Exhibit 10.2

 

CONFIDENTIAL TREATMENT

 

AMENDMENT NO. 3

to the

MANUFACTURING AND SUPPLY AGREEMENT

entered into as of September 30, 2001

by and between

ACS Dobfar, SpA and Cubist Pharmaceuticals, Inc.

 

This AMENDMENT NO. 3 (“Amendment No. 3”), to that certain Manufacturing and
Supply Agreement (as amended to date pursuant to Amendments Nos. 1 and 2, the
“Agreement”) entered into as of September 30, 2001, is made this 20th day of
October, 2005,(“Amendment Effective Date”) by and between ACS Dobfar, SpA, an
Italian corporation (“ACSD”) and Cubist Pharmaceuticals, Inc., a Delaware
corporation (“Cubist”). Unless otherwise defined herein, capitalized terms used
but not defined herein shall have the meaning set forth in the Agreement, and
the Agreement shall be amended to incorporate any additional definitions
provided for in this Amendment No. 3, including definitions in the preamble and
recitals hereto.

 

WHEREAS, Cubist and ACSD desire to amend the Agreement as set forth in this
Amendment No. 3;

 

NOW, THEREFORE, in consideration of the foregoing and the mutual promises made
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree to amend
the Agreement as follows:

 

1.                                       Amendment of Section 1.  The Agreement
is hereby amended by inserting the following definition in between the
definitions for “Certificate of Analysis (COA)” and “Change Order”:

 

“Change of Control” shall mean, with respect to ACSD:

 

(a)                                  the acquisition of ownership through a
corporate acquisition, reorganization, sale or otherwise, directly or
indirectly, beneficially or of record, by any third party(ies) of shares
representing more than 50% of the aggregate ordinary voting power represented by
the issued and outstanding capital stock of ACSD;

 

(b)                                 a merger or similar combination after which
50% or more of the voting stock of the surviving corporation is held by persons
who were not stockholders of ACSD immediately prior to such merger or
combination;

 

(c)                                  any other acquisition by any third
party(ies) of the power to directly or indirectly direct or cause the direction
of the management or policies of ACSD, whether through the ability to exercise
voting power, by contract or otherwise; or

 

(d)                                 ACSD’s sale or other disposition of that
part of ACSD’s business that includes the Facility.

 

2.                                       Amendment of Section 4.3. The Agreement
is hereby amended by deleting Section 4.3 thereof in its entirety.

 

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*Confidential Treatment Requested.  Omitted portions filed with the Commission.

 

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3.                                       Amendment of Section 5.1.  The
Agreement is hereby amended by replacing the [  ]* in the table included at the
end of Section 5.1 of the Agreement with [  ]* and by replacing the total of [ 
]*  with [  ]*

 

4.                                       Amendment of Section 5.2.  The
Agreement is hereby amended by deleting “/ Payment of Product Price Premiums”
from the heading to Section 5.2 thereof and deleting the first sentence of such
Section.

 

5.                                       Amendment of Section 6.1. The Agreement
is hereby amended by deleting Section 6.1 thereof in its entirety and replacing
it with the following Section 6.1:

 

6.1                               Product Price

 

(a) subject to the provisions of Sections 5, 6 and 7, Cubist will purchase
Product from ACSD at a price of [  ]*.

 

Provided that ACSD hires and so long as ACSD maintains [  ]* new full time
employees (“FTEs”) dedicated to the manufacture and supply of Product to Cubist
hereunder consistent with the organizational chart and parameters set forth in
Exhibit F, an additional [  ]* shall be added to the Product Price for 2005
through 2010 only. Upon request, ACSD shall supply Cubist with periodic work
schedules and payroll records for the FTEs for the purpose of monitoring
compliance with FTE requirements set forth herein. ACSD shall also provide
notice to Cubist upon any termination or resignation of an FTE and shall use its
best efforts to replace such FTE promptly with an individual with equivalent
skills. In each calendar year beginning in 2005 and ending in 2010, once the
cumulative quantity of Product ordered has reached the applicable [  ]* quantity
for such year, as provided in Section 5.1 herein, Cubist will immediately stop
paying the additional [  ]* for any additional Product purchased and supplied in
such year, and will pay [  ]* of Product, for such additional Product.

 

6.                                       Amendment of Section 6.2. The Agreement
is hereby amended by deleting Section 6.2 thereof in its entirety and replacing
it with the following Section 6.2:

 

6.2                               Product Price Premiums

 

Cubist will pay ACSD [  ]* on the price of all Product (the “Product Price
Premium”) actually purchased and supplied up to the purchase [  ]* requirements
established in Section 5.1 and the other terms and conditions of this
agreement.  Payment of the Product Price Premium shall continue until cumulative
Product Price Premium payments equal [  ]*.  In each calendar year beginning in
2005 and ending in 2010, once the cumulative Product Price Premium payments have
reached the applicable “Total Product Price Premium” for such year, Cubist will
immediately stop paying the Product Price Premiums for any additional Product
purchased and supplied in such year, and will pay [  ]* of Product, as provided
in Section 6.1 herein, for such additional Product.  For the avoidance of doubt,
once the cumulative Total Product Price Premium has reached [  ]*, Cubist shall
not pay a Product Price Premium for any additional Product purchased in that
year and thereafter.  In addition, if in any year Cubist orders a sufficient
quantity of Product to meet the purchase [  ]*, but ACSD supplies less than the
purchase [  ]* for such year (such shortfall, as measured in kgs, below the
purchase [  ]* shall be referred to herein as the “ACSD Shortfall”), Cubist
shall have satisfied the purchase [  ]* for such year, and the

 

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*Confidential Treatment Requested.  Omitted portions filed with the Commission.

 

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amount of the Shortfall shall not be carried over to future years.  In such
case, the cumulative Product Price Premium of [  ]* will be reduced by an amount
equal to the ACSD Shortfall times [  ]*, with all other figures in the table
below remaining the same for future years, subject to any future ACSD Shortfall.

 

Calendar Year

 

Purchase
[  ]*

 

Total Product
Price Premium

 

 

 

 

 

 

 

2005

 

[  ]*

 

[  ]*

 

 

 

 

 

 

 

2006

 

[  ]*

 

[  ]*

 

 

 

 

 

 

 

2007

 

[  ]*

 

[  ]*

 

 

 

 

 

 

 

2008

 

[  ]*

 

[  ]*

 

 

 

 

 

 

 

2009

 

[  ]*

 

[  ]*

 

 

 

 

 

 

 

2010

 

[  ]*

 

[  ]*

 

 

 

 

 

 

 

 

 

 

 

[  ]*

 

 

The [  ]* and schedule for the purchase thereof will be modified at Cubist’s
discretion in the event of [  ]*.

 

7.                                       Amendment of Section 6.4. The Agreement
shall be amended by adding the following sentence to the end of Section 6.4:

 

Notwithstanding the above, for calendar year 2005 only, the Product will be
delivered “Ex works” Milan, which means that Cubist shall arrange and pay all
shipping, insurance, customs, duties and other governmental charges relating to
the shipment of the Product after ACSD’s delivery to Cubist’s common carrier in
Milan, and Cubist shall have all responsibility for storing and clearing the
Product through all customs and importation requirements.

 

8.                                       Amendment of Section 9.1. The Agreement
shall be amended by deleting section 9.1(a) in its entirety and replacing it
with the following Section 9.1(a):

 

9.1 Publicity.

 

The parties shall

 

(a)                                  keep the material terms of this Agreement
confidential; provided however that in no event shall the foregoing obligation
prevent Cubist from disclosing the terms of this Agreement in its ordinary
course Securities and Exchange Act filings or pursuant to any contractual
requirement.

 

9.                                       Amendment of Section 12.1. The
Agreement is hereby amended by deleting Section 12.1 thereof in its entirety and
replacing it with the following Section 12.1:

 

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*Confidential Treatment Requested.  Omitted portions filed with the Commission.

 

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12.1                        Term

 

This Agreement shall take effect as of the Effective Date and shall remain in
effect until the sixth anniversary of the Amendment Effective Date or until ACSD
has received all payments due under Section 6.2 unless sooner terminated in
accordance with Section 12.2 or extended in accordance with this Section 12.1.
Unless, not later than the [  ]* of the Amendment Effective Date, Cubist
notifies ACSD in writing that Cubist does not desire to extend the term of
Agreement, the term of the Agreement will be extended for an additional two
years; provided, that, ACSD and Cubist have negotiated in good faith a revision
to the prices charged for Product, pursuant to Section 6.1 hereof, based on
ACSD’s then current costs to manufacture Product. All applicable terms and
conditions of this Agreement shall remain in effect during the extension term,
unless expressly amended in writing by the parties. Cubist may renew this
Agreement for additional two-year extension terms by providing written renewal
notice to ACSD not later than [  ]* prior to the expiration of the then current
extension term.

 

10.                                 Amendment of Section 12.2. The Agreement is
hereby amended by deleting Section 12.2(c) thereof and replacing it with the
following Section 12.2(c):

 

(c)                                  ACSD shall promptly notify Cubist in
writing if ACSD enters into discussions relating to a Change of Control.  If
ACSD enters into a Change of Control without Cubist’s prior written consent,
Cubist shall have the right to terminate this Agreement upon written notice to
ACSD, or its successor, at anytime within [  ]* days following the effective
date of such Change of Control.  In the event of such notice of termination by
Cubist, ACSD shall assist Cubist, at no additional cost to Cubist, in
identifying and transitioning to a new supplier of Product;

 

For the avoidance of doubt, following the execution of this Amendment No. 3
Section 12.2(d) of the Agreement shall read as follows:

 

(d)                                 Cubist may terminate this Agreement upon [ 
]* days notice to ACSD if Cubist or an affiliate or sublicensee terminates the
manufacture or sale of the Product;

 

11.                                 Amendment of Section 12.3(b). The Agreement
is hereby amended by deleting Section 12.3(b) in its entirety and replacing it
with the following Section 12.3(b):

 

(b)                                 If this Agreement is terminated by Cubist
pursuant to Section 12.2(a) or (c) above, ACSD shall pay to Cubist a supplier
replacement fee (the “Supplier Replacement Fee”) in the amount of [  ]* dollars
US (USD[  ]*), adjusted annually beginning on January 1, 2006 in accordance with
the changes in the Producer Price Index, Pharmaceutical Preparation Mfg,
published by the U.S. Department of Labor, Bureau of Labor Statistics and
payable within [  ]* of the effective date of termination.  Cubist shall also be
entitled to any other remedies set forth herein or

 

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*Confidential Treatment Requested.  Omitted portions filed with the Commission.

 

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available to Cubist under law or in equity.  The Supplier Replacement Fee is
intended to compensate Cubist for the time, expense and risk of identifying,
negotiating with, validating, qualifying and developing a new manufacturer and
supplier of Product to replace ACSD.  In addition, in the case of such a
termination, ACSD shall continue to supply Product to Cubist in accordance with
the terms and conditions of this Agreement until Cubist is able to identify,
negotiate with, validate, qualify and develop a new manufacturer and supplier of
Product to replace ACSD and such manufacturer and supplier is ready to supply
commercial Product and has obtained FDA and EMEA approval (if required).

 

12.                                 Amendment to Section 14.4.  The Agreement is
hereby amended by deleting Section 14.4 in its entirety and replacing it with
the following Section 14.4:

 

14.4                        Assignment

 

Except as otherwise explicitly provided in this Section 14.4, neither party may
assign this Agreement or any such party’s rights and obligations hereunder, by
operation of law or otherwise, to any third party without the prior written
consent of the other party, which consent shall not be unreasonably withheld. 
Cubist may assign this Agreement, and its rights and obligations hereunder, to
an Affiliate (including a subsidiary) which controls, is controlled by, or is
under common control with Cubist so long as Cubist remains primarily liable for
its obligations hereunder.  In addition, Cubist may assign this Agreement, and
its rights and obligations hereunder, to any third party that purchases
substantially all of Cubist’s stock or assets relating to that portion of
Cubist’s business that is related to the subject of this Agreement.  Any
attempted assignment, delegation or transfer in contravention of this Agreement
shall be null and void.

 

13.                                 Amendment to Section 14.6.  The Agreement is
hereby amended by deleting the name “Alan Watson” in Section 14.6 and replacing
it with “Vice President, Technical Operations.”  The Agreement is hereby further
amended by adding after Cubist’s address and contact information the following:

 

With a copy to:

Cubist Pharmaceuticals, Inc.

65 Hayden Avenue

Lexington, MA  02421, U.S.A.

Attn: General Counsel

Telefax No.:  (781) 860-1407

 

14.                                 No Other Amendments.  Except to the extent
amended hereby, all of the definitions, terms, provisions and conditions set
forth in the Agreement are hereby ratified and confirmed and shall remain in
full force and effect.  The terms and conditions herein and subject matter
hereof shall at all times be considered Confidential Information of Cubist, as
defined in the Agreement. The Agreement and this Amendment No. 3 shall be read
and construed together as a single agreement and the term “Agreement” shall be
deemed a reference to the Agreement as amended by this Amendment No. 3.  This
Amendment No. 3 may be signed in any number of counterparts, each of which shall
be deemed to be an original and all of which together shall constitute but one
and the same instrument.  In making proof of this Amendment No. 3 it shall not
be necessary to produce or account for more than one such counterpart.

 

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*Confidential Treatment Requested.  Omitted portions filed with the Commission.

 

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IN WITNESS WHEREOF, this Amendment No. 3 has been executed under seal by the
parties hereto to be effective as of the day and year first above written.

 

 

ACS DOBFAR SpA

 

 

 

 

 

By:

/s/ Falciani Marco

 

 

 

 

Name: Falciani Marco

 

 

 

Title: President

 

 

 

Date: 12, September 2005

 

 

 

 

 

CUBIST PHARMACEUTICALS, INC.

 

 

 

 

 

By:

/s/ Lindon M. Fellows

 

 

 

 

Name: Lindon M. Fellows

 

 

 

Title: SVP Technical Operations

 

 

 

Date: 20 October, 2005

 

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*Confidential Treatment Requested.  Omitted portions filed with the Commission.

 

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*Confidential Treatment Requested.  Omitted portions filed with the Commission.

 

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[  ]*

 

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*Confidential Treatment Requested.  Omitted portions filed with the Commission.

 

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