Document:

Exhibit
10.1

CONFIDENTIAL
TREATMENT

FIRST
AMENDMENT TO DEVELOPMENT AND SUPPLY AGREEMENT

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

RECITALS

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

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

AGREEMENT

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

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

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

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

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

 

 

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

 

 

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

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

8.1                                 Purchase
and Sale of Product.
 

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

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

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

 

 

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

 2
 

 

 

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

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

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

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

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

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

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

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

 3
 

 

 

g.              Amendment
of Exhibit 8.5.1.

Schedule and Prices

	
  Year

  	
   

  	
  Volume (1)

  	
   

  	
  Volume (2)

  	
   

  	
  Price per [ ]*

  	
   

  	
  Price per[ ]*

  	
   

  	
  Price per [ ]*

  	
   

  
	
  2006

  	
   

  	
  [
  ]*

  	
   

  	
  [
  ]*

  	
   

  	
  [
  ]*

  	
   

  	
  [
  ]*

  	
   

  	
  [
  ]*

  	
   

  
	
  2007

  	
   

  	
  [
  ]*

  	
   

  	
  [
  ]*

  	
   

  	
  [
  ]*

  	
   

  	
  [
  ]*

  	
   

  	
  [
  ]*

  	
   

  
	
  2008

  	
   

  	
  [
  ]*

  	
   

  	
  [
  ]*

  	
   

  	
  [
  ]*

  	
   

  	
  [
  ]*

  	
   

  	
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  ]*

  	
   

  
	
  2009

  	
   

  	
  [
  ]*

  	
   

  	
  [
  ]*

  	
   

  	
  [
  ]*

  	
   

  	
  [
  ]*

  	
   

  	
  [
  ]*

  	
   

  
	
  2010

  	
   

  	
  [
  ]*

  	
   

  	
  [
  ]*

  	
   

  	
  [
  ]*

  	
   

  	
  [
  ]*

  	
   

  	
  [
  ]*

  	
   

  
	
  2011

  	
   

  	
  [
  ]*

  	
   

  	
  [
  ]*

  	
   

  	
  [
  ]*

  	
   

  	
  [
  ]*

  	
   

  	
  [
  ]*

  	
   

  
	
  2012

  	
   

  	
  [
  ]*

  	
   

  	
  [
  ]*

  	
   

  	
  [
  ]*

  	
   

  	
  [
  ]*

  	
   

  	
  [
  ]*

  	
   

  
	
  2013

  	
   

  	
  [ ]*

  	
   

  	
  [ ]*

  	
   

  	
  [ ]*

  	
   

  	
  [ ]*

  	
   

  	
  [ ]*

  	
   

  

[ ]*

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

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

 

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

 4
 

 

 

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

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

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

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

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

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

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

To:          Cubist Pharmaceuticals, Inc.

65 Hayden Avenue

Lexington, MA 02421 

U.S.A.

Attention: Senior Vice President, Technical Operations

Facsimile: (781) 860-1498

With
a copy to:    General Counsel

Cubist Pharmaceuticals,
Inc.

65 Hayden Avenue

Lexington, MA 02421

U.S.A.

Facsimile : (781) 860-1407

 

 

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

 5
 

 

 

To :           HospiraWorldwide, Inc.

H1-3, Dept 988

275 N. Field Drive

U.S.A

Attention : V.P. and G.M. Contract Manufacturing

Facsimile : (224) 212-3210

With a copy to :  General Counsel

Hospira Worldwide, Inc.

H1-2, Dept. NLEG

275 N. Field Drive

U.S.A

Facsimile : (224) 212-2088

 6
 

 

 

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

Bulk Drug Specifications

 

	
  Process Step

  	
   

  	
  Parameter

  	
   

  	
  Method

  	
   

  	
  Limit

  	
   

  
	
  [ ]*

  	
   

  	
  [
  ]*

  	
   

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

 7
 

 

 

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

Product Specifications

 

	
  Description

  	
   

  	
  Method

  	
   

  	
  Specification

  	
   

  
	
  [ ]*

  	
   

  	
  [
  ]*

  	
   

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

 8
 

 

 

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

Test Methods

 

	
  Test

  	
   

  	
  Method*

  	
   

  
	
  [ ]*

  	
   

  	
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  ]*

  	
   

  
	
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[ ]*

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

 

 

 

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

 9
 

 

 

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

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

 

	
  HOSPIRA WORLDWIDE, INC.

  	
   

  	
  CUBIST PHARMACEUTICALS, INC.

  
	
   

  	
   

  	
   

  
	
  By 

  	
  /s/ John Arnott

  	
   

  	
   

  	
  By 

  	
  /s/ Lindon M. Fellows

  	
   

  
							

 

	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name

  	
  John Arnott

  	
   

  	
   

  	
  Name

  	
  Lindon M. Fellows

  	
   

  
	
   

  	
  (type or print)

  	
   

  	
   

  	
   

  	
  (type or print)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title 

  	
  S.V.P.
  Commercial Operations

  	
   

  	
   

  	
  Title

  	
  S.V.P. Technical Operations

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date

  	
  June 9, 2006

  	
   

  	
   

  	
  Date

  	
  01 June 2006

  	
   

  

 

 

 10EXHIBIT
10.2

CONFIDENTIAL
TREATMENT

DEVELOPMENT AND SUPPLY
AGREEMENT

 

This Agreement is made this third day of April, 2000 (“Effective
Date”) by and between Cubist Pharmaceuticals, Inc., having a principal place of
business at 24 Emily Street, Cambridge, Massachusetts 02139 (hereinafter
referred to as “Cubist”) and Abbott Laboratories, having a principal place of
business at 100 Abbott Park Road, Abbott Park, Illinois 60064-3500 (U.S.A.)
(hereinafter referred to as “Abbott”).

 

WITNESSETH:

WHEREAS, Cubist owns rights to the compound
daptomycin, an injectable antibiotic drug, and wishes to develop and market the
drug in a standard flip top vial for the treatment of serious gram positive
infections;

WHEREAS, Cubist and Abbott desire that Abbott assist
Cubist in the development of daptomycin as a parenteral formulation;

WHEREAS, after Cubist has received an approved NDA
from the U.S. Food and Drug Administration (“FDA”) and/or corresponding new
drug approvals in selected international markets, the parties desire that
Abbott manufacture [   ]*, daptomycin as
a parenteral formulation.

NOW, THEREFORE, in consideration of the premises and
the mutual promises and agreements contained herein, Cubist and Abbott agree as
follows:

 

ARTICLE 1. DEFINITIONS

 

The following words and phrases when used herein with
capital letters shall have the meanings set forth or referenced below:

1.1 “Bulk Drug” shall mean the Drug in bulk form that
Cubist or its Bulk Drug suppliers shall deliver to Abbott for incorporation
into Product and meeting the applicable Bulk Drug Specifications.

1.2 “Bulk Drug Specifications” shall mean the detailed
description and parameters of Bulk Drug set forth on Exhibit 1.2.

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

 

 

 

1.3 “Confidential Information” shall mean all
information disclosed hereunder in writing and identified as being confidential
or, if disclosed orally, visually or through some other media, is identified as
confidential at the time of disclosure and is reduced to writing within thirty
(30) days of disclosure and identified as being confidential, except any
portion thereof which:

a.                 is
known to the recipient, as evidenced by the receiving party’s written records,
before receipt thereof under this Agreement;

b.                is
disclosed in good faith to the recipient after acceptance of this Agreement by
a third person lawfully in possession of such information and not under an
obligation of nondisclosure;

c.                 is
or becomes part of the public domain through no fault of the  recipient;

d.                is
developed by or for the recipient independently of information disclosed
hereunder as evidenced by the recipient’s written records or  other competent evidence; or

e.                 is
required by law to be disclosed; provided notice of such disclosure is provided
to the disclosing party prior to such disclosure.

1.4 “Contract Year” shall mean the twelve-month period
commencing on the first day of the month after the month of Cubist’s first bona
fide sale of Product to a non-affiliate customer after Product has received an
approved NDA from the FDA and/or a corresponding government marketing approval
in an international market.

1.5 “Drug” shall mean the human antibiotic
pharmaceutical that Cubist refers to as daptomycin and described in Exhibit 1.5.

1.6 “NDA” shall mean the daptomycin New Drug
Application filed with the FDA to obtain regulatory approval in the US.

1.7 “Product” shall mean the Drug in final dosage
form, packaged in a standard flip top vial, meeting the Product Specifications.

1.8 “Product Specifications” shall mean those product,
labeling and performance specifications for Product filed with the FDA or other
appropriate regulatory authorities, including Product formula and materials
required for the manufacture of the Product that is to be purchased and 

 

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

 2
 

 

 

supplied under this
Agreement, as such are set forth on Exhibit 1.8,  which specifications may be amended from time
to time by the written agreement of the parties.

1.9 “Term” shall mean the period commencing on the
Effective Date and ending at the end of the fifth Contract Year, unless this
Agreement is sooner terminated in accordance with Paragraph 11.2 or 11.3 or
extended in accordance with Paragraph 11.1.

ARTICLE 2. PRODUCT
DEVELOPMENT PROJECT

 

2.1 GENERAL. Promptly following the Effective Date,
the parties shall undertake a product development project (“Project”)
consisting of the development activities outlined in Articles 3 and 4 hereof.
The Project will be conducted in accordance with the Project Timetable attached
hereto as Exhibit 2.1.

2.2 REASONABLE EFFORTS. Each party shall use its
reasonable efforts to complete successfully the Project in accordance with the
Project Timetable specified in Exhibit 2.1. However, the parties agree and
understand that neither party hereto guarantees that the Project will be
successful, nor warrants or guarantees that a marketable Product will result
from the Project. In the event that Abbott’s Project Development
Responsibilities, described in Section 3, prior to regulatory submission are
not completed [ ]* after the date specified in Exhibit 2.1 (after taking into
account any mutually agreed upon date adjustments and assuming that Cubist has
fulfilled its Project Development Responsibilities), the parties shall meet and
discuss appropriate remedies. If the parties are unable to agree upon an
allocation of responsibility, damages and payment terms, the matter shall be
resolved by Alternative Dispute Resolution (“ADR”) in accordance with the
procedure set forth in Exhibit 13.4.

ARTICLE 3. ABBOTT’S
DEVELOPMENT RESPONSIBILITIES

3.1 ABBOTT’S RESPONSIBILITIES. The objective of the
Project shall be for Abbott to assist in the development of the Product and to
assist Cubist in obtaining an approved NDA (and/or foreign equivalents)
covering the Product. Abbott shall then manufacture and deliver Product to
Cubist for sale by Cubist as a human pharmaceutical product, as herein
provided. Abbott shall have the following responsibilities, as required:

a.                 Identify
compatible components for use in manufacturing the Drug. 

 

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b.                Manufacture
clinical supplies, stability supplies, NDA consistency batches and process
validation batches of Product in accordance FDA and European Union (“EU”)
guidelines for current Good Manufacturing Practices (“cGMPs”) and pursuant to
protocols that the parties shall agree to mutually.

c.                 [   ]*

d.                Prepare
suitable manufacturing instructions and manufacturing controls for inclusion in
regulatory submissions.

e.                 Provide
appropriate regulatory agencies with letters of authorization referencing
Abbott’s Drug Master File (“DMF”). The DMF shall contain general operational
information about Abbott’s manufacturing including but not limited to
microbiological data, process validation data, batch documents and other data
required to support regulatory submissions. In addition, provide Cubist with
specific Product related Chemistry, Manufacturing and Controls (“CMC”)
documentation as required by regulatory guidelines to support the US and EU
regulatory filings of the Product, provided that Abbott shall not be required
to prepare more than one set of CMC documentation in connection with EU regulatory
filings.

f.                   Provide
Cubist and appropriate regulatory agencies with letters of  reference to Abbott’s applicable DMFs needed
to support Cubist  worldwide regulatory
submissions related to Product and assist Cubist  in responding to questions from government
regulatory agencies concerning the Product.

g.                [   ]*

h.                Permit
Cubist to conduct all necessary cGMP and quality assurance reviews of Abbott
documentation, including review and receipt of copies of Abbott manufacturing
work orders.

 

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i.                    Permit
Cubist to conduct all necessary cGMP and quality assurance reviews of Abbott
facilities and operations, subject to the provisions of Paragraph 8.4.8.

j.                    Provide
Cubist with acceptable environmental impact statements for inclusion with
regulatory submissions.

k.                 Assist
Cubist in the development of instructions for use, which will be submitted as
labeling in regulatory submissions relating to Product.

l.                    Provide
Cubist with appropriate manufacturing documentation for regulatory submissions.
Provide safe record retention for the period required by regulatory
authorities.

m.              Provide
Cubist with development reports and stability reports to support regulatory
filings.

n.                [   ]*

o.                Maintain
adequate samples of the marketed Product and provide samples as required by
third party analytical laboratories and contracted by Cubist to assist in
commercial Product release and stability studies.

ARTICLE 4. CUBIST’S
DEVELOPMENT RESPONSIBILITIES

 

4.1 CUBIST’S RESPONSIBILITIES. Cubist shall have the
following development responsibilities:

a.                 Optimize
Product information transfer for formulation and Project approaches in
consultation with Abbott.

b.                Provide
approved Bulk Drug from Cubist’s Bulk Drug suppliers, with certificates of
analysis, at no cost to Abbott, for formulation studies, stability supplies,
manufacturing studies, and other needs as required by Abbott for execution of
its responsibilities under this Agreement.

 

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c.                 Provide
Abbott with reference and assay standards for Bulk Drug and any ther
proprietary assay standards and certificates of analysis as may be required to
perform quality control testing, including all necessary reference standards.

d.                Develop
and provide to Abbott validated analytical test methods for Bulk Drug and
Product to be used for regulatory submissions, as well as for use in manufacture
of Product. Validation which is determined to be required beyond that provided
by Cubist, will be mutually agreed upon and resolved with Abbott to assure both
validation and regulatory compliance.

e.                 Provide
all compendial specifications and testing instructions for Bulk Drug, if such
specifications are available.

f.                   Provide
Abbott with technical data on Bulk Drug that includes, but is not limited to,
the following: 1) material safety data sheets with environmental and safety
information, and 2) additional detailed data, if necessary, to define potential
hazards and establish employee exposure levels and equipment cleanability
limits.

g.                Perform
and be responsible for all clinical/efficacy studies necessary to obtain
regulatory approval.

h.                Conduct
all stability testing (including marketed Product stability testing), retain
all samples required to conduct stability testing and compile data for
regulatory submissions.

i.                    Prepare
and submit to appropriate government regulatory agencies submissions covering
Product, respond to all questions from the regulatory agencies, take necessary
steps to obtain marketing approvals and to maintain the approved regulatory
submissions.

j.                    Provide
Abbott with copies of regulatory filings as necessary for Abbott to obtain
regulatory pre-inspections.

k.                 Conduct
all other research and development and other work required to submit
appropriate regulatory submissions and to obtain marketing approvals covering
product.

 

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ARTICLE 5. PAYMENT FOR
ABBOTT’S DEVELOPMENT EFFORTS

 

5.1 MANUFACTURING IMPLEMENTATION AND DEVELOPMENT FEE.
To reimburse Abbott for its participation in the Project, Cubist shall pay to
Abbott several, non-refundable development fees in the form of milestone
payments as described in Paragraph 5.3.

5.2 [ ]*.

5.3 MILESTONE PAYMENTS. Cubist agrees to pay Abbott
the following milestone payments according to the Project Timetable described
in Exhibit 2.1:

a. [   ]*

b. [   ]*

c. [   ]*

d. [   ]*

e. [   ]*

f. [   ]*

 

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g. [   ]*

5.4 CHANGES. If changes occur in the Project or
Product Specifications, or if technical difficulties require that Abbott
perform either additional work or repeat work, and the reasons for such work
are not due to Abbott’s fault or negligence, Cubist shall pay Abbott’s costs
for such work, subject to Cubist’s prior approval which shall be requested
using the procedure specified in this Paragraph 5.4. Reimbursement for such
additional work shall be at the rate of [ ]* Dollars (US$[ ]*) per hour, plus
out-of-pocket costs for reasonable travel and substance, materials and
supplies. Abbott shall provide Cubist with a new or revised test protocol with
cost estimates for such work and Cubist shall pay Abbott within [ ]* of
completion of such work. No changes to the Product Specifications or the
Project will be made without written approval of Cubist and Abbott. Either party
may request amendments to Product Specifications or the Project. If a party
wishes to make a change it shall notify the other party of the requested change
specifying the change with sufficient details to enable the other party to
evaluate the change (a “Change Request”). Within [ ]* following the date of
Abbott’s receipt of a Cubist Change Request, Abbott shall deliver a document
that: (a) assesses the impact of the change on the total cost of the Project,
the Product and the Project Timetable, and (b) incorporates a description of
the requested change and its cost (a “Change Control Document”). Any Abbott
Change Request shall include all information specified for a Change Control
Document said the procedure specified in the preceding sentence shall apply to
Cubist’s review of same. If Cubist accepts the Change Control Document, then
the provisions of this Agreement shall be deemed amended to incorporate such
change in accordance with the Change Control Document. The price stated in the
Change Control Document shall be deemed an increase in the charges specified in
the then applicable Project and Project Timetable. 

5.5 [   ]*

5.6 NDA STABILITY STUDIES. If Cubist requests, Abbott
will consider having performed or performing NDA stability studies for Cubist.
If

 

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requested, Abbott shall provide an estimate of the time required and
costs associated with performing such stability studies.

 

5.7 USER FEES. [ ]* shall pay any FDA (or foreign
equivalent) user fees which may become payable for Product.

 

ARTICLE 6.
CLINICAL AND STABILITY SUPPLIES

6.1 STABILITY SUPPLIES. After Cubist selects its final
Product formulation, concentration and fill volume, and the parties mutually
agree to the final Product Specifications, Abbott shall provide to Cubist
stability supplies consisting of [ ]* lots of Product with each lot consisting
of no more than [ ]* units. If possible, Abbott shall manufacture all lots from
different production lots of Bulk Drug. Cubist and Abbott shall develop jointly
and agree mutually to the formulation, concentration, fill volume and the
components for each lot. Abbott currently estimates the cost of manufacturing
stability lots of fewer than [ ]* units to be [ ]* per lot. The per unit cost
of Product manufactured in connection with this Paragraph 6.1 for lots
consisting of more than [ ]* units is set forth on Exhibit 8.5.1. If Cubist and
Abbott agree to split a master batch such that the yield is less than [ ]*
units @ [ ]* Product and less than [ ]* units @ [ ]* Product, the aggregate
cost will not exceed [ ]*.

6.2 ADDITIONAL STABILITY/CLINICAL SUPPLIES. If Cubist,
the FDA or any other regulatory authority requires additional stability
supplies or sample lots from the Abbott manufacturing facility, other than
those specified above, Cubist will issue separate purchase order(s) for such
supplies or lots consisting of approximately [ ]* units. Abbott currently
estimates the cost of manufacturing stability lots of fewer than [ ]* units to
be [ ]* per lot. The per unit cost of Product manufactured in connection with
this Paragraph 6.2 for lots consisting of more than [ ]* units is set forth on
Exhibit 8.5.1.

ARTICLE 7. CUBIST’S
REGULATORY SUBMISSIONS

Abbott shall have the right to review those portions
of Cubist’s proposed regulatory submissions relating to Abbott’s packaging or
manufacturing procedures before the submissions are filed with appropriate
regulatory agencies. Abbott shall complete its review of any such submission
within [ ]* after receipt of such proposed regulatory submission. Abbott shall
consult with and advise Cubist in responding to questions from the regulatory
agencies regarding Cubist’s submission(s) for Product. Abbott agrees that
Cubist shall be the sole owner of any regulatory submission filed pursuant to
this Agreement.

 

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ARTICLE 8.
MANUFACTURE AND SUPPLY OF PRODUCT

8.1 PURCHASE AND SALE OF PRODUCT. Subject to the
provisions of Paragraph 8.3 and during the Term of this Agreement, Abbott shall
manufacture, sell and deliver Product to Cubist and Cubist shall take delivery
and purchase a minimum of [ ]* percent ([ ]*%) of their worldwide requirements
of Product per Contract Year from Abbott according to the schedule outlined in
Exhibit 8.1. Abbott shall manufacture Product in accordance with the Product
Specifications, as amended by mutual agreement of the parties. The parties may
alter from time to time the Product Specifications by mutual written agreement
without the necessity of amending this Agreement.

8.2 MINIMUM PURCHASE REQUIREMENT. Cubist covenants to
purchase from Abbott not less than [ ]* units of Product during the Term, with
the intent that Cubist purchase from Abbott not less than [ ]* Dollars (US$ [
]* of Product in each of the third, fourth and fifth Contract Years (“Minimum
Purchase Requirements”). In the event Cubist purchases less than the Minimum
Purchase Requirement of Product from Abbott in any of the third, fourth or
fifth Contract Years, the parties will elect that either (i) Abbott shall
invoice Cubist for the difference between the amount of Product purchased in
such Contract Year and the Minimum Purchase Requirement, and Cubist shall pay
Abbott within [ ]* days after receipt of Abbott’s invoice, or
(ii) the prices set forth on Exhibit 8.5.1 shall be adjusted
accordingly.

8.3 GOVERNMENT APPROVALS. Notwithstanding any other
provision of this Agreement, Abbott shall have no obligation to manufacture,
sell or deliver Product to Cubist and Cubist shall have no obligation to
purchase and take delivery of Product for commercial purposes in a specific
territory until Cubist has obtained necessary government approvals required to
manufacture and sell Product in such territory. In the event a regulatory
authority orders the withdrawal of Product from any country, Cubist shall not
be obligated to purchase the Product or sell the Product in such country from
the date of such withdrawal and until Cubist is again authorized to sell
Product in such country, and Abbott shall not be obligated to supply the
Product to Cubist for sale in such country for such period. If such a
withdrawal decision is final and not appealable, this Agreement shall terminate
with respect to such country.

8.4 MANUFACTURE OF PRODUCT

8.4.1 BULK DRUG SUPPLY. Abbott shall manufacture
Product for Cubist from Bulk Drug that Cubist supplies at no cost to Abbott and
in quantities sufficient to satisfy Abbott’s gross manufacturing requirements
of Product.

 

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Cubist shall deliver Bulk Drug, F.O.B. Abbott’s
manufacturing plant, pursuant to no-cost purchase orders that Abbott issues to
Cubist. Cubist warrants to Abbott that Bulk Drug supplied to Abbott hereunder
shall meet the Bulk Drug Specifications. Abbott agrees that Abbott’s use of
Bulk Drug received from Cubist shall be limited to development contemplated by
this Agreement and the manufacture of Product for Cubist. Within [ ]* after
Abbott receives each shipment of Bulk Drug supplied by Cubist hereunder, Abbott
shall (a) perform an identification test on the Bulk Drug and confirm the
shipment amount and, (b) notify Cubist of any claim that any portion of that
shipment failed the identification test or the quantity was inaccurate. In the
event of such claim, Cubist shall have the right to confirm such findings at
Abbott’s manufacturing location, and upon such confirmation, Cubist shall
replace, at no cost to Abbott, the portion of the Bulk Drug shipment which
represented the short fall amount (if quantity was at issue) or failed the
identification test.

8.4.2 BULK DRUG REPLACEMENT. If due to an
intentionally wrongful act or any negligent act or omission on Abbott’s part in
the examination of Bulk Drug supplied by Cubist, and as a result thereof, the
Product that Abbott manufactures therewith fails to conform with the Product
Specifications, Abbott’s sole liability in such case shall be limited to
replacement of Product, at no cost to Cubist, with conforming Product using
Bulk Drug that Abbott purchases from Cubist at Cubist’s purchase cost/kg (as
evidenced by Cubist’s invoices that Cubist provides by notice to Abbott from
time to time). Abbott’s responsibilities (and associated costs) for replacing
lost, damaged or otherwise unusable Bulk Drug pursuant to this Subparagraph
8.4.2 shall in no event exceed [ ]* Dollars (US$[ ]*) per batch.
Notwithstanding the foregoing to the contrary, this Subparagraph 8.4.2 shall
not limit any liability of Abbott under Subparagraph 8.8.4.

8.4.3 BULK DRUG TITLE AND CONSUMPTION. Cubist shall
retain title to the Bulk Drug that it supplies to Abbott hereunder. Abbott
shall assume all responsibility and risk for the safekeeping, storage and
handling of all shipments of Bulk Drug delivered hereunder. In the event of
loss or damage, Cubist shall supply to Abbott Bulk Drug required for
replacement at Cubist’s purchase cost/kg as evidenced by Cubist’s invoices
provided by notice to Abbott from time to time. The consumption of Bulk Drug
for the manufacture of Product shall be in accordance with the maximum
consumption factors that Abbott and Cubist agree upon mutually in writing as
promptly as practicable; where such consumption factors are subject to change
from time to time by mutual written agreement of the parties. If during any [
]* period, the consumption of Bulk Drug to produce a given quantity of Product
exceeds the maximum agreed upon consumption factors for such quantity of
Product, Abbott shall promptly reimburse Cubist for the consumed excess at
Cubist’s

 

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purchase cost/kg as evidenced by Cubist’s invoices
that Cubist provides by notice to Abbott from time to time. Abbott’s
responsibilities (and associated costs) for reimbursing Cubist for excess
consumption of Bulk Drug pursuant to this Subparagraph 8.4.3 shall in no event
exceed [ ]* Dollars (US$[ ]*) per twelve (12) month period.

8.4.4 NON-STANDARD EQUIPMENT COSTS. If non-standard,
specialized equipment is required to manufacture Product for Cubist, Cubist
shall pay the cost of such equipment, subject to Cubist’s prior approval of
such costs, which approval shall not be unreasonably withheld Abbott shall
advise Cubist of specialized equipment required and the estimated cost(s)
associated with the purchase and installation of such equipment. Abbott shall
bill Cubist for the associated costs after Abbott installs the equipment.
Cubist shall make payment to Abbott no later than [ ]* after Cubist receives an
invoice from Abbott. Title to the equipment shall be in Abbott’s name. If
Abbott uses the specialized equipment for manufacture of a product other than
Product for Cubist, Abbott shall promptly notify Cubist and purchase the
equipment by paying Cubist the then current book value of the equipment. This
provision shall not apply to any standard equipment normally used or required
for the manufacture of Product or for additional standard equipment required to
increase production capacity or efficiency at Abbott’s manufacturing plant.
Cubist purchased equipment will be transferred to Cubist with title at the
completion or termination of the Project, provided that Abbott has not
purchased such equipment from Cubist pursuant to this Subparagraph 8.4.4. In
general, no customized or specialized equipment is expected.

8.4.5 ACCESS TO DRUG MASTER FILES. Abbott shall
manufacture Product that conforms with Product Specifications. Abbott shall
grant Cubist reference rights to all DMFs necessary to support Cubist’s
applications for marketing authorizations of Product. To effect this, Abbott
shall execute Letters of Authorization to regulatory authorities permitting
such regulatory authorities to consult Abbott’s DMFs in their review of Cubist’s
Product marketing authorizations. Abbott shall send copies of such
Authorization Letters to Cubist. Abbott shall update its DMFs annually and
shall inform Cubist prior to any modifications in order to permit Cubist to
amend or supplement any affected regulatory applications and files for Product.

8.4.6 PRODUCT LABELING. Abbott shall label Product in
accordance with label copy that Cubist provides. Such copy may be modified from
time to time by agreement of the parties. Cubist shall reimburse Abbott for
Abbott’s actual costs of making any label copy changes.

 

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8.4.7 QUALITY CONTROL. Abbott shall apply its quality
control procedures and in-plant quality control checks on the manufacture of
Product for Cubist in the same manner as Abbott applies such procedures and
checks to products (bearing like qualities to the Drug) that Abbott
manufactures and sells for its own account. In addition, Abbott will test and
release Product in accordance with the test methods described in Exhibit 8.4.7
to ensure that Product conforms to the Product Specifications. The parties may
change the test methods from time to time and by mutual agreement. Abbott shall
provide or cause to be provided, for each lot of Product purchased pursuant to
this Agreement, a certificate of manufacturing compliance, containing the types
of information which shall have been approved by Cubist, which will certify
that the lot of Product was manufactured in accordance with the Product
Specifications and cGMPs, as the same may be amended from time to time.

8.4.8 AUDITS. (a) Cubist shall have the right, upon [
]* prior written notice to Abbott, to conduct during normal business hours a
quality assurance audit and inspection of Abbott’s records and production
facilities relating to the manufacture of Product, and follow-up audits as
necessary. Such audits and inspections may be conducted from time to time on a
reasonable basis prior to production of the first commercial Product order
placed by Cubist and thereafter once each calendar year. The duration of such
audits shall not exceed two (2) days and such audits shall be performed by no
more than three (3) auditors, unless Cubist reasonably believes that a longer
audit or additional personnel are necessary and provides its reasons for such
belief to Abbott in writing. If Cubist wishes to perform audits more often than
once per year or over a period in excess of [ ]*, Cubist shall pay Abbott [ ]*
Dollars (US$[ ]*) per additional audit day. If more than three (3) auditors
perform the audit, Cubist shall pay Abbott [ ]* Dollars (US$ [ ]*) per
additional auditor. In addition, Cubist shall have the right at any time during
the Term, upon [ ]* prior written notice to Abbott, to conduct any audits
specifically mandated by any regulatory authority or to respond to specific
questions from any regulatory authority. Visits by Cubist to Abbott’s
production facilities may involve the transfer of Confidential Information and
shall be subject to the terms of Article 12 hereof. The results of such audits
and inspections shall be considered Confidential Information under Article 12
and shall not be disclosed to third persons, including but not limited to the
FDA and other government regulatory agencies, unless required by law and upon
prior written notice to Abbott. In the event, Abbott fails to meet cGMPs or the
Product Specifications, Abbott will be responsible, at Abbott’s expense, for
(i) conducting an investigation to define the probable causes for the failure,
(ii) providing an acceptable cGMPs investigation report to Cubist for review
and written approval and (iii) achieving compliance with cGMPs.

 

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(b) In the event the FDA or other governmental
regulatory agency notifies Abbott that it intends to visit or inspect the
Abbott production facilities relating to the manufacture of Product. Abbott
shall promptly provide notice of such visit or inspection to Cubist and Cubist
shall have the right to participate in such visit or inspection. Abbott shall
advise Cubist immediately if an authorized agent of the FDA or other
governmental regulatory agency visits the Abbott production facilities relating
to the manufacture of Product without prior notice. Abbott shall furnish to
Cubist the report by such agency of such visit to the Abbott production
facilities relating to the manufacture of Product within [ ]* of Abbott’s
receipt of such report.

8.4.9 INSPECTION OF PRODUCT. Cubist shall have a
period of [ ]* from the date of receipt of a shipment of Product to inspect and
reject such shipment on the grounds that it does not conform with the Product
Specifications. If Cubist rejects such shipment, it shall promptly so notify
Abbott and provide to Abbott samples of such shipment for testing. If Abbott
tests such shipment and determines that it did conform to the Product
Specifications, the parties shall submit samples of such shipment to a mutually
acceptable independent laboratory for testing. If such independent laboratory
determines that the shipment conformed to the Product Specifications, Cubist
shall bear all expenses of shipping and testing such shipment samples. If
Abbott or such independent laboratory confirms that such shipment did not meet
the Product Specifications, Abbott shall replace, at no cost to Cubist, that
portion of the Product shipment which does not conform to the Product
Specifications, and shall bear all expenses of shipping and testing the shipment
samples. Any nonconforming portion of any shipment shall be disposed of as
directed by Abbott, at Abbott’s expense. Any Product that Cubist does not
reject pursuant to this Subparagraph 8.4.9 shall be deemed accepted and all
claims with respect to Product not conforming with Product Specifications shall
be deemed waived by Cubist, except as to latent defects which are not
reasonably discoverable. Notwithstanding the foregoing to the contrary, this
Subparagraph 8.4.9 shall not limit any liability of Abbott under Subparagraph
8.8.4 or release Abbott from its warranty under Subparagraph 8.8.3(b). Cubist
shall not be required to pay Abbott for any Product which has been properly
rejected pursuant to this Paragraph 8.4.9. Abbott shall replace rejected Product
at no additional cost to Cubist as soon as reasonably possible after receipt of
test results confirming nonconformance with the Product Specifications.

8.4.10 NOTIFICATION OF COMPLAINTS. Cubist shall notify
Abbott of any Product complaints involving Abbott’s manufacture or packaging in
sufficient time to allow Abbott to evaluate the complaints and assist Cubist in
responding to such complaints.

 

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8.4.11 PRODUCT RECALLS. If (a) any regulatory
authority withdraws the approval to sell the Product in such country or issues
a directive or request that the Product be recalled for product safety reasons
relating to the Product or (b) any regulatory authority or court of competent
jurisdiction issues a request, directive or order that the Product be recalled,
or (c) Cubist or Abbott shall reasonably determine that the Product should be
recalled, both parties shall collaboratively take all appropriate corrective
actions, and shall cooperate in any governmental investigations surrounding the
recall. In the event that such recall results from any cause or event arising
from defective manufacture, storage or handling of the Product by Abbott
(excluding defects relating to Bulk Drug, packaging or labeling supplied by or
prepared at the direction of Cubist), Abbott shall be responsible for all
expenses of the recall and Abbott shall promptly replace such Product at no
additional cost to Cubist consistent with directions received from the
appropriate governmental authority. In all other cases, Cubist shall be
responsible for the expenses of recall, including the cost of replacement
Product. For the purposes of this Agreement, the expenses of recall shall
include, without limitation, the expenses of notification and destruction or
return of the recalled Product and all other costs incurred in connection with
such recall, but shall not include lost profits of either party.

8.5. PRICE AND PAYMENT.

8.5.1 PRICE. Product shall be delivered by Abbott at
prices set forth on Exhibit 8.5.1 of this Agreement. 

8.5.2 PAYMENT. Abbott shall invoice Cubist upon
delivery of Product. Cubist shall make payment net [ ]* from the date of
receipt of Abbott’s invoice. 

8.5.3 TAXES. Any federal, state, county or municipal
sales or use tax, excise, customs charges, duties or similar charge, or any
other tax assessment (other than that assessed against income), license, fee or
other charge lawfully assessed or charged on the manufacture, sale or
transportation of Product sold pursuant to this Agreement shall be paid by
Cubist.

8.6 DELIVERY.

Abbott shall deliver Product to Cubist, F.O.B. Abbott’s
plant at McPherson, Kansas or at any other Abbott plant the parties may agree
to in writing. Title shall pass to Cubist at such point. Shipment shall be via
a carrier designated by Cubist.

 

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8.7 ORDERS AND
FORECASTS.

8.7.1 FIRST YEAR
ESTIMATE. Cubist shall, within [ ]* after filing its NDA, ANDA or equivalent
foreign regulatory submission for the Product, provide Abbott with a written
estimate of Cubist’s monthly requirements for the Product from Abbott for the
first Contract Year Abbott acknowledges that such quantities are estimates only.

8.7.2 TRUST ORDER.
Abbott and Cubist shall cooperate fully in estimating and scheduling production
for the first commercial order of Product to be placed by Cubist with Abbott in
anticipation of regulatory approval of Product. 

8.7.3 FIRST FIRM
QUARTERLY ORDER AND ANNUAL FORECAST. Cubist shall place its first firm
quarterly order approximately [ ]* in advance of the anticipated NDA approval
date, ANDA approval date or equivalent foreign regulatory submission approval
date, or desired Product availability date for the Product to be available for
the first quarter of commercial launch. [ ]*.

8.7.4 ROLLING
FORECAST. Thereafter, Cubist shall provide within the first [  ]* of each quarter to Abbott a rolling [ ]*
projection of requirements with the first [ ]* of such projection consisting of
firm purchase orders and the remaining [ ]* of such projection consisting of Cubist’s
best estimate forecast of its Product requirements.

8.7.5 PURCHASE
ORDER ACCEPTANCE. Within [ ]* after receipt of Cubist’s firm purchase orders
for Product, Abbott shall confirm to Cubist its acceptance of the purchase
order, delivery date and quantity of Product ordered by Cubist.

8.7.6 FIRM
QUARTERLY ORDER CHANGES. If, due to significant unforeseen circumstances,
Cubist requests changes to firm quarterly orders with less than [  ]* notice, Abbott shall attempt within
reasonable manufacturing capabilities and efficiencies to accommodate the
changes. Abbott shall advise Cubist of the costs associated with making any
such change and Cubist shall be deemed to have accepted the obligation to pay
Abbott for such costs if Cubist indicates to Abbott that Abbott should proceed
to make the change; provided that if the change requested is a reschedule of a
firm order for delivery within the same calendar quarter no additional fee
shall be assessed.

8.7.7 PURCHASE ORDER TERMS. Each purchase order or any
acknowledgment thereof, whether printed, stamped, typed, or written, shall be
governed by the terms of this Agreement and none of the provisions of 

 

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such purchase order or acknowledgment shall be
applicable except those specifying quantity ordered, delivery dates, special
shipping instructions and invoice information. 

8.8 GUARANTEES AND WARRANTIES. 

8.8.1 CUBIST’S GUARANTEE. Cubist guarantees to Abbott
that all Bulk Drug delivered to Abbott pursuant to this Agreement shall, at the
time of delivery, not be adulterated or misbranded within the meaning of the
Federal Food, Drug and Cosmetic Act, as amended, (the “Act”) or within the
meaning of any applicable state or municipal law in which the definitions of
adulteration and misbranding are substantially the same as those contained in
the Act, as the Act and such laws are constituted and effective at the time of
delivery and will not be an article which may not under the provisions of
Sections 404 and 505 of the Act be introduced into interstate commerce. Cubist
further warrants to Abbott that Bulk Drug supplied to Abbott hereunder shall
meet the Bulk Drug Specifications set forth on Exhibit 1.2. Cubist further
guarantees that all Product Specifications Cubist provides to Abbott shall
conform with the appropriate Cubist filing with either the FDA or its foreign
equivalent.

8.8.2 ABBOTT’S GUARANTEE. Abbott guarantees to Cubist
that Product Abbott delivers to Cubist pursuant to this Agreement shall, at the
time of delivery, not be adulterated or misbranded within the meaning of the
Act, or within the meaning of any applicable state or municipal law in which
the definitions of adulteration and misbranding are substantially the same as
those contained in the Act, as the Act and such laws are constituted and
effective at the time of delivery and will not be an article which may not
under the provisions of Sections 404 and 505 of such Act be introduced into
interstate commerce.

8.8.3 ABBOTT’S PRODUCT WARRANTY. Abbott represents and
warrants to Cubist that Product Abbott delivers to Cubist pursuant to this
Agreement shall be free from defects in material and workmanship and shall be
manufactured (a) in accordance and conformity with the Product Specifications
and (b) in compliance with all applicable statutes, laws, rules or regulations,
including those relating to the environment, food or drugs and occupational
health and safety, including, without limitation, those enforced or promulgated
by the FDA (including, without limitation, compliance with cGMPs). Abbott
further represents and warrants to Cubist that the performance of its
obligations under this Agreement will not result in a violation or breach of
and will not conflict with or constitute a default under its Certificate of
Incorporation or corporate bylaws or any agreement, contract, commitment or
obligation to which Abbott or any of its Affiliates is a party or by which it
is bound.

 17
 

 

 

The foregoing warranties shall not extend to any
nonconformity or defect which relates to or is caused by Bulk Drug that Cubist
supplies to Abbott. Subject to Subparagraph 8.8.4, the replacement provisions
of Subparagraph 8.4.2 shall be Cubist’s sole and exclusive remedy for
non-conforming or defective Product. ABBOTT MAKES NO OTHER WARRANTIES, EXPRESS
OR IMPLIED, WITH RESPECT TO PRODUCT. ALL OTHER WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE ARE HEREBY DISCLAIMED BY ABBOTT. Except as
otherwise provided under Subparagraph 8.8.4 with respect to third party claims,
neither party shall be liable to the other for indirect, incidental or
consequential damages resulting from any breach of this Agreement.

8.8.4 ABBOTT INDEMNIFICATION. Subject to the
provisions of Subparagraph 8.8.6, Abbott shall indemnify and hold Cubist, its
affiliates, officers, directors and employees harmless from and against all
claims, causes of action, settlement costs, losses or liabilities of any kind
(including reasonable attorney’s fees) related to this Agreement and asserted
by third persons which arise out of or are attributable to (a) any intentional
wrongful act or any negligent act or omission on the part of Abbott’s
employees, agents or representatives, (b) Abbott’s breach of any representation
or warranty set forth in Subparagraph 8.8.3, or (c) a third party’s proprietary
rights relating to Abbott’s manufacturing processes used in the manufacture of
Product pursuant to this Agreement. The foregoing indemnification action shall
not apply in the event and to the extent that a court of competent jurisdiction
determines that such losses arose as a result of Cubist’s (or any Cubist
indemnitee’s) negligence, intentional misconduct or breach of this Agreement.

8.8.5 CUBIST INDEMNIFICATION. Subject to the
provisions of Subparagraphs 8.8.6, Cubist shall indemnify and hold Abbott, its
affiliates, officers, directors and employees harmless from and against all
claims, causes of action, settlement costs, losses or liabilities of any kind
(including reasonable attorney’s fees) related to this Agreement and asserted
by third persons which arise out of or are attributable to (a) any intentional
wrongful act or any negligent act or omission on the part of Cubist’s
employees, agents or representatives, (b) the use of or lack of safety or
efficacy of Drug or Product except to the extent such claim is based upon a
breach of Abbott’s representations or warranties set forth in Subparagraph
8.8.3, and (c) a third party’s proprietary rights relating to the Drug or
Product. The foregoing indemnification action shall not apply in the event and
to the extent that a

 18
 

 

 

court of competent jurisdiction determines that such
losses arose as a result of Abbott’s (or any Abbott indemnitee’s) negligence,
intentional misconduct or breach of this Agreement. 

8.8.6 CONDITIONS OF INDEMNIFICATION. If either party
seeks indemnification from the other hereunder, it shall promptly give notice
to the other party of any such claim or suit threatened, made or filed against
it which forms the basis for such claim of indemnification and shall cooperate
fully with the other party in the investigation and defense of all such claims
or suits. The indemnifying party shall have the option to assume the other
party’s defense in any such claim or suit with counsel reasonably satisfactory
to the other party. No settlement or compromise shall be binding on a party
hereto without its prior written consent, such consent not to be unreasonably
withheld.

ARTICLE 9. PRESS
RELEASE

Neither party shall make any public announcement
concerning the transactions contemplated herein, or make any public statement
which includes the name of the other party or any of its affiliates or
subsidiaries, or otherwise use the name of the other party or any of its
affiliates or subsidiaries in any public statement or document, except as may
be required by law or judicial order, without the written consent of the other
party, which consent shall not be unreasonably withheld. Subject to any legal
or judicial disclosure obligation, any such public announcement proposed by a
party that names the other party shall first be provided in draft to the other
party. The other party shall have [ ]* to review and approve such draft prior
to the issue or publication of the announcement.

 

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

 19
 

 

ARTICLE 10.
INTELLECTUAL PROPERTY RIGHTS

10.1. [ ]*

10.2. [ ]* 

ARTICLE 11. TERM
AND TERMINATION

11.1 TERM. This Agreement shall commence on the
Effective Date and the initial Term shall expire at the end of the [   ]* Contract Year. Thereafter, the Agreement
shall continue automatically until terminated. This Agreement may be terminated
upon expiration of the Term or at anytime thereafter [   ]* written notice from one party to the
other.

11.2 TERMINATION OF PRODUCT DEVELOPMENT PROJECT. The
Project as described in Article 2 may be terminated by either party at any time
by [ ]* prior written notice if such party makes a good faith determination
that the Product is not technically or commercially feasible. If the Project is
terminated, Abbott shall advise Cubist of Abbott’s actual development costs

 

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

 20
 

 

 

on the Project incurred prior to such termination.
Based upon Abbott’s actual costs and Cubist’s payments to Abbott, an
appropriate adjustment negotiated in good faith shall be made. Abbott, if
requested by Cubist, shall provide to Cubist a summary of costs payable
pursuant to this Paragraph 11.2. Upon payment of any adjustment required by
this Paragraph 11.2, this Agreement shall terminate.

11.3 GENERAL
TERMINATION RIGHTS. Either party may terminate this Agreement by giving to the
other [ ]* prior written notice as follows:

a.                 Upon
the bankruptcy or the insolvency of the other party unless, in the case of an
involuntary proceeding, it is dismissed within the notice period; or 

b.                Upon
the breach of any warranty or any other material provision of this Agreement by
the other party if the breach is not cured within [ ]* after written notice
thereof to the party in default.

11.4 REIMBURSEMENT UPON TERMINATION. Upon termination
pursuant to this Article 11, Cubist shall reimburse Abbott for Abbott’s cost of
all supplies purchased and on hand or on order, if such supplies were ordered
by Abbott based on firm purchase orders or Cubist estimates of its requirements
of Product and such supplies cannot be reasonably used by Abbott for other
purposes and cannot be cancelled. Abbott shall use reasonable efforts to
mitigate the costs of non-cancelable orders. Abbott shall invoice Cubist for
amounts due hereunder. Payment shall be made pursuant to Subparagraph 8.5.2.

11.5 RETURN OF INVENTORY. In the event of any
termination, within [ ]* of said termination, Abbott shall return any remaining
inventory of Bulk Drug and Product to Cubist at Cubist’s expense, unless such
termination shall have been as a result of a breach of this Agreement by
Abbott, in which case such inventory shall be returned at Abbott’s expense.

11.6 RETURN OF EQUIPMENT. In the event of any
termination, within [ ]* of said termination, Abbott shall return to Cubist at
Cubist’s expense any equipment purchased with Cubist funds, provided that
Abbott has not purchased such equipment from Cubist pursuant to Subparagraph
8.4.4.

11.7 SURVIVAL. Termination of this Agreement shall not
affect rights and obligations of either party that may have accrued prior to
the effective date of termination or any obligation specifically stated to
survive termination. The provisions of Articles 1-2 and Paragraphs 8.8, 10, 11,
12, and 13 shall survive any expiration or termination of this Agreement.

 

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

 

 21
 

 

ARTICLE 12.
CONFIDENTIAL INFORMATION

 

12.1 It is recognized by the parties that, during the
Term of this Agreement, the parties will exchange Confidential Information.
Abbott agrees that it shall not disclose or use for Abbott’s benefit (other
than as provided herein) or for the benefit of any third person Confidential
Information received from Cubist. Cubist agrees that it shall not disclose or
use for Cubist’s benefit (other than as provided herein) or for the benefit of
any third person Confidential Information received from Abbott.

12.2 Notwithstanding the above, nothing contained in
this Agreement shall preclude Cubist or Abbott from utilizing Confidential
Information as may be necessary in prosecuting patent rights of the parties
pursuant to Article 10, or obtaining governmental marketing approvals, or in
manufacturing Product pursuant to the terms and conditions of this Agreement.
The obligations of the parties relating to Confidential Information shall
expire [ ]* after the termination of this Agreement.

ARTICLE 13. MISCELLANEOUS

13.1 FORCE MAJEURE.

13.1.1 EXCUSABLE DELAY. Any
delay in the performance of any of the duties or obligations of either party
hereto (except the payment of money) shall not be considered a breach of this
Agreement and the time required for performance shall be extended for a period
equal to the period of such delay, provided that such delay has been caused by
or is the result of any acts of God, acts of the public enemy, insurrections,
riots, embargoes, labor disputes, including strikes, lockouts, job actions,
boycotts, fires, explosions, floods, shortages of material or energy, or other
unforeseeable causes beyond the control and without the fault or negligence of
the party so affected. The affected party shall give prompt notice to the other
party of such cause, and shall take promptly whatever reasonable steps are necessary
to relieve the effect of such cause.

13.1.2 TRANSFER OF PRODUCTION. If Abbott becomes
subject to an event of force majeure or problems are encountered which
interfere with production of Product at Abbott’s McPherson, Kansas plant, the
parties shall agree mutually on implementation of an agreed upon action plan to
transfer production to another Abbott plant. The parties shall meet, after the
execution of this Agreement and at the request of either party, to discuss and
define such an action plan. 

 

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

 

 

 22
 

 

 

13.2 NOTICES. All notices hereunder shall be delivered
either: (a) personally; (b) by facsimile and confirmed by first class mail
(postage prepaid); (c) by registered or certified mail (postage prepaid); or
(d) by overnight courier service to the following addresses of the respective
parties:

	
  

  	
  To:

  	
  Cubist Pharmaceuticals, Inc.

  	
   

  	
   

  
	
   

  	
   

  	
  24 Emily Street

  	
   

  	
   

  
	
   

  	
   

  	
  Cambridge, MA 02139 U.S.A.

  	
   

  	
   

  
	
   

  	
   

  	
  Attention: Dr. Alan Watson

  	
   

  	
   

  
	
   

  	
   

  	
  Facsimile: (617) 576-0271

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  To:

  	
  Hospital Products Division

  	
   

  	
   

  
	
   

  	
   

  	
  Abbott Laboratories

  	
   

  	
   

  
	
   

  	
   

  	
  200 Abbott Park Road

  	
   

  	
   

  
	
   

  	
   

  	
  Abbott Park, Illinois 60064-3537 U.S.A.

  	
   

  	
   

  
	
   

  	
   

  	
  Attention: President

  	
   

  	
   

  
	
   

  	
   

  	
  Facsimile: 847-937-2927

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  With copy to:

  	
   

  	
  Divisional Vice President

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Domestic Legal Operations

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  100 Abbott Park Road

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  D-322, AP6D

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Abbott Park, Illinois 60064-3500 U.S.A.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Facsimile: 847-938-1206

  	
   

  	
   

  

 

Notices shall be effective upon receipt if personally
delivered or delivered by facsimile and confirmed by first class mail, on the
third business day following the date of registered or certified mailing or on
the first business day following the date of delivery to the overnight courier.
A party may change its address listed above by written notice to the other
party.

13.3 CHOICE OF LAW. This Agreement shall be construed,
interpreted and governed by the laws of the State of Illinois, except for its
choice of law rules.

13.4 ALTERNATIVE DISPUTE RESOLUTION. The parties
recognize that bona fide disputes may arise which relate to the parties’ rights
and obligations under this Agreement. The parties agree that any such dispute
shall be resolved by ADR in accordance with the procedure set forth in Exhibit
13.4.

 

 23
 

 

 

13.5 ASSIGNMENT. Neither party shall assign this
Agreement nor any part thereof without the prior written consent of the other
party; which shall not be unreasonably withheld, PROVIDED, HOWEVER, (a) either
party may assign this Agreement to one of its wholly-owned subsidiaries without
such consent; or (b) either party, without such consent, may assign or sell the
same in connection with the transfer or sale of substantially all of its
business to which this Agreement pertains or in the event of its merger or
consolidation with another company. Any permitted assignee shall assume all
obligations of its assignor under this Agreement. No assignment shall relieve
any party of responsibility for the performance of any accrued obligation which
such party then has hereunder.

13.6 ENTIRE AGREEMENT. This Agreement, together with
the Exhibits referenced and incorporated herein, constitute the entire
agreement between the parties concerning the subject matter hereof and
supersede all written or oral prior agreements or understandings with respect
thereto.

13.7 SEVERABILITY. This Agreement is subject to the
restrictions, limitations, terms and conditions of all applicable governmental
regulations, approvals and clearances. If any term or provision of this
Agreement shall for any reason be held invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other term or provision hereof, and this Agreement shall be interpreted and
construed as if such term or provision, to the extent the same shall have been
held to be invalid, illegal or unenforceable, had never been contained herein.

13.8 WAIVER - MODIFICATION OF AGREEMENT. No waiver or
modification of any of the terms of this Agreement shall be valid unless in writing
and signed by authorized representatives of both parties. Failure by either
party to enforce any such rights under this Agreement shall not be construed as
a waiver of such rights, nor shall a waiver by either party in one or more
instances be construed as constituting a continuing waiver or as a waiver in
other instances.

13.9 INSURANCE CLAUSE. Cubist shall, at its sole cost
and expense, obtain and keep in force general liability insurance with bodily
injury, death and property damage limits of [ ]* Dollars (US$[ ]*) per
occurrence and [ ]* Dollars (US$[ ]*) in the aggregate including product
liability coverage. Upon the Effective Date, Cubist shall furnish to Abbott a
certificate of insurance signed by an authorized representative of Cubist’s
insurance underwriter evidencing the insurance coverage required by this
Agreement and providing for at least [ ]* prior written notice to Abbott of any
cancellation, termination, material change or reduction of such insurance
coverage.

 

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

 24
 

 

 

13.10 DISTRIBUTION AGREEMENT. If requested by Cubist,
Abbott agrees to negotiate in good faith with Cubist for a separate contract
for distributing finished product

13.11 [    ]*

13.12 EXHIBITS. All Exhibits referred to herein are
hereby incorporated by reference.

13.13 MISCELLANEOUS.

13.13.1 PROCESS REWORK. Process rework created as a
result of Cubist’s changes shall be billed separately at a reasonable fee
mutually agreed upon in writing.

13.13.2 POSTPONEMENT OF SCHEDULED PRODUCTION RUN. If
Cubist postpones a scheduled production run less than sixty (60) days prior to
the production date, then Cubist shall pay to Abbott [  ]* Dollars
(US$[  ]*) for this change; notwithstanding the foregoing, if Abbott
is able to fill such scheduled time period with another production run for a
third party, Cubist will receive a refund of such fee.

13.13.3 SUB-LOTS. Should Cubist desire Abbott to split
a manufacturing lot of material into several sub-lots during packaging, there
is a split fee of [  ]* Dollars (US$[  ]*) for each sub-lot
packaged off due Abbott.

13.13.4 COLD STORAGE FEE. A cold storage fee shall be due
and payable to Abbott if Cubist stores Product at Abbott’s plant after such
Product’s final release. The fee shall be [  ]* (US$[  ]*)
per pallet per month or any part thereof.

13.13.5 SHIPMENT PER BATCH. Abbott shall make up to
two (2) shipments to Cubist of Product per batch at no charge to Cubist. Any
other shipments requested shall be at a fee of [  ]* Dollars (US$[  ]*)
per shipment plus shipping costs. 

13.13.6 DEBARMENT WARRANT. Abbott and Cubist represent
and warrant that neither party uses nor will in the future use in any capacity
the services of any person debarred under Section (a) or (b) of 21 U.S.C.
Section 335a.

 

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

 25
 

 

The parties intending to be bound by the terms and
conditions hereof have caused this Agreement to be signed by their duly
authorized representatives on the date first above written.

 

	
  ABBOT LABORATORIES

  	
   

  	
  CUBIST PHARMACEUTICALS, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  /S/ RICHARD A.
  GONZALEZ

  	
   

  	
  /S/ SCOTT M. ROCKLAGE

  	
   

  	
   

  
	
  By (Signature)

  	
   

  	
  By (Signature)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  RICHARD A.
  GONZALEZ

  	
   

  	
  SCOTT M. ROCKLAGE

  	
   

  	
   

  
	
  Name (Printed)

  	
   

  	
  Name (Printed)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PRESIDENT

  	
   

  	
  PRESIDENT AND CEO

  	
   

  	
   

  
	
  Title

  	
   

  	
  Title

  	
   

  	
   

  

 

 26

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