Document:

Exhibit
10.1

 

CONFIDENTIAL TREATMENT

 

AGREEMENT

 

This Agreement, dated as
of July 30, 2001, (the “Effective Date”) is by and, between Albany Molecular
Research, Inc., a Delaware corporation, located at 21 Corporate Circle, P.O.
Box 15098, Albany, New York 15098 (“AMRI”), and CUBIST Pharmaceuticals, Inc., a
Delaware corporation with a place of business at 24 Emily Street, Cambridge,
Massachusetts 02139 (“CUBIST”).

 

NOW, THEREFORE, in
consideration of the mutual promises and other good and valuable consideration,
the parties agree as follows:

 

SECTION 1. - Definitions.

 

The terms used in this
Agreement have the following meaning:

 

1.1                                 “Affiliate”
with respect to any Party, shall mean any Person whether de jure or de facto,
controlling, controlled by, or under common control with, such Party. For these
purposes, “control” shall refer to (a) the possession, directly or indirectly,
of the power to direct the management or policies of a Person, whether through
the ownership of voting securities, by contract or otherwise or (b) the
ownership, directly or indirectly, of at least 50% (or such lesser percentage
which is the maximum allowed to be owned by a foreign corporation in a
particular jurisdiction of the voting securities or other ownership interest of
a Person).

 

1.2                                 “AMRI
Background Patents” means claims of any and all patents and patent
applications anywhere in the world that are owned by AMRI as of the Effective
Date and that claim a [*] that was used by AMRI in producing AMRI Derivatives
pursuant to the Research Program.

 

1.3                                 “AMRI
Derivative” means (i) a compound(s) prepared by AMRI pursuant to the
Research Program and that is either a derivative of [*] created utilizing [*]
or biocatalysis technology developed or practiced by AMRI, or a derivative of
any such derivative created utilizing [*] or biocatalysis technology developed
or practiced by AMRI, and/or (ii) compound(s) prepared by CUBIST or its
Affiliates or Sublicensees that are [*] in (i).

 

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WITH THE COMMISSION

 

 

 

1.4                                 “AMRI
Process Technology” means the data, know-how and information that is
required to produce [*] used by AMRI in the Research Program, whether patented
or not.

 

1.5                                 “Biocatalytic
process” means biocatalytic procedure or biocatalysis used by AMRI to
prepare derivatives of [*] and, without limitation, any process or procedure
using [*] under this Agreement.

 

1.6                                 “Combination Product” shall mean a CUBIST
Product that includes an AMRI Derivative or a CUBIST Derivative and one or more
additional active agents.

 

1.7                                 “CUBIST Derivative” means a compound
prepared by CUBIST or its Affiliates or Sublicensees or any of their agents,
consultants or collaborators that is directly based upon or directly derived
from an AMRI Derivative.

 

1.8                                 “CUBIST Product” means either an

 

(a)                                  “AMRI Derivative Product” which is a product (i)
the making, using, selling, offering for sale, or import of which would, but
for the licenses granted herein, infringe a valid claim of a Research Patent or
(ii) that includes an AMRI Derivative; or

 

(b)                                 “CUBIST Derivative Product” which is a product
containing a CUBIST Derivative.

 

1.9                                 “FDA” means the United States Food and Drug Administration, or the successor
thereto.

 

1.10                           “FTE” means a full time equivalent person year of scientific or technical work,
working forty hours per week for at least 48 weeks.

 

1.11                           “First Commercial Sale”
means, with respect to any CUBIST Product in a country of the Territory, the
first sale of a CUBIST Product by CUBIST, its Affiliates, distributors or
Sublicensees to a Third Party, in such country anywhere in the Territory, after
all required marketing and pricing approvals have been granted, or otherwise
permitted, by the governing health authority of such country. “First Commercial
Sale” shall not include the sale of any CUBIST Product for use in clinical
trials or for compassionate use prior to the grant of regulatory approval.

 

1.12                           “IND” shall mean an investigational new drug
application filed with the FDA for approval to commence human clinical trials,
or the equivalent application in other countries or regulatory jurisdictions.

 

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1.13                           “Major Markets” means the United States,
Japan, United Kingdom, Germany, Italy, Spain and France.

 

1.14                           “Net Sales” means, with respect to any
CUBIST Product, the gross amount received by CUBIST, its Affiliates,
Sublicensees, distributors or co-marketers for sale of CUBIST Product to an
independent Third Party in a bona fide arms length transaction less deductions
for: (i) trade, quantity and/or cash discounts, allowances and rebates actually
allowed or given; (ii) freight, shipping, insurance and other transportation
expenses (if separately identified in such invoice); (iii) credits or refunds
actually allowed for rejections, or defects of such CUBIST Product, outdated or
returned CUBIST Product, or because of rebates or retroactive price reductions;
and (iv) sales, value-added, excise taxes, tariffs and duties, and other taxes
directly related to the sale and except for excise taxes, only to the extent
that such items are separately identified in such invoice. If a CUBIST Product
is a Combination Product, then Net Sales shall be calculated by multiplying the
actual Net Sales of such Combination Product by the fraction A/(A+B) where A is
the invoice price of the AMRI Derivative or CUBIST Derivative if sold
separately, and B is the total invoice price of the other active ingredient or
ingredients in the combination, if sold separately. If, on a country-by-country
basis, the other active ingredient or ingredients in the combination are not
sold separately in said country, Net Sales for the purpose of determining
royalties of the combination product shall be calculated by multiplying
actual Net Sales of such combination product by the fraction A/C where A is the
invoice price of the AMRI Derivative or CUBIST Derivative if sold separately,
and C is the invoice price of the combination product.

 

1.15                           “Party”
means AMRI or CUBIST and, when used in the plural, means AMRI and CUBIST.

 

1.16                           “Person”
means any natural person, corporation, firm, business trust, joint venture,
association, organization, company, partnership or other business entity, or
any government or any agency or political subdivision thereof.

 

1.17                           “Research
Patents” means any and all patents or patent applications that are invented
by an employee(s) of AMRI pursuant to the Research Program (alone or jointly
with an employee of CUBIST) and claim AMRI Process Technology, AMRI
Derivatives, or the use thereof.

 

1.18                           “Research
Plans” means the plans for Stage I Research and Stage II Research attached
as Appendix A.

 

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WITH THE COMMISSION

 

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1.19                           “Research
Program” means research performed by the Parties pursuant to the Research
Plans.

 

1.20                           “Royalty
Term” means, with respect to each CUBIST Product in each country in the
Territory the period of time commencing on the Effective Date in such country
and ending on the later of (i) ten (10) years from the date of the First
Commercial Sale of such CUBIST Product in such country, or (ii) the date on
which the CUBIST Product in the country where manufactured, used, sold or
offered for sale no longer infringes (a) a Valid Claim of a Research Patent or
(b) a Valid Claim of an AMRI Background Patent but for the licenses granted
herein.

 

1.21.                        “Stage
I Research Plan” means the stage I research as described in the plan
attached as Appendix A and any amendment thereto agreed to in writing by the
Parties.

 

1.22                           “Stage
II Research Plan” means the stage II research as described in the plan
attached as Appendix A and any amendment thereto agreed to in writing by the
Parties.

 

1.23                           “Sublicensee”
shall mean a Third Party to which CUBIST has granted a license and/or
sub-sublicense rights under the licenses granted to CUBIST hereunder.

 

1.24                           “Third
Party” means any Person who or which is neither a Party nor, with respect
to a Party, an Affiliate of that Party.

 

1.25                           “Valid
Claim” means (i) any claim of a pending patent application which has not
been pending for more than [*] and/or (ii) any claim of an unexpired patent
which has not been held unenforceable or invalid by a decision of a court or
other government agency of competent jurisdiction, unappealable or unappealed
within the time allowed for appeal, and which has not been disclaimed, denied
or admitted to be invalid or unenforceable through reissue or disclaimer or
otherwise.

 

2.                                       RESEARCH
PROGRAM

 

2.1                                 Steering
Committee. Within [*] after the Effective Date, the Parties shall form a
Steering Committee for the Research Program. The Steering Committee shall
consist of [*] representatives of each Party and shall be responsible for
ensuring that the research plan is consistent with the goals and objectives of
the Research Program. The operation and authority of the Steering Committee
shall be as follows:

 

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(a)                                  Research
Program.  The Steering Committee
shall have general authority over [*] and [*] of the Research Program. The
Steering Committee shall periodically review the Research Program from a
strategic perspective and make changes as it deems necessary to accomplish the
purpose of the overall Research Program.

 

(b)                                 Review
of Activities. The Steering Committee shall periodically review the results
of the Research Program to ensure, to the extent reasonably practical, that the
Parties are meeting their commitments for both human and financial support for
the fulfillment of all contractual obligations between the Parties.

 

(c)                                  Representation.
AMRI and CUBIST shall each appoint a minimum of [*] representatives to serve on
the Steering Committee. The representatives of a Party may be changed from time
to time at the discretion of that Party upon written notification by the Party
making such change to the other.

 

(d)                                 Meetings.
The Steering Committee shall meet from time to time as determined by the
Steering Committee members. It is expected that the Steering Committee shall
meet in person at least [*] in each calendar year. The location of Steering
Committee meetings shall alternate between AMRI’s and CUBIST’s offices unless
otherwise agreed by the Parties, with the first meeting being held at a CUBIST
office. Consultants and non-representative employees of the Parties may attend meetings of the Steering Committee as
required to further the Research Program. Minutes of all meetings setting forth
decisions of the Steering Committee relative to the Research Program will be
prepared and circulated by the Party hosting the meeting within [*] of such
meeting. Such minutes will become official when agreed to by all members of the
Steering Committee. Each Party will bear all expenses associated with
attendance of its employees and consultants at such meetings. If the Steering
Committee members all agree, a meeting may be held by means of telephone
conference or similar communications equipment by means of which all persons
participating in the meeting can hear each other. A quorum for a meeting shall
require [*] of AMRI and [*] of CUBIST.

 

(e)                                  Decisions.
CUBIST will define the goals and objectives of the program, and shall have the
right to change the goals and objectives at any time during the tern of this
Agreement, provided such changes are put in writing and provided to the Steering
Committee. The Steering Committee shall make decisions about the ways to
technically achieve such goals and objectives, preferably by a unanimous vote,
with the representatives of each Party having one collective vote. If a dispute
arises, it shall be referred to the

 

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[*] of AMRI (or successor position), and the [*] of
CUBIST (or successor position) for further discussion and resolution. These
individuals shall, as soon as practicable, attempt in good faith to resolve the
dispute and, thereby, make the decision on behalf of the Steering Committee.
These individuals may obtain the advice of other employees as they deem
necessary or advisable in order to make the decision. If such dispute is not
resolved within [*] days after it has been referred to such persons for
resolution, the dispute shall be referred to CUBIST’s [*] (or the applicable
successor thereof), who shall make the final decision regarding such dispute in
good faith.

 

2.2                                 AMRI
shall perform research in accordance with the Stage I Research Plan. The
research for the Stage I Research Plan shall be performed over a [*] period at
a total cost of not more than [*], which shall be paid in [*] equal [*]
installments, provided Stage 1 is not terminated prior to the completion of the
[*] period. The [*] installment shall be paid within [*] days of the Effective
Date, and each subsequent [*] installment shall be paid within [*] days of the
previous [*] installment.

 

2.3                                 If
the results of the Stage I Research are successful as determined by CUBIST, and
CUBIST desires to proceed to Stage II, CUBIST shall select one or more AMRI
Derivatives for research pursuant to the Stage II Research Plan.

 

2.4                                 Subject
to CUBIST’S desire to proceed under Section 2.3, AMRI shall perform research in
accordance with the Stage II Research Plan for a period not to exceed [*].
CUBIST shall pay AMRI [*] dollars [*] for [*] TE’s [*] for the Stage II
Research, plus the cost of materials to the extent that CUBIST has provided
prior authorization for such costs. CUBIST shall pay the first [*] payment to
AMRI for the Stage II Research within [*] days after commencement of the Stage
II Research, and shall make each of the subsequent payments on a [*] basis
thereafter. CUBIST shall pay AMRI for the cost of materials within [*] days of
receipt of an invoice therefor. The parties anticipate that AMRI shall provide
to CUBIST approximately [*] mgs of each of [*] AMRI Derivatives having at least
[*] purity within [*] of the initiation of Stage II, and it is expressly
understood that the achievement thereof is not an obligation or requirement of
this Agreement

 

2.5                                 CUBIST
shall screen for biological activity of AMRI Derivatives provided by AMRI to
CUBIST and CUBIST shall report all results of all such screening to AMRI.

 

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3.                                       SUPPLY
OF SELECTED AMRI DERIVATIVES

 

3.1                                 (a)                                  With
respect to supply of AMRI Derivatives for [*], CUBIST agrees that AMRI shall
have the sole and exclusive right of first negotiation, for a period of [*]
days, to negotiate with CUBIST the terms and conditions of an agreement by
which AMRI will supply to CUBIST CUBIST’s requirements for AMRI Derivatives for
such purposes. Either Party can initiate such [*] period by written notice to
the other Party, provided such written notice is given no earlier than the time
that CUBIST notifies AMRI in writing which AMRI Derivative CUBIST has selected
for [*] (the “Selected AMRI Derivative”). Upon receipt of written notice to
initiate the negotiation period, the Parties shall negotiate in good faith the
terms and conditions of a supply agreement for a period of [*].

 

(b)                                 If
the Parties fail to reach agreement in such period, CUBIST shall have the right
to supply or have supplied by a Third Party the Selected AMRI Derivative.  CUBIST will have the right to produce or
have produced the Selected AMRI Derivative by use of [*] Processes, and/or
AMRI’s proprietary synthesis technology that exists at such time. In no event
shall AMRI have the right to provide or license such AMRI Derivatives to any
Third Party.

 

4.                                       GRANT OF LICENSES AND ASSIGNMENT

 

4.1                                 License.

 

(a)   AMRI hereby grants to CUBIST and its
Affiliates a worldwide, exclusive, royalty-bearing license with the right to
grant sublicenses in accordance with the terms of this Agreement, under AMRI’s
interest in Research Patents, AMRI Process Technology and AMRI Background
Patents to develop, register, use, make, have made, import, export, offer to
sell, and sell CUBIST Products.

 

(b)                                 CUBIST agrees that it will use AMRI Process
Technology, Research Patents and AMRI Background Patents only for CUBIST
PRODUCTS as licensed under this Agreement, only as long as licensed under this
Agreement and in each case in accordance with the terms and conditions of this
Agreement.

 

4.2                                 Sublicensing
by CUBIST.

 

(a)                                  CUBIST
shall have the right to grant sublicenses to a Third Party under the licenses
granted pursuant to Section 4.1 provided that (i) such sublicense does not
substantively alter AMRI’s rights or CUBIST’s obligations to AMRI hereunder,
and (ii) each Sublicensee agrees

 

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in writing to comply with Sections 8.3, 8.4, 10,
11.1(b), 11.2 and 11.3 of this Agreement,

 

(b)                                 Any sublicense granted by CUBIST to a Third Party
shall include a provision prohibiting further sublicenses and a provision
terminating the sublicense in the event that the license from AMRI to CUBIST is
terminated.

 

4.3                                 No right or license is granted to CUBIST hereunder
except as expressly granted under Section 4.1.

 

5.                                       DEVELOPMENT AND COMMERCIALIZATION.

 

5.1                                 Development Efforts by CUBIST.

 

(a)                                  CUBIST will use reasonable efforts consistent with
the efforts exerted by CUBIST in pursuing the development and commercialization
of its other products of similar stage, technical challenge and economic
potential, at its own expense, to develop and commercialize [*] CUBIST Product in a Major Market. In the event
that CUBIST is not interested in pursuing development and/or commercialization
of a AMRI Derivative Product in any country or countries, CUBIST shall promptly
notify AMRI, and [*]. Notwithstanding
the foregoing, in no event is CUBIST obligated to grant such rights.

 

5.2                                 Reporting.

 

Within
[*] days after the end of each calendar year, CUBIST shall provide to AMRI an
annual project status report (including the status of regulatory approvals) of
the development, and registration of each AMRI Derivative Product. All such
reports by CUBIST shall be treated as Confidential Information of CUBIST and
shall be subject to the restrictions imposed under Section 11.2. Within [*]
days after the end of each calendar year, CUBIST shall provide to AMRI an
annual project status report of the development and registration of each CUBIST
Derivative Product. All such reports by CUBIST shall be treated as Confidential
Information of CUBIST and shall be subject to the restrictions imposed
under Section 11.2. In no event will CUBIST be required to provide structural
information of such CUBIST Derivative Product.

 

5.3                                 Remedy

 

AMRI shall have the right
to terminate this Agreement in its entirety by written notice to CUBIST if
CUBIST (i) has not filed an IND for a

 

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CUBIST Product within five (5) years of the Effective
Date (ii) has not initiated a Phase II clinical trial for a CUBIST Product
within seven (7) years of the IND filing or (iii) has not initiated a Phase III
clinical trial for a CUBIST Product within seven (7) years of the completion of
a Phase II clinical trial.

 

6.                                       FEE;
MILESTONE PAYMENTS AND ROYALTIES.

 

6.1                                 Milestone
Payments by CUBIST. CUBIST shall pay AMRI each of the following
non-refundable and non-creditable milestone payments the first time that each
milestone is achieved for a CUBIST Product, whether achieved by CUBIST, its
Affiliates, its Sublicensee or distributor:

 

(a)                                  [*]
upon initiation of the first Phase I clinical study;

 

(b)                                 [*]
upon commencement of the first Phase III clinical trial or the equivalent
thereof in any Major Market;

 

(c)                                  [*]
upon the first filing for regulatory approval in any Major Market;

 

(d)                                 [*]
upon the first receipt of regulatory approval in any Major Market;

 

(e)                                  In
the event that any of the milestones of Section 6.1(a)-(d) are achieved and one
or more preceding milestone payments have not been made, then the payment
required by the preceding milestone(s) shall also be paid at the same time.
Cubist shall be obligated to pay each of milestone payments (a) through (d)
only once.

 

6.2                                 Royalties.
In partial consideration of the rights and licenses granted by AMRI to CUBIST
under this Agreement, during the Royalty Term, CUBIST shall pay to AMRI a
royalty on Net Sales of CUBIST Products as follows:

 

(a)                                  Royalties
on Net Sales of AMRI Derivative Products

(i)                                     [*]
of aggregate Net Sales up to [*] dollars;

(ii)                                [*]*
of aggregate Net Sales over [*] dollars.

 

(b)                                 CUBIST
will pay to AMRI a royalty of [*] of Net Sales of CUBIST Derivative Products.

 

In calculating the
royalty due under this Section 6.2 with respect to Net Sales of CUBIST Products
during any period of less than a calendar

 

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year, the foregoing thresholds for a calendar year Net
Sales shall be prorated in accordance with the duration of such period.

 

6.3                                 Obligation to Pay Royalties. The obligation to pay royalties to AMRI under
this Section 6 is imposed only once with respect to the same unit of CUBIST
Product regardless of the number of patents pertaining thereto. In the case
where the CUBIST Product is to be resold, there shall be no obligation to pay
royalties to AMRI under this Section 6 on sales of CUBIST Products between
CUBIST and its Affiliates or between any of them and its distributor,
co-marketer or Sublicensee, but in such instances the obligation to pay
royalties shall arise upon the resale based on Net Sales of the reseller.

 

7.                                       REPRESENTATIONS AND WARRANTIES.

 

7.1                                 Representations and Warranties of Both Parties. Each Party represents and warrants to the other
Party that, as of the date of this Agreement, such Party is duly organized and
validly existing and has full corporate power and authority to enter into this
Agreement and to carry out the provisions hereof. Additionally, AMRI and CUBIST
each represents and warrants that its employees and agents have an obligation
to assign all rights in any intellectual property to AMRI or CUBIST,
respectively.

 

7.2                                 UNLESS OTHERWISE SET FORTH IN THIS AGREEMENT,
NEITHER AMRI NOR CUBIST MAKES ANY OTHER REPRESENTATION OR WARRANTY HEREUNDER
AND DISCLAIMS ALL OTHER REPRESENTATIONS AND WARRANTIES, INCLUDING, BUT NOT
LIMITED TO, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR USE OR WITH RESPECT TO
THE VALIDITY, ENFORCEABILITY, OR PATENTABILITY OF PATENTS OR THAT CUBIST
PRODUCT WILL NOT INFRINGE PATENT RIGHTS OF A THIRD PARTY.

 

8.                                       PAYMENTS
AND REPORTS.

 

8.1                                 Royalty
Payments. All royalty payments due hereunder shall be paid [*] within [*]
days of the end of each [*]. Each such payment shall be accompanied by a
statement, CUBIST Product by CUBIST Product and country-by-country (unless
otherwise mutually agreed in writing by the parties), of the amount of gross
sales used in calculating Net Sales, the calculation of Net Sales and the units
of CUBIST Product sold during such [*], the amount of royalties due on such Net
Sales, the conversion rates used in converting to United States Dollars and any
other information

 

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reasonably requested by AMRI to enable AMRI to
determine amounts it is owed hereunder.

 

8.2                                 Mode of Payment. CUBIST shall make all payments required under this Agreement as directed
by AMRI from time to time in United States Dollars. Whenever conversion from
any foreign currency shall be required, such conversion shall be at the average
rate of exchange for the last twenty (20) business days of the applicable
calendar quarter as published in the Wall Street Journal, New York edition.

 

8.3                                 Records Retention. CUBIST and its Affiliates and its Sublicensees, distributors and
co-marketers shall keep complete and accurate records pertaining to the sale of
CUBIST Products in the Territory and covering all transactions from which Net
Sales are derived for a period of three calendar years after the year in which
such sales occurred, and in sufficient detail to permit AMRI to confirm the
accuracy of royalty payments due hereunder.

 

8.4                                 Audit Request. At the request and expense (except as provided below and no more than
once each calendar year) of AMRI, CUBIST and its Affiliates and its Sublicensees,
distributors and co-marketers shall permit an independent, certified public
accountant jointly selected by AMRI and CUBIST, at reasonable times and upon
reasonable notice, to examine those records and all other material documents
directly relating to, or directly relevant to, Net Sales of Cubist Product in
the possession or control of CUBIST and/or its Affiliates or its Sublicensees,
distributors and co-marketers, for a period of three years after such royalties
have accrued. Said accountant shall sign an appropriate confidentiality
agreement with CUBIST, and shall not disclose to AMRI any information other
than information directly relating to said reports, royalties, and payments.
Results of any such examination shall be made available to both Parties. If, as
a result of any inspection of the books and records of CUBIST or its Affiliates
or its Sublicensees, distributors and co-marketers it is shown that Cubist
underpaid by more than 7 %, Cubist will pay for the costs associated with the
audit. Prompt adjustments shall be
made by the Parties to reflect any underpayment or overpayment determined to
have been made as a result of such audit.

 

8.5                                 Taxes.
In the event that CUBIST is required by the revenue authorities in any country
to withhold any tax, such amount shall be deducted from the royalty or other
payment to be made by CUBIST, and CUBIST shall notify AMRI and promptly furnish
AMRI with copies of any tax certificate or other documentation evidencing such
withholding. Each

 

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Party agrees to cooperate with the other Party in
claiming exemptions from such deductions or withholdings under any agreement or
treaty in effect.

 

9.                                       INTELLECTUAL PROPERTY.

 

9.1                                 Ownership of Inventions. Ownership of inventions shall be determined in
accordance with U.S. Patent Laws; inventions shall be licensed as set forth in
Article 4.

 

9.2                                 Research Patents. In the event that a Research Patent is jointly owned by both AMRI and
Cubist, neither party may license such patent without obtaining the prior
written consent of the other.

 

9.3                                 Patent Filing, Maintenance and Prosecution.

 

(a)                                  Research Patents claiming Derivatives only.  CUBIST shall
file, prosecute and maintain Research Patents claiming AMRI Derivatives at
CUBIST’s cost and expense through patent counsel selected by CUBIST, and CUBIST
shall provide AMRI copies of all documentation relating to such patent
activities, with sufficient time for AMRI to review and provide comments
thereto. CUBIST shall disclose to AMRI the complete texts of all such patents
and patent applications filed by CUBIST, as well as all information received
concerning the institution or possible institution of any interference,
opposition, re-examination, reissue, revocation, nullification or any official
proceeding involving any Research Patents. AMRI shall have the right to review
such pending applications and other proceedings and make recommendations to CUBIST
concerning them and their conduct. AMRI and its employees agree to cooperate
with CUBIST in taking all steps which CUBIST believes reasonably
necessary or desirable to secure its rights on this property at CUBIST’s cost.

 

CUBIST shall give [*]
days prior written notice to AMRI of any intent to cease prosecution and/or
maintenance of any Research Patents and, in such case, on a county-by-country
basis, shall permit AMRI, at its sole discretion, to continue prosecution or
maintenance at its own expense. If AMRI elects to continue such prosecution or
maintenance, AMRI shall notify CUBIST within such [*] day period, and CUBIST
shall execute such documents and perform such acts as may be reasonably
requested by AMRI to assign all of CUBIST’s right, title and interest in and to
such Research Patents to AMRI and CUBIST’s license to such Research Patents
shall terminate.

 

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(b)                                 Research
Patents claiming Derivatives and Processes. In the event that Research
Patents claim AMRI Process Technology or other processes for making AMRI
Derivatives, in addition to AMRI Derivatives, the patents shall be filed,
prosecuted and maintained by patent counsel selected jointly by Cubist and
AMRI, and the parties shall share equally all costs associated therewith,
unless otherwise agreed in writing by the parties. Such patent counsel shall
represent both AMRI and Cubist.

 

(c)                                  AMRI
Background Patents and AMRI Process Technology. Except as set forth in (b)
above, AMRI shall file, prosecute and maintain patents in AMRI Background
Patents, and AMRI Process Technology licensed to CUBIST hereunder. AMRI shall
provide CUBIST copies of all documentation relating to such patent activities.

 

9.4                                 Infringement
Actions. Each of AMRI and/or CUBIST shall promptly notify the other in
writing of any alleged or threatened infringement of any patents licensed
hereunder, or of any allegation by a Third Party that the activity of either of
the parties pursuant to this Agreement infringes or may infringe the
intellectual property rights of such Third Party. In the event of the
institution of any suit by a Third Party against CUBIST, its Affiliates or its
Sublicensees for patent infringement involving the use, sale, distribution or
marketing of any CUBIST Product, CUBIST shall defend such action at its own
expense. CUBIST shall have the right to settle the suit or consent to an
adverse judgment thereto, in its sole discretion. During the pendency of such
action, all royalties due hereunder shall continue to be paid by CUBIST. CUBIST
shall assume full responsibility for the payment of any award for damages, or
any amount due pursuant to any settlement entered into by CUBIST with such
Third Party.

 

In the event a Third
Party allegedly infringes an Research Patents which do not have claims to an
AMRI Derivative, then AMRI shall have the first right to prosecute such action
at its own expense and represented by counsel of its own choice. In the event a
claim in a Research Patent directed to an AMRI Derivative is infringed, then
Cubist shall have the right to participate in such action represented by
counsel of its own choice and at its own expense.

 

Both Cubist and AMRI agree
to cooperate fully with each other in the event of any of offensive or
defensive litigation.

 

10.                                 INDEMNIFICATION.

 

10.1                           By
CUBIST. CUBIST shall indemnify and hold AMRI and its directors, officers,
employees, shareholders and agents, harmless from and

 

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WITH THE COMMISSION

 

13

 

against any and all Third Party claims, suits or
demands for liabilities, damages, losses, costs and expenses (including the
reasonable fees of attorneys and other professionals) directly arising out of
or directly resulting from the development, manufacture, use, distribution or
sale of any CUBIST Product by CUBIST, its Affiliates, distributors,
co-marketers or Sublicensees or any person or entity that prepares or
manufactures CUBIST Product or AMRI Derivatives or CUBIST Derivatives for or on
behalf of any, of the foregoing or any person or entity who receives or obtains
(directly or indirectly) CUBIST Product or AMRI Derivatives from any of the
foregoing, except those losses which arise out of the gross negligence or
intentional misconduct of AMRI.

 

10.2                           By
AMRI. AMRI shall indemnify and hold CUBIST and its directors, officers,
employees, shareholders and agents, harmless from and against any and all Third
Party claims, suits or demands for liabilities, damages, losses, costs and
expenses (including the reasonable fees of attorneys and other professionals)
directly arising out of or directly resulting from work performed by AMRI
pursuant to the Research Program, except those losses which arise out of the
gross negligence or intentional misconduct of CUBIST and except for those
losses as to which AMRI is indemnified pursuant to Section 10.2.

 

10.3                           Costs
of Enforcement.                          As
the Parties intend complete indemnification, the indemnifying Party shall also
reimburse all costs and expenses of enforcing any provision of this Section 10.

 

10.4                           Conditions
to Indemnification. A person or entity that intends to claim indemnification
under this Section (the “Indemnitee”) shall promptly notify the other Party
(the “Indemnitor”) of any loss, claim, damage, liability or action in respect
of which the Indemnitee intends to claim such indemnification, and the
Indemnitor shall assume the defense thereof with counsel mutually satisfactory
to the Indemnitee whether or not such claim is rightfully brought; provided,
however, that an Indemnitee shall have the right to retain its own counsel,
with the fees and expenses to be paid by the Indemnitor if Indemnitor does not
assume the defense, or if representation of such Indemnitee by the counsel
retained by the Indemnitor would be inappropriate due to actual or potential
differing interests between such Indemnitee and any other person represented by
such counsel in such proceedings. The indemnity agreement in this Section shall
not apply to amounts paid in settlement of any loss, claim, damage, liability
or action if such settlement is effected without the consent of the Indemnitor,
which consent shall not be withheld or delayed unreasonably. The failure to
deliver notice to the Indemnitor within a reasonable time after the
commencement of

 

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14

 

any such action, only if prejudicial to its ability to
defend such action, shall relieve such Indemnitor of any liability to the
Indemnitee under this Section, but the omission so to deliver notice to the
Indemnitor will not relieve it of any liability that it may have to any
Indemnitee otherwise than under this Section. The Indemnitee under this
Section, its employees and agents, shall cooperate fully with the Indemnitor
and its legal representatives in the investigations of any action, claim or
liability covered by this indemnification.

 

10.5                           Any and
all licensees of CUBIST, with respect to CUBIST Product, shall agree to the
same indemnity as in Section 10.1 of this Agreement and AMRI shall be made a
Third Party beneficiary thereof with the right of enforcement.

 

11.                                 CONFIDENTIALITY.

 

11.1                           Confidentiality
and Exceptions.

 

(a)                                  Except
to the extent expressly authorized by this Agreement or otherwise agreed to in
writing, AMRI agrees that, it, its Affiliates and its Sublicensees, if any,
shall use reasonable efforts to keep, and to ensure that their officers and
directors keep completely confidential and shall not publish or otherwise
disclose and shall not use for any purpose any information furnished to it by CUBIST, its Affiliates or its
Sublicensees, if any, except to the extent that it can be established by AMRI
by competent proof that such information: (i) is or hereafter becomes generally
available to the public other than by reason of any default by AMRI with respect
to its confidentiality obligations hereunder; (ii) was already known to AMRI as
evidenced by prior written documents in its possession; (iii) is disclosed to
AMRI by a Third Party who is not in default of any confidentiality obligation
to CUBIST; or (iv) is independently developed by or for AMRI without reference
to or reliance upon the information furnished by CUBIST (“Confidential
Information”). Information disclosed by one Party to the other shall remain the
property of the disclosing Party unless otherwise specified in this Agreement.

 

(b)                                 Except to the extent expressly authorized by this
Agreement or otherwise agreed to in writing, CUBIST agrees that, it, its
Affiliates and its Sublicensees, if any, shall use reasonable efforts to keep,
and to ensure that their officers and directors keep completely confidential
and shall not publish or otherwise disclose and shall not use for any purpose
any information furnished to it by AMRI, or its Affiliates, if any, except to
the extent that it can be established by CUBIST by competent proof that such
information: (i) is or hereafter becomes generally available

 

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15

 

to the public other than by reason of any default by
CUBIST with respect to its confidentiality obligations hereunder, (ii) was
already known to CUBIST as evidenced by prior written documents in its
possession; (iii) is disclosed to CUBIST by a Third Party who is not in default
of any confidentiality obligation to AMRI; or (iv) is independently developed
by or for AMRI without reference to or reliance upon the information furnished
by AMR1 (“Confidential Information”). Information disclosed by one Party to the
other shall remain the property of the disclosing Party unless otherwise
specified in this Agreement:

 

11.2                           Notwithstanding the foregoing, the Parties may
disclose Confidential Information (i) to governmental authorities to facilitate
the issuance of marketing approvals for a CUBIST Product, provided that
reasonable measures shall be taken to assure confidential treatment of such
information, provided the non-disclosing party is given prior written notice of
such disclosure, (ii) to Third Parties under appropriate terms and conditions,
including confidentiality provisions equivalent to those in this Agreement, for
consulting, manufacturing, development, external testing, marketing, clinical
trials and licensing or potential licensing of CUBIST Product in accordance
with this Agreement; and (iii) to comply with applicable laws or regulations
(including, without limitation, to comply with SEC, NASDAQ or stock exchange
disclosure requirements) or order by a court or other regulatory body having
competent jurisdiction; provided that if a Party is required to make any such
disclosure of the other Party’s Confidential Information under (i)-(iii) above,
it will to the extent practicable, give reasonable advance notice to the other
Party of such disclosure requirement and, will use its reasonable best efforts
to secure confidential treatment of such Confidential Information required to
be disclosed.

 

11.3                           The obligations of this Section 11 shall terminate [*] after the termination of this Agreement.

 

12.                                 TERM; TERMINATION.

 

12.1            Term

 

This
Agreement shall commence as of the Effective Date and, unless sooner terminated
as provided hereunder, shall expire as follows:

 

(a)                                  As
to each CUBIST Product in each country in the Territory, this Agreement shall
expire upon the expiration of the Royalty Term with respect to such CUBIST
Product in such country.

 

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16

 

(b)                                 This
Agreement shall expire in its entirety upon the termination of the Royalty Term
with respect to all CUBIST Products in all countries in the Territory.

 

12.2                           Notwithstanding
the foregoing, CUBIST shall have the right to terminate the Agreement at any
time upon sixty (60) days prior written notice to AMRI, provided that CUBIST
pays all amounts for work performed prior to the effective date of the
termination.

 

12.3                           Breach.

 

(a)                                  Failure
by either Party to comply with any of its material obligations contained in
this Agreement shall entitle the other Party to give to the Party in default
notice specifying the nature of the default and requiring it to cure such
default. If such default is not cured within 60 days (thirty (30) days in the
event of a default with respect to an obligation to pay money) after receipt of
such notice, the notifying Party shall be entitled, without prejudice to any of
its other rights conferred on it by this Agreement, and in addition to any
other remedies available to it by law or in equity, to terminate this Agreement
in its entirety, by giving written notice to take effect immediately upon
delivery of such notice. The right of either Party to terminate this Agreement,
as provided in this Section 12.3, shall not be affected in any way by its
waiver or failure to take action with respect to any previous default.

 

(b)                                 An
election of remedy by a Party for a material breach of this Agreement under
this Section 12.3 on one occasion shall not constitute a waiver as to any other
remedy that may be available to such Party under this Section 12.3 as to any
material breach on another occasion.

 

12.4                           Effect
of Expiration or Termination.

 

(a)                                  Following
expiration of this Agreement under Section 12.1 with respect to a CUBIST
Product in a country, CUBIST shall have the royalty-free, perpetual right to
manufacture, have manufactured, use and sell such CUBIST Product in such
country under the license granted pursuant to Section 4.1(a) of this
Agreement.  Following expiration of the
term of this Agreement in its entirety under Section 12.2, CUBIST shall have
the royalty-free, perpetual right to continue to manufacture, have manufactured
use and sell all CUBIST Products in all countries so long as CUBIST continues
to pay the royalties and milestones provided for herein.

 

(b)                                 In
the event that this Agreement is terminated by AMRI under Section 12.3 as a
result of CUBIST’s failure to make payments owed to

 

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17

 

AMRI, or under Section 5.3, CUBIST will grant AMRI a
first right to negotiate an exclusive, worldwide, royalty-bearing license to
make, have made, use, sell, offer to sell and import CUBIST Products containing
AMRI Derivatives throughout the world, including a right to sublicense a Third
Party(ies).

 

12.5                           Either
Party may terminate this Agreement, if, at any time, the other Party becomes
insolvent or the other Party shall file in any court or agency pursuant to any
statute or regulation of a country in the Territory a petition of bankruptcy or
insolvency or for reorganization or for an arrangement or for the appointment
of a receiver of trustee of the other Party or of its assets or if the other
Party proposes a written agreement of composition or extension of its debts or
if the other Party shall be served with an involuntary petition against it,
filed in any insolvency proceeding, and such petition shall not be dismissed
within sixty (60) days after filing thereof, or if the other party shall make
an assignment for the benefit of its creditors.  Notwithstanding the bankruptcy of AMRI or the impairment of
performance of AMRI of its obligations under this section, CUBIST shall be
entitled to retain the licenses granted herein, provided it continues to comply
with its obligations to AMRI hereunder.

 

12.6                           Accrued
Rights, Surviving Obligations.

 

(a)                                  Termination,
relinquishment or expiration of this Agreement for any reason shall be without
prejudice to any rights which shall have accrued to the benefit of either Party
prior to such termination, relinquishment or expiration. Such termination,
relinquishment or expiration shall not relieve Party from obligations which are
expressly indicated to survive termination or expiration of this Agreement.

 

(b)                                 Termination,
relinquishment or expiration of this Agreement shall not terminate CUBIST’s
obligation to pay all royalties and other payments that shall have accrued
prior to such termination.  All of the
Parties’ rights and obligations under Sections 4.1 (b) and (c), 6.1, 6.2, 6.3,
8.1, 8.2, 8.3, 8.4, 8.5, 9.1, 9.2, 12.4(b), 12.6 and Articles 10, 11 and 14
shall survive termination, relinquishment or expiration hereof.

 

12.7                           This
Agreement may not be terminated by either Party except as specifically provided
in this Section 12.

 

13.                                 FORCE
MAJEURE.

 

13.1                           Events
of Force Majeure. Neither Party shall be held liable or responsible to the
other Party nor be deemed to be in default under or in

 

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18

 

breach of any provision of this Agreement for failure
or delay in fulfilling or performing any obligation of this Agreement when such
failure or delay is due to force majeure, and without the fault or
negligence of the Party so failing or delaying.  For purposes of this Agreement, force majeure is defined
as causes beyond the control of the Party, including, without limitation, acts
of God; acts, regulations, or laws of any government; acts of regulatory or
medical advisory groups to the extent that it is beyond the control of a Party;
war; civil commotion; destruction of production facilities or materials by
fire, flood, earthquake, explosion or storm; labor disturbances; epidemic; and
failure of pubic utilities or common carriers. In such event CUBIST or AMRI, as
the case may be, shall immediately notify the other Party of such inability and
ability is expected to continue. The Party giving such notice shall thereupon
be excused from such of its obligations under this Agreement as it is thereby
disabled from performing for so long as it is so disabled, provided, that the
Parry giving such notice exerts reasonable efforts to resume such performance.

 

14.                                 MISCELLANEOUS.

 

14.1                           Relationship
of Parties. Nothing in this Agreement is intended or shall be deemed to
constitute a partnership, agency, employer-employee or joint venture
relationship between the Parties. No Party shall incur any debts or make any
commitments for the other, except to the extent, if at all, specifically
provided herein.

 

14.2                           Assignment.
Neither Party shall, be entitled to assign its rights hereunder without the
express written consent of other Party hereto, which consent shall not be
unreasonably withheld, except that both CUBIST and AMRI may otherwise assign
their respective rights and  transfer their respective duties
hereunder to any assignee of all or substantially all of their respective
businesses (or that portion thereof to which this Agreement relates) or in the
event of their respective merger or consolidation or similar transaction.
CUBIST may assign this Agreement to an Affiliate but such assignment shall not
relieve CUBIST of its obligations hereunder. No assignment and transfer shall
be valid or effective unless and until the assignee/transferee shall agree in
writing to be bound by the provisions of this Agreement in which case the
Agreement will inure to the benefit of such successors and assigns.

 

14.3                           Further
Actions. Each Party agrees to execute, acknowledge and deliver such further
instruments, and to do all such other acts, as may be necessary or appropriate
in order to carry out the purposes and intent of this Agreement.

 

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19

 

14.4                           Notice.
Any notice or request required or permitted to be given under or in connection
with this Agreement shall be deemed to have been sufficiently given if in
writing and personally delivered or sent by certified mail (return receipt
requested), facsimile transmission (receipt verified), or overnight express
courier service (signature required), prepaid, to the Party for which such
notice is intended, at the address set forth for such Party below:

 

(a)                                  In
the case of CUBIST, to:

 

Alan Watson, Ph.D, MBA

Senior Vice President, Corporate Development Cubist

Pharmaceuticals

24 Emily Street Cambridge, MA 02139 With a copy to:

Contract Manager

 

(b)                                 In
the case. of AMRI, to:

 

Mr. David P. Waldek, CPA

Chief Financial Officer

Albany Molecular Research, Inc.

PO Box 15098

21 Corporate Circle

Albany, NY 12212-5098

 

or to such other address for such Party as it shall
have specified by like notice to the other Party, provided that notices of a
change of address shall be effective only upon receipt thereof. If delivered
personally or by facsimile transmission, the date of delivery shall be deemed
to be the date on which such notice or request was given. If sent by overnight
express courier service, the date of delivery shall be deemed to be the next
business day after such notice or request was deposited with such service. If
sent by certified mail, the date of delivery shall be deemed to be the third
business day after such notice or request was deposited with the U.S. Postal
Service.

 

14.5                           Use
of Name. Except as otherwise provided herein, neither Party shall have any
right, express or implied, to use in any manner the name or other designation
of the other Party or any other trade name or trademark of the other Party for
any purpose in connection with the performance of this Agreement.

 

14.6                           Exclusivity.
AMRI expressly acknowledges that the during the term of this Agreement, as a
result of the exclusive licenses granted to CUBIST hereunder, AMRI shall not
have the right, directly or indirectly,

 

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20

 

itself or through or in connection with any Third Party,
to conduct research, develop, make or market AMRI Derivatives, CUBIST
Derivatives or daptomycin. AMRI further agrees that for a period of 3 years
after the termination of this Agreement, it shall not directly or indirectly
conduct research, develop, make or market AMRI Derivatives, CUBIST Derivatives
or daptomycin. CUBIST expressly acknowledges that nothing in the terms of this
Agreement shall prevent AMRI from utilizing AMRI Background Patents AMRI
Process Technology, or Research Patents in any manner for compounds which are
not AMRI Derivatives or CUBIST Derivatives.

 

14.6                           Public
Announcements. Except as required by law, rule or regulation (including,
without limitation, disclosure requirements of the U.S. Securities and Exchange
Commission, NASDAQ or any other stock exchange on which securities issued by
AMRI are traded), neither Party shall make any public announcement concerning
this Agreement or the subject matter hereof without the prior written consent
of the other, which shall not be unreasonably withheld. It shall not be
unreasonable for a Party to withhold consent with respect to any public
announcement containing any of such Party’s Confidential Information. In the
event of a required or desired public announcement the Party making such announcement
shall provide the other Party with a copy of the proposed text prior to such
announcement sufficiently in advance of the scheduled release of such
announcement to afford such other Party a reasonable opportunity to review and
comment upon the proposed text. Once the text is approved, either Party may
disclose the substance of that which has been previously disclosed to the
public.

 

14.7                           Waiver.
A waiver by either Party of any of the terms and conditions of this Agreement
in any instance shall not be deemed or construed to be a waiver of such term or
condition for the  future, or of any
subsequent. breach hereof. All rights, remedies, undertakings, obligations and
agreements contained in this Agreement shall be cumulative and none of them
shall be in limitation of any other remedy, right, undertaking, obligation or
agreement of either Party.

 

14.8                           Compliance
with Law. CUBIST and AMRI agree to comply with all applicable laws, rules
and regulations with respect to their activities under this Agreement.

 

14.9                           Severability.
When possible, each provision of this Agreement will be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Agreement is held to be prohibited by or invalid under applicable law,
such provision will be ineffective only to the extent of such prohibition or
invalidity, without invalidating the

 

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21

 

remainder of this Agreement and the parties shall
negotiate, in good faith, a new provision which will, as closely as possible,
carry out the intentions of the parties provided for in the invalidated
provision. If such agreement is not reached in sixty (60) days, the affected
Party(ies) may terminate this Agreement.

 

14.10                     Amendment.
No amendment, modification or supplement of any provisions of this Agreement
shall be valid or effective unless made in writing and signed by a duly
authorized officer of each Party.

 

14.11                     Governing
Law. This Agreement shall be governed by and interpreted in accordance with
the laws of the Commonwealth of Massachusetts without regard to its choice of
law principles. In the event that either Party desires to initiate litigation
with respect to this Agreement, such litigation shall be conducted in an
appropriate court in the Commonwealth of Massachusetts to the extent possible.

 

14.12                     Entire
Agreement. This Agreement, together with the Exhibits hereto, sets forth
the entire agreement and understanding between the Parties as to the subject
matter hereof and merges all prior discussions and negotiations between them,
and neither of the Parties shall be bound by any conditions, definitions,
warranties, understandings or representations with respect to such subject
matter other than as expressly provided herein or as duly set forth on or
subsequent to the date hereof in writing and signed by a proper and duly
authorized officer or representative of the Party to be bound thereby.

 

14.13                     Parties in
Interest.  All the terms and
provisions of this Agreement shall be binding upon, inure to the benefit of and
be enforceable by the Parties hereto and their respective permitted successors
and assigns.

 

14.14                     Descriptive
Headings. The descriptive headings of this Agreement are for convenience
only, and shall be of no force or effect in construing or interpreting any of
the provisions of this Agreement.

 

14.15                     Counterparts.
This Agreement may be executed simultaneously in any number of counterparts,
any one of which need not contain the signature of more than one Party but all
such counterparts taken together shall constitute one and the same agreement.

 

IN WITNESS WHEREOF, each
of the Parties has caused this Agreement to be executed by its duly authorized
officer as of the day and year first above written.

 

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22

 

	
   

  	
  ALBANY MOLECULAR RESEARCH, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas
  D’Ambra

  	
   

  
	
   

  	
  Name:

  	
  Thomas
  D’Ambra

  	
   

  
	
   

  	
  Title:

  	
  Chairman and CEO

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CUBIST PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Alan Watson

  	
   

  
	
   

  	
  Name:

  	
  Alan
  Watson

  	
   

  	 

	
   

  	
  Title:

  	
  Sr Vice President

  	
   

  
											

 

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WITH THE COMMISSION

 

23Exhibit
10.63

 

CONFIDENTIAL TREATMENT

 

MANUFACTURING
AND SUPPLY AGREEMENT

 

This
Manufacturing and Supply Agreement (Agreement) is entered into as of
September 30, 2001 (Effective Date) by and between
ACS Dobfar, SpA, an Italian corporation (ACSD) and Cubist Pharmaceuticals, Inc., a Delaware
corporation (Cubist).

 

BACKGROUND

 

Cubist
is a drug company focused on the development and commercialization of
daptomycin antibiotic drug. Cubist has commenced Phase III clinical trials of
daptomycin and intends to obtain approval to market and sell the drug for the
treatment of serious and life threatening infections in humans.

 

ACSD
has expertise in the manufacture of drugs on a contract basis. ACSD wishes to
provide scale-up services and to construct a production facility dedicated to
the manufacturing of daptomycin for Cubist, and to sell bulk daptomycin
exclusively to Cubist. Cubist desires to have ACSD construct a production
facility, and manufacture and supply Cubist with daptomycin for marketing and
sale in all jurisdictions. This Agreement sets forth the terms under which ACSD
will construct a dedicated production facility and manufacture and supply
daptomycin to Cubist.

 

NOW,
THEREFORE, in consideration of the premises and the mutual covenants contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, ACSD and Cubist agree as follows:

 

1.                                      DEFINITIONS

 

Capitalized
terms used in this Agreement and not otherwise defined herein shall have the
meaning set forth below.

 

Affiliate means with
respect to either party, any entity that, directly or indirectly, is controlled
by, controls or is under common control with such party. For purposes of this
Agreement, control means, with respect to any party, the direct or indirect
ownership of more than fifty percent (50%) of the voting or income interest in
such party or the possession otherwise, directly or indirectly, of the power to
direct the management or policies of such party.

 

Batch Record means a
record of the procedures followed by ACS with respect to the manufacture,
handling and storage of Product. The Batch Record consists of [*], such as [*].

 

[*.]

 

Certificate of Analysis (COA) means
a document which is generated for each batch of Product and which certifies
that Product was manufactured in a cGMP compliant facility and meets the filed
regulatory release testing specifications.

 

Change Order is
defined in Section 2.4 herein.

 

Change Order Request is
defined in Section 2.4 herein.

 

Confidential Information means
all data, specifications, training and any other know-how related to the
design, development, manufacture, or performance of the Product, as well as all
other information and data provided by either party to the other party pursuant
to this Agreement in written or other tangible 

 

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

 

1

 

medium
and marked as confidential, or if disclosed orally or displayed, confirmed in writing
within [*] days after disclosure, except any portion thereof which:

 

(a)                                  is
known to the receiving party, as evidenced by the receiving party’s written
records, before receipt thereof under this Agreement;

 

(b)                                 is
disclosed to the receiving party by a third person who is under no obligation
of confidentiality to the disclosing party hereunder with respect to such
information and who otherwise has a right to make such disclosure;

 

(c)                                  is
or becomes generally known in the trade through no fault of the receiving
party; or

 

(d)                                 is
independently developed by the receiving party without access to such
information, as evidenced by the receiving party’s written records.

 

Contract Year means
each twelve (12) month period during the term of this Agreement beginning on
the Effective Date.

 

Contractor means any
manufacturer, packager, or other Product support service provider who performs
processing and/or packaging of a Product or any intermediate step of
manufacture, or other Product support service.

 

Critical Equipment means
any equipment that comes into contact with Product or is essential to the
manufacturing process or is designed to assure that Product has the identity,
strength, quality and purity that it is represented to possess.

 

Cubist Technology means
individually and collectively the:

 

(a)                                  intellectual
property rights embodied or disclosed in:

 

	
  (i)

  	
   

  	
  Cubist patent application(s) and patents,

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  any patent application filed as a continuation,
  division, or continuation-in-part of the application(s) described in clause
  (a)(i), patents issuing therefrom and reissues, reexaminations and extensions
  of such patents; and

  
	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  any foreign counterpart to the application(s)
  described in clauses (a)(i)-(ii) (including divisions, continuations, confirmations,
  additions, renewals or continuations-in-part of such patent applications),
  patents issuing therefrom and extensions thereof, and

  

 

(b)                                 all
other Confidential Information, discoveries, inventions, know-how, techniques,
methodologies, modifications, improvements, works of authorship, designs and
data (whether or not protectable under patent, copyright, trade secrecy or
similar laws) that are conceived, discovered, developed, created or reduced to
practice or tangible medium of expression by consultants (other than those
consultants that are also affiliated with ACSD in connection with the
transactions contemplated by this Agreement) or employees of Cubist at any
time, concurrent with or related to the transactions contemplated by the
Development and Facility Construction Timetable, or based on the results of the
transactions contemplated by the Timetable and Facility Construction Plan.
Cubist Technology specifically includes, but is not limited to, all process
development technology developed for Cubist as part of the Materials Transfer
& Confidentiality Agreement between Cubist and ACSD dated February 11,
1998.

 

cGMP means Current
Good Manufacturing Practices and is further defined in Section 3.1 herein.

 

Daptomycin means the
compound daptomycin the chemical structure of which is detailed in Exhibit A or
a pharmaceutically acceptable salt thereof or a pharmaceutically acceptable
formulation thereof.

 

Deviation means
documented evidence of an excursion from operating, manufacturing, testing
instructions or procedures. A Deviation does not permanently change an existing
procedure, it is intended to be a specific or one time excursion.

 

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

 

2

 

Drug Master File (DMF)  is
a submission to the FDA that provides detailed information about the Facility,
Process and Materials used in the manufacture of Product, and that is used to
support an NDA and other regulatory submissions.

 

Facility means the
cGMP drug production facility in Anagni, Italy constructed and equipped by ACSD
exclusively for the manufacture of Product.

 

Facility Approval  means
the FDA approval of the NDA Manufacturing Supplement for the Facility.

 

Facility Approval Target Date is
defined in Section 2.1 herein.

 

Facility Completion means
the construction, equipment, testing, and qualification of the Facility
according to the terms of this Agreement.

 

Facility Completion Target Date is
defined in Section 2.1 herein

 

FDA means the United
States Food and Drug Administration or any successor entity thereto or any
equivalent U.S. or foreign governmental regulatory agency with jurisdiction to
grant Product Approvals.

 

Force Majeure means
any event beyond the control of the parties, including, but not limited to,
fire, earthquakes, flood, riots, epidemics, war, or embargoes.

 

Formal Investigation means
a written report detailing the specifics of an investigation resulting from an
exceptional event, and which includes a description of the incident,
investigation, conclusions and corrective action or action plan, if applicable.

 

In-Process Specifications mean
the chemical, physical, biological and microbial testing methods and results
required for the commercial manufacture of Product in accordance with Process,
and which are listed in Exhibit B herein, provided that such specifications
shall at all times comply with the relevant regulations of the FDA or other
regulatory agency in the country of sale, and provided that such specifications
may be modified from time to time in accordance with this Agreement.

 

Lot Number means a
controlled number used to identify a specific lot or batch of Product or
Material.

 

Material means any
actives, excipients, or components, which are used in the manufacture of
Product.

 

Nonconforming Materials Report  means
a document used to describe the disposition of Product or Material that fails
to meet established specifications.

 

Manufacturing Compliance Report is
defined in Section 8.3 herein.

 

Material Review Board (MRB) means
a Cubist multidisciplinary committee responsible for the review, evaluation and
disposition of non-conforming materials and Product.

 

NDA means a new drug
application filed with the FDA to obtain marketing approval for Product in the
United States or any comparable application fled with the regulatory
authorities of a country other than the United States to obtain marketing
approval for Product in that country.

 

NDA Manufacturing Supplement means
an application filed with the FDA, or any comparable application filed with the
regulatory authorities of a country other than the United States, to obtain
approval to manufacture Product at the Facility.

 

Process means the
commercial process employing the [*].

 

Product means
Daptomycin bulk drug substance that meets Product Specifications and is
manufactured for Cubist in accordance with Sections 2 and 3 and Exhibits B, C
and D of this Agreement.

 

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

 

3

 

Product Approval means
those regulatory or other approvals required for the manufacture, importation,
promotion, pricing, marketing and sale of the Product in any particular
country.

 

Product Price Premium is
defined in Section 6.2 herein.

 

Product Specifications mean
the chemical, physical, biological and microbial testing methods and results
required for the release of Product and listed in Exhibit C herein, provided
that such specifications shall at all times comply with the relevant
regulations of the FDA or other regulatory agency in the country of sale, and
provided that such specifications may be modified from time to time in
accordance with this Agreement.

 

Purchase Forecast is
defined in Section 5.3 herein.

 

Reprocessing means
duplication of a step or steps in a manufacturing process in order to bring
Product into conformance with Product Specifications without altering the
safety, identity, strength, quality, or purity of Product beyond established
requirements.

 

RMA means Return
Material Authorization and is further defined in Section 6.5(b) herein.

 

SOP means standard
operating procedure.

 

Specification Review Committee (SRC) means
a Cubist multidisciplinary committee responsible for the review and approval of
new specifications and changes to existing specifications as they relate to
Product or Process.

 

Stability Review Group (SRG) means
a Cubist multidisciplinary committee responsible for the review and approval of
new stability protocols and changes to existing stability protocols as they
relate to Product. In addition it is responsible for the routine review of
stability data and evaluation of any trends that are noted.

 

USD means United
States Dollars.

 

Vialed Drug Product means
Product that has been filled into single dosage vials, lyophilized, and
released according to Cubist’s secondary manufacturing process specifications.

 

2.                                      CONSTRUCTION
OF PRODUCTION FACILITY IN ANAGNI

 

2.1                               Facility
Construction and Timetable

 

By [*]
(the Facility Completion Target Date), ACSD
will [*] and make [*] in accordance with current Good Manufacturing Practices.
ACSD’s obligations hereunder include, but are not limited to:

 

(a)                                  construction
of [*] to perform the Process in a dedicated Facility;

 

(b)                                 provision
of [*] of Product;

 

(c)                                  the
installation of all [*] and [*]; and

 

(d)                                 obtaining
approval from the [*].

 

Subject
to adjustment in accordance with Section 2.2, ACSD will make its best efforts
to complete all activities and to meet all dates set forth in this Agreement.
The performance of [*] of the Facility is expected no later than [*] with all data and reports [*] by [*].
The target date for [*] for the ACSD facility (the Facility Approval Target Date) is
[*].

 

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

 

4

 

2.2                               Date
Adjustments

 

Cubist
and ACSD each agree to perform the tasks assigned to each in this Agreement.
Each party acknowledges that delays in performance by either party
may cause delays in performance by the other party. If [*] fails to meet
its obligations under this Agreement in a timely manner so as to cause a [*]
delay in [*] performance, all dependent dates shall be adjusted day-for-day to
account for the delay caused by [*]. If [*] failure is due to additional
written requirements from [*], then such dates may be adjusted by mutual
written agreement.

 

2.3                               Inspection

 

Cubist
will have the right to observe and inspect the progress of work at the Facility
at all reasonable times, both during the construction process and at any time
thereafter, and to confer with ACSD regarding compliance with the dates set
forth in Section 2.1 above, Product Specifications, In-Process Specifications,
cGMP, and other legal, regulatory or contractual requirements.

 

2.4                               Change
Procedures

 

(a)                                  ACSD
will notify and consult with Cubist immediately concerning any potential delay
in completion or validation of the Facility. ACSD acknowledges that time is of
the essence for this Agreement, and that significant delays in the completion
of the Facility may cause Cubist material harm. Cubist and ACSD will, from
time to time during the construction process, confer regarding the quality
standards for materials and layout of operations within the Facility. [*].
Cubist may request amendments to the building, equipment, or Process to:

 

(i)                                     effect
[*] in the Facility,

 

(ii)                                  to
[*], or

 

(iii)                               to accommodate [*].

 

(b)                                 If
Cubist wishes to make a change it shall notify ACSD of the requested change in
writing, specifying the change with sufficient details to [*] (each, a Change Order Request). Within
[*] business days following the date of ACSD’s receipt of a Change Order
Request, ACSD shall deliver a document that:

 

(i)                                     assesses
the impact of the change on the total cost of the Timetable and Facility
Construction Plan, and

 

(ii)                                  incorporates
a description of the requested change and its proposed cost (a Change Order).

 

If Cubist accepts the Change Order in writing, then
the provisions of this Agreement shall be deemed amended to incorporate such
Change Order. The cost stated in the Change Order shall be deemed an adjustment
to the charges specified in this Agreement.

 

It is the expectation of both parties that the dates
and milestones set forth in this Agreement has been defined broadly enough to
accomplish both parties’ goals and that no Change Orders will be required.

 

2.5                               ACSD
Capital Investment

 

Subject
to Section 4 below, the [*]. Any increases in capital expenditures required by
Cubist will be specified in writing and will be [*].

 

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

 

5

 

3.                                      PRODUCTION

 

3.1                               Manufacturing
Quality

 

ACSD
shall manufacture Product for Cubist in accordance with Exhibit D of this
Agreement and under Current Good Manufacturing Practices (cGMPs) as required by the
FDA and set forth in Title 21 Code of Federal Regulations Parts 210 and 211
(§§210.1-211.204 et. seq.), with particular emphasis on 211.22, 211.25 and
211.28 or the equivalents thereto pertaining to the responsibilities of a
quality unit, personnel qualifications and personnel responsibilities
respectively.

 

According
to the provisions of Exhibit D, ACSD will develop a cGMP-compliant quality unit
at the Facility. This quality unit will follow and implement policies and
procedures mutually authorized by ACSD and Cubist. Compliance with this
Agreement is dependent upon, among other factors, ACSD hiring or training a
full-time senior level quality manager reasonably acceptable to Cubist
dedicated to, and located at, the Facility, to establish and lead the
cGMP-compliant quality unit.

 

ACSD
will develop a cGMP compliant quality control test laboratory for the testing
and release of Product.

 

3.2                               Process
Validation

 

ACSD
will develop and complete a validation process at the Facility in accordance
with Exhibit D herein, and [*]. Validation parameters and limits for the
process must span the actual process parameters and limits developed and
documented during the manufacture of consistency batches at commercial scale.
All post-validation process changes [*]. Cubist will provide test method
validation reports and small-scale purification validation studies as such
reports become available. ACSD will provide Cubist with a master validation
plan for the Facility and Process.

 

3.3                               Process
Improvements

 

Following
Facility Approval, ACSD may continue operating [*] with the [*].
Development undertaken for the purpose of [*] will be [*]. ACSD will [*].  All modifications in raw materials, conditions
or processing related to the manufacture of Product will be implemented
[*].  The [*] following a successful and
complete cGMP change control process outlined in the [*].

 

3.4                               Stability
Program Batches

 

ACSD
will supply Cubist with samples from the first [*] validation batches of
Product to be placed on stability as defined by Cubist’s approved stability
protocols. In addition, ACSD will supply Cubist with samples from a minimum of
[*] commercial batch per year. Cubist will be responsible for conducting all
stability testing. ACSD agrees to ship stability samples under defined storage
conditions to either Cubist or a site designated by Cubist.

 

4.                                      CUBIST
INVESTMENT

 

According
to the provisions of this Section 4, Cubist will contribute to ACSD up to eight
million five hundred thousand dollars (USD 8,500,000) in equity, milestones,
Product Price Premiums, resin investment, process development, quality systems
and facility qualification support as specified below.

 

4.1                               Equity
Contribution

 

Within
thirty (30)* days of execution of this Agreement Cubist will transfer to ACSD
shares of Cubist Common Stock with an aggregate value of two million dollars (USD
2,000,000). This equity contribution will comply with terms and
conditions specified in Exhibit E.

 

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

 

6

 

4.2                               Milestones

 

Cubist
will pay to ACSD:

 

•                  [*] upon [*] and
[*]; and

 

•                  [*] upon [*].

 

4.3                               Product
Price Premiums

 

Cubist
will pay to ACSD [*] through a [*] specified in Section 6.2.

 

4.4                               Resin
Investment

 

ACSD
expects to spend [*]. In the event that Product is not approved for commercial
sale by [*].

 

4.5                               Process
Development, Quality Systems, Facility Qualification Support

 

Cubist
will contribute such expertise, training, and support staff and services, [*],
as is reasonably necessary to assist ACSD in the [*].

 

5.                                      PURCHASE
OF PRODUCT

 

5.1                               Purchase
Commitment

 

Contingent
upon the receipt of the necessary Product and Facility Approvals, Cubist will
purchase [*] of Product during the term of this Agreement. During the period
prior to the receipt of Product Approvals, Cubist may, but is not obligated to,
purchase Product produced using commercial Process in accordance with Exhibits
B, C and D herein. Any such Product purchases [*] of Product that Cubist is
required to purchase. Subject to the conditions of this Agreement, Cubist
agrees to make the following yearly purchases:

 

	
  Year

  	
   

  	
  Purchase[*] (kg)

  
	
  [*]

  	
   

  	
  [*]

  
	
  [*]

  	
   

  	
  [*]

  
	
  [*]

  	
   

  	
  [*]

  
	
  [*]

  	
   

  	
  [*]

  
	
  [*]

  	
   

  	
  [*]

  
	
  [*]

  	
   

  	
  [*]

  
	
   

  	
   

  	
  [*]

  

 

The
above schedule will be extended for any delays caused by ACSD.

 

5.2                               Delay
in Purchases / Payment of Product Price Premiums

 

In the
event that Facility Approval is received, but Cubist does not choose to
purchase [*], Cubist may defer the purchase and the payment for Product
until the following year, [ *]. Any delays caused by ACSD (including, but not
limited to delays in construction, validation, qualification, documentation,
regulatory approvals and other ACSD activities under this Agreement) will
extend the Cubist purchase commitment schedule, as described in Section 5.1
herein, on a day for day basis to account for such ACSD delays.

 

5.3                               Purchase
Forecasts

 

During
the term of this Agreement, Cubist shall provide to ACSD, within the first [*]
business days of each quarter, on a quarterly basis, a rolling forecast for
orders of Product with respect to the following [*] quarters (Purchase Forecast). Cubist
shall be [*] of the amount of Product forecast for the [*] of any Purchase
Forecast, and shall 

 

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

 

7

 

execute
a binding purchase order to that effect. The forecast for the remaining [*] of
any Purchase Forecast shall be non-binding.

 

5.4                               Product
Orders

 

Orders
for Product shall be placed by written purchase order and submitted by mail or
facsimile, or by other means agreed upon by the parties. Due to the expected
variance in Product yield, an exact purchase amount may not be possible
and the Cubist purchase orders will accordingly include a [*]. Amounts in
excess of the stated [*]. No order shall be binding upon ACSD until it has been
accepted by ACSD in writing. ACSD shall accept or reject all orders within [*]
days following receipt of same and shall deliver all orders that are accepted
within [*] days of the projected delivery date.

 

5.5                               Changed
Purchase Orders

 

In the
event that Cubist cancels, reschedules or otherwise reduces a purchase order
less than [*] days in advance of the scheduled batch initiation, Cubist shall
[*] of the price of the Product that is [*]. Cubist may not [*] less than
[*]days in [*]. Cubist may [*] days in [*].

 

5.6                               Obligation
to Supply

 

(a)                                  ACSD
shall use best efforts to accept and fill each order for Product submitted by
Cubist including orders that exceed the Purchase Forecast by [*], provided that
such request is delivered to ACSD [*] days prior to [*]. ACSD shall not be in
breach of this Section 5.6 if ACSD’s failure to supply Product is due to a
Force Majeure event or if ACSD’s failure is limited to [*]. Delivery dates will
be set independently from Product release and invoice dates as described in
Section 5.7;

 

(b)                                 If
ACSD is unable to supply the Product ordered by Cubist in accordance with the
terms of this Agreement, then ACSD shall [*], and any such [*]. If ACSD is
unable to [*] days after its initial failure to supply, then ACSD shall consult
with Cubist and the parties shall work together to remedy the problem. In such
an event, Cubist may, at its option, and upon notice to ACSD:

 

(i)                                     [*]
and/or

 

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

 

8

 

(ii)                                  in
the event that the parties agree that Cubist will [*];

 

(c)                                  In
order to minimize adverse consequences from any interruption in ACSD’s ability
to supply Cubist with Product, ACSD shall maintain a back-up supply of raw
materials sufficient to support Cubist’s forecasted production needs for a
period of [*] months following any failure of ACSD to timely supply Cubist with
Product. The costs of purchasing and maintaining this back-up supply of raw
materials will be borne by [*]. Upon removal of any units of raw materials from
the back-up supply, [*]*, in accordance with cGMP First-To-Expire-First-Out
rules, so that an adequate back-up supply is maintained at all times. The
parties shall confer [*] to review their aggregate requirements for raw
material and will adjust the size of the back-up supply of raw materials in
order to maintain at least [*] month supply of raw material [*] shall also
increase the size of the back-up supply from time to time as warranted by
commercially prudent risk management practices.

 

5.7                               Product
Warehousing and Payment Schedule

 

Storage
of Product after release by ACSD will be the responsibility of [*] for a
quantity amounting to the greater of [*] supply or [*] of Product as [*].
Delivery of Product to finish/fill organizations will be scheduled and mutually
agreed upon by Cubist and ACSD. Cubist will be invoiced at the time [*]. The
payment for released Product that is warehoused at ACSD or contract freezer
warehouse facilities will follow promptly behind the invoicing of material that
is ready for shipment provided that a Certificate of Analysis is sent to
Cubist, and such Certificate of Analysis is reviewed and accepted by Cubist. In
addition, a batch payment becomes due upon review and approval of the Batch
Record and batch Certificate of Analysis by Cubist.

 

5.8                               Third
Party Supply

 

If
Cubist notifies ACSD that Cubist will obtain the Product through a third party
[*] then Cubist may purchase Product from a [*]. Cubist may continue
to exercise [*] and substantiates such claim to Cubist’s reasonable satisfaction.
[*], Cubist shall commence purchasing Product from ACSD, provided that:

 

(a)                                  Cubist
shall [*] and

 

(b)                                 ACSD
shall [*].

 

6.0                               TERMS
OF SALE

 

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 [*];

 

(b)                                 Subject
to [*], Cubist and ACSD agree to re-evaluate the cost structure of Product
manufacturing [*] days after the [*] anniversary of the Facility Approval, and
to negotiate in good faith an appropriate adjustment to the price of the
Product specified in Section 6.1 (a).

 

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

 

9

 

6.2                               Product
Price Premiums

 

Cubist
will pay ACSD a [*] on the price of Product (Product Price Premium) purchased over [*].
Once the [*] have accrued to [*], Cubist will immediately stop paying the
Product Price Premiums and will pay [*] of Product, as provided in Section 6.1
herein.

 

	
  Year

  	
   

  	
  Purchase [*]

  	
   

  	
  Product Price Premium

  
	
  [*]

  	
   

  	
  [*]

  	
   

  	
  $

  	
  [*]

  
	
  [*]

  	
   

  	
  [*]

  	
   

  	
  $

  	
  [*]

  
	
  [*]

  	
   

  	
  [*]

  	
   

  	
  $

  	
  [*]

  
	
  [*]

  	
   

  	
  [*]

  	
   

  	
  $

  	
  [*]

  
	
  [*]

  	
   

  	
  [*]

  	
   

  	
  $

  	
  [*]

  
	
  [*]

  	
   

  	
  [*]

  	
   

  	
  $

  	
  [*]

  
	
   

  	
   

  	
   

  	
   

  	
  $

  	
  [*]

  

 

The
above schedule [*]. In the event that Cubist [*]. Any delays caused by ACSD
(including, but not limited, to delays in construction, validation, qualification,
documentation and other ACSD activities under this Agreement) will extend
Cubist’s obligation to pay the Product Price Premiums.

 

6.3                               Payment

 

(a)                                  Cubist
shall pay for Product within [*] days after the date of receipt by Cubist of
ACSD’s invoice, Certificate of Analysis, Batch Records, and Manufacturing
Compliance Reports as required by Exhibit D with respect to such Product. [*],
all taxes and charges that may be imposed by any government taxing
authority on the amounts paid by [*]. In the event and to the extent that [*],
Cubist may [*].

 

(b)                                 Cubist
shall make payments required under this Section 6.3 by wire transfer to a bank
identified by ACSD in writing. All payments shall be calculated, invoiced,
stated and paid in United States Dollars (USD).

 

6.4                               Shipping

 

ACSD
shall arrange for shipment of the Product ordered by Cubist via common carrier
of Cubist’s choice, [*]to the port of entry specified by Cubist. [*] shall pay
all shipping, insurance, customs, duties and other governmental charges relating
to the importation and sale of the Product, if any, and shall have all
responsibility for storing and clearing the Product through all customs and
importation requirements. ACSD acknowledges that validation of shipping
procedures by Cubist will require ACSD to prepare shipments that comply with
validation parameters, comply with cGMP regulations related to shipping and
conform to relevant SOPs.

 

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

 

10

 

6.5                               Quality,
Documentation, Facility Expectation and Acceptance

 

(a)                                  Each
shipment of Product from ACSD shall contain Certificates of Analysis for the
Product being shipped as are necessary to show that the Product is in conformity
with the Product Specifications and Product Approval. Cubist shall have
reviewed and approved Batch Records and quality control records for all
Products to be shipped prior to shipment. Cubist shall notify ACSD within [*]
days of the receipt of a shipment of the Product of any apparent non-conformity
of the Product to the Product Specifications; provided that with respect to
obvious nonconformities, Cubist will promptly notify ACSD in order that ACSD
may notify its shipper and insurer. If Cubist fails to so notify ACSD, it
will be deemed to have accepted the Product; provided that ACSD’s obligations
under Sections 10.2 and 11.1 herein shall survive acceptance of the Product by
Cubist. [*].

 

(b)                                 Cubist
shall not be required to pay ACSD for any Product which has been properly
rejected or for which unresolved Deviations remain. [*]. Samples of all
defective units of the Product shall be returned to ACSD using the procedure
specified in this Section 6.5(b). Cubist shall notify ACSD in writing of its
rejection of Product under Section 6.5(a), and shall request a Return Material
Authorization (RMA)  number,
which ACSD shall issue promptly. Within [*] days of receipt of such RMA number
Cubist shall return rejected Product to ACSD freight prepaid and properly insured,
along with a reasonably detailed statement of the claimed defect and proof of
date of purchase. In the event ACSD determines that the returned Product is
defective and Product has been properly rejected by Cubist, ACSD shall replace
such defective Product free of charge. ACSD shall return to Cubist, freight
prepaid, all replaced Product, along with reimbursement of the shipment charges
for return of the nonconforming Product if ACSD requires said nonconforming
Product to be returned. In the event, that ACSD determines that the returned
Product is not defective and the parties are unable to resolve such dispute to
their mutual satisfaction within [*] business days of ACSD’s determination,
ACSD shall submit a sample of such returned Product to an independent
laboratory reasonably acceptable to Cubist for testing against the Product
Specifications and the test results obtained by such laboratory shall be final
and controlling as between Cubist and ACSD. The fees and expenses of such
laboratory testing shall be borne entirely by the party against whom such
laboratory’s findings are made. In the event the test results indicate that the
Product in question does not conform to the Product Specifications, ACSD shall
replace such Product at no additional cost to Cubist within [*] business days
after receipt of such results if replacement Product stock is available, and in
any case as soon as possible after receipt of such results.

 

7.                                      EXCLUSIVITY

 

ACSD
covenants that it will not

 

(a)                                  promote,
sell or deliver any Product or Daptomycin or

 

(b)                                 provide
Product or Daptomycin to any third party except as specifically designated by
Cubist in writing.

 

8.                                      REGULATORY
ACTIVITIES

 

8.1                               General
and Permanent Conditions

 

(a)                                  ACSD
shall cooperate with Cubist to

 

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

 

11

 

(i)                                     obtain
all necessary regulatory approvals, including but not limited to, DMF and
Facility Approvals,

 

(ii)                                  maintain
all such Facility approvals in effect throughout the term of this Agreement.

 

(b)                                 ACSD
shall obtain approval to manufacture Product from the Italian Ministry of
Health and other applicable local authorities as required by law or regulation;

 

(c)                                  Provide
Cubist with all necessary documentation to support Cubist regulatory filings.

 

8.2                               Certificates
of Analysis

 

ACSD
shall perform, or cause to be performed, sample tests on each lot of Product to
be purchased pursuant to this Agreement before delivery to Cubist. Each test
report shall set forth the items tested, In-Process Specifications, Product
Specifications and test results in a Certificate of Analysis, containing the
types of information which shall have been requested by Cubist, for each lot
delivered. ACSD shall send or cause to be sent such certificates to Cubist
prior to shipment of each lot. The Certificate of Analysis will be accompanied
by a certified Batch Record signed by ACSD’s quality assurance department and
co-signed by the technical director of the Facility. Review of the production
documents including, but not limited to, Certificates of Analysis by a Cubist
representative on site will be permitted under mutually agreed conditions.

 

8.3                               Manufacturing
Compliance Reports

 

ACSD
shall provide or cause to be provided, for each lot of Product purchased
pursuant to this Agreement, a manufacturing compliance report, which

 

(a)                                  outlines
the process sub-lots and the processing organization used for the formation of
the batch; and

 

(b)                                 contains
Deviation reports, investigations, resolved discrepancies and other
information, memos and other documentation concerning the quality of each batch
of Product as requested by Cubist; and

 

(c)                                  includes
a certification that the lot of Product was manufactured in accordance with the
In-Process and Product Specifications and the then current Good Manufacturing
Practices of the FDA, including without limitation practices and procedures
listed in Exhibit D.

 

In the
event the FDA or other governmental regulatory agency notifies ACSD that it intends
to visit or inspect the Facility, ACSD shall immediately provide notice of such
visit or inspection to Cubist and Cubist shall have the right to participate in
such visit or inspection. ACSD shall advise Cubist immediately if an authorized
agent of the FDA or other governmental regulatory agency visits the Facility
without prior notice. ACSD shall furnish to Cubist the report by such agency of
such visit within [*] business days of ACSD’s receipt of such report. ACSD
shall not respond in writing to any regulatory agency without the prior review
and written approval of such response by Cubist. In the event ACSD fails to
meet the cGMPs, ACSD will be responsible, at ACSD’s expense, for

 

(a)                                  conducting
an investigation to define the probable causes for the failure,

 

(b)                                 providing
an acceptable cGMP investigation report to Cubist for review and written
approval and

 

(c)                                  achieving
compliance with cGMPs.

 

Additionally,
ACSD will provide adequate staffing and training for manufacturing and quality
control for the production of Product. In addition, a functional quality unit
responsible for quality requirements described in Exhibit D must operate in the
Facility for the issuance of document change control, cGMP policies,
verification, compliance demonstration and cGMP documentation of all
manufacturing operations including but not limited to Product impact parameters
such as environmental monitoring, cleaning, process validation, preventative
maintenance, calibration and similar support functions outlined in the ICH and
FDA guidelines for the safe and efficacious production of pharmaceutical
products. This

 

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

 

12

 

documentation
will include all Deviations and investigations performed as part of the Product
release procedure that will be mutually developed by the parties.

 

8.4                               Access
to Facility; Cubist’s Right to Monitor

 

(a)                                  Cubist
shall at all times upon reasonable notice and during normal business hours have
the right to inspect the Facility to ascertain compliance with cGMPs. In
addition, Cubist shall have the right to designate a Cubist employee or an
independent consultant to monitor the Process at the Facility at Cubist’s sole
expense.

 

(b)                                 ACSD
shall not change the specified raw materials or the Process for the manufacture
of Product without the prior written consent of Cubist; Cubist may require
ACSD to make changes in raw materials or the Process subject to mutually agreed
price adjustments; ACSD will not use the Facility for any purpose except the
manufacture of Product and will not supply Product to any party except Cubist.

 

8.5                               Product
Recalls

 

If                                        (a)                                  any
regulatory authority withdraws the approval to sell the Product in such country
or issues a directive or requests that the Product be recalled from the market
for Product safety reasons or

 

(b)                                 any
regulatory authority or court of competent jurisdiction issues a request,
directive or order that the Product be recalled, or

 

(c)                                  Cubist
shall reasonably determine that the Product should be recalled

 

then
the parties shall take all appropriate corrective actions, and shall cooperate
in any governmental investigations surrounding the recall.

 

In the
event that such recall results from any cause or event arising from defective
manufacture, storage or handling of the Product by ACSD (excluding defects
relating to packaging or labeling supplied by or prepared at the direction of
Cubist), then ACSD shall be responsible for all expenses of the recall. ACSD
shall, at Cubist’s option, either refund the purchase price for recalled
Product plus the cost of vialing the Product (not to exceed [*] per vial
of Product (in vialed form) with a maximum liability of [*] per batch of
Product (in vialed form)) or replace recalled Product held by Cubist or its
customers, including in each case Product embodied in vialed form consistent
with directions received from the appropriate governmental authority within a
reasonable time at ACSD expense, including freight and applicable duties,
unless the recall is due to an act or omission of Cubist or its agents. [*].
For the purposes of this Agreement, the expenses of recall shall include,
without limitation, the expenses of notification and destruction or return of
the recalled Product and all other costs incurred in connection with such
recall, but shall not include [*].

 

In the
event a regulatory authority orders the withdrawal of Product from any country,
Cubist shall not be obligated to purchase the Product or sell the Product in
such country from the date of such withdrawal until Cubist is again authorized
to sell Product in such country. ACSD shall not be obligated to supply the
Product to Cubist in such country for such period. If such a withdrawal
decision is final and not appealable, this Agreement shall terminate with
respect to such country.

 

8.6                               Compliance
with Laws

 

ACSD
and Cubist will comply with all applicable laws and regulations pertaining to
the manufacture use or sale of the Product and performance of their respective
duties under this Agreement. The compliance obligations of each party shall
include but not be limited to regulatory compliance in the areas of safety,
health and the environment.

 

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

 

13

 

9.                                      CONFIDENTIALITY;
PROPRIETARY RIGHTS

 

9.1.                            Publicity

 

The
parties shall:

 

(a)                                  keep
the material terms of this Agreement confidential,

 

(b)                                 agree
upon the text and the exact timing of an initial public announcement relating
to the transactions contemplated by this Agreement as soon as possible after
the Effective Date (such agreement not to be unreasonably withheld by either
party), and

 

(c)                                  agree
on the text and the timing of any subsequent public announcements regarding
this Agreement or the transactions contemplated herein.

 

Neither
party shall use the name of the other party or any director, officer or
employee of the other party or any adaptation thereof in any advertising,
promotional or sales literature or publicity without the prior written approval
of the other party. If this Agreement is required to be filed by either Party
with the Securities and Exchange Commission or another applicable securities
regulatory authority, to the extent reasonable, such party shall request
confidential treatment for any provisions of this Agreement that the other
party believes would disclose trade secrets, confidential commercial or
financial information that would impair the value of the contractual rights
represented by this Agreement or provide detailed commercial and financial
information to competitors or third parties.

 

9.2.                            Confidentiality

 

It is
contemplated that in the course of the performance of this Agreement each party
may, from time to time, disclose Confidential Information to the other. Each
party agrees that any Confidential Information disclosed by either party in
accordance with this Agreement shall be maintained in secrecy and each will use
all reasonable diligence to prevent disclosure except to personnel and
consultants, provided that disclosure to such personnel or consultants is
necessary in order to accomplish the purposes for which the Information was
disclosed to the receiving party and provided further that such personnel and
consultants agree to be bound by the Confidentiality provision of the
Agreement. Each party agrees that it will protect and maintain the
confidentiality of the Confidential Information that it receives from the other
with at least the same degree of care as it uses to protect its own
confidential information. Each party hereby further agrees that it will not use
the Information for any purpose other than as contemplated by this Agreement.

 

Any
and all Confidential Information received by either party from the other, upon
request shall be promptly returned, [*].

 

It is
understood that no patent right or license is hereby granted by this Agreement
and that the disclosure of Confidential Information does not result in any
obligation to grant either party any right in and to such Information.

 

9.3                               Proprietary
Rights.

 

(a)                                  This
Agreement does not convey to ACSD any rights in the Cubist Technology by
implication, estoppel or otherwise except for the rights expressly granted
under this Agreement. Title to the Cubist Technology, Process, and Product (and
the intellectual property rights embodied in the Product) shall at all times
remain vested in Cubist.

 

(b)                                 ACSD
will implement and conduct the Process but will not research, modify or enhance
the Process without authorization from Cubist; provided that in the event
Process improvements are realized in implementing and running the Process then
ACSD will take all necessary steps to assign, free of charge, ownership of the
improvements specific to the Product in Cubist.

 

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

 

14

 

 (c)                               Subject
to the terms and conditions of this Agreement, Cubist hereby grants to ACSD,
and ACSD hereby accepts, a non-exclusive, royalty-free right and license,
excluding the right to grant sublicenses, to practice the Process and to make,
have made, export and sell Product exclusively to Cubist.

 

9.4                               Proprietary
Rights Notices

 

ACSD
shall mark or have marked all containers or packages of Product in accordance
with the patent marking laws of the jurisdiction in which such units of Product
are manufactured or sold.

 

10.                               REPRESENTATIONS
AND WARRANTIES

 

10.1                        Authorization;
Enforceability

 

Each
of ACSD and Cubist represent and warrant to the other that:

 

(a)                                  it
is a corporation duly organized, validly existing and in good standing under
the laws of its incorporating jurisdiction;

 

(b)                                 it
has all requisite corporate power and authority to enter into this Agreement;

 

(c)                                  it
is duly authorized to execute and deliver this Agreement and to perform its
obligations hereunder and consummate the transactions contemplated hereby; and

 

(d)                                 this
Agreement is a valid and binding obligation of such party enforceable in
accordance with its terms.

 

10.2                        Product
Warranty

 

ACSD
represents and warrants to Cubist that all Product supplied to Cubist hereunder
shall:

 

(a)                                  conform
to the Product Specifications; and

 

(b)                                 be
manufactured, labeled, packaged and tested (while in the possession or control
of ACSD) in accordance with the In-Process Specifications, the applicable
cGMPs, and the applicable laws and regulations in the United States and the EU
relating to the manufacture, labeling, packaging and testing of the Product,
including all FDA and EU standards as defined by regulations, guidelines and
International Conference on Harmonization advisory documents.

 

THE
FOREGOING WARRANTY IS THE SOLE AND EXCLUSIVE WARRANTY GIVEN BY ACSD WITH
RESPECT TO THE PRODUCT, AND ACSD GIVES AND MAKES NO REPRESENTATIONS OR
WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR MEDICAL PURPOSE AND IMPLIED MEDICAL
WARRANTIES ARISING UNDER TRADE USAGE OR CUSTOM OR ANY EXPRESS OR IMPLIED WARRANTIES
OF PATENT VALIDITY OR FREEDOM TO PRACTICE OR FROM PATENT INFRINGEMENT.

 

11.                               RISK
ALLOCATION

 

11.1                        ACSD
Indemnification

 

ACSD,
which as used herein shall include its directors, employees, representatives
and Affiliates, shall defend, indemnify and hold harmless Cubist, its
directors, employees and consultants from and against any and all losses
(including reasonable attorney’s fees) arising from or related to:

 

(a)                                  any
material breach of this Agreement, including but not limited to, ACSD’s
representations and warranties herein;

 

(b)                                 any
negligence, recklessness or intentional misconduct by ACSD in performing its
obligations under this Agreement or with respect to the manufacture, storage,
handling or delivery of the Product; or 

 

15

 

(c)                                  any
failure of the Product or failure of the Product to comply with Product
Specifications, but in each case only if such defect or failure did not arise
or result from the improper use, administration, storage or handling of the
Product by a third party.

 

The
foregoing indemnification action shall not apply in the event and to the extent
that a court of competent jurisdiction determines that such losses arose as a
result of Cubist’s negligence, intentional misconduct or breach of this
Agreement.

 

11.2                        Cubist
Indemnification

 

Cubist,
which as used herein shall include its directors, employees, representatives
and Affiliates, shall defend, indemnify and hold harmless ACSD from and against
any and all losses arising from or related to:

 

(a)                                  any
material breach of Cubist’s representations and warranties under this
Agreement;

 

(b)                                 any
negligence, recklessness or intentional misconduct by Cubist in performing its
obligations under this Agreement or with respect to its storage, handling,
shipping, use, marketing, distribution or sale of the Product;

 

(c)                                  any
representation or warranty made by Cubist to its customers or users with
respect to the Product other than representations or warranties that

 

(i)                                     the
Product conforms to the Product Specifications or

 

(ii)                                  the
Product is not, at the time of delivery by ACSD to Cubist, adulterated within
the meaning of the FDA regulations;

 

(d)                                 any
packaging or labeling of any Product to the extent that such packaging or
labeling has been supplied by or at the direction of Cubist and applied in
accordance with instructions from Cubist;

 

(e)                                  an
inherent defect in the Product, including such a claim arising from an injury
to a person resulting from proper use, administration, storage and handling of
the Product in accordance with the Product instructions, but only if such
defect or failure did not arise or result from the improper use,
administration, storage or handling of the Product by a person other than the
Indemnifying Party; or

 

(f)                                    an
allegation that the Product infringes or misappropriates any intellectual
property right of any third party (including without limitation, any patent,
copyright, trade secret or trademark); provided that Cubist will not be
obligated to indemnify ACSD pursuant to Section 11.2(f) in the event and to the
extent that the alleged infringement is caused by:

 

(i)                                     ACSD’s
misuse or modification of the Product; or

 

(ii)                                  ACSD’s
use of the Product in combination with any products or materials not provided
by Cubist (except for products and materials with which the Product is designed
to be used, as provided in the In-Process or Product Specifications).

 

The
foregoing indemnification obligation shall not apply in the event and to the
extent that a court of competent jurisdiction determines that such losses arose
as a result of ACSD’s negligence, intentional misconduct or breach of this
Agreement.

 

11.3                        Insurance

 

(a)                                  ACSD
shall purchase and maintain in force during the term of this Agreement and at
its expense:

 

(i)                                     premises
liability insurance and all-risk property insurance including boiler and
machinery coverage, written at replacement cost value and with replacement cost
endorsement and

 

(ii)                                  workmen’s
compensation or similar insurance in form and amounts required by law and employer’s
liability insurance, covering employees of ACSD having coverage

 

16

 

limits at least equal to those covering similar types
of ACSD employees at other locations. Certificates of such insurance shall be
provided to Cubist upon the execution of this Agreement. The insurance policies
specified in clause 11.3(a)(i) shall name Cubist as an additional named
insured;

 

(b)                                 Each
party shall purchase and maintain insurance or self-insurance adequate to cover
its obligations hereunder and which are consistent with normal business
practices of prudent companies similarly situated at all times during this
Agreement. It is understood that such insurance shall not be construed to
create a limit of either party’s liability with respect to its indemnification
obligations under this Section 11;

 

(c)                                  Each
party shall provide the other with written evidence of the insurance required
under Sections 11.3(a) and 11.3(b) (or financial information that describes the
amounts available under any self-insurance facility) upon request. Each party
shall provide the other with written notice at least [*] days prior to the
cancellation, non-renewal or material change in such insurance or
self-insurance which materially adversely affects the rights of the other party
hereunder. If such party does not obtain replacement insurance or take other
measures that allow it to provide comparable coverage within such [*] day
period, the other party shall have the right to terminate this Agreement effective
at the end of such [*] day period without notice or any additional waiting
periods.

 

12.                               TERM
AND TERMINATION

 

12.1                        Term

 

This
Agreement shall take effect as of the Effective Date and shall remain in effect
until the sixth anniversary of Facility Approval 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. Thereafter, this
Agreement shall automatically renew for additional two-year terms. Not later
than the fifth (5th) anniversary of the Effective Date, Cubist shall
notify ACSD in writing whether Cubist desires to extend the Agreement for an
additional two years. All applicable terms and conditions of this Agreement
shall remain in effect during such 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 twelve (12) months] prior to the expiration of the then current extension
term.

 

12.2                        Termination

 

(a)                                  Either
party may terminate this Agreement at any time:

 

(i)                                     upon
ninety (90) days written notice to the other party in the event that the other
party shall have breached any of its material obligations hereunder and shall
not have cured such default prior to the expiration of the ninety (90) day
period; or

 

(ii)                                  upon
written notice to the other party in the event that any bankruptcy, insolvency
or receivership proceeding or the like (including out-of-court arrangements
involving a party that cannot pay its debts as they mature) is commenced by or
against the other party unless, in the case of an involuntary proceeding, it is
dismissed within sixty (60) days;

 

(b)                                 Cubist
may terminate this Agreement with notice to ACSD

 

(i)                                     in
the event that ACSD fails to achieve its obligations under Section 2.1 within
180 (one hundred and eighty) days of the Facility Completion Target Date or

 

(ii)                                  in
the event that Facility Approval is not received within one hundred and eighty
(180) days of the Facility Approval Target Date due to ACSD failure by to meet
its obligations under this Agreement.

 

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

 

17

 

Prior to Cubist terminating this Agreement under this
Paragraph 12.2(b), but no later than one hundred and eighty days from the
applicable Target Date, ACSD will be given reasonable opportunity to present to
Cubist a plan of corrective action. If Cubist and ACSD mutually agree on the
plan in writing, ACSD will be provided an additional period of time, specified
and agreed to in writing by both parties, to remedy the delay in meeting its
obligations;

 

(c)                                  Cubist
may terminate this Agreement upon one hundred and eighty (180) days notice
to ACSD if Cubist or an affiliate or sublicensee terminates the manufacture or
sale of the Product;

 

(d)                                 Cubist
may terminate this Agreement in the event that the FDA does not approve
the Product within a commercially reasonable timeframe;

 

(e)                                  The
parties may also terminate this Agreement at any time with one hundred and
eighty (180) days notice upon mutual written agreement between Cubist and ACSD.

 

12.3                        Effect
of Termination

 

(a)                                  Upon
any termination (including expiration) of this Agreement:

 

(i)                                     ACSD
and Cubist will terminate all tasks being performed pursuant to Section 3 in an
orderly manner, as soon as practical and in accordance with a written schedule
agreed to by Cubist and ACSD to minimize disruption to customers for the
Product;

 

(ii)                                  All
licenses from Cubist to ACSD shall terminate with the exception of those
necessary to fulfill ACSD’s obligations to Cubist in accordance with this
Section 12.3;

 

(iii)                               Each party will return
to the other party or certify in writing to the other party that it has
destroyed all documents and other tangible items it or its employees or agents
have received or created pursuant to this Agreement pertaining, referring or
relating to the Confidential Information of the other party, except that each
party may retain one (1) complete copy of Confidential Information for use
in accordance with Section 8.3(a)(i) for archival purposes to assure compliance
with this Agreement; and

 

(iv)                              ACSD
shall promptly notify Cubist of the quantity of Product in inventory and in
production and Cubist shall have the right but not the obligation to purchase
such inventory of Product in accordance with the provisions of Sections 5 &
6 or, in the alternative, to direct such other disposition of Product as Cubist
specifies.  In addition, ACSD will
accept orders from Cubist on a C.O.D. basis for additional Product that Cubist
is, as of the date of termination notice, contractually obligated to furnish to
its customers, if Cubist does not have sufficient Product in its inventory to
fulfill such obligations, provided Cubist notifies ACSD of any and all such
transactions in writing within 30 (thirty) days of the termination date;

 

(b)                                 If
this Agreement is terminated by Cubist pursuant to Section 12.2(a) or Section
12.2(b), ACSD shall reimburse Cubist for the Premium within thirty (30) days
following termination. In all other cases, if termination occurs after the
receipt of Product Approvals and Cubist has not recovered the Premium as of the
date of termination, Cubist will forfeit the balance of the un-recovered
Premium, which shall be considered liquidated damages for Cubist’s early
termination of the Agreement;

 

(c)                                  Termination
of this Agreement shall not affect rights and obligations of either party that
may have accrued prior to the effective date of termination or any
obligation specifically stated to survive termination. The provisions of
Sections 1,7,8.5,9,10,11,12,13 and 14 shall survive any expiration or
termination of this Agreement.

 

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

 

18

 

13.                               DISPUTE
RESOLUTION

 

In the
event that any dispute arises relating to this Agreement, ACSD and Cubist shall
each designate a representative to meet and attempt to resolve the dispute
through good faith discussions. If the representatives are unable to resolve
such dispute to their mutual satisfaction within [*] days after they commence
discussions, then either party may seek alternate resolution or legal or
equitable relief.

 

14.                               GENERAL
PROVISIONS

 

14.1                        Governing
Law

 

This
Agreement shall be governed and construed in accordance with the laws of
Massachusetts, to the exclusion of both its rules on conflicts of laws and the
provisions of the “United Nations Convention on Contracts for the International
Sale of Goods”.

 

14.2                        Amendment
and Waiver

 

No
provision of or right under this Agreement shall be deemed to have been waived
by any act or acquiescence on the part of either party, its agents or
employees, but only by an instrument in writing signed by an authorized officer
of each party. No waiver by either party of any breach of this Agreement by the
other party shall be effective as to any other breach, whether of the same or
any other term or condition and whether occurring before or after the date of
such waiver.

 

14.3                        Independent
Contractors

 

Each
party represents that it is acting on its own behalf as an independent
contractor and is not acting as an agent for or on behalf of any third party.
This Agreement and the relations hereby established by and between ACSD and
Cubist do not constitute a partnership, joint venture, franchise, agency or
contract of employment. Cubist is not granted, and shall not exercise, the
right or authority to assume or create any obligation or responsibility on
behalf of or in the name of ACSD or its Affiliates.

 

14.4                        Assignment

 

Neither
party may assign this Agreement or any of such party’s rights and
obligations hereunder to any third party without the prior written consent of
the other party, which consent shall not be unreasonably withheld. Either party
may assign this Agreement, and such party’s rights and obligations
hereunder, to an Affiliate (including a subsidiary) which controls, is
controlled by, or is under common control with a party so long as the assigning
party remains primarily liable for its obligations hereunder. In addition,
either party may assign this Agreement, and its rights and obligations
hereunder, to any third party that purchases substantially all of the assigning
party’s stock or assets relating to that portion of such party’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.

 

14.5                        Successors
and Assigns

 

This
Agreement shall bind and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.

 

14.6                        Notices

 

Unless
otherwise provided herein, any notice, report, payment or document to be given
by one party to the other shall be in writing and shall be deemed given when
received:

 

If to
ACSD:

ACS
Dobfar, SpA

20067
Tribiano (Milan)

Viale
Addetta, 6/8/10 Italy

Attention:  Marco Falciani

Phone:  0113902-90693218

Fax:  0113902-90693204

 

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

 

19

 

If to
Cubist:

Cubist
Pharmaceuticals, Inc.

65
Hayden Avenue

Lexington,
MA 02421 U.S.A.

Attention:  Alan Watson

Telefax
No.:  (781) 861-0566

Telephone
No.:  (781) 860-8660

 

or to
such other place as either party may designate as to itself by written
notice to the other party.

 

14.7                        Severability

 

In the
event any provision of this Agreement shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other term or provision hereof. The
parties agree that they will negotiate in good faith or will permit a court or
arbitrator to replace any provision hereof so held invalid, illegal or
unenforceable with a valid provision which is as similar as possible in
substance to the invalid, illegal or unenforceable provision.

 

14.8                        Conflict
or Inconsistency

 

In the
event of any conflict or inconsistency between the terms and conditions hereof
and any terms or conditions set forth in any purchase order or other document
relating to the transactions contemplated by this Agreement, the terms and
conditions set forth in this Agreement shall prevail.

 

14.9                        Entire
Agreement

 

The
terms and provisions contained in this Agreement (including the Exhibits)
constitute the entire understanding of the parties with respect to the
transactions and matters contemplated hereby and supersede all previous
communications, representations, agreements and understandings relating to the
subject matter hereof. No representations, inducements, promises or agreements,
whether oral or otherwise, between the parties not contained in this Agreement
or incorporated by reference in this Agreement shall be of any force or effect.
No agreement or understanding extending this Agreement or varying its terms
(including any inconsistent terms in any purchase order, acknowledgment or
similar form) shall be binding upon either party unless it is in a writing
specifically referring to this Agreement and signed by the duly authorized
representative of the applicable party.

 

14.10                 Rules
of Construction

 

The
parties agree that they have participated equally in the formation of this
Agreement and that the language and terms of this Agreement shall not be
construed against either party by reason of the extent to which such party or
its professional advisors participated in the preparation of this Agreement.

 

14.11                 Force
Majeure

 

Except
as otherwise provided in this Agreement, in the event that a delay or failure
of a party to comply with any obligation created by this Agreement is caused by
a Force Majeure condition, that obligation shall be suspended during the
continuance of the Force Majeure condition.

 

14.12                 Further
Assurances

 

Each
party covenants and agrees that, subsequent to the execution and delivery of
this Agreement and without any additional consideration, it will execute and
deliver any further legal instruments and perform any acts which are or
may become reasonably necessary to effectuate the purposes of this
Agreement.

 

20

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective duly authorized officers, and have duly delivered and
executed this Agreement under seal as of the date first set forth above.

 

	
  ACS DOBFAR SpA

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Marco Falciani

  	
   

  
	
   

  	
  Title:  President

  
	
   

  	
  Date:  November 13, 2001

  
	
   

  	
   

  
	
   

  	
   

  
	
  CUBIST PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Scott M. Rocklage

  	
   

  
	
   

  	
  Title:  Chairman and CEO

  
	
   

  	
  Date:  9/28/01

  

 

21

 

List of
Exhibits

 

	
  Exhibit
  A

  	
   

  	
  Daptomycin
  Structure

  
	
  Exhibit
  B

  	
   

  	
  In-Process
  Specifications

  
	
  Exhibit
  C

  	
   

  	
  Product
  Specifications

  
	
  Exhibit
  D

  	
   

  	
  Quality
  Requirements

  
	
  Exhibit E

  	
   

  	
  Terms of Stock Purchase Agreement

  

 

22

 

Exhibit A

 

Daptomycin
Structure

 

[*]

 

 

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

 

23

 

Exhibit B

 

In-Process
Testing Procedures and Specifications:

 

[*]

 

 

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

 

24

 

Exhibit C

 

Product
Release Test Methods and Specifications

 

[*]

 

 

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

 

25

 

Exhibit D

 

Quality
Requirements

 

[*]

 

 

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

 

26

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