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.


 










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


 





















 


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


 










*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:


 










*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


 










*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.


 










*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

  



 










*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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[  ]*


 










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