printer-friendly

Sample Business Contracts

Research and Development Collaboration and Option Agreement - Emisphere Technologies Inc. and Cubist Pharmaceuticals Inc.

Sponsored Links

                             CONFIDENTIAL TREATMENT

                 RESEARCH & DEVELOPMENT COLLABORATION AND OPTION
                                    AGREEMENT


         Research and Development Collaboration and Option Agreement (the
"Agreement"), dated and effective as of September --, 2000 (the "EFFECTIVE
DATE") between Emisphere Technologies, Inc., 765 Old Saw Mill River Road,
Tarrytown, NY 10591, a Delaware corporation ("EMISPHERE"), and Cubist
Pharmaceuticals Inc., 24 Emily Street, Cambridge, MA 02139, a Delaware
corporation ("CUBIST").

         WHEREAS, Emisphere is engaged in the research and development of
proprietary synthetic chemical compounds, compositions and methods that
facilitate and/or enable the improved systemic delivery of therapeutic
macromolecules and other compounds. Whereas Emisphere owns compounds and
technology (including patents, patent applications, trade secrets, know-how
and other intellectual property rights) and will develop pursuant to the
Program (as defined below) certain compounds and technology, collectively the
"EMISPHERE TECHNOLOGY"); and

         WHEREAS, Cubist produces, or is engaged in research to produce,
therapeutic macromolecules and other compounds, has significant expertise in
identifying and developing compounds that mediate a variety of disorders, and
has proprietary compounds and technology (including patents, patent
applications, trade secrets, know-how and other intellectual property rights
presently owned or controlled by Cubist and to be developed by Cubist
pursuant to the Program); and

         WHEREAS, Emisphere and Cubist desire to collaborate in research
regarding the applicability of the Emisphere Technology to the oral delivery
of Cubist's compounds, and to provide for certain rights and obligations of
Emisphere and Cubist in the event such research produces commercially viable
applications; and

         WHEREAS, Emisphere desires to grant certain options and rights to
Cubist to jointly with Emisphere research and develop Cubist's products using
the Emisphere Technology.

*Confidential treatment requested:  Material has been omitted and filed with
the Commission

<PAGE>

         NOW, THEREFORE, in consideration of the mutual promises and
agreements contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Emisphere and
Cubist (each a "Party" and together "the Parties") agree as follows:

                                   ARTICLE I

                                RESEARCH PROGRAM

         1.1    COLLABORATION. Cubist and Emisphere hereby agree to
collaborate on a research and development program (the "PROGRAM"), as
specified in Exhibit A of this Agreement and modified as needed during the
term of this Agreement, to research and develop the use of the Emisphere
Technology for the oral delivery of Daptomycin, its Cubist developed
analogues and derivatives thereof (the "Compound"). Emisphere will make
available to Cubist, Emisphere Technology including chemical compounds (the
"Carriers") that it identifies as relevant to the Program, which can be used
to facilitate and/or enable improved transport of therapeutic compounds
through membranes.

         1.2    PROGRAM MANAGEMENT.

         (a)    Cubist and Emisphere shall establish a steering committee
(the "STEERING COMMITTEE"). The function of the Steering Committee shall be
to plan, coordinate and manage the Program. The Steering Committee is not
intended to, replace any internal management procedures of either Party.
Rather, it is intended to be a vehicle to ensure that the Program proceeds in
a timely, coordinated, and well planned fashion. It shall be made up of a
maximum of six (6) members, with an equal number appointed by each of Cubist
and Emisphere and with a central contact person appointed by each Party. Each
Party hereto shall name one member to be a co chairperson of the Steering
Committee. Meetings of the Steering Committee will alternate between
Emisphere's designated facility and Cubist's designated facility. The first
responsibility of the Steering Committee shall be to establish and approve a
work plan to assure the timely completion of the various tasks of the
Program. The second responsibility of the Steering Committee shall be to
define acceptance criteria (e.g., bioavailability, % absorption) which will
be used to make the "go/no go" decisions with respect to continued research
into and/or development of the use of the Carriers for oral delivery of the
Compound (the "CRITERIA"). Cubist and Emisphere shall establish the Criteria
within thirty (30) days of the Effective Date and shall determine whether the
Criteria have been met. On at least a quarterly basis, the Steering Committee
shall meet to review the results of the Program and to modify the

*Confidential treatment requested:  Material has been omitted and filed with
the Commission

<PAGE>

work plan as necessary. On a quarterly basis or time frame agreed to by the
parties, each party's respective patent counsel shall meet to discuss patent
filings and intellectual property matters.

         (b)    The Steering Committee shall keep minutes of its meetings,
and shall be responsible only for the development and implementation of the
work plan. If the members of the Steering Committee cannot agree jointly on a
task in the work plan, it will be up to the Co-Chairmen to reach a decision.
If the Co-Chairmen cannot reach agreement, the matter shall be brought to the
CEO of Emisphere and CEO of Cubist. In the event that the CEO's cannot
resolve the issues then Cubist shall make the final decision. Notwithstanding
the preceding sentence, if the CEO's cannot resolve a matter that relates to
the manufacture and qualification of the Carrier, and if Emisphere reasonably
believes that the final decision by Cubist could materially adversely affect
Emisphere's other then current research programs or collaborations or
Emisphere's business, then Emisphere shall have the right to invoke the
dispute resolution mechanism outlined in section 4.19 in which case Emisphere
may suspend the Program and implementation of the decision by Cubist, pending
completion of such dispute resolution mechanism. It is further understood and
agreed by the Parties that Emisphere shall use its reasonable commercial
efforts tonsure that it takes all reasonable steps necessary to be able to
meet Cubist's needs for the manufacture of the Carrier. It is further
understood and agreed by the Parties that Cubist shall use its reasonable
commercial efforts to ensure that it takes all reasonable steps necessary to
advance the progress of the development efforts.

         1.3    TERM; TERMINATION.

         (a)    The Agreement is in effect as of the Effective Date. Subject
to articles 1.3(b), (c), (d), and (e), the Program shall proceed as outlined
in Exhibit A. The Parties will determine whether the Criteria have been met.
If the Criteria have been met, then the Program shall continue provided that
the Steering Committee determines that the profile of the Compound itself
does not preclude its further development (e.g. efficacy, toxicity, side
effects, etc.).

         (b)    If the Steering Committee determines that preclinical or
clinical findings prevent initiation or completion of the Program with
respect to the Emisphere Technology and/or the Compound, either Cubist or
Emisphere will have the option of immediately terminating the Program.

         (c)    Either Party may terminate this Agreement upon written notice
to the other Party that such other Party has committed a material breach of

*Confidential treatment requested:  Material has been omitted and filed with
the Commission

<PAGE>

this Agreement if, within [ ]* days of receipt of such notice, such breach
has not been cured, or the Parties have not agreed in writing to amend the
Agreement to waive such breach or to give extra time to cure such breach.

         (d)    Termination or expiration of this Agreement shall not affect
the rights and obligations of the Parties accrued hereunder prior to
termination or expiration.

         (e)    Should the License (defined below) not be executed by the
parties by the Deadline (defined below) or should the Parties not agree to an
extension in the absence of a License after the Deadline this Agreement shall
terminate.

         (f)    Cubist may terminate this Agreement at any time for any
reason upon [ ]* days notice to Emisphere. Should Cubist terminate this
Agreement for any reason other than an inability of the Emisphere technology
to deliver the drug via oral administration, then Cubist and Emisphere, at
Emisphere's option, shall issue a joint press release indicating that the
Agreement was terminated for reasons unconnected with the Emisphere
technology.

         1.4    PAYMENTS.

         (a)    As part of the work plan established by the Steering
Committee, the Parties shall jointly define the number of Emisphere Full Time
Equivalent personnel ("FTE'S") required to complete each-Stage of the Program
in a timely manner. Cubist shall pay to Emisphere US $[ ]* per quarter for
each Emisphere FTE who works on the Program pursuant to the work plan as
supported by appropriate documentation. Cubist shall be required to fund all
Emisphere FTE's required by the work plan. All payments shall be paid within
[ ]* days following receipt of Emisphere's invoice by Cubist.

         (b)    "FTE" means a full-time equivalent scientific person year
directly related to the Program wherein said scientific person year refers to
chemical, biological or engineering research scientists and does not include
administrative or support staff. Scientific work on or directly related to
the Program to be performed by Emisphere can include, but is not limited to,
experimental laboratory work, recording and writing up results, reviewing
literature and references, holding scientific discussions, managing and
leading scientific staff, and carrying out Program management duties or such
other activities as may be appropriate to the conduct of the Program.

*Confidential treatment requested:  Material has been omitted and filed with
the Commission

<PAGE>

         (c)    If Cubist desires to expand research beyond the scope of the
program and, if acceptable to Emisphere, the Parties hereto will mutually
agree in writing upon the research programs to be added and the number of
Emisphere FTE's necessary to achieve the objectives of the expanded research.
The additional cost for each Emisphere FTE shall be US $[ ]* per quarter to
be paid as follows: (i) an initial payment shall be made on the next date a
payment is due, pro-rated for the period between such day the Emisphere FTE
is added and the next quarterly payment due pursuant to Section 1.4(a),
above, and (ii) all subsequent payments shall be made at the same time as the
payments for the Program.

         1.5    INTELLECTUAL PROPERTY.

         (a)    "EMISPHERE KNOW-HOW" means all materials, trade secrets,
confidential scientific, technical and medical information, experimental
results and expertise from time to time developed, produced, created or
acquired by or on behalf of Emisphere either prior to the Effective Date and
pertaining to the Program or during the term and in the course of carrying
out the Program, including, but not limited to, unpatented inventions,
discoveries, theories, plans, ideas or designs (whether or not reduced to
practice) relating to the research and development, registration for
marketing, use, or sale of the Carriers, or products utilizing the Carriers,
preclinical toxicology and manufacturing for the Carriers, and toxicological,
pharmacological, analytical and clinical data, bioavailability studies and
formulations, control assays and specification, methods of preparation,
tableting techniques, salt and other physical forms, and stability data
related thereto. To the extent that any of the items listed above are
acquired by Emisphere, they shall only fall within the definition of Know-How
hereunder to the extent to which there are no obligations or restrictions in
respect of such items that would prohibit disclosure by Emisphere or free use
by Cubist.

         (b)    "Cubist Improvements of Emisphere Know-How" shall mean any
improvement specifically relating to the Carriers alone, or Carrier/Compound
combination and invented or made solely by Cubist during the term and in the
course of carrying out the Program.

         (c)    "CUBIST KNOW-HOW" means all trade secrets, confidential
scientific, technical and medical information, experimental results and
expertise from time to time developed, produced, created or acquired by or on
behalf of Cubist either prior to the Effective Date and pertaining to the
Program or during the term and in the course of carrying out the Program,
including, but not limited to, unpatented inventions, discoveries, theories,
plans, ideas or designs (whether or not reduced to practice) relating to the

*Confidential treatment requested:  Material has been omitted and filed with
the Commission

<PAGE>

research and development, registration for marketing, use, or sale of the
Compound, preclinical toxicology and manufacturing for the Compounds, and
toxicological, pharmacological, analytical and clinical data, bioavailability
studies and formulations, control assays and specification, methods of
preparation, and stability data related thereto. To the extent that any of
the items listed above are acquired by Cubist, they shall only fall within
the definition of Know-How hereunder to the extent to which there are no
obligations or restrictions in respect of such items which would prohibit
disclosure by Cubist or free use by Emisphere.

         (d)    "EMISPHERE IMPROVEMENTS OF CUBIST KNOW-HOW" shall mean any
improvement specifically relating to the Compound alone and invented or made
solely by Emisphere during the term and in the course of carrying out the
Program.

         (e)    "JOINT IMPROVEMENTS" shall mean any improvement invented or
made jointly by Emisphere and Cubist during the term and in the course of
carrying out the Program.

         (f)    Emisphere shall have the right to use any data including
preclinical and toxicology data, protocols and methods pertaining to the
Carriers and the Compound/Carrier combinations that are generated for the
Program, such use being subject to the confidentiality provisions of Article
IV except that Emisphere shall have the right to include data in patent
applications. Cubist shall have the right to use any data including
preclinical and toxicology data, protocols and methods that are generated for
the Program pertaining to the Compound and the Compound/Carrier combinations,
such use being subject to the-confidentiality provisions of Article IV except
that Cubist shall have the right to include data in patent applications.

         (g)    "INTELLECTUAL PROPERTY" shall mean all patents, patent
applications, copyrights, Know-How, trade secrets, data generated during the
Program, and other intangible property rights relating to the inventions
and/or developments that pertain to the Program.

         (h)    Ownership with respect to Intellectual Property conceived
and/or developed by Emisphere or a third party working on behave of
Emisphere, Cubist, or a third party working on behalf of Cubist, or jointly
or a third-party working on behalf of Emisphere and Cubist jointly as a
result of activities carried out pursuant to this Agreement, the extent of
ownership of such Intellectual Property shall be as follows:

*Confidential treatment requested:  Material has been omitted and filed with
the Commission

<PAGE>

         i)     if the Intellectual Property relates to the Carriers alone or
                the Carrier/Compound combination, Emisphere shall own such
                Intellectual Property without regard to which party invented,
                made, conceived or developed the Intellectual Property;

         ii)    if the Intellectual Property relates to the Compound alone,
                Cubist shall own such Intellectual Property without regard to
                which party invented, made, conceived or developed the
                Intellectual Property

         iii)   if the Intellectual Property is invented, made, conceived, or
                developed-jointly-by employees of Cubist and Emisphere and
                the Intellectual Property does not relate to the Carrier
                alone, Carrier/Compound combination, or the Compound alone,
                Cubist and Emisphere shall each own an undivided one-half
                interest in such Intellectual Property;

         iv)    if the Intellectual Property is invented, made, conceived, or
                developed solely by Emisphere or solely by Cubist and the
                Intellectual Property does not relate to the Carrier alone,
                Carrier/Compound combination, or the Compound alone, then the
                respective party shall own the Intellectual Property.

         (i)    Patent counsel mutually acceptable to the parties shall
determine inventorship of all Intellectual Property as defined in 1.51. in
accordance with U.S. patent law when determining whether such Intellectual
Property is jointly owned or is owned solely by Emisphere or by Cubist.

         (j)    Cubist and Emisphere each agree to communicate promptly and
disclose to the other party, information, details and data pertaining to any
Intellectual Property described in Section 1.5, and to execute and deliver to
the other Party such formal transfers and assignments and such other papers
and documents and shall give such testimony as may be necessary for the party
that owns such Intellectual Property to file and prosecute patent
applications and, as to copyrightable material, to obtain copyrights thereof
in any and all countries of the world. The obligations of each Party under
this Section 1.50) shall survive any expiration of this Agreement and shall
be subject to the Party receiving such assistance paying the reasonable
expenses of the Party providing such assistance.

         (k)    Cubist and Emisphere shall cooperate with each other in
obtaining patent term extensions or supplemental protection certificates or
their equivalents in any country with respect to the Intellectual Property.
In the event that elections with respect to obtaining such patent term
extensions or supplemental protections certificates or their equivalents are
to

*Confidential treatment requested:  Material has been omitted and filed with
the Commission

<PAGE>

be made, the owner of the Intellectual Property shall have the right to make
the election.

                                  ARTICLE II

                               RIGHTS AND OPTIONS

         2.1    THE OPTION. Cubist is hereby granted an exclusive option (the
"Option") to obtain an exclusive worldwide (the "TERRITORY") license (the
"License") to develop (in conjunction with Emisphere) and to make, have made,
use and sell products embodying the Emisphere Technology for the Compound for
oral delivery thereof (the "PRODUCT"). The License shall be based upon the
terms set forth in the outline attached hereto as Exhibits B and C.

         2.2    THE OPTION PERIOD. The Option shall expire [ ]* days from the
Effective Date ("the Deadline") or upon execution of a License whichever is
sooner (the "Option Period").

         2.3    THE LICENSE. The language of the License shall be negotiated
in good faith during the Option Period and a final, executable License shall
be attached to this agreement as Exhibit D no later than the Deadline. The
Royalty rates shown in Exhibit B and the Program Milestones shown in Exhibit
C shall be the final financial terms in the License.

         2.4    THE LICENSE FEE. In order to exercise the Option to obtain
the License, Cubist shall send Emisphere a letter (the "License Letter")
prior to the Deadline indicating Cubist's intent to exercise its Option, and
Cubist shall pay Emisphere US $[ ]* (the "License Fee") by wire transfer
within [ ]* days after receipt by Emisphere of the License Letter.

         2.5    EXECUTING THE LICENSE. At such time upon exercise of the
Option the License shall be executed and become effective upon execution.
However should Emisphere not receive the License Fee within [ ]* days of the
execution of the Option then the License shall immediately terminate.

         2.6    RESPONSIBILITIES OF THE PARTIES DURING THE OPTION PERIOD.
During the Option Period as described in Exhibit A, Emisphere shall, in
accordance with the agreed Program workplan, (i) select and provide Carrier
preparations for in vivo experiments, (ii) assist in the formulation
development, and (iii) assist in Product development. Cubist shall, in
accordance-with the agreed Program workplan, (i) supply bulk Compounds for
the Program, (ii) provide necessary physical or chemical data on the

*Confidential treatment requested:  Material has been omitted and filed with
the Commission

<PAGE>

Compounds, and (iii) take responsibility for the necessary preclinical or
clinical studies. Each Party shall perform its respective tasks as decried in
Exhibit A.

         2.7    PROGRAM CARRIER MATERIALS. During the Program Emisphere may
require a third party to manufacture the Carrier. Upon approval of such third
party by Cubist, which shall not be unreasonably withheld, Cubist shall
reimburse Emisphere for the actual cost paid by Emisphere to supply, produce
or procure the Carrier used in the Program. It is understood by the Parties
that the total number of kilograms of Carrier required in the Program will
have to be specified and agreed in writing between the members of the
Steering Committee of each Party.

                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

         3.1    DUE INCORPORATION. Each of the Parties represents and
warrants to the other that it is duly incorporated under the relevant laws of
incorporation and each has full corporate authority to enter into and to
perform its obligations under this Agreement.

         3.2    DUE AUTHORIZATION. Each of the Parties represents and
warrants to the other that this Agreement has been fully authorized, executed
and delivered by it and it has full legal right, power and authority to enter
into and perform this Agreement, which constitutes a valid and binding
agreement between the Parties and that it does not conflict with or result in
a breach of the terms of such Party's organizational documents and applicable
laws, regulation or order or any agreement or other obligation to which such
party is a party.

         3.3    LITIGATION. Each of the Parties represents and warrants to
the other that it is not engaged in any litigation or arbitration, or in any
dispute or controversy reasonably likely to lead to litigation, arbitration
or other proceeding, which would materially affect the validity of this
Agreement or such Party's ability to fulfill its respective obligations under
this Agreement.

         3.4    NO BREACH. Each of Emisphere and Cubist represent and warrant
for the benefit of the other that the execution of this Agreement by them and
performance by them of their respective obligations under this Agreement will
not (a) breach the terms and conditions of any agreement between them and any
third party or (b) conflict with any laws or regulations that apply to them.

*Confidential treatment requested:  Material has been omitted and filed with
the Commission

<PAGE>

         3.5    NO INFRINGEMENT; NO ENCUMBRANCES. Each of Emisphere and
Cubist represent and warrant for the benefit of the other Party that as of
the Execution Date of this Agreement, to the best of their present,
respective knowledge regarding their own technology, that currently there are
no patents, trade secrets or other intellectual property rights of third
parties that would be infringed by or misappropriated by Emisphere or Cubist
in the development, marketing, sale, use, manufacture, and offer for sale of
oral forms of the Compound, that both parties have sufficient intellectual
property rights to grant the licenses to be granted under this Agreement and
to perform their obligations under this Agreement and that there is no known
claim or threat with respect thereto.

                                   ARTICLE IV

                                  MISCELLANEOUS

         4.1    CONFIDENTIALITY.

         4.1.1  EMISPHERE INFORMATION. Cubist will maintain in confidence,
and will ensure that its Affiliates and its and their consultants, employees,
agents and representatives maintain in confidence, all proprietary and
confidential information which has been or is provided by Emisphere to
Cubist, including but not limited to, Emisphere's data, Know-How, inventions,
discoveries, improvements, trade secrets, carriers (including structures and
physical properties), methods, scientific protocols, business plans,
marketing techniques or plans, manufacturing and other plant designs,
location of operations, and any other information affecting the business
operations of Emisphere ("Emisphere Information"), and will not use for any
purpose other than the completion of the Agreement and will not publish,
disseminate, or disclose, in any manner, to any person any Emisphere
Information unless: (i) Cubist is legally required to do so provided that
Emisphere is advised in advance in order to seek legal protection from such
disclosure, (ii) the Emisphere Information has entered or enters the public
domain through no fault of Cubist, (iii) the Emisphere Information was
already known by Cubist before receipt from Emisphere, or is developed
independently by Cubist without breach of this Agreement, in either case as
shown by contemporaneous written records, or (iv) the Emisphere Information
is received by Cubist from a third party who may lawfully make such
disclosure and who is under no confidentiality obligation to Emisphere.

         4.1.2  CUBIST INFORMATION. Emisphere will maintain in confidence,
and will ensure that its Affiliates and its and their consultants, employees,
agents

*Confidential treatment requested:  Material has been omitted and filed with
the Commission

<PAGE>

and representatives maintain in confidence, all proprietary and confidential
information which has been or is provided by Cubist to Emisphere, including
but not limited to, Cubist's data, Know-How, inventions, discoveries;
improvements and methods, business plans, marketing techniques or plans,
manufacturing and other plant designs, location of operations, and any other
information affecting the business operations of Cubist ("Cubist
information"), and will not use for any purpose other than the completion of
the Agreement, and will not publish, disseminate, or disclose, in any manner,
to any person any Cubist Information unless: (i) Emisphere is legally
required to do so provided that Emisphere is advised in advance in order to
seek legal protection from such disclosure, (ii) the Cubist Information has
entered or enters the public domain through no fault of Emisphere, (iii) the
Cubist Information was already known by Emisphere before receipt from Cubist,
or is developed independently by Emisphere without breach of this Agreement,
in either case as shown by contemporaneous written records, or (iv) the
Cubist Information is received by Emisphere from a third party who may
lawfully make such disclosure and who is under no confidentiality obligation
to Cubist.

         4.1.3  REQUIRED DISCLOSURE. In the event that either Party is
requested or required (by oral questions, interrogatories, requests for
information or documents in legal proceedings, subpoena, civil investigative
demand or other similar process) to disclose any of the confidential
information of the other Party, the Party requested or required to make the
disclosure shall provide the other Party with prompt notice of any such
request or requirement so that the other Party may seek a protective order or
other appropriate remedy and/or waive compliance with the provisions of this
Agreement. If in the absence of a protective order or other remedy or the
receipt of a waiver by such other Party, the Party requested or required to
make the disclosure are nonetheless, in the opinion of counsel, legally
compelled to disclose the other Party's Confidential information to any
tribunal, the Party requested or required the disclosure may without
liability hereunder, disclose to such tribunal only that portion of the other
Party's Confidential Information which such counsel advises is legally
required to be disclosed, provided that the Party requested or required to
make the disclosure exercises its reasonable efforts to preserve the
confidentiality of the other Party's Confidential information, including
without limitation, by cooperating with the other Party to obtain an
appropriate protective order or other reliable assurance that confidential
treatment will be accorded the other Party's Confidential Information by such
tribunal.

         4.1.5  CERTAIN DISCLOSURE. To the extent it is reasonably necessary
or appropriate to fulfill its obligations under this Agreement, either Party
may

*Confidential treatment requested:  Material has been omitted and filed with
the Commission

<PAGE>

disclose Confidential Information to its affiliates, potential licensees,
licensees and parent companies on a need-to-know basis on condition that such
affiliates, potential licensees, licensees and parent companies agree to keep
the Confidential Information confidential for the same periods and to the
same extent as the Parties are required to keep the Confidential Information
confidential under this Agreement.

         4.2    INDEMNITY.

         4.2.1  Subject to Section 4.2.4, Cubist shall indemnify, defend and
hold harmless Emisphere, its affiliates, agents, directors, officers and
employees, successors and assigns from and against any loss, damage, action,
proceeding, expense or liability (including attorney's fees, but excluding
internal overhead) (collectively, "Loss") arising from or in connection with
any claim by a third party with regard to the manufacture, importation,
exportation, distribution, sale, offer for sale, storage, possession or use
of any Compound or Product supplied by Cubist or its third party suppliers to
Emisphere or prepared pursuant to the Program, except in the event and to the
extent that a court of competent jurisdiction for an arbitrator pursuant to
Section 4.19) determines that such Loss is caused by Emisphere's negligence
or intentional misconduct.

         4.2.2  Subject to Section 4.2.4, Emisphere shall indemnify, defend
and hold harmless Cubist, its affiliates, agents, directors, officers and
employees, successors and assigns from and against any Loss arising from or
in connection with any claim by a third party with regard to the manufacture,
importation, exportation distribution, storage, possession or use of any
Carrier prepared and supplied by Emisphere or its third party suppliers to
Cubist, except in the event and to the extent that a court of competent
jurisdiction (or an arbitrator pursuant to Section 4.19) determines that such
Loss is caused by Cubist's negligence or intentional misconduct.

         4.2.3  (a) Subject to the provisions of Section 4.2.4, Emisphere
shall defend, indemnify and hold harmless Cubist, its affiliates, agents,
directors, officers and employees, successors and assigns from and against
any Loss arising from or in connection with any claim by a third party based
upon an allegation that the Emisphere Know-How or Emisphere Improvements of
Cubist Know-How infringes or misappropriates any intellectual property right
of any third party (including without limitation, any patent, copyright,
trade secret or trademark); PROVIDED that Emisphere will not be obligated to
indemnify Cubist if and only to the extent that the alleged infringement is
caused by: (i) Cubist Know-How or (ii) Cubist's modification of the Emisphere
Know-How or Emisphere Improvements of Cubist Know-How; or (iii) Cubist's

*Confidential treatment requested:  Material has been omitted and filed with
the Commission

<PAGE>

use of the Emisphere Know-How or Emisphere Improvements of Cubist Know-How in
combination with any products or materials not provided by Emisphere (except
for the products or materials with which the Emisphere Know-How or Emisphere
Improvements of Cubist Know-How is designed to be used, as provided in the
Criteria). If the Emisphere Know-How or Emisphere Improvements of Cubist
Know-How or its use is held to constitute an infringement or misappropriation
of any third party's intellectual property rights or if in Emisphere's
opinion, any portion of the Emisphere Know-How or Emisphere Improvements of
Cubist Know-How is, or is likely to be held to constitute, an infringement or
misappropriation, Emisphere will at its expense and option: (1) procure the
right for Cubist to continue using the Emisphere Know-How or Emisphere
Improvements of Cubist Know-How; or (2) replace or modify the Emisphere
Know-How or Emisphere Improvements of Cubist Know-How with a non-infringing
and non-misappropriating equivalent conforming to the applicable Criteria. If
none of the foregoing options is economically feasible, Emisphere shall so
notify Cubist and shall be entitled to terminate this Agreement.

         (b)    Subject to the provisions of Section 4.2.4, Cubist shall
defend, indemnify and hold harmless Emisphere, its affiliates, agents,
directors, officers and employees, successors and assigns from and against
any Loss arising from or in connection with any claim by a third party based
upon an allegation that the Compound, the Cubist Know-How or Cubist
Improvements to Emisphere Know-How infringes or misappropriates any
intellectual property right of any third party (including without limitation,
any patent, copyright, trade secret or trademark); PROVIDED that Cubist will
not be obligated to indemnify Emisphere if and only to the extent that the
alleged infringement is caused by: (i) the Emisphere Know-How or use of the
Emisphere Know-How as contemplated by this Agreement. If any Compound, the
Cubist Know-How or Cubist Improvements to Emisphere Know-How is held to
constitute an infringement or misappropriation of any third party's
intellectual property rights or if in Cubist's opinion, any Compound, the
Cubist Know-How or Cubist Improvements to Emisphere Know-How is, or is likely
to be held to constitute, an infringement or misappropriation, Cubist will at
its expense and option: (1) procure the right for Emisphere to continue using
the Cubist Know-How or Cubist Improvements of Emisphere Know-How; or (2)
replace or modify the Compound, the Cubist Know-How or Cubist Improvements to
Emisphere Know-How to make it non-infringing and non-misappropriating while
conforming to the applicable Criteria. If none of the foregoing options is
economically feasible, Cubist shall so notify Emisphere and shall be entitled
to terminate this Agreement.

*Confidential treatment requested:  Material has been omitted and filed with
the Commission

<PAGE>

         4.2.4  To receive the benefit of indemnification under Sections
4.2.1 or 4.2.2 or 4.2.3, the Party seeking indemnification must promptly
notify the other Party in writing of a claim or suit and provide reasonable
cooperation (at the indemnifying Party's expense) and tender to the
indemnifying Party (and its insurer) full authority to defend or settle the
claim or suit. Neither Party has any obligation to indemnify the other Party
in connection with any settlement made without the indemnifying Party's
written consent. The Party seeking indemnification has the right to
participate at its own expense in the claim or suit and to select counsel to
represent it at its own expense. The Party seeking indemnification shall
cooperate with the indemnifying Party (and its insurer), as reasonably
requested, at the indemnifying Party's cost and expense.

         4.3    PUBLIC DISCLOSURE. The Parties hereto agree to disclose
publicly via a joint press release, upon signing the License, the nature and
scope of the collaboration. All press releases and other public disclosures
shall be approved in writing in advance by both Parties, except for such
disclosures permitted pursuant to Section 4.1 above, such approval not to be
unreasonably withheld or delayed. Upon the occurrence of other material
events in the Program, Emisphere and Cubist agree to make joint press
releases.

         4.4    (a) CUBIST STANDSTILL. For the term of this Agreement or the
License, whichever is longer, or unless Cubist shall have been specifically
invited in writing by Emisphere (it being understood that Cubist's
acknowledgment of this Agreement does not constitute such an invitation), and
unless and until a third party does such, Cubist will not, and will cause
each of its Affiliates (as defined in the License Agreement attachment) not
to, directly or indirectly, solicit, seek or offer to effect, negotiate with,
encourage or support (including by providing financing for another person)
any person with respect to, or make any statement or proposal, whether
written or oral, either alone or in concert with others, to Emisphere, or any
of its Affiliates (whether to the Board of Directors of Emisphere, to any
director or officer of Emisphere or otherwise) or to any security holder of
Emisphere, or otherwise make any public announcement or proposal or offer
whatsoever, with respect to (i) any form of business combination or
transaction involving Emisphere or any Affiliate thereof, including, without
limitation, a merger, consolidation, tender or exchange offer, sale or
purchase of assets or securities, or dissolution or liquidation of Emisphere
or any direct or indirect subsidiary thereof, (ii) any form of restructuring,
recapitalization or similar transaction with respect to Emisphere or any
affiliate thereof, (iii) any proposal or other statement inconsistent with
the terms of this Agreement, (iv) any demand or

*Confidential treatment requested:  Material has been omitted and filed with
the Commission

<PAGE>

proposal to amend waive or terminate any provision of this section 4.4; or
(v) instigate, encourage or assist any person to do any of the foregoing.

As of the date hereof, neither Cubist nor any Affiliate of Cubist
beneficially owns any securities of Emisphere. Cubist agrees that without the
express prior written consent of Emisphere unless and until a third party
does such that Cubist will not, and will cause each of its Affiliates not to,
singly or as part of a "partnership, limited partnership, syndicate or other
group" (as those terms are used within the meaning of Section 13(d)(3) of the
Exchange Act, which meanings shall apply for all purposes of this Agreement),
directly or indirectly, through one or more intermediaries or otherwise;

         i)     acquire, offer or propose to acquire, or agree to acquire, by
                purchase or otherwise, any securities entitled to, or that
                may be entitled to, vote generally in the election of
                Emisphere's Board of Directors (collectively, "Voting
                Securities") or any direct or indirect rights or options to
                acquire (through purchase, exchange, conversion or otherwise)
                any Voting Securities;

         ii)    make, or in any way participate in, any "solicitation" of
                "proxies" (as such terms are defined or used in Regulation
                14A of the Exchange Act) with respect to the Voting
                Securities (including by the execution of action by written
                consent), seek to advise, encourage or influence any person
                or entity with respect to the voting of any Voting Securities
                or demand a copy of Emisphere's stock ledger, list of its
                stockholders, or other books and record;

         iii)   participate in, encourage or support any person (or the
                formation of any group) which owns or seeks or offers to
                acquire beneficial ownership of securities of Emisphere or
                rights to acquire such securities or which seeks or offers to
                affect control of Emisphere or for the purpose of
                circumventing any provision of this Agreement; or

         iv)    otherwise act, alone or in concert with others (including by
                providing financing for another person), to seek or offer to
                control or influence, in any manner, the management, Board of
                Directors or policies of Emisphere; or seek, alone or in
                concert with others, representation on the Board of Directors
                of Emisphere or seek the removal of any member of the Board
                of Directors.

*Confidential treatment requested:  Material has been omitted and filed with
the Commission

<PAGE>

         (b)    EMISPHERE STANDSTILL. For the term of this-agreement or the
License Agreement, whichever is longer, or unless Emisphere shall have been
specifically invited in writing by Cubist (it being understood that
Emisphere's acknowledgment of this Agreement does not constitute such an
invitation), and unless and until a third party does such, Emisphere will
not, and-will cause each of its Affiliates (as defined in the License
Agreement attachment) not to, directly or indirectly, solicit, seek or offer
to effect, negotiate with, encourage or support (including by providing
financing for another person) any person with respect to, or make any
statement or proposal, whether written or oral, either alone or in concert
with others, to Cubist or any of its Affiliates (whether to the Board of
Directors of Cubist, to any director or officer of Cubist or otherwise) or to
any security holder of Cubist, or otherwise make any public announcement or
proposal or offer whatsoever, with respect to (i) any form of business
combination or transaction-involving Cubist or any Affiliate thereof,
including, without limitation, a merger, consolidation, tender or exchange
offer, sale or purchase of assets or securities, or dissolution or
liquidation of Cubist or any director indirect subsidiary thereof; (ii) any
form of restructuring, recapitalization or similar transaction with respect
to Cubist or any affiliate thereof, (iii) any proposal or other statement
inconsistent with the terms of this Agreement, (iv) any demand or proposal to
amend waive or terminate any provision of this section 4.4; or (v) instigate,
encourage or assist any person to do any of the foregoing.

As of the date hereof, neither Emisphere nor any Affiliate of Emisphere
beneficially owns any securities of Cubist. Emisphere agrees that without the
express prior written consent of Cubist unless and until a third party does
such that Emisphere will not, and will cause each of its Affiliates not to,
singly or as part of a "partnership, limited partnership, syndicate or other
group" directly or indirectly, through one or more intermediaries or
otherwise;

         i)     acquire, offer or propose to acquire, or agree to acquire, by
                purchase or otherwise, any securities entitled to, or that
                may be entitled to, vote generally in the election of
                Cubist's Board of Directors (collectively, "Voting
                Securities") or any direct or indirect rights or options to
                acquire (through purchase, exchange, conversion or otherwise)
                any Voting Securities;

         ii)    make, or in any way participate in, any "solicitation" of
                "proxies" (as such terms are defined or used in Regulation
                14A of the Exchange Act) with respect to the Voting
                Securities (including by the execution of action by written
                consent), seek to advise, encourage or influence any person
                or entity with respect to the

*Confidential treatment requested:  Material has been omitted and filed with
the Commission

<PAGE>

                voting of any Voting Securities or demand a copy of Cubist's
                stock ledger, list of its stockholders, or other books and
                record;

         iii)   participate in, encourage or support any person (or the
                formation of any group which owns or seeks or offers to
                acquire beneficial ownership of securities of Cubist or
                rights to acquire such securities or which seeks or offers to
                affect control of Cubist or for the purpose of circumventing
                any provision of this Agreement;

         iv)    otherwise act, alone or in concert with others (including by
                providing financing for another person), to seek or offer to
                control or influence, in any manner, the management, Board of
                Directors or policies of Cubist; or seek, alone or in concert
                with others, representation on the board of Directors of
                Cubist or seek the removal of any member of the Board of
                Directors.

         4.5    CHANGE OF CONTROL. Upon any occurrence of a change in control
of Emisphere or Cubist prior to commercial introduction of the Product, the
other Party shall have the right to terminate this Agreement; however, all
provisions of Articles 1.4, 1.5, 2 and 4, herein shall survive said
termination.

For purposes of this Section 4.5 a "change-of control" shall mean that (A) in
any three-year period, a majority of the members of the Board of Directors or
similar governing body elected during such three-year period shall have been
so elected against the recommendation of the management of the company or the
Board of Directors or similar governing body in office immediately prior to
such election; and (B) a person, singly or as a part of a partnership,
syndicate or other group owns 50% or more of the company's capital or
business assets, has the power to exercise 50% or more of the voting rights
or to appoint 50% or more of the Board of Directors of the company, or
otherwise has the right to control the company's affairs.

         4.6    AMENDMENT. No amendment, waiver or consent to this Agreement
shall be effective unless signed in writing by both Parties hereto.

         4.7    ASSIGNMENT. Neither Party may assign its rights or
obligations under this Agreement without the prior written consent of the
other Party, except that a Party hereto may, without such prior written
consent, assign any of its rights or obligations to an Affiliate in the
pharmaceutical business.

         4.8    ENTIRE AGREEMENT. This Agreement, constitutes the entire
agreement of the Parties with respect to the subject matter hereof

*Confidential treatment requested:  Material has been omitted and filed with
the Commission

<PAGE>

and supersedes any and all prior negotiations, correspondence understandings
and agreements between the Parties with respect to the subject matter hereof,
whether oral or in writing.

         4.9    GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.

         4.10   NOTICES. All notices and other communications pursuant to
this Agreement shall be in writing, shall be effective when received, and
shall be deemed to have been received on the date of delivery if delivered
personally; or on the second business day after the business day of deposit
with Federal Express or other similar courier for overnight delivery, freight
prepaid; in each such case, addressed as follows (until any-such address is
changed by notice duly given):

to Emisphere:                       Emisphere Technologies, Inc.
                                    765 Old Saw Mill River Road
                                    Tarrytown, NY 10591
                                    Attention: Lewis H. Bender
                                    Telecopy: (914) 347-2498

with copy to:                       Paul, Weiss, Rifkind, Wharton & Garrison
                                    1285 Avenue of the Americas
                                    New York, NY 10019-6064
                                    Attention: Edwin S. Maynard
                                    Telecopy: (212) 757-3990

to Cubist:                          Cubist Pharmaceuticals, Inc.
                                    24 Emily Street
                                    Cambridge, MA 02139
                                    Attention: Dr. Alan D. Watson
                                    Telecopy: (617) 234-5592

with copy to:                       Bingham Dana LLP
                                    150 Federal Street
                                    Boston, MA 02110
                                    Attention: Julio E. Vega
                                    Telecopy: (617) 951-8736

*Confidential treatment requested:  Material has been omitted and filed with
the Commission

<PAGE>

         4.11   COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

         4.12   DILIGENCE. Each Party will use diligent efforts to conduct
the tasks assigned to it hereunder. Each Party, further, agrees to conduct
such tasks at least as diligently as the Party conducts research and
development for other projects of similar commercial potential and at similar
stages of development. Neither Party will be responsible for delays due to
factors beyond its control.

         4.13   NO AGENCY. It is understood and agreed that Emisphere and
Cubist each shall have the status of independent contractors under this
Agreement and that nothing in this Agreement shall be construed as
authorization for either Party to act as agent for the other. Members of the
Steering Committee who are employees of Emisphere shall be and shall remain
employees of Emisphere. Cubist shall not incur any liability for any act or
failure to act by such employees. Members of the Steering Committee who are
employees of Cubist shall be and shall remain employees of Cubist and
Emisphere shall not incur any liability for any act or failure to act by such
employees.

         4.14   FORCE MAJEURE. Each Party hereto shall be relieved of its
obligations hereunder to the extent that fulfillment of such obligations
shall be prevented by acts beyond its reasonable control.

         4.15   TITLES. The titles of the Articles and Sections of this
Agreement are for general information and reference only, and this Agreement
shall not be construed by reference to such titles.

         4.16   SEVERABILITY. Each Party agrees that, should any provision of
this Agreement be determined by a court of competent jurisdiction to violate-
or contravene any applicable law or policy, such provision will be severed or
modified by the court to the extent necessary to comply with the applicable
law or policy, and such modified provision and the remainder of the
provisions hereof will continue in full force and effect.

         4.17   WAIVER. Failure by either Party to enforce any rights under
this Agreement shall not be construed as a waiver of such rights nor shall a
waiver by either Party in one or more instances be construed as constituting
a continuing waiver or as a waiver in other instances.

*Confidential treatment requested:  Material has been omitted and filed with
the Commission

<PAGE>

         4.18   NO STRICT CONSTRUCTION. This Agreement has been prepared
jointly and shall not be strictly construed against either Party.

         4.19   DISPUTE RESOLUTION. Any dispute regarding this Agreement or
the enforcement of a Party's rights or obligations hereunder shall be
submitted in the first instance to the Chief Executive Officers of Emisphere
and of Cubist. If the dispute cannot be resolved by the designated
individuals within thirty (30) days after such submission, then the matter
may be submitted to binding arbitration in accordance with such rules as may
be agreed upon by the Parties, or, failing agreement within thirty (30) days
after arbitration is demanded, pursuant to the rules of the American
Arbitration Association applicable to commercial disputes, such arbitration
to take place in New York, NY, as such rules may be modified by this
Agreement. This agreement to arbitrate shall continue in full force and
effect despite the expiration, rescission or termination of this Agreement.
If the Parties are unable to agree upon a single arbitrator within thirty
(30) days following the date arbitration is demanded, three (3) arbitrators
knowledgeable in the field of biotechnology shall be used, one selected by
each Party within ten (10) days after the conclusion of the thirty (30) day
period and a third selected by the first two within ten (10) days thereafter.
Unless the Parties agree otherwise, the scope of discovery shall be
reasonable given the nature of the dispute. Additional rules regarding
discovery shall be agreed upon by the Parties, and if the Parties cannot
agree, the rules shall be decided by the arbitrator(s). The arbitrator(s)
shall resolve any discovery disputes. The arbitrator(s) shall only have the
authority to award actual money damages (with interest on unpaid amounts from
the date due) and the arbitrator(s) shall not have the authority to award
exemplary or punitive damages and the Parties waive any claimed right to such
damages. 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. The costs and expenses of the arbitration, but not the costs and
expenses of the Parties, shall be shared equally by the Parties. 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.

         4.20   DISCLOSURE OF EVALUATION RESULTS. Each party recognizes that
the other may wish to publish a scientific article or make any other public
disclosure based upon the results of the Program (the "Disclosure"). Each
party agrees that as a condition of any Disclosure, the disclosing party must
(i) provide the other party with a copy of the proposed Disclosure prior to
its submission to any public forum, (ii) receive from the other party its
approval

*Confidential treatment requested:  Material has been omitted and filed with
the Commission

<PAGE>

of the form and content of the proposed Disclosure, which approval shall not
be unreasonably withheld or delayed, and Emisphere and Cubist agree that no
Disclosure will be submitted to any third party without the prior written
consent of the other. Both Parties hereby agree that either party shall have
the right to withhold its approval of any Disclosure if such Disclosure (a)
contains the chemical structure of the Carrier or Compound(s) (b) otherwise
contains any of the Confidential Information of the non-disclosing party or
(c) would require the filing of a patent application.

         4.21   BANKRUPTCY. DEFINITION. For purposes of this Section 4.21,
the term "Event of Bankruptcy" relating to either Party shall mean:

         (A)    an application or petition for bankruptcy, whether voluntary
                or involuntary, under the law of any applicable jurisdiction
                that is not discharged within thirty (30) days;

         (B)    a declaration of bankruptcy or insolvency by the relevant
                authority under the law of the applicable jurisdiction;

         (D)    an assignment for the benefit or creditors, whether voluntary
                or involuntary; or involuntary; or

         (E)    a dissolution, winding-up, confiscation or sequestration of
                substantially all of a Party's assets under the law of the
                applicable jurisdiction.

                (ii)    EMISPHERE BANKRUPTCY. If at any time during the Term
                        of this Agreement, an Event of Bankruptcy relating to
                        Emisphere occurs, Cubist shall have, in addition to
                        all other legal and equitable rights and remedies
                        available hereunder, the option to terminate this
                        Agreement upon thirty (30) days' written notice,
                        given within sixty (60) days following the date that
                        Cubist becomes aware of the Event of Bankruptcy. Upon
                        such termination, Cubist shall be entitled to the
                        continued benefits of any license granted to it
                        pursuant to this Agreement and shall be entitled to
                        solely continue the activities conducted or to be
                        conducted pursuant to this Agreement but for the
                        Event of Bankruptcy.

                (iii)   CUBIST BANKRUPTCY. If at any time during the Term of
                        this Agreement, an Event of Bankruptcy relating to
                        Cubist occurs, Emisphere shall have, in addition to
                        all other legal

*Confidential treatment requested:  Material has been omitted and filed with
the Commission

<PAGE>

                        and equitable rights and remedies available
                        hereunder, the option to terminate this Agreement
                        upon thirty (30) days' written notice, given within
                        sixty (60) days following the date that Emisphere
                        becomes aware of the Event of Bankruptcy. Upon such
                        termination by Emisphere, Emisphere shall be entitled
                        to the continued benefits of any license granted to
                        it pursuant to this Agreement and shall be entitled
                        to solely continue the activities conducted or to be
                        conducted pursuant to this Agreement but for the
                        Event of Bankruptcy.

         4.22   NON-SOLICITATION. Without the prior written consent of the
other party, Cubist and Emisphere each agree that during the Term of this
Agreement and for one year following the termination of this Agreement, it
will not directly or indirectly solicit for purposes of hiring any person
employed by the other Party or who was employed by the other Party within the
then prior six (6) months.

         4.23   SURVIVAL. The provisions of Articles 1.5, 4.1, 4.2, 4.9,
4.10-4.20, 4.22 will survive the termination or expiration of this Agreement.

IN WITNESS WHEREOF, the undersigned have executed this Agreement on the day
and year first above written.

EMISPHERE TECHNOLOGIES, INC.



By: /s/ Lewis H. Bender
   --------------------------------------------------
Name: /s/ Lewis H. Bender
     ------------------------------------------------
Title: Sr. VP, Business Development
      -----------------------------------------------
Date: October 4th, 2000
     ------------------------------------------------


CUBIST PHARMACEUTICALS INC.



By: /s/ Alan Watson
   --------------------------------------------------
Name: Alan Watson
     ------------------------------------------------
Title: Sr. Vice President, Corporate Development
      -----------------------------------------------
Date: September 27, 2000
     ------------------------------------------------

*Confidential treatment requested:  Material has been omitted and filed with
the Commission