Manufacturing and Supply Agreement - DSM Capua SpA and Cubist Pharmaceuticals Inc.
CONFIDENTIAL TREATMENT
MANUFACTURING AND SUPPLY AGREEMENT
This Manufacturing and Supply Agreement (AGREEMENT) is entered into as of June
22, 2000 (EFFECTIVE DATE) by and between:
DSM Capua S.p.A., an Italian company with registered address Strada Statale
Appia, 46-48, Capua, Italy (DSM)
and
Cubist Pharmaceuticals, Inc., a Delaware corporation with registered address 24
Emily Street, Cambridge, MA 02139, USA (CUBIST).
BACKGROUND
Cubist is a drug company focused on the discovery, development and
commercialization of novel drugs to treat infections. Cubist has commenced Phase
III clinical trials of its lead product, Daptomycin, an agent with potential
bactericidal activity against life threatening infections. DSM has expertise in
the manufacture of drugs on a contract basis. DSM is willing to manufacture
Daptomycin for Cubist and to sell clinical and commercial quantities of
Daptomycin to Cubist. This Agreement sets forth the terms under which DSM will
manufacture and supply Daptomycin exclusively 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, DSM 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 Person 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 Person, the direct or indirect ownership of more than
fifty percent (50%) of the voting or income interest in such Person or
the possession otherwise, directly or indirectly, of the power to
direct the management or policies of such Person.
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FOB means "Free on Board", as that expression is defined in INCOTERMS
2000, LCIA Publishing S.A.
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 medium and marked as confidential, or if
disclosed orally or displayed, confirmed in writing within thirty (30)
days after disclosure and marked as confidential, except any portion
thereof which: (i) is known to the receiving party, as evidenced by the
receiving party's written records, before receipt thereof under this
Agreement; (ii) 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; (iii) is or becomes generally known in
the trade through no fault of the receiving party; or (iv) is
independently developed by the receiving party, as evidenced by the
receiving party's written records, without access to such information.
CONTRACT YEAR means each twelve (12) month period during the term of
this Agreement beginning on the date of the commencement of commercial
production of Daptomycin in the Facility. Preliminary activities
related to Facility development, validation and product registration
which occur in the period prior to the first Contract Year will be
referred to as Year Zero.
CUBIST TECHNOLOGY [ ]*
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the Commission.
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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 DSM in connection with this Agreement) or employees of
Cubist at any time prior to the Effective Date, concurrent with or
related to this Agreement.
DAPTOMYCIN, DAPTOMYCIN PRODUCT OR PRODUCT means Daptomycin (the
compound [ ]* whose structure is detailed in Exhibit B) API bulk drug
substance manufactured in accordance with Exhibit C.
EMEA means the European Medicines Evaluation Agency or any successor
entity thereto.
FDA means the United States Food and Drug Administration or any
successor entity thereto.
FACILITY means the GMP Drug Production facility in Capua, Italy to be
equipped by DSM for the manufacture of Product pursuant to the
provisions of Section 2.
FORCE MAJEURE means any event beyond the reasonable control of the
parties, including, without limitation, fire, flood, riots, strikes,
epidemics, war (declared or undeclared and including the continuance,
expansion or new outbreak of any war or conflict now in existence),
embargoes and governmental actions or decrees.
NDA means a new drug application filed with the FDA to obtain marketing
approval for Product in the United States.
PERSON means any individual, corporation, association, partnership
(general or limited), joint venture, trust, estate, limited liability
company, limited liability partnership, unincorporated organization,
government (or any agency or political subdivision thereof) or other
legal entity or organization.
PROCESS [ ]*
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the Commission.
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PRODUCT APPROVALS means, those regulatory approvals required for
manufacture, importation promotion, pricing, marketing and sale of the
Product in any particular country.
SPECIFICATIONS means the specifications for the Product attached to
this Agreement as Exhibit D. Such specifications may be modified from
time to time to reflect improvements (if any) by mutual agreement of
the parties. Copies of such modified Specifications shall be maintained
by both parties, and shall become a part of this Agreement as if
incorporated herein.
OTHER DEFINED TERMS. Each of the following terms have the meanings
ascribed to it in the section set forth opposite such term
DSM Recitals
AGREEMENT Recitals
CUBIST Recitals
EFFECTIVE DATE Recitals
FDA ACT Section 6.3
GMPS Section 4.3
IMPLEMENTATION DATE Section 3.3
INDEMNIFYING PARTY Section 7.2/7.3
INDEMNITEE(S) Section 7.2/7.3
LCIA Section 9.2
LOSSES Section 7.2
REPRESENTATIVE Section 9.1
RMA Section 3.11 sub b
SUPPLY FORECAST Section 3.3
TARGET DATE Section 2.1
2. CONSTRUCTION OF PRODUCTION FACILITY
2.1 FACILITY CONSTRUCTION. By [ ]* (the Target Date), DSM will (i) carry
out the modifications to the Facility and equip the Facility for the
manufacture of Daptomycin and (ii) qualify the Facility in accordance
with the qualification requirements set forth in Exhibit E.
2.2 DATE ADJUSTMENTS. If due to any other reason than the late-, non- or
misperformance by DSM of its obligations hereunder except for reasons
of force majeure, the relevant dates shall be adjusted day-for-day.
2.3 INSPECTION; CHANGE PROCEDURES. Cubist will have the right to inspect
the progress of work at the Facility at all reasonable times during the
equipment and qualification process and to confer with
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the Commission.
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DSM to confirm compliance with DSM's obligations under this Agreement.
In addition, Cubist will be consulted concerning any matters that could
cause a delay in completion of the Facility. DSM acknowledges that time
is of the essence for this Agreement, and that significant delays in
the completion of the Facility caused by DSM's non-, late or
misperformance of its obligations hereunder may cause Cubist
significant harm. Cubist and DSM will, from time to time during the
construction process, confer regarding the quality standards for
materials and layout of operations within the Facility; every
reasonable effort consistent with prudent business practice will be
made to minimize the capital investment without compromising quality or
efficiency of Product production operations. No changes to the Exhibits
D and E or the quality standards for materials and layout will be made
without written consent of both parties.
3. PURCHASE OF PRODUCTS AND TERMS OF SALE.
3.1 [ ]*.
3.2 PURCHASE COMMITMENT. During the [ ]* Contract Years following the date
of the commencement of commercial production of Daptomycin in the
Facility [(2002 until 2006)]*, Cubist will purchase [ ]*. At the end
of Contract Year [ ]*. During the period prior to the date of the
commencement of commercial production of Daptomycin in the Facility,
Cubist shall purchase [ ]* consistency batches of Product for a price
equal to [ ]*. The [ ]* consistency batches shall be considered part
of the aggregate minimum purchase of Contract Year One.
3.3 PURCHASE FORECASTS. At least [ ]* prior to the anticipated date of the
modification of the Facility (i.e. [ ]* and thereafter, on a [ ]* basis
at least [ ]* prior to the first day of each calendar quarter, Cubist
will provide DSM with a non-binding rolling forecast of its orders of
the Product with respect to the next [ ]* including expected delivery
dates (SUPPLY FORECAST). The forecasts for the first two quarters of
any four quarter period shall represent binding purchase obligations of
Cubist with respect to [ ]* of the Product forecast in the previous
quarter's Supply Forecast. In no event shall a Supply Forecast exceed
the optimal production capacity of the Facility for the period in
question.
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3.4 PRODUCT ORDERS. Orders shall be placed by written purchase order and
submitted by mail or facsimile, or by other means agreed upon by the
parties. No order shall be binding upon DSM until the same shall have
been accepted in writing by DSM. DSM shall accept or reject all orders
within [ ]* following receipt of same and shall deliver all orders that
are accepted in accordance with clauses 3.2, 3.3 and 3.5. It is agreed
by the parties that the standard printed terms of purchase/sale of
Cubist and DSM, shall not be applicable. DSM shall deliver against each
such order in accordance with Section 3.5.
3.5 OBLIGATION TO SUPPLY. (a) DSM shall use best efforts to accept and fill
each order for Product submitted by Cubist; including orders that
exceed the Supply Forecast for any quarter by [ ]* of the amount in the
Supply Forecast for such quarter delivered to DSM [ ]* days prior to
such quarter. DSM shall not be in breach of this Section 3.5 if DSM's
failure to supply Product is due to a Force Majeure event.
(b) If DSM is unable to supply the Product ordered by Cubist in
accordance with the terms of this Agreement, then DSM shall [ ]* to
remedy the problem or secure an alternative source of supply within a
reasonable time at no cost to Cubist, and any such alternative source
of supply shall be on terms substantially identical with the terms of
this Agreement. If DSM is unable to remedy the problem or secure an
alternative source of supply within [ ]* days after its initial failure
to supply, then DSM 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 DSM: (i) draw down units of Product from
the back-up supply established pursuant to Section 3.6 and (ii) in the
event that the parties agree that Cubist will exhaust such back-up
supply before DSM is able to resume supplying Product in sufficient
volume, take measures to obtain the Product through a third party and
such purchases shall be counted against the minimum purchase
obligations specified in Section 3.2. Cubist may continue to purchase
Product committed to DSM from third party suppliers until DSM notifies
Cubist that it is again able to supply Cubist's needs and substantiates
such claim to Cubist's reasonable satisfaction. Thereafter, Cubist
shall commence purchasing Product from DSM in accordance with the
obligations specified in Section 3.2; provided that: (i) Cubist shall
not be required to cancel binding purchase orders with any third party
and (ii) DSM shall pay all cancellation costs incurred by Cubist in
switching its purchases to DSM.
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the Commission.
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3.6 BACK-UP INVENTORY. In order to increase the flexibility and to minimize
adverse consequences from any interruption in DSM's ability to supply
Cubist with Product, DSM [ ]*. The back-up inventory of raw materials
will be DSM's property, and no sale or transfer or ownership of such
raw materials in inventory is contemplated herewith. The parties
shall mutually agree upon the exact size of such back-up supply
of raw materials. DSM will promptly notify Cubist if the back-up
inventory of raw material falls below the agreed level, including
the reasons for such depletion, and shall restock the back-up supply
as soon as practicable so that the agreed back-up supply is
maintained at all times. The parties shall adjust the size of the
back-up supply from time to time as mutually agreed and as warranted by
commercially prudent risk management practices.
3.7 CHANGES. DSM shall not change the specified raw materials vendors, raw
materials or the process without the consent of Cubist; provided that
DSM may implement changes in the process in accordance with Section
5.3(c).
3.8 PRODUCT PRICES. (a) Cubist's price for the Product shall equal [ ]*.
(b) Except as otherwise agreed by the parties or as provided in this
Section 3.8, DSM may not increase the price charged for the Product
(c) If Cubist's aggregate purchases of Product from DSM in Contract
Year [ ]*, Contract Year [ ]*, and Contract Year [ ]* cumulatively
exceed [ ]* and Cubist's binding orders for Product for Contract
Year [ ]* and Contract Year [ ]* exceed an aggregate volume of [ ]*
3.9 PAYMENT. Cubist shall pay for Product within [ ]* days after the date
of DSM's invoice with respect to Product. Except for income taxes that
may be assessed against DSM, all taxes and charges that may be imposed
by any government taxing authority on the amounts paid by Cubist to DSM
under this Agreement shall be paid by [ ]*. [ ]* shall
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the Commission.
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make payments by wire transfer to a bank identified by [ ]* using the
procedure specified in Section 10.6. All payments shall be stated and
paid in United States Dollars.
3.10 DELIVERY. DSM shall arrange for shipment and invoicing to Cubist of the
Product ordered by Cubist via common carrier, FOB Naples, Italy. In
case, upon request of Cubist, a quantity of Product ordered by Cubist
is stored by DSM, DSM will be entitled to prepayment of the invoice
value pertaining to the amount of Product stored. DSM shall be
responsible for maintaining the Product under storage conditions that
are mutually agreed by the parties. If DSM maintains the agreed storage
conditions, DSM shall not be liable for any degradation of the Product.
Storing of Product shall not constitute any reason for Cubist to deter
or withhold payment of the relevant invoice(s).
3.11 ACCEPTANCE. (a) Each shipment of Product from DSM to Cubist shall
contain such quality control certificates as described in Exhibit F to
show that the Product is in conformity with the Product Specifications
and Product Approvals. Cubist shall notify DSM within [ ]* of the
receipt of a shipment of the Product of any nonconformity of the
Product to the Product Specifications; provided that with respect to
obvious nonconformities, Cubist will promptly notify DSM. If Cubist
fails to so notify DSM or if Cubist processes the Product (or has it
processed by a third party), it will be deemed to have accepted the
Product and to have waived all claims in this respect.
(b) Cubist shall not be required to pay DSM for any Product which has
been property rejected in accordance with clause 3.11 sub (a). Subject
to clause 3.11 sub a, DSM shall at its expense and at no further cost
to Cubist replace any Product that does not conform to the Product
Specifications. Initially samples of any defective Product shall be
returned to DSM using the procedure specified in this Section 3.11(b).
Cubist shall notify DSM in writing of its rejection of Product under
Section 3.11(a), shall provide DSM with a sample of the defective
Product along with a reasonably detailed statement of the claimed
defect and proof of date of purchase and shall request a Return
Material Authorization (RMA) number and shall within thirty (30) days
of receipt of such RMA number return such rejected Product to DSM
freight prepaid and properly insured. In the event DSM determines that
the sample of Product is defective and properly rejected by Cubist, DSM
shall issue the RMA and replace such defective Product. The parties
will then in mutual consent decide on how to dispose of the defective
Product in the most favorable manner. DSM shall return to Cubist,
freight prepaid, all replaced Product,
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along with reimbursement of the shipment charges for return of the
samples of nonconforming Product. In the event, that DSM determines
that the returned sample of Product is not defective and the parties
are unable to resolve such dispute to their mutual satisfaction within
[ ]*, DSM shall submit a sample of such returned Product to an
independent laboratory reasonably acceptable to Cubist for testing
against the Specifications and the test results obtained by such
laboratory shall be final and controlling. The fees and expenses of
such laboratory testing shall be done 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
Specifications, DSM shall replace such Product at no additional cost to
Cubist within [ ]* after receipt of such results if replacement Product
stock is available, and in any case as soon as reasonably possible
after receipt of such results.
4. REGULATORY COMPLIANCE SYSTEMS, CERTIFICATES AND ACCESS
4.1 GENERAL. DSM agrees to manufacture Daptomycin bulk drug substance in
accordance with the Good Manufacturing Practice regulations outlined in
USC 21 CFR 211, subparts A-J, where applicable for the production of
active pharmaceutical ingredients. This will include, at a minimum, the
maintenance of a separate, dedicated, appropriately staffed quality
control unit that has the responsibility of accepting or rejecting
incoming components, review of batch records, and approving or
rejecting Daptomycin bulk drug substance; the provision of adequate
laboratory facilities for conducting component testing, in-process and
final bulk drug substance testing; assuring that facility personnel
have the appropriate education, training and experience to perform
their designated job responsibilities; assuring that the manufacturing
facilities are appropriately designed and maintained to ensure that
Daptomycin bulk drug substance meets pre-determined specifications and
is free of potential contamination; assuring that the manufacturing and
laboratory equipment is adequate for the production and testing of
Daptomycin bulk drug substance and that the equipment is appropriately
maintained; the preparation and maintenance of batch production and
control records; and having written standard operating procedures
(SOP's) that are adhered to for the following:
a. Receipt and testing of incoming components
b. Operational procedures for manufacturing including
sampling and in-process testing
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c. Handling of deviations during the manufacturing process
d. Procedures for analytical methods which are used for
component, in-process and final product testing
e. Maintenance of manufacturing facilities as well as
equipment used in the manufacturing and laboratory
facilities
f. GMP training of manufacturing and quality control
personnel
DSM shall use reasonable best efforts consistent with prudent business
practice in cooperation with Cubist to (a) obtain all necessary
approvals required under Italian law for the production of the Product
in the Facility and (b) maintain such approvals in effect throughout
the term of this Agreement.
4.2 CERTIFICATES OF ANALYSIS. DSM shall perform, or cause to be performed,
sample tests on each lot of Product purchased pursuant to this
Agreement before delivery to Cubist. Each test report shall set forth
the items tested, specifications and test results in a certificate of
analysis, containing the types of information which shall have been
agreed between the parties for each lot delivered. DSM shall send or
cause to be sent such certificates to Cubist prior to delivery of each
lot. The certificate of analysis will be accompanied by a certified
batch manufacturing record signed by DSM's quality assurance
department.
4.3 CERTIFICATES OF MANUFACTURING COMPLIANCE. DSM shall provide or cause to
be provided, for each lot of Product purchased pursuant to this
Agreement, a certificate of manufacturing compliance, containing the
types of information which shall have been agreed between the parties,
which will certify that the lot of Product was manufactured in
accordance with the Specifications and the current Good Manufacturing
Practices of the FDA, as the same may be amended from time to time,
including without limitation the requirements listed on Exhibit F
(collectively, GMPS). In the event the FDA or other governmental
regulatory agency notifies DSM that it intends to visit or inspect the
Facility, DSM shall immediately provide notice of such visit or
inspection to Cubist and Cubist shall have the right to participate in
such visit or inspection. DSM shall advise Cubist immediately If an
authorized agent of the FDA or other governmental regulatory agency
visits the Facility without prior notice, DSM shall furnish to Cubist
the report by such agency of such visit within [ ]* of DSM's receipt of
such report. In the event DSM fails to meet the GMPs, as a consequence
of the non-, late- or misperformance of its obligations hereunder
except for reasons of Force Majeure DSM will be responsible, at DSM's
expense, for (a) conducting an investigation to define the probable
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the Commission.
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causes for the failure, (b) providing an acceptable GMP investigation
report to Cubist for review and written approval and (c) achieving
compliance with GMP.
4.4 ACCESS TO FACILITY; CUBIST'S RIGHT TO MONITOR. Cubist shall at all
times upon reasonable notice and during normal business hours have the
right to inspect the Facility to ascertain compliance with GMPs. In
addition, Cubist shall have the right to designate a Cubist employee or
an independent consultant to monitor the production process at the
Facility, the expenses of which employee or consultant would be borne
by Cubist.
4.5 PRODUCT RECALLS. (a) if (i) any regulatory authority withdraws the
approval to sell the Product in such country or issues a directive or
request that the Product be recalled for product safety reasons
relating to the Product; or (ii) any regulatory authority or court of
competent jurisdiction issues a request, directive or order that the
Product be recalled; or (iii) Cubist shall reasonably determine that
the Product should be recalled; 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 the non-, late- or misperformance by DSM of its
obligations hereunder except for reasons of Force Majeure, DSM shall up
to an aggregate maximum amount of [ ]* be responsible for all expenses
of the recall (except that in the event of a contributory fault of
Cubist DSM and Cubist shall share such expenses accordingly) and DSM
shall promptly replace such Product at no additional cost to Cubist
consistent with directions received from the appropriate governmental
authority. In all other cases, Cubist shall be responsible for the
expenses of recall, including the cost of replacement Product. 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 lost profits of
either party.
(b) 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 and until Cubist is again authorized to sell Product in such
country, and DSM 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, the minimum offtake obligations pursuant to Section
3.2 will be adjusted accordingly.
* Confidential treatment requested: Material has been omitted and filed with
the Commission.
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5. CONFIDENTIALITY; PROPRIETARY RIGHTS.
5.1. PUBLICITY. Except as is necessary for governmental notification
purposes relating to the production, importation, marketing or sale of
Product or to enforce their respective rights under this Agreement, or
to a party's legal or financial advisors, and except as otherwise
agreed to by the parties hereto in writing, 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) 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, such party shall not file this Agreement with the
Securities and Exchange Commission without seeking confidential
treatment for any provisions of this Agreement that either 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. Neither party
shall use the name of the other party or any director, officer or
employee of the other party or any adaptation thereof without the prior
written approval of the other party.
5.2 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 to
take all reasonable steps to prevent disclosure of Confidential
Information of the other party and not to use any Confidential
Information of the other party except for the limited purposes set
forth in this Agreement; provided that no provision of this Agreement
shall be construed to preclude such disclosure of Confidential
Information as may be required by valid court or administrative order,
or to the extent necessary and appropriate to divulge such Confidential
Information to obtain governmental approval for marketing the Product;
provided notice of such disclosure is provided to the other party prior
to such disclosure. All Confidential Information made available
hereunder, including copies thereof, shall be returned or destroyed
upon the first to occur of (a) termination of this Agreement or (b)
written request by
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the Commission.
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the discloser, except that each party may retain one (1) complete copy
of Confidential Information for archival purposes to assure compliance
with this Agreement. For the purpose of this Article 5, it is agreed
that any direct or indirect Affiliate of DSM shall not be regarded as a
third party.
5.3 PROPRIETARY RIGHTS. (a) This Agreement does not convey to DSM any
ownership rights in [ ]* by implication, estoppel or otherwise except
for the rights expressly granted under this Agreement. Title to [ ]*
shall at all times remain vested in Cubist or its licensors.
(b) This Agreement does not convey to Cubist any ownership rights in
any existing [ ]* by implication, estoppel or otherwise. Title to
all such [ ]* shall at all times remain vested in DSM or its
licensors.
(c) [ ]*
(d) Subject to the terms and conditions of this Agreement, Cubist
hereby grants to DSM, and DSM hereby accepts, a [ ]*
(e) Each party agrees that any of its employees, affiliates,
consultants who are designated as inventors agree to execute all
assignments, powers of attorney or other patent documents necessary to
vest ownership to the other party as described in Section 5.3 (c) (i).
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5.4 PROPRIETARY RIGHTS NOTICES. DSM 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.
6. REPRESENTATIONS AND WARRANTIES.
6.1 AUTHORIZATION; ENFORCEABILITY. Each of DSM and Cubist represents and
warrants 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.
6.2 CONFORMITY; GMP'S. DSM represents and warrants to Cubist that all
Product supplied to Cubist hereunder shall, at the time of delivery:
(a) conform to the Specifications; and (b) be manufactured, labeled,
packaged and tested (while in the possession of, stored by or control
of DSM) in accordance with the applicable GMP's, and the applicable
laws and the regulations in the United States and the EU relating to
the manufacture and testing of the Product as defined in Exhibit F to
this Agreement. THE FOREGOING WARRANTY IS THE SOLE AND EXCLUSIVE
WARRANTY GIVEN BY DSM WITH RESPECT TO THE DAPTOMYCIN PRODUCT, AND DSM
GIVES AND MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, EXPRESS
OR IMPLIED, INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE AND IMPLIED WARRANTIES ARISING UNDER TRADE
USAGE OR CUSTOM OR ANY EXPRESS OR IMPLIED WARRANTIES OF PATENT VALIDITY
OR FREEDOM OF OR FROM PATENT INFRINGEMENT.
6.3 COMPLIANCE WITH FDA. DSM represents and warrants to Cubist that (a) all
Product supplied to Cubist hereunder shall at the time of such
delivery, not be adulterated within the meaning of the Federal Food,
Drug and Cosmetic Act of 1941, as amended (FDA ACT), as such FDA Act is
effective at the time of delivery, and will not be an article which may
not, under the provisions of the FDA Act, be introduced into interstate
commerce.
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6.4 FDA DEBARMENT CERTIFICATION. DSM warrants that it shall not knowingly,
after due inquiry, employ, contract with or retain any person directly
or indirectly to perform services under this Agreement, if such person
is debarred by the FDA under 21 USC 335a(k) (Section 306, Federal Food,
Drug and Cosmetic Act). Upon written request from Cubist (including a
request made on it's behalf by Cubist's agent), DSM shall, within [ ]*,
provide written confirmation that it has complied with the foregoing
obligation.
6.5 EXCLUSIVE REMEDY. EXCEPT AS OTHERWISE PROVIDED IN SECTION 7 (WITH
RESPECT TO THIRD PARTY CLAIMS), IN THE EVENT ANY PRODUCT PURCHASED BY
CUBIST FROM DSM FAILS TO CONFORM TO THE WARRANTY SET FORTH IN SECTION
6.2, DSM'S SOLE AND EXCLUSIVE LIABILITY AND CUBIST'S SOLE AND EXCLUSIVE
REMEDY SHALL BE, [ ]*, PROVIDED THAT CUBIST NOTIFIES DSM OF SUCH
NONCONFORMITY AND RETURNS A SAMPLE OF THE PRODUCT AND THE PRODUCT IN
ACCORDANCE WITH SECTION 3.11 (A) AND (B).
7. RISK ALLOCATION
7.1 LIMITATION OF LIABILITY. EXCEPT FOR INFRINGEMENT OF CUBIST'S
INTELLECTUAL PROPERTY RIGHTS OR BREACH OF CONFIDENTIALITY OBLIGATIONS
UNDER SECTION 5.1 AND EXCEPT AS OTHERWISE PROVIDED IN SECTION 7.2 WITH
RESPECT TO THIRD PARTY CLAIMS, DSM SHALL NOT BE LIABLE TO CUBIST FOR
LOST PROFITS OR FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL,
PUNITIVE OR EXEMPLARY DAMAGES IN CONNECTION WITH THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, HOWEVER CAUSED, UNDER ANY
THEORY OF LIABILITY. THE AGGREGATE LIABILITY OF DSM FOR DIRECT DAMAGES
OF CUBIST OUT OF THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
HEREBY SHALL BE LIMITED TO THE INVOICE VALUE OF THE PRODUCT WITH
RESPECT TO WHICH A CLAIM PERTAINS.
7.2 DSM INDEMNIFICATION. Subject to the provisions of Section 7.4 [ ]*, DSM
(as INDEMNIFYING PARTY) shall solely defend, indemnify and hold
harmless Cubist, its subsidiaries, parent corporations, Affiliates,
officers, directors, independent contractors, partners, shareholders,
employees, agents, successors and assigns (each, as an INDEMNITEE) from
and against any claim, suit, demand, loss, damage, expense (including
reasonable attorney's fees of Indemnitee(s) and those that
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the Commission.
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may be asserted by a third party) or liability (collectively, LOSSES)
relating to personal injuries and/or property damages to the extent
arising from Product Liability legislation. The foregoing
Indemnification action shall not apply in the event and to the extent
that such Losses arose as a result of any Indemnitee's negligence,
intentional misconduct or breach of this Agreement.
7.3 CUBIST INDEMNIFICATION. Subject to the provisions of Section 7.4,
Cubist (as INDEMNIFYING PARTY) shall defend, indemnify and hold
harmless DSM, its subsidiaries, parent corporations, Affiliates,
officers, directors, independent contractors, partners, shareholders,
employees, agents, successors and assigns (each, as an INDEMNITEE) from
and against any Losses arising from or related to (a) the negligence or
willful misconduct of Cubist, (b) the use, sale or processing of the
Product by Cubist, to the extent not attributable to DSM and (c) any
allegation that the Process or Product infringes any intellectual
property right of any third party, unless caused by DSM's unauthorized
use or modification of the Process or Product.
7.4 PROCEDURE. To receive the benefit of indemnification under Sections 7.2
and 7.3, the Indemnitee must (a) promptly notify the Indemnifying Party
in writing of a claim or suit (such notice to include a description of
such claim or suit and a copy of such claim or process and all legal
pleadings in connection therewith); (b) provide reasonable cooperation
(at the Indemnifying Party's expense) in the defense and settlement of
the claim or suit; and (c) tender to the Indemnifying Party (and its
insurer) full authority to defend or settle the claim or suit. The
Indemnifying Party shall have no obligation to indemnify Indemnitee in
connection with any settlement made without the Indemnifying Party's
written consent. Failure to comply with the provisions of Section
7.4(a)-(c) shall relieve the Indemnifying Party of its indemnification
obligations; provided, that failure to give notice in accordance with
Section 7.4(a) shall not relieve the Indemnifying Party of its
indemnification obligations, except where, and solely to the extent
that, such failure actually and materially prejudices the rights the
Indemnifying Party. Notwithstanding the provisions of Section
7.4(b)-(c): (i) Indemnitee shall have the right to retain its own
counsel, with the fees and expenses to be paid by the Indemnifying
Party, if representation of Indemnitee by the counsel retained by the
Indemnifying Party would be inappropriate due to actual or potential
differing interests between such Indemnitee and any other party
represented by such counsel in such proceedings; and (a) if an
Indemnitee determines that there is a reasonable probability that a
claim may materially and adversely affect it, other than as a result of
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the Commission.
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money payments required to be reimbursed by the Indemnifying Party
under this Section 7, the Indemnitee shall have the right to defend,
compromise or settle such claim or suit, provided that such settlement
or compromise shall not, unless consented to in writing by the
Indemnifying Party, be relevant as to the liability of the Indemnifying
Party to Indemnitee.
7.5 INSURANCE. (a) DSM shall cause to purchase and maintain in force during
the term of this Agreement, at its expense, premises liability
insurance coverage described in Exhibit G hereto. Certificates of such
insurance shall be provided to Cubist upon the execution of this
Agreement.
(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 which any Product is being clinically tested with
human subjects or commercially distributed or sold. It is understood
that such insurance shall not be construed to create a limit of either
party's liability.
(c) Each party shall provide the other with written evidence of the
insurance required under Sections 7.5(a) and 7.5(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 fifteen (15) 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.
8. TERM AND TERMINATION.
8.1 TERM. This Agreement shall take effect at the Effective Date and shall
remain in effect unto the end of the [ ]* Contract Year, unless sooner
terminated in accordance with Section 8 or extended in accordance with
this Section 8.1. Thereafter, [ ]*. All applicable terms and
conditions of this Agreement shall remain in effect during such
extension term, unless expressly amended by the parties.
8.2 TERMINATION. (a) Either party may terminate this Agreement at any time:
(i) upon [ ]* notice to the other party in the event that the other
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the Commission.
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party shall have breached any of its material obligations hereunder and
shall not have cured such default prior to the expiration of the [ ]*
period; (ii) upon notice to the other party in the event that a Force
Majeure condition has prevented performance by the other party for more
than [ ]*; (iii) upon 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 [ ]*.
(b) Cubist may terminate this Agreement at any time, upon [ ]* notice
to DSM, if Cubist finally and irrevocably terminates the manufacture
and sale of the Product (both directly and indirectly). Cubist may also
terminate this Agreement in the event that the FDA refuses to approve
the Product. In this event the parties will reasonably agree upon the
disposition of any ongoing orders for Product and Product which is
currently work in progress.
(c) The parties may also terminate this Agreement at any time upon
mutual written agreement of the parties.
8.3 EFFECT OF TERMINATION. Upon any termination (including expiration) of
this Agreement: (i) 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 archival purposes to assure compliance with this
Agreement; and
(ii) DSM shall promptly notify Cubist of the quantity of Product in
inventory and Cubist shall have the obligation to purchase such
inventory of Product in accordance with the provisions of Sections
3.4-3.5 and subject to Sections 3.10-3.11; provided, that Cubist shall
not be obligated to purchase any more than the quantity of Product
specified in Cubist's then most recent quarterly forecast for the
following four quarters unless the parties had agreed to a larger
inventory, in which case such inventory will be purchased and taken in
its entirety by Cubist. DSM shall also promptly notify Cubist of the
quantity of raw materials in inventory and Cubist shall have the
obligation to either reimburse DSM for the purchase price and inventory
costs of DSM relating to such raw materials or to have DSM manufacture
Product thereof and pay the applicable purchase price;
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the Commission.
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provided, that Cubist shall not be obligated to reimburse or purchase
any more than the quantity of raw materials in inventory agreed upon by
the parties.
(b) 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. To that extent, all outstanding payments due by
Cubist to DSM, will become payable at once. In particular the
provisions of Sections 1, 4.5, 5.1-5.4, 6-9 and 10 shall survive any
expiration or termination of this Agreement. Neither party shall be
entitled to damages resulting from the termination of this Agreement in
accordance with this Section 8.
9. DISPUTE RESOLUTION.
9.1 DESIGNATED CONTACTS. (a) Each party will designate an individual
(REPRESENTATIVE) who will have the authority to represent such party in
all matters concerning the transactions contemplated by this Agreement.
All communications should be addressed to the designated
Representative. The initial Cubist Representative will be [ ]*. The
initial DSM Representative will be [ ]*.
(b) In the event that any dispute arises relating to this Agreement,
the Representatives shall promptly meet and attempt to resolve same
through good faith discussions. If the Representatives are unable to
resolve any dispute to their mutual satisfaction within [ ]* after they
commence discussions regarding same, and do not agree to extend the
time for resolution of the issue at the end of their meeting, then
either party may initiate alternative dispute resolution in accordance
with Section 9.2.
9.2 ARBITRATION. (a) Except in the case of a breach of Section 5, any
claim, dispute, or controversy arising out of or relating to this
Agreement that is not resolved in accordance with the provisions of
Section 9.1 will be submitted by the parties to arbitration by the
London Court of International Arbitration (LCIA) under the rules then
in effect for the LCIA, as modified herein or by agreement of the
parties. Any such arbitration shall be conducted in London, England by
one or more arbitrators selected in accordance with this Section 9.2.
Each party irrevocably and unconditionally (i) consents to the
jurisdiction of any such proceeding and waives any objection that it
may have to personal jurisdiction or the laying of venue of any such
proceeding; and (ii) knowingly and voluntarily waives its rights to
have disputes tried and adjudicated by a judge and jury except as
otherwise expressly provided
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the Commission.
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herein. The parties will cooperate with each other in causing the
arbitration to be held in as efficient and expeditious a manner as
practicable. The parties will attempt to agree upon a mutually
acceptable arbitrator within 30 days of receipt of the notice of intent
to arbitrate. If the parties are unable to agree upon a single
arbitrator within such 30-day period or any extension of time which is
mutually agreed upon, three (3) arbitrators shall be used, one selected
by each party within ten (10) days after the conclusion of the 30-day
period and a third selected by the first two within ten (10) days
thereafter. Unless the parties agree otherwise, they shall be limited
in their discovery to directly relevant documents. Responses or
objections to a document request shall be served twenty (20) days after
receipt of the request. The arbitrator(s) shall resolve any discovery
disputes. It is understood that the parties may (but are not required
to) submit disputes concerning any breach of Section 5 to arbitration
in accordance with this Section 9.2. Nothing herein shall prevent the
parties from settling any dispute by mutual agreement at any time.
(b) The arbitrator(s) shall apply the substantive laws of England when
construing this Agreement and attempting to resolve any dispute
relating to the transactions contemplated by this Agreement, without
regard for any choice or conflict of laws rule or principle that would
result in the application of the substantive law of any other
jurisdiction. The arbitration shall be of each party's individual
claims only, and no claim of any other party shall be subject to
arbitration in such proceeding. Except as otherwise required by law,
the parties and the arbitrator(s) shall maintain as confidential all
information or documents obtained during the arbitration process,
including the resolution of the dispute.
(c) The arbitrator(s) shall not have the authority to award exemplary
or punitive damages, and the parties expressly waive any claimed right
to such damages. The arbitrator(s) shall have the authority to award
actual money damages (with interest on unpaid amounts from the date
due) and may grant equitable relief as is just and provided by the LCIA
Rules, in each case except as specifically provided to the contrary
herein The costs and expenses of the arbitration, but not the costs and
expenses of the parties, shall be shared equally by the parties,
provided that the non-prevailing party in any arbitration shall pay the
other party's costs and expenses (including travel expenses) and
reimburse such party for its portion of the arbitration costs. Any
award rendered by the arbitrator(s) shall be final and binding upon the
parties. Judgment upon the award may be entered in any court of
competent jurisdiction. If a party fails to proceed with arbitration,
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the Commission.
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unsuccessfully challenges the arbitration award, or fails to comply
with the arbitration award, the other party is entitled to costs,
including reasonable attorneys' fees, for having to compel arbitration
or defend or enforce the award.
(d) In the case of a breach of Section 5, either party may seek legal
or equitable relief in the court(s) having jurisdiction over such
matter.
10. GENERAL PROVISIONS.
10.1 GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of England, 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.
10.2 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 tern or condition and whether occurring before or after the
date of such waiver.
10.3 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 DSM 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 DSM or its Affiliates.
10.4 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
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the Commission.
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assignment, delegation or transfer in contravention of this Agreement
shall be null and void.
10.5 SUCCESSORS AND ASSIGNS. This Agreement shall bind and inure to the
benefit of the parties hereto and their respective successors and
permitted assigns.
10.6 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 delivered personally or mailed by
certified or registered mail, postage prepaid (such mailed notice to be
effective on the date which is three (3) business days after the date
of mailing), or sent by nationally recognized overnight courier (such
notice sent by courier to be effective one business day after it is
deposited with such courier), or sent by telefax (such notice sent by
telefax to be effective when sent, if confirmed by certified or
registered mail or overnight courier as aforesaid):
If to DSM:
DSM Capua S.p.A.
Strada Statale Appla 4fi-48
Capua, Italy
Attention: Eric Lodder
Phone: 39.0823.628.325
Fax: 39.0823.628.326
If to Cubist:
Cubist Pharmaceuticals, Inc.
24 Emily Street
Cambridge. MA 02139 U.S.A.
Attention: Alan Watson
Telefax No.: (617) 234-5592
Telephone No.: (617) 576-1999
or to such other place as any party may designate as to itself by
written notice to the other party.
10.7 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
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the Commission.
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valid provision which is as similar as possible in substance to the
invalid, illegal or unenforceable provision.
10.8 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 of this Agreement shall prevail.
10.9 CAPTIONS. Captions of the sections and subsections of this Agreement
are for reference purposes only and do not constitute terms or
conditions of this Agreement and shall not limit or affect the meaning
or construction of the terms and conditions hereof.
10.10 WORD MEANINGS. Words such as HEREIN, HEREINAFTER, HEREOF AND HEREUNDER
refer to this Agreement as a whole and not merely to a section or
paragraph in which such words appear, unless the context otherwise
requires. The singular shall include the plural, and each masculine,
feminine and neuter reference shall include and refer also to the
others, unless the context otherwise requires.
10.11 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.
10.12 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.
10.13 COUNTERPARTS. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument. In making proof of this
Agreement, it shall not be necessary to produce or account for more
than one such counterpart.
10.14 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,
other than a payment obligation, created by this Agreement
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the Commission.
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is caused by a Force Majeure condition, that obligation shall be
suspended during the continuance of the Force Majeure condition.
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.
CUBIST PHARMACEUTICALS, INC.
By: /s/ SCOTT M. ROCKLAGE
---------------------------------
Title:
DSM CAPUA S.p.A
By:
---------------------------------
Title:
By: /s/ E. LODDER
---------------------------------
Title:
By: /s/ C. MANTOVANI
---------------------------------
Title:
LIST OF EXHIBITS
A: List of Patent and Patent Applications
B: Daptomycin Structure
C: Process
D: Specifications
E: Requirements
F: Qualification Certificates and cGMPs
G: Insurance
* Confidential treatment requested: Material has been omitted and filed with
the Commission.
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