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Please sign below to evidence ADM's agreement that we intend for this
letter agreement to be a binding contract between us governed by the laws of the
State of Delaware.
Very truly yours,
METABOLIX, INC.
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
President and CEO
Agreed:
Xxxxxx-Xxxxxxx-Midland Company
By: /s/ Xxxx X. Xxxx
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Name: Xxxx X. Xxxx
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Title: Senior Vice President
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duly authorized
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