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EXHIBIT 10.20
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CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4),
200.83 AND 240.24B-2
LICENSE AGREEMENT
This Agreement made this 29 day of December, 1999 by and between
1. ORGANON INTERNATIONAL AG., a corporation duly organized and existing under
the laws of Switzerland and having its registered offices at 160 B,
Churerstrasse, P.O. Box 129, 8808 Pfaffikon, Switzerland,
and
N.V. ORGANON, a corporation duly organized and existing under the laws of
The Netherlands and having its registered offices at Kloosterstraat 6, 5348
AB, Oss, The Netherlands, on the one hand, jointly hereinafter referred to
as "Organon",
and
2. CIMA LABS INC. a corporation duly organized and existing under the laws of
Delaware and having its registered offices at 10000 Valley View Road, Eden
Prairie , Minnesota 55344, USA, on the other hand, hereinafter referred to
as "CIMA".
CIMA and Organon may hereinafter be referred to as "Party", or collectively as
"Parties".
WITNESSETH THAT:
CIMA has developed and owns or has rights to certain patented oral drug-delivery
technology referred to as Orasolv(R) which has applications in the field of
pharmaceutical product formulation;
[...***...]
On December 2, 1998, CIMA and N.V. Organon, the latter acting on behalf of
Organon International A.G., entered into a Development and License Option
Agreement under which prototypes of certain pharmaceutical product formulations
were developed by CIMA for N.V. Organon's evaluation subject to the granting of
an option to enter into a license agreement with CIMA;
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UNDER 17 C.F.R. SECTIONS 200.80(B)(4),
200.83 AND 240.24B-2
The conclusion of a Toll Manufacturing Agreement within six (6) months after the
Effective Date regarding the manufacturing of the Product as defined in this
License Agreement is a condition for this License Agreement.
CIMA desires to enter into such a license agreement with Organon.
NOW, THEREFORE, in consideration of the foregoing and the mutual agreement as
set forth herein, the Parties agree as follows:
ARTICLE 1 DEFINITIONS
Whenever used in this Agreement, unless otherwise clearly required by the
context, the following terms shall have the meaning as defined hereinafter (in
alphabetical order) and shall include both the single and the plural.
1.1 The term "Affiliated Company" shall mean any company which by means of a
majority of shares or otherwise, either directly or indirectly, controls,
is controlled by or is under common control with either Party hereto.
1.2 The term "Effective Date" shall mean the date first written above.
1.3 [...***...]
1.4 The term "Know-How" shall mean and include any and all data, information
and any experience or other data, in possession of CIMA, relating to the
Product, including Manufacturing Know How.
1.5 The term "Manufacturing Know-How" shall mean and include any and all data,
information and any experience or other data, in the possession of CIMA
which is necessary for Organon to effectively and efficiently manufacture
the Product.
1.6 The term "Net Sales" shall mean the total revenue from commercial sales
received by Organon, its Affiliated Companies and/or (sub)licensee(s) from
the sale to independent third parties of the Product subject to royalties
hereunder less the following amounts:
(i) discounts, including cash and quantity discounts, trade allowances or
rebates actually allowed or granted,
(ii) credits or allowances actually granted upon claims or returns,
regardless of the party requesting the return,
(iii) separately itemized freight charges paid for delivery
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(freight, postage, shipping)
(iv) insurance costs,
(v) taxes or other governmental charges levied on or measured by the
invoiced amount and included in the invoice, whether absorbed by Organon or
the third party (other than franchise or income taxes on the income of the
selling party)
(vi) amounts prepaid or credited on account of rejections, expired dating
on return of Products.
1.7 The term "Patents" shall mean the patents, and patent applications (and any
patents issuing on such applications) listed in Exhibit I hereto and any
divisional, continuation and continuation-in-part applications thereof,
reissues, reexaminations, substitutions, additions and any extensions to
such patents as well as foreign counterparts thereof.
1.8 The term "Cima-Patents" shall mean the Patents excluding US patent nr.
5,225, 197 d.d. July 6, 1993, and corresponding patents in other countries.
1.9 The term "Registration Dossiers" shall mean and include dossiers filed by
Organon in the Territory with the relevant government institutions for the
purpose of obtaining marketing approval for the Product in the name of
Organon or its Affiliated Companies.
1.10 [...***...]
1.11 [...***...]
1.12 The term "Territory" shall mean the whole world.
1.13 The term "Toll Manufacturing Agreement" shall mean the Toll Manufacturing
Agreement referred to in the preamble hereof.
1.14 [...***...]
1.15 The term "Patent Country" means a country in which one or more Patents
covering the Product and/or its method of manufacture are in force and have
not expired, been nullified or revoked.
1.16 The term "Non-Patent Country" means a country other than a Patent Country.
1.17 The term "Patent Country Sale" means a sale of Product in which the Product
is transferred within a Patent Country;
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from a Patent Country to a Non-Patent Country; or from a Non-Patent Country
to a Patent Country.
1.18 The term "Non-Patent Country Sale" means a sale of product other than a
Patent Country Sale.
ARTICLE 2 GRANT OF LICENSES
2.1 [...***...]
2.2 [...***...]
2.3 Organon covenants that any third party to which it may sub-license certain
rights hereunder as well as any third party distributor entrusted by
Organon with the physical distribution of the Product, will be bound by the
terms and conditions of this Agreement.
ARTICLE 3 TRANSFER OF MANUFACTURING KNOW-HOW
[...***...]
ARTICLE 4 CONFIDENTIALITY
4.1 It is understood and agreed by Organon, that all Know-How and other
information and data disclosed by CIMA to Organon under this Agreement
and/or under the Toll Manufacturing Agreement is and shall remain the
exclusive property of CIMA. It is acknowledged by Organon that the Know-How
and other information and data are only disclosed to Organon for the
purposes and use described in this Agreement and that they are to be
regarded as trade secrets containing unpublished results of private
research and experience which are used in CIMA's business and which are of
a nature customarily held in strict confidence and regarded as privileged
knowledge; consequently any disclosure by Organon of Know-How information
and data in violation of the obligation of this paragraph will harm and
damage CIMA's legitimate business interests. Organon hereby undertakes to
keep secret and confidential the know-How and above mentioned information
and data during the term of this Agreement as well as thereafter and not to
disclose the Know-How, information and data to any third party, person,
government institution other than those referred to in Article 5, or
Affiliated Company of Organon, or third party designated by Organon in
compliance with Article 3, having a need to know such information and
agreeing to comply with
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UNDER 17 C.F.R. SECTIONS 200.80(B)(4),
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the terms of this Article 4, without CIMA's prior written approval and not
to use it for any other use or purpose than those described in this
Agreement.
4.2 The obligations described in paragraph 4.1 above shall not be applicable to
any part of the Know-How or other information and data disclosed by CIMA
under this Agreement which:
- at the moment of disclosure, is general (public) knowledge;
- after disclosure, through no fault of Organon or the government
institution referred to in article 5, becomes general (public) knowledge;
- properly and lawfully becomes available to Organon, from sources not
bound to CIMA by a secrecy obligation, provided this can be adequately
substantiated.
4.3 Organon will use the Product and the Know-How and other information and
data of CIMA solely for the purposes specified in this Agreement and for no
other purpose. Upon termination or expiration of this Agreement Organon
hereby undertakes, upon such request from CIMA, to promptly return all
documentation received from CIMA on which the Know-How is displayed and/or
described and not to retain any copy or photocopy of such documentation and
to stop any further use or disclosure of CIMA's Know-How and/or other
information and data as referred to in paragraph 4.1 above, except one copy
of all documents or other written material containing confidential
information -to be kept in the files of its law department provided that
reasonable measures are taken to limit access to such files- for the sole
purpose of resolving future disputes concerning this Agreement.
ARTICLE 5 REGISTRATION AND MARKETING APPROVAL
Organon shall use its reasonable best efforts to have the registrations and
marketing approval for the Product in the Territory granted as soon as possible.
All expenses and fees in connection with the application and maintaining of the
registrations and marketing approval by Organon in the Territory shall be for
account of Organon. Organon shall own all registrations and marketing approvals
of the Product.
ARTICLE 6 PRICE APPROVAL
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UNDER 17 C.F.R. SECTIONS 200.80(B)(4),
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At the same time as the application for marketing approval, Organon shall file
with the relevant government institution
an application for price approval for the Product.
ARTICLE 7 PROMOTION
Organon shall use its reasonable best efforts to successfully commercialize the
Product within the Territory and agrees to use such reasonable best efforts in
particular to successfully promote the Product in the Territory. The amount of
effort to be applied to each region of the Territory is to Organon's discretion.
ARTICLE 8 PURCHASE AND SUPPLY OF PRODUCTS
The terms of the manufacture and supply of the Product will be contained in the
Toll Manufacturing Agreement.
ARTICLE 9 CONSIDERATION
9.1 [...***...]
9.2 [...***...]
9.3 [...***...]
9.4 [...***...]
9.5 [...***...]
9.6 Payments due shall be made within 30 days after receipt of the relevant
invoices.
ARTICLE 10. MAINTENANCE OF PATENT, INFRINGEMENT
[...***...]
ARTICLE 11 WARRANTIES
11.1 CIMA warrants that:
a) CIMA is a corporation duly organized, duly existing and in good
standing under the laws of the State of Delaware in the United States
of America, with full right, power and authority to enter into and
perform this Agreement and to grant all of the rights, powers and
authorities herein granted;
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UNDER 17 C.F.R. SECTIONS 200.80(B)(4),
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b) The execution, delivery and performance of this Agreement do not
conflict with, violate or breach any agreement to which CIMA is a
party, or CIMA's articles of incorporation or bylaws;
c) CIMA has sufficient rights in the Know-How and the Patents to grant to
Organon the rights set forth in Section 2.1. To the knowledge of CIMA
the execution of the provisions of this Agreement does not infringe in
any third parties proprietary rights.
d) CIMA agrees to indemnify Organon against any claim from any third
party regarding any infringement by the Product or the process used to
make the Product of third parties' US patents rights valid on the
Effective Date. CIMA shall have the right to control the defense of
any such claim provided that CIMA will not settle any such claim on
terms requiring discontinuance of the Product without consent of
Organon, which shall not be unreasonably withheld. Nevertheless,
Organon shall perform research regarding the Product for possible
conflicts with third parties proprietary rights valid in Europe. Such
research shall be terminated within three (3) months after Effective
Date. Organon shall assess the results of such research, and shall
decide whether the results are satisfactory. An unsatisfactory result
from such research shall be a condition to this Agreement. Any and all
actions performed under this Agreement shall than be reversed.
11.2 Organon warrants that:
a) The companies herein defined as Organon are corporations duly
organized, existing and in good standing under the laws of Switzerland
and/or the Netherlands, with full right, power and authority to enter
into and perform this Agreement and to grant all of the rights, powers
and authorities herein granted;
b) The execution, delivery and performance of this Agreement do not
conflict with, violate or breach any agreement to which Organon is a
party, or the articles of incorporation or by laws of any of the
companies defined herein as Organon;
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UNDER 17 C.F.R. SECTIONS 200.80(B)(4),
200.83 AND 240.24B-2
c) This Agreement has been duly executed and delivered by Organon and is a
legal, valid and binding obligation enforceable against Organon in
accordance with its terms.
ARTICLE 12 DURATION
12.1 This Agreement shall become effective as of the Effective Date and shall
expire upon the expiration of the last Patent covering the Product.
12.2 Notwithstanding the preceding paragraphs, this Agreement may be terminated
forthwith by registered mail or overnight courier:
a) by either Party in the event the other Party shall materially breach
any of its obligations under this Agreement and shall fail to remedy
such breach within ninety (90) days from receipt of written notice of
such breach by the Party not in default; or
b) by either Party in the event of the other Party's liquidation,
bankruptcy or state of insolvency; or
c) By either Party in case the other Party assigns this Agreement in
whole or in part to any third party or sells a substantial part of its
business to any third party or in the event there is a substantial
change in the identity of that other Parties present management or
shareholders without the prior written consent of the other Party.
d) By CIMA if the Toll Manufacturing Agreement has not been signed within
(12) twelve months after the signing of this Agreement.
12.3 Articles Confidentiality, Indemnification, Miscellaneous and 15.1 shall
survive termination of this Agreement.
ARTICLE 13 INDEMNIFICATION
13.1.CIMA will indemnify and hold Organon and Organon's Affiliated Companies
harmless from and against all claims, suits and proceedings, and all
damages, losses, costs, recoveries and expenses, including reasonable legal
expenses and costs (including attorneys' fees) that Organon or Organon's
Affiliated Companies may incur, arising out of any
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UNDER 17 C.F.R. SECTIONS 200.80(B)(4),
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third party's claim of property damage or personal injury or death arising
from the use of the Product or CIMA's negligent or willful misconduct in
its performance of this Agreement or any breach of a representation or
warranty given herein by CIMA. However, CIMA will in no event be liable for
any such claims, damages, losses, costs or expenses to the extent they
arise out of or result from materials, including the Substance, supplied by
Organon to CIMA, or from Organon's or Organon's Affiliated Companies'
negligence or willful misconduct.
13.2.Organon will indemnify and hold CIMA and CIMA's Affiliated Companies
harmless from and against all claims, suits and proceedings, and all
damages, losses, costs, recoveries and expenses, including reasonable legal
expenses and costs (including attorneys' fees) that CIMA or CIMA's
Affiliated Companies may incur, arising out of any third party's claim of
property damage or personal injury or death arising from use of the Product
to the extent that such liability results from Organon's or Organon's
Affiliated Companies' negligent or willful misconduct in its performance of
this Agreement or any breach of a representation or warranty given herein
by Organon. However, Organon will in no event be liable for any such
claims, damages, losses, costs or expenses to the extent they arise out of
or result from materials supplied by CIMA to Organon, or from CIMA's or
CIMA's Affiliated Companies' negligence or willful misconduct.
13.3.In the event any third party asserts a claim covered by Sections 13.1 or
13.2, the indemnified party will give prompt notice to the indemnifying
party, who may, at its election, handle and control the defense or
settlement of the claim at its own expense by giving prompt notice to the
indemnified party. However, the indemnifying party will not settle any such
claim without the indemnified party's prior written consent, which will not
be unreasonably withheld. If the indemnifying party does not give such
notice and does not proceed diligently to defend the claim within thirty
(30) days after receipt of notice, the indemnifying party will be bound by
any defense or settlement that the indemnified party may make as to that
claim and will reimburse the indemnified party for any expenses related to
the defense or settlement of the claim. The parties will cooperate in
defending against any asserted third-party claims. Indemnification of the
indemnified party will also cover the indemnified party's directors,
officers, employees, agents, Affiliated Companies, and third parties
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UNDER 17 C.F.R. SECTIONS 200.80(B)(4),
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performing services for the indemnified party.
ARTICLE 14 APPLICABLE LAW AND DISPUTE RESOLUTION
14.1 The validity, construction and performance of this Agreement shall be
governed by and construed in accordance with the laws of the State of
Delaware.
14.2 The Parties shall attempt in good faith to resolve promptly any dispute
arising out of or relating to this Agreement by negotiation. If the matter
can not be resolved in the normal course of business any interested Party
shall give the other Party written notice of any such dispute not resolved,
after which the dispute shall be referred to more senior executives of both
Parties, who shall likewise attempt to resolve the dispute.
14.4 If the dispute has not been resolved by non-binding means as provided in
paragraph 14.3 above within forty-five (45) days of the initiation of such
procedure, the dispute shall be finally and exclusively settled by
arbitration by three independent arbitrators in Minneapolis, Minnesota
under the Uncitral Arbitration Rules. Each party shall select one
arbitrator, and those two arbitrators shall appoint the third by mutual
agreement and in accordance with the Uncitral Arbitration Rules. The
appointing authority shall be The London Court of International Arbitration
in London, England. The language of the arbitration shall be English. The
arbitration shall be in lieu of any other remedy and the award shall be
final, binding and enforceable by any court having jurisdiction for that
purpose. The Parties further agree that the arbitrators are not authorized
to award punitive damages in connection with any controversy or claim
settled by arbitration.
14.5 This Article shall, however, not be construed to limit or to preclude
either Party from bringing any action in any court of competent
jurisdiction for injunctive or other provisional relief as necessary or
appropriate.
ARTICLE 15 NON CONCURRENCE AND NEW DEVELOPMENTS
[...***...]
ARTICLE 16 MISCELLANEOUS
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UNDER 17 C.F.R. SECTIONS 200.80(B)(4),
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16.1 Publicity. Except as may be required by law or regulatory authorities,
neither party shall release or generate any publicity concerning the
transactions contemplated hereunder without the express consent of the
other party, which consent shall not be unreasonably withheld or delayed. A
press release announcing this Agreement is attached as Exhibit III. The
term "publicity" shall not include responses to press or trade inquiries or
internal communications by either party directly or solely to its
employees, provided, that such responses or communications do not describe
the specific terms of the transactions contemplated hereunder in
substantially greater detail than contained in a description of the
transactions agreed to by both parties, and provided further, that each
party will be free to provide employees with information required in the
performance of their duties. Any party that determines applicable
securities laws require it to file this Agreement shall first provide the
other party a copy of the redacted version it intends to file and shall
provide the other party the opportunity to comment thereon. Nonetheless the
filing party will make the final decision regarding the version to file,
based on the advice of its counsel.
16.2 Headings. All headings of the Articles and Paragraphs of this Agreement are
added to those Articles and Paragraphs for the purpose of convenience only
and the contents and meaning of such headings shall in no way limit the
meaning and applicability of the relevant Articles and Paragraphs.
16.3 Entire Agreement. This Agreement, the Development and License Option
Agreement and the Toll Manufacturing Agreement constitute the entire
agreement between the Parties and annuls and replaces any other agreement
or understanding whether written or oral which may have existed between the
parties with respect to the subject matter hereof. All schedules and
Exhibits referred to form an integral part of this Agreement. this
Agreement can be modified or amended and rights under this Agreement waived
only in writing signed by the Party to be charged.
16.4 No Assignment. Organon shall not assign or otherwise transfer this
Agreement or any part thereof to any third party, without the written
consent of CIMA.
16.5 Binding upon Successors. This Agreement shall bind and benefit the Parties
and their respective successors and assigns.
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UNDER 17 C.F.R. SECTIONS 200.80(B)(4),
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16.6 Notices. All notices in connection with this Agreement shall be in writing
and be in the English language (as shall all other written communications
and correspondence) and may be given by personal delivery, prepaid
registered airmail letter, telegram or telefax, addressed to the Party
required or entitled to receive same at its address set forth below, or to
such other address as it shall later designate by like notice to the other
Party. Notice of termination of this Agreement if given by telegram or
telefax, shall be confirmed by prepaid registered airmail letter dated and
posted the same day. The effective date of any notice if served by
telegram, telex or telefax shall be deemed the first business day in the
city of destination following the dispatch thereof and if given by prepaid
registered airmail letter only, it shall unless earlier received, be deemed
served not later than seven (7) days after date of posting.
Notice to Organon shall be to:
Organon International AG
Switzerland
Telefax: + 41 55 4151998
Attention: General Manager
with a copy to:
N.V. Organon
PO Box 20
5340 BH OSS
The Netherlands
Telefax: 31 412 646923
Attention: President
Notice to CIMA shall be to:
CIMA Labs Inc.
+ 1 612 947 8770
Attention: President
16.7 Severability. All stipulations contained in this Agreement shall be so
construed as not to infringe any provision of any law prevailing to this
Agreement. To the extent that, and only to the extent that, any stipulation
does infringe any such provisions, said stipulation shall be deemed void
and shall be replaced by a stipulation in such a way as in accordance with
the prevailing law is possible and in such a way as will be the least
prejudicable to the interest of either Party. The infringement of any
provision by a stipulation shall not affect the validity of any other
stipulation of this Agreement.
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UNDER 17 C.F.R. SECTIONS 200.80(B)(4),
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16.8 Independent Contractors. The Parties are independent contractors and
nothing in this Agreement shall imply any principal or agent relationship
or other joint relationship and neither Party shall have the power or
authority, either express or implied, to obligate the other Party.
16.9 Language. This Agreement is written in the English language and executed in
two (2) counterparts, each of which shall be deemed an original. The
English language text of this Agreement shall prevail over any translation
thereof.
16.10 No Waiver. Failure of either party to insist upon the strict and punctual
performance of any provision of this Agreement shall not constitute a
waiver of, or estoppel against asserting the right to require such
performance, nor should a waiver or estoppel in one case constitute a
waiver or estoppel with respect to a later breach whether of similar nature
or otherwise.
16.11 [...***...]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in duplicate by their duly authorized representatives to be effective as of the
date first written above.
ORGANON INTERNATIONAL AG. CIMA Labs Inc.
By : /s/ T. Boerma By : John M. Siebert
Name : Mr. T. Boerm Name : John M. Siebert, Ph.D.
Title: General Manager Title: President and CEO
By : /s/ R. Hugli By : ___________________
Name : Mr. R. Hugli Name : ___________________
Title: General Manager Title: ___________________
N.V. ORGANON
By : /s/ J. Lakeman
Name : Dr. J. Lakeman
Title: Managing Director International
Production and Quality Affairs
By : /s/ T.J. Kalff
Name : Drs. T.J. Kalff
Title: President