Document:

Class B(2005-4) Terms Document

 Exhibit 4.1 
  

EXECUTION COPY 
  

 
 MBNA CREDIT CARD MASTER NOTE TRUST 
  
 as Issuer 
  
 CLASS B(2005-4) TERMS DOCUMENT 
  
 dated as of November 2, 2005 
  
 to 
  
 MBNASERIES INDENTURE SUPPLEMENT 
  
 dated as of May 24, 2001 
  
 to 
  
 INDENTURE 
  
 dated as of May 24, 2001 
  
 THE BANK OF NEW YORK 
  
 as Indenture Trustee 
  

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page

	ARTICLE I
	
	Definitions and Other Provisions of General Application
			
	 Section 1.01.
	  	Definitions	  	1
			
	 Section 1.02.
	  	Governing Law; Submission to Jurisdiction; Agent for Service of Process	  	5
			
	 Section 1.03.
	  	Counterparts	  	5
			
	 Section 1.04.
	  	Ratification of Indenture and Indenture Supplement	  	5
	
	ARTICLE II
	
	The Class B(2005-4) Notes
			
	 Section 2.01.
	  	Creation and Designation	  	6
			
	 Section 2.02.
	  	Specification of Required Subordinated Amount and other Terms	  	6
			
	 Section 2.03.
	  	Interest Payment	  	7
			
	 Section 2.04.
	  	Payments of Interest and Principal	  	7
			
	 Section 2.05.
	  	Form of Delivery of Class B(2005-4) Notes; Depository; Denominations	  	8
			
	 Section 2.06.
	  	Delivery and Payment for the Class B(2005-4) Notes	  	8
			
	 Section 2.07.
	  	Targeted Deposits to the Accumulation Reserve Account	  	8
	
	ARTICLE III
	
	Representations and Warranties
			
	 Section 3.01.
	  	Issuer’s Representations and Warranties	  	9

  

 -i- 

 THIS CLASS B(2005-4) TERMS DOCUMENT (this “Terms Document”), by and between MBNA CREDIT
CARD MASTER NOTE TRUST, a statutory trust created under the laws of the State of Delaware (the “Issuer”), having its principal office at Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890, and THE BANK OF NEW
YORK, a New York banking corporation ( the “Indenture Trustee”), is made and entered into as of November 2, 2005. 
  
 Pursuant to this Terms Document, the Issuer and the Indenture Trustee shall create a new tranche of Class B Notes and shall specify the principal terms
thereof. 
  
 ARTICLE I 
  
 Definitions and Other Provisions of General Application 
  
 Section 1.01. Definitions. For all purposes of this Terms
Document, except as otherwise expressly provided or unless the context otherwise requires: 
  

	 	(1)	the terms defined in this Article have the meanings assigned to them in this Article, and include the plural as well as the singular; 

  

	 	(2)	all other terms used herein which are defined in the Indenture Supplement or the Indenture, either directly or by reference therein, have the meanings assigned to them therein;

  

	 	(3)	all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles and, except as otherwise herein
expressly provided, the term “generally accepted accounting principles” with respect to any computation required or permitted hereunder means such accounting principles as are generally accepted in the United States of America at the date
of such computation; 

  

	 	(4)	all references in this Terms Document to designated “Articles,” “Sections” and other subdivisions are to the designated Articles, Sections and other subdivisions
of this Terms Document as originally executed; 

  

	 	(5)	the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Terms Document as a whole and not to any particular
Article, Section or other subdivision; 

  

	 	(6)	in the event that any term or provision contained herein shall conflict with or be inconsistent with any term or provision contained in the Indenture Supplement or the Indenture,
the terms and provisions of this Terms Document shall be controlling; 

  

	 	(7)	each capitalized term defined herein shall relate only to the Class B(2005-4) Notes and no other tranche of Notes issued by the Issuer; and 

	 	(8)	“including” and words of similar import will be deemed to be followed by “without limitation.” 

  
 “Accumulation Reserve Funding Period” shall mean,
(a) if the Accumulation Period Length is determined to be one (1) month, there shall be no Accumulation Reserve Funding Period and (b) otherwise, the period (x) commencing on the earliest to occur of (i) the Monthly Period
beginning three (3) calendar months prior to the first Transfer Date for which a budgeted deposit is targeted to be made into the Principal Funding sub-Account of the Class B(2005-4) Notes pursuant to Section 3.10(b) of the
Indenture Supplement, (ii) the Monthly Period following the first Transfer Date following and including the September 2006 Transfer Date for which the Quarterly Excess Available Funds Percentage is less than 2%, but in such event the
Accumulation Reserve Funding Period shall not be required to commence earlier than 24 months prior to the Expected Principal Payment Date, (iii) the Monthly Period following the first Transfer Date following and including the March 2007
Transfer Date for which the Quarterly Excess Available Funds Percentage is less than 3%, but in such event the Accumulation Reserve Funding Period shall not be required to commence earlier than 18 months prior to the Expected Principal Payment Date,
and (iv) the Monthly Period following the first Transfer Date following and including the May 2007 Transfer Date for which the Quarterly Excess Available Funds Percentage is less than 4%, but in such event the Accumulation Reserve Funding
Period shall not be required to commence earlier than 16 months prior to the Expected Principal Payment Date and (y) ending on the close of business on the last day of the Monthly Period preceding the earlier to occur of (i) the Expected
Principal Payment Date for the Class B(2005-4) Notes and (ii) the date on which the Class B(2005-4) Notes are paid in full. 
  
 “Base Rate” means, with respect to any Monthly Period, the sum of (i) the Weighted Average Interest Rates for the Outstanding
MBNAseries Notes, (ii) the Net Servicing Fee Rate (as such term is defined in the Series 2001-D Supplement) and (iii) so long as MBNA or The Bank of New York is the Servicer, the Servicer Interchange Rate, in each case, for such Monthly
Period. 
  
 “Class B(2005-4) Note” means any
Note, substantially in the form set forth in Exhibit A-2 to the Indenture Supplement, designated therein as a Class B(2005-4) Note and duly executed and authenticated in accordance with the Indenture. 
  
 “Class B(2005-4) Noteholder” means a Person in whose name a
Class B(2005-4) Note is registered in the Note Register. 
  
 “Class B(2005-4) Termination Date” means the earliest to occur of (a) the Principal Payment Date on which the Outstanding Dollar Principal Amount of the Class B(2005-4) Notes is paid in full, (b) the Legal
Maturity Date and (c) the date on which the Indenture is discharged and satisfied pursuant to Article VI thereof. 
  
 “Class B Required Subordinated Amount of Class C Notes” is defined in Section 2.02(b). 
  
 “Controlled Accumulation Amount” means $12,500,000;
provided, however, if the Accumulation Period Length is determined to be less than twelve (12) months pursuant to 
  

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 Section 3.10(b)(ii) of the Indenture Supplement, the Controlled Accumulation Amount shall be the amount
specified in the definition of “Controlled Accumulation Amount” in the Indenture Supplement. 
  
 “Excess Available Funds Percentage” means, with respect to any Transfer Date, the amount, if any, by which the Portfolio Yield for the
preceding Monthly Period exceeds the Base Rate for such Monthly Period. 
  
 “Expected Principal Payment Date” means October 15, 2008. 
  
 “Initial Dollar Principal Amount” means $150,000,000. 
  
 “Interest Payment Date” means the fifteenth day of each month commencing December 15, 2005, or if such fifteenth day is not a
Business Day, the next succeeding Business Day. 
  
 “Interest Period” means, with respect to any Interest Payment Date, the period from and including the previous Interest Payment Date (or in the case of the initial Interest Payment Date, from and including the Issuance
Date) through the day preceding such Interest Payment Date. 
  
 “Issuance Date” means November 2, 2005. 
  
 “Legal Maturity Date” means March 15, 2011. 
  
 “MBNAseries Servicer Interchange” means, with respect to any Monthly Period, an amount equal to the product of (a) the Servicer Interchange (as such term is defined in the Series 2001-D
Supplement) with respect to such Monthly Period and (b) a fraction the numerator of which is the Weighted Average Available Funds Allocation Amount for the MBNAseries for such Monthly Period and the denominator of which is the Weighted Average
Available Funds Allocation Amount for all series of Notes for such Monthly Period. 
  
 “Note Interest Rate” means a per annum rate equal to 4.90%. 
  
 “Paying Agent” means The Bank of New York. 
  
 “Portfolio Yield” means, with respect to any Monthly Period, the annualized percentage equivalent of a fraction, the numerator of which
is (a) the amount of Available Funds allocated to the MBNAseries pursuant to Section 501 of the Indenture, plus (b) any Interest Funding sub-Account Earnings on the related Transfer Date, plus (c) any amounts to be treated
as MBNAseries Available Funds pursuant to Sections 3.20(d) and 3.27(a) of the Indenture Supplement, plus (d) the MBNAseries Servicer Interchange for such Monthly Period, minus (e) the excess, if any, of the sum of the PFA
Prefunding Earnings Shortfall plus the PFA Accumulation Earnings Shortfall over the sum of the aggregate amount to be treated as MBNAseries Available Funds for such Monthly Period pursuant to Sections 3.04(a)(ii) and 3.25(a) of the
Indenture Supplement plus any other amounts applied to cover earnings shortfalls on amounts in the Principal Funding sub-Account for any tranche of MBNAseries Notes for such Monthly Period, minus (f) the MBNAseries Investor Default Amount for
such Monthly Period, 
  

 -3- 

 and the denominator of which is the Weighted Average Available Funds Allocation Amount for the MBNAseries for such
Monthly Period. 
  
 “Predecessor Note” means,
with respect to any particular Note, every previous Note evidencing all or a portion of the same debt as that evidenced by such particular Note; and, for the purpose of this definition, any Note authenticated and delivered under
Section 306 of the Indenture in lieu of a mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same debt as the mutilated, lost, destroyed or stolen Note. 
  
 “Quarterly Excess Available Funds Percentage” means, with respect to the September 2006 Transfer Date
and each Transfer Date thereafter, the percentage equivalent of a fraction the numerator of which is the sum of the Excess Available Funds Percentages with respect to the immediately preceding three Monthly Periods and the denominator of which is
three. 
  
 “Record Date” means, for any Transfer
Date, the last Business Day of the preceding Monthly Period. 
  
 “Required Accumulation Reserve sub-Account Amount” means, with respect to any Monthly Period during the Accumulation Reserve Funding Period, an amount equal to (i) 0.5% of the Outstanding Dollar Principal Amount of the
Class B(2005-4) Notes as of the close of business on the last day of the preceding Monthly Period or (ii) any other amount designated by the Issuer; provided, however, that if such designation is of a lesser amount, the Note
Rating Agencies shall have provided prior written confirmation that a Ratings Effect will not occur with respect to such change. 
  
 “Servicer Interchange Rate” means, for any Monthly Period, the percentage equivalent of a fraction, the numerator of which is the
MBNAseries Servicer Interchange for such Monthly Period, and the denominator of which is the Weighted Average Available Funds Allocation Amount for the MBNAseries for such Monthly Period. 
  
 “Stated Principal Amount” means $150,000,000. 
  
 “Weighted Average Interest Rates” means, with respect to any Outstanding Notes of a class or tranche of the
MBNAseries, or of all of the Outstanding Notes of the MBNAseries, on any date, the weighted average (weighted based on the Outstanding Dollar Principal Amount of the related Notes on such date) of the following rates of interest: 
  
 (a) in the case of a tranche of Dollar Interest-bearing Notes with no
Derivative Agreement for interest, the rate of interest applicable to that tranche on that date; 
  
 (b) in the case of a tranche of Discount Notes, the rate of accretion (converted to an accrual rate) of that tranche on that date; 
  
 (c) in the case of a tranche of Notes with a payment due under a Performing
Derivative Agreement for interest, the rate at which payments by the Issuer to the applicable Derivative Counterparty accrue on that date (prior to the netting of such payments, if applicable); and 
  

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 (d) in the case of a tranche of Notes with a non-Performing Derivative Agreement for interest, the rate
specified for that date in the related terms document. 
  
 Section 1.02. Governing Law; Submission to Jurisdiction; Agent for Service of Process. This Terms Document shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to principles of
conflict of laws. The parties hereto declare that it is their intention that this Terms Document shall be regarded as made under the laws of the State of Delaware and that the laws of said State shall be applied in interpreting its provisions in all
cases where legal interpretation shall be required. Each of the parties hereto agrees (a) that this Terms Document involves at least $100,000.00, and (b) that this Terms Document has been entered into by the parties hereto in express
reliance upon 6 DEL. C. § 2708. Each of the parties hereto hereby irrevocably and unconditionally agrees (a) to be subject to the jurisdiction of the courts of the State of Delaware and of the federal courts sitting in the State of
Delaware, and (b)(1) to the extent such party is not otherwise subject to service of process in the State of Delaware, to appoint and maintain an agent in the State of Delaware as such party’s agent for acceptance of legal process, and
(2) that, to the fullest extent permitted by applicable law, service of process may also be made on such party by prepaid certified mail with a proof of mailing receipt validated by the United States Postal Service constituting evidence of
valid service, and that service made pursuant to (b)(1) or (2) above shall, to the fullest extent permitted by applicable law, have the same legal force and effect as if served upon such party personally within the State of Delaware.

  
 Section 1.03. Counterparts. This Terms Document
may be executed in any number of counterparts, each of which so executed will be deemed to be an original, but all such counterparts will together constitute but one and the same instrument. 
  
 Section 1.04. Ratification of Indenture and Indenture Supplement.
As supplemented by this Terms Document, each of the Indenture and the Indenture Supplement is in all respects ratified and confirmed and the Indenture as so supplemented by the Indenture Supplement as so supplemented and this Terms Document shall be
read, taken and construed as one and the same instrument. 
  
 [END
OF ARTICLE I] 
  

 -5- 

 ARTICLE II 
  
 The Class B(2005-4) Notes 
  
 Section 2.01. Creation and Designation. There is hereby created a tranche of MBNAseries Class B Notes to be issued pursuant to the Indenture
and the MBNAseries Indenture Supplement to be known as the “MBNAseries Class B(2005-4) Notes.” 
  
 Section 2.02. Specification of Required Subordinated Amount and other Terms. 
  
 (a) Notwithstanding any provision of Section 2.03 of the Indenture Supplement to the contrary, on any date of
determination, the available subordinated amount of Class C Notes for the Class B(2005-4) Notes shall be at least equal to the Class B Required Subordinated Amount of Class C Notes for the Class B(2005-4) Notes. For purposes of this clause, the
available subordinated amount of Class C Notes for the Class B(2005-4) Notes as of any date will be an amount equal to, after giving effect to any issuances, deposits, allocations, reallocations or payments to be made on that date: 
  
 (i) the aggregate Nominal Liquidation Amount of all tranches
of Class C Notes which are Outstanding on that date; minus 
  
 (ii) the sum of (A) the aggregate Class B Required Subordinated Amount of Class C Notes for all other tranches of Class B Notes which are Outstanding on that date plus (B) the aggregate Class A Required
Subordinated Amount of Class C Notes for all tranches of Class A Notes for which the Class A Required Subordinated Amount of Class B Notes is equal to zero which are Outstanding on that date. 
  
 (b) (i) For the Class B(2005-4) Notes for any date of determination, the
Class B Required Subordinated Amount of Class C Notes will be an amount equal to the product of (A) the Adjusted Outstanding Dollar Principal Amount of the Class B(2005-4) Notes on such date, times (B) the sum of: 
  
 (x) a fraction, the numerator of which is the aggregate
Class A Required Subordinated Amount of Class C Notes for all tranches of Class A Notes which are Outstanding on that date for which the Class A Required Subordinated Amount of Class B Notes is greater than zero, and the denominator
of which is the aggregate Adjusted Outstanding Dollar Principal Amount for all tranches of Class B Notes (including the Class B(2005-4) Notes) which are Outstanding on that date; plus 
  
 (y) the product of: 
  
 (1) 8.10811%; times 
  
 (2) a fraction, the numerator of which is the aggregate Adjusted Outstanding Dollar Principal Amount for all tranches of
Class B Notes (including the Class B(2005-4) Notes) which are Outstanding on that date minus the aggregate Class A Required 
  

 -6- 

 Subordinated Amount of Class B Notes for all tranches of Class A Notes which are Outstanding on
that date, and the denominator of which is the aggregate Adjusted Outstanding Dollar Principal Amount for all tranches of Class B Notes (including the Class B(2005-4) Notes) which are Outstanding on that date. 
  
 (ii) If an Early Redemption Event with respect to the Class
B(2005-4) Notes shall have occurred, if an Event of Default and acceleration of the Class B(2005-4) Notes shall have occurred or if the Class B Usage of the Class C Required Subordinated Amount for the Class B(2005-4) Notes is greater than
zero, on any date of determination following any such event, the Class B Required Subordinated Amount of Class C Notes for the Class B(2005-4) Notes shall be the greater of (i) the amount determined pursuant to subsection 2.02(b)(i) on such
date of determination and (ii) the amount determined pursuant to subsection 2.02(b)(i) as of close of business on the day immediately preceding the occurrence of such Early Redemption Event, such Event of Default and acceleration or the date on
which the Class B Usage of Class C Required Subordinated Amount exceeded zero. 
  
 (c) The Issuer may change the definition of the Class B Required Subordinated Amount of Class C Notes with respect to the Class B(2005-4) Notes without the consent of any Noteholder so long as the Issuer has
(i) received written confirmation from each Note Rating Agency that has rated any Outstanding Notes of the MBNAseries that the change in such definition will not result in a Ratings Effect with respect to any Outstanding Class B(2005-4) Notes
and (ii) delivered to the Indenture Trustee and the Note Rating Agencies a Master Trust Tax Opinion and an Issuer Tax Opinion with respect to such change. 
  

Section 2.03. Interest Payment. 
  
 (a) For each Interest Payment Date, the amount of interest due with respect to the Class B(2005-4) Notes shall be an amount equal to one-twelfth of the
product of (i) the Note Interest Rate, times (ii) the Outstanding Dollar Principal Amount of the Class B(2005-4) Notes determined as of the Record Date preceding the related Transfer Date; provided, however, that for
the first Interest Payment Date the amount of interest due is $877,916.67. Interest on the Class B(2005-4) Notes will be calculated on the basis of a 360-day year and twelve 30-day months. 
  
 (b) Pursuant to Section 3.03 of the Indenture Supplement, on each
Transfer Date, the Indenture Trustee shall deposit into the Class B(2005-4) Interest Funding sub-Account the portion of MBNAseries Available Funds allocable to the Class B(2005-4) Notes. 
  
 Section 2.04. Payments of Interest and Principal. 
  
 (a) Any installment of interest or principal, if any, payable on any Class B(2005-4) Note which is punctually paid or duly
provided for by the Issuer and the Indenture Trustee on the applicable Interest Payment Date or Principal Payment Date shall be paid by the Paying Agent to the Person in whose name such Class B(2005-4) Note (or one or more 
  

 -7- 

 Predecessor Notes) is registered on the Record Date, by wire transfer of immediately available funds to such
Person’s account as has been designated by written instructions received by the Paying Agent from such Person not later than the close of business on the third Business Day preceding the date of payment or, if no such account has been so
designated, by check mailed first-class, postage prepaid to such Person’s address as it appears on the Note Register on such Record Date, except that with respect to Notes registered on the Record Date in the name of the nominee of
Cede & Co., payment shall be made by wire transfer in immediately available funds to the account designated by such nominee. 
  
 (b) The right of the Class B(2005-4) Noteholders to receive payments from the Issuer will terminate on the first Business Day following the Class
B(2005-4) Termination Date. 
  
 Section 2.05. Form of
Delivery of Class B(2005-4) Notes; Depository; Denominations. 
  
 (a) The Class B(2005-4) Notes shall be delivered in the form of a global Registered Note as provided in Sections 202 and 301(i) of the Indenture, respectively. 
  
 (b) The Depository for the Class B(2005-4) Notes shall be The Depository Trust Company, and the Class B(2005-4) Notes shall
initially be registered in the name of Cede & Co., its nominee. 
  
 (c) The Class B(2005-4) Notes will be issued in minimum denominations of $5,000 and multiples of $1,000 in excess of that amount. 
  
 Section 2.06. Delivery and Payment for the Class B(2005-4) Notes. The Issuer shall execute and deliver the Class
B(2005-4) Notes to the Indenture Trustee for authentication, and the Indenture Trustee shall deliver the Class B(2005-4) Notes when authenticated, each in accordance with Section 303 of the Indenture. 
  
 Section 2.07. Targeted Deposits to the Accumulation Reserve
Account. The deposit targeted to be made to the Accumulation Reserve Account for any Monthly Period during the Accumulation Reserve Funding Period will be an amount equal to the Required Accumulation Reserve sub-Account Amount. 
  
 [END OF ARTICLE II] 
  

 -8- 

 ARTICLE III 
  
 Representations and Warranties 
  
 Section 3.01. Issuer’s Representations and Warranties. The Issuer makes the following representations and warranties as to the Collateral
Certificate on which the Indenture Trustee is deemed to have relied in acquiring the Collateral Certificate. Such representations and warranties speak as of the execution and delivery of this Terms Document, but shall survive until the termination
of this Terms Document. Such representations and warranties shall not be waived by any of the parties to this Terms Document unless the Issuer has obtained written confirmation from each Note Rating Agency that there will be no Ratings Effect with
respect to such waiver. 
  
 (a) The Indenture creates a valid and
continuing security interest (as defined in the Delaware UCC) in the Collateral Certificate in favor of the Indenture Trustee, which security interest is prior to all other liens, and is enforceable as such as against creditors of and purchasers
from the Issuer. 
  
 (b) The Collateral Certificate constitutes
either an “account,” a “general intangible,” an “instrument,” or a “certificated security,” each within the meaning of the Delaware UCC. 
  
 (c) At the time of the transfer and assignment of the Collateral Certificate to the Indenture Trustee pursuant to the
Indenture, the Issuer owned and had good and marketable title to the Collateral Certificate free and clear of any lien, claim or encumbrance of any Person. 
  
 (d) The Issuer has caused, within ten days of the execution of the Indenture, the filing of all appropriate financing statements in the proper filing
office in the appropriate jurisdictions under applicable law in order to perfect the security interest in the Collateral Certificate granted to the Indenture Trustee pursuant to the Indenture. 
  
 (e) Other than the security interest granted to the Indenture Trustee
pursuant to the Indenture, the Issuer has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed the Collateral Certificate. The Issuer has not authorized the filing of and is not aware of any financing statements against
the Issuer that include a description of collateral covering the Collateral Certificate other than any financing statement relating to the security interest granted to the Indenture Trustee pursuant to the Indenture or any financing statement that
has been terminated. The Issuer is not aware of any judgment or tax lien filings against the Issuer. 
  
 (f) All original executed copies of the Collateral Certificate have been delivered to the Indenture Trustee. 
  

 -9- 

 (g) At the time of the transfer and assignment of the Collateral Certificate to the Indenture Trustee
pursuant to the Indenture, the Collateral Certificate had no marks or notations indicating that it has been pledged, assigned or otherwise conveyed to any Person other than the Indenture Trustee. 
  
 [END OF ARTICLE III] 
  

 -10- 

 IN WITNESS WHEREOF, the parties hereto have caused this Terms Document to be duly executed, all as of the
day and year first above written. 
  

			
	 MBNA CREDIT CARD MASTER NOTE TRUST,

	by MBNA AMERICA BANK,
	 NATIONAL ASSOCIATION,
 as Beneficiary
and not in its individual capacity

		
	By:	 	 /s/ Kevin F. Sweeney

	 	 	Kevin F. Sweeney
	 	 	First Vice President
	
	 THE BANK OF NEW YORK, as Indenture Trustee
 and not in its individual capacity

		
	By:	 	 /s/ Catherine Cerilles

	Name:	 	Catherine Cerilles
	Title:	 	Assistant Vice President

  
 [Signature Page
to the Class B(2005-4) Terms Document] 
  

 -11-Letter Agreement dated September 20, 2005 between XOMA (US) LLC and Cubist Phrm.

 Exhibit 10.54 
  

	[***] 	indicates that a confidential portion of the text of this agreement has been omitted. The non-public information has been filed separately with the Securities and Exchange
Commission. 

  
 CONFIDENTIAL 
  
 September 16, 2005 
  
 Cubist Pharmaceuticals, Inc. 
 65 Hayden Avenue

 Lexington, MA 02421 
 Attention: Lindon Fellows 
  

	 	Re:	Proposed Production Services Relationship 

  
 Dear Lindon: 
  
 We have been discussing the establishment of a strategic manufacturing relationship between our companies under which XOMA will develop, establish and scale-up the manufacturing process for Cubist’s HepeX-B
product candidate (the “Product”), which is a combination of two fully human monoclonal antibodies, and commit to manufacture a minimum amount of Product (i.e., a number of production lots) to provide for clinical trials and potential
commercial launch. The parties understand that successful completion of the Services (as defined below) is the critical path item to the commercial launch of the Product. 
  
 The purpose of this letter of understanding (this “Letter Agreement”) is to provide an overview of the major terms anticipated in
the Definitive Agreement (as defined below) and to describe the course of action and terms during the interim period prior to the execution of the Definitive Agreement. Any disclosures made between our companies will be subject to the Mutual
Confidentiality Agreement between our companies effective as of December 22, 2004 (the “Confidentiality Agreement”). 
  
 Scope of the Project 
  

	1.	XOMA will develop processes intended for commercial approval for the manufacture of two monoclonal antibodies (which will together form the Product) (the “Commercial
Processes”), including validated testing and documentation in a form ready for submission to the United States Food and Drug Administration (“FDA”) and that can be adapted by Cubist for submission to equivalent foreign agencies (the
“Services”). It is the intention of the parties that the Services will be completed no later than [***]. The parties also agree that in order for the Services to be completed in a satisfactory manner, there must be timely performance by
both parties and the costs associated with the development of the Commercial Processes must be controlled in the manner set forth in this Letter Agreement. 

 Definitive Agreement 
  

	2.	The parties intend to establish a definitive process development and manufacturing agreement (a “Definitive Agreement”) as rapidly as possible and XOMA has begun drafting
a Definitive Agreement. The Definitive Agreement shall cover in more detail (a) the Services described in this Letter Agreement and (b) a mechanism for planning the manufacture of additional clinical materials and commercial quantities of
Product. The parties shall begin negotiating the terms of the Definitive Agreement as promptly as practicable after execution of this Letter Agreement. 

  
 Interim Course of Action and Terms 
  

	3.	Work on this project will commence immediately upon execution of this Letter Agreement. Among other things, the parties agree to undertake the following activities:

  

	 	a.	Cubist will deliver all information necessary for XOMA to undertake its responsibilities hereunder, together with relevant details of any hazards and/or characterization relating to
the Cubist materials (including the Master Cell Bank tests) to be used, and the storage and use of Cubist materials. 

  

	 	b.	Cubist will send [***] at XOMA’s request once XOMA has satisfactorily determined that the materials meet XOMA’s criteria for acceptance, which are attached to this Letter
Agreement as Appendix B. 

  

	 	c.	The parties’ respective technical staffs will transfer the existing process technology from Cubist to XOMA. 

  

	 	d.	XOMA will apply its reasonable diligence and technical expertise to reviewing this process, recommending modifications, planning and implementing any necessary improvements thereon,
and will take other steps necessary or appropriate to initiate scale-up and manufacture of HepeX-B, including, without limitation, those activities outlined in Appendix A hereto. 

  

	 	e.	The work of each party will be performed in a professional and workmanlike manner in accordance with the standards of performance in the industry, this Letter Agreement, all
applicable laws and all business conduct and health and safety guidelines or other relevant policies. 

  

	 	f.	The parties will commence work according to the initial work plan and cost estimate attached as Appendix A. 

  

	 	g.	The parties will meet no less frequently than monthly in order to discuss the progress of the development of the Commercial Processes. The parties shall alternate responsibility for
taking the minutes of such meeting, and draft minutes shall be distributed to the other party for comment prior to being finalized. 

  

	 	h.	The parties will work to establish a Quality Agreement on or before the completion of the Definitive Agreement. 

  

	 	i.	In addition, XOMA shall produce development reports for Cubist at certain critical stages on which the parties shall agree. 

  

 -2- 

 Price 
  

	4.	The parties agree to the following with respect to price: 

  

	 	a.	XOMA and Cubist estimate that the cost of developing the Commercial Processes is approximately [***]. A breakdown of this estimate is contained in Appendix A hereto.

  

	 	b.	Cubist and XOMA agree on the need to control costs associated with development of the Commercial Processes. To that end, the parties have agreed that XOMA will perform the Services
on a fee-for service basis (as described more fully below), but that in no event will the total cost to Cubist for the Services exceed [***]; provided, however, that the total cost of the Services may exceed [***] to the extent that the actual cost
to XOMA of raw materials and resins exceeds [***]. 

  

	 	c.	In the event that the total cost of the Services to Cubist is less than [***] prior to any payment pursuant to this paragraph 3(c), then Cubist shall pay XOMA an additional [***].

  

	 	d.	In the event that the Services are completed within [***] of the date of this Letter Agreement, then Cubist shall pay XOMA an additional [***], which amount shall be in addition to
any other amounts owed hereunder and shall not be subject to the limits set forth in paragraph 4(b). 

  

	 	e.	For the purposes of clarity, payment for the Services will include any and all costs (whether internal or external) incurred by XOMA in connection with (i) developing,
validating and performing required quality control tests with respect to the Commercial Processes, (ii) completing any documentation, including the CMC section for submission to regulatory agencies to allow use of the Phase 3 clinical
materials, (iii) permitting and/or conducting any regulatory audits by Cubist or regulatory agencies and responding to any questions from regulatory agencies, (iv) providing any Product that is manufactured during the development of the
Commercial Processes to Cubist, and (v) any other activity reasonably requested by Cubist, at Cubist’s expense, in connection with seeking commercial approval of the Commercial Processes; provided, however, that the Services, as defined
herein, shall not include any process /cleaning validation and stability testing which shall be negotiated separately by the Parties. 

  
 Calculation of Fees and Expenses 
  

	5.	 For the Services contemplated by this Letter Agreement (excluding batch production costs for any [***] batches, the costs for which are addressed below), which
includes work associated with the transfer, scale-up and development work outlined on Appendix A hereto, XOMA’s costs shall be at the applicable FTE rates set forth in the table below (excluding the third party goods and services referred to
below) and such costs shall be all-inclusive and shall be subject to the overall limits described in paragraph 4(b) above. In addition, a [***] will be added to [***] as representation of an agreed upon profit to XOMA on the direct expenses related
to the development Services. For purposes of clarity, such costs shall include all facilities costs (including allocated rent and allocated utilities), 

  

 -3- 

	 	 
corporate costs, equipment depreciation, and any other cost incurred by XOMA, but shall not include charges for third party goods and services directly
related to the Commercial Processes. Charges for third party goods and services directly related to development of the Commercial Processes, including obtaining, testing and purifying raw materials and resins, will be passed through to Cubist at
XOMA’s cost without mark-up but subject to paragraph 4(b) above. 

  

			
	 Functional Area

	  	Annual FTE Rate

	 [***]
	  	[***]
	 [***]
	  	[***]
	 [***]
	  	[***]
	 [***]
	  	[***]

  
 For Services
associated with batch production costs for any [***] batches, XOMA will be reimbursed a flat fee as described in the table in Appendix A [***]. 
  

	6.	While XOMA does not anticipate the need for significant equipment purchases prior to execution of the Definitive Agreement, XOMA and Cubist will identify equipment necessary to
commence manufacturing of the Product in XOMA facilities. [***] 

  
 Payment and Invoicing 
  

	7.	Cubist and XOMA agree to the following with respect to payment and invoicing: 

  

	 	a.	Concurrent with the execution of this Letter Agreement, Cubist will pay XOMA an advance (the “Advance”) of [***], which amount will be an advance against which fees for
the Services will be credited. 

  

	 	b.	Within [***] days of the end of each calendar month after execution of this Letter Agreement, XOMA will send Cubist a detailed report (each, a “Monthly Report”) which
documents all costs for the Services during such calendar month. Such report shall also reconcile the fees incurred in such calendar month against the remaining amount of the Advance. 

  

	 	c.	Absent a good faith dispute, within [***] days of receiving a Monthly Report indicating that the remaining amount of the Advance is less than [***], Cubist shall pay XOMA an
additional [***]. Each such additional payment will be an addition to the Advance, and subsequent Monthly Reports will credit such additional amount in calculating the remaining amount of the Advance. 

  

	 	d.	Cubist shall have the right to audit the information underlying the Monthly Reports, and XOMA shall cooperate fully in any such audit, in both cases subject to customary standards
of reasonableness. 

  
 Termination 
  

	8.	XOMA and Cubist will work diligently to complete a Definitive Agreement. If for any reason the Definitive Agreement is not signed within [***] following the execution of this Letter
Agreement, either party may terminate the relationship embodied in this Letter Agreement with [***] prior written notice to the other party. 

  

 -4- 

 Effect of Termination 
  

	9.	In the event of any such termination by either party, XOMA shall be entitled to retain from the Advance all amounts due to XOMA in accordance with paragraph 4 above. XOMA shall also
be entitled to retain an additional [***] of the Advance, in consideration of opportunity costs and work already performed. The balance, if any, of the Advance shall be returned to Cubist within [***] days of termination of this Letter Agreement. In
no event shall money owed by Cubist to XOMA pursuant to this paragraph 9 exceed the amount of the Advance. Upon any such termination, both companies agree to return the other’s materials in accordance with, and otherwise to adhere to, the
applicable terms of the Confidentiality Agreement. In addition, upon termination of this Letter Agreement, to the extent reasonably requested by Cubist and at Cubist’s cost, XOMA shall promptly transfer and/or deliver to Cubist (i) any
Product developed by XOMA, (ii) any raw materials and resins purchased in connection with performance of the Services, (iii) any documentation reasonably related to the Commercial Processes, including documentation related to cell line
characterization and optimization, analytical development and assay development, validation-related documentation, any relevant protocols and SOPs, and any other documentation reasonably request by Cubist, (iv) any assays used in connection
with the development of the Commercial Process, and (v) any master or working cell bank related to the Product. For purposes of clarity, in the event that this Letter Agreement is terminated, it is the intention of the parties that Cubist be
able to recommence the development of the Commercial Processes with a third party with as little interruption as possible, and therefore, that pursuant to this paragraph, Cubist shall have access to and the right to use any and all information,
processes, intellectual property and materials developed by XOMA in the course of its work hereunder reasonably required to do so. It is also agreed that Cubist shall be responsible for all costs associated with XOMA’s compliance with the terms
of this paragraph. 

  
 Manufacturing Rights 
  

	10.	It is the parties’ intention to enter into a Definitive Agreement within [***] of the date hereof. However, it is understood that Cubist requires the flexibility to manufacture
the Product at multiple manufacturers, and that Cubist requires the ability to transfer the process to a third party [***] either (a) in the event that any agreement between Cubist and XOMA, including this Letter Agreement, is terminated or
performance of the Services is significantly delayed or (b) solely for purposes of obtaining multiple sources for commercial supply of the Product. To that end, Cubist and third party manufacturers working at Cubist’s request will be
entitled to use the manufacturing process developed pursuant to this Letter Agreement and/or the Definitive Agreement without royalty or other obligations to XOMA. XOMA and Cubist make no representation or warranty and shall have no obligation to
the other as to non-infringement with respect to intellectual property claims of third parties. 

  

 -5- 

 Miscellaneous 
  

	11.	Neither party to this Letter Agreement may use the other party’s name, logos, copyrights or trademarks without the prior written permission of such other party. Any
publication, news release or other public announcement relating to this Letter Agreement or to the performance hereunder, except as required by law, shall first be reviewed and approved by both Parties, which approval shall not be unreasonably
withheld. 

  

	12.	Except as set forth above, each company shall be solely responsible for its own costs and expenses in negotiating the Definitive Agreement. 

  

	13.	This Letter Agreement shall be governed by the laws of the State of New York without regard to the conflicts of laws provisions thereof. XOMA and Cubist each agree to resolve any
dispute regarding this Letter Agreement in the state and federal courts of the State of New York, and each party hereby consents to the jurisdiction of such courts. 

  
 We are very pleased at the prospect of a strategic manufacturing relationship with Cubist and look forward to working with you. If this
Letter Agreement and the attachments accurately set forth our current understanding, please countersign where indicated below. 
  

			
	 Very truly yours,

	
	 XOMA (US) LLC

		
	 By:
	 	 
	 	 	 Robert S. Tenerowicz
 Vice President, Operations

  

			
	Agreed and accepted as of the date first above written:
	
	 CUBIST PHARMACEUTICALS, INC.

		
	 By:
	 	 
	 	 	 Lindon M. Fellows
 Senior Vice President, Technical Operations

  

 -6- 

 Appendix A 
  
 INITIAL WORK PLAN AND COST ESTIMATE 
  
 [***] 
  

 -7- 

 Appendix B 
  

XOMA ACCEPTANCE CRITERIA 
  
 [***] 
  

 -8-

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