Exhibit 10.1

 

CONFIDENTIAL TREATMENT

 

AMENDMENT NO. 2

 

Cardinal Health PTS, LLC (“Cardinal Health”) and Cubist Pharmaceuticals, Inc.,
(“Cubist”) are parties to a Processing Services Agreement dated August 11, 2004,
as amended by Amendment No. 1 dated May 23, 2005 (the “Agreement”).

 

The parties now desire to amend the Agreement pursuant to the terms of this
Amendment No. 2 to set forth the terms and conditions upon which Cardinal Health
would move the manufacture of the Product primarily to a second facility.

 

Cardinal Health and Cubist have executed a December 1, 2006 Quotation
QTE-2006-0361.00 (“Tech Transfer Feasibility Quote”) pursuant to which Cardinal
Health will produce a Process Transfer Feasibility Report and a Plant
Certification Document pursuant to the terms of the Tech Transfer Feasibility
Quote.  Cubist will pay Cardinal Health $13,900 for the work performed under the
Tech Transfer Feasibility Quote.  The Process Transfer Feasibility Report and
the Plant Certification Document will detail how Cardinal Health’s second
facility will be validated and the costs and responsibilities of each of the
Parties associated with such validation.

 

Now therefore, in consideration of the mutual conditions and covenants set forth
herein, Cardinal Health and Cubist agree as follows:

 

1.                     Cardinal Health shall perform the activities described in
the Plant Certification Document (“Certification Activities”) in accordance with
the terms and the schedules contained in the Plant Certification Document.

 

2.                     Provided that Cardinal Health performs the Certification
Activities in accordance with the Plant Certification Document, Cubist shall use
diligent and commercially reasonable efforts to achieve the approval of the
Cardinal Health facility located at 8900 Capital Blvd, Raleigh, NC for the
Processing of the commercial supplies of the Product (“FDA Approval”) as soon as
reasonably possible.

 

3.                     Effective upon FDA Approval,

 

a.               Section 1.20 of the Agreement shall be amended by adding “(“NM
Facility”) and at 8900 Capital Blvd, Raleigh, NC (“NC Facility”) immediately
after “Albuquerque, New Mexico.”

 

b.              The Agreement shall be amended by adding the following sentence
to the end of Section 2.1:

 

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

 

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Upon approval of the NC Facility, Cardinal Health shall Process Product in a
quantity not more than []* batches []*, and not more than []* batch []* during
the Term at the NM Facility without Cubist’s prior written consent.

 

c.               The Agreement shall be amended by adding the following sentence
to the end of Section 3.3:

 

All Product Processed (other than packaging) at the NC Facility shall be
packaged by Cardinal Health at its packaging facility located at 3001 Red Lion
Road, Philadelphia, PA.

 

d.              The first sentence of Section 15.1 of the Agreement shall be
deleted in its entirety and replaced with the following:

 

This Agreement shall commence on the Effective Date and shall continue until
August 11, 2010, unless earlier terminated under Section 15.2 below (the
“Term”).

 

e.               A new Section 4.8 shall be added to the Agreement, as follows:

 

4.8             Minimum Requirement. Upon regulatory approval of the NC
Facility, Cubist shall order a minimum of []* of Product to be Processed
(“Minimum Requirement”) during []* commencing on []* and Cardinal Health shall
accept Cubist’s Purchase Orders including such minimum number of units and shall
Process and Deliver at least such minimum number of units according to such
Purchase Orders. Notwithstanding the foregoing, Cardinal Health may propose
alternative delivery date(s) that are within []* of what is requested in
Cubist’s Purchase Order in order to permit Cardinal Health to manage its
available manufacturing capacity in respect of commitments previously made to
its clients; in such cases, the parties shall reasonably agree to the revised
delivery date(s).    The Minimum Requirement shall be pro-rated in any partial
[]*. If Cubist does not order such Minimum Requirement during []*, within []*
after the end of []*, Cubist shall pay Cardinal Health the difference between
[]*.  Notwithstanding anything herein to the contrary, if at any time during the
initial term but following the first []* batches of Product produced under this
Agreement, if Cubist appropriately rejects Product due to Cardinal Health’s
breach of its obligations hereunder to provide Product conforming to the
Specifications and Applicable Laws []* or more times in []*, Cubist shall have
the right, at Cubist’s sole discretion, to withdraw any or all Purchase Orders
which have been submitted at the time of []*, and any remaining Minimum
Requirement during the Term shall no longer apply.

 

f.                 The Agreement shall be amended by inserting the following
sentence after the first sentence of Section 7.1:

 

Cubist shall pay []* for the []* of Product purchased from Cardinal Health under
this Agreement []*.

 

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

 

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4.                     Termination Prior to FDA Approval.

 

a.               If FDA Approval does not occur by December 31, 2008, the
provisions set forth in Sections 2, 3 and 7 of this Amendment No. 2 shall have
no further force or effect unless otherwise agreed to by the parties in writing.

 

b.              If Cubist elects to cease efforts to transfer the Product to the
NC Facility or otherwise fails to support or elects to abandon its pursuit of
FDA Approval for any reason other than a Cardinal Reason, as defined below, then
[]*.

 

c.               If a Cardinal Reason occurs, then []*.

 

d.              .  As used in this Amendment No. 2, a “Cardinal Reason” shall
mean: (i) Cardinal Health’s failure to completely perform the Certification
Activities in accordance with the Plant Certification Document; (ii) Cardinal
Health’s election to abandon its pursuit of FDA Approval for any reason; or
(iii) the NC Facility’s failure to comply with FDA requirements or Cardinal
Health’s failure to satisfactorily address any FDA documented observations at
the NC Facility.

 

5.                     The first sentence of Section 7.2 of the Agreement is
hereby amended to delete the phrase “,effective on the anniversary date of this
Agreement” in its entirety and to replace such language with “commencing on
January 1, 2008”.

 

6.                     Section 16.1 of the Agreement is hereby amended by adding
[]* within the parenthetical, immediately before []*.

 

7.                     Effective as of October 1, 2006, Exhibit B-1 of the
Agreement shall be deleted in its entirety and replaced with Exhibit B-1
attached to this Amendment No. 2.

 

Any conflict between the provisions of this Amendment No. 2 and the Agreement
shall be resolved in favor of this Amendment No. 2 and capitalized terms used in
this Amendment No. 2 shall have the same meaning given to them in the Agreement,
unless otherwise defined in this Amendment No. 2.

 

This Amendment No. 2 shall be effective April 18, 2007 (“Amendment No. 2
Effective Date”).  Unless otherwise expressly set forth herein, all other terms
and conditions set forth in the Agreement shall remain in full force and
effect.  Following the Amendment No. 2 Effective Date, the term “Agreement”
shall be deemed a reference to the Agreement as amended by this Amendment No. 2.

 

This Amendment No. 2 may be signed in counterparts, each of which shall be
deemed to be an original and all of which together shall constitute but one and
the same instrument, and such counterparts may be exchanged by facsimile.

 

In witness whereof, this Amendment No. 2 has been executed by the Parties to be
effective as of the Amendment No. 2 Effective Date.

 

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

 

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CARDINAL HEALTH PTS, LLC

 

CUBIST PHARMACEUTICALS, INC.

 

 

 

 

 

By:

/s/ Shawn L. Gallagher

 

By:

/s/ Lindon M. Fellows

 

 

 

 

 

Name:

Shawn L. Gallagher

 

Name:

Lindon M. Fellows

 

 

 

 

 

Title:

VP and General Manager

 

Title:

Senior Vice President

 

 

 

 

Technical Operations

 

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

 

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EXHIBIT B-1

 

[]*

 

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

 

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