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EXHIBIT 10.20
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;
Organon International A.G. and N.V. Organon own the rights for respectively the
USA and Canada at the one hand and the rest of
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the world on the other hand to a compound, known as Org. 3770 (mirtazapine;
defined as Substance in this Agreement) and marketed under the tradename (among
others) Remeron;
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;
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 The term "Product" shall mean a tablet for the treatment of depression
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manufactured using the technology of CIMA commonly known as
Orasolv(R) as patented by the Patents as described in Exhibit I
hereof, containing the Substance as the active ingredient and
adapted to disperse in the mouth of a human adult, which tablet
incorporates the Substance together with a matrix or coating in
microparticles or microcapsules which provide essentially complete
release of the Substance into the gastrointestinal tract in a period
of less than one hour after dissolution of the tablet.
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 (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.
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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 The term "Stability Batches" shall mean a total of five pilot scale GMP
production batches, comprising two batches of 15 mg Substance
Orasolv(R) tablets, one batch of 30 mg Substance Orasolv(R) tablets and
two batches of 45 mg Substance Orasolv(R) tablets. The batch numbers
are respectively: 990017, 990018, 990019, 990020 and 990021.
1.11 The term "Substance" shall mean mirtazapine and/or its salts and/or its
enantiomers.
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 The term "Validation Batches" shall mean a total of three full scale
GMP production batches of 525 kilograms each, comprising one batch of
15 mg, 30 mg and 45 mg Substance Orasolv(R) tablets, respectively.
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
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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; 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 CIMA hereby grants to Organon (a) an exclusive license under the
Know-How and the Cima-Patents regarding the Product, during the term of
this Agreement, to use, sell, offer to sell or otherwise distribute the
Product in the Territory and (b) an exclusive license under the
Manufacturing Know-How and the CIMA-Patents to make a Product, have the
Product made, solely under Organon's right to the extent permitted to
self-supply in the Toll Manufacturing Agreement and (c) a non-exclusive
license under US Patent 5,225, 197 and corresponding patents in foreign
countries to make, have made, sell, use, or offer for sale or otherwise
distribute the Product in the Territory.
2.2 Organon has the right to sub-license the rights granted to it under
Section 2.1(a) to an Affiliated Company of Organon and/or a Non
Affiliated Company of Organon for the purposes of marketing or
distributing the Product. In case such a right is granted to a Non
Affiliated Company of Organon, CIMA shall be notified by Organon.
Organon has the right to sub-license the rights granted to it under
Section 2.1(b) to an Affiliated Company of Organon, and CIMA retains
the right to make the Product for Organon under the Toll Manufacturing
Agreement. Sales will be recorded as "Net Sales" for purposes of
royalty calculations.
2.3 Organon covenants that any third party to which it may sub-license
certain rights hereunder as well as any third party
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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
3.1 In the event Organon decides to manufacture certain of its requirements
of the Product itself or have the Product manufactured by its
Affiliated Companies a third party shall be designated by Organon
subject to CIMA's written consent which shall not be unreasonably
withheld or delayed. Written notice must occur six months in advance of
the manufacturing Know-How Transfer. CIMA shall collaborate with
Organon to transfer to Organon all Manufacturing Know-How as further
described in the Toll Manufacturing Agreement. The technology transfer
fee for transfer of Know-How is addressed in the Toll Manufacturing
Agreement.
3.2 Upon the request of Organon, CIMA shall make available personnel to
assist Organon or the third parties designated by Organon in starting
up the manufacture of the Product as further described in the Toll
Manufacturing Agreement.
3.3. Organon warrants that the elected third party shall comply with the
confidentiality clause of Article 4 hereof.
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
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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 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.
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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
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 In consideration of the rights granted to Organon under article 2,
Organon shall pay CIMA[***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] within 14 days after execution of this Agreement.
Furthermore, the following milestone payments shall be made by Organon
to CIMA:
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(i) [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]upon
completion of the Stability Batches;
(ii) [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]upon
completion of the Validation Batches;
(iii)[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]upon first
regulatory acceptance by a regulatory authority of the Registration
Dossier of a Product for review for obtaining registration;
(iv) [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]upon
successful registration of the first Product in the United States;
(v) [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]upon
successful registration of the first Product in any country belonging
to the European Union.
For clarity of understanding the payments referred to in this Article
9.1 shall each be payable only once such that the maximum aggregate
payment will be US$3,000,000 (three million United States Dollars)
irrespective of the number of Product commercialized.
Organon may take as a credit against royalties payable to CIMA under
Section 9.2 [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]in respect
of each of the first five calendar years during which Net Sales of the
Product amount to more than[***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***]This credit shall be made to Organon by
crediting[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]against the
royalties payable by it to CIMA
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for each of the four calendar quarters during the year following the
Qualifying Year.
For any other indication of the Product other than the treatment
of depression Organon and CIMA shall agree separately as to the
reimbursement of any development costs, royalty percentages and
milestone costs for that indication.
9.2 As a further compensation for granting such rights to Organon, Organon
shall pay the royalties to CIMA as described in Exhibit II. Any and all
royalty payments pursuant to this Agreement shall be based upon Net
Sales.
As further compensation for granting such rights to Organon, Organon
shall pay to CIMA royalties as follows: with respect to any Patent
Country sale, the amount of royalties due shall be the full royalties
set forth in Exhibit 2 hereof. With respect to any Non-Patent Country
Sale, the royalty shall be[***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***]of the amount set forth in Exhibit 2, provided that
Organon's obligation to pay royalties on Non-Patent Country Sales to
purchasers in each Non-Patent Country shall terminate five (5) years
after Organon first makes a bonafide, commercial scale Non-Patent
Country Sale to a purchaser in that country; Organon shall be granted a
royalty free license after those five years. In calculating the
amounts of royalties due hereunder, all sales made by Organon and/or
its licensee during each calendar year, including Patent Country sales,
Non-Patent Country Sales upon which royalties are due and Non-Patent
Country sales upon which no royalties are due shall be aggregated.
9.3 For the purpose of determining the royalties under paragraph 9.1 and/or
9.2, Organon shall render CIMA within sixty (60) days after the end of
each calendar quarter
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an accounting of the Net Sales during that calendar quarter by country,
and shall accompany such accounting with its payment, if any such
payment is due hereunder, for the calendar quarter. The currency
conversion from local currencies into U.S. dollars for the purpose of
this agreement will be carried out using the currency exchange rate
published in the Wall Street Journal on the last working day of each
calendar quarter. Organon will inform CIMA of the amount payable and
CIMA will invoice them for that amount. Organon will include with each
payment a breakdown of actual Net Sales which is the basis for the
calculation of the payment.
9.4 Organon shall keep accurate and adequate records with respect to Net
Sales subject to royalty hereunder. Organon shall permit from time to
time during the term of this Agreement and one (1) year after its
termination or expiration, upon reasonable request by CIMA a certified
public accountant acceptable to Organon to examine said records, shall
provide any information reasonably requested to explain the records,
and shall permit the accountant to make copies or extracts from such
records to the extent necessary to verify the accuracy thereof.
9.5 Organon's royalty payment obligations will cease to accrue upon the
expiration or termination of this Agreement subject to the terms of,
Article 12 below. Expiration of this agreement shall not affect
Organon's obligation to pay royalties with respect to sales made prior
to such expiration or termination.
9.6 Payments due shall be made within 30 days after receipt of the
relevant invoices.
ARTICLE 10. MAINTENANCE OF PATENT, INFRINGEMENT
10.1 CIMA shall at its own discretion prosecute any of its applications for
CIMA-Patents and shall pursue the application, defense, prosecution,
maintenance and all other handling of the CIMA-Patents. CIMA shall
provide Organon with copies of all material patenting documents and
shall respond to any inquiries of Organon regarding the CIMA-
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Patents which may be relevant to Organon. CIMA shall give consideration
to any reasonable recommendations and/or requests by Organon.
10.2 CIMA may at its sole discretion decide whether it wishes to maintain
any of the granted Patents or any patent application and nothing
contained herein shall or may be construed as an obligation to CIMA to
maintain any such granted Patents or pursue any such pending patent
applications. In the event that CIMA wishes to abandon any of the
Patents, it shall notify Organon of such decision not less than sixty
(60) days prior to the date of such abandonment becomes irrevocable and
CIMA shall consider any opinions or comments of Organon concerning such
abandonment.
10.3 Organon's obligation to pay royalties for Know-How on Net Sales of
Products shall for countries for which CIMA abandoned the Patents
continue at[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] of the
royalty rate.
10.4 Organon shall have the right but not the obligation to seek extensions
of terms of Patents and to seek to obtain Supplementary Protection
Certificates in relation to the Products. At Organon's request CIMA
shall authorize Organon to act as CIMA's agent for the purpose of
making any application for any extension of the term of the patents or
for attainment of Supplementary Protection Certificates in relation to
the Products and, at Organon's request, CIMA shall provide reasonable
assistance thereof to Organon at Organon's expense.
10.5 CIMA shall inform Organon from time to time about the institution or
possible institution of any interference, opposition, re-examination,
re-issue, revocation, nullification or any other official proceeding
involving a Patent anywhere in the Territory. CIMA agrees to keep
Organon at Organon's request informed of the course of patent
prosecution or other proceedings by providing Organon with copies of
substantive communications, search reports and third party observations
submitted to or received from patent offices throughout the territory.
CIMA shall provide
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such patent consultation to Organon at no cost to Organon. Organon
shall hold all information disclosed to it under this section as
confidential.
10.6 Each party shall give written notice of any suspected infringement of
the Patent Rights regarding the Product to the other party within 30
(thirty) days of their receipt of notification. Within 4 (four) weeks
of such notice, parties' patent and/or legal counsel shall consult on
the strategy to be pursued with respect to the infringement. In such
event, Articles 10.7 to 10.10 shall apply.
10.7 CIMA shall be responsible for taking any legal action against the
infringer and the costs thereof and shall regularly consult with
Organon during the pursuance thereof. CIMA shall seek the written
consent of Organon for any proposed settlement with any infringing
party, provided however that CIMA may settle such action without
consent of Organon if such settlement includes a cessation of the
infringing activity regarding the Product. Organon shall not withhold
any such consent unreasonably, it being understood that to the extent
such settlement adversely impacts the benefits to Organon under the
licenses granted hereunder, such licenses will be modified as
appropriate to compensate Organon.
10.8 If CIMA does not diligently address any infringement regarding the
Product within thirty (30) days of receipt of Organon's notice thereof
or if CIMA fails to notify Organon of any discovered infringement
regarding the Product within thirty (30) days of discovery, Organon
will have the right to prosecute such infringement at the expense of
CIMA, following notification to CIMA of its intent and inaction by CIMA
within 30 (thirty) days of such notification. Any costs and expenses
made by Organon with respect thereto may be offset against quarterly
royalties otherwise owing to CIMA in the country where the infringement
took place. The charge to CIMA will be billed against royalties in four
quarterly payments. Organon shall have the right to settle, and CIMA
shall execute any settlement documents as necessary, such action
without consent of CIMA if such settlement includes a cessation of the
infringing activity or provides for a sub-
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license within the Field and provided such settlement can not
reasonably be expected to impact the validity of the Patent Rights;
otherwise Organon may settle only with the consent of CIMA which
consent may not be unreasonably withheld. CIMA shall cooperate in
such action with Organon and will at the request and for the account
of Organon, join in such action if such is formally necessary in
order to avoid dismissal.
10.9 The non-controlling party shall have the right to participate in such
action with its own counsel and at its own expense and the
non-controlling party shall render all assistance reasonably required
by the controlling party.
10.10 Any recovery from such action contemplated in 10.8 and 10.9 above
except the expenses of counsel shall be applied first to the costs and
expenses of the parties. The remainder of recoveries shall be
distributed as follows:
a) CIMA shall be compensated first for loss of royalty income over
Net Sales of Products by Organon if and to the extent that
Organon has withheld royalty payments pursuant to Article 10.3
above;
b) the remaining balance of the recoveries shall be for Organon.
10.11 In all cases of infringement of the Patent Rights other than foreseen
in paragraph 10.6 above, CIMA shall have the sole and exclusive right
to prosecute, control and settle such an action. The cost of such
action shall be borne solely by CIMA and the recovery from such action
shall belong solely to CIMA.
10.12 Organon will mark the Product with the proper legend concerning patent
coverage in accordance with the laws of each country where the patent
marking is required.
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
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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;
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
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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;
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.
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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 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.
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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 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
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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.
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ARTICLE 15 NON CONCURRENCE AND NEW DEVELOPMENTS
15.1 In case CIMA develops new fast dissolve technologies for formulations
of Product that could contain the Substance, CIMA will grant Organon
the right, for a period of one year after CIMA makes any such new
technology commercially available, to obtain an exclusive license on
such technologies to manufacture, use and sell Product containing the
Substance in the Territory. CIMA shall offer such license to Organon at
least at the same terms or terms not less favorable than those offered
to third parties based on royalty, at development-, milestone and
license fees.
15.2 In the event that any invention is made jointly by employees of CIMA
and Organon ("Joint Invention") in the course of any research conducted
pursuant to this Agreement, or in the course of research using any of
the Prototypes supplied under the License Option Agreement, then the
following shall apply: Any Joint Invention which is applicable to
product containing active ingredients other than the Substance shall be
owned by CIMA, but Organon shall have an exclusive, worldwide,
royalty-free license to use such invention in connection with products
containing the Substance as the sole active ingredient. Any Joint
Invention which is applicable only to products containing only the
Substance shall be owned by Organon. Any invention made by employees of
CIMA which is applicable to products containing only the Substance and
does not include fast-dissolve technology shall be owned by Organon.
The party owning any invention pursuant to this Agreement (the "Owner")
shall have the right, but not the obligation, to obtain patents and
other forms of protection for such invention at its own expense, and
the other party hereto shall cooperate with the owner in obtaining such
protection as requested by the Owner. The Owner shall reimburse the
other party hereto for reasonable expenses and reasonable charges for
staff time devoted to such cooperation. If the party does not exercise
its right to obtain patent protection, it shall enable the other party
to get such protection. The ownership and licenses granted under this
section doe not include any license or right
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under any other patent, technology, trade secrets, know-how or other
Confidential Information owned or licensed by either party hereto.
15.3 If, during the term of this Agreement, Organon discovers that the
combination of Substance and a fast-dissolving dosage form has an
effect outside the field of depression, then Organon will own the
rights to such use but will not commercialize such a combination
outside the range of the Product without either (a) using Orasolv(R) or
another fast-dosage dosage form owned by CIMA, provided that the rights
to such fast-dissolve technology of CIMA are available to be licensed
for that indication of the Product other than depression, or (b) paying
to CIMA a fee of[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***].
ARTICLE 16 MISCELLANEOUS
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
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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.
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
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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.
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.
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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 Back-up facility. 36 months after the Effective Date Manufacturer shall
have provided for a back-up facility that will be available immediately
when the manufacturing of the Product is for practical reasons of any
kind no longer possible in the facility that is normally used to
manufacture the product.
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 : /s/ 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
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LIST OF EXHIBITS
EXHIBIT I Patents and Patent Applications
EXHIBIT II Royalty payments
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LIST OF EXHIBITS
EXHIBIT I
Patents and Patent Applications
- ---------------------- ------------------------ ----------------------------
Country Patent / Filing/Issue
Application No. Date
- ---------------------- ------------------------ ----------------------------
US 5,178,878(1) January 12, 1993
- ---------------------- ------------------------ ----------------------------
US 5,225,197(1) July 6, 1993 *
- ---------------------- ------------------------ ----------------------------
US S.N.230,738(2) April 21, 1994
- ---------------------- ------------------------ ----------------------------
US S.N.601,042,566(2) April 1, 1997
- ---------------------- ------------------------ ----------------------------
CAN S.N.2,061,917(2) February 26, 1992
- ---------------------- ------------------------ ----------------------------
JAPAN S.N.2,514,500(2) September 13, 1990
- ---------------------- ------------------------ ----------------------------
AUSTRALIA 646,232(1) June 3, 1994
- ---------------------- ------------------------ ----------------------------
EUROPE 494,972 November 27, 1996
- ---------------------- ------------------------ ----------------------------
(1) Issued Patents
(2) Pending Patent Applications
* Licensed Technology
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EXHIBIT II
Royalty payments
NET SALES PER PRODUCT (US$ IN MILLION) PER CALENDAR YEAR - YEARS 1
THROUGH 5 (reflects potential give-back of $1 million)
------------- ------------ ------------- ------------- ------------- ------------- ------------ -------------
GREATER THAN: 0 50 100 150 200 300 400 OVER 500
LESS THAN EQUAL TO 50 100 150 200 300 400 500
------------- ------------ ------------- ------------- ------------- ------------- ------------ -------------
ROYALTY % *** *** *** *** *** *** *** ***
------------- ------------ ------------- ------------- ------------- ------------- ------------ -------------
*** - [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.***]
NET SALES PER PRODUCT(US$ IN MILLION) PER CALENDAR YEAR - YEARS 6 THROUGH
ALL PATENT EXPIRATIONS
------------- ------------ ------------- ------------- ------------- ------------- ------------ -------------
GREATER THAN: 0 50 100 150 200 300 400 OVER 500
LESS THAN EQUAL TO 50 100 150 200 300 400 500
------------- ------------ ------------- ------------- ------------- ------------- ------------ -------------
ROYALTY % *** *** *** *** *** *** *** ***
------------- ------------ ------------- ------------- ------------- ------------- ------------ -------------
*** - [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]