Exhibit 10.4

***Text Omitted and Filed Separately with the Securities and Exchange
Commission.

Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

BP Biofuels North America LLC

28100 Torch Parkway

Warrenville, Illinois 60555

March 31, 2010

Galaxy Biofuels LLC

28100 Torch Parkway

Warrenville, Illinois 60555

Verenium Biofuels Corporation

55 Cambridge Parkway

Cambridge, MA 02142

 

   Re:      Jennings Capital Expenditures

Ladies and Gentlemen:

Reference is hereby made to that certain Operating Agreement of Galaxy Biofuels
LLC (the “Operating Agreement”) effective as of August 1, 2008, by and among BP
Biofuels North America LLC, a Delaware limited liability company (“Lender”),
Verenium Biofuels Corporation, a Delaware corporation (“Verenium”), and Galaxy
Biofuels LLC, a Delaware limited liability company (“Borrower”), and that
certain Master Promissory Note dated March 31, 2010 in the principal amount of
[…***…] made by Borrower in favor of Lender (the “Note”). Capitalized terms used
and not defined in this letter (this “Letter Agreement”), if any, shall have the
meanings assigned to them in Operating Agreement.

Borrower has requested that Lender pay for certain capital expenditures and
other costs to be incurred by Verenium with respect to its demonstration
facility located in Jennings, Louisiana (the “Jennings Plant”) pursuant to the
terms of the Note and this Letter Agreement. Accordingly, Lender, Borrower and
Verenium hereby agree as follows:

1. Funding Commitment. Subject to the terms and conditions of this Letter
Agreement, Lender hereby agrees to make advances under the Note in the aggregate
amount of up to […***…] to pay certain capital expenditures and other related
costs with respect to the Jennings Plant approved by Lender (collectively,
“Jennings Expenditures”) during the period commencing from April 1, 2010 and
ending on July 31, 2010.

2. Approval for Expenditures. Verenium shall have the right to submit to Lender
an AFE (Approval for Expenditures) Request Form (an “AFE”) for Lender’s review
and approval on a periodic basis. Each AFE shall be signed by all parties
necessary for approval of the AFE in accordance with Verenium’s standard
procedures, and shall include a reasonably detailed description of the work or
services to be performed or materials to be supplied and the

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Galaxy Biofuels LLC

March 31, 2010

Page 2

 

anticipated cost thereof. If Lender elects to approve the expenditures set forth
in an AFE (an “Approved AFE”), Lender shall so notify Verenium by adding such
Approved AFE to the Annex attached hereto as Exhibit A (the “Annex”) and
delivering a copy thereof to Verenium. Lender shall have no obligation to
approve any AFE under this Letter Agreement unless it so elects in the exercise
of its sole and absolute discretion. As of the date hereof, Lender has approved
the Jennings Expenditures listed as “Pre-approved Expenditures” on the Annex
attached hereto as Exhibit A. Notwithstanding the foregoing, Verenium may pay
for any expenditures or other costs with respect to the Jennings Plant or
otherwise as it may determine in its sole discretion without Lender’s approval,
it being understood that only Jennings Expenditures will be paid for by Lender
under this Letter Agreement.

3. Purchase Orders. Immediately following Lender’s approval of any AFE, and
immediately following the full execution of this Letter Agreement with respect
to the Pre-Approved Expenditures, Verenium and Lender shall work together to
prepare purchase orders between Lender and such contractors, vendors, suppliers
or other providers as necessary to implement the expenditures set forth in such
Approved AFE. Each purchase order shall include (a) a reasonably detailed
description of the scope of the work to be performed or materials to be
supplied, as applicable, (b) the names of each contractor, vendor, supplier or
other provider for whom funds are being requested and the amount requested for
each, and (c) such other information as Lender may reasonably require. Lender
may outsource its administrative and project management activities under this
Letter Agreement to its agents and contractors. Each purchase order for work,
services or materials included in an Approved AFE or included within the
Pre-Approved Expenditures shall be considered a “Purchase Order”. Any supplies,
materials and equipment (“Jennings Surge Assets”) that are the subject of the
Purchase Orders or the Pre-Approved Expenditures shall remain the property of
Lender and shall be stored in a designated area at the Jennings Plant reasonably
acceptable to Lender, free of charge, until such time as such Jennings Surge
Assets are incorporated into the Jennings Plant pursuant to work undertaken,
directed, coordinated or supervised by Verenium and/or Lender in consultation
with each other, at which time the Jennings Surge Assets will become the
property of Verenium. The Jennings Plant shall at all times remain the property
of Verenium. Verenium shall take such actions as may be necessary to receive,
accept and implement the work, services, goods and materials listed in the
Purchase Orders or Pre-approved Expenditures, as applicable, at the Jennings
Plant. Lender and Verenium will negotiate and enter into additional or
supplemental documentation after the date hereof, to the extent necessary or
desirable, for the purpose of implementing the intent of this Section 3,
including the parties’ intent as to (i) Lender’s ownership of the Jennings Surge
Assets and the transfer of such ownership to Verenium upon such assets being
incorporated into the Jennings Plant; and (ii) Lender’s rights with respect to
the Jennings Surge Assets while such assets are the property of Lender,
including the time during which such assets are in storage at the Jennings Plant
site. The parties agree and acknowledge that the services relating to the
Jennings Expenditures constitute services under the JDP Plan as amended pursuant
to the Second Extension (as hereinafter defined) and Amendment No. 1 and the
Extension (as defined in the Second Extension).

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Galaxy Biofuels LLC

March 31, 2010

Page 3

 

4. Funding. Following receipt by Lender of invoices from contractors, vendors,
suppliers or other providers relating to Approved AFEs and the related Purchase
Orders, if the expenditures set forth in such invoices are consistent with the
expenditures previously approved by Lender under an Approved AFE and the related
Purchase Order, Lender shall promptly pay the amounts contained in such invoices
directly to the applicable contractors, vendors, suppliers or providers to whom
such payments are due and payable.

5. The Note. Disbursements by Lender in accordance with this Letter Agreement
shall be advances of the Loan (as defined in the Note) and shall be deemed made
as of the date on which the funds are disbursed by Lender pursuant to the
provisions of paragraph 4 above. Lender and Verenium agree that if they mutually
decide after the date hereof to further extend the JDP Term (as defined in the
Operating Agreement) from August 1, 2010 to a future date no earlier than
[…***…], the parties will negotiate the terms of an early repayment of the Note
by Borrower.

6. No Third Party Beneficiaries. No Person which is not a party hereto shall
have any rights or obligations pursuant to this Letter Agreement.

7. Miscellaneous. This Letter Agreement will be governed and construed in
accordance with the laws of the State of New York, United States of America, to
the exclusion of both its principles and rules on conflicts of laws and the
provisions of the United Nations Convention on Contracts for the International
Sale of Goods. This Letter Agreement may be amended only by a written agreement
signed by the parties under this Letter Agreement to be charged with any such
amendment. The rights and remedies of the parties are cumulative and not
alternative. Neither the failure nor any delay in exercising any right, power or
privilege under this Letter Agreement will operate as a waiver of such right,
power or privilege, and no single or partial excuse of any such right, power or
privilege will preclude any other or further exercise of such right, power or
privilege or any other right, power or privilege. This Letter Agreement,
together with Exhibit A hereto, the Note, the Second Extension Agreement to
Joint Development and License Agreement dated as of the date hereof by and among
BP, Verenium and Galaxy (the “Second Extension”) and the other Galaxy Agreements
(as defined in the Second Extension), contain the entire agreement and
understanding between the parties respecting the subject matter hereof, and
supersede all prior and contemporaneous agreements, statements, understandings,
terms, conditions, negotiations, representations and warranties, whether written
or oral, made by and among the parties concerning the matters covered by this
Letter Agreement. This Letter Agreement may be executed in one or more
counterparts, none of which need contain the signatures of each of the parties
and each of which shall be deemed an original. The parties may deliver executed
signature pages to this Letter Agreement by facsimile or e-mail transmission. No
party shall raise as a defense to the formation or enforceability of this Letter
Agreement as a contract, and each party forever waives any such defense, that
either (i) the use of facsimile or e-mail transmission to deliver a signature or
(ii) the fact that any signature was signed and subsequently transmitted via
facsimile or e-mail transmission.

*** Confidential Treatment Requested

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Galaxy Biofuels LLC

March 31, 2010

Page 4

 

If the above correctly reflects our understanding and agreement with respect to
the foregoing matters, please so confirm by signing the enclosed copy of this
Letter Agreement.

 

Very truly yours, BP BIOFUELS NORTH AMERICA LLC By:  

/s/ Susan Ellerbusch

Name:   Susan Ellerbusch Title:   Authorized Signatory

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Galaxy Biofuels LLC

March 31, 2010

Page 5

 

Agreed to and Accepted by:

GALAXY BIOFUELS LLC,

a Delaware limited liability company

 

By:

  BP Biofuels North America LLC      By:  

/s/ Susan Ellerbusch

     Name:   Susan Ellerbusch      Title:   President   

By:

  Verenium Biofuels Corporation      By:  

/s/ Carlos A. Riva

     Name:   Carlos A. Riva      Title:   President        and   

 

VERENIUM BIOFUELS CORPORATION

By:

 

/s/ Carlos A. Riva

Name:

  Carlos A. Riva

Title:

  President

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EXHIBIT A

APPROVED AFE ANNEX

(See Attached)

 

Exhibit A

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

APPROVED AFE ANNEX

This Annex, initially dated March 31, 2010 and hereby updated as of
                    , comprises a part of that certain Letter Agreement dated
March 31, 2010 by and between BP Biofuels North America LLC, a Delaware limited
liability company (“Lender”), Verenium Biofuels Corporation, a Delaware
corporation (“Verenium”), and Galaxy Biofuels LLC, a Delaware limited liability
company (“Borrower”).

Lender hereby agrees to fund the following Jennings Expenditures as such term is
defined in the Letter Agreement on the terms and conditions set forth therein:

Pre-approved Expenditures:

 

DATE OF PURCHASE

ORDER OR AFE

 

AMOUNT OF PRE-APPROVED
EXPENDITURE

 

NAME OF CONTRACTOR/
SUPPLIER

 

DATE APPROVED BY LENDER

[***]

  [***]     [***]

[***]

  [***]   [***]   [***]

[***]

  [***]   [***]   [***]

*** Confidential Treatment Requested

 

Exhibit A

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Galaxy Biofuels LLC

March 31, 2010

Page 8

 

Subsequent Expenditures:

 

DATE OF AFE

 

AMOUNT TO BE FUNDED
PURSUANT TO THE AFE

 

NAME OF CONTRACTOR/
SUPPLIER UNDER AFE

   DATE APPROVED BY
LENDER