Exhibit 10.58

 

CONFIDENTIAL TREATMENT

 

AMENDMENT NO. 5

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. 5 (“Amendment No. 5”), to that certain Manufacturing and
Supply Agreement (as amended to date pursuant to Amendments Nos. 1, 2, 3 and 4,
the “Agreement”) entered into as of September 30, 2001, is made this 17th day of
November, 2009 (“Amendment No. 5 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. 5, including definitions in the
preamble and recitals hereto.

 

WHEREAS, Cubist and ACSD desire to amend the Agreement as set forth in this
Amendment No. 5;

 

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 3.3.  The Agreement is hereby amended by deleting the
text of Section 3.3 thereof in its entirety and replacing it with the following
text:

 

(a) Capacity Improvements. ACSD and Cubist have agreed on the project plan
attached hereto at Exhibit G for the process and associated plant improvements
to the Facility that are intended to increase the capacity of the Facility to
produce Product (the “Capacity Improvements”).  The Parties shall work together
diligently to implement the Capacity Improvements as rapidly as reasonably
possible after the Amendment No. 5 Effective Date.  Cubist shall be responsible
for the agreed-upon []* necessary to []* the Capacity Improvements; provided
that, ACSD shall be prohibited from using such capital equipment for any other
activities other than activities in support of Cubist, and such prohibition
shall survive the expiration or termination of this Agreement.  ACSD shall
purchase the capital equipment, and Cubist shall issue a purchase order to ACSD
for capital expenditure contribution for []*.  ACSD shall be responsible for all
other ACSD costs related to the Capacity Improvements, including without
limitation the costs of []*.

 

(b) Additional Improvements.  Cubist and ACSD shall each have the right to
propose additional process and associated plant improvements for the production
of Product to be implemented at the Facility that are intended to improve the
quality of, and the efficiency of the process for producing, Product
(“Additional Improvements”); provided that, Cubist shall have final
decision-making authority on what Additional Improvements are implemented.  ACSD
shall agree to all reasonable Additional Improvement proposals by Cubist and
shall implement the Additional Improvements as rapidly as possible; provided
that, both Cubist and ACSD agree that

 

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*Confidential Treatment Requested.  Omitted portions filed with the Securities
and Exchange Commission (the “Commission”).

 

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it is possible for the Additional Improvement to achieve regulatory approval, if
necessary, and that Cubist and ACSD agree to a project implementation plan for
such Additional Improvement. A failure by ACSD to agree to a reasonable
Additional Improvement in accordance with all Italian regulations and law or to
implement such Additional Improvement as rapidly as possible shall constitute a
breach by ACSD of a material obligation under Section 12.2(a)(i) of this
Agreement if the delay or the failure will cause relevant damage to Cubist. 
Cubist shall be responsible for the agreed-upon []* necessary to []* the
Additional Improvements; provided that, ACSD shall be prohibited from using such
capital for any other activities other than activities in support of Cubist, and
such prohibition shall survive the expiration or termination of this Agreement. 
ACSD shall be responsible for all other ACSD costs related to the Additional
Improvements, including without limitation the costs of []*.  ACSD shall not
implement any process improvements for the production of Product on its own
without the express prior written consent of Cubist.

 

2. Amendment of Section 5.1.  The Agreement is hereby amended by deleting the
text of Section 5.1 thereof in its entirety and replacing it with the following:

 

Provided that ACSD maintains the staff appropriate to operate the Facility in
order to satisfy Cubist’s purchase orders, including, but not limited to, at
least []* 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, Cubist shall order from ACSD at least []*
percent ([]*%) of Cubist’s requirements of Product each calendar year during the
Term; provided that, ACSD is fully committed to supply 100% of Cubist’s
requirements.

 

3. Amendments of Section 5.6.  The Agreement is hereby amended by inserting the
following two sentences at the beginning of Section 5.6(a) thereof:

 

ACSD shall be obligated to accept Cubist Purchase Forecasts and purchase orders
for each calendar year up to the anticipated annual capacity of the Facility. A
failure by ACSD to so accept a Cubist Purchase Forecast or purchase order shall
constitute a breach by ACSD of a material obligation under Section 12.2(a)(i) of
the Agreement.

 

The Agreement is hereby further amended by adding the following subsection
(d) at the end of Section 5.6 of the Agreement:

 

(d) If ACSD fails to deliver any Product ordered by Cubist in any calendar year
in accordance with Sections 5.1, 5.3 and 5.4 hereof, Cubist, at its sole
discretion, may add the amount of the shortfall to the Product that it intends
to order for the following calendar year, and the price that Cubist shall pay
for Product the following year shall be the price pursuant to Section 6.1 based
on the total volume ordered for that year, including the shortfall from the
previous year. For the avoidance of doubt, Cubist shall pay for Product
delivered in the calendar year in which the shortfall occurred using the price
pursuant to Section 6.1 for the amount of Product ordered in such year, not the
amount actually delivered.

 

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

 

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4. 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

 

Provided that ACSD maintains the staff appropriate to operate the Facility in
order to satisfy Cubist’s purchase orders, including, but not limited to, at
least []* FTEs dedicated to the manufacture and supply of Product to Cubist
hereunder consistent with the organizational chart and parameters set forth in
Exhibit F, Cubist shall pay the following amounts for Product hereunder:

 

(a) For all Product ordered by Cubist for delivery in 2009, Cubist shall pay to
ACSD USD $[]* per kilogram.

 

(b) For all Product ordered by Cubist for delivery on or after January 1, 2010
and until implementation and validation of the first Additional Improvement,
Cubist shall pay for Product in Euros according to the Product Price Schedule
attached hereto at Exhibit H.

 

(c) In connection with the implementation of any Additional Improvement, Cubist
and ACSD shall agree on a new Product Price Schedule, which shall be appended to
the Agreement in replacement of the Product Price Schedule attached hereto at
Exhibit H.  The prices on the new Product Price Schedule will be calculated []*,
such calculation to be based on []*. The prices on the new Product Price
Schedule will reflect []*.  For the avoidance of doubt, the prices on the new
Product Price Schedule shall in no instance be higher than the prices on the
Product Price Schedule attached at Exhibit H hereto.

 

(d) The appropriate price from the Product Price Schedule (including any new
Product Price Schedule) shall be determined using the number of kgs of Product
forecast by Cubist to be delivered during the relevant calendar year in
accordance with Section 5.3.  At the end of each calendar year, if the actual
number of kgs of Product ordered to be delivered during such calendar year would
cause the price per kg according to the Product Price Schedule to be different
than previously paid by Cubist, then, no later than March 31st of the following
calendar year, Cubist shall pay to ACSD the additional amount if Cubist paid too
little; or ACSD shall pay to Cubist the amount Cubist overpaid if Cubist paid
too much.

 

5. Amendment of Section 6.2.  The Agreement is hereby amended by deleting the
text of Section 6.2 thereof in its entirety and replacing it with, “[Reserved].”

 

6. Addition of Exhibits.  The Agreement is hereby amended by adding as exhibits
thereto Exhibit G and Exhibit H attached hereto.

 

7. 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. 5 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. 5.  This Amendment No. 5 may be
signed in any number of counterparts, each of which shall be deemed to be an
original and all of

 

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

 

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which together shall constitute but one and the same instrument.  In making
proof of this Amendment No. 5 it shall not be necessary to produce or account
for more than one such counterpart.

 

IN WITNESS WHEREOF, this Amendment No. 5 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: November 17, 2009

 

 

 

 

 

CUBIST PHARMACEUTICALS, INC.

 

 

 

By:

/s/ Lindon M. Fellows

 

 

 

Name: Lindon M. Fellows

 

 

 

Title: SVP, Technical Operations

 

 

 

Date: 17 November 2009

 

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

 

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EXHIBIT G

 

ACSD Capacity Expansion Plan

 

[attached]

 

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

 

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ACSD Capacity Expansion Plan

November 11th, 2009

 

Cubist’s production requirements to meet demand are expected to increase to
about []* kg annually. In order to meet expected future demand, ACSD and Cubist
have agreed to expand the API capacity in Anagni. Cubist will be responsible for
the agreed upon []*, and ACSD will be responsible for []* and any other agreed
upon costs. ACSD and Cubist personnel will collaborate closely during all phases
of the capacity expansion project. Cubist must agree to all significant
decisions in writing, including equipment design and specifications, suppliers,
key contractors including engineering companies and consultants, building
layout, and any changes of the manufacturing process. Cubist shall have final
say over any decisions for the project.

 

The key milestones for the capacity expansion project, and the projected time
for completion for each milestone are described below.

 

Project Milestones

 

1. Agreement on conceptual design and project approach

· ACSD and Cubist shall agree conceptually to changes of the manufacturing
process, and the manufacturing facility, including equipment changes, target
date []*

 

2.  Long-lead-time items

· ACSD and Cubist shall identify long lead time items which are expected to have
a delivery time of 4 months or longer, target date []*

· ACSD and Cubist shall agree on suppliers, design, and price of long lead time
items, target date []*

· ACSD orders long lead time items, target date []*

· Cubist shall owe ACSD []*% of the total amount invoiced solely for such
equipment by the third party vendor(s) to ACSD upon completion of such long lead
time equipment orders, []*% upon delivery, and []*% after completion of
installation and qualification

· Within 3 business days of the event triggering the payment owed, ACSD shall
invoice Cubist for such amounts owed, and shall attach to such invoices copies
of any third party invoices upon which ACSD’s invoice is based, and Cubist shall
pay such invoice within 30 days of Cubist’s receipt thereof

 

3. Detailed Project Plan

· ACS and Cubist shall agree upon and sign a detailed project plan, including
project scope, project team, equipment list, suppliers for key equipment,
facility layout, basic design drawings and project schedule, target date []*

 

4. Third party contractors, engineering companies, consultants

· ACSD and Cubist shall agree upon third party contractors, engineering
companies, and consultants, including scope of external services, documentation
standards, price of services, target date []*

 

5. Detailed design review

· ACSD and Cubist shall agree and sign off on detailed design package, including
facility layout, detailed design drawings of buildings, detailed specifications
and drawings of new or changed equipment, detailed drawings of piping and
instrumentation, description of automation, target date []*

· Cubist shall owe ACSD []*% of ACSD’s external costs invoiced by a third party
directly related to completion of the detailed design package upon Cubist’s sign
off

· Within 3 business days of Cubist’s sign off, ACSD shall invoice Cubist for
such amounts owed, and shall attach to such invoice copies of any third party
invoices upon which ACSD’s invoice is based, and Cubist shall pay such invoice
within 30 days of Cubist’s receipt thereof

 

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

 

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6. Process Equipment (other than long lead time items)

· ACSD and Cubist shall agree on suppliers, design, and price of all equipment,
target date []*

· Cubist shall owe ACSD []*% of the total amount invoiced solely for such
equipment by the third party vendor(s) to ACSD upon completion of such other
equipment orders, []*% upon delivery, and []*% after completion of installation
and qualification of all other equipment

· Within 3 business days of the event triggering the payment owed, ACSD shall
invoice Cubist for such amounts owed, and shall attach to such invoices copies
of the third party invoices upon which ACSD’s invoice is based, and Cubist shall
pay such invoice within 30 days of Cubist’s receipt thereof

 

7. Process materials, i.e. resins

· ACSD and Cubist shall agree on suppliers, design, price, and the distribution
of costs for process materials between ACSD and Cubist, target date []*

· Cubist shall owe ACSD []*% of the agreed upon Cubist share of the total amount
invoiced solely for such process materials by the third party vendor(s) to ACSD
upon completion of all process material orders, []*% upon delivery, and []*%
after completion of installation and qualification of the process materials

· Within 3 business days of the event triggering the payment owed, ACSD shall
invoice Cubist for such amounts owed, and shall attach to such invoices copies
of any third party invoices upon which ACSD’s invoice is based, and Cubist shall
pay such invoice within 30 days of Cubist’s receipt thereof

 

8. Utility Infrastructure

· ACSD and Cubist shall agree on changes to utilities and related equipment
required to support the capacity expansion project, and the distribution of
utility related costs between ACSD and Cubist, target date []*

 

9. Buildings and building modifications

· ACSD and Cubist shall agree on all building additions and modifications,
including buildings design, materials, contractors, and prices, target date []*

· Cubist shall owe ACSD []*% of the total amount invoiced by the third party
vendor(s) to ACSD for such agreed upon building additions and modifications
after completion of such additions and modifications to Cubist’s satisfaction in
accordance with the detailed project plan

 

10. Process changes and validation

· ACSD and Cubist shall agree on all process changes, including implementation
schedules and validations protocols.

 

11. Final validation of equipment and processes at the increased capacity

· Upon successful completion of the final validation of a process in the
modified facility which is capable of producing at an annual capacity of []* kg
or higher, such capability determined by the number of kg produced and the time
it takes to produce any 3 consecutive batches that are released for commercial
use, Cubist shall owe half of the remaining []*% of project costs which Cubist
is responsible for according to the agreement of amendment No. 5, this project
plan, the detailed project plan referred to above, and any other agreements
between ACSD and Cubist.  Within 3 business days of release for commercial use
of the third such batch, ACSD shall invoice Cubist for such amounts owed, and
shall attach to such invoice copies of any third party invoices upon which
ACSD’s invoice is based, and Cubist shall pay such invoice within 30 days of
Cubist’s receipt thereof

 

· Upon successful completion of the final validation of a process in the
modified facility which is capable of producing at an annual capacity of []* kg
or higher, such capability determined by the number of kg produced and the time
it takes to produce any 3 consecutive batches that are released for commercial
use, Cubist will pay the  remaining []*% of project costs which Cubist is
responsible for according to the agreement of amendment No. 5, this project
plan, the detailed project plan referred to above, and any other agreements
between ACSD and Cubist.  Within 3 business days of release for commercial use
of

 

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

 

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the third such batch, ACSD shall invoice Cubist for such amounts owed, and shall
attach to such invoice copies of any third party invoices upon which ACSD’s
invoice is based, and Cubist shall pay such invoice within 30 days of Cubist’s
receipt thereof

 

ACSD shall pay all third party vendors on a timely basis and shall use best
efforts to ensure delivery and performance by such third party vendors. In
addition to Cubist’s right to monitor under the Agreement, Cubist shall have the
right to audit all original invoices from any third party vendor(s) and any
other documents demonstrating delivery and performance by such third party
vendors relating to the project. ACSD shall inform Cubist of any deviations from
the agreed upon project plan, including but not limited to project costs and
timelines.

 

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

 

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EXHIBIT H

 

Product Price Schedule

 

Kgs Ordered/

 

Price

 

Calendar Year

 

(beginning 2010)

 

[]*

 

€

[]

*

 

 

 

 

[]*

 

€

[]

*

 

 

 

 

[]*

 

€

[]

*

 

 

 

 

[]*

 

€

[]

*

 

 

 

 

[]*

 

€

[]

*

 

 

 

 

[]*

 

€

[]

*

 

 

 

 

[]*

 

€

[]

*

 

 

 

 

[]*

 

€

[]

*

 

 

 

 

[]*

 

€

[]

*

 

 

 

 

[]*

 

€

[]

*

 

 

 

 

[]*

 

€

[]

*

 

 

 

 

[]*

 

€

[]

*

 

 

 

 

[]*

 

€

[]

*

 

 

 

 

[]*

 

€

[]

*

 

 

 

 

[]*

 

€

[]

*

 

 

 

 

[]*

 

€

[]

*

 

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

 

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