Document:

EXHIBIT
10.3

 

CONFIDENTIAL
TREATMENT REQUESTED BY GEVITY HR, INC.

 

HEALTH
CARE BENEFITS CONTRACT

 

BLUE
CROSS AND BLUE SHIELD OF FLORIDA, INC.

HEALTH
OPTIONS, INC.

 

and

 

Gevity HR, Inc.

 

Effective
Date: October 1, 2008 

 

 

CONFIDENTIAL
TREATMENT REQUESTED BY GEVITY HR, INC.

 

BLUE
CROSS AND BLUE SHIELD OF FLORIDA, INC.

HEALTH
OPTIONS, INC.

HEALTH
CARE BENEFITS CONTRACT

 

TABLE OF
CONTENTS

 

	
  SECTION

  	
  I

  	
  TERMS OF THE AGREEMENT

  
	
   

  	
   

  	
   

  
	
  SECTION

  	
  II

  	
  RATE SHEET

  
	
   

  	
   

  	
   

  
	
  SECTION

  	
  III

  	
  ADMINISTRATIVE EXPENSE AND
  ANNUAL EXCESS LIABILITY CHARGE

  
	
   

  	
   

  	
   

  
	
  SECTION

  	
  IV

  	
  CLAIM LIABILITY CHARGE

  
	
   

  	
   

  	
   

  
	
  SECTION

  	
  V

  	
  ANNUAL EXCESS LIABILITY
  COVERAGE

  
	
   

  	
   

  	
   

  
	
  SECTION

  	
  VI

  	
  TERMINATION PROVISIONS

  
	
   

  	
   

  	
   

  
	
  SECTION

  	
  VII

  	
  MODIFICATION OF RATES

  
	
   

  	
   

  	
   

  
	
  SECTION

  	
  VIII

  	
  PRODUCTS

  
	
   

  	
   

  	
   

  
	
  SECTION

  	
  IX

  	
  THE OFFERING OF BCBSF/HOI
  PRODUCTS

  
	
   

  	
   

  	
   

  
	
  SECTION

  	
  X

  	
  ENROLLMENT

  
	
   

  	
   

  	
   

  
	
  SECTION

  	
  XI

  	
  ADMINISTRATIVE POLICIES

  
	
   

  	
   

  	
   

  
	
  SECTION

  	
  XII

  	
  GROUP REPORTING REQUIREMENTS

  
	
   

  	
   

  	
   

  
	
  SECTION

  	
  XIII

  	
  BCBSF/HOI REPORTING
  REQUIREMENTS

  
	
   

  	
   

  	
   

  
	
  SECTION

  	
  XIV

  	
  RENEWAL

  
	
   

  	
   

  	
   

  
	
  SECTION

  	
  XV

  	
  COLLATERAL

  
	
   

  	
   

  	
   

  
	
  SECTION

  	
  XVI

  	
  PERFORMANCE STANDARDS AND
  PERFORMANCE INCENTIVE PLAN

  
	
   

  	
   

  	
   

  
	
  SECTION

  	
  XVII

  	
  GENERAL

  

 

2

 

CONFIDENTIAL
TREATMENT REQUESTED BY GEVITY HR, INC.

 

AGREEMENT
TO PROVIDE

COMPREHENSIVE HEALTH CARE BENEFITS

 

This
is an Agreement (hereinafter “Agreement”) between the Blue Cross and Blue
Shield of Florida Inc.   (hereinafter
referred to as “BCBSF”) and its subsidiary HEALTH OPTIONS, INC., (hereinafter
referred to as “HOI”) located at 4800 Deerwood Campus Parkway, Jacksonville
Florida 32246, hereinafter jointly referred to as “BCBSF/HOI”, and Gevity HR, Inc.
(together with its subsidiaries hereinafter referred to as “Employer/Plan
Sponsor”) and the Gevity Health &
Welfare Plan (the “Plan” and, together with the Employer/Plan Sponsor,
hereinafter jointly referred to as “the Group”) located at9000 Town Center
Parkway, Lakewood Ranch, Florida 34202.

 

WHEREAS,
the Group is a professional employer organization and requests BCBSF/HOI to
provide health insurance and health maintenance organization products
(hereinafter referred to as “the Product Offering”), to employees of its
clients  who have contracted with the
Employer/Plan Sponsor for provision of such products to its employees who
are  co-employed by the Employer/Plan
Sponsor; and

 

WHEREAS,
BCBSF agrees to offer health insurance products to employees of  Employer/Plan Sponsor’s clients who have
contracted with the Employer/Plan Sponsor for provision of such products to its
employees who are  co-employed by the
Employer/Plan Sponsor; and

 

WHEREAS, HOI agrees to
offer health maintenance organization products, and

 

WHEREAS, each of the
parties to this Agreement seeks to set forth, in writing, the terms and
conditions of this Agreement;

 

THEREFORE, the parties
agree as follows:

 

I.              Terms of the
Agreement

 

This
Agreement between the parties is for the period beginning October 1, 2008
(the effective date) and shall end on September 30, 2009 (the termination
date).

 

II.            Rate Sheet

 

The rates, charges, and
maximum amounts applicable to this Agreement are set forth in Exhibit A titled
“Minimum Premium Accounting Agreement Rate Sheet,” which may be modified from
time to time with the mutual consent of the parties and which is hereby
incorporated by reference into and made a part of this Agreement.

 

III.           Administrative Expense
and Annual Excess Liability Charge

 

Approximately 15 days
before the first date of each month, BCBSF/HOI will submit to the Group an
invoice for the amount of estimated administrative expenses (Minimum Premium
Charge and Annual Excess Liability Charge) to be paid during the forthcoming
month.  Such charges shall be equal to
the product of the Minimum Premium Rate and the Annual Excess liability rate,
as set forth in Exhibit A hereto, then in effect multiplied by (times) the
number of Insured’s as determined by BCBSF/HOI (on the renewal exhibit).   The Group agrees to pay the full amount of
the invoice each month by the later of (i) the end of business on the
first calendar day of the month the payment is due to cover (if the first of
the month falls on a non-working day, payment will be made by end of business
on the first working day 

 

3

 

CONFIDENTIAL TREATMENT REQUESTED
BY GEVITY HR, INC.

 

thereafter) or  (ii) 4 business days after the date the
invoice for the amount of estimated administrative expenses is made available
to the Group.  If the payment is not
received by BCBSF/HOI by the later of 
the end of business on the first calendar day of the month (if the first
of the month falls on a non-working day and payment is not made by end of
business on the first working day thereafter) or (ii) 4 business days
after the date the invoice  for the
amount of estimated administrative expenses is made available to the Group, the
payment will be considered past due and subject to a Late Payment Charge in
accordance with this Agreement and Exhibit A.  If after 1 day the invoice amount is not
paid, Corporate Receivables will notify the marketing representative.  The marketing representative will place a
call to the group.  If the invoice amount
is not paid by the 10th day the marketing representative will contact the
group and place the group in suspense. 
If on the 15th day, the invoice is not paid the marketing
representative will generate and send to the Group by certified mail, a
cancellation notification.  BCBSF/HOI has
the right, but not the duty; to notify Insured’s of the Group’s failure to make
such payment and BCBSF/HOI’s intention to terminate this Agreement.

 

Within 120 days following
the close of the contract period BCBSF will prepare an annual administrative
expense and annual excess liability coverage expense settlement.  This settlement will compare actual and
contract period estimated and paid administrative expenses and excess liability
coverage expenses for the same time period. 
The product of monthly enrollment as adjusted for retroactive
enrollments and terminations during the contract period and the minimum premium
rate plus the annual excess liability coverage expense rate will determine actual
expenses in effect during the contract period. 
If actual expenses are greater than the previously estimated amount, the
Group agrees to pay the full amount of the difference within ten (10) calendar
days after receipt of the invoice.  If
the invoice is not paid within 10 days the payment will be considered past due
and subject to a Late Payment Charge in accordance with this Agreement and Exhibit A.  If estimated expenses are greater than
actual, BCBSF will pay the Group the difference at the same time the annual
administrative expense settlement is presented.

 

IV.           Claim Liability Charge

 

A.          1.              Prospective Claim Payment

 

Approximately 15
days before the first date of each month, BCBSF/HOI will submit to the Group an
invoice for the amount of the expected claims 
(“Claim Liability Charge(s)”) to be paid during the forthcoming month
see (Exhibit A).  This claim
liability charge will be adjusted on a quarterly basis through the term of the
Agreement and will be based on an average of monthly paid claims as determined
by BCBSF/HOI for the identified three month periods as follows:

 

	
  Months
  Used in Calculating Prospective Claim Payment

  	
   

  	
  Prospective Claim Payment Effective

  
	
  May, June, July

  	
   

  	
  October,
  November, December

  
	
  August,
  September, October

  	
   

  	
  January, February,
  March

  
	
  November,
  December, January

  	
   

  	
  April, May, June

  
	
  February, March,
  April

  	
   

  	
  July, August,
  September

  

 

The claim
liability charge will be invoiced each month. 
The Group agrees to pay the full amount of the invoice each month by the
the later of (i) the end of business on the first calendar day of the
month the payment is due to cover (if the first of the month falls on a
non-working day, payment will be made by end of business on the first working
day thereafter) or (ii) 4 business days after the date the invoice for the
amount of Claim Liability Charge(s) is made available to the Group.  If the payment is not received by BCBSF/HOI
by the end of business on the first calendar day of the month (if the first of
the month falls on a non-working day and payment is not made by end of business
on the first working day thereafter) or 4 business days after the date the
invoice for the 

 

4

 

CONFIDENTIAL TREATMENT REQUESTED
BY GEVITY HR, INC.

 

amount of Claim
Liability Charge(s) is made available to the Group, the payment will be
considered past due and subject to a Late Payment Charge in accordance with
this Agreement and Exhibit A.  If
after 1 day the invoice amount is not paid, Corporate Receivables will notify
the marketing representative.  The
marketing representative will place a call to the group.  If the invoice amount is not paid by the 10th
day the marketing representative will contact the group and place the group in
suspense.  If on the 15th day,
the invoice is not paid the marketing representative will generate and send to
the Group by certified mail, a cancellation notification.  BCBSF/HOI has the right, but not the duty; to
notify Insured’s of the Group’s failure to make such payment and BCBSF/HOI’s intention
to terminate this Agreement.

 

2.     Actual Claim Settlement:

 

At the end of each
month, BCBSF/HOI will provide to the Group access to a detailed report in Excelä
format of the previous month’s claims and capitation payments (“Claim Liability
Charge(s)”). In the event the actual claims are in excess of the estimated
amount received, BCBSF shall invoice the difference on the next prospective
claim payment invoice.  In the event the
actual claims are less than the estimated claims, BCBSF/HOI shall offset the
next prospective claim payment invoice.

 

B.            1.              The Group will wire transfer the Minimum
Premium charge, Annual Excess Liability charge, Prospective Claim Payment, and
Actual Claim settlement to BCBSF/HOI’s designated bank account as set forth
below Paragraph C of this Section.

 

2.     If funds are not transferred
in accordance with this section, the payment will be considered past due and
will be immediately subject to a Late Payment Charge in accordance with this
Agreement and Exhibit A. 
Additionally, if the Claim Liability Charge is not paid as set forth in Section IV.
A. 2., BCBSF/HOI also has the right to terminate this Agreement as set forth in
Section VI.   Accordingly, BCBSF/HOI
has the right, but not the duty, to notify Insureds of the Group’s failure to
make such payment and BCBSF/HOI’s intention to terminate this Agreement.

 

C.    The Group’s payment of the
Minimum Premium charge, Administrative expense, Annual Excess Liability charge,
Prospective Claim Payment and Actual Claim Settlement to BCBSF/HOI shall be via
a Federal Reserve Bank Transfer directed to [*]

 

V.            Annual Excess Liability
Coverage

 

A.    BCBSF/HOI agrees to provide
Annual Excess Liability Coverage, whereby the maximum annual liability for the
Group is defined as the average number of Insureds for the policy year
multiplied by the Annual Individual Excess Liability Limit as set forth in Exhibit A
which are based on the Group’s maximum annual liability being 115% of expected
claims.  The average number of insureds
for the policy year shall be the sum total of Insureds, as determined by
BCBSF/HOI in accordance with the annual administrative expense and annual
excess liability coverage expense settlement in Section III, divided by
twelve.

 

B.    BCBSF/HOI will be responsible
for any and all Claim Liability Charges incurred by Insureds in excess of the
Group’s maximum annual liability, provided that the claim is covered under the
terms of the Benefit Contracts and is actually incurred during the term of this
Agreement.  Claims incurred by any member
during a period of time when they were covered and whose coverage was later 

 

* THIS CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

 

5

 

CONFIDENTIAL TREATMENT REQUESTED
BY GEVITY HR, INC.

 

retroactively
termed will not be covered under the annual excess liability coverage.

 

C.    The Annual Excess Liability
coverage may be changed for each policy year based on BCBSF/HOI renewal
underwriting analysis and mutual consent of BCBSF/HOI and the Group.

 

 

D.    Settlement
Process

 

1.     Settlement will be performed
within 120 days after the end of each policy year.  This settlement will include all claims and
capitation payments liability incurred from October 1, of each year
through September 30, of each year (“Actual Incurred Claims”) and paid
prior to January 1 following that period.

 

2.     If Actual Incurred Claims
exceed the Group’s maximum annual liability for the period as

Calculated in Section V.
A. of this Agreement, BCBSF/HOI will pay a settlement amount equal to such
excess to the Group.

 

3.     If Actual Incurred Claims are
less than or equal to the Group’s maximum annual liability for the period as
calculated in Section V. A. of this Agreement, there will be no settlement
payment due.

 

E.     Example of
Calculation of the Group’s Maximum Annual Liability

 

	
  Plan Type

  	
   

  	
  Avg No. of

  Insureds

  	
   

  	
  Annual Individual

  Excess Liability Limit

  	
   

  	
  Aggregate Liability

  per Plan Type

  	
   

  	
  Group’s

  Maximum

  Annual Liability

  	
   

  
	
  HMO

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  
	
  PPO

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  
	
  Blue Options

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  

 

Based on the calculations
above, if Actual Incurred Claims exceed [*], BCBSF/HOI will pay a settlement
amount equal to such excess to the Group. 
If Actual Incurred Claims are less than or equal to [*] no settlement
payment shall be due.

 

VI.           Termination
Provisions

 

A.    On any Minimum Premium Charge
due date, the Plan may terminate this Agreement if one or more of the following
conditions exists, but written notice of its intent to do so must be given to
the Group at least ninety  (90) days in
advance.

 

1.     Except
for the public or private sale of common or preferred stock or the
incorporation of the Group’s partnerships which does not result in a material
change in the ownership or legal structure of the Group, there is a material
change in the ownership or legal structure of the Group and the Group has not
sought and received approval from the Plan for such a change, such approval not
to be unreasonably withheld.

 

2.     Except
for the public or private sale of common or preferred stock or the
incorporation of the

 

* THIS CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

 

6

 

CONFIDENTIAL TREATMENT REQUESTED
BY GEVITY HR, INC.

 

Group’s partnerships
which does not result in a material change in the ownership or legal structure
of the Group, the Group merges with or is acquired by another legal entity and
the Group has not sought and received approval from the Plan for such a change,
such approval not to be unreasonably withheld.

 

3. The
Group acquires another legal entity with more than [*] client employees in the
state of Florida that are not then covered by a BCBSF/HOI plan, and the Group
has not sought and received approval from BCBSF/HOI to merge such acquired
employees into the Plan, such approval not to be unreasonably withheld. If,
however, BCBSF/HOI does not approve the merger of the acquired employees into
BCBSF/HOI, the acquired legal entity would be in breach of a contractual
commitment if it were to merge the acquired employees into a BCBSF/HOI plan.
The Group will be allowed to continue with the current carrier or provide for
such employees’ healthcare coverage under an alternative carrier plan as
selected by the Group.  This decision
will be reviewed annually with BCBSF/HOI for continuation, as BCBSF/HOI may be
interested in providing the coverage to this population.

 

4. Bankruptcy by the
Group.

 

B.    This Agreement may be
terminated on any Anniversary Date by either party by giving the other party at
least one hundred and eighty (180) calendar days prior written notice of such
termination.

 

C.    If the Group fails to pay to
BCBSF/HOI the Administrative Expense, Annual Excess Liability Charge or the
Claim Liability Charge in accordance with the provisions of Section III
and Section IV respectively, of this Agreement, BCBSF/HOI may terminate
this Agreement at any time with written notice.

 

D.    Upon termination of this
Agreement by either party for any reason, including termination for non-payment
of any charges/fees due under this Agreement, BCBSF/HOI shall continue to
invoice the Group and the Group shall continue to pay to BCBSF/HOI the Claim
Liability Charge, subject to the Annual Excess Liability Coverage limitation,
in accordance with the provisions of Sections IV and V of this Agreement, for a
period of eighteen (18) months immediately following the date this Agreement
terminated.

 

VII.         Modification
of Rates

 

Charges/maximum amounts
for the term of this Agreement will remain in effect, as set forth in Exhibit A,
provided there is no material change to the Product Offering(s), or Group’s new
or renewal underwriting or rating process or factors as determined by
BCBSF/HOI;  In the event there is a
change in the total enrollment of [*] or greater during any [*] period, or a
material change in the Product Offering(s), BCBSF/HOI reserves the right to review and
modify the rates and factors in exhibit A, either up or down, to compensate for
changes in the risk factors.  Any rate
changes shall be mutually agreed to by the Group and BCBSF/HOI.  Notwithstanding the foregoing, upon the
effective date of termination of this Agreement all Minimum Premium Charges and
Annual Excess Liability Charges shall no longer be due.

 

In the event of a rate
modification, the modified rates will be set forth and presented to the Group
on a revised Exhibit A within 45 days. The Group and BCBSF/HOI shall
cooperate with each other in the 

 

* THIS CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

7

 

CONFIDENTIAL TREATMENT REQUESTED
BY GEVITY HR, INC.

 

development and execution
of rate modification communications and effective date for the required rate
change in order to minimize disruption and attrition of the Group’s
clients.  All other provisions of this
Agreement shall remain in effect without modification.

 

VIII.        Products

 

A.    BCBSF/HOI will offer the products set forth in Exhibit B titled “Minimum
Premium Accounting Agreement Product Sheet” to the Group.   Exhibit B is hereby incorporated by
reference into and made a part of this Agreement.  Exhibit B may be modified from time to
time with the mutual consent of the parties.

 

B.    It is specifically
acknowledged that the Benefits Contracts are insured health benefit products
(i.e., not self-insured or administrative services only) and consequentially:

 

1.     Are subject to the laws of
the State of Florida that regulate insurance.

 

2.     Given that each is an
insurance product the benefit of rebates, including but not limited to health
care provider rebates and pharmacy rebates, are exclusively taken into account
in the calculation of the amount of the applicable Minimum Premium Charge.  The Group is therefore not entitled to any
credit for any such rebates beyond such inclusion in the pricing of the Benefit
Contracts.

 

3.     The above referenced products
will be offered to employees of clients of the Group working in Florida. Any
employees of clients of the Group working outside the State of Florida may be
insured through an alternate carrier. Any employees outside the State of
Florida that are employed by a client headquartered in Florida may be insured
through an alternate carrier or may be covered through the BlueCard arrangement
provided no more than [*] of the client’s enrollment is outside the State of
Florida or BCBSF/HOI agrees to provide coverage to such client.   The Benefit Contracts may be amended, changed
or replaced from time to time with the mutual consent of the parties, and are
hereby incorporated by reference into and made a part of this Agreement.

 

C.    BCBSF/HOI and the Group agree
that during the term of this Agreement the Group will offer BCBSF/HOI health
products [*] to employees of its clients working in Florida whose client
employers contract with the Employer/Plan Sponsor for services including
provision of health insurance through the Plan on or after October 1,
2008.  No other health plans will be
offered during the contract period, unless mutually agreed to by both parties.
If, however, during the term of this Agreement BCBSF/HOI’s Provider Networks
are significantly diminished in a particular service area so as to no longer
provide a competitive commercially desirable healthcare option and BCBSF/HOI
cannot provide alternative providers in that particular area or cannot arrange
for quality healthcare provider services, the Group may elect to cover those
specifically affected employees under an alternative carrier plan with the
consent of BCBSF/HOI which will not be unreasonably withheld.

 

IX.           The Offering of
BCBSF/HOI Products

 

A.    The Group will make the
Product Offerings available to its client’s employees (i.e. Employer/Plan
Sponsor’s co-employees) when the applicable client has contracted with the
Employer/Plan Sponsor for services including provision of health insurance
through the Plan in the following manner:

 

* THIS CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

 

8

 

CONFIDENTIAL TREATMENT REQUESTED
BY GEVITY HR, INC.

 

1.     The Group will require every
individual client group to offer to its employees working in the State of Florida
the product offerings as defined in Section VIII; provided, however, a
client group may enter into a No Benefits Contract with the Group.

 

2.     The Group will conduct at one
annual enrollment per year or more with the mutual consent of BCBSF/HOI. The annual enrollment will be conducted for a reasonable
period of time and will commence approximately 60-90 days before the annual
coverage period begins.

 

3.     BCBSF/HOI’s marketing
materials including , product designs, network information, and other pertinent
information will be available to the Group to make the selection of the Product
Offerings available to its employees. 
BCBSF/HOI, in consultation with the Group, shall determine the
appropriate quantity of marketing materials to make available to the Group.

 

4.     The Group will ensure that all
of its new clients and make best efforts to ensure that all of its existing
clients (who contract with the Employer/Plan Sponsor for services including
provision of health insurance through the Plan on or after October 1,
2008)  meet [*] participation of eligible
employees after waivers for other coverage. 
In addition, the group will ensure that all new clients and make best
efforts to ensure that all of its existing clients contribute at least [*] of
the lowest cost plan offered.  The Group
will monitor compliance with these requirements on a quarterly basis and, upon
request by BCBSF/HOI, will provide copies of the monitoring reports to
BCBSF/HOI.

 

X.            Enrollment

 

A.    As of the first day of the
term of this Agreement, the Group will have delivered to BCBSF/HOI enrollment
information regarding eligible and properly enrolled members, as defined by the
Benefit Contracts.  BCBSF/HOI shall be
entitled to rely on the information furnished to it by the Group, and the Group
shall hold BCBSF/HOI harmless for any inaccuracy or failure to provide such
information in a timely manner.  The
Group shall deliver to BCBSF/HOI all employee and dependent eligibility status
changes on a weekly basis, or more frequently as mutually agreed by the
parties.

 

The Group shall rely on
the Plan rules to determine timely enrollment for newly eligible
employees. However, occasionally, due to Group error, an enrollment may not be
reported to BCBSF/HOI timely.   BCBSF/HOI
will accept these retroactive additions as determined by the Group.

 

B.    The Group shall notify
BCBSF/HOI of any termination of coverage of an individual within [*] days of
the termination date, whenever possible, however, BCBSF/HOI will accept
retroactive terminations as determined by the Group. The Group shall be liable
for all claims/capitation paid on enrollment(s) that have retroactive
termination dates.  For retroactive
terminations within [*] days BCBSF/HOI will make every reasonable attempt to
recoup claims paid, however, no efforts will be made to recover Pharmacy claims
and claims less than [*] and in those cases where recoveries cannot be
obtained, the Group retains liability for those costs.

 

C.    The Group shall notify
BCBSF/HOI of any retroactive addition or retroactive termination of 

* THIS CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

 

9

 

CONFIDENTIAL TREATMENT REQUESTED
BY GEVITY HR, INC.

 

coverage
of an individual within [*] days of the effective date of such addition or
termination.

 

XI.           Administrative Policies

 

A.            Enrollment Methodology

 

The Group’s human
resource staff will enroll each new client group’s employees via the Group’s
Benefit Election Form or other acceptable method (IVR or web application).
On a [*] basis, the Group will present to BCBSF an automated enrollment
file.  Enrollments will be accepted as
submitted from the Group. BCBSF/HOI’s assigned Personal Service Representative
(PSR) will review discrepancy reports produced from the automated enrollment
file and work reports directly with the Group’s assigned staff member to
resolve all enrollment(s) on a timely basis.

 

B.            Identification Cards

Identification cards will be issued by BCBSF/HOI to each member enrolled within
[*][working days of receipt of the completed enrollment information.

 

C.            Terminations

Terminations are removed on the date of termination.  BCBSF/HOI will generate Certificates of
Creditable Coverage (COC) and submit directly to each member at the address on
file for all terminated contracts.

 

D.            HOI Primary Care
Physician Assignment

 

If an HOI member does not
choose a Primary Care Physician (PCP), BCBSF/HOI will assign a PCP based on the
member’s home address.  A letter will be
generated advising the member that a PCP was assigned and offering them the
option to change if they so desire.  The
member may call the customer service number on their identification card to
initiate the change.  When a member
changes their PCP, the effective date of the change is determined by the time
of the month the change is requested.  If
a member requests a change between the 1st and 15th of
the month, the member is eligible to utilize the new PCP the 1st of
the following month.  Changes requested
after the 15th of the month, will be effective the 1st of
the second month following the month the member made the request (Example:  PCP change requested January 20th.  PCP would be effective March 1st.)

 

E.             Eligibility

BCBSF/HOI and the Group have agreed to accept enrollment as determined by the
Group in accordance with the Plan. An eligible employee and/or dependent must
enroll within the initial eligibility period as determined in accordance with
the Plan or wait until the next Annual Enrollment Period unless a qualified
family or employment event occurs under which a member has an additional period
to enroll under a Special Enrollment Period if set forth in the Plan.

 

1.             The Group’s
Benefit Election Form

 

Each employee applying
for coverage must complete a Benefit Election Form or be enrolled through
the Gevity web application.

 

2.             Status Change Form

 

* THIS CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

 

10

 

CONFIDENTIAL TREATMENT REQUESTED
BY GEVITY HR, INC.

 

Any membership change,
i.e., marriage, divorce, addition of newborns, etc., will require completion of
a Status Change form (paper or through the Gevity web application).  The Group will retain adequate documentation
of status change requests for a reasonable period of time in the event
BCBSF/HOI requires copies to respond to an enrollment inquiry. All qualifying
events have a notification timeframe mandated by the Plan.  To the extent allowed by State law, newborns
will be covered back to the date of birth.

 

If changes are not
submitted within the specified time frames, the member must wait until the next
annual enrollment to make changes except under HIPAA requirements for special
enrollment.

 

F.           COBRA

 

The Group has chosen to
administer COBRA on an internal basis. 
COBRA enrollment will be provided to BCBSF/HOI on a weekly basis
directly to the assigned PSR of the Membership/Billing Area.  Unless otherwise stated, the Group will be
responsible for all COBRA administration including notification
requirements.  All previously stated
enrollment guidelines will apply.

 

G.          Overage Dependent Status Verification

 

BCBSF/HOI is responsible for
verifying overage dependent children’s eligibility status on at least an annual
basis.  Any overage dependent who is no
longer eligible will be reported to the Group so coverage can be terminated.

 

H.          Disabled Dependent Verification

 

BCBSF/HOI is responsible for
verifying the disability status of overage dependent children on at least an
annual basis.  Any overage dependent
child who is no longer disabled will be reported to the Group so coverage can
be terminated.

 

I.            Creditable Coverage

 

The Group will report to
BCBSF/HOI the amount of creditable time to be applied to satisfy the
pre-existing condition exclusion limitation for those members providing that
information at time of eligibility.  If
this information is not supplied, BCBSF/HOI will deny the impacted claim.  The denial advises the member that if they
had previous coverage a credit may be applicable and to please contact customer
service.  Once information is received
and reviewed, the claim will be reprocessed and pre-existing condition
limitation updated in their system.  The Group will not track creditable time in
their system.

 

XII.         Group
Reporting Requirements

 

A.            Upon
request, the Group will provide BCBSF/HOI with the necessary reports to ensure
compliance with participation and contribution goals as described in Section IX,
4. above.

 

B.            Upon
request, the Group will provide to BCBSF/HOI the industry classification codes
(SIC) of the enrolled client groups.

 

C.            Upon
request, the Group will provide to BCBSF/HOI enrollment data by county, or
other such 

 

11

 

CONFIDENTIAL TREATMENT REQUESTED
BY GEVITY HR, INC.

 

information
maintained by the Group that may be required to adequately evaluate risk.

 

D.            Upon
request, the Group will provide to BCBSF/HOI, business practice information
related to the following:

 

·      monitoring of participation
levels and contribution levels

·      financial statements

·      benefits administration
process including enrollment, premium remittance and

·      reconciliation and new
client/employee orientation

 

XIII.                        BCBSF/HOI
Reporting Requirements

 

BCBSF/HOI
will provide the Group access to Monthly Paid Claims Reports, Quarterly
Incurred But Not Reported (IBNR) Reports, Annual Account Specific Reporting,
and Ad Hoc reports as requested by the Group and mutually agreed upon by both
parties, to the extent permitted under the federal Privacy Rules of the
Health Insurance Portability and Accountability Act – Administration
Simplification (HIPAA-AS) of 1996.  In
the event the Group executes and provides to BCBSF/HOI a Group Health Plan
Representation of Compliance Letter, such document shall be incorporated into
and made a part of this Agreement.

 

XIV.                       Renewal

 

This
Agreement shall automatically renew/extend for additional one year period(s) on
each Anniversary Date (October 1st) 
at the rates then in effect (the renewal rates), unless either party
notifies the other party of its intent not to extend this Agreement at least
one hundred and eighty (180)  calendar
days prior to the applicable Anniversary Date. 
The renewal rates/charges/maximum amounts/collateral will be negotiated
by the parties and set forth and presented to the Group on a revised Exhibit A.

 

XV.                           Collateral

 

The Group shall provide BCBSF/HOI collateral to secure
Gevity’s payment obligations under this Agreement in the amounts set forth in Exhibit A.   The collateral shall be provided in the form
of an irrevocable letter of credit issued in favor of BCBSF/HOI which shall
automatically increase in accordance with the schedule specified in Exhibit A.   BCBSF/HOI shall be entitled to draw from the
letter of credit only in the event the Group fails to meet its payment
obligations as set forth in Sections III, IV or VII of this Agreement. The form
of letter of credit must be acceptable to BCBSF/HOI.

 

The Group upon 60 days prior written notice to
BCBSF/HOI may replace the outstanding letter of credit with cash collateral
equal to the outstanding letter of credit to be held in an interest-bearing
trust or escrow account in favor of BCBSF/HOI (with interest accruing and
payable to the Group on a quarterly basis). 
If the Group elects to replace the letter of credit in accordance with
the foregoing, the parties will select a trustee bank and enter into a trust
participation agreement (or similar agreement) acceptable to both parties.

 

Following
the termination or expiration of this contract, and provided the Group is
current with respect to its financial obligations to BCBSF/HOI, the collateral
shall be reduced to [*] of its then current value at the end of the third,
sixth and ninth month and fully released at the end of the twelfth month,
exclusive of any known or pending claims, including any potential cases in
litigation.

 

* THIS CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

 

12

 

CONFIDENTIAL TREATMENT REQUESTED
BY GEVITY HR, INC.

 

XVI.                       Performance Standards and Performance
Incentive Plan

 

A.    BCBSF/HOI shall meet the
following Performance Standards and be measured pursuant to BCBSF/HOI ‘s
standard audit procedures:

 

Claim Processing

 

	
  Category

  	
   

  	
  Penalty

  	
   

  	
  Incentive

  
	
  Financial Accuracy

  	
   

  	
  [*]

  	
   

  	
  [*]

  
	
  Payment Accuracy

  	
   

  	
  [*]

  	
   

  	
  [*]

  
	
  Processing Accuracy

  	
   

  	
  [*]

  	
   

  	
  [*]

  
	
  Claims processed within
  30 calendar days

  	
   

  	
  [*]

  	
   

  	
  [*]

  

 

Customer Service

 

	
  Category

  	
   

  	
  Penalty

  	
   

  	
  Incentive

  
	
  Average Hold Time for
  Incoming Calls

  	
   

  	
  [*]

  	
   

  	
  [*]

  
	
  Abandon
  rate

  	
   

  	
  [*]

  	
   

  	
  [*]

  
	
  Closure
  of open inquiries

  	
   

  	
  [*]

  	
   

  	
  [*]

  
	
  Closure
  of open inquiries

  	
   

  	
  [*]

  	
   

  	
  [*]

  

 

Account Management

 

The Group will be
responsible for creating and maintaining an account management survey questionnaire.  The survey questionnaire to be completed by
The Group will measure account management performance in the areas of product
and service knowledge, professionalism, proactive management, accessibility,
and responsiveness.

 

B.    The Performance Standard
Penalty/Incentive

 

The Performance
Incentive/Penalty will be in effect for Claim Processing and Customer Service
standards only.  Account Management
categories will be monitored, but are not subject to incentive/penalty payments
at this time.  The Group reserves the
right, at a future date, to open discussions with BCBSF to include Account
Management activities, and Eligibility as account specific reporting metrics
become available, in the Penalty/Incentive calculation.

 

1.     BCBSF/HOI
will be subject to a [*] reduction in the Minimum Premium Rates (set forth in Exhibit A)
for the quarter if three of four claims processing performance standards are
below the percentages (set forth above) for the quarter.

 

2.     BCBSF/HOI
will be subject to a [*] reduction in the Minimum Premium Rates (set forth in Exhibit A)
for the quarter if three of four customer service performance standards are
below the percentages (set forth above) for the quarter.

 

3.   BCBSF/HOI will receive a [*]
increase in the Minimum Premium Rates (set forth in Exhibit A) 

 

* THIS CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

 

13

 

CONFIDENTIAL TREATMENT REQUESTED
BY GEVITY HR, INC.

 

for the
quarter if all four of the claims processing performance standards are met or
exceeded for the quarter.

 

4.   BCBSF/HOI will receive a [*]
increase in the Minimum Premium Rates (set forth in Exhibit A) for the
quarter if all four of the customer service performance standards are met or
exceeded for the quarter.

 

5.   BCBSF/HOI’s Operational Units
will report their Performance Standard scores on a monthly basis to BCBSF/HOI’s
Marketing Staff.  Each quarter Marketing
will provide the Group with monthly results and calculate the incentive/penalty
based on quarterly results.

 

6.   Within [*] days following the
close of the contract period BCBSF will prepare an annual Performance Standard
Penalty/Incentive expense settlement based on the quarterly outcomes and present
it to the Group.  If based on the expense
settlement an incentive is due the Group will pay the full amount of the
expense settlement within [*] calendar days after receipt of the invoice.  If based on the expense settlement a penalty
is due BCBSF/HOI will credit the next administrative expense and annual excess
liability charge invoice.

 

C.    Performance Audit

 

The Group has the right
to perform, or have performed by a mutually agreed upon third party, an audit
of BCBSF/HOI’s Operational performance on an annual basis.

 

The focus of the audit
will be the preceding contract year (e.g. audit is in 2009 for 2008 contract
period).  The audit will be limited to a
reasonable number of statistically valid claims not to exceed [*].  Any request for audits outside the above
mentioned will require mutual agreement of the Group and BCBSF/HOI.

 

BCBSF/HOI will [*].

 

BCBSF/HOI requires
reasonable advance notification of at least 60 days prior to the audit.

 

XVII.      General

 

A.            Inconsistencies

 

If the
provisions of this Agreement are, in any way, inconsistent with the provisions
of the Product Offerings, then the provisions of the Agreement shall prevail,
and the other provisions shall be deemed modified but only to the extent
necessary to implement the intent of the parties herein.

 

B.            Survival

 

The
rights and obligations of the parties, as set forth herein, shall survive the
termination of this Agreement to the extent necessary to effectuate the intent
of the parties as expressed herein.

 

C.            Waiver
of Breach

 

The
failure by either party, at any time, to enforce or to require the strict
adherence to any provision of this Agreement shall not be deemed to be a waiver
of such provision or any other 

 

* THIS CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

 

14

 

CONFIDENTIAL TREATMENT REQUESTED
BY GEVITY HR, INC.

 

provision of this Agreement.

 

D.            Governing Law

 

This
Agreement, and the rights of the parties hereunder, shall be construed
according to the laws of the State of Florida.

 

E.             Severance

 

In the
event any provision of this Agreement is deemed to be invalid or unenforceable,
all other provisions shall remain in full force and effect.

 

F.             Amendment

 

This
Agreement may be amended at any time upon mutual written agreement of both
parties, except that BCBSF/HOI or the Group may make changes necessary to
comply with state and federal laws.  In
the event such changes are necessary, BCBSF/HOI or the Group will provide
appropriate written notice to the other party.

 

G.            Entire Agreement

 

This
Agreement, which includes the Exhibits, Master Policy, Benefit Election Form,
Status Change Form, Member Handbook, True Group Application for coverage, and
the Product Offerings, which are hereby incorporated by reference, constitute
the entire Agreement between the Group and BCBSF/HOI.  Any prior agreements, promises, or
representations, either oral or written, relating to the subject matter of this
Agreement, and not expressly set forth in this Agreement, are of no force or
effect.

 

H.            Notices

 

Any
notice, required or permitted under this Agreement, shall be deemed given if
hand delivered or if mailed by United States mail, or an overnight mail service
(e.g. Federal Express), postage prepaid, to the applicable address as set forth
above or to such other address as a party may designate, in writing, to the
other party.  Such notice shall be deemed
effective as of the date so deposited or delivered.

 

I.              Provider Networks

 

BCBSF/HOI’s
Health Care Provider Networks are subject to change and may be modified at any
time during the term of this Agreement without notice to or the consent of the
Group.

 

J.             Marketing
Fund

 

BCBSF/HOI will
share in the cost of marketing materials up to [*] per plan year.  The Group or the Group’s approved vendor will
submit a detailed invoice to BCBSF/HOI Corporate Accounts for the marketing
materials no later than 30 days following the end of the plan year.

 

K.            Training
and enrollment support

 

BCBSF/HOI will
provide up to [*] training sessions of not more than one half day in length for
the Group’s staff.  In addition BCBSF/HOI
will provide up to [*] on site visits of no more than one half day in length to
provide enrollment support for clients with [*] or more eligible employees.  All training and enrollment support will be
coordinated through the Group’s 
headquarters and mutually agreed to by the Group and BCBSF/HOI.

 

* THIS CONFIDENTIAL INFORMATION HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

15

 

CONFIDENTIAL TREATMENT REQUESTED
BY GEVITY HR, INC.

 

IN
WITNESS WHEREOF each of the parties to this Agreement, through their duly
authorized representative, hereby acknowledges that they have read and
understand this Agreement and agree to be bound by its terms.

 

 

	
   

  	
  BLUE
  CROSS AND BLUE SHIELD OF FLORIDA, INC./

  
	
   

  	
  HEALTH
  OPTIONS, INC.

  
	
   

  	
   

  
	
   

  	
  Signature:

  	
  /s/ Alan Guzzino

  
	
   

  	
   

  	
   

  
	
   

  	
  Print Name:

  	
  Alan Guzzino

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
  9-29-2008

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Gevity
  HR, Inc.

  
	
   

  	
   

  
	
   

  	
  Signature:

  	
  /s/ Edwin E.
  Hightower, Jr.

  
	
   

  	
   

  	
   

  
	
   

  	
  Print Name:

  	
  Edwin E.
  Hightower, Jr.

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Senior Vice
  President and Chief Legal Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
  10-1-2008

  
	
   

  	
   

  
	
   

  	
  Gevity
  Health & Welfare Plan

  
	
   

  	
   

  
	
   

  	
  Signature:

  	
  /s/ Edwin E. Hightower, Jr.

  
	
   

  	
   

  	
   

  
	
   

  	
  Print Name:

  	
  Edwin E.
  Hightower, Jr.

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Senior Vice
  President and Chief Legal Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
  10-1-2008

  
				

 

16

 

CONFIDENTIAL TREATMENT REQUESTED
BY GEVITY HR, INC.

 

EXHIBIT
A

 

MINIMUM
PREMIUM ACCOUNTING AGREEMENT

RATE
SHEET

FOR

GEVITY HR, INC. – GROUP No. 56953

10/1/2008
– 9/30/2009

 

[*THIS
CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE

SECURITIES AND EXCHANGE COMMISSION*]  

 

17

 

CONFIDENTIAL TREATMENT REQUESTED
BY GEVITY HR, INC.

 

EXHIBIT B

 

MINIMUM PREMIUM ACCOUNTING AGREEMENT

PRODUCT SHEET

FOR

GEVITY  HR, INC. – GROUP No. 56953

10/1/2008 – 9/30/2009

 

[*THIS
CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE

SECURITIES AND EXCHANGE COMMISSION*]

 

18Exhibit 10.1

 

CONFIDENTIAL TREATMENT

 

 

COMMERCIAL
SERVICES AGREEMENT

 

by
and between

 

ASTRAZENECA
PHARMACEUTICALS LP

 

and

 

CUBIST
PHARMACEUTICALS, INC.

 

Dated
as of July 1, 2008

 

 

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

 

 

Execution Copy

 

TABLE OF CONTENTS

 

	
  ARTICLE I - DEFINITIONS

  	
  5

  
	
   

  	
   

  
	
  1.1

  	
  DEFINITIONS

  	
  5

  
	
  1.2

  	
  CONSTRUCTION

  	
  19

  
	
   

  	
   

  	
   

  
	
  ARTICLE II - ENGAGEMENT

  	
  19

  
	
   

  	
   

  
	
  2.1

  	
  ENGAGEMENT OF CUBIST

  	
  19

  
	
  2.2

  	
  CONDUCT OF EMPLOYEES

  	
  20

  
	
   

  	
   

  	
   

  
	
  ARTICLE III - PROMOTION AND OTHER SERVICES

  	
  20

  
	
   

  	
   

  
	
  3.1

  	
  SALES FORCE OBLIGATIONS

  	
  20

  
	
  3.2

  	
  CSD OBLIGATIONS

  	
  21

  
	
  3.3

  	
  SPEAKER PROGRAMS

  	
  22

  
	
  3.4

  	
  CONDUCT OF THE PROGRAM

  	
  23

  
	
  3.5

  	
  PROMOTIONAL MATERIALS

  	
  24

  
	
  3.6

  	
  NO SAMPLES

  	
  27

  
	
  3.7

  	
  STATEMENTS ABOUT THE PRODUCT

  	
  27

  
	
  3.8

  	
  REQUESTS FOR MEDICAL INFORMATION

  	
  27

  
	
  3.9

  	
  COMPLIANCE WITH LAWS AND POLICIES

  	
  28

  
	
  3.10

  	
  SALES MEETINGS

  	
  29

  
	
  3.11

  	
  REPORTING BY THE PARTIES

  	
  30

  
	
  3.12

  	
  INFORMATION TECHNOLOGY

  	
  31

  
	
  3.13

  	
  CERTAIN ASTRAZENECA EFFORTS; MANUFACTURE
  AND SUPPLY OF PRODUCT

  	
  32

  
	
  3.14

  	
  ORDERS FOR PRODUCT; TERMS OF SALE AND OTHER
  CONTRACTING MATTERS

  	
  32

  
	
  3.15

  	
  INCENTIVE COMPENSATION BY CUBIST

  	
  33

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV - TRAINING

  	
  33

  
	
   

  	
   

  
	
  4.1

  	
  SALES FORCE TRAINING PROGRAMS

  	
  33

  
	
  4.2

  	
  CSD TRAINING

  	
  36

  
	
  4.3

  	
  RETURN OF TRAINING MATERIALS

  	
  38

  
	
   

  	
   

  	
   

  
	
  ARTICLE V - DESIGNATED MEDICAL AFFAIRS REPRESENTATIVES

  	
  38

  
	
   

  	
   

  
	
  5.1

  	
  APPOINTMENT

  	
  38

  
	
  5.2

  	
  RESOLUTION OF SCIENTIFIC SUPPORT DISPUTES

  	
  38

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI - CALCULATION AND PAYMENT OF FEES TO CUBIST

  	
  39

  
	
   

  	
   

  
	
  6.1

  	
  BASELINE SALES AND ANNUAL BASELINE AMOUNTS

  	
  39

  
	
  6.2

  	
  CUBIST COMPENSATION, OTHER AMOUNTS DUE AND
  RELATED OBLIGATIONS

  	
  40

  
	
  6.3

  	
  MAINTENANCE OF CERTAIN BOOKS AND RECORDS;
  AUDIT RIGHTS

  	
  42

  
	
  6.4

  	
  ALL INCLUSIVE

  	
  43

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII - ALLIANCE MANAGERS

  	
  43

  
	
   

  	
   

  
	
  ARTICLE VIII - ADVERSE EVENT REPORTING AND OTHER REGULATORY
  MATTERS

  	
  43

  
	
   

  	
   

  
	
  8.1

  	
  REGULATORY REPORTING AND RELATED MATTERS

  	
  43

  
	
  8.2

  	
  THREATENED AGENCY ACTION

  	
  47

  

 

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

 

 

	
  8.3

  	
  COMPLIANCE PROGRAM

  	
  47

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX - RETURNED/RECALLED PRODUCT

  	
  47

  
	
   

  	
   

  
	
  9.1

  	
  RETURNED PRODUCT

  	
  47

  
	
  9.2

  	
  RECALLED PRODUCT

  	
  48

  
	
   

  	
   

  	
   

  
	
  ARTICLE X - INDEPENDENT CONTRACTOR STATUS OF CUBIST,
  INCLUDING THE SALES FORCE AND THE CSD FORCE

  	
  48

  
	
   

  	
   

  
	
  10.1

  	
  INDEPENDENT CONTRACTOR STATUS

  	
  48

  
	
  10.2

  	
  NO ASTRAZENECA BENEFITS

  	
  48

  
	
  10.3

  	
  NO RECRUITMENT

  	
  49

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI - NONCOMPETITION

  	
  49

  
	
   

  	
   

  
	
  11.1

  	
  NONCOMPETITION

  	
  49

  
	
  11.2

  	
  INJUNCTIVE RELIEF

  	
  50

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII – CONFIDENTIALITY

  	
  50

  
	
   

  	
   

  
	
  12.1

  	
  CONFIDENTIAL INFORMATION

  	
  50

  
	
  12.2

  	
  EXCEPTIONS TO CONFIDENTIALITY

  	
  50

  
	
  12.3

  	
  AUTHORIZED DISCLOSURE

  	
  51

  
	
  12.4

  	
  NOTIFICATION

  	
  51

  
	
  12.5

  	
  RETURN OR DESTRUCTION OF CONFIDENTIAL
  INFORMATION

  	
  51

  
	
  12.6

  	
  REMEDIES

  	
  52

  
	
  12.7

  	
  USE OF NAMES

  	
  52

  
	
  12.8

  	
  CONFIDENTIAL TREATMENT

  	
  52

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII - TRADEMARKS AND OTHER INTELLECTUAL PROPERTY
  RIGHTS

  	
  53

  
	
   

  	
   

  
	
  13.1

  	
  PRODUCT TRADEMARKS; ASTRAZENECA HOUSEMARKS;
  AND CUBIST TRADEMARKS

  	
  53

  
	
  13.2

  	
  NO OWNERSHIP OR RIGHTS IN THE PRODUCT
  TRADEMARKS, ASTRAZENECA HOUSEMARKS OR CUBIST TRADEMARKS

  	
  53

  
	
  13.3

  	
  TRADEMARK MAINTENANCE

  	
  54

  
	
  13.4

  	
  TRADEMARK INFRINGEMENT

  	
  55

  
	
  13.5

  	
  OTHER RIGHTS

  	
  55

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIV - WARRANTIES; INDEMNITIES; INSURANCE

  	
  56

  
	
   

  	
   

  
	
  14.1

  	
  REPRESENTATIONS, WARRANTIES AND COVENANTS

  	
  56

  
	
  14.2

  	
  ASTRAZENECA INDEMNIFICATION

  	
  59

  
	
  14.3

  	
  CUBIST INDEMNIFICATION

  	
  60

  
	
  14.4

  	
  INDEMNIFICATION PROCEDURE

  	
  60

  
	
  14.5

  	
  CUBIST WORKERS’ COMPENSATION AND LIABILITY
  INSURANCE

  	
  62

  
	
  14.6

  	
  ASTRAZENECA INSURANCE

  	
  63

  
	
  14.7

  	
  LIMITATIONS OF LIABILITY; CAP

  	
  63

  
	
   

  	
   

  	
   

  
	
  ARTICLE XV - TERM AND TERMINATION

  	
  64

  
	
   

  	
   

  
	
  15.1

  	
  TERM

  	
  64

  
	
  15.2

  	
  TERMINATION

  	
  64

  
	
  15.3

  	
  EFFECT OF EXPIRATION OR TERMINATION

  	
  67

  

 

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

 

2

 

	
  15.4

  	
  ACCRUED RIGHTS; SURVIVING OBLIGATIONS

  	
  67

  
	
  15.5

  	
  RETURN OF ALL MATERIALS

  	
  67

  
	
   

  	
   

  	
   

  
	
  ARTICLE XVI - MISCELLANEOUS

  	
  68

  
	
   

  	
   

  
	
  16.1

  	
  DISPUTE RESOLUTION

  	
  68

  
	
  16.2

  	
  GOVERNING LAW, JURISDICTION, VENUE AND SERVICE
  OF PROCESS

  	
  70

  
	
  16.3

  	
  FORCE MAJEURE

  	
  70

  
	
  16.4

  	
  WAIVER

  	
  70

  
	
  16.5

  	
  NOTICES

  	
  71

  
	
  16.6

  	
  ENTIRE AGREEMENT

  	
  72

  
	
  16.7

  	
  SUCCESSORS; ASSIGNS; SUBCONTRACTING

  	
  72

  
	
  16.8

  	
  EXHIBITS

  	
  73

  
	
  16.9

  	
  COUNTERPARTS

  	
  73

  
	
  16.10

  	
  SEVERABILITY

  	
  73

  
	
  16.11

  	
  AFFILIATES

  	
  73

  
	
  16.12

  	
  EXPENSES

  	
  73

  
	
  16.13

  	
  FURTHER ASSURANCES

  	
  74

  
	
  16.14

  	
  CONSTRUCTION

  	
  74

  
	
  16.15

  	
  NO JOINT VENTURE

  	
  74

  

 

EXHIBITS

 

	
  EXHIBIT A

  	
  ANNUAL AND QUARTERLY
  BASELINE SALES AND EXAMPLE OF CALCULATION OF ANNUAL AMOUNT DUE

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT B-1

  	
  SPECIFIC CUBIST
  BUSINESS POLICIES

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT B-2

  	
  SPECIFIC AZ BUSINESS
  POLICIES

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT C

  	
  CSD ACTIVITIES

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT D

  	
  SPEAKER PROGRAM
  PROCEDURES

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT E

  	
  INITIAL DESIGNATED
  MEDICAL AFFAIRS REPRESENTATIVES

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT F-1

  	
  INITIAL SALES TRAINING
  PLAN

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT F-2

  	
  INITIAL CSD TRAINING
  PLAN

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT G-1

  	
  CUBIST TRADEMARKS

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT G-2

  	
  ASTRAZENECA HOUSEMARKS

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT H

  	
  [INTENTIONALLY OMITTED]

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT I

  	
  [INTENTIONALLY OMITTED]

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT J

  	
  FORM OF DETAIL
  REPORT

  	
   

  

 

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

 

3

 

	
  EXHIBIT K

  	
  FORM OF CSD
  ACTIVITIES REPORT

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT L

  	
  INITIAL SALES TRAINING
  MATERIALS

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT M

  	
  PROMOTION PLAN

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT N

  	
  INITIAL PROMOTIONAL
  MATERIALS

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT O

  	
  FORM OF PRODUCT
  SALES (WEEKLY/MONTHLY REPORTS)

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT P

  	
  FORM OF REPORTING
  OF GROSS SALES/NET SALES

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT Q

  	
  FORM OF ANNUAL
  AMOUNT DUE REPORT AND EXAMPLES OF CALCULATION

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT R

  	
  FORM OF PRODUCT
  INVENTORY REPORT

  	
   

  

 

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

 

4

 

COMMERCIAL SERVICES AGREEMENT

 

This COMMERCIAL SERVICES AGREEMENT (the “Agreement”) is entered into as of July 1, 2008  (the
“Effective Date”), by and between
ASTRAZENECA PHARMACEUTICALS LP, a Delaware limited partnership (“AstraZeneca”), and CUBIST PHARMACEUTICALS, INC., a Delaware
corporation (“Cubist”).

 

R E C I T A L S:

 

WHEREAS, AstraZeneca markets that certain pharmaceutical
compound known as meropenem in prescription form currently marketed under the
trademark Merrem®.

 

WHEREAS, AstraZeneca acknowledges Cubist’s expertise
in detailing and otherwise promoting pharmaceutical products through its sales
and promotional efforts related to Cubicin® (as defined herein) in the acute
care setting and wishes to engage the services of Cubist to Promote (as defined
herein) and provide other services related to the Product (as defined herein).

 

WHEREAS, the parties hereto desire that Cubist Promote
(as defined herein) the Product in the Territory (as defined herein) and
perform certain other services, all on the terms and conditions set forth
herein.

 

NOW, THEREFORE, in consideration of the respective
covenants, representations, warranties and agreements set forth herein, and
intending to be legally bound hereby, the parties hereby agree as follows:

 

ARTICLE I - DEFINITIONS

 

1.1           Definitions.

 

Unless specifically set forth to the contrary herein,
the following terms shall have their indicated meanings when used in this
Agreement (including the Exhibits):

 

(a)                 “Act” means the Federal Food, Drug, and Cosmetic Act, as
amended, and the rules, regulations, guidances, guidelines and requirements of
the FDA as may be in effect from time to time.

 

(b)                “Adverse Event”
means the development of an undesirable
medical condition or the deterioration of a pre-existing medical condition
following or during exposure to the Product, whether or not considered causally
related to the Product, the exacerbation of any pre-existing condition(s) occurring
during the use of the Product, or any other adverse experience or adverse drug
experience described in the FDA’s Investigational New Drug safety reporting and
New Drug Application postmarketing reporting regulations, 21 C.F.R. 312.32 and
314.80, respectively, as they may be amended from time to time.  For purposes of this Agreement, “undesirable
medical condition” shall include symptoms (e.g.,
nausea, chest pain), signs (e.g.,
tachycardia, enlarged liver) or the abnormal results of an investigation (e.g., laboratory findings,
electrocardiogram), including unfavorable side effects, toxicity, injury, 

 

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

 

5

 

overdose, sensitivity reactions or failure of
the Product to exhibit its expected pharmacologic/biologic effect.

 

(c)                 “Affiliate” means, with respect to any
Person, any other Person that directly, or indirectly through one or more
intermediaries, Controls, is Controlled by or is under Common Control with such
first Person.

 

(d)                “Agency” means any governmental or
regulatory authority in the Territory.

 

(e)                 “Agreed Baseline Adjustment” has the meaning
ascribed to such term in Section 6.1(b).

 

(f)                 “Agreement” has the meaning ascribed to such
term in the Preamble.

 

(g)                “Alliance Manager” has the meaning ascribed
to such term in ARTICLE
VII.

 

(h)                “Annual Amount Due” has the meaning ascribed
to such term in Exhibit A.

 

(i)                  “Annual Baseline Amount” has the meaning
ascribed to such term in Exhibit A.

 

(j)                  “Annual Baseline Sales” has the meaning
ascribed to such term in Exhibit A.

 

(k)                 “Applicable Law” means (i) the American
Medical Association Guidelines on Gifts to Physicians from Industry, (ii) the
PhRMA Code on Interactions with Healthcare Professionals, and (iii) all
federal, state and local laws, and the rules, regulations, guidelines and
guidances  of all Agencies, in
effect from time to time, applicable to the manufacture, marketing, promotion,
distribution and sale of the Product in the Territory, including the Act, the
PDMA, state and federal anti-kickback statutes, false claims statutes, statutes
that govern price reporting and reimbursement, statutes that govern marketing
disclosure, and all rules and regulations related thereto, in each case in
the Territory.

 

(l)                  “AstraZeneca” has the meaning ascribed to
such term in the Preamble.

 

(m)                “AstraZeneca CSD Materials” has the meaning ascribed to such
term in Section 3.2(b).

 

(n)                “AstraZeneca Housemarks” means (i) the
Trademarks of AstraZeneca and its Affiliates set forth on Exhibit G-2
and any pending or future Trademark registrations, applications and
unregistered Trademark rights, in each case relating to such 

 

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

 

6

 

Trademarks, and (ii) any current or future modifications or
variants of any of the foregoing rights.

 

(o)                “AstraZeneca Indemnified Parties” has the
meaning ascribed to such term in Section 14.3.

 

(p)                []*.

 

(q)                “Average Selling Price” means the average
selling price of a product as reported by the Centers for Medicare and Medicaid
(as of the Effective Date, the Centers for Medicare and Medicaid report average
selling prices at
http://www.cms.hhs.gov/McrPartBDrugAvgSalesPrice/01_overview.asp).

 

(r)                 “AZAP Review Team”
means that certain team of employees of AstraZeneca assigned to review and
approve the Promotional Materials, as such team is constituted from time to
time.

 

(s)                 “AZ Knowledge Group” means []*.

 

(t)                 “Baseline Commencement Date”
shall mean []*.

 

(u)                “Baseline Sales Dispute”
means any Dispute with respect to the modification of Annual Baseline Sales or
Quarterly Baseline Sales pursuant to Section 6.1(b).

 

(v)                “Business Policies”  means []*.

 

(w)                “Calendar Quarter” means each successive
period of three (3) consecutive calendar months ending on March 31, June 30,
September 30 and December 31.

 

(x)                 “Calendar Year” means each successive period
of twelve (12) consecutive calendar months commencing on January 1 and
ending on December 31.

 

(y)                “Call” means an interactive in-person visit
to and discussion with a medical professional with prescribing authority (other
than a microbiologist or pharmacist) by a Representative that consists of one
or more details of a product.

 

(z)                 “Cap” has the meaning ascribed to such
term in Section 14.7.

 

(aa)               “Change in Control” means, with respect to a
party, an event in which:

 

(i)          Any
Person or group (as such term is defined in the Securities Exchange Act of
1934, as amended) (other than one or more Affiliate(s) of such party that
were Affiliates immediately prior to such event (any such Affiliate with
respect to such party, an “Existing Affiliate”),
acquires beneficial ownership of securities of such party or any Affiliate
thereof that directly, or indirectly through one or more intermediaries,
Controls such party (any such Affiliate with respect to such Party, a “Controlling Entity”) representing more than
fifty 

 

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

 

7

 

percent (50%) of
the voting power of the then outstanding securities of such party or its
Controlling Entity, if any, with respect to the election of directors of such
party or its Controlling Entity, if any;

 

(ii)         Such
party or its Controlling Entity, if any, enters into a merger, consolidation or
similar transaction with another Person (other than an Existing Affiliate of
such party) in which such party or Controlling Entity is not the surviving
entity in such transaction;

 

(iii)        Such party or its Controlling Entity, if any,
enters into a merger, consolidation or similar transaction with another Person (other
than an Existing Affiliate of such party) in which such party or Controlling
Entity, as applicable, is the surviving entity in such transaction but (A) the
members of the Board of Directors of such party or Controlling Entity, as
applicable, immediately prior to such transaction constitute less than one half
of the members of the Board of Directors of such party or Controlling Entity,
as applicable, following such transaction or (B) the Persons who
beneficially owned the outstanding voting securities of such party or
Controlling Entity, as applicable, immediately prior to such transaction cease
to beneficially own securities of such party or Controlling Entity, as
applicable, representing more than fifty percent (50%) of the voting power of
the then outstanding securities of such party or Controlling Entity, as
applicable, with respect to the election of directors immediately after such
transaction in substantially the same proportions as their ownership of
securities of such party or Controlling Entity, as applicable, immediately
prior to such transaction;

 

(iv)       Such
party or its Controlling Entity, if any, sells or transfers to any Person(s) (other
than Existing Affiliate(s) of such party) in one or more related
transactions, properties or assets (A) representing more than fifty
percent (50%) of such party’s or Controlling Entity’s, as applicable,
consolidated total assets as reflected on its most recent Annual Report on Form 10-K
or Quarterly Report on Form 10-Q or (B) from which more than fifty
percent (50%) of such party’s or Controlling Entity’s, as applicable,
consolidated operating income for its most recent fiscal year as reflected on
its most recent Annual Report on Form 10-K was derived; or

 

(v)        Such
party or its Controlling Entity, if any, fails to maintain its corporate
existence or liquidates (unless, in connection with the foregoing, the assets
of such party or Controlling Entity, as applicable, are acquired by an Existing
Affiliate of such party and the liabilities of such party or Controlling Entity
are assumed by an Existing Affiliate of such party).

 

(bb)              “Commercially Diligent
Efforts” of a party
mean (i) with respect to Cubist, those efforts that are consistent with
Applicable Law and with industry standards and practices followed by a pharmaceutical
company in the Promotion of pharmaceutical products with a potential market
comparable to the Product, and (ii) with respect to AstraZeneca, those
efforts that are consistent with Applicable Law and with industry standards and
practices followed by pharmaceutical companies in connection with the
manufacture, Promotion, marketing, distribution and sale of pharmaceutical
products with a potential market comparable to the Product.  For clarity, if a party is required hereunder
to use Commercially Diligent Efforts with respect to a given activity and such
activity is performed by an Affiliate of such party, 

 

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

 

8

 

rather than such party, such party shall cause such Affiliate to use
Commercially Diligent Efforts to perform such activity.

 

(cc)               “Competing Product”
means any product, other than the Product, that is []*.

 

(dd)              “Confidential Information”
means (i) any and all information or material, that, at any time before or
after the Effective Date has been or is provided or communicated to the
Receiving Party by or on behalf of the Disclosing Party, including by or on
behalf of any of its Affiliates, pursuant to this Agreement or in connection
with the transactions contemplated hereby or any discussions or negotiations
with respect thereto; (ii) any data, ideas, concepts or techniques
contained in any of the foregoing; and (iii) any modifications of any of
the foregoing or derivations of any of the foregoing.  Confidential Information may be disclosed
orally, visually, in writing, by delivery of materials containing Confidential
Information, or in any other form now known or hereafter invented.  The terms of this Agreement shall be the
Confidential Information of both parties.

 

(ee)               “Control” and, with correlative meanings,
the terms “Controlled by” and “under Common Control with,” means (i) the
power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of voting securities, by contract,
resolution, regulation or otherwise or (ii) the ownership, directly or
indirectly, of more than fifty percent (50%) of the voting securities or other
ownership interest of a Person (or, with respect to a limited partnership or
other similar entity, its general partner or controlling entity).

 

(ff)                “Cost of Goods” means (i) with respect
to Product sold in Calendar Year 2008 or 2009, that certain amount to be used
as the cost of goods for purposes of this Agreement for such period per one (1) gram
vial of Product or per five hundred (500) milligram vial, as applicable, as
such amount was specified in that certain letter dated as of June 30, 2008  provided
by AstraZeneca to Cubist on the Effective Date, or (ii) with respect to
each Calendar Year commencing with Calendar Year 2010, the standard cost of
goods for the Product for such Calendar Year, as such standard cost of goods is
established by AstraZeneca in accordance with its standard operating
procedures, which standard cost shall be AstraZeneca’s good faith estimate of
[]*.

 

(gg)              “Critical Care Prescriber”
means a physician who is an intensivist, pulmonologist or critical care
physician or other physician who practices, is employed by or otherwise
provides services in the critical care department of a Critical Care Target
Account.

 

(hh)              “Critical Care Target Accounts” mean those certain acute care
institutions identified on that certain list of critical care accounts provided
by Cubist in electronic form to AstraZeneca on the Effective Date, as such list
may be amended from time to time in accordance with this Agreement.

 

(ii)                 “CSD” means a clinical science director primarily focused on
infectious diseases and therapeutic areas related thereto in the Territory (i) employed
by Cubist 

 

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

 

9

 

or its Affiliate, (ii) whom Cubist or its Affiliate has hired
using its own recruiting and hiring standards and (iii) who satisfies the
Hiring Profile for clinical science directors.

 

(jj)                 “CSD Activities” means those activities with
respect to the Product in the Territory to be performed by CSDs pursuant to
this Agreement, including those responsibilities of the CSDs described in Exhibit C.

 

(kk)               “CSD Force” means all of the CSDs and their
direct supervisors, managers and trainers, in each case who are employed by
Cubist or its Affiliate.

 

(ll)                 “CSD Materials” has the meaning ascribed to
such term in Section 3.2(b).

 

(mm)             “CSD Training Materials”
means the Initial CSD Training Materials and any updates or supplements thereto
provided by AstraZeneca or its Affiliates to Cubist pursuant to Section 4.2(e).

 

(nn)              “Cubicin” means that certain
pharmaceutical compound known as daptomycin in prescription form for injection
that has received regulatory approval from the FDA to be marketed in the
Territory under the trademark Cubicin®.

 

(oo)              “Cubist” has the meaning ascribed to such term in the
Preamble.

 

(pp)              “Cubist CSD Materials” has the meaning ascribed to such term
in Section 3.2(b).

 

(qq)              “Cubist Indemnified
Parties” has the meaning ascribed to such term in Section 14.2.

 

(rr)                “Cubist Knowledge Group” means  []*.

 

(ss)               “Cubist Program
Activities” means activities conducted by or on behalf of Cubist or
its Affiliate under the Program with respect to the Product in the Territory (i.e., the Promotion of the Product by
Cubist or its Affiliate (including Details), and the CSD Activities with
respect to the Product).

 

(tt)                “Cubist Speaker Programs”
has the meaning ascribed to such term in Section 3.3.

 

(uu)              “Cubist Trademarks”
means (i) the Trademarks of Cubist and its Affiliates set forth on Exhibit 

G-1, and any pending or future Trademark registrations, applications and
unregistered Trademark rights, in each case relating to such Trademarks, and (ii) any
current or future modifications or variants of any of the foregoing rights.

 

(vv)              “Designated Medical Affairs Representatives”  has the
meaning ascribed to such term in Section 5.1.

 

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

 

10

 

(ww)             “Detail” means that part of a Call during
which a Representative makes a presentation of the Product to a Target
Prescriber such that the relevant characteristics of the Product are described
by the Representative consistent with the requirements of this Agreement and
Applicable Law and in a manner that is customary in the industry for the
purpose of promoting a prescription pharmaceutical product.  When used as a verb, “Detail” means to engage
in a Detail.

 

(xx)               “Disclosing Party” means the party disclosing
Confidential Information.

 

(yy)              “Dispute” means any dispute arising between
the parties in connection with or relating to this Agreement, the transactions
contemplated hereby or any document or instrument delivered in connection
herewith or therewith, other than a dispute that is referable to an accounting firm pursuant to Section 6.2(d).

 

(zz)               “Dispute Notice” has the meaning ascribed to
such term in Section 16.1(a).

 

(aaa)             “Effective
Date” has the meaning ascribed to such term in the Preamble.

 

(bbb)            “Employment
Law” means all federal, state, or local statutes, laws, ordinances,
regulations or guidelines relating to (i) employment, (ii) safety and
health, and (iii) the payment of taxes and required taxes and payments
with respect to employees.

 

(ccc)             “Escalation Period”
has the meaning ascribed to such term in Section 16.1(b).

 

(ddd)            “FDA”
means the United States Food and Drug Administration and any successor agency
having substantially the same functions.

 

(eee)             “Field
Alert” has the meaning ascribed to such term in Section 8.1(i).

 

(fff)               []* has the meaning ascribed to such
term in Exhibit A.

 

(ggg)            []* means, with respect to any period,
Net Sales for such period, less []*.

 

(hhh)            “Gross
Sales” means, for a given period, all sales of the Product during
such period []* by or on behalf of AstraZeneca or its Affiliates to
Third Parties in the Territory (regardless of whether AstraZeneca or its
Affiliates have received more or less than the []*.  For purposes of determining Gross
Sales, (i) the Product shall be deemed to be sold when shipped, and (ii) sales,
transfers or dispositions of the Product for charitable or pre-clinical or
clinical studies purposes shall be excluded from Gross Sales, and (iii) sales
or transfers of the Product among AstraZeneca and its Affiliates shall be
excluded from Gross Sales, provided that any subsequent sale to a Third Party
in the Territory shall be included.

 

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

 

11

 

(iii)                “Hiring
Profile” means, in the case of a position within the Sales Force or
CSD Force, the minimum qualifications that Cubist requires with respect to such
position based on its standard operating procedures, as such minimum
qualifications may, subject to Section 3.4(a), be modified by Cubist from
time to time.

 

(jjj)                “Indemnification
Claim Notice” has the meaning ascribed to such term in Section 14.4(a).

 

(kkk)             “Indemnified
Party” has the meaning ascribed to such term in Section 14.4(a).

 

(lll)                “Indemnifying
Party” has the meaning ascribed to such term in Section 14.4(a).

 

(mmm)          “Infectious
Disease Prescriber” means an infectious disease physician identified
on that certain list of infectious disease prescribers provided by []* in electronic form to []* on the Effective Date, as such list
may be amended from time to time in accordance with this Agreement.

 

(nnn)            “Infectious Disease Target
Account” means any acute care institution where an Infectious
Disease Prescriber practices, is employed or otherwise provides services.

 

(ooo)            “Initial
CSD Training Materials” means those certain initial training
materials provided to Cubist by AstraZeneca for training the CSDs.

 

(ppp)            “Initial
CSD Training Plan” means that certain plan with respect to training
the CSD Force set forth in Exhibit F-2, as such plan may be
modified from time to time in accordance with this Agreement.

 

(qqq)            “Initial CSD Training Program” means that
certain training program to be provided to CSDs by AstraZeneca in accordance
with Section 4.2.

 

(rrr)               “Initial Promotional Materials”  has
the meaning ascribed to such term in Section 3.5.

 

(sss)             “Initial
Sales Training Materials” has the meaning ascribed to such term in Section 4.1(b).

 

(ttt)               “Initial
Sales Training Plan” means that certain plan with respect to
training the Sales Force set forth in Exhibit F-1, as modified from
time to time in accordance with this Agreement.

 

(uuu)            “Initial
Sales Training Program” has the meaning ascribed to such term in Section 4.1(c).

 

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

 

12

 

(vvv)            “International Accounting
Standards”  means those accounting standards established by
the International Accounting Standards Board from time to time.

 

(www)          []*.

 

(xxx)              []*.

 

(yyy)            “Key
Opinion Leader” or “KOL”
means a medical professional recognized as a leading expert in his or her
respective field with a primary focus on treating infections in the acute care
setting or conducting research related to treatment of acute infections in the
Territory, including any person set out on that certain list of such medical
professionals provided by AstraZeneca to Cubist on the Effective Date.

 

(zzz)              []*  means []* and each of their respective
successors and assigns.

 

(aaaa)           “Know-how”
means all technical knowledge, expertise, skill, practice, market research
data, marketing and sales data and any other marketing-related data,
proprietary rights, regulatory approvals, discoveries, inventions,
improvements, trade secrets, copyrights and processes relating to the Product
and all preclinical, clinical, stability and other data relating to the
Product.

 

(bbbb)         “Legal Matter” means any Dispute with respect to the existence,
negotiation, validity, formation, interpretation, breach, performance or
application of this Agreement.

 

(cccc)           “Losses”
has the meaning ascribed to such term in Section 14.2.

 

(dddd)         “National
Sales Meeting” has the ascribed to such term in Section 4.1(d).

 

(eeee)           “NDA” means a “New
Drug Application,” as defined in the Act.

 

(ffff)             “NDC”
means a national drug code.

 

(gggg)         “Net Sales” means, with respect to any
period, Gross Sales for such period less deductions, to the extent actually
taken or allowed and not for promotional purposes for:  []*. 
Deductions pursuant to subsection (viii) above shall be taken in
the Calendar Quarter in which the []*, in accordance with International
Accounting Standards.  Any of the
deductions specified in this definition that involves a payment or credit shall
be taken as a deduction in the Calendar Quarter in which the payment or credit
is accrued by AstraZeneca or its applicable Affiliate, in accordance with
International Accounting Standards.  For
purposes of determining Net Sales, the Product shall be deemed to be sold when
shipped, and transfers or dispositions of the Product for charitable purposes
or pre-clinical or clinical studies purposes, and sales or transfers of the
Product among AstraZeneca and its Affiliates (provided that any subsequent sale
to a Third Party shall be included) shall be excluded from Net Sales.  If, as part of any managed care program or
arrangement, the Product is sold with other products such that it is not
possible to determine which of the deductions set forth above are specifically
attributable 

 

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

 

13

 

to the Product, then AstraZeneca shall apportion the
deductions across the bundle of products on a fair and reasonable basis.  Notwithstanding anything contained herein, in
no event shall any category of expense, to the extent included in AstraZeneca’s
determination of the Cost of Goods for a given period, be taken as a deduction
in the calculation of Net Sales for such period.

 

(hhhh)         “Notice”
means any notice, request, report, statement or other communication to either
party by the other party pursuant to, in connection with, or relating to, this
Agreement.

 

(iiii)              “Nurse In-Service”
means []*.

 

(jjjj)              “Off-Label
Information” means any written, printed, graphic or oral information
with respect to the Product that is inconsistent with, or outside the scope of,
the approved labeling for the Product in the Territory.

 

(kkkk)          “Other Meropenem Product” means []*.

 

(llll)              “PDMA”
means the Prescription Drug Marketing Act of 1987, as amended, and the rules,
regulations and guidelines promulgated thereunder and in effect from time to
time.

 

(mmmm)     “Pediatric Prescriber”
means a physician who is an infectious disease physician, or an intensivist or
critical care physician, who practices, is employed by or otherwise provides
services at a Pediatric Target Account.

 

(nnnn)         “Pediatric
Target Accounts” mean those certain pediatric acute care
institutions identified on that certain list of pediatric target accounts
provided by []* in electronic
form to []* on the Effective
Date, as such list may be amended from time to time in accordance with this
Agreement.

 

(oooo)         “Performance
Report” has the meaning ascribed to such term in Section 3.11(a).

 

(pppp)         “Person”
means any individual or entity, including a government or political
subdivision, department or agency of a government.

 

(qqqq)         “PIR”
has the meaning ascribed to such term in Section 3.8(b).

 

(rrrr)             “Primary
Detail” means a Detail []*.

 

(ssss)           “Proceeding(s)” has the meaning ascribed to such term in Section 14.1(b)(ii).

 

(tttt)             “Product” means any form of meropenem
(including that form of meropenem in prescription form marketed by AstraZeneca
under the Product NDA as of the Effective Date) that is sold by AstraZeneca or
its Affiliates in the Territory, but excluding []*.

 

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

 

14

 

(uuuu)         “Product Incentive Compensation”
has the meaning ascribed to such term in Section 3.15.

 

(vvvv)         “Product Inventory” means the inventory of finished
Product held by AstraZeneca or its Affiliates and []* for sale or distribution in the Territory.

 

(wwww)      “Product Labels
and Inserts” means (i) all labels and other written, printed or
graphic matter affixed to any container, packaging or wrapper utilized in
connection with the Product, or (ii) any written material physically
accompanying the Product, including Product package inserts.

 

(xxxx)           “Product NDA”
means any NDA for any product sold by AstraZeneca under the Trademark Merrem
(including that form of meropenem in prescription form currently marketed by
AstraZeneca as of the Effective Date).

 

(yyyy)         “Product
Quality Complaint” means any and all manufacturing or
packaging-related complaints related to the Product, including (i) any
complaint involving the possible failure of the Product to meet any of the
specifications for the Product; (ii) any dissatisfaction with the design,
package or labeling of the Product; or (iii) any Adverse Event that may
involve the quality of the Product, including lack of effect, infection, or
request for testing.

 

(zzzz)           “Product
Trademarks” means (i) the Trademark Merrem® and the
registrations thereof, (ii) any pending or future Trademark registration
applications relating to the Product, (iii) any unregistered Trademark
rights relating to the Product as may exist through use prior to or as of the
Effective Date, (iv) any current or future modifications or variants of
any of the foregoing rights, and (v) any future Trademarks adopted by
AstraZeneca or its Affiliates for use in connection with the Product.  For the avoidance of doubt, “Product
Trademarks” shall not include any AstraZeneca Housemarks.

 

(aaaaa)         “Program”
means (i) the program of Promotion, including Details, to be conducted by
Cubist during the Term in accordance with the terms of this Agreement and (ii) the
CSD Activities.

 

(bbbbb)       “Program
Commencement Date” means July 21, 2008.

 

(ccccc)         “Program
Employees” means all members of the Sales Force and the CSD Force
and all other employees of Cubist directly engaged in the performance of Cubist’s
obligations hereunder.

 

(ddddd)       “Promotion”
means those activities normally undertaken by a pharmaceutical company’s sales
force and its supervisors and managers, to implement marketing plans and
strategies aimed at encouraging the appropriate use or sale of a particular prescription
or other pharmaceutical product, including detailing.  When used as a verb, “Promote” means to engage in such activities.

 

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

 

15

 

(eeeee)         “Promotional
Materials” means (i) all written, printed, electronic and
graphic materials, other than Product Labels and Inserts, provided by
AstraZeneca or its Affiliate to Cubist in accordance with this Agreement for
use by Representatives during Details, including reminder items and materials
used in the Cubist Speaker Programs (i.e., the slide
decks) and the Initial Promotional Materials, and (ii) any copies, in any
form, of any of the foregoing made by Cubist in accordance with the Agreement.

 

(fffff)            “Promotion Plan”  means that certain promotion plan set forth on Exhibit M,
as such plan is modified from time to time in accordance with this Agreement.

 

(ggggg)       “Public
Announcement” means public announcements, press releases, investor
calls, or advertising, recruiting and other public documents.

 

(hhhhh)       “Quarterly
Amount Due” has the meaning ascribed to such term in Exhibit A.

 

(iiiii)             “Quarterly
Baseline Sales” has the meaning ascribed to such term in Section 6.1(a).

 

(jjjjj)             “Receiving
Party” means the party receiving or having access to Confidential
Information of the other party.

 

(kkkkk)        “Recipients” has
the meaning ascribed to such term in Section 12.1.

 

(lllll)             “Representative”
means a sales representative primarily focused on infectious diseases and
therapeutic areas related thereto in
the Territory employed by Cubist or any of its Affiliates and whom Cubist or
such Affiliate has hired using its own recruiting and hiring standards and who
satisfies the Hiring Profile for sales representatives and who has completed
the Initial Sales Training Program.  For the avoidance of doubt, the
definition of Representatives excludes CSDs. 
Cubist’s regional account managers (i.e., sales
representatives who work primarily in the outpatient setting) are hereby
excluded from (i) the definition of Representatives and (ii) the term
“sales representatives,” as such term is used in this Agreement.

 

(mmmmm)   “Royalties” means any royalties or other amounts due as consideration for
a license or other grant of intellectual property rights payable by AstraZeneca
or any of its Affiliates if and to the extent that such license or grant of
rights is necessary or reasonably useful to make, have made, use, import, sell
or offer for sale the Product in the Territory, []* with respect to the sale of the Product in the Territory.

 

(nnnnn)       “Sales Force”
means all of the Representatives and their direct supervisors, managers and
trainers, in each case who are employed by Cubist or an Affiliate thereof.

 

(ooooo)       “Sales
Training Materials”
means the Initial Sales Training Materials and any updates or supplements
thereto provided by AstraZeneca or its Affiliates to Cubist pursuant to Section 4.1(e).

 

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

 

16

 

(ppppp)       “Scientific Support Dispute”
means any Dispute with respect to any medical affairs or scientific support
matter with respect to the Product, including any matter relating to (i) the
conduct of the CSD Activities, (ii) any modification of the Initial CSD
Training Plan or (iii) any additional training materials pursuant to Section 4.2(h).

 

(qqqqq)       “Secondary Detail” means a Detail []*.

 

(rrrrr)            “Significant
Market Event” means any:

 

(i)          []*

 

(ii)         []*

 

(iii)        []*

 

(iv)       []*

 

(v)        []*

 

(vi)       []*

 

(vii)      []*

 

(viii)     []*

 

(each of the foregoing significant market events set
out in subsections (i) through (viii), a “Type I SME”),

 

(ix)        []*

 

(x)         []*

 

(xi)        []*

 

(xii)       []*

 

(xiii)      []*

 

(xiv)      []*

 

(xv)       []*

 

(xvi)      []*

 

(each of the foregoing significant market events set
out in subsections (ix) through (xvi), a “Type II SME”).  For
purposes of this definition the phrase []*.

 

(sssss)         “Significant Stockout”
means []*.

 

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

 

17

 

(ttttt)            “Specific AZ
Business Policies” means (i) those certain AstraZeneca business
policies specified in Exhibit B-2, and (ii) any other business
policy adopted by AstraZeneca after the Effective Date that covers subject
matter that is substantially similar to a business policy described in the
foregoing clause (i) (or a subset of such subject matter).

 

(uuuuu)       “Specific
Cubist Business Policies” means (i) those certain Business
Policies specified in Exhibit B-1, and (ii) any other Business
Policy adopted by Cubist after the Effective Date that covers subject matter
that is substantially similar to a Business Policy described in the foregoing
clause (i) (or a subset of such subject matter).

 

(vvvvv)       “Stepped
Amount” has the meaning ascribed to such term in Exhibit A.

 

(wwwww)   “Stockout” means:

 

(i)          any failure by
AstraZeneca []*

 

(ii)         any failure by
AstraZeneca []*

 

(iii)        []*, or

 

(iv)       if the []*.

 

A Stockout shall be deemed to have ceased as of the
date on which:

 

(A)       in the case of clause (i),
[]*

 

(B)        in the case of clause
(ii), []*

 

(C)        in the case of clause
(iii), []*, and

 

(D)        in the case of clause
(iv), []*.

 

(xxxxx)         “Sumitomo”
means Sumitomo Pharmaceuticals Co. Limited and its successors and assigns.

 

(yyyyy)      “Sumitomo License”
means that certain agreement between Sumitomo Pharmaceuticals Co.,
Limited and AstraZeneca UK Limited, as an indirect assignee of Imperial
Chemical Industries PLC, dated as of December 7, 1990, as such agreement
has been and may be amended from time to time.

 

(zzzzz)          “Systems” has the meaning ascribed to such term in Section 3.12.

 

(aaaaaa)      “Target
Accounts” means the Infectious Disease Target Accounts, the Critical
Care Target Accounts and the Pediatric Target Accounts.

 

(bbbbbb)    “Target
Prescribers” means Infectious Disease Prescribers, Critical Care
Prescribers and Pediatric Prescribers.

 

(cccccc)      “Term”
has the meaning ascribed to such term in Section 15.1.

 

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

 

18

 

(dddddd)     []*.

 

(eeeeee)       “Territory”
means the United States of America, including Puerto Rico and the District of
Columbia, but excluding any other territories or possessions of the United
States of America.

 

(ffffff)           “Third
Party” means any Person other than the parties and their respective
Affiliates.

 

(gggggg)     “Third Party
Claim” has the meaning ascribed to such term in Section 14.2.

 

(hhhhhh)     “Trademark”
means any trademark, trade dress, brand mark, trade name, brand name, corporate
name, logo or business symbol.

 

(iiiiii)             “Wholesale Acquisition Cost” means AstraZeneca’s published list price for the Product in the
Territory (which list price, for clarity, does not include prompt pay or other
discounts, rebates or reductions in price) for the month in which the
applicable sale of the Product occurred, as such list price is publicly
reported by AstraZeneca.

 

1.2           Construction.

 

Unless the context of
this Agreement otherwise requires: (a) words of any gender include each
other gender; (b) words using the singular or plural number also include
the plural or singular number, respectively; (c) the terms “hereof,” “herein,”
“hereby” and derivative or similar words refer to this entire Agreement; (d) the
terms “Article,” “Section,” “Schedule” or “Exhibit” refer to the specified
Article, Section, Schedule or Exhibit of this Agreement; (e) the term
“or” has, except where otherwise indicated, the inclusive meaning represented
by the phrase “and/or”; and (f) the term “including” or “includes” means “including
without limitation” or “includes without limitation.”

 

ARTICLE II - ENGAGEMENT

 

2.1           Engagement of Cubist.

 

AstraZeneca hereby
engages Cubist, and Cubist hereby accepts such engagement, to Promote
(including to Detail), and engage in CSD Activities with respect to, the
Product, and to train its Representatives, CSDs and other employees to conduct
Cubist Program Activities, in each case, itself or through any of its
Affiliates, in the Territory, commencing on the Effective Date and continuing
thereafter during the Term, pursuant to the terms hereof.  Such engagement, with respect to Detailing of
Target Prescribers during the Term shall be on an exclusive basis (including as
to AstraZeneca and its Affiliates), commencing as of the Program Commencement
Date, []*.  From time to time, including as may be
reasonably requested by Cubist, AstraZeneca shall keep Cubist reasonably
apprised of any Promotion of the Product by AstraZeneca.

 

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

 

19

 

2.2           Conduct of Employees.

 

Each
party shall be legally responsible and liable for the actions, omissions and
conduct of all of its employees that conduct activities with respect to the
Product pursuant to this Agreement; provided that the foregoing shall be
without limitation of, or expansion to, any obligations of the other party
under this Agreement (including under Section 14.2 or Section 14.3,
as applicable).

 

ARTICLE III- PROMOTION AND OTHER SERVICES

 

3.1           Sales Force
Obligations.

 

(a)             Commencing as of the
Program Commencement Date and during each Calendar Year of the Term, Cubist
shall ensure that the Representatives:  (i) []*,
Detail the Product during []* to Infectious Disease Prescribers []*, (ii) Detail
the Product to Critical Care Target Accounts as required by the Promotion Plan,
and (iii) Detail the Product to Pediatric Target Accounts as required by
the Promotion Plan.  In no event shall a
Detail be counted in fulfillment of Cubist’s obligations under more than one of
clauses (i) through (iii) of this Section 3.1(a).  Cubist shall ensure that (A) each Detail
by a Representative to []* is a Primary Detail, and (B) each Detail by a
Representative to []* is a Primary Detail or a Secondary Detail.  Cubist’s obligations to conduct Detailing of
the Product pursuant to this Section 3.1(a) shall be []*.  If Cubist plans, or is required,
to substantially modify its approach to []* in a manner that would be
reasonably likely to []*,  then
Cubist shall notify AstraZeneca in writing as promptly as practicable in
advance of such planned modification or requirement (or, in the case of a
requirement, if advance notice is not possible, promptly after the imposition
of such requirement).  If requested by
AstraZeneca within ten (10) calendar days after AstraZeneca’s receipt of
such notice from Cubist, the parties shall discuss in good faith whether to
amend this Agreement to modify the manner in which Cubist’s level of []* is
determined pursuant to this Section 3.1(a) to ensure that such
planned modification or any such requirement that is the subject of Cubist’s
notice does not have the effect of reducing Cubist’s level of Detailing effort
with respect to the Product hereunder. 
If the parties do not mutually agree on whether or not to make such
amendment, or the terms or conditions of such amendment, within thirty (30)
calendar days after such a request by AstraZeneca, then AstraZeneca shall have
the right to terminate this Agreement upon sixty (60) calendar days written
notice to Cubist, provided that AstraZeneca exercises such right no later than
sixty (60) calendar days after AstraZeneca’s receipt of such notice from
Cubist.  Without limitation of any of the
foregoing, Cubist shall notify
AstraZeneca in writing as promptly as practicable of any such cessation or any
planned cessation of the Promotion of Cubicin.

 

(b)             At least ninety (90)
calendar days prior to the commencement of each Calendar Year commencing with
Calendar Year 2010, the parties shall update the Promotion Plan to specify []* to be conducted by Cubist with
respect to the Critical Care Target Accounts and the Pediatric Target Accounts
for such Calendar Year.  In addition to
the foregoing annual updates, the parties may modify the Promotion Plan from
time to time by written agreement.

 

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

 

20

 

(c)             If either party
desires to modify the list of institutions constituting the Target Accounts, []*.

 

(d)             Cubist shall ensure
that the number of Representatives at all times after the Program Commencement
Date and during the Term is not less than []*. 
Notwithstanding the foregoing, Cubist may have a vacancy rate with
respect to the Representatives not to exceed []* of such minimum required
number of Representatives, provided that Cubist shall use Commercially Diligent
Efforts to promptly fill any Representative vacancy, or otherwise achieve the
minimum required number of Representatives.  Cubist shall perform its Promotion
and Detail obligations hereunder exclusively through the Sales Force.

 

(e)             If reasonably
requested by AstraZeneca, and only if and to the extent reasonably required by
AstraZeneca to comply with Applicable Law (including complying with AstraZeneca’s
Adverse Event reporting obligations under Applicable Law), Cubist shall provide to AstraZeneca a list of
the identifying numbers for each Representative (but not the Representative
names or any other personally identifiable information of the Representatives)
and to the extent that Cubist has such information, []* with respect to the
Representatives, which list and information shall be updated from time to time
to account for Representative turnover.  For the avoidance of doubt, and without limiting ARTICLE XII, any such background information with
respect to any member of the Sales Force provided to AstraZeneca pursuant to
this Section 3.1(e) is the Confidential Information of Cubist, and
AstraZeneca shall limit disclosure of such Confidential Information relating to
any member of the Sales Force to only those employees  of AstraZeneca who
have a need to know such information for purposes of compliance with
AstraZeneca’s reporting and other obligations under Applicable Law.  Upon request, AstraZeneca shall provide Cubist
with a list of all of AstraZeneca’s employees who have received or otherwise had access to, or are
anticipated to receive or otherwise have access to, any such Confidential Information.

 

3.2           CSD Obligations.

 

(a)             Commencing as of the
Program Commencement Date and during the Term, Cubist shall be responsible for
performing all of the CSD Activities. 
Cubist shall ensure that the number of CSDs on the CSD Force is at all
times, commencing as of the Program Commencement Date and during the Term, not
less than []*.  Notwithstanding the
foregoing, Cubist may have a vacancy rate with respect to the CSD Force not to
exceed []* of such minimum required number of CSDs, provided that Cubist shall
use Commercially Diligent Efforts to promptly fill any CSD vacancy, or
otherwise achieve the minimum required number of CSDs.  Cubist
shall perform the CSD Activities exclusively through the CSD Force.

 

(b)             Subject to complying
with its obligations under Section 3.9(b), AstraZeneca, in its discretion
and at its sole expense, may develop and provide materials to be used by the
CSDs in connection with their interactions with Third Parties with respect to
the Product (such materials, “AstraZeneca CSD Materials”).  AstraZeneca shall ensure that all AstraZeneca
CSD Materials comply with Applicable Law and AstraZeneca’s applicable business
policies (to the extent consistent with Applicable Law and this
Agreement).    If Cubist desires that one or more CSDs use or provide any materials,
other than those provided by AstraZeneca 

 

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

 

21

 

or its Affiliates,
in connection with any interactions with Third Parties with respect to the
Product, Cubist, in its discretion and at its sole expense, may develop and
provide scientific article reprints, slide presentations and such other
materials as Cubist may []* consistent with Applicable Law and (to the
extent consistent with Applicable Law and this Agreement) the Business Policies (such materials, the “Cubist CSD Materials” and, together with the AstraZeneca CSD
Materials, the “CSD Materials”).  In no event shall any Cubist CSD Materials be
distributed to any Third Party in connection with the performance of the Cubist
Program Activities unless such Cubist CSD Materials have been approved in
writing by AstraZeneca for distribution to Third Parties (except if and to the
extent that Cubist is required by Applicable Law to distribute such materials
to Third Parties).  Cubist shall
ensure that all Cubist CSD Materials comply with Applicable Law and the
Business Policies (to the extent consistent with Applicable Law and this
Agreement).

 

(c)             The CSDs shall not use any written, printed,
electronic or graphic material in their performance of the CSD Activities in
substantive interactions with a Third Party with respect to the Product other
than the CSD Materials.

 

(d)             If reasonably
requested by AstraZeneca, and only if and to the extent reasonably required by
AstraZeneca to comply with Applicable Law (including complying with AstraZeneca’s
Adverse Event reporting obligations under Applicable Law), Cubist shall provide to AstraZeneca an
identifying number for each CSD (but not the CSD names or any other personally
identifiable information of the CSDs) and to the extent that Cubist has such
information, []* with respect to the CSDs, which list and information shall be
updated from time to time to account for CSD turnover.  For the avoidance of doubt, and without
limiting ARTICLE XII, any such
background information with respect to any member of the CSD Force provided to
AstraZeneca pursuant to this Section 3.2(d) is the Confidential
Information of Cubist, and AstraZeneca shall limit disclosure of such
Confidential Information relating to any member of the CSD Force to only those
employees  of AstraZeneca who have a need to know such information for purposes of
compliance with AstraZeneca’s reporting and other obligations under Applicable
Law.  Upon request, AstraZeneca shall
provide Cubist with a list of all of AstraZeneca’s employees who have received or otherwise had
access to, or are anticipated to receive or otherwise have access to, any such Confidential Information.

 

3.3           Speaker Programs.

 

(a)             Cubist, []* implement promotional speaker
programs concerning the Product (including through a Third Party vendor as set
forth below in this Section 3.3(a)) (“Cubist
Speaker Programs”).  The
Cubist Speaker Programs may be directed to []*.  At least one
Representative shall attend each Cubist Speaker Program.  Notwithstanding anything contained herein,
the parties acknowledge and agree that Cubist shall have the right to implement
Cubist Speaker Programs through a Third Party vendor that is reasonably
acceptable to AstraZeneca.  []*.

 

(b)             The development,
approval and implementation of the Cubist Speaker Programs, including the
content used therein, shall be subject to the procedures set forth in Exhibit D.   Notwithstanding anything in Exhibit D to
the contrary, Cubist shall not use any 

 

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

 

22

 

written, printed, electronic or graphic material to Promote the Product
during a Speaker Program other than (i) the Product Labels and Inserts,
and (ii) Promotional Materials (including reminder items and slide decks)
(as provided by AstraZeneca or its Affiliates, or, if applicable, reproduced by
Cubist in accordance with this Agreement).

 

(c)             For clarity, the
Cubist Speaker Programs, and any activities in support thereof, shall not
constitute Details for purposes of Section 3.1(a).

 

(d)             AstraZeneca shall
ensure that all slide decks provided by AstraZeneca or its Affiliates to Cubist
for use in the Speaker Programs comply with Applicable Law and AstraZeneca’s
applicable business policies (to the extent consistent with Applicable Law and
this Agreement).

 

3.4           Conduct of the
Program.

 

(a)             Cubist represents
that it has disclosed true and correct copies of its Hiring Profiles for its
Sales Force and CSD Force.  If Cubist
desires to modify any Hiring Profile in a manner that would reduce the minimum qualifications for a position on the Sales
Force or CSD Force, Cubist shall notify AstraZeneca in writing of such proposed
modification and provide AstraZeneca at least ten (10) business days to
comment on such proposed modifications, which comments, if any, shall be
considered in good faith by Cubist prior to implementing any such modification.

 

(b)             Cubist shall make
available its Alliance Manager and appropriate management personnel to
periodically accompany (i) Representatives on Calls to Target Prescribers
and to review whether the conduct of such Calls is consistent with the terms of
this Agreement, and (ii) CSDs to review whether the conduct of the CSD
Activities is consistent with the terms of this Agreement.

 

(c)             The Representatives
shall remain exclusively under the supervisory authority of Cubist and Cubist’s
field management.  The CSDs shall remain
exclusively under the supervisory authority of Cubist and Cubist’s CSD
manager(s).

 

(d)             Cubist shall not disseminate any information
to the Representatives []* unless dissemination of such information to
the Representatives has been approved in writing by AstraZeneca.  Cubist shall provide at least ten (10) business
days written notice to AstraZeneca’s Alliance Manager prior to dissemination of
any such information to the Representatives, and AstraZeneca shall
notify Cubist in writing within ten (10) business days after it receives
such notification as to whether or not AstraZeneca approves the dissemination
of such information; []*.  If AstraZeneca does not respond within such
ten (10) business day period, then AstraZeneca shall be deemed to have
approved the dissemination of such information to Representatives.  Any such information disseminated by Cubist
shall comply with Applicable Law and the Business Policies (to the extent
consistent with Applicable Law and this Agreement).

 

(e)             AstraZeneca shall provide to Cubist information
sufficient to allow the Representatives to discuss Product pricing (i) consistent
with the Sales Training Materials or 

 

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

 

23

 

(ii) to the extent required by
Applicable Law.  Cubist shall ensure that
the Representatives discuss Product pricing only in a manner consistent with
the Sales Training Materials.

 

(f)              Any or all of
AstraZeneca’s Vice President of GI and Infectious Disease, AstraZeneca’s Brand
Director for the Product, and AstraZeneca’s Commercial Brand Leader for the
Product, AstraZeneca’s Alliance Manager, and such other persons designated by
AstraZeneca as may be approved by Cubist (such approval not to be unreasonably
withheld) may conduct field observations of the Representatives; provided that (i) such
field observations []*, (ii) such
field observations shall be []* and (iii) []*.

 

(g)             Each party shall
respond, as promptly as practicable, to the other party’s requests for
information relating to the Promotion of the Product and in the control of such
party, to the extent that the requesting party reasonably requires such
information to comply with Applicable Law or to perform its obligations under this
Agreement.

 

(h)             []*.

 

(i)              Except for the
limited role of the CSDs set forth on Exhibit C with respect to
investigator-sponsored studies, AstraZeneca shall retain all rights and
responsibilities with respect to matters relating to the conduct of investigator-sponsored
studies or any clinical studies, including Phase IV studies, with respect to
the Product.  AstraZeneca shall, in a
timely and reasonable manner, including as reasonably requested by Cubist, keep
Cubist informed of the conduct and results of such studies and provide
information and data, in each case (A) that is reasonably required by the
CSD Force in connection with performance of CSD Activities hereunder and (B) solely
to the extent that AstraZeneca has the right to provide such results, information
and data to Cubist.  If the Cubist
Alliance Manager or any CSD receives any inquiry regarding any such matter (to
the extent the CSDs are not responsible for responding to such matter pursuant
to Exhibit C), Cubist shall []*
to refer the Person making the inquiry to AstraZeneca, in a manner directed by
AstraZeneca from time to time.  Cubist
shall not conduct any such study with respect to the Product without the prior
written consent of AstraZeneca.

 

(j)              Cubist shall ensure
that its regional account managers (sales representatives who work primarily in
the outpatient setting) do not Promote the Product.  Cubist’s regional account managers may, for
the avoidance of doubt, participate in the Initial Sales Training Program and
subsequent training conducted by Cubist with respect to the Product.

 

3.5           Promotional
Materials.

 

(a)             The “Initial Promotional
Materials” are those certain promotional materials described in Exhibit N.  AstraZeneca shall use Commercially Diligent
Efforts to []*, in each case as promptly as practicable after the Effective
Date.

 

(b)             In addition to the
Initial Promotional Materials, AstraZeneca, []*, shall be responsible for developing and producing
Promotional Materials hereunder []*,
as and to the extent set forth herein.  []*. 
Subject only to Section 3.9(e),
Cubist shall use the Promotional Materials in connection with the Promotion of
the Product until such time as such Promotional 

 

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

 

24

 

Materials expire or AstraZeneca directs in writing to Cubist that such
Promotional Materials shall no longer be used. 
[]*.  (For clarity, (A) AstraZeneca’s
obligation set forth in the immediately preceding sentence constitutes
AstraZeneca’s sole obligation to []*
Promotional Materials, and (B) without limitation of AstraZeneca’s
foregoing obligation []*,
AstraZeneca shall have the right to direct Cubist to no longer use any given
Promotional Materials.)  AstraZeneca
shall, in its sole discretion (but in compliance with Applicable Law),
determine the content of such Promotional Materials, including the messaging
with respect to the Product, []*;
provided  that AstraZeneca shall include the Cubist Trademarks
in such Promotional Materials in a form and manner to be mutually agreed upon
by the parties (such agreement not to be unreasonably withheld, conditioned or
delayed).  In the event that Cubist
desires AstraZeneca to develop and produce Promotional Materials in addition to
the Promotional Materials previously provided to Cubist by AstraZeneca, Cubist
may propose such additional Promotional Materials to AstraZeneca’s Alliance
Manager for consideration by AstraZeneca; provided  that,
without limitation of Cubist’s rights under Section 3.5(k), AstraZeneca
shall have the sole right to determine whether to develop or produce such
Promotional Materials.

 

(c)             All Promotional
Materials, whether provided by AstraZeneca or its Affiliates or printed by
Cubist, shall be the property of AstraZeneca.

 

(d)             Cubist shall be
responsible, at its expense, for (i) the storage of all Promotional
Materials received from AstraZeneca or printed by Cubist hereunder, and (ii) the
distribution of all Promotional Materials to the Representatives.

 

(e)             AstraZeneca shall be
solely liable and responsible for the content of all Promotional Materials
(excluding any Cubist Trademark) and for ensuring that such Promotional
Materials comply with Applicable Law, []*
(to the extent consistent with Applicable Law and this Agreement) and the
requirements of this Agreement.  []* provided  that, at
a minimum, AstraZeneca shall review any given Promotional Material within []* from the date on which AstraZeneca
last reviewed such Promotional Material. 
AstraZeneca shall notify Cubist in writing of any materials that have
been approved by AstraZeneca for use as Promotional Materials and that such
materials have been so approved, promptly following such approval.

 

(f)              Cubist shall
determine []* the Promotional Materials,
subject to compliance with Applicable Law with respect to the use of such
Promotional Materials in connection with the Product, the terms of this
Agreement and the Business Policies (to the extent consistent with Applicable
Law and this Agreement).  Cubist shall
immediately cease the use of any Promotional Materials (i) when instructed
to do so by AstraZeneca or (ii) as of the expiration date of such
Promotional Materials (as such expiration date is provided to Cubist by
AstraZeneca).  Cubist shall use the
Promotional Materials only for the purposes contemplated by this Agreement and
only in connection with the Promotion of the Product.

 

(g)             Without limiting any
of AstraZeneca’s obligations under this Agreement, Cubist may reproduce any
Promotional Materials that have not expired in connection with its Promotion of
the Product under this Agreement; provided  that such reproduction is (i) in
the same form, and of the same nature and quality, as the original Promotional
Materials, or (ii) done in a manner agreed by AstraZeneca in writing
(provided that 

 

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

 

25

 

if AstraZeneca’s Alliance Manager receives a written request from Cubist, AstraZeneca shall notify
Cubist in writing within ten (10) business days after AstraZeneca’s
Alliance Manager receives such request as to whether or not AstraZeneca
approves the proposed reproduction and if AstraZeneca does not respond within
such ten (10) business day period, then AstraZeneca shall be deemed to
have approved such reproduction).  Cubist
shall not change or otherwise alter the Promotional Materials in any way
(including by underlining or otherwise highlighting any text or graphics or
adding any notes thereto).  AstraZeneca
hereby grants Cubist a non-exclusive, royalty-free license under all copyrights
owned or controlled by AstraZeneca or its Affiliates that cover the Promotional
Materials and all other materials provided by AstraZeneca or its Affiliates to
Cubist in connection with the Product solely for the purpose of copying,
displaying and distributing such Promotional Materials or other materials, to
the extent that such copying, displaying and distributing is permitted hereunder,
for the purpose of satisfying Cubist’s obligations hereunder, which license
shall automatically and immediately terminate upon the expiration or earlier
termination of this Agreement for any reason and shall be non-transferable
(except through a permitted assignment of this Agreement) and
non-sublicensable.

 

(h)             If any member of the
Sales Force leaves the Sales Force, Cubist shall use reasonable efforts to
retrieve from such Person, or have destroyed, all Promotional Materials in his
or her possession and for any Promotional Materials retrieved from such
departing member of the Sales Force that have not yet expired, Cubist shall
provide such Promotional Materials to another member of the Sales Force.

 

(i)              Notwithstanding
anything in this Section 3.5 to the contrary, AstraZeneca shall have the
sole right and responsibility []*
to develop, produce and provide to Cubist reminder items with respect to the
Product (and AstraZeneca shall ensure that such reminder items comply with
Applicable Law, []* (to the
extent consistent with Applicable Law and this Agreement) and the requirements
of this Agreement), for distribution to Target Prescribers in quantities that
are determined by AstraZeneca in its sole discretion.

 

(j)              Cubist shall not use
any written, printed, electronic or graphic material to Promote the Product
during a Detail other than (i) the Product Labels and Inserts, (ii) Promotional
Materials (including reminder items) (as provided by AstraZeneca or its
Affiliates, or, if applicable, reproduced by Cubist) or (iii) other
materials approved by AstraZeneca in writing for use in Details (provided that
if Cubist submits any such materials to AstraZeneca’s Alliance Manager for
AstraZeneca’s review and approval, AstraZeneca
shall notify Cubist in writing within ten (10) business days after
AstraZeneca’s Alliance Manager receives 

such submission as to whether or not AstraZeneca approves such materials and if
AstraZeneca does not respond within such ten (10) business day period,
then AstraZeneca shall be deemed to have approved such materials).  The parties acknowledge and agree that any
such materials shall be subject to review and approval through the AZAP Review
Team []*.

 

(k)             If Cubist plans to
conduct any Promotion activity with respect to the Product in the Territory
other than Detailing and Cubist Speaker Programs (e.g., an exhibit at a tradeshow or similar Promotional or
scientific event), Cubist may do so if AstraZeneca approves such activity in
writing (provided that if Cubist submits any such proposed activity to
AstraZeneca’s Alliance Manager for AstraZeneca’s review and approval, AstraZeneca shall 

 

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

 

26

 

notify Cubist in writing within ten (10) business days after
AstraZeneca’s Alliance Manager receives such submission as to whether or not
AstraZeneca approves such activity and if AstraZeneca does not respond within
such ten (10) business day period, then AstraZeneca shall be deemed to
have approved such activity).  In
connection with any such activity, Cubist shall not use any written, printed,
electronic or graphic material to Promote the Product during such activity other
than (i) the Product Labels and Inserts, (ii) Promotional Materials
(including reminder items) (as provided by AstraZeneca or its Affiliates, or,
if applicable, reproduced by Cubist) or (iii) other materials approved by
AstraZeneca in writing for use in conducting such activity (provided that if
Cubist submits any such materials to AstraZeneca’s Alliance Manager for
AstraZeneca’s review and approval, AstraZeneca shall notify Cubist in writing
within ten (10) business days after AstraZeneca’s Alliance Manager
receives such submission as to whether or not AstraZeneca approves such
materials and if AstraZeneca does not respond within such ten (10) business
day period, then AstraZeneca shall be deemed to have approved such
materials).  The parties acknowledge and
agree that any such materials shall be subject to review and approval through
the AZAP Review Team []*.

 

(l)              Cubist shall not
distribute any Product reminder items after December 31, 2008, and shall
destroy any Product reminder items in Cubist’s possession that have not been
distributed, on or prior to December 31, 2008, in accordance with this
Agreement, provided that Cubist shall not be required to destroy de minimis
quantities of reminder items in the possession of its employees that are
retained for personal or internal use.

 

3.6           No Samples.

 

The parties acknowledge and agree that (a) AstraZeneca
shall have no obligation to provide any samples of the Product and (b) Cubist
shall not distribute any samples of the Product.

 

3.7           Statements about the
Product.

 

Cubist shall ensure that (a) the
Representatives make only those statements and claims regarding the Product,
including as to efficacy and safety, that are consistent with and within the
scope of the Product Labels and Inserts and the then-current Promotional
Materials and Detail the Product in a fair and balanced manner and (b) no
Program Employee provides any Off-Label Information to any Third Party
[]*.  Cubist shall not make any knowingly
untrue or misleading statements or comments about (i) the Product, or (ii) AstraZeneca
or its Affiliates or any of their respective employees.

 

3.8           Requests for Medical
Information.

 

(a)             Notwithstanding
anything in this Agreement or the Business Policies to the contrary, no Program
Employee may respond to or otherwise communicate with any Target Prescriber or
other Third Party with respect to any Off-Label Information  []*.

 

(b)             AstraZeneca shall
have the exclusive right to respond in the ordinary course of its business, to
all questions or requests for information about the Product made by any 

 

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

 

27

 

medical professionals or any other Person to the Representatives or
CSDs, that (i) warrant a response beyond the understanding or knowledge of
the Representative or CSD, as applicable, or (ii) are outside the scope of
the Product Labels and Inserts or the Promotional Materials (each, a “PIR”);
provided that []*.  Cubist shall promptly communicate all PIRs
(other than any PIR for which a
response is provided by a CSD pursuant to Section 3.8(a)) to AstraZeneca
as follows:  by telephone at []*
(or such other number as AstraZeneca may designate from time to time) (which
unpublished number is not to be provided by Cubist to Third Parties), 8:00 a.m. – 6:00 p.m. ET, Monday
through Friday, excluding holidays, or completing an electronic Web PIR Form at
[]*, or such other website address as AstraZeneca may designate from time to
time.  Cubist shall have the right at its option to include a hyperlink to
such website address on Cubist’s internal website for the Product in a
form and manner to be mutually agreed upon by the parties (such agreement not
to be unreasonably withheld, conditioned or delayed).  Cubist may also provide the
following published number 1-800-236-9933 (or such other number as AstraZeneca
may designate from time to time)  to
medical professionals (and any other Persons who make any PIRs) for such
Persons to contact the AstraZeneca Information Center directly (provided that
the foregoing shall not limit Cubist’s obligations set out above in this Section 3.8(b) with
respect to any PIRs).  Cubist may at its
option require a signed document from any Person making an unsolicited inquiry
before accepting the inquiry.

 

(c)             In connection with
the Program, including the Promotion of the Product, Cubist may inform Target
Prescribers or other medical professionals that they may contact the
AstraZeneca Information Center at 1-800-236-9933 (or such other number as
AstraZeneca may designate from time to time) regarding questions or requests
for information about the Product.

 

3.9           Compliance with Laws
and Policies.

 

(a)             Cubist shall notify
AstraZeneca’s Alliance Manager in writing in advance of any material changes to
the []*.  Any material change to a []* shall require []*; provided that if Cubist submits
such a change to a []* to
AstraZeneca’s Alliance Manager for AstraZeneca’s review and approval, AstraZeneca shall notify Cubist in
writing within ten (10) business days after AstraZeneca’s Alliance Manager
receives such submission as to whether or not AstraZeneca approves such change
to []* and if AstraZeneca does
not respond within such ten (10) business day period, then AstraZeneca
shall be deemed to have approved such change. 
AstraZeneca may []*.  AstraZeneca shall notify Cubist in writing of
any material changes []*.  If requested by Cubist, AstraZeneca shall
provide Cubist with its []*.  Cubist shall adopt, prior to the Program
Commencement Date, a business policy with respect to the conduct of CSD
Activities and upon its adoption, such business policy shall constitute a
Specific Cubist Business Policy.  Such
policy shall require the approval of AstraZeneca as if it were a change to []* pursuant to this Section 3.9(a),
provided, however, that (i) AstraZeneca shall notify Cubist in writing as
promptly as practicable whether it approves such policy, (ii) in no event
shall Cubist be in breach of the immediately preceding sentence due to a delay
by AstraZeneca with respect to such notification, and (iii) in no event
shall Cubist permit its CSDs to interact with Third Parties with respect to the
Product until such policy has been adopted and distributed to the CSDs.

 

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

 

28

 

(b)         Cubist
shall perform all of its obligations under this Agreement in compliance with (i) Applicable
Law, (ii) Employment Law, and (iii) the Business Policies (to the
extent consistent with Applicable Law and this Agreement).  AstraZeneca shall perform all of its
obligations under this Agreement, including its preparation and development of
Promotional Materials, AstraZeneca CSD Materials, the content of Cubist Speaker
Programs, training materials and any other Product-related materials used by
AstraZeneca or its Affiliates or provided to Cubist under this Agreement, in
compliance with (A) Applicable Law, (B) Employment Law, and (C) AstraZeneca’s
business and other applicable policies (to the extent consistent with
Applicable Law and this Agreement).

 

(c)          Each party shall ensure
that all employees of such party or its Affiliates engaged in the performance
of such party’s obligations under this Agreement comply with the requirements
set forth in Section 3.9(b) and the other terms and conditions of the
Agreement.  Cubist shall report on or
before thirty (30) calendar days after the end of each Calendar Quarter to AstraZeneca
all []*.  AstraZeneca shall report on or before thirty
(30) calendar days after the end of each Calendar Quarter to Cubist []*.

 

(d)         Each
party shall screen any employees performing such party’s obligations under this
Agreement against the United States Health and Human Services Office of
Inspector General and Government Services Administration Websites for excluded
persons and shall not utilize any persons determined by such screen to be an
excluded person in connection with the performance of its obligations under
this Agreement.

 

(e)          Notwithstanding
anything in this Agreement to the contrary, neither party shall be required to
take any action if (i) such action would violate any settlement or
judgment to which it may be subject from time to time during the Term, or (ii) such
party reasonably determines, based on the advice of legal counsel or other
appropriate experts, that such action would violate any Applicable Law,
including any such action involving the use or dissemination of any Promotional
Materials (including reminder items), training materials provided by
AstraZeneca or its Affiliates, including the Sales Training Materials and the
CSD Training Materials, or CSD Materials. 
[]*; provided, that the foregoing shall
not limit AstraZeneca’s obligations pursuant to this Section 3.9 or Section 14.2; and provided  further,
that, []*.  For the avoidance of doubt, nothing contained
herein shall limit Cubist’s rights under Section 3.5(f).

 

(f)          Within
a reasonable time after the Effective Date, AstraZeneca shall provide to Cubist
a list of the expiration dates for the Promotional Materials, AstraZeneca CSD
Materials and other materials provided by or on behalf of AstraZeneca or its
Affiliates to Cubist under this Agreement, which list AstraZeneca shall update
from time to time to include additional materials so provided by AstraZeneca or
its Affiliates.

 

3.10         Sales
Meetings.

 

Cubist shall notify
AstraZeneca in writing of Cubist’s sales meeting as promptly as possible after
such sales meetings have been scheduled. 
Upon AstraZeneca’s reasonable request, with reasonable advance
notice, Cubist shall permit AstraZeneca’s Vice
President of GI 

 

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

 

29

 

and Infectious Disease, the
Brand Director for the Product, the Commercial Brand Leader for the Product,
and Alliance Manager to participate, at AstraZeneca’s expense, in those
portions of the sales meetings of Cubist at which promotion and strategies
relating to the Product are discussed, including such portions of Cubist’s
annual sales meeting.  AstraZeneca shall
be afforded the opportunity to make a presentation during any such meeting and
the amount of time allocated to AstraZeneca for any such presentation shall be
reasonable under the circumstances.  AstraZeneca’s
participation in such sales meetings []*.

 

3.11         Reporting
by the Parties.

 

(a)          Reporting by Cubist. 
Subject to Section 3.12, within []* calendar days after the
end of each of the applicable time periods specified below (or, with respect to
Section 3.11(a)(ix), []* business days after the end of the applicable
Calendar Quarter), Cubist shall furnish AstraZeneca with a written report that
provides the following information (which information shall be (x) based
on the information collected by Cubist’s Systems or (y) with respect to
information that is not collected by Cubist’s Systems, as determined by Cubist
in its ordinary course of business) for such time period (each, a “Performance Report”):

 

(i)            on a
monthly and Calendar Quarterly basis, a report substantially in the form
attached as Exhibit J;

 

(ii)           on
a Calendar Quarterly basis, the minimum number of Representatives, the minimum
number of Sales Force management (excluding Representatives), the maximum
number of vacancies, the average time open of any vacancies and the maximum
vacancy rate, in each case with respect to the Representatives for such period,
and the total number of Representatives at the end of such period;

 

(iii)          on a Calendar Quarterly basis, the minimum number of CSDs, the maximum number of vacancies and average time open
of any vacancies, in each case with respect to the CSDs for such period, and
the total number of CSDs at the end of such period;

 

(iv)          on
a Calendar Quarterly basis,  a
report listing the CSD Activities performed substantially in the form attached
as Exhibit K;

 

(v)           at
the end of the second Calendar Quarter and the end of the fourth Calendar
Quarter of each Calendar Year, a list identifying KOLs and institutions to be
targeted by the CSD Force for scientific support;

 

(vi)          on a Calendar Quarterly basis, (A) the number of members of the
Sales Force completing (1) the Initial Sales Training Program, and (2) any
supplemental and updated training for the Promotion of the Product and (B) the
number of members of the CSD Force completing (1) the Initial CSD Training
Plan and (2) any supplemental and updated training in connection with the
Product;

 

(vii)         at the end of the second Calendar Quarter and
the end of the fourth Calendar Quarter of each Calendar Year, the CSD region
plans with respect to the Product;

 

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

 

30

 

(viii)        on a
Calendar Quarterly basis, for each Cubist Speaker Program conducted
during such Calendar Quarter, the program date, the city and state of the
program location, name of the location (as reported by the applicable
Representative), the speaker name and the approximate number of attendees; and

 

(ix)           on a Calendar Quarterly basis, the
list of persons included as []*.

 

(b)         Reporting by AstraZeneca.  Within []* calendar days
after the end of each of the applicable time periods specified below (or, with
respect to any time period less than a Calendar Quarter, []* calendar days
after the end of each of the applicable time periods specified below),
AstraZeneca shall furnish Cubist with a written report containing the following
information  (which information shall be (i) based
on the information collected by AstraZeneca’s systems or (ii) with respect
to information that is not collected by AstraZeneca’s systems, as determined by
AstraZeneca in its ordinary course of business (subject to modification of
AstraZeneca’s standard operating procedures with respect to its products
generally)) with respect to such time period (each, an “AstraZeneca Report”):

 

(i)            on
a weekly and monthly basis, for the Territory, the Product unit sales by
AstraZeneca or any of its Affiliates to distributors and other Third Parties
substantially in the form attached as Exhibit O;

 

(ii)           on
a monthly basis, for the Territory, Product returns to AstraZeneca or its
Affiliates from distributors substantially in the form attached as Exhibit O;

 

(iii)          on a monthly basis, the amount and a detailed
calculation of the Gross Sales and Net Sales (including all deductions (by
category) included in the calculation thereof) substantially in the form
attached as Exhibit P;

 

(iv)          on
a Calendar Yearly basis, the amount and a detailed calculation of the Annual
Amount Due substantially in the form attached as Exhibit Q, which
calculation shall be consistent with the methodology set forth in Exhibit A
for the calculation of the Annual Amount Due; and

 

(v)           on
a monthly basis, AstraZeneca shall provide to Cubist a report with respect to
the Product Inventory substantially in the form attached as Exhibit R.

 

3.12         Information
Technology.

 

Cubist shall have the sole right and responsibility to
determine and provide, at its expense, the information technology systems (the “Systems”)
to be employed by its Program Employees in the performance of Cubist’s
responsibilities under this Agreement with respect to the Promotion of the
Product.  Cubist shall (a) use
Commercially Diligent Efforts to implement Systems with the capacity and
ability to collect the information required to comply with Cubist’s reporting
obligations pursuant to Sections 3.11(a)(i) and 3.11(a)(viii) hereunder  as promptly as practicable following the
Effective Date, and (b) ensure that such Systems are available for use  no later than []* (the “Implementation Date”) to comply with Cubist’s reporting
obligations pursuant to Sections 3.11(a)(i) and 3.11(a)(viii) hereunder.  Without limiting the foregoing, 

 

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

 

31

 

Cubist shall use Commercially Diligent Efforts to make
the Systems available for preliminary use on []* and to generate preliminary reports
pursuant to Sections 3.11(a)(i) and 3.11(a)(viii) hereunder by []*; provided that AstraZeneca acknowledges
that such reports would be preliminary and may be incomplete as Cubist rolls
out and implements the Systems).  During
the period commencing on the Program Commencement Date and continuing until the
Implementation Date, (i) AstraZeneca acknowledges and agrees that the
Systems may not be available or fully operational to generate the reports
required pursuant to Section 3.11(a)(i) and 3.11(a)(viii), and (ii) Cubist
shall instruct the Representatives detailing Cubicin in the Territory to Detail
the Product as a Primary Detail or a
Secondary Detail []* and,
if requested by AstraZeneca, []*.

 

3.13         Certain
AstraZeneca Efforts; Manufacture and Supply of Product.

 

(a)          AstraZeneca
shall, at its cost and expense, have the sole responsibility for the manufacture
and supply of the Product in the Territory. 
AstraZeneca shall use Commercially Diligent Efforts to manufacture or
have manufactured and to supply or have supplied []* during the Term. 
AstraZeneca shall ensure that Product for sale or distribution in the
Territory is manufactured, filled, finished, packaged, labeled, tested, stored,
distributed, promoted (other than Promoted by Cubist hereunder), marketed,
imported, sold and offered for sale in material compliance with the Product
NDA, Applicable Law, AstraZeneca’s applicable business policies (to the extent
consistent with Applicable Law and this Agreement) and the requirements of this
Agreement (including, with respect to the manufacture of the Product, in
compliance with good manufacturing practices (the current standards for
manufacture, as set forth in the Act and applicable regulations and guidelines
promulgated thereunder)).

 

(b)         AstraZeneca
shall notify in writing Cubist as promptly as practicable of the occurrence of
any Stockout.

 

(c)          AstraZeneca shall
maintain the website for the Product in the Territory which is located at
http://www.merremiv.com and http://www.merrem.com during the Term.  AstraZeneca shall update such website(s), []*, so that such website(s) are consistent
with the []*.  Cubist shall have the right at its option to include a hyperlink to such website addresses
for the Product on Cubist’s website in a form and manner that shall be
mutually agreed upon by the parties (such agreement not to be unreasonably
withheld, conditioned or delayed) and subject to AZAP Review Team review []*.

 

3.14         Orders
for Product; Terms of Sale and other Contracting Matters.

 

(a)          AstraZeneca
shall have the sole responsibility and right to fill orders with respect to the
Product.  Cubist shall not take orders
for the Product, but if for any reason Cubist should receive sales orders for
the Product, Cubist shall promptly forward such orders to AstraZeneca.  Subject to AstraZeneca’s obligation set forth
in the second sentence of Section 3.13(a), all orders for the Product
shall be subject to AstraZeneca’s acceptance, in its sole discretion, and
AstraZeneca may cancel any order for the Product, or any part thereof, at any
time after acceptance without thereby incurring any liability to Cubist.  (Nothing in the foregoing is intended to
limit AstraZeneca’s obligations or Cubist’s rights under Section 6.2(f) or
Section 14.2.)  

 

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

 

32

 

AstraZeneca shall be solely responsible for responding to requests from
physicians for individual patients who need the Product but are unable to
afford it.  Any such request received by
Cubist should be forwarded to AstraZeneca for processing in such manner as may
be reasonably requested by AstraZeneca in writing from time to time.  Except as provided in the immediately
preceding sentence, Cubist shall have no obligation with respect to any patient
assistance program of AstraZeneca with respect to the Product.  AstraZeneca shall have the sole right and
responsibility for establishing and modifying the terms and conditions of the
sale of the Product, including the price at which the Product will be sold, whether
the Product shall be subject to any trade or quantity discounts, whether any
discount shall be provided for payments on accounts receivable, whether the
Product shall be subject to rebates, returns and allowances or retroactive
price reductions, the channels of distribution of the Product, and whether
credit is to be granted or refused in connection with the sale of the Product.

 

(b)         Without
limitation of Section 3.14(a), AstraZeneca shall be solely responsible for
all contracting with respect to the sale of the Product, including the setting
of pricing for the Product; provided that AstraZeneca shall notify in writing
Cubist promptly following any change in the Wholesale Acquisition Cost.  AstraZeneca shall be solely responsible for
complying with pricing requirements with respect to the Product in the
Territory under Applicable Law (and related reporting, as set forth in Section 8.1(b))
and Cubist shall have no liability or responsibility with respect thereto.  Except for the CSD Activities as they relate
to hospital formulary committees and hospital buying groups, AstraZeneca shall
be responsible for activities relating to managed care market segments,
including (i) contract strategy, (ii) contract creation, (iii) government
reporting and rebate processing, (iv) contract compliance, monitoring and
audits, (v) contract administration and claims processing, and (vi) any
other matters related to managed care.  []*.

 

3.15         Incentive
Compensation by Cubist.

 

Subject to Applicable
Law, Cubist shall provide to the Representatives who Detail the Product in the
Territory Product Incentive Compensation (as defined below in this Section 3.15)
with respect to the Product, which Product Incentive Compensation shall be paid
to a Representative if such Representative []* (“Product Sales Target”); provided  that
[]*.  “Product Incentive Compensation”
means the incentive compensation payable to a Representative for a given
Calendar Year []*. “Incentive Compensation” means the incentive compensation
payable to a Representative for a given Calendar Year if such Representative
[]*.

 

ARTICLE IV- TRAINING

 

4.1           Sales
Force Training Programs.

 

(a)          Cubist
shall ensure that each sales
representative employed by Cubist or any of its Affiliates who will be
Detailing the Product in the Territory, including all such representatives who
are employed by Cubist or such Affiliate as of the Effective Date  who will be Detailing the Product in the
Territory (provided that they remain in the employ of Cubist or an Affiliate
thereof), and the other members of the Sales Force have been or shall be
trained with 

 

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

 

33

 

respect to compliance with Applicable Law, the applicable requirements
of this Agreement and the Specific Cubist Business Policies (to the extent
consistent with Applicable Law and this Agreement), and specifically in
accordance with the terms of this Section 4.1, subject to AstraZeneca
fulfilling its obligations under this Section 4.1 (including with respect
to providing the Initial Sales Training Materials and any additional Sales Training Materials, as and to the
extent set forth herein).

 

(b)         AstraZeneca
shall develop and provide, at its cost and expense, copies in printed or
electronic form, as determined by AstraZeneca, of the initial training
materials to Cubist sufficient for training the Sales Force with respect to the
Product (“Initial Sales Training Materials”)
and shall use Commercially Diligent Efforts to provide such materials as
promptly as practicable after the Effective Date. The Initial Sales Training Materials shall include those components
set forth on Exhibit L.  AstraZeneca shall be
responsible for the costs and expenses of the Initial Sales Training Program
(including for the Initial Sales Training Materials but excluding any internal
and external costs and expenses incurred by Cubist, including any compensation
paid or for technology provided by Cubist to its personnel for participating in
the Initial Sales Training Program, which costs and expenses shall be borne by
Cubist).  Cubist shall be responsible for
all costs and expenses of any training of its Representatives other than those
for which AstraZeneca is responsible pursuant to this Section 4.1(b).

 

(c)          Cubist
shall (i) ensure that all sales representatives of Cubist or its Affiliate
as of the Effective Date (provided they remain employed by Cubist or its
Affiliate) and any sales representatives subsequently hired by Cubist or its 

Affiliate []*, along with other
members of the Sales Force, are trained using the Initial Training Materials in
accordance with this Agreement (such program, the “Initial
Sales Training Program”) prior to Detailing or otherwise Promoting
the Product (or providing supervision, management or training with respect
thereto) and (ii) permit only
those members of the Sales Force who have completed the Initial Sales Training
Program and who demonstrate a thorough knowledge of the Product and the Product’s
associated disease entities by achieving a minimum score of []* on the
assessment test included in the Initial Sales Training Materials and any
additional tests specified in the Initial Sales Training Plan, which test(s) shall
be administered by Cubist, as instructed by AstraZeneca, to Detail or otherwise
Promote the Product (or provide supervision, management or training with
respect thereto).  Cubist may permit its
Sales Force members to retake such assessment test(s) to the extent
consistent with the Business Policies (to the extent consistent with
Applicable Law and this Agreement).  Cubist shall maintain and make available to
AstraZeneca, upon AstraZeneca’s request, records of such test results.  Cubist shall use reasonable efforts to ensure
that, at all times on and after the Program Commencement Date, by the
applicable dates specified in the Initial Sales Training Plan or as otherwise
agreed by the parties in writing, all Cubist sales representatives who will be
Detailing the Product hereunder have completed the training required by this Section 4.1 with respect to the Product (as demonstrated
by achieving a minimum score of []* on the assessment test included in the
Initial Sales Training Materials and any additional tests specified in the
Initial Sales Training Plan).

 

(d)         Without
limitation of any other provisions of this Section 4.1, the parties shall
coordinate to provide training of the Sales Force with respect to the Product
at Cubist’s national sales meeting (the “National Sales Meeting”) anticipated to be held in July 2008.  

 

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

 

34

 

Such training is intended to be in addition to, not in lieu of, the
Initial Training Program.  Except as
otherwise agreed by the parties in writing or specified in the Initial Sales Training Plan, each
party shall bear its own costs and expenses associated with preparing for,
conducting and participating in the National Sales Meeting, including the costs
and expenses associated with the attendance by such party’s employees at such
National Sales Meeting.  AstraZeneca and
Cubist shall cooperate to prepare and conduct the portion of such meeting
relating to the Product.

 

(e)          AstraZeneca
shall promptly provide to Cubist updated or supplemental training materials for
the Product for the Representatives Detailing the Product if Applicable Law
requires that such training materials be updated or supplemented or if such
materials are inconsistent with Applicable Law. 
In addition, AstraZeneca may from time to time provide to Cubist
supplemental training materials for the Representatives Detailing the
Product.  In such a case, the parties
shall modify the Initial Sales Training Plan to provide for training of the
Representatives of the Sales Force who are or will be Detailing the Product in
the Territory using such training materials within a reasonable time period.  Cubist
shall ensure that the Representatives Detailing the Product are trained using
such training materials and shall use reasonable efforts to ensure that such
Representatives are trained within the time period set forth in the Initial
Sales Training Plan, which plan shall be amended by mutual written agreement of
the Alliance Managers to establish a reasonable time period during which such
training will be completed, taking account of Cubist’s regularly scheduled
training meetings.   (In the
event the parties do not reach agreement on amendment to the plan, Cubist shall
ensure that such training occurs within a reasonable time period after the date
on which AstraZeneca provides the training materials.)

 

(f)          Upon
AstraZeneca’s reasonable request and with reasonable advance notice,
AstraZeneca may, at its own expense, have AstraZeneca’s Vice President of GI
and Infectious Disease, AstraZeneca’s Brand Director for the Product, and
AstraZeneca’s Commercial Brand Leader for the Product, AstraZeneca’s Alliance
Manager, and such other persons designated by AstraZeneca as may be approved by
Cubist (such approval not to be unreasonably withheld), observe Cubist’s Sales
Force training meetings relating to the Product, if any.  To the extent provided in the Initial Sales
Training Plan, AstraZeneca shall, at its own expense, cause its applicable
personnel to participate in Cubist’s Sales Force training meetings relating to
the Product (other than the National Sales Meeting, which is the subject of Section 4.1(d)).

 

(g)         In
the event that Cubist desires to conduct any training of its Sales Force
specifically with respect to the Product using any training materials other
than the Sales Training Materials, Cubist shall obtain the approval of
AstraZeneca of the training materials to be used in connection with such
training prior to conducting such training; provided that AstraZeneca shall review such training materials and
notify Cubist within a reasonable period of time as to whether or not
AstraZeneca approves such training materials (and if AstraZeneca does not
approve any such training materials, such notice shall include the reason for such
non-approval).  The foregoing shall not
require Cubist to obtain any consent to generally train the Sales Force in a
manner consistent with Cubist’s Business Policies or past practices (to the
extent consistent with Applicable Law and this Agreement).

 

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

 

35

 

(h)         AstraZeneca
shall ensure that all Sales Training Materials comply with Applicable Law and
AstraZeneca’s applicable business policies (to the extent consistent with
Applicable Law and this Agreement). 
Cubist shall ensure that training materials provided by Cubist (for
clarity, other than the Sales Training Materials) to train the Representatives
with respect to the Product comply with Applicable Law and the Business
Policies (to the extent consistent with Applicable Law and this Agreement).

 

4.2           CSD
Training.

 

(a)          Cubist
shall ensure that each member of the CSD Force who will be conducting CSD
Activities in the Territory shall be trained with respect to compliance with
Applicable Law and the applicable requirements of this Agreement, and trained
in accordance with the terms of this Section 4.2, subject to AstraZeneca
fulfilling its obligations under this Section 4.2.

 

(b)         AstraZeneca
shall develop and provide, at its cost and expense, the initial CSD training
materials for training the CSD Force with respect to the Product (“Initial CSD Training
Materials”) as
promptly as practicable after the Effective Date.  AstraZeneca shall be responsible for the
costs and expenses of the Initial CSD Training Program (excluding any internal
and external costs and expenses of Cubist, including any compensation paid or
for technology provided by Cubist to its personnel for participating in the
Initial CSD Training Program, which costs and expenses shall be borne by
Cubist).  Cubist shall be responsible for all
costs and expenses of any training of its CSDs other than those for which
AstraZeneca is responsible pursuant to this Section 4.2(b).

 

(c)          Cubist
shall (i) ensure that all members of the CSD Force are trained using the
Initial CSD Training Materials in accordance with this Agreement (such program,
the “Initial CSD Training Program”) prior to
commencing the CSD Activities and (ii) permit only those members of the CSD Force who have completed the Initial CSD Training Program to conduct
CSD Activities.  Cubist shall ensure
that, on and after the Program Commencement Date, all members of the CSD Force
have completed the training required by this Section 4.2, and shall use
reasonable efforts to ensure that such training is completed by the applicable
dates specified in the Initial CSD Training Plan or as otherwise agreed by the
parties in writing.

 

(d)         After
the Program Commencement Date, other than as specified with respect to the
Initial CSD Training Program (and any updates or supplements thereto provided
pursuant to Section 4.2(e)), subject to Section 4.2(h), Cubist shall
be responsible for all training of members of the CSD Force employed by Cubist
or its Affiliate at any time during the Term.

 

(e)          AstraZeneca
shall promptly provide to Cubist updated or supplemental training materials for
the CSD Force if Applicable Law requires that such training materials be
updated or supplemented.  In addition,
AstraZeneca may from time to time provide to Cubist supplemental training
materials for the CSD Force.  In such a
case, the parties shall modify the Initial CSD Training Plan to provide for
training of the CSD Force using such training materials within a reasonable
time period.  Cubist shall ensure that
the members of the CSD Force are trained using such training materials within
the time period set forth in the Initial CSD Training 

 

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

 

36

 

Plan, which plan shall be amended by the parties to establish a
reasonable time period during which such training will be completed, taking
account of Cubist’s regularly scheduled training meetings.  In the event the parties do not reach
agreement on amendment to the plan, Cubist shall ensure that such training
occurs within a reasonable time period after the date on which AstraZeneca
provides the training materials.

 

(f)          Cubist
shall permit only those members of the CSD Force who have completed the Initial
CSD Training Program and demonstrated competency as determined by Cubist’s
management to perform the CSD Activities with respect to the Product in the
Territory under this Agreement.

 

(g)         Upon
AstraZeneca’s reasonable request and with reasonable advance notice,
AstraZeneca may, at its own expense, have AstraZeneca’s Vice President of GI
and Infectious Disease, AstraZeneca’s Alliance Manager, either of AstraZeneca’s
regional scientific managers with respect to the Product, and such other
persons designated by AstraZeneca as may be approved by Cubist (such approval
not to be unreasonably withheld) observe Cubist’s CSD Force training meetings
relating to the Product, if any.  To the
extent provided in the Initial CSD Training Plan, AstraZeneca shall, at its own
expense, cause its applicable personnel to participate in Cubist’s CSD Force
training meetings relating to the Product.

 

(h)         Without
limitation of Cubist’s rights in Section 3.2(b) with respect to
providing Cubist CSD Materials to CSDs, in the event that Cubist desires to
conduct any training of its CSD Force specifically with respect to the Product
using any training materials other than the CSD Training Materials, including
any training conducted pursuant to this Section 4.2(h), Cubist shall
obtain the approval of the Designated Medical Representative of AstraZeneca of
the training materials to be used in connection with such training prior to
conducting such training (provided that if AstraZeneca’s Designated Medical
Representative receives a written request from Cubist, AstraZeneca shall notify Cubist in writing within []* after AstraZeneca’s Designated
Medical Representative receives such request as to whether or not AstraZeneca
approves the proposed training materials and if AstraZeneca does not respond
within such five (5) business day period, then AstraZeneca shall be deemed
to have approved such training materials []*).  In such a case, the parties shall modify the
Initial CSD Training Plan to provide for training of the CSD Force for the
Product using such other materials within a reasonable time period.  For the avoidance of doubt the foregoing
shall not limit Cubist from providing any training materials or conducting any
training of its CSD Force that is general in nature or which relates to
products other than the Product.

 

(i)           Without
limitation of any of the foregoing, Cubist shall ensure that each member of its
CSD Force is properly trained in accordance with Applicable Law, the terms of
this Agreement and the Business
Policies (to the extent consistent with Applicable Law and this Agreement)
to []*.

 

(j)           AstraZeneca
shall ensure that all CSD Training Materials comply with Applicable Law and
AstraZeneca’s applicable business policies (to the extent consistent with
Applicable Law and this Agreement). 
Cubist shall ensure that training materials provided by Cubist (for
clarity, other than the CSD Training Materials) to train the CSDs with respect
to the 

 

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

 

37

 

Product comply with Applicable Law and the Business Policies (to the
extent consistent with Applicable Law and this Agreement).

 

4.3           Return
of Training Materials.

 

(a)          If
any member of the Sales Force leaves the Sales Force, Cubist shall use
reasonable efforts to retrieve from such person, or have destroyed, all Sales
Training Materials and any training materials with respect to the Product
provided by Cubist with respect to the Product in his or her possession  and for any such materials retrieved from
such departing member of the Sales Force that have not yet expired, Cubist
shall, if Cubist determines it is appropriate, provide such Sales Training
Materials and any other training materials with respect to the Product to
another member of the Sales Force.

 

(b)         If any member
of the CSD Force leaves the CSD Force, Cubist shall use reasonable efforts to
retrieve from such person, or have destroyed, all CSD Training Materials and
any training materials with respect to the Product provided by Cubist in his or
her possession and for any such materials retrieved from such departing member
of the CSD Force that have not yet expired, Cubist shall, if Cubist determines
it is appropriate, provide such CSD Training Materials and any other training
materials with respect to the Product to another member of the CSD Force.

 

ARTICLE V - DESIGNATED MEDICAL AFFAIRS REPRESENTATIVES

 

5.1           Appointment.

 

Each party shall designate a “Designated
Medical Affairs Representative”, 
who shall be an employee in such party’s compliance, legal, regulatory
or medical affairs departments with sufficient authority to resolve Scientific
Support Disputes.  The initial Designated
Medical Affairs Representative of each party is set forth in Exhibit E.  Either party may remove its Designated
Medical Affairs Representative and appoint a substitute with comparable
seniority and authority from time to time upon written notice to the other
party.  Either party may refer any
Scientific Support Dispute to the Designated Medical Affairs Representatives
for resolution.

 

5.2           Resolution
of Scientific Support Disputes.

 

The Designated Medical Affairs Representatives shall
endeavor to resolve a Scientific Support Dispute referred to them by consensus
within ten (10) business days after such referral.  If the Designated Medical Affairs
Representatives do not reach consensus within such time period with regard to
any Scientific Support Dispute, other than a Legal Matter or a Dispute with
respect to modifying the Initial CSD Training Program, then []* Designated
Medical Affairs Representative shall have final decision-making authority with
respect to such matter, provided that (a) he or she shall consider []* final decision and (b) he or
shall not have the authority to amend this Agreement or impose any obligation
or expense on []*.  In all other cases, Section 16.1
shall apply.  The Designated Medical
Affairs Representatives shall document in writing their resolution of any
Scientific Support Dispute and any such resolution shall be final and 

 

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

 

38

 

binding on the parties, provided that, for
clarity, the Designated Medical Representatives shall not have any authority to
amend the terms or conditions of this Agreement.

 

ARTICLE VI - CALCULATION AND PAYMENT OF FEES TO CUBIST

 

6.1           Baseline
Sales and Annual Baseline Amounts.

 

(a)          Subject
to modification pursuant to Section 6.1(b), the Annual Baseline Sales for
Calendar Year 2008 (which shall be prorated to reflect the portion of Calendar
Year 2008 commencing on the Baseline Commencement Date through December 31,
2008) and 2009 and the baseline Gross Sales for each Calendar Quarter (“Quarterly Baseline Sales”)  in each such
Calendar Year are set forth in Exhibit A.  For each Calendar Year thereafter, the []*.

 

(b)         In
the event of a Significant Market Event, []*.  Notwithstanding anything contained herein,
unless otherwise agreed in writing by the parties, with respect to any request
pursuant to this Section 6.1(b) for a given Significant Market Event:

 

(i)            if
such Significant Market Event is set forth in Section 1.1(rrrrr)(viii) []*,
Section 1.1(rrrrr)(xiv) []* or Section 1.1(rrrrr)(xv) []*, then,
pursuant to this Section 6.1(b) or Section 16.1, Annual
Baselines Sales and Quarterly Baseline Sales may be increased (but not
decreased) or remain the same;

 

(ii)           if
such Significant Market Event is set forth in Section 1.1(rrrrr)(v) []*,
then, pursuant to this Section 6.1(b) or Section 16.1, Annual
Baselines Sales and Quarterly Baseline Sales may be increased, decreased, or
remain the same; and

 

(iii)          if such Significant Market Event is not
covered by either clause (i) or clause (ii) of this Section 6.1(b),
then, pursuant to this Section 6.1(b) or Section 16.1, Annual
Baselines Sales and Quarterly Baseline Sales may be decreased (but not
increased) or remain the same.

 

If and
to the extent that a Significant Market Event would also constitute a breach of
AstraZeneca’s obligations under this Agreement, then if (x) []*, then such []* such Significant Market Event (but not for any other
occurrences of such Significant Market Event or any other type of Significant
Market Event) []* (but, for the avoidance of doubt, shall not limit: (A) Cubist’s
right to terminate this Agreement pursuant to Section 15.2(b) for
such breach (provided that
Cubist sends AstraZeneca notice pursuant to Section 15.2(b) of such
breach of AstraZeneca’s obligation that corresponds to such Significant Market
Event []*, (B) AstraZeneca’s
indemnity obligations under Section 14.2, or (C) any rights or
remedies that Cubist may have (including under this Section 6.1(b)) with
respect to any other occurrences of such Significant Market Event or any other
type of Significant Market Event).

 

(c)          []*.

 

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

 

39

 

6.2           Cubist
Compensation, Other Amounts Due and Related Obligations.

 

(a)          AstraZeneca
shall pay to Cubist the Annual Amount Due for each Calendar Year during the
Term, as set forth in this Section 6.2 and Exhibit A.  For purposes of calculating the Annual Amount
Due for Calendar Year 2008, the applicable period for making such calculation,
including any intermediate calculation in connection therewith (including the
calculation of Gross Sales, Net Sales, []*)
shall be the period from the Baseline Commencement Date through December 31,
2008.  In addition, and notwithstanding
anything in this Agreement (including in Exhibit A) to the
contrary, the Annual Amount Due for Calendar Year 2008 shall be deemed to equal
[]*.  If the Term ends at any time other than the
end of a Calendar Year, for purposes of calculating the Annual Amount Due for
such Calendar Year (and correspondingly, the Quarterly Amount Due for the last
Calendar Quarter of the Term), (i) the applicable period for making such
calculation, including any intermediate calculation in connection therewith
(including the calculation of Gross Sales, Net Sales []*) shall be the period from the first day of the Calendar Year
(or, in the case of Calendar Year 2008, the Baseline Commencement Date for
Calendar Year 2008) through the last day of the Term and (ii) Annual
Baseline Sales shall be deemed to equal []*.

 

(b)         Subject
to the other provisions of this Section 6.2 and the other terms of this
Agreement (based, in the case of the Quarterly Amount Due for the last Calendar
Quarter of any Calendar Year and the Annual Amount Due, on the applicable
report provided by AstraZeneca to Cubist pursuant to Section 3.11(b)), for
each Calendar Quarter during the Term,
within forty-five (45) calendar days after the end of such Calendar Quarter,
Cubist shall provide AstraZeneca with an invoice for the Quarterly Amount Due
for such Calendar Quarter, or, in the case in which the Quarterly Amount Due
for the last Calendar Quarter of a Calendar Year is less than zero, Cubist shall
refund to AstraZeneca the amount by which Cubist was overpaid by AstraZeneca
for the applicable Calendar Year. 
Subject to the terms of this Agreement, AstraZeneca shall pay to Cubist
in U.S. dollars the amounts reflected on the invoice(s) provided to AstraZeneca
pursuant to this Section 6.2(b) by check or wire transfer in
immediately available funds to an account designated by Cubist, at Cubist’s
option, within fifteen (15) calendar days (after receipt of such invoice.

 

(c)          AstraZeneca
shall keep and maintain complete and accurate books and records sufficient to
support and confirm the calculation (including any deductions) of Annual Amount
Due, []*, Gross Sales and Net
Sales hereunder and shall retain such books and records for a period of at
least three (3) years after the end of the applicable Calendar Year.

 

(d)         (i) If
Cubist disagrees with []* amount
or calculation reported by AstraZeneca pursuant to Section 3.11(b) for
a given Calendar Quarter or Calendar Year, provided that Cubist notifies
AstraZeneca of such disagreement within thirty (30) calendar days after the
receipt of such report, and the parties are unable to resolve the disagreement
within thirty (30) calendar days after such notification, or (ii) if
Cubist desires to have an audit conducted with respect to AstraZeneca’s
determination of []* for a given
Calendar Year, provided that Cubist notifies AstraZeneca of its intention to
have such audit conducted within thirty (30) calendar days after Cubist’s
receipt of AstraZeneca’s calculation of the Annual Amount Due for such Calendar
Year, then the audit provisions in Section 6.2(e) shall apply; 

 

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

 

40

 

provided that, in no event shall Cubist have the right to exercise its
rights under Section 6.2(e) with respect to a given Calendar Quarter
or Calendar Year more than []* (provided that an audit with respect to a
Calendar Year may cover the entire Calendar Year but any determination made
pursuant to a prior audit with respect to a Calendar Quarter in such Calendar
Year shall be binding with respect to such Calendar Quarter for purposes of
such Calendar-Year audit).  With respect
to any challenge by Cubist made pursuant to clause (i), any mutual agreement of
the parties, in writing, with respect to amount or calculation in dispute shall
be binding on the parties.

 

(e)          For
any audit to be conducted pursuant to this Section 6.2(e), Cubist shall
engage an independent nationally recognized accounting firm mutually acceptable
to AstraZeneca and to Cubist.  The
expenses of any independent accounting firm engaged in connection with this Section 6.2(e) shall
be borne by Cubist, except that AstraZeneca shall bear such expenses (x) in
the case in which the amount of the Annual Amount Due for the applicable
period, as reported by AstraZeneca, is less than []* of the amount of the
Annual Amount Due, as determined by such accounting firm, and (y) as set
forth below in this Section 6.2(e).    AstraZeneca
shall provide such accounting firm conducting any audit pursuant to this Section 6.2(e) access
to AstraZeneca’s books and records and its calculations solely to the extent
necessary to confirm the amounts of the Annual Amount Due (including those
certain amounts corresponding to the defined financial terms set forth in Exhibit A
that are used to calculate the Annual Amount Due) (or in the case of an audit
conducted solely for a Calendar Quarter, []*
and the calculations thereof), including to determine the amounts payable to
Cubist under this Agreement.  In the
event that such independent accounting firm determines that the Annual Amount
Due for a given Calendar Year is (i) more than the Annual Amount Due as
calculated by AstraZeneca, then AstraZeneca shall pay to Cubist the difference
between the Annual Amount Due, as determined by such independent accounting
firm, and the Annual Amount Due, as calculated by AstraZeneca, or (ii) less
than the Annual Amount Due as calculated by AstraZeneca, then Cubist shall
refund to AstraZeneca the difference between the Annual Amount Due, as
calculated by AstraZeneca, and the Annual Amount Due, as determined by such
independent accounting firm (an “Overage”)
(provided that Cubist shall have the right to deduct from any Overage the
expenses of the independent accounting firm, and to the extent any amounts
remain after such deduction, refund any remaining amounts to AstraZeneca), in
each case within thirty (30) calendar days after the date on which the
independent accounting firm (or Cubist) first notifies AstraZeneca of the
independent accounting firm’s determination.

 

(f)          Notwithstanding
anything to the contrary in this Agreement (including Exhibit A), in the
case of a []*, for purposes of
calculating the Quarterly Amount Due for the last Calendar Quarter of such
Calendar Year(s) and the Annual Amount Due for a Calendar Year in which
such []* occurred (in whole or
in part), if the actual Gross Sales for the calendar days of such Calendar Year
during which such []* was in
effect []* are less than the
portion of Annual Baseline Sales for such Calendar Year for the calendar days
of such Calendar Year during which such []*
was in effect (i.e., prorated based on the
number of such calendar days) []*,
then Gross Sales for such Calendar Year shall be deemed actual Gross Sales for
such Calendar Year plus the difference between the []* and the []*.  For clarity, nothing in this Section 6.2(f) shall
preclude a party from exercising its rights pursuant to Section 6.1(b) with
respect to a []*.  For clarity, in the case in which []* are greater than or equal to []*.

 

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

 

41

 

(g)         With respect to any amounts due under this Agreement, other than any Quarterly
Amount Due or Annual Amount Due (or any refund by Cubist pursuant to Section 6.2(b)),
the party to which such amounts are due shall (i) provide to the other
party within three (3) business days after the end of the Calendar Quarter
in which such amounts were incurred a report describing such amounts, and (ii) provide
to the other party within thirty (30) calendar days after the end of such
Calendar Quarter an invoice (and reasonable documentation with respect to the
basis for such amounts) for such amounts (or such amounts due that were
incurred in an earlier Calendar Quarter, if not yet invoiced).  The party receiving such an invoice shall pay
to the other party the amounts reflected in such invoice in U.S. dollars by, at
such other party’s option, check or wire transfer in immediately available
funds to an account designated by such other party within thirty (30) calendar
days after receipt of such invoice.

 

(h)         Each
party shall pay interest on any amounts overdue under this Agreement at a rate
of one and one-half percent (1.5%) of the overdue payment per month, or, if
lower than one and one-half percent (1.5%) of the overdue payment per month,
the highest interest rate permitted under Applicable Law.

 

6.3           Maintenance
of Certain Books and Records; Audit Rights.

 

Cubist shall maintain complete and accurate books and
records with respect to whether Cubist has performed its obligations pursuant
to []* of this
Agreement, including books and records to support the information contained in
the reports to be provided to AstraZeneca pursuant to Section 3.11(a), in
each case, []*, if longer, is
required to do so under Applicable Law, but in no event less than three (3) years
from the date of the creation of the applicable records.  Upon reasonable advance notice to Cubist,
AstraZeneca shall be entitled, at its expense, not more than []* in any twelve
(12) month period, to have access to the foregoing records of Cubist, solely if
and to the extent necessary to review such books and records to determine
whether Cubist has performed its obligations pursuant to []*  of
this Agreement or to verify the information contained in the reports to be
provided by Cubist to AstraZeneca pursuant to Section 3.11(a) (an “Audit”), provided that (i) an Audit
shall take place only (x) in the presence of Cubist personnel on site at
Cubist’s offices, or such other location designated by Cubist, (y) during
normal business hours, on such days and at such times as mutually agreed upon
by the parties, and in a manner not disruptive to the business operations of
Cubist, and (z) for a period of no longer than five (5) business days (in the aggregate for a given Audit), or such
longer period as is reasonably requested by AstraZeneca and approved by Cubist,
such approval not to be unreasonably withheld, conditioned or delayed, (ii) no
more than three (3) representatives of AstraZeneca reasonably acceptable
to Cubist shall be permitted to participate in any Audit, and (iii) AstraZeneca
shall not, without the prior written consent of Cubist, be permitted to take
any copies (in any form or medium) of any such books and records (or other
documents of Cubist) from Cubist’s premises or make copies (in any form or
medium) of any such books and records (provided that, for clarity, during an
Audit, AstraZeneca may take notes regarding such books and records).  Each party shall bear its own expenses in
connection with any Audit.  Should
AstraZeneca discover information indicating, in its reasonable opinion, an
inaccuracy in any report provided by Cubist pursuant to Section 3.11(a) or
a material breach of Cubist’s obligations under []*, AstraZeneca shall so notify Cubist in writing thereof (and
shall set out its preliminary conclusions in reasonable detail), provided that
such notice shall not constitute notice of a 

 

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

 

42

 

material breach for purposes of Section 15.2(b)(i) unless
such Section applies and AstraZeneca sends a notice to Cubist pursuant to Section 15.2(b)(i).  Cubist
shall advise AstraZeneca in writing within thirty (30) business days of
receiving such notice should Cubist disagree with the determination of
AstraZeneca.  If the parties are unable
to reach a mutually acceptable resolution of any such disagreement within
thirty (30) business days of AstraZeneca’s receipt of such notice from Cubist, Section 16.1
shall apply.

 

6.4           All
Inclusive.

 

The amounts to be paid by AstraZeneca pursuant to Section 3.3
and Section 6.2 constitute AstraZeneca’s complete obligation to pay Cubist
for the performance of its obligations under this Agreement; provided that the
foregoing shall not limit (a) AstraZeneca’s obligations to pay certain
costs and expenses that AstraZeneca is expressly obligated to pay to Cubist, or
reimburse Cubist for, under this Agreement (including Cubist’s costs or
expenses under Section 8.1(f)), or (b) any of AstraZeneca’s
obligations or any of Cubist’s rights or remedies hereunder (including Cubist’s
right to indemnification pursuant to Section 14.2 and Cubist’s right to
seek and collect any damages and any remedies that may be available in law or
equity).  Except as otherwise expressly
provided herein, Cubist shall be responsible for all of its costs and expenses
incurred in connection with the performance of its obligations hereunder, and
AstraZeneca shall be responsible for all of its costs and expenses incurred in
connection with the performance of its obligations hereunder.

 

ARTICLE VII -
ALLIANCE MANAGERS

 

The parties shall each designate a single person
(each, an “Alliance Manager”)
through whom all significant communications (other than regulatory reporting,
which shall be governed by ARTICLE VIII hereof) shall be channeled.  The Alliance Manager appointed by each of the
parties shall, itself or in the event that the Alliance Manager is unavailable,
through a designee, (a) function as a single point of contact in all
substantive communications with the other party relative to the Program, (b) coordinate
all Cubist Program
Activities, (c) represent their respective parties in matters
pertaining to the Program, and (d) attend Program coordination meetings
between the parties.  Within five (5) business
days after the Effective Date, each party shall notify the other in writing as
to the name of the Alliance Manager it has so appointed.  Each party may replace its Alliance Manager
at any time, upon at least one (1) week’s prior written notice to the
other party.

 

ARTICLE VIII - ADVERSE EVENT REPORTING AND OTHER
REGULATORY MATTERS

 

8.1           Regulatory
Reporting and Related Matters.

 

(a)          AstraZeneca
shall be solely responsible for the Product NDA during the Term.  Except to the extent required by Applicable
Law, Cubist shall not take any action concerning any application, registration,
authorization or approval under which the Product is sold.

 

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

 

43

 

(b)         AstraZeneca
shall be solely responsible for preparing and making all reports, submissions
and responses to Agencies, including DDMAC (the FDA’s Division of Drug
Marketing, Advertising, and Communications), concerning the Product, including
reporting Adverse Events and Field Alerts and other pharmacovigilance reports
and including price reporting with respect to the Product required by
Applicable Law, each in conformance with Applicable Law.

 

(c)          Notwithstanding
Sections 8.1(a) and 8.1(b), at Cubist’s expense and with respect to the
Product:

 

(i)            Cubist
shall have the right to make such reports as are necessary for Cubist to comply
with all applicable laws, rules, regulations and requirements of the FDA or any
other Agencies applicable to it, and

 

(ii)           Cubist
shall be responsible for making any reports required by any Applicable Law
(including any law in any state, territory or possession in the Territory) that
requires the reporting of expenditures by or on behalf of Cubist or its
Affiliates under this Agreement, including the reporting of gifts, fees,
payments, and other items of value provided by or on behalf of Cubist or its
Affiliates to any medical professionals or similar Persons relating to the
Product, including for the purpose of promoting, marketing or advertising the
Product; provided however, that upon the request of Cubist, AstraZeneca shall
provide to Cubist, in a timely manner, such information in the control of
AstraZeneca that is required to be included in any such report.  AstraZeneca shall be responsible for making
any reports required by any Applicable Law (including any law in any state,
territory or possession in the Territory) that requires the reporting of
expenditures by or on behalf of AstraZeneca or its Affiliates under this
Agreement, if any, including the reporting of gifts, fees, payments, and other
items of value provided by or on behalf of AstraZeneca or its Affiliates to any
medical professionals or similar Persons relating to the Product, including for
the purpose of promoting, marketing or advertising the Product.

 

(d)         Without
limitation of the parties’ obligations under Section 8.1(c)(ii), upon the
request of a party, the other party shall provide to the requesting party, in a
timely fashion, such information and data concerning the Product in its control
that is requested by the requesting party and is required for the requesting
party to meet its reporting obligations under Applicable Law; provided that the
other party has the right to disclose such information to the requesting party.

 

(e)          Except
with respect to communications with Agencies concerning the Product in
connection with the reports that Cubist is required to make under Section 8.1(c)(ii),
to the extent permitted by Applicable Law, and to the extent practicable given
the time period within which any such communication is required to be made,
Cubist shall provide AstraZeneca with reasonable advance written notice of, and
an opportunity to discuss in good faith, any communications concerning the
Product with any Agency proposed to be made by Cubist in advance thereof.  Cubist shall promptly provide notice to
AstraZeneca of any communications that it has with any Agency concerning the Product
and if reasonably requested by AstraZeneca, shall, to the extent permitted by
Applicable Law, send AstraZeneca copies of written 

 

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

 

44

 

communications or meeting minutes with respect to such communications
(but, for clarity, Cubist may exclude any minutes or information contained
therein that are subject to attorney client privilege).

 

(f)          Subject
to Section 8.1(c), AstraZeneca shall be solely responsible for (i) taking
all actions and conducting all communication with all Third Parties with
respect to the Product, including responding to all Product Quality Complaints
with respect thereto, including complaints related to tampering or
contamination, and (ii) investigating all Product Quality Complaints,
Adverse Events and Field Alerts with respect to the Product.  Cubist may notify a Third Party that it will
report information regarding Product Quality Complaints, Adverse Events and
Field Alerts about the Product to AstraZeneca, but, subject to Section 8.1(c),
may not otherwise communicate with any Third Party regarding any such
matter.  Cubist shall, at AstraZeneca’s
expense, cooperate with AstraZeneca’s reasonable requests and use its
reasonable efforts to assist AstraZeneca, as may be reasonably requested by
AstraZeneca, in connection with (A) preparing any and all reports with
respect to the Product in the Territory for submission to any Agency, (B) preparing
and disseminating communications with respect to the Product in the Territory
to Third Parties, to the extent relating to Cubist’s obligations hereunder, and
(C) investigating and responding to any Product Quality Complaint or
Adverse Event related to the Product in the Territory.

 

(g)         Each
party shall comply with Applicable Law in connection with collection of
information regarding, and reporting of, Adverse Events.

 

(h)         Cubist
shall provide notice to AstraZeneca by the end of the []* after the time it
becomes aware of an Adverse Event associated with use of the Product (whether
or not the reported effect is (i) described in the Product Labels and
Inserts or the published literature with respect to the Product or (ii) determined
to be attributable to the Product) of any information in or coming into its
possession or control concerning such Adverse Event by contacting the
AstraZeneca Information Center by telephone at []* (or such other number as
AstraZeneca may designate from time to time) (which unpublished number is not
to be provided by Cubist to Third Parties) 8:00 a.m. – 6:00 p.m. ET,
Monday through Friday, excluding holidays, or such other number as AstraZeneca
may from time to time designate, or by completing the Adverse Event Report Form(s) provided
by AstraZeneca and submitting such form to AstraZeneca (which form, at the
election of AstraZeneca, may be provided and or required to be submitted in
electronic form).  Cubist may also
provide the following published number 1-800-236-9933 (or such other number as
AstraZeneca may designate from time to time)  to
Third Parties for such Third Parties to contact the AstraZeneca Information
Center directly (provided that
the foregoing shall not limit Cubist’s obligations set out above in this Section in
the event that it becomes aware of an Adverse Event).

 

(i)           Cubist
shall notify AstraZeneca by the end of the []* after the time it becomes aware
of any information that might necessitate the filing by AstraZeneca of a field
alert report, as required under 21 C.F.R. § 314.81(b)(1), as such
regulation may be amended from time to time, (a “Field Alert”) by contacting the AstraZeneca Information Center
by telephone at []* (or such other number as AstraZeneca may designate from
time to time) (which unpublished number is not to be provided by Cubist to
Third Parties) 8:00 a.m. – 6:00 p.m.
ET, 

 

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

 

45

 

Monday through Friday, excluding holidays,
or such other number as AstraZeneca may from time to time designate in
writing.  Cubist may also provide the
following published number 1-800-236-9933 (or such other number as AstraZeneca
may designate from time to time)  to
Third Parties for such Third Parties to contact the AstraZeneca Information
Center directly (provided that the foregoing shall not limit Cubist’s
obligations set out above in this Section in the event that it becomes
aware of any information that might necessitate the filing by AstraZeneca of a
Field Alert).

 

(j)           Cubist
shall notify AstraZeneca by the end of the []* after it becomes aware of any
Product Quality Complaint associated with use of the Product that has been
received by Cubist by contacting the AstraZeneca Information Center by
telephone at []* (or such other number as AstraZeneca may designate from time
to time) (which unpublished number is not to be provided by Cubist to Third
Parties) 8:00 a.m. – 6:00 p.m.
ET, Monday through Friday, excluding holidays, or such other number as
AstraZeneca may from time to time designate in writing.  Cubist may also provide the following
published number 1-800-236-9933 (or such other number as AstraZeneca may
designate from time to time) to Third Parties for such Third Parties to contact
the AstraZeneca Information Center directly (provided that the foregoing shall
not limit Cubist’s obligations set out above in this Section in the event
that it becomes aware of an Adverse Event).

 

(k)          AstraZeneca
shall provide adverse drug experience information regarding the Product to
Cubist to the extent AstraZeneca would provide such information to its own
pharmaceutical sales representatives or to its medical or scientific employees
if it were continuing to detail the Product or it is required to do so by
Applicable Law.  AstraZeneca shall also
notify Cubist in writing immediately of any formal communication received by
AstraZeneca from the FDA or any other Agency regarding any threatened or
pending action that may affect the safety or efficacy claims of the Product or
the continued marketing of the Product. 
AstraZeneca shall provide to Cubist all safety information with respect
to the Product in the possession of AstraZeneca or its Affiliates and mutually
agreed by the parties to be necessary or useful for Cubist personnel to conduct
CSD Activities pursuant to Section 3.2 or to respond to requests for
medical information pursuant to Section 3.8.

 

(l)           AstraZeneca
shall provide to Cubist copies of any drug information standard response
letters that relate to the Product in the Territory and any updates made to
such response letters reasonably promptly after such letters and updates are
generated, which response letters and updates may be used by Cubist’s CSDs in
connection with the performance of the CSD Activities under this
Agreement.  Without limitation of ARTICLE
XII (including with respect to the exceptions set forth in Section 12.2
and authorized disclosures pursuant to Section 12.3), in no event shall
Cubist provide any such letters (or updates) to any Third Party.

 

(m)         Notwithstanding
anything in Section 4.1 to the contrary, Cubist shall be responsible for
training, at its expense, its Representatives regarding Adverse Event, Field
Alert, Product Quality Complaint and PIR reporting requirements of AstraZeneca
with respect to the Product in accordance with this Agreement and shall
maintain records regarding such training.

 

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

 

46

 

(n)         For
the avoidance of doubt, for all purposes of this Section 8.1, Cubist shall
be deemed to be aware of any reportable information at the time that []*
becomes aware of such information. 
Cubist shall put in place procedures and protocols that shall be
actively managed by Cubist to ensure that all relevant information regarding
the matters referred to in this Section 8.1 that come to the attention of
[]* is promptly conveyed to Cubist so that Cubist can comply with its reporting
obligations hereunder.

 

(o)         AstraZeneca shall have
sole discretion regarding safety matters with respect to the Product, including
determining whether to conduct a Product recall or withdrawal.

 

8.2           Threatened
Agency Action.

 

Each party shall notify the other party’s Regulatory Affairs Department,
as promptly as practicable after becoming aware of the applicable occurrence, of
(a) any threatened or pending investigation by an Agency, including the
FDA, Federal Trade Commission, U.S. Department of Health and Human Services, or
(b) any threatened or pending claims or actions by any Third Parties,
including any Agency, including any such claims or actions that (i) relate
to any product liability claim, or sales or promotional activities, or (ii) allege
violations of (A) the Act or other Applicable Law, including any federal
or state anti-kickback laws, or (B) the federal False Claims Act, in each
case (a) and (b), that relate to the Product in the Territory and may
affect the safety or efficacy claims of the Product or the continued marketing
and Promotion of the Product.  Upon
receipt of any such information, the other party may consult with such
notifying party in an effort to arrive at a mutually acceptable procedure for
taking appropriate action; provided, however, that nothing in this Section 8.2
shall restrict such notifying party’s ability to make a timely report of such
matter to any Agency or take other action that it deems to be appropriate or
required by Applicable Law, subject to Section 8.1.

 

8.3           Compliance
Program.

 

Each party, consistent with
good practice, shall maintain a corporate compliance program that will include
a mechanism for its employees to report, anonymously if they choose, any
concerns about potential illegal activity, and that such party will investigate
any such reports.  Each party shall
notify the other party in writing of the substance of any such report that
relates to the subject of this Agreement within a reasonable time after it is
received, and before reporting any such activity to any Agency, unless such
party concludes in good faith that doing so would violate Applicable Law or
would compromise such party’s ability to complete an appropriate
investigation.  Each party shall in any
case promptly inform the other party of the result of the investigation (unless
such party concludes in good faith that doing so would violate Applicable Law).

 

ARTICLE IX- RETURNED/RECALLED PRODUCT

 

9.1           Returned
Product.

 

AstraZeneca shall have the
sole responsibility and right to accept returned Product.  Except as directed by AstraZeneca pursuant to
Section 9.2, Cubist
shall not solicit the 

 

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

 

47

 

return of Product.  If Cubist receives an inquiry from a Third
Party regarding Product returns, Cubist shall instruct such Third Party to
return the Product in accordance with AstraZeneca’s return policy for the
Product, as such policy is provided to Cubist from time to time.  If, for any reason, Cubist should receive any
returned Product, Cubist shall promptly notify AstraZeneca in writing.  Any Product returned to Cubist shall be
shipped by Cubist to AstraZeneca’s designated facility, with shipping costs to
be reimbursed to Cubist by AstraZeneca pursuant to Section 6.2. 
Cubist may advise the customer who made the return that the Product has
been returned to AstraZeneca.  Cubist
shall fully complete and deliver to AstraZeneca the AstraZeneca Return
Authorization Form provided by AstraZeneca to Cubist with respect to any
returned Product received by Cubist and shipped to AstraZeneca pursuant to this
Section 9.1.

 

9.2           Recalled
Product.

 

At AstraZeneca’s reasonable
request, Cubist shall assist AstraZeneca in obtaining and receiving the Product
in the event the Product is recalled or withdrawn from the market, and
AstraZeneca shall reimburse Cubist for all documented  costs and expenses incurred by Cubist in taking such actions.

 

ARTICLE X - INDEPENDENT CONTRACTOR STATUS OF 

CUBIST, INCLUDING THE SALES FORCE AND THE CSD FORCE

 

10.1         Independent
Contractor Status.

 

The status of Cubist under
this Agreement shall be that of an independent contractor.  Cubist shall not have the right to enter into
any agreements on behalf of AstraZeneca, nor shall it represent to any Person that
it has any such right or authority.  The
Sales Force and the CSD Force shall not be, and shall not be considered to be, “employees”
or “joint employees” of AstraZeneca for any purpose.  AstraZeneca shall not be responsible for the
control of any of Cubist’s employees. 
Cubist shall be solely responsible for determining all conditions of
employment of the Sales Force and the CSD Force.  Cubist shall be responsible for the means, manner,
mode and methods of performing its activities hereunder, subject to the terms
of this Agreement.

 

10.2         No
AstraZeneca Benefits.

 

(a)          Cubist
acknowledges and agrees that none of the Program Employees, nor anyone else
acting on its or their behalf, shall receive any employee benefits of any kind
from AstraZeneca.  In addition, Cubist
(on behalf of itself, the Program Employees, and other employees, agents and
contractors) hereby declines any offer now or hereafter made to participate in
any of AstraZeneca’s benefit plans or programs.

 

(b)         The
acknowledgment and declination set forth in Section 10.2(a) is
intended to apply even if AstraZeneca is determined to be a co-employer or
common law or statutory law employer of any of Cubist’s employees, including
the Program Employees, notwithstanding the parties’ express agreement, and such
employees’ written acknowledgement, to the contrary.

 

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

 

48

 

(c)          AstraZeneca
shall not maintain or procure any workers’ compensation or unemployment
compensation insurance for or on behalf of any Program Employee.  Cubist shall be solely responsible for paying
all salaries, wages, benefits and other compensation that the Program Employees
may be entitled to receive in connection with the performance of its
obligations hereunder.  Cubist shall
likewise be liable for all taxes, excises, assessments and other charges levied
by any Agency on, or because of, the services to be provided by Cubist under
the terms of this Agreement.

 

(d)         Cubist
shall, for all Program Employees, (i) maintain all necessary personnel and
payroll records; (ii) calculate wages and withhold taxes and other
government mandated charges, taxes, deductions, and contributions, if any; (iii) remit
such taxes, insurance, deductions, contributions or charges to the appropriate
government entity; (iv) pay net wages and employee and other fringe
benefits, if any; and (v) provide workers’ compensation and unemployment
insurance coverage in amounts as required by law.

 

10.3         No
Recruitment.

 

During the Term, neither
party shall attempt to actively recruit or solicit any employees or personnel
of the other party []* under this Agreement (“Covered Employees”) without the prior written consent of the
other party; provided that, notwithstanding the foregoing, a party shall be
permitted to engage in general recruitment through advertisements or recruiting
through head-hunters so long as the other party’s Covered Employees are not
specifically targeted.

 

ARTICLE XI - NONCOMPETITION

 

11.1         Noncompetition.

 

(a)          Subject
to Section 11.1(b) and the other terms and conditions of this
Agreement, during the Term and for three (3) months thereafter ([]*) (the “Noncompete Period”),
Cubist shall not, and shall cause its Affiliates not to, directly or
indirectly, (i) market, Promote, sell or accept orders for the sale of any
Competing Product in the Territory, or (ii) assist or cooperate in any way
with any other Person in connection with the marketing, Promotion, selling or
acceptance of orders for the sale of any Competing Product in the Territory.

 

(b)         In
the event that Cubist or its Affiliate acquires all or substantially all of the
assets of a Third Party, or is acquired, whether through an acquisition or
other transaction or a Change in Control, that results in Cubist or its
Affiliate, as applicable,  acquiring
any right, title or interest in or to any Competing Product(s) in the
Territory that would violate Section 11.1(a) (a “Transaction”), Cubist shall not []*.

 

(c)          Each
party acknowledges and agrees that the temporal and geographic limitations set
forth in this Section 11.1 are reasonable and necessary to protect the
legitimate interests of the other party and agrees not to contest such
limitations in any proceeding.

 

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

 

49

 

11.2         Injunctive
Relief.

 

Each party acknowledges that the failure of the other
party to comply with any of the provisions of this ARTICLE XI will result in
irreparable injury and continuing damage to the other party for which there
will be no adequate remedy at law.  In
the event of a breach of any provision of this ARTICLE XI by a party, the other
party shall be authorized and entitled to obtain from any court of competent
jurisdiction injunctive relief, whether preliminary or permanent, specific
performance and other equitable remedies, including an equitable accounting of
all earnings, profits and other benefits arising from such violation, which
remedies shall be cumulative and in addition to any other rights or remedies to
which such party may be entitled in law or equity.  The party in breach of any provision of this
ARTICLE XI agrees to waive any requirement that the other party (a) post a
bond or other security as a condition for obtaining any such relief or (b) show
irreparable harm, balancing of harms, consideration of the public interest or
inadequacy of monetary damages as a remedy. 
Nothing in this Section 11.2 is intended, or shall be construed, to
limit a party’s right to equitable relief or any other remedy for a breach of
any provision of this Agreement.

 

ARTICLE XII – CONFIDENTIALITY

 

12.1         Confidential
Information.

 

Except to the extent
permitted by this Agreement and subject to Sections 12.2 and 12.3, at all times during the Term and for five (5) years following
the expiration or earlier termination of this Agreement, the Receiving Party (a) shall
keep completely confidential and shall not publish or otherwise disclose any
Confidential Information of the Disclosing Party, except to those of the
Receiving Party’s employees, Affiliates, subcontractors or consultants who have
a need to know such information (collectively, “Recipients”)
to perform the Receiving Party’s obligations hereunder (and who shall be
advised of the Receiving Party’s obligations hereunder) and who are bound by
written confidentiality obligations with respect to such Confidential
Information no less stringent than those set forth in this Agreement and (b) shall
not use any Confidential Information directly or indirectly for any purpose
other than performing its obligations hereunder.  The Receiving Party shall be fully liable for
any breach by any of its Recipients of the restrictions set forth in this
Agreement.

 

12.2         Exceptions
to Confidentiality.

 

The Receiving Party’s
obligations set forth in this Agreement shall not extend to any Confidential
Information of the Disclosing Party that:

 

(a)          is
or hereafter becomes part of the public domain by public use, publication,
general knowledge or the like through no wrongful act, fault or negligence on
the part of the Receiving Party or any Recipients;

 

(b)         is
received from a Third Party without restriction and without breach of any
agreement between such Third Party and the Disclosing Party or any of its
Affiliates;

 

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

 

50

 

(c)          the
Receiving Party can demonstrate by competent evidence was already in its or its
Affiliates’ possession without any limitation on use or disclosure prior to its
receipt from the Disclosing Party or any of its Affiliates;

 

(d)         is
generally made available to Third Parties by the Disclosing Party or any of its
Affiliates without restriction on disclosure; or

 

(e)          the
Receiving Party can demonstrate by competent evidence was independently
developed by the Receiving Party or any Recipients without the aid, use or
application of any Confidential Information of the Disclosing Party.

 

12.3         Authorized
Disclosure.

 

Each party and its
Recipients may disclose Confidential Information to the extent that such
disclosure is:

 

(a)          made
in response to a valid order of a court of competent jurisdiction or other
Agency of a country or any political subdivision thereof of competent
jurisdiction; provided, however, that the Receiving Party shall first have
given notice to the Disclosing Party and given the Disclosing Party a
reasonable opportunity to quash such order or to obtain a protective order
requiring that the Confidential Information or documents that are the subject
of such order be held in confidence by such court or Agency or, if disclosed,
be used only for the purposes for which the order was issued; and provided
further that if a disclosure order is not quashed or a protective order is not
obtained, the Confidential Information disclosed in response to such court or
governmental order shall be limited to that information
which is legally required to be disclosed in such response to such court or
governmental order;

 

(b)         made
pursuant to Section 12.7 or Section 12.8;

 

(c)          []*;
or

 

(d)         otherwise
required by Applicable Law, based on advice of legal counsel to the Receiving
Party or its Recipients.

 

12.4         Notification.

 

The Receiving Party shall
notify the Disclosing Party in writing immediately, and cooperate with the
Disclosing Party as the Disclosing Party may reasonably request, upon the
Receiving Party’s discovery of any loss or compromise of the Disclosing Party’s
Confidential Information.

 

12.5         Return
or Destruction of Confidential Information.

 

Without
limiting Section 13.5, upon the expiration or earlier termination of this Agreement or a
written request by the Disclosing Party, whichever occurs first, the Receiving
Party shall (a) destroy, all tangible embodiments of Confidential
Information of the Disclosing Party, including any and all copies thereof, and
those portions of any documents, memoranda, 

 

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

 

51

 

notes, studies and analyses
prepared by the Receiving Party or its Recipients that contain, incorporate or
are derived from such Confidential Information and provide written
certification of such destruction to the Disclosing Party in a form reasonably
acceptable to the Disclosing Party, provided that the legal department of the
Receiving Party shall have the right to retain one (1) copy of any such
tangible embodiments for archival purposes, and (b) immediately cease, and
shall cause its Recipients to cease, use of such Confidential Information as
well as any information or materials that contain, incorporate or are derived
from such Confidential Information.

 

12.6         Remedies.

 

Each party acknowledges that
the failure of the Receiving Party or any of its Recipients to comply with any
of the provisions of this ARTICLE XII will result in irreparable injury and
continuing damage to the Disclosing Party for which there will be no adequate
remedy at law.  In the event of a
breach or threatened breach of any provision of this ARTICLE XII by the Receiving Party,
the Disclosing Party shall be authorized and entitled to obtain from any court
of competent jurisdiction injunctive relief, whether preliminary or permanent,
specific performance and other equitable remedies, including an equitable
accounting of all earnings, profits and other benefits arising from such
violation,  which remedies shall be
cumulative and in addition to any other rights or remedies to which the
Disclosing Party may be entitled in law or equity.  The Receiving Party agrees to waive any
requirement that the Disclosing Party (a) post a bond or other security as
a condition for obtaining any such relief or (b) show irreparable harm,
balancing of harms, consideration of the public interest or inadequacy of
monetary damages as a remedy.  Nothing in
this Section 12.6 is intended, or shall be construed, to limit a party’s
right to equitable relief or any other remedy for a breach of any provision of
this Agreement.

 

12.7         Use
of Names.

 

Except as required by law or
regulation, or as expressly permitted under any written agreement between the
parties or any of their respective Affiliates, subject to Section 12.8 if applicable, neither party shall make a
Public Announcement regarding the Program or this Agreement or use the name of
the other in any Public Announcement without the prior written approval of the
other party.  Each party shall provide
the other with the proposed text of any such Public Announcement for review and
approval, as early as possible, but in no event less than three (3) business
days in advance of the making of such Public Announcement.  Notwithstanding anything in this Section 12.7
to the contrary, the foregoing provisions of this Section 12.7 shall not
apply to (a) either party’s disclosure of its unaudited financials made in
its ordinary course of business, or (b) statements made during any of
either party’s investor calls that are substantially similar to statements made
in the script for such investor call that were reviewed and approved by the
other party pursuant to this Section 12.7.

 

12.8         Confidential
Treatment.

 

If either Party is required to file or disclose this
Agreement or any portion thereof with the United States Securities and Exchange
Commission or any other Agency, such party shall notify the other party in writing
and shall provide the other party with at least seven (7) 

 

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

 

52

 

business days  to
request redactions thereof prior to making such filing or disclosure.  The Disclosing Party shall use its reasonable
efforts to procure confidential treatment of the Agreement pursuant to the
Securities Act of 1933 or the Securities Exchange Act of 1934, in each case as
amended, and the rules, regulations and guidelines promulgated thereunder, or
any other applicable law or regulation. 
If the Disclosing Party cannot procure confidential treatment of the
entire Agreement, it will use its reasonable efforts to procure confidential treatment
for such portions of the Agreement as may be reasonably requested in a timely
manner by the other party.

 

ARTICLE XIII - TRADEMARKS AND OTHER INTELLECTUAL
PROPERTY RIGHTS

 

13.1         Product
Trademarks; AstraZeneca Housemarks; and Cubist Trademarks.

 

(a)          Cubist
shall Promote the Product only under the Product Trademarks; provided that the
parties acknowledge and agree that (i) AstraZeneca shall include the
Cubist Trademarks in the Promotional Materials in a form and manner mutually
agreed upon by the parties (such agreement not to be unreasonably withheld,
conditioned or delayed), and may include the AstraZeneca Housemarks, and (ii) Cubist
may include the Product Trademarks and the AstraZeneca Housemarks on business
cards, stationery, trade show announcements and similar materials of Cubist and
its Affiliates to be used in connection with the Cubist Program Activities (A) solely to the extent approved
by AstraZeneca in writing, and (B) in a form and manner to be mutually
agreed upon by the parties (“Permitted Uses”).

 

(b)         AstraZeneca
hereby grants to Cubist a non-exclusive, royalty-free license to use the
Product Trademarks and the AstraZeneca Housemarks in the Territory solely (i) for
the Permitted Uses and (ii) to use Promotional Materials or other materials
provided by AstraZeneca pursuant to this Agreement in compliance with this
Agreement, which license shall automatically and immediately terminate upon the
expiration or earlier termination of this Agreement for any reason.  Such license shall be non-transferable
(except through a permitted assignment or other permitted transfer of this
Agreement) and non-sublicensable.

 

(c)          Cubist
hereby grants AstraZeneca a non-exclusive, royalty-free license to use the
Cubist Trademarks in the Territory solely for purposes of including the Cubist
Trademarks in the Promotional Materials to be used in connection with the
Promotion of the Product by the Sales Force in the Territory in the form and
manner mutually agreed upon by the parties pursuant to Section 13.2(a),
which license shall automatically and immediately terminate upon the expiration
or earlier termination of this Agreement for any reason.  Such license shall be non-transferable
(except through a permitted assignment or other permitted transfer of this
Agreement) and non-sublicensable.

 

13.2         No
Ownership or Rights in the Product Trademarks, AstraZeneca Housemarks or Cubist
Trademarks.

 

(a)          Except
for the non-exclusive licenses expressly set forth in Section 13.1,
nothing in this Agreement shall give Cubist any rights, title or interest in
and to the Product 

 

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

 

53

 

Trademarks, the AstraZeneca Housemarks or any other Trademarks that
AstraZeneca, or any of its Affiliates, as the case may be, own, license or
maintain.  Cubist acknowledges and agrees
that AstraZeneca or its Affiliates, as the case may be, are the owners of all
rights, title and interest in and to the Product Trademarks and the AstraZeneca
Housemarks, including any form or embodiment thereof, and the goodwill now and
hereafter associated therewith.  Except
for the non-exclusive licenses expressly set forth in Section 13.1,
nothing in this Agreement shall give AstraZeneca any rights, title or interest
in and to the Cubist Trademarks or any other Trademarks which Cubist or any of
its Affiliates, as the case may be, own, license or maintain.  AstraZeneca acknowledges and agrees that
Cubist or its Affiliates, as the case may be, are the owners of all rights,
title and interest in and to the Cubist Trademarks, including any form or
embodiment thereof, and the goodwill now and hereafter associated with the
Cubist Trademarks.

 

(b)         Cubist
shall not, and shall not knowingly cause another Person to, contest or dispute
or otherwise impair the validity of, or the exclusive rights of AstraZeneca, or
any of its Affiliates, as the case may be, in and to, the Product Trademarks or
the AstraZeneca Housemarks, or any part thereof, or the registrations
thereof.  AstraZeneca shall not, and
shall not knowingly cause another Person to, contest or dispute or otherwise
impair the validity of, or the exclusive rights of Cubist or any of its
Affiliates, as the case may be, in and to the Cubist Trademarks, or any part
thereof, or the registrations thereof.

 

(c)          Cubist
acknowledges that all use of the Product Trademarks and the AstraZeneca
Housemarks by or on behalf of Cubist shall inure to the benefit of AstraZeneca
or its Affiliates.  Cubist shall not be
entitled to any compensation for any increase in the value of the Product
Trademarks or the AstraZeneca Housemarks or in the goodwill associated
therewith.  Cubist (upon the reasonable
written request of AstraZeneca) shall assist AstraZeneca and its Affiliates, at
their cost, to safeguard their full rights, title and interest in and to the
Product Trademarks and the AstraZeneca Housemarks in the Territory, as may
reasonably be requested by AstraZeneca. 
AstraZeneca acknowledges that all use of the Cubist Trademarks by or on
behalf of AstraZeneca shall inure to the benefit of Cubist or its Affiliates,
as the case may be.  AstraZeneca shall
not be entitled to any compensation for any increase in the value of the Cubist
Trademarks or in the goodwill associated therewith.  AstraZeneca (upon the reasonable written
request of Cubist) shall assist Cubist and its Affiliates, at their cost, to
safeguard their full rights, title and interest in and to the Cubist Trademarks
in the Territory, as may reasonably be requested by Cubist.

 

13.3         Trademark
Maintenance.

 

Neither party shall
undertake any action to register or renew any of the Trademarks of the other
party or to defend against or pursue an infringement claim based on or relating
to any of the Trademarks of the other party, except upon the reasonable written
request of the other party and at the other party’s expense, which request
shall be permitted only to the extent relating specifically to the Territory
and this Agreement.  If a registration or
renewal of any of the Trademarks of a party is secured by the other party,
whether or not in its name, such registration or renewal, as the case may be,
shall be effected solely for the benefit of such party.  Upon termination of this Agreement or upon
earlier request of a party, any such registrations or renewals (or any pending
application therefor) shall either be assigned to such party, or 

 

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

 

54

 

surrendered by the other
party for cancellation, as the requesting party shall direct in writing, and
the other party shall file with appropriate Agencies any statement required in
connection with such assignment, surrender or cancellation.

 

13.4         Trademark
Infringement.

 

(a)          Each
party shall advise the other party of those cases of actual or potential
infringement of the Product Trademarks or, if and to the extent such party
determines that such actual or potential infringement relates to the Promotion
or other exploitation of the Product, the AstraZeneca Housemarks, in the
Territory that come to such party’s attention and Cubist shall, at AstraZeneca’s
cost, render such assistance as may be reasonably requested by AstraZeneca in
writing in connection with any action taken by AstraZeneca in connection
therewith (which action, if any, shall be in AstraZeneca’s sole
discretion).  AstraZeneca shall have sole
control of such action.  AstraZeneca
shall be liable for reasonable expenses and reasonable attorneys’ fees incurred
by Cubist at the specific written request of AstraZeneca in connection with
such actions.

 

(b)         Each party shall advise
the other party of those cases of actual or potential infringement of, if and
to the extent such party determines that such actual or potential infringement
relates to the Promotion of the Product, the Cubist Trademarks in the
Territory, as used in the Promotional Materials, that come to such party’s
attention and AstraZeneca shall, at Cubist’s cost, render such assistance as
may be reasonably requested by Cubist in writing in connection with any action
taken by Cubist in connection therewith (which action, if any, shall be in
Cubist’s sole discretion).  Cubist shall
have sole control of such action.  Cubist
shall be liable for reasonable expenses and reasonable attorneys’ fees incurred
by AstraZeneca at the specific written request of Cubist in connection with
such actions.

 

13.5         Other
Rights.

 

(a)          Without
limitation of any reporting, disclosure or other obligations of Cubist set
forth in this Agreement, AstraZeneca shall have the right to obtain from
Cubist, during the Term and for a thirty (30) calendar day period after the
Term, to the extent not already provided to AstraZeneca by Cubist, []* “Product
Information”); provided  that (A) []* (C) Cubist may redact from any
copies provided to AstraZeneca pursuant to this Section 13.5(a) confidential,
business, technical or proprietary information (including any information or
materials regarding Cubist’s own products) other than the Product Information,
and (D) Cubist shall not be obligated to provide or disclose such information,
Know-how or materials to AstraZeneca, []* (subject to the foregoing subsections
(A) through (D), []* be
referred to herein, collectively, as the “Program
Materials”).  The Product
Information and the Program Materials shall be []*.  Notwithstanding anything contained herein,
and for the avoidance of doubt, the Product Information and Program Materials
shall exclude any information or materials that are subject to attorney client
privilege or are considered attorney work product.

 

(b)         Notwithstanding
anything in this Agreement to the contrary, the Product Information and Program
Materials shall not constitute the Confidential Information of Cubist or
AstraZeneca (and in lieu of ARTICLE XII, this Section 13.5 shall
apply).  

 

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

 

55

 

Notwithstanding Section 13.5(a), Cubist shall have the right to (i) disclose
Product Information and Program Materials pursuant to Section 12.3 (in the
same manner it would have the right to do so if such information were
Confidential Information of AstraZeneca), and []* (A) are or hereafter become
part of the public domain by public use, publication, general knowledge or the
like through no wrongful act, fault or negligence on the part of Cubist’s or
any of its employees, Affiliates, subcontractors or consultants, (B) are
received from a Third Party without restriction and without breach of any
agreement between such Third Party and AstraZeneca or any of its Affiliates, (C) are
generally made available by AstraZeneca or any of its Affiliates to Third
Parties, or (D) Cubist can demonstrate by competent evidence was
independently developed by or on behalf of Cubist or its Affiliates (x) []*.

 

(c)          Except
as otherwise expressly provided in this Agreement (or other written agreement
between the parties or their respective Affiliates), as between the parties,
AstraZeneca or its Affiliates shall own all rights, title and interest in and
to the Product and Know-how owned or controlled by AstraZeneca or its
Affiliates as of or prior to the Effective Date, or developed by AstraZeneca or
its Affiliates during the Term.  Without
limitation of the foregoing, AstraZeneca or its applicable Affiliate shall have
all rights to prosecute, maintain, defend and enforce all such intellectual
property.  Cubist acknowledges and agrees
that all copyright and other intellectual property rights (other than the
Cubist Trademarks) in the Promotional Materials shall remain vested in
AstraZeneca or its Affiliates, as applicable.

 

(d)         Except
as otherwise expressly provided in this Agreement (or other written agreement
between the parties or their respective Affiliates), as between the parties,
Cubist and its Affiliates shall own all rights, title and interest in and to
Know-how owned or controlled by Cubist or its Affiliates as of or prior to the
Effective Date, or developed by Cubist or their Affiliates during the
Term.  Without limitation of the
foregoing, Cubist or its applicable Affiliate shall have all rights to
prosecute, maintain, defend and enforce all such intellectual property.

 

ARTICLE XIV- WARRANTIES; INDEMNITIES; INSURANCE

 

14.1         Representations,
Warranties and Covenants.

 

(a)          Each
party represents and warrants to the other party as of the Effective Date as
follows:

 

(i)            it
is a duly organized and validly existing corporation or limited partnership under
the laws of its jurisdiction of incorporation or formation;

 

(ii)           it
has full corporate or partnership power and authority and has taken all
corporate or partnership action necessary to enter into and perform this
Agreement;

 

(iii)          this Agreement is its legal, valid and
binding obligation, enforceable in accordance with the terms and conditions
hereof; and

 

(iv)          the
execution, delivery and performance of this Agreement by such party and the
transactions contemplated herein, including the rights granted hereunder or the

 

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

 

56

 

exercise of such
rights as contemplated by this Agreement, do not (A) violate, conflict
with, or constitute a breach of or under, its charter or similar organization
document, its by-laws, partnership agreement, or any order, award, judgment,
decree, agreement or instrument to which such party or any of its Affiliates is
a party or by which it is bound (including, with respect to AstraZeneca,
the []*, or (B) require the consent of, or notice to, any Person (including,
with respect to AstraZeneca, []*) or the authorization of (by notice or
otherwise) any Agency.

 

(b)         Cubist
represents and warrants, as of the Effective Date, and covenants to AstraZeneca
that:

 

(i)            Neither
it nor its Affiliates has been debarred or is subject to debarment and neither
it nor its Affiliates will use in any capacity, in connection with the
performance of its obligations under this Agreement, any person who is debarred
pursuant to Section 306 of the Act or who is the subject of a conviction
described in such section.  Cubist will
notify AstraZeneca in writing immediately if it or any Program Employee is
debarred or is the subject of a conviction described in Section 306 of the
Act, or if any action, suit, claim, investigation, or legal or administrative
proceeding is pending or, to the best of Cubist’s knowledge, is threatened,
relating to the debarment or conviction of Cubist or any Program Employee.

 

(ii)           To
the actual knowledge of the Cubist Knowledge Group, since July 1, 2005, (A) Cubist
and its Affiliates have Promoted Cubicin in the Territory in compliance with
Applicable Law []*, (B) as of the Effective Date, neither Cubist nor any
of its Affiliates (x) is being investigated, and there are no ongoing
investigations by any Agency in the Territory specifically or primarily
relating to the Promotion of Cubicin in the Territory, nor (y) has Cubist
or any of its Affiliates received written notice that any Agency in the
Territory intends to conduct any such investigation, and (C) neither
Cubist nor any of its Affiliates (x) is a party to, or the subject of, any
action, suit or other proceeding (collectively, “Proceeding(s)”)
that is pending as of the Effective Date or was pending or filed at any time
during the two year period prior to the Effective Date, that alleges that
Cubist or any of its Affiliates violated any Applicable Law in the Territory in
connection with the Promotion of Cubicin in the Territory, nor (y) has
Cubist or any of its Affiliates received any threats in writing of any such
Proceeding as of the Effective Date or at any time during the two year period
prior to the Effective Date.

 

(iii)          The information regarding (A) the number
of sales representatives employed as of the Effective Date by Cubist and its
Affiliates and (B) number of calls to infectious disease prescribers recorded in 2007 by Cubist as tracked by
Cubist’s information systems, in each case ((A) and (B)) provided
by Cubist to AstraZeneca in writing prior to the Effective Date, is true and
correct.

 

(c)          AstraZeneca
represents and warrants as of the Effective Date and covenants to Cubist that:

 

(i)            AstraZeneca
(or its applicable Affiliate) holds the Product NDA and has all other licenses,
authorizations, permissions, consents and approvals from any Agency necessary
to use, Promote, sell and offer for sale the Product in the Territory, and all
licenses, 

 

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

 

57

 

authorizations,
permissions, consents and approvals from any Agency (or applicable foreign
equivalent) to manufacture the Product for sale in the Territory.

 

(ii)           To
the actual knowledge of the AZ Knowledge Group, neither the manufacture or
importation of the Product for sale in the Territory nor the use, sale or offer
for sale of the Product in the Territory infringes or misappropriates any valid
claims of any Third Party’s patent rights or any trademark, copyright or trade
secret of a Third Party that is not licensed to or otherwise controlled by
AstraZeneca or its Affiliates.

 

(iii)          To the actual knowledge of the AZ Knowledge
Group, since []*, AstraZeneca has not been subject to any action, suit, claim,
hearing or other proceeding, at law or equity, in or before any court or
arbitrator in which the counterparty alleged that (A) the exploitation of
the Product in the Territory infringes or misappropriates any patent,
trademark, copyright or trade secret right of any Third Party, or (B) the
use of the Product in the Territory resulted in any death, personal injury or
other harm to any Person, []*.

 

(iv)          To
the actual knowledge of the AZ Knowledge Group (A) since []* (B) as
of the Effective Date, neither AstraZeneca nor any of its Affiliates (x) is
being investigated, and there are no ongoing investigations by, any Agency in
the Territory specifically or primarily relating to the Promotion of the
Product in the Territory, nor (y) has AstraZeneca or any of its Affiliates
received written notice that any Agency in the Territory intends to conduct any
such investigation, and (C) neither AstraZeneca nor any of its Affiliates (x) is
a party or the subject of any Proceeding that is pending as of the Effective
Date or was pending or filed at any time []*, that alleges that AstraZeneca or
any of its Affiliates have violated any Applicable Law in the Territory in
connection with the Promotion of the Product in the Territory, nor (y) has
AstraZeneca or any of its Affiliates received any threats in writing of any
such Proceeding []* prior to the Effective Date.

 

(v)           The
information regarding Product sales (including Gross Sales and Net Sales
figures) and number of Product units sold, in each case in the Territory,
provided by AstraZeneca to Cubist in writing prior to the Effective Date have
been reported in or are to be reported in AstraZeneca’s formal audited
financial statements (as certified by or to be certified by AstraZeneca’s
accounting firm).

 

(vi)          To
the actual knowledge of the AZ Knowledge Group, the information regarding
Product Inventory and Product returns, in each case with respect to the
Territory, provided by AstraZeneca to Cubist in writing prior to the Effective
Date are true and correct.

 

(vii)         Any in-license agreements between AstraZeneca
or any of its Affiliates and any Third Party with respect to the Product are
valid and in force.

 

(viii)        That copy of that certain letter agreement
between AstraZeneca UK and AstraZeneca dated as of June 26, 2008 provided
to Cubist on or before the Effective Date is true and correct and such letter
agreement is in full force and effect as of the Effective Date.

 

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

 

58

 

(ix)           That
certain []*.

 

(x)            Neither
AstraZeneca nor any of its Affiliates has granted any (sub)license to any Third
Party to sell any Product (other than Product sold by AstraZeneca or its
Affiliates) in the Territory.

 

(xi)           During the period from []* through the Effective Date, AstraZeneca and
its Affiliates have conducted the sale of the Product in the Territory in the
ordinary course and substantially consistent with past practice with respect to
the Product in the Territory.

 

14.2         AstraZeneca Indemnification.

 

(a)          Without
limitation of Section 14.2(b), AstraZeneca shall indemnify Cubist, its
Affiliates and its and their respective directors, officers, employees and
agents (the “Cubist Indemnified Parties”), and defend and save each of them
harmless, from and against any and all losses, damages, liabilities, penalties,
costs and expenses (including reasonable attorneys’ fees and disbursements)
(collectively, “Losses”) incurred by any of them
in connection with, arising from or occurring as a result of any suit,
investigation, or claim by, or demand of, a Third Party (a “Third Party Claim”) (including for death, personal injury or
product liability) arising from (i) the breach by AstraZeneca of any of
its obligations under this Agreement (including this Section 14.2), (ii) the
breach or inaccuracy of any representation or warranty made by AstraZeneca in
this Agreement, (iii) the negligence or intentional misconduct of any
AstraZeneca Indemnified Parties in connection with the performance of
AstraZeneca’s obligations under this Agreement, (iv) the manufacture,
distribution, promotion, marketing, use, import, sale, offer for sale or other
commercialization of the Product by or on behalf of AstraZeneca or any of its
Affiliates in the Territory (including any death, personal injury or product
liability) (but, with respect to subsection (iv), for clarity (A) not from
the Cubist Program Activities or any other actions or omissions by or on behalf
of Cubist or any of its Affiliates and (B) without limitation of Section 14.2(b)),
(v) any actual or alleged infringement or misappropriation of any Third
Party intellectual property arising from the commercialization of the Product
in the Territory (including use of any Product Trademark or AstraZeneca
Housemark) and (vi) the []* (including, in the case of this subsection
(vi), any Third Party Claim in connection with, arising from or occurring as a
result of any violation, conflict with, or breach of or under the []* by
AstraZeneca or any of its Affiliates); except, in each case (subsections (i) through
(vi)), for those Losses for which Cubist has an obligation to indemnify
AstraZeneca pursuant to Section 14.3, as to which Losses each party shall
indemnify the other to the extent of its respective liability for such Losses; provided,
however, in no event shall AstraZeneca have any obligations under this Section 14.2(a) (other
than under subsection (v) or (vi) of this Section 14.2(a)) with
respect to the Cubist Program Activities (but, for clarity, without limitation
of Section 14.2(b)).

 

(b)         AstraZeneca shall
indemnify the Cubist Indemnified Parties, and defend and save each of them
harmless, from and against any and all Losses incurred by any of them in
connection with, arising from or occurring as a result of any Third Party Claim
(including for death, personal injury or product liability) arising from (i) the
[]* (subsections (i) 

 

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

 

59

 

through (iii)), in compliance with this Agreement (provided that, for
purposes of this Section 14.2(b), if, in performing its obligations under
this Agreement, Cubist does not []* subsections (i) through (iii)),
(subsections (i) through (iii), collectively, the []*; provided that
AstraZeneca shall have no obligation to indemnify or hold harmless any Cubist
Indemnified Party for or from any Losses incurred by any of them in connection
with, arising from or occurring as a result of (A) the breach by Cubist of
any of its obligations under this Agreement, (B) the breach or inaccuracy
of any representation or warranty made by Cubist in this Agreement, or (C) the
negligence or intentional misconduct of any Cubist Indemnified Parties in
connection with the performance of Cubist’s obligations under this Agreement,
provided that, []* for purposes of subclauses (A) or (C) of this Section 14.2(b).   For
clarity, as used in this Section, no material, or action or omission by or on
behalf of Cubist or its Affiliates, shall be deemed “expressly provided” or “expressly
instructed” by AstraZeneca as a result of AstraZeneca’s approval (or deemed
approval) of such material, action or omission.

 

14.3         Cubist Indemnification.

 

(a)          Without
limitation of Section 14.3(b), Cubist shall indemnify AstraZeneca, its
Affiliates and its and their respective directors, officers, employees and
agents (the “AstraZeneca Indemnified Parties”),
and defend and save each of them harmless, from and against any and all Losses
incurred by any of them in connection with, arising from or occurring as a
result of any Third Party Claim (including for death, personal injury or
product liability) arising from (i) the breach by Cubist of any of its
obligations under this Agreement (including this Section 14.3), (ii) the
breach or inaccuracy of any representation or warranty made by Cubist in this
Agreement, or (iii) the negligence or intentional misconduct of any Cubist
Indemnified Parties in connection with the performance of Cubist’s obligations
under this Agreement; except in each case (subsections (i) through (iii)),
for those Losses for which AstraZeneca has an obligation to indemnify Cubist
pursuant to Section 14.2, as to which Losses each party shall indemnify
the other to the extent of its respective liability for such Losses.

 

(b)         Cubist
shall indemnify the AstraZeneca Indemnified Parties, and defend and save each
of them harmless, from and against any and all Losses incurred by any of them
in connection with, arising from or occurring as a result of any Third Party
Claim for any []*, or (B) any equipment or technology []*, including the
use of Cubist’s Systems, or (ii) the use of any Cubist Trademark in any
Promotional Materials.

 

14.4         Indemnification
Procedure.

 

(a)          Notice
of Claim.  The indemnified party (the
“Indemnified Party”) shall give
the indemnifying party (the “Indemnifying
Party”) prompt written notice (an “Indemnification
Claim Notice”) of any Losses or discovery of facts upon which such
Indemnified Party intends to base a request for indemnification under Section 14.2
or Section 14.3, but in no event shall the Indemnifying Party be liable
for any Losses that result directly from any delay in providing such
notice.  Each Indemnification Claim
Notice must contain a description of the claim and the nature and amount of
such Loss (to the extent that the nature and amount of such Loss are known at
such time).  The Indemnified Party shall
furnish 

 

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

 

60

 

promptly to the Indemnifying Party copies of all papers and official
documents received in respect of any Losses.

 

(b)         Other Procedures.  The
obligations of an Indemnifying Party under Section 14.2 or Section 14.3
shall be governed by and be contingent upon the following additional terms and
conditions:

 

(i)            Control
of Defense.  At its option, the
Indemnifying Party may assume the defense of any Third Party Claim by giving
written notice to the Indemnified Party within thirty (30) calendar days after
the Indemnifying Party’s receipt of an Indemnification Claim Notice.  The assumption of the defense of a Third
Party Claim by the Indemnifying Party shall not be construed as an
acknowledgment that the Indemnifying Party is liable to indemnify any
Indemnified Party in respect of the Third Party Claim, nor shall it constitute
a waiver by the Indemnifying Party of any defenses it may assert against any
Indemnified Party’s claim for indemnification. 
Upon assuming the defense of a Third Party Claim, the Indemnifying Party
may appoint as lead counsel in the defense of the Third Party Claim any legal
counsel selected by the Indemnifying Party which shall be reasonably acceptable
to the Indemnified Party.  In the event
the Indemnifying Party assumes the defense of a Third Party Claim, the
Indemnified Party shall immediately deliver to the Indemnifying Party all
original notices and documents (including court papers) received by any
Indemnified Party in connection with the Third Party Claim.  Subject to clause (ii) below, if the
Indemnifying Party assumes the defense of a Third Party Claim, the Indemnifying
Party shall not be liable to the Indemnified Party for any legal expenses
subsequently incurred by such Indemnified Party in connection with the
analysis, defense or settlement of the Third Party Claim.  In the event that it is ultimately determined
that the Indemnifying Party is not obligated to indemnify, defend or hold
harmless an Indemnified Party from and against the Third Party Claim, the
Indemnified Party shall reimburse the Indemnifying Party for any and all costs
and expenses (including attorneys’ fees and costs of suit) and any Losses
incurred by the Indemnifying Party in its defense of the Third Party Claim with
respect to such Indemnified Party.

 

(ii)           Right
to Participate in Defense.  Without
limiting Section 14.4(b)(i), any Indemnified Party shall be entitled to
participate in, but not control, the defense of such Third Party Claim and to
employ counsel of its choice for such purpose; provided, however, that such
employment shall be at the Indemnified Party’s own expense unless (A) the
employment thereof has been specifically authorized by the Indemnifying Party
in writing, or (B) the Indemnifying Party has failed to assume the defense
and employ counsel in accordance with Section 14.4(b)(i) (in which
case the Indemnified Party shall control the defense).

 

(iii)          Settlement.  With respect to any Losses relating solely to
the payment of money damages in connection with a Third Party Claim and that
will not result in the Indemnified Party’s becoming subject to injunctive or
other relief or otherwise adversely affect the business of the Indemnified
Party in any manner, and as to which the Indemnifying Party shall have acknowledged
in writing the obligation to indemnify the Indemnified Party hereunder, the
Indemnifying Party shall have the sole right to consent to the entry of any
judgment, enter into any settlement or otherwise dispose of such Loss, on such
terms as the Indemnifying Party, in its sole discretion, shall deem
appropriate.  With respect to all other
Losses in connection with 

 

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

 

61

 

Third Party
Claims, where the Indemnifying Party has assumed the defense of the Third Party
Claim in accordance with Section 14.4(b)(i), the Indemnifying Party shall have
authority to consent to the entry of any judgment, enter into any settlement or
otherwise dispose of such Loss provided that it obtains the prior written
consent of the Indemnified Party (which consent shall not be unreasonably
withheld, conditioned or delayed).  The
Indemnifying Party shall not be liable for any settlement or other disposition
of a Loss by an Indemnified Party that is reached without the prior written
consent of the Indemnifying Party. 
Regardless of whether the Indemnifying Party chooses to defend or
prosecute any Third Party Claim, no Indemnified Party shall admit any liability
with respect to, or settle, compromise or discharge, any Third Party Claim
without the prior written consent of the Indemnifying Party (which consent
shall not be unreasonably withheld, conditioned or delayed).

 

(iv)          Cooperation.  Regardless of whether the Indemnifying Party
chooses to defend or prosecute any Third Party Claim, the Indemnified Party
shall cooperate in the defense or prosecution thereof and shall furnish such
records, information and testimony, provide such witnesses and attend such
conferences, discovery proceedings, hearings, trials and appeals as may be
reasonably requested in connection therewith. 
Such cooperation shall include access during normal business hours
afforded to the Indemnifying Party to, and reasonable retention by the
Indemnified Party of, records and information that are reasonably relevant to
such Third Party Claim, and making employees and agents available on a mutually
convenient basis to provide additional information and explanation of any
material provided hereunder, and the Indemnifying Party shall reimburse the
Indemnified Party for all its reasonable out-of-pocket expenses in connection
therewith.

 

(v)           Expenses.  Except as provided above, the reasonable and
verifiable costs and expenses, including fees and disbursements of counsel,
incurred by the Indemnified Party in connection with any Third Party Claim
shall be reimbursed on a Calendar Quarter basis by the Indemnifying Party,
without prejudice to the Indemnifying Party’s right to contest the Indemnified
Party’s right to indemnification and subject to refund in the event the
Indemnifying Party is ultimately held not to be obligated to indemnify the
Indemnified Party.

 

14.5         Cubist Workers’
Compensation and Liability Insurance.

 

(a)          Cubist
shall, at its own expense, provide and keep in full force and effect during the
Term the following kinds and minimum amounts of insurance:

 

(i)            Workers’
Compensation.  Workers’ compensation
statutory coverage as required by the laws of the jurisdictions in which the
services hereunder are performed;

 

(ii)           Employer’s
Liability.  Employer’s liability
insurance with a limit of []* for bodily injury by accident per person, []*
disease and []* policy limit;

 

(iii)          Automobile.  Commercial automobile liability insurance with
a []* combined single limit on vehicles owned, leased or hired by Cubist while
performing its obligations under this Agreement;

 

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

 

62

 

(iv)          General
Liability.  Commercial general
liability insurance in the amount of []* each occurrence and aggregate;

 

(v)           Umbrella
Liability.  Umbrella liability
insurance in the amount of []* each occurrence and aggregate; and

 

(vi)          Employment
Practices Liability Insurance. 
Employment practices liability insurance in the amount of []* each
occurrence.

 

(b)         Each
of the above policies shall be []* to any liability insurance carried by
AstraZeneca, which insurance shall be []* for claims and losses arising out of
the performance of this Agreement.

 

(c)          A
certificate(s) of insurance evidencing the coverages in Section 14.5(a) shall
be submitted to AstraZeneca by Cubist prior to the Program Commencement Date
and shall bear a certification that the coverage specified therein will not be
cancelled without at least []* prior written notice to AstraZeneca’s purchasing
department.  All such policies shall be
written with a company or companies listed to do business in []* having a
financial rating of not less than []* in the most current edition of Best’s Key
Rating Guide.  []*.

 

14.6         AstraZeneca Insurance.

 

AstraZeneca shall, at its own expense, provide and
keep in full force and effect during the Term product liability insurance in
the amount of []* each occurrence and aggregate and []*.  A certificate of insurance evidencing the
coverage described in this Section 14.6 shall be submitted to Cubist by
AstraZeneca prior to the Program Commencement Date and shall bear a
certification that the coverage specified therein will not be cancelled without
at least []* prior written notice to Cubist. 
All such policies shall be written with a company or companies listed to
do business in []* having a financial rating of not less than []* in the most
current edition of Best’s Key Rating Guide.

 

14.7         Limitations of
Liability; Cap.

 

TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY’S
AND ITS AFFILIATES’ TOTAL COLLECTIVE LIABILITY UNDER OR RELATING TO THIS
AGREEMENT, EXCLUDING ITS LIABILITY UNDER []*, AS THE CASE MAY BE (WHICH
LIABILITY SHALL NOT BE SUBJECT TO THE CAP), SHALL NOT EXCEED, IN THE AGGREGATE,
THE CAP.  NOTWITHSTANDING THE FOREGOING,
THE CAP SHALL NOT APPLY TO ANY LIABILITY ARISING FROM (a) []* OF SUCH
PARTY OR ANY OF ITS AFFILIATES, OR THEIR RESPECTIVE DIRECTORS, OFFICERS,
EMPLOYEES OR AGENTS, OR (b) ANY []* BY SUCH PARTY OR ANY OF ITS
AFFILIATES, OR THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES OR AGENTS, NOR
SHALL THE CAP APPLY TO []*.  THE “CAP” SHALL EQUAL THE GREATER OF []*, AND []*, BUT IN NO
EVENT SHALL THE CAP EXCEED []*.  EACH
PARTY ACKNOWLEDGES AND AGREES THAT THE LIMITATIONS OF LIABILITIES 

 

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

 

63

 

SET FORTH IN THIS SECTION 14.7 WERE BARGAINED FOR
AND ARE ESSENTIAL TERMS OF THIS AGREEMENT.

 

ARTICLE XV- TERM AND TERMINATION

 

15.1         Term.

 

The term of this Agreement
shall commence on the Effective Date and shall continue through December 31,
2012, unless earlier terminated pursuant to Section 15.2 or any other applicable provision of this
Agreement (the “Term”).

 

15.2         Termination.

 

Without limitation of any other right of termination
(or automatic termination) set forth elsewhere in this Agreement:

 

(a)          This
Agreement shall terminate automatically upon (i) termination of the
Sumitomo License, or (ii) an amendment to the Sumitomo License that (A) causes
the rights of AstraZeneca UK Limited thereunder to sell the Product in the
Territory to be other than exclusive []* or (B) terminates the rights of
AstraZeneca UK Limited thereunder to sell the Product in the Territory;
provided that AstraZeneca shall notify Cubist in writing of such termination or
any such amendment of the Sumitomo License as promptly as possible after its
occurrence.

 

(b)         This
Agreement may be terminated by either party pursuant to any of the following
clauses:

 

(i)            Immediately
upon written notice to the other party, in the event of a material breach of
this Agreement by the other party (other than those breaches and events
described in Sections 15.2(c) or 15.2(d), which shall be governed by those
Sections), including in the case of Cubist as the breaching party, a failure to
fully perform its obligations to conduct the required level of Detailing under Section 3.1(a) in
a calendar month (if applicable) or Calendar Quarter, which breach remains
uncured thirty (30) calendar days after written notice thereof is given to the
breaching party (except in the case of a breach by either party of its obligations
under Section []*, the cure period shall be []* instead of thirty (30)
calendar days).  Notwithstanding the
foregoing, AstraZeneca shall not have the right to terminate this Agreement
pursuant to this Section 15.2(b)(i) on the basis of Isolated Program
Employee Conduct.

 

(ii)           Immediately
upon written notice to the other party, (A) if
the other party files in any court or Agency, pursuant to any statute or
regulation of any state or country, a petition in bankruptcy or insolvency or
for reorganization or for an arrangement or for the appointment of a receiver
or trustee of that party or of its assets; (B) if the other party proposes
a written agreement of composition or extension of its debts; (C) if the
other party shall be served with an involuntary petition against it, filed in
any insolvency proceeding, and such petition shall not be dismissed within
sixty (60) calendar days after the filing thereof; (D) if the other party
consents to the appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of such party
or for any substantial part of its property or 

 

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

 

64

 

make any
assignment for the benefit of creditors; (E) if the other party admits in
writing its inability to pay its debts generally as they become due; or (F) if
any judgment, writ, warrant of attachment or execution or similar process shall
be issued or levied against property of the other party which represents a
substantial portion of its property.

 

(iii)          In
the event that Cubist ceases to Promote Cubicin in the Territory, by written
notice to the other party, effective as of the later of (A) the date on
which such notice is provided, and (B) the date on which Cubist ceases to
Promote Cubicin in the Territory.

 

(iv)          Upon at least []* prior written notice to the
other party, provided that the effective date of such termination shall be no
earlier than January 1, 2010.

 

(c)          This
Agreement may be terminated by AstraZeneca pursuant to any of the following
clauses:

 

(i)            Upon
thirty (30) calendar days’ prior written notice to Cubist, if, for []*
consecutive Calendar Quarters, Gross Sales for each such Calendar Quarter do
not exceed []* of Quarterly Baseline Sales for such Calendar Quarter.

 

(ii)           Immediately
upon written notice to Cubist, if (A) AstraZeneca withdraws the Product from
the market in the Territory, (B) AstraZeneca is required or determines, for
safety or efficacy reasons, to restrict the approved indications for the
Product in the Territory or (C) any government entity, including any federal or
state entity, imposes price controls that are reasonably likely to result in an
obvious and substantial loss of Gross Sales for the Product.

 

(iii)          Immediately upon written notice to Cubist, if
Cubist violates Section 11.1.

 

(iv)          Immediately
upon written notice to Cubist, if there is a Change in Control with respect to
Cubist, provided that such notice of termination is given within thirty (30)
calendar days  after the later of (A) such
Change in Control and (B) the date on which Cubist provides AstraZeneca
with written notice thereof.

 

(v)           Immediately
upon written notice to Cubist, if (A) Cubist fails to maintain the
required number of Representatives as set forth in Section 3.1 (taking
account of the permitted vacancy rate) for []* or (B) Cubist fails to
maintain the required number of CSDs as set forth in Section 3.2 (taking
account of the permitted vacancy rate) for []*.

 

(vi)          Upon ten (10) calendar days’ prior
written notice to Cubist, if (A) Cubist has failed to ensure
compliance by the Program Employees with Applicable Law, which failure to
comply is not promptly rectified after first notice thereof to (w) Cubist’s
chief []*, (B) Cubist fails to report to AstraZeneca within []* business
days after when []* first learns of any material violation by any Program
Employee of Applicable Law, excluding any violations of the American Medical
Association Guidelines on Gifts to Physicians from Industry or PhRMA Code on
Interactions with Healthcare Professionals (which violations are covered by
clause (C)), (C) Cubist fails to report to AstraZeneca within []* business
days after []* violation 

 

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

 

65

 

by any Program
Employee of the American Medical Association Guidelines on Gifts to Physicians
from Industry or PhRMA Code on Interactions with Healthcare Professionals, or (D) Cubist fails to fulfill
its reporting obligations set forth in clause (ii) of Section 8.1(c) and
has not cured such failure as of the earlier of (x) []* business days
after notice from AstraZeneca of such failure or (y) []* business days
after the date on which []* of such failure; 
provided however, that none of the foregoing is materially the result of
the use, in compliance with the Agreement, of Promotional Materials, training materials
or other materials, in each case provided by or on behalf of AstraZeneca, or
actions taken at the direction of AstraZeneca (where AstraZeneca’s approval or
deemed approval shall not constitute “direction”), or materially due to any
violation of Applicable Law by AstraZeneca or any of its Affiliates.

 

(vii)         Upon []* business days’ prior written notice
to Cubist, in the case of a Significant Stockout, provided that such written
notice of termination is provided no later than []* calendar days after the end
of such Significant Stockout.

 

(d)         This
Agreement may be terminated by Cubist pursuant to any of the following clauses:

 

(i)            Immediately
upon written notice to AstraZeneca, if (A) AstraZeneca withdraws the
Product from the market in the Territory, (B) AstraZeneca fails to
maintain the Product NDA, (C) AstraZeneca is required or determines, for
safety or efficacy reasons, to restrict the indications  approved for the Product under the Product
NDA or (D) any government entity, including any federal or state entity, imposes
price controls that are reasonably likely to result in an obvious and
substantial loss of Gross Sales.

 

(ii)           Immediately
upon written notice to AstraZeneca, if AstraZeneca or its Affiliates, directly
or indirectly, (i) market, Promote, sell or accept orders for the sale of
any Competing Product in the Territory, or (ii) assist or cooperate in any
way with any other Person in connection with the marketing, Promotion, selling
or acceptance of orders for the sale of any Competing Product in the Territory.

 

(iii)          Immediately upon written notice to
AstraZeneca, if there is a Change in Control with respect to AstraZeneca,
provided that such notice of termination is given within thirty (30) calendar
days  after the later of (A) such Change in Control and (B) the
date on which AstraZeneca provides Cubist with written notice thereof.

 

(iv)          Upon
ten (10) calendar days’ prior written notice to AstraZeneca, if
AstraZeneca or any of its Affiliates has failed to comply with Applicable Law
in connection with the performance of its obligations under this Agreement,
which failure would reasonably be expected to have a material adverse effect on
the Promotion of the Product in the Territory.

 

(v)           Upon
[]* business days’ prior written notice to AstraZeneca, in the case of a
Significant Stockout, provided that such written notice of termination is
provided no later than []* calendar days after the end of such Significant
Stockout.

 

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

 

66

 

15.3         Effect of Expiration
or Termination.

 

(a)          Notwithstanding
any provision herein to the contrary, in the event that the Term does not end
on the last day of a Calendar
Year, for any reason, then the last day of the Term shall be treated as the last day of the
Calendar Year and the end-of-Term proration principles set forth in Section 6.2(a) shall
apply to calculate the final amount due and payable to Cubist pursuant to
ARTICLE VI.

 

(b)         Notwithstanding any provision herein to the contrary, without limiting
any of a party’s other rights or remedies hereunder or otherwise in law or
equity, in the event that this Agreement (i) terminates automatically
pursuant to Section 15.2(a) because []*.

 

(c)          Upon
the effective date of the expiration or termination of this Agreement, except
as otherwise agreed by AstraZeneca and Cubist in writing with respect to any
wind-down activities, Cubist shall promptly cease all Promotion of the Product,
including Detailing, and all CSD Activities, and promptly discontinue the use of
any Promotional Materials, AstraZeneca CSD Materials, and Product Trademarks.

 

(d)         Except as otherwise
expressly provided herein, termination of this Agreement in accordance with the
provisions hereof shall not limit remedies that may otherwise be available in
law or equity.

 

15.4         Accrued
Rights; Surviving Obligations.

 

(a)          Termination
or expiration of this Agreement for any reason shall be without prejudice to
any rights that shall have accrued to the benefit of a party prior to such
termination or expiration.  Such
termination or expiration shall not relieve a party from obligations that are
expressly indicated to survive the termination or expiration of this Agreement.

 

(b)         Sections
3.11 (with respect to reporting for the final month or Calendar Quarter of the
Term, as applicable), 6.2 (for purposes of the final accounting of amounts due
to Cubist hereunder), 6.3, 6.4, 8.1(c) through (j) (if and to the
extent required by Applicable Law), 8.1(n) (if and to the extent required
by Applicable Law), 10.1, 10.2, 13.5, 14.2 through 14.4, 14.7, 15.3, 15.5, this
Section 15.4, and Articles IX, XI (solely for the time period set forth
therein), XII,
and XVI shall survive expiration or earlier termination of this Agreement for
any reason.

 

15.5         Return
of All Materials.

 

Upon the expiration or
earlier termination of this Agreement, Cubist shall destroy or promptly ship or
otherwise provide to AstraZeneca all Promotional Materials, training materials
and other materials (including Sales Training Materials and CSD Training
Materials) including any and all copies, in any form, of any of the foregoing
made by or on behalf of Cubist or its Affiliates or AstraZeneca, in Cubist’s
possession or control (including those in the possession of any Program
Employee, Affiliate or printer of Cubist). 
Cubist shall ensure that all electronic copies of any of the foregoing
within Cubist’s possession or control (including those 

 

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

 

67

 

in the possession of any
Program Employee) are deleted; provided that Cubist may retain, for archival
purposes only, electronic copies made as routine back-ups in accordance with
Cubist’s standard operating procedures and one copy of other materials in
non-electronic form by Cubist’s general counsel solely for archival
purposes.  Notwithstanding anything
contained herein, (a) Cubist shall not have any obligation to return any
such materials that contain the Cubist Trademarks, but shall not use, and shall
ensure that all such materials are destroyed, and (b) with respect to all
materials relating to the Promotion of the Product in the Territory in
AstraZeneca’s or any of its Affiliate’s possession or control that contain any
Cubist Trademark, AstraZeneca shall not use such materials and shall ensure
that all such materials are destroyed.

 

ARTICLE XVI - MISCELLANEOUS

 

16.1         Dispute
Resolution.

 

(a)          Subject
to Sections 11.2, 12.6 and 16.1(d),
in the event that the parties or the Designated Medical Affairs Representatives
fail to resolve any Dispute, other than with respect to a Dispute resolved by
AstraZeneca’s Designated Medical Affairs Representative pursuant to Section 5.2,
within the time period specified in this Agreement for resolution of the
applicable matter, or if no time
period is so specified, within a
reasonable time, either party may refer such Dispute to executive
representatives of the parties (each such executive representative shall be
designated by the party to be represented) who have decision-making authority
regarding such matter (subject to Board of Directors’ or equivalent approval,
if required).  Within ten (10) calendar
days after either party gives written notice to the other party of its desire
to resolve such a Dispute pursuant to this Section 16.1(a) (the “Dispute Notice”), such executive
representatives shall meet at a mutually acceptable time and place, and
thereafter as often as they reasonably deem necessary, to exchange relevant
information and to attempt to resolve the Dispute.

 

(b)         If, within thirty (30) calendar days after
the Dispute Notice is provided (“Escalation Period”),
such executive representatives have not resolved a Dispute, then (i) if
such Dispute is not []*, neither
party shall be precluded from initiating litigation or other legal action with
respect to such Dispute, or []* Section 16.1(c) shall
apply.  Notwithstanding anything
contained herein, if there is []*
that involves any provisions of this Agreement that relate to []*.

 

(c)          Any
[]* not resolved by the executive representatives of the parties, within the
time period set forth in Section 16.1(b), may be submitted by either
party, upon written notice to the other party to expert arbitration pursuant to
this Section 16.1(c) (an “Arbitration Notice”) and shall be finally
settled by such arbitration.  Such
arbitration shall, unless otherwise mutually agreed by the parties, be held, if
initiated by AstraZeneca, in Massachusetts, and if initiated by Cubist, in Delaware,
before one neutral arbitrator (selected as set out below in Section 16.1(c)(i)).  Such right shall be without limitation to any
termination right of a party that may arise as a result of the Significant
Market Event to which such Baseline Sales Dispute relates.

 

(i)            Following
delivery of an Arbitration Notice pursuant to this Section 16.1(c) with respect to a []*, the parties shall promptly negotiate
in good faith to appoint 

 

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

 

68

 

a mutually
acceptable neutral arbitrator who has the appropriate business background in
the pharmaceutical industry and experience as an arbitrator of disputes between
entities in the pharmaceutical industry not affiliated with either party (a “Neutral”).  If the
parties are not able to agree in writing on a mutually acceptable Neutral
within ten (10) calendar days after delivery of such Arbitration Notice,
the International
Institute for Conflict Prevention & Resolution (“CPR Institute”) shall be responsible
for selecting a qualified, disinterested and conflict-free Neutral (in
accordance with its rules for selecting such a person, if any) within
fifteen (15) calendar days after a written request by either party (the other
party shall be copied on such request). 
The out-of-pocket fees and costs of the Neutral and, if any, the CPR
Institute, in connection with the arbitration shall be shared equally by the
parties.

 

(ii)           Within
thirty (30) calendar days after such matter is referred to the Neutral, each
party shall provide the Neutral and the other party with such party’s proposal
with respect to []* with a written memorandum in support of such proposal,
including any relevant supporting data and analysis (a “Proposal”). 
Within sixty (60) calendar days after such matter was first referred to
the Neutral, each party shall have the right to respond to the other party’s
Proposal, including its memorandum and supporting data and analysis (but
neither party may change its own Proposal), which response and any data and
analysis in support thereof shall be provided to the Neutral and the other
party (a “Response”).

 

(iii)          Within fifteen (15) calendar days after the
earlier of (a) each party’s receipt of the other party’s Response and (b) the
seventy-fifth (75th)
calendar day after such matter was first submitted to arbitration, the
Neutral must select one or the other of the parties’ Proposals to resolve the Baseline Sales Dispute and may not
combine, supplement or otherwise modify the parties’ Proposals in any
manner.  If a Party fails to submit a
Proposal to the Neutral as provided hereunder, the Proposal submitted by the
other party to the Neutral shall be deemed to be the selected Proposal.  The authority of the Neutral shall be
expressly and solely limited to considering the two Proposals (and any
Responses) submitted to the Neutral by the parties and to choosing between the
two Proposals, and, within the scope of the Neutral’s limited authority, the
decision of the Neutral made in accordance with the terms of this Section 16.1
shall be a final, legal, valid and binding and enforceable against the
parties.  With respect to a []*, the Neutral shall establish the
[]*, as applicable, that were the subject of the []* by selecting the amount(s) proposed
by one of the parties as set out in its Proposal that is the most fair and
reasonable to the parties in light of the totality of the circumstances.  The amount(s) set out in the party’s
Proposal selected by the Neutral shall be deemed, upon a decision by the
Neutral in accordance with the terms of this Section 16.1, to be the []*
for the applicable Calendar Year(s) and Calendar Quarter(s) that were
the subject of such []* for all purposes under this Agreement.  The parties hereby waive any right to
institute a court or other dispute resolution proceeding with respect to, and
acknowledge that arbitration in accordance with this Section 16.1(c) is
the sole and exclusive means of resolving, a []*.  For the avoidance of doubt, the Neutral shall
not have any authority (A) to award any damages or to act contrary to, or
to modify or otherwise amend, any of the terms or conditions of this Agreement
or (B) determine whether or not an event constitutes a []*.

 

(d)         Neither party shall initiate litigation or
other legal action with respect to any Dispute until after the conclusion of
the Escalation Period; provided that nothing in this 

 

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

 

69

 

Section 16.1 shall preclude either party from seeking interim or
provisional relief, including a temporary restraining order, preliminary
injunction or other interim equitable relief with respect to a Dispute if
necessary to protect the interests of such party.  This Section 16.1 shall be specifically
enforceable.

 

16.2         Governing
Law, Jurisdiction, Venue and Service of Process.

 

The interpretation and
construction of this Agreement, and all matters relating hereto, shall be
governed by the laws of the State of Delaware applicable to agreements executed
and to be performed solely within such state excluding any conflicts or choice of law rule or principle that
might otherwise refer construction or interpretation of this Agreement to the
substantive law of another jurisdiction. 
Each party hereby irrevocably and unconditionally (a) consents
to the exclusive jurisdiction of the courts of the State of Delaware or in the
United States District Court for Delaware for any action, suit or proceeding
(other than appeals therefrom) arising out of or relating to this Agreement,
and agree not to commence any action, suit or proceeding (other than appeals
therefrom) related thereto except in such courts, (b) waives its right to
a jury trial, (c) waives any objection to the laying of venue of any
action, suit or proceeding (other than appeals therefrom) arising out of or
relating to this Agreement in the courts of the State of Delaware or in the
United States District Court for Delaware, (d) agrees not to plead or
claim in any such court that any such action, suit or proceeding brought in any
such court has been brought in an inconvenient forum, and (e) agrees that
service of any process, summons, notice or document by registered mail to its
address set forth in Section 16.5 shall be effective service of process
for any action, suit or proceeding brought against it under this Agreement in
any such court.

 

16.3         Force
Majeure.

 

Neither party shall be
liable for delay in delivery or nonperformance in whole or in part, nor shall
the other party have the right to terminate this Agreement except as otherwise
specifically provided in this Section 16.3, where delivery or performance
has been affected by a condition beyond a party’s reasonable control, including
inability to obtain labor, materials or manufacturing facilities; provided,
that the party affected by such a condition shall, within ten (10) calendar
days after its occurrence, give notice to the other party stating the nature of
the condition, its anticipated duration and any action being taken to avoid or
minimize its effect.  The suspension of
performance shall be of no greater scope and no longer duration than is
reasonably required and the nonperforming party shall use its reasonable
efforts to remedy its inability to perform; provided, however, that if the
suspension of performance continues for sixty (60) calendar days after the date
of the occurrence, and such failure to perform would constitute a material
breach of this Agreement in the absence of such force majeure, the nonaffected
party may terminate this Agreement immediately upon written notice to the other
party.

 

16.4         Waiver.

 

A
party’s failure to enforce, at any time or for any period of time, any
provision of this Agreement, or to exercise any right or remedy, does not
constitute a waiver of such provision, right or remedy, or prevent such party
thereafter from enforcing any or all provisions 

 

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

 

70

 

and
exercising any or all other rights and remedies.  The exercise of any right or remedy does not
constitute an election or prevent the exercise of any or all rights or
remedies, all rights and remedies being cumulative.  In no event shall AstraZeneca’s (or the AZAP
Review Team’s) approval (or deemed approval) of any (a) materials to be
used by Cubist or its Affiliates in connection with the Program, or (b) acts or
omissions of Cubist or its Affiliates in connection with the Program,
constitute a waiver of AstraZeneca’s rights, or otherwise be deemed to limit
Cubist’s obligations, under this Agreement, including with respect to any
breach of this Agreement by Cubist.  In
no event shall Cubist’s (or Cubist’s AZAP Representative’s) approval (or deemed
approval) of any (x) materials provided by AstraZeneca or its Affiliates in
connection with its activities under this Agreement or (y) acts or
omissions of AstraZeneca or its Affiliates in connection with
its activities under this Agreement, constitute a waiver of Cubist’s
rights, or otherwise be deemed to limit AstraZeneca’s obligations, under this
Agreement, including with respect to any breach of this Agreement by
AstraZeneca.

 

16.5         Notices.

 

Unless otherwise expressly
provided for herein, all Notices shall be in writing, shall refer specifically to this Agreement and shall be hand
delivered or sent by express courier service, costs prepaid, or by facsimile,
to the respective addresses specified below (or to such other address as may be
specified by Notice to the other party):

 

	
  If
  to AstraZeneca, to:

  	
  AstraZeneca
  Pharmaceuticals LP

  1800 Concord Pike

  Wilmington, Delaware 19803

  Attention: Alliance Manager

  U.S. Business Development

  Facsimile No.: []*

  
	
   

  	
   

  
	
  With
  a copy to:

  	
  AstraZeneca
  Pharmaceuticals LP

  1800 Concord Pike

  Wilmington, Delaware 19803

  Attention: General Counsel

  Facsimile No.: []*

  
	
   

  	
   

  
	
  If
  to Cubist, to:

  	
  Cubist
  Pharmaceuticals, Inc.

  65 Hayden Avenue

  Lexington, Massachusetts 02421

  Attention: Chief Operating Officer

  Facsimile No.: 781-274-0787

  

 

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

 

71

 

	
  With
  a copy to:

  	
  Cubist
  Pharmaceuticals, Inc.

  65 Hayden Avenue

  Lexington, Massachusetts 02421

  Attention: General Counsel

  Facsimile No.: 781-860-1407

  

 

Any
Notice delivered by facsimile or similar means shall be confirmed by a hard
copy delivered as soon as practicable thereafter.  The effective date of any Notice shall be: (a) the
date of the addressee’s receipt, if delivered by hand or express courier; or (b) the
date of receipt if received by 5:00 p.m. local time on a business day or,
if not, the first business day after receipt, if sent by facsimile.  It is understood and agreed that this Section 16.5
is not intended to govern the day-to-day business communications necessary
between the parties in performing their duties, in due course, under the terms
of this Agreement.

 

16.6        Entire Agreement.

 

This Agreement, including
the Exhibits attached hereto, constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior or
contemporaneous understandings or agreements, whether written or oral, with
respect to the subject matter hereof, including, with respect to such subject
matter, that certain reciprocal confidentiality agreement between the parties
effective as of December 3, 2007. 
Each party confirms that it is not relying on any representations or
warranties of the other party except as specifically set forth herein.  No amendment or modification hereof shall be
binding upon the parties unless in writing and duly executed by authorized
representatives of both parties.

 

16.7         Successors;
Assigns; Subcontracting.

 

The terms and provisions
hereof shall inure to the benefit of, and be binding upon, AstraZeneca, Cubist
and their respective successors and permitted assigns.  Subject to Section 16.11, neither party shall assign or transfer this
Agreement, or assign, transfer or delegate any of its rights or obligations
hereunder, including subcontracting any of its obligations hereunder without
the prior written consent of the other party; provided, however, that each
party shall have the right, without the consent of the other party, (a) to
assign or transfer this Agreement, or to assign, transfer or delegate any of
its rights and obligations hereunder, to its Affiliates, (b) to assign or
transfer this Agreement to any successor in interest in any manner to all or
substantially all of the business to which this Agreement relates (in the case
of Cubist, solely in connection with a Change in Control), or (c) to
subcontract the performance of any of its obligations hereunder to any Person
(other than, with respect to Cubist, any of its obligations relating to
Promotion or CSD Activities hereunder with respect to the Product in the
Territory (except with respect to vendors in connection with the Speaker
Program, as set forth in Section 3.3(a)), provided that such party shall remain
responsible for such obligations to the extent it would be responsible for its
own performance of such obligations.  Any
attempt to assign, transfer, subcontract or delegate this Agreement, or any
rights or obligations hereunder, in violation of this Section 16.7 shall be null and void.  Each party shall notify the other party as
promptly as possible of (i) any assignment or transfer of any of its
rights or obligations hereunder, or any 

 

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

 

72

 

assignment or transfer of
this Agreement by such party, or (ii) any Change in Control with respect
to such party.

 

16.8         Exhibits.

 

All Exhibits referred to in
this Agreement are intended to be, and hereby are, specifically incorporated
into and made a part of this Agreement; provided that, in the event of
any conflict or any inconsistency between any term or condition of this
Agreement and any term or condition of any Exhibit or other attachment
hereto, the terms and conditions of this Agreement shall control.

 

16.9         Counterparts.

 

This Agreement may be
executed in one or more counterpart copies, each of which shall be deemed an
original and all of which taken together shall be deemed to constitute one and
the same instrument.  It shall not be
necessary in making proof of this Agreement or any counterpart hereof to
produce or account for any of the other counterparts.

 

16.10       Severability.

 

If any provision hereof
should be invalid, illegal or unenforceable in any respect, then, to the
fullest extent permitted by applicable law, (a) all other provisions
hereof shall remain in full force and effect and shall be liberally construed
in order to carry out the intent of the parties as nearly as may be possible,
and (b) the parties shall use their best efforts to negotiate a provision,
in replacement of the provision held invalid, illegal or unenforceable, that is
consistent with applicable law and accomplishes, as nearly as possible, the
original intention of the parties with respect thereto.  To the fullest extent permitted by applicable
law, each party hereby waives any provision of law that would render any
provision hereof prohibited or unenforceable in any respect.

 

16.11       Affiliates.

 

Each party shall cause its
respective Affiliates to comply fully with the provisions of this Agreement to
the extent such provisions relate, or are intended to relate to such
Affiliates, as if such Affiliates were expressly named as joint obligors hereunder.  Without limiting the generality of the
foregoing or Section 16.7, any obligations of a party hereunder may be
delegated to or performed by any of such party’s Affiliates, and such
obligations will be deemed satisfied upon performance by such Affiliate.

 

16.12       Expenses.

 

Each of the parties shall
pay the fees and expenses of its respective counsel and other experts and all
other expenses, except as otherwise expressly set forth herein, incurred by
such party incident to the negotiation, preparation, execution, delivery and
performance of this Agreement.

 

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

 

73

 

16.13       Further Assurances.

 

Each party shall duly execute
and deliver, or cause to be duly executed and delivered, such further
instruments and do and cause to be done such further acts and things, including
the filing of such assignments, agreements, documents and instruments, as may
be necessary or as the other party may reasonably request to carry out more
effectively the provisions and purposes hereof, or to better assure and confirm
unto such other party its rights and remedies under this Agreement.

 

16.14       Construction.

 

The captions of this
Agreement are for convenience of reference only and in no way define, describe,
extend or limit the scope or intent of this Agreement or the intent of any
provision contained in this Agreement. 
The language of this Agreement shall be deemed to be the language
mutually chosen by the parties and no rule of strict construction shall be
applied against either party hereto.

 

16.15       No Joint Venture.

 

Nothing contained in this
Agreement shall be construed as creating a partnership, joint venture or agency
relationship between the parties hereto or, except as otherwise expressly
provided herein, as granting to either party the authority to bind or contract
any obligation in the name of or on the account of the other party, or to make
any statements, representations, guarantees or warranties on behalf of the
other party.

 

[The remainder of this page has been
intentionally left blank.]

 

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

 

74

 

IN WITNESS WHEREOF, the
parties have caused this Commercial Services Agreement to be executed by their
representatives thereunto duly authorized as of the Effective Date.

 

 

	
  ASTRAZENECA
  PHARMACEUTICALS LP

  	
   

  	
  CUBIST
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s Anthony P. Zook

  	
   

  	
  By:

  	
  /s Michael W. Bonney

  
	
  Name:

  	
  Anthony P. Zook

  	
   

  	
  Name:

  	
  Michael W. Bonney

  
	
  Title:

  	
  President and CEO

  	
   

  	
  Title:

  	
  President and CEO

  
									

 

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

 

75

 

EXHIBIT A

ANNUAL AND QUARTERLY BASELINE SALES

AND

EXAMPLE OF CALCULATION OF ANNUAL AMOUNT DUE

 

This Exhibit is subject to the terms and
conditions of the Agreement.

 

The following terms shall have their indicated
meanings when used in this Exhibit A and elsewhere in the
Agreement:

 

[]* means, for a Calendar Year (or portion thereof),
the []* for such Calendar Year (or portion thereof) multiplied by the []* for
such Calendar Year or portion thereof).

 

[]* means, for a Calendar Year (or portion thereof),
the Gross Sales for such Calendar Year (or portion thereof) []*.

 

“Annual Amount Due”
or “AAD” means, subject to Section 6.2(a) and
(f) of the Agreement, for a Calendar Year (or portion thereof), the []*
for such Calendar Year (or portion thereof), unless this Agreement is effective
for less than the entirety of such Calendar Year (i.e., not in effect at the
beginning of such Calendar Year or terminated in accordance with the terms of
this Agreement), in which event the AAD shall be prorated as set forth in the
proration principles set forth in Section 6.2(a) of the
Agreement.  For clarity, the AAD shall be
determined after the end of such Calendar Year unless this Agreement is
terminated in accordance with its terms before the end of such Calendar Year
and in which event it shall be determined at the end of the Calendar Quarter in
such Calendar Year where the Agreement is terminated (provided that this
sentence relates only to the determination of the AAD and not the time period
used to calculate the AAD, which shall be determined in accordance with the
aforementioned proration principles).

 

“Annual Baseline
Amount” or “ABA” means
$20,000,000 (Twenty Million Dollars).

 

“Annual Baseline
Sales” or “ABS” means
the forecasted Gross Sales for a Calendar Year as set forth in this Exhibit A
or determined pursuant to Section 6.1.

 

[]* means, for a Calendar Year (or portion thereof),
[]* for such Calendar Year (or portion thereof).

 

[]* means, for a Calendar Year (or portion thereof),
the []* for such Calendar Year (or portion thereof) divided by the []* for such
Calendar Year (or portion thereof), expressed as a percentage.

 

“Quarterly Amount
Due” means, subject to Section 6.2(a) and (f), (i) for
any Calendar Quarter during the Term, other than the last Calendar Quarter of
any Calendar Year, one-fourth (1/4) of the Annual Baseline Amount for the
Calendar Year in which such Calendar Quarter occurs and (ii) for the last
Calendar Quarter of a Calendar Year, the difference between the Annual Amount
Due for the Calendar Year in which such Calendar Quarter occurs and the sum of
the Quarterly Amount Due for each prior Calendar Quarter during such Calendar
Year.  Notwithstanding the

 

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

 

A-1

 

foregoing, the last Calendar Quarter of the Term shall
be treated under clause (ii) rather than clause (i) and the
calculations under this definition shall be subject to the proration principles
set forth in Section 6.2(a) of the Agreement.

 

“Stepped Amount”
means, subject to the proration principles set forth in Section 6.2(a), in
the case where []*

 

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

 

A-2

 

I.                                         Annual
and Quarterly Baseline Sales by Calendar Year:

 

	
  Calendar Year

  	
   

  	
  Annual Baseline Sales

  (as of the Effective Date []*)

  	
   

  	
  Quarterly Baseline Sales

  	
   

  
	
  2008

  	
   

  	
  []*

  	
   

  	
  []*

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  []*

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2009

  	
   

  	
  []*

  	
   

  	
  []*

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  []*

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  []*

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  []*

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  During the Term,
  commencing 2010

  	
   

  	
  To be determined pursuant to Section 6.1 of the Agreement

  	
   

  	
  To be determined pursuant to Section 6.1 of the Agreement

  	
   

  

 

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

 

A-3

 

II.                                     Example
Calculation of Annual Amount Due:

 

An example, for illustrative purposes only, of the
foregoing calculation is provided below:

 

Assuming that in Calendar Year 2009 the Gross Sales
are []* million []* (as shown calculated below in this example), the Annual
Amount Due would be calculated as follows:

 

	
  []*

  	
   

  	
  []

  	
  *

  	
   

  	
   

  	
  []

  	
  *

  
	
  []*:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  []*

  	
   

  	
  []

  	
  *

  	
  []

  	
  *

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  []*

  	
   

  	
  []

  	
  *

  	
  []

  	
  *

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  []*

  	
   

  	
  []

  	
  *

  	
  []

  	
  *

  	
   

  	
   

  
	
  []*

  	
   

  	
  []

  	
  *

  	
  []

  	
  *

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  []*

  	
   

  	
  []

  	
  *

  	
  []

  	
  *

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  []*

  	
   

  	
  []

  	
  *

  	
  []

  	
  *

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  []*

  	
   

  	
  []

  	
  *

  	
   

  	
   

  	
  []

  	
  *

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  []*

  	
   

  	
  []

  	
  *

  	
   

  	
   

  	
  []

  	
  *

  

 

Calculation of []* for item (d) in the above calculation:

 

	
  []*

  	
   

  	
  []

  	
  *

  	
  []

  	
  *

  
	
  []*

  	
   

  	
   

  	
   

  	
  []

  	
  *

  
	
  []*

  	
   

  	
   

  	
   

  	
  []

  	
  *

  
	
  []*

  	
   

  	
   

  	
   

  	
  []

  	
  *

  
	
  []*

  	
   

  	
   

  	
   

  	
  []

  	
  *

  
	
  []*

  	
   

  	
   

  	
   

  	
  []

  	
  *

  
	
  []*

  	
   

  	
  []

  	
  *

  	
  []

  	
  *

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  []*

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  []*

  	
   

  	
  []

  	
  *

  	
  []

  	
  *

  
	
  []*

  	
   

  	
  []

  	
  *

  	
  []

  	
  *

  
	
  []*

  	
   

  	
  []

  	
  *

  	
  []

  	
  *

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  []*

  	
   

  	
  []

  	
  *

  	
  []

  	
  *

  
	
  []*

  	
   

  	
  []

  	
  *

  	
  []

  	
  *

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  []*

  	
   

  	
  []

  	
  *

  	
  []

  	
  *

  

 

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

 

A-4

 

EXHIBIT
B-1

 

SPECIFIC
CUBIST BUSINESS POLICIES

 

[]*

 

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

 

B-1

 

EXHIBIT
B-2

 

SPECIFIC
AZ BUSINESS POLICIES

 

[]*

 

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

 

B-2

 

EXHIBIT C

CSD ACTIVITIES

 

1.                                       []*

 

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

 

C-1

 

EXHIBIT D

SPEAKER PROGRAM PROCEDURES

 

I.                   []*

 

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

 

D-1

 

EXHIBIT E

INITIAL DESIGNATED MEDICAL AFFAIRS REPRESENTATIVES

 

AstraZeneca
Representative

 

[]*

 

Cubist Representative

 

[]*

 

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

 

E-1

 

EXHIBIT F-1

INITIAL SALES TRAINING PLAN

 

PRODUCT TRAINING

 

For
clarity, all training conducted pursuant to and all training materials used in
connection with, the Initial Training Plan shall be in accordance with the
Agreement.

 

INITIAL PRODUCT SALES TRAINING PLAN FOR CUBIST

 

[]*

 

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

 

F-1

 

EXHIBIT F-2

INITIAL CSD TRAINING PLAN

 

[]*

 

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

 

F-2

 

EXHIBIT G-1

CUBIST TRADEMARKS

 

The mark “CUBIST” that is
covered by U.S. Trademark Reg. No. 2,125,875 for “pharmaceutical products,
namely, antimicrobial drugs” in International Class 5 only, and the stylized mark/logo below.  (The PMS color for the purple color is 2607.)

 

 

 

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

 

G-1

 

EXHIBIT G-2

ASTRAZENECA HOUSEMARKS

 

The
mark “ASTRAZENECA” in upper case block letters and the stylized mark/logo
below.

 

 

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

 

G-2

 

EXHIBIT H

 

[INTENTIONALLY
OMITTED]

 

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

 

H-1

 

EXHIBIT I

 

[INTENTIONALLY
OMITTED]

 

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

 

I-1

 

EXHIBIT
J

FORM OF DETAIL REPORT

 

Quarterly
Report

 

Reporting Period:
                          
to                          

 

Prescriber
Level Reporting

 

	
  []*

  	
   

  	
  []

  	
  *

  	
  []

  	
  *

  	
  []

  	
  *

  	
  []

  	
  *

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  []*

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  []

  	
  *

  	
   

  	
   

  

 

	
  []*

  	
   

  	
   

  	
   

  
	
  []*

  	
   

  	
   

  	
   

  
	
  []*

  	
   

  	
   

  	
   

  

 

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

 

J-1

 

Account
Level Reporting

 

	
  []*

  	
   

  	
  []

  	
  *

  	
  []

  	
  *

  	
  []

  	
  *

  	
  []

  	
  *

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  []*

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  []

  	
  *

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  []*

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  []

  	
  *

  	
   

  	
   

  

 

[]*

[]*

 

Report Created:                       

 

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

 

J-2

 

Monthly
Report

 

Reporting Period:
                          
to                            

 

Prescriber
Level Reporting

 

	
  []*

  	
   

  	
  []

  	
  *

  	
  []

  	
  *

  	
  []

  	
  *

  	
  []

  	
  *

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  []*

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  []

  	
  *

  	
   

  	
   

  

 

	
  []*

  	
   

  	
   

  
	
  []*

  	
   

  	
   

  
	
  []*

  	
   

  	
   

  

 

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

 

J-3

 

Account
Level Reporting

 

	
  []*

  	
   

  	
  []

  	
  *

  	
  []

  	
  *

  	
  []

  	
  *

  	
  []

  	
  *

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  []*

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  []

  	
  *

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  []*

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  []

  	
  *

  	
   

  	
   

  

 

[]*

[]*

 

Report Created:                           

 

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

 

J-4

 

EXHIBIT K

FORM OF CSD ACTIVITIES REPORT

 

	
  []*

  	
   

  	
  []

  	
  *

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  []*

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  []*

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  []

  	
  *

  	
  []

  	
  *

  	
  []

  	
  *

  	
  []

  	
  *

  	
  []

  	
  *

  	
  []

  	
  *

  	
  []

  	
  *

  	
  []*

  	
   

  
	
  []*

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  []*

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  []*

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  []

  	
  *

  	
  []

  	
  *

  	
  []

  	
  *

  	
  []

  	
  *

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  []*

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  []*

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
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  []*

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  []*

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
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  []*

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  []*

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  []*

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
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  []*

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  []*

  	
   

  	
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  []*

  	
   

  	
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  []*

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
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  []*

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  []*

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  []*

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  []*

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

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

 

K-1

 

EXHIBIT L

INITIAL SALES TRAINING MATERIALS

 

	
  eSTAR #

  	
   

  	
  Item Name

  
	
   

  	
   

  	
   

  
	
  []*

  	
   

  	
   

  

 

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

 

L-1

 

EXHIBIT M

PROMOTION PLAN

 

1.             Critical Care Target Accounts

 

[]*

 

2.             Pediatric Target Accounts

 

[]*

 

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

 

M-1

 

EXHIBIT N

INITIAL PROMOTIONAL MATERIALS

 

	
  eSTAR #

  	
   

  	
  Item Name

  
	
   

  	
   

  	
   

  
	
  []*

  	
   

  	
   

  

 

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

 

N-1

 

EXHIBIT O

FORM OF PRODUCT SALES (WEEKLY/MONTHLY) REPORTS

 

Calculations
to be done by AstraZeneca to generate the Merrem []* Inventory Reports.  
For purposes of clarity, these calculations are not required to be
included in the report.

 

[]*
Inventory – []* Inventory on Hand for []*

 

Example:
On a monthly basis (in units):

 

	
   

  	
   

  	
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  *

  	
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  []*

  	
   

  	
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  *

  	
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  *

  	
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  *

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
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  *

  	
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[]*

 

	
   

  	
   

  	
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[]*

 

	
   

  	
   

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

 

O-1

 

[]*
Monthly Inventory On Hand []*

 

	
  []*

  	
   

  	
  []

  	
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  []*

  	
   

  	
  []

  	
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  []*

  	
   

  	
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*Sales-out
represent sales out []*

**Reported
to Cubist in the Merrem:  []*

 

Reports
to be generated for Cubist per Agreement:

 

[]*

 

	
  []*

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
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[]*

 

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

 

O-2

 

[]*

 

[]*

 

	
  []*

  	
   

  	
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[]*

 

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

 

O-3

 

EXHIBIT P

FORM OF REPORTING OF GROSS SALES/NET SALES

 

[]*

[]*

 

	
  []*

  	
   

  	
   

  	
   

  
	
  []*

  	
   

  	
   

  	
   

  
	
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[]*

[]*

 

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

 

P-1

 

EXHIBIT
Q

FORM OF ANNUAL AMOUNT DUE REPORT

AND EXAMPLES OF CALCULATION

 

REPORT
1

 

	
  []*

  	
   

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

 

Q-1

 

	
  []*

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

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

 

Q-2

 

REPORT
2

 

	
  []*

  	
   

  	
   

  	
   

  	
   

  	
   

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

 

Q-3

 

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

 

Q-4

 

REPORT 3 – []*

 

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

 

Q-5

 

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

 

Q-6

 

 

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

 

Q-7

 

REPORT
4 - []*

 

 

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

 

Q-8

 

Calculation
of []*

 

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

 

Q-9

 

REPORT
4 – []*

 

Calculation
of []*

 

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

 

Q-10

 

EXHIBIT R

FORM OF PRODUCT INVENTORY REPORT

 

Merrem:  Finished Goods Inventory and Sales for Month, Year

 

	
  NDC

  	
   

  	
  Product Name

  	
   

  	
  Vials Sold

  	
   

  	
  Month Ending

  Inventory in

  Vials

  	
   

  
	
  []*

  	
   

  	
  []*

  	
   

  	
  xxx

  	
   

  	
  xxx

  	
   

  
	
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  []*

  	
   

  	
  []*

  	
   

  	
  xxx

  	
   

  	
  Xxx

  	
   

  

 

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

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00149-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00149-of-00352.parquet"}]]