EXHIBIT 10.1

CONFIDENTIAL TREATMENT

FIRST AMENDMENT TO DEVELOPMENT AND SUPPLY AGREEMENT

THIS FIRST AMENDMENT TO DEVELOPMENT AND SUPPLY AGREEMENT (this “First
Amendment”) is entered into as of the 1st day of June 2006 by and between Cubist
Pharmaceuticals, Inc., a Delaware corporation (“Cubist”) and Hospira Worldwide,
Inc., a Delaware corporation (“Hospira”) to amend the terms of that certain
Development and Supply Agreement dated the third day of April, 2000 between
Abbott Laboratories, predecessor in interest to Hospira, and Cubist (the
“Agreement”).

RECITALS

The parties desire to amend the Agreement to set forth amended purchase and
supply volume commitments, to amend Product pricing, and to extend the Term of
the Agreement through December 31, 2013.

The parties also desire to recognize that Hospira succeeded to the interests of
Abbott Laboratories under the Agreement by virtue of the spin-off of Hospira
from Abbott Laboratories into an independent public company on May 1, 2004, and
that all rights and obligations of Abbott Laboratories under the Agreement are
now rights and obligations of Hospira.  Therefore, all instances of “Abbott
Laboratories” in the Agreement shall be replaced by “Hospira Worldwide, Inc.”,
and all instances of “Abbott” in the Agreement shall be replaced by “Hospira.”

AGREEMENT

1.     Incorporation of the Agreement.  The Recitals set forth above are hereby
incorporated herein.  All capitalized terms which are not defined herein shall
have the same meanings as set forth in the Agreement, and the Agreement, as
amended by this First Amendment, is incorporated herein by this reference as
though the same was set forth in its entirety.  Except as specifically set forth
herein, the Agreement shall remain in full force and effect and its provisions
shall be binding on the parties hereto; provided, that the parties agree that
development activities described in Articles 2 through 5 of the Agreement have
been completed and the provisions in these Articles have no further
applicability.

2.               Amendment of the Agreement.  The Agreement is hereby amended as
follows:

a.               Amendment of Section 1.4.  Section 1.4 is hereby deleted and
replaced with the following:

1.4                                 “Contract Year” shall mean: (a) for the
period commencing on the Effective Date and ending on December 31, 2005, the
twelve-month period commencing on the first day of the month after the month of
Cubist’s first bona fide sale of Product to a non-affiliate customer after
Product has received an approved NDA from the FDA and/or a corresponding
government marketing approval in an international market; and (b) for the period
commencing on January 1, 2006, each twelve-month calendar year thereafter
through December 31, 2013.

b.              Amendment of Section 1.9.  Section 1.9 is hereby deleted and
replaced with the following:

 

 

*Confidential Treatment Requested. Omitted portions filed with the Securities
and Exchange Commission (the “Commission”).

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1.9                                 “Term” shall mean the period commencing on
the Effective Date and ending on December 31, 2013, unless this Agreement is
sooner terminated in accordance with Paragraph 11.2 or 11.3 or extended in
accordance with Paragraph 11.1.

c.               Amendment of Section 8.1.  Section 8.1 is hereby deleted in its
entirety and replaced with the following:

8.1                                 Purchase and Sale of Product.
 

8.1.1                        Cubist shall place purchase orders with Hospira and
Hospira shall manufacture Product for Cubist, all in accordance with the volume
schedule outlined in Exhibit 8.5.1, amended below, and deliver such Product to
Cubist in accordance with Section 8.6.  The initial volume schedule is defined
in Exhibit 8.5.1 under the column labeled “Volume (1)”.  In the event that
Cubist provides Hospira with sufficient quantities of Bulk Drug [ ]*to allow
Hospira to validate Cubicin® in the [ ]* lyophilizer of the expansion of the
McPherson, Kansas facility “Lyophilizer [ ]*”, Hospira shall complete [ ]*
validation runs of Lyophilizer [ ]* by [ ]* with the cost of validation runs,
testing and validation reports for Lyophilizer [ ]* to be paid by [ ]* (except
that [ ]* shall pay for any testing of the Product performed by a third party),
and, if such validation runs are successfully completed, the volume schedule for
[ ]* will be defined by the column labeled “Volume (2)”.

If Cubist also provides Hospira with sufficient quantities of Bulk Drug [ ]* to
allow Hospira to validate the manufacture of Cubicin® in the first [ ]*
lyophilizer, “Lyophilizer [ ]*”, at the McPherson, Kansas facility, at [ ]* own
cost, with a batch size designed to fill that chamber, and if such validation is
successfully completed, then the volume schedule will continue to be defined by
the column labeled “Volume (2)” for [ ]*.  In the event that Lyophilizer [ ]* is
not validated by [ ]*, the volumes for [ ]* will be the volume (under either the
Volume (1) column or the Volume (2) column, as determined above) for [ ]*,
provided that, Cubist ordered at least such volume to be manufactured in [ ]*. 
If Cubist did not order at least such volume, the volume for [ ]* will be the
volume actually ordered by Cubist to be manufactured in [ ]*.  Nothing herein
shall require Cubist to provide the Bulk Drug for the validation of Lyophilizer
[ ]* or Lyophilizer [ ]*. 

In the event that Cubist requires more volume than that set forth in the
applicable column of Exhibit 8.5.1, Cubist may formally request an increase
through its forecast.  Notwithstanding any provision to the contrary in the
Agreement, Hospira [ ]* purchase orders that would cause the volume of Product
delivered in any Contract Year to exceed the applicable volume for such Contract
Year, as set forth in Exhibit 8.5.1, but Hospira will [ ]* to satisfy Cubist’s
request for additional volume to the extent that Hospira [ ]*, it being
understood and agreed by the parties that Hospira [ ]* to satisfy Cubist’s
requests for additional volume.

 

 

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

2

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8.1.2                        Hospira shall manufacture Product in accordance
with the Product Specifications, as may be amended from time to time by mutual
written agreement of the parties without the necessity of amending this
Agreement; provided that, Hospira shall not unreasonably withhold or delay its
agreement to any amendment to the Specifications requested by Cubist or required
by the FDA or a corresponding regulatory agency in another country.  In
addition, Cubist shall be responsible for any studies, testing or other
administrative costs resulting from such change in the Specifications.  If the
change in the Specifications results in an increase in Hospira’s cost to
manufacture Product, the parties shall agree on an appropriate increase in
pricing that is reflective of such change in manufacturing costs.

d.              Amendment of Section 8.2.  Section 8.2 is hereby deleted in its
entirety and replaced with the following:

8.2                                 Minimum Firm Order Requirement.  In the
event Cubist does not provide purchase orders for at least [ ] of the applicable
amount of Product set forth in Exhibit 8.5.1 for any of the Contract Years [ ]*
and Hospira certifies in writing that it was willing and able to manufacture at
least [ ]* of such amount in such Contract Year, Hospira shall invoice Cubist
after the end of such Contract Year for the difference between the amount of
Product actually ordered by Cubist to be manufactured in such Contract Year and
[ ]* the amount of Product required to be manufactured in Exhibit 8.5.1, and
Cubist shall pay Hospira for such difference within [ ]* after receipt of
Hospira’s invoice.

e.               Amendment of Section 8.4.2.  The second sentence of Section
8.4.2 is hereby deleted in its entirety and replaced with the following:

Hospira’s responsibilities for replacing lost, damaged or otherwise unusable
Bulk Drug pursuant to this Subparagraph 8.4.2 shall in no event exceed [ ]* for
the [ ]* of Product lost, damaged or otherwise made unusable in whole or in part
pursuant to this Subparagraph 8.4.2 during any Contract Year and [ ]* for any [
]* lost, damaged or otherwise made unusable in whole or in part in such Contract
Year.

f.                 Amendment of Section 8.4.8(a).  Section 8.4.8(a) is hereby
amended by inserting the following new sentence immediately following the sixth
sentence of such Section:

In the case of such audits that are mandated by a regulatory authority or to
respond to regulatory authority questions, Cubist shall [ ]*for additional audit
days or additional auditors unless the audits are due to a [ ]*.

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

3

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g.              Amendment of Exhibit 8.5.1.

Schedule and Prices

Year

 

Volume (1)

 

Volume (2)

 

Price per [ ]*

 

Price per[ ]*

 

Price per [ ]*

 

2006

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

2007

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

2008

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

2009

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

2010

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

2011

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

2012

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

2013

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

h.              Amendment of Section 8.7.5.  Section 8.7.5 is hereby deleted in
its entirety and replaced with the following:

8.7.5                        Purchase Order Acceptance.  Subject to this Section
8.7.5, Hospira shall accept the volume of Product ordered in all firm purchase
orders from Cubist that would cause the total of Product manufactured in any
Contract Year to be [ ]* for such Contract Year as specified in Exhibit 8.5.1,
provided that, the ordered volume for each month does not exceed [ ]* of the
total volume for the Contract Year.  The parties acknowledge that while Cubist
is obligated to purchase from Hospira the volume of Product set forth in Exhibit
8.5.1 and Hospira is obligated to supply Cubist with such volume of Product, the
delivery dates for quantities of Product ordered [ ]* scheduled in accordance
with [ ]*; provided that, Hospira shall be required to deliver Product within [
]* of the delivery date specified for the second quarter of a firm purchase
order if the quantity ordered for such second quarter is within the volumes
specified in Exhibit 8.5.1 and between [ ]* and [ ]* of the quantity forecasted
for the same quarter in the prior quarter’s forecast (i.e., the third quarter
forecasted in the prior quarter’s forecast).

 

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

4

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Within [ ]*after receipt of Cubist’s firm purchase orders for Product pursuant
to Section 8.7.4, Hospira shall advise Cubist in writing if it is able to accept
a firm purchase order for any quantity of Product [ ]* the applicable volumes
for the Contract Year in which such Product is ordered to be delivered and
whether Hospira is able to meet the delivery dates specified by Cubist.  If
Hospira accepts a firm purchase order for Product that would cause the amount of
Product delivered in any Contract Year to [ ]* the applicable volume in Exhibit
8.5.1, Hospira shall be obligated to supply such amount as if it was included in
the volumes in Exhibit 8.5.1.

i.                  Amendment of Section 8.8.5.  Section 8.8.5 is hereby amended
by deleting “based upon a breach of Abbott’s representations or warranties set
forth in Subparagraph 8.8.3” and replacing such language with: “subject to
indemnification by Hospira pursuant to Section 8.8.4 hereto”.

j.                  Amendment to Section 11.1.  Section 11.1 is hereby amended
by deleting “at the end of the fifth Contract Year” and replacing such language
with: “on December 31, 2013.”

k.               Amendment to Section 11.2.  Section 11.2 is hereby deleted in
its entirety and replaced with the following:

11.2         Termination for Convenience.  [ ]* after June 30, 2010, either
party may terminate this Agreement [ ]* by giving the other party [ ]* prior
written notice.  Following any such notice of termination, Cubist shall be
obligated to purchase and Hospira shall be obligated to supply only the volume
of Product that has been forecasted up to the effective date of such termination
pursuant to a rolling forecast submitted by Cubist pursuant to Section 8.7.4.

l.                  Amendment to Section 11.4.  Section 11.4 is hereby amended
by adding the following language directly in between “Article 11,” and “Cubist
shall reimburse”: “except if such termination is by Cubist pursuant to Section
11.3”.

m.            Amendment to Section 13.2.  Section 13.2 is hereby amended by
deleting the contact information contained therein in its entirety and replacing
it with the following:

To:          Cubist Pharmaceuticals, Inc.

65 Hayden Avenue
Lexington, MA 02421
U.S.A.
Attention: Senior Vice President, Technical Operations
Facsimile: (781) 860-1498

With a copy to:    General Counsel

Cubist Pharmaceuticals, Inc.
65 Hayden Avenue
Lexington, MA 02421
U.S.A.
Facsimile : (781) 860-1407

 

 

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

5

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To :           HospiraWorldwide, Inc.

H1-3, Dept 988
275 N. Field Drive
U.S.A
Attention : V.P. and G.M. Contract Manufacturing
Facsimile : (224) 212-3210

With a copy to :  General Counsel

Hospira Worldwide, Inc.
H1-2, Dept. NLEG
275 N. Field Drive
U.S.A
Facsimile : (224) 212-2088

6

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n.              Amendment to Exhibit 1.2.  Exhibit 1.2 is hereby deleted in its
entirety and replaced with the following:

Bulk Drug Specifications

 

Process Step

 

Parameter

 

Method

 

Limit

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

 

 

 

 

 

 

 

 

[ ]*

 

 

 

 

 

 

 

 

 

 

 

 

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

7

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o.              Amendment to Exhibit 1.8.  Exhibit 1.8 is hereby deleted in its
entirety and replaced with the following:

Product Specifications

 

Description

 

Method

 

Specification

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

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

8

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p. Amendment to Exhibit 8.4.7.  Exhibit 8.4.7 is hereby deleted in its entirety
and replaced with the following:

Test Methods

 

Test

 

Method*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

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[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

 

[ ]*

3.               Effectuation.  The amendment to the Agreement contemplated by
this First Amendment shall be deemed effective as of the date first written
above upon the full execution of this First Amendment and without any further
action required by the parties hereto.  There are no conditions precedent or
subsequent to the effectiveness of this First Amendment.

 

 

 

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

9

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4.               Counterparts.  This First Amendment may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.  One or more
counterparts of this First Amendment may be delivered by facsimile, with the
intention that delivery by such means shall have the same effect as delivery of
an original counterpart thereof.

        IN WITNESS WHEREOF, the parties hereto have duly executed this First
Amendment as of the date first above written.

 

HOSPIRA WORLDWIDE, INC.

 

CUBIST PHARMACEUTICALS, INC.

 

 

 

By

/s/ John Arnott

 

 

By

/s/ Lindon M. Fellows

 

 

 

 

 

 

 

 

Name

John Arnott

 

 

Name

Lindon M. Fellows

 

 

(type or print)

 

 

 

(type or print)

 

 

 

 

 

 

 

 

Title

S.V.P. Commercial Operations

 

 

Title

S.V.P. Technical Operations

 

 

 

 

 

 

 

 

Date

June 9, 2006

 

 

Date

01 June 2006

 

 

 

10

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