***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4),
200.83 AND 240.24B-2
CIMA LABS INC.
DEVELOPMENT AND LICENSE OPTION AGREEMENT
WITH
N.V. ORGANON
THIS DEVELOPMENT AND LICENSE OPTION AGREEMENT (the "Agreement") is
entered into by and between CIMA LABS INC., a Delaware corporation ("CIMA") and
N.V. ORGANON, a Dutch corporation (Organon), on this 2nd day of December, 1998
(the "EFFECTIVE DATE").
RECITALS
WHEREAS, CIMA owns or has rights to certain patented oral
drug-delivery technology referred to as ORASOLV-Registered Trademark-, which
has applications in the field of pharmaceutical product formulation; and
WHEREAS, ORGANON has substantial expertise and experience in the
development, commercialization and marketing of human pharmaceutical products;
and
WHEREAS, the parties desire to explore the possibility of entering
into future agreements regarding the development and commercialization of
Orasolv-Registered Trademark- formulations of certain pharmaceutical products
for sale [...***...]; and
WHEREAS, ORGANON wishes to sponsor the development by CIMA of
prototypes of certain pharmaceutical product formulations for Organon's
evaluation, subject to the granting by CIMA to Organon of an option to enter
into a license agreement with CIMA.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants set forth below, the parties hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 "DEVELOPMENT PLAN" shall mean the plan set forth on Exhibit A
for the development of the Prototypes.
1.2 "FIELD" shall mean [...***...].
1.3 "PRODUCTS" shall mean the pharmaceutical products which are
formulated using OraSolv-Registered Trademark- technology (in any flavor) and
which contain [...***...] as their sole active ingredient.
1.4 "OPTION" shall have the meaning assigned thereto in Section 3.1.
1.5 "ORASOLV-Registered Trademark- TECHNOLOGY" shall mean CIMA's
effervescent, fast-dissolving, oral drug-delivery tablet technology, which
technology includes, to the extent applicable to the formulation of products,
the sole active ingredient of which is [...***...], (i) the inventions
disclosed in patents and patent applications owned, controlled or licensed
(with the right to sublicense) by CIMA during the term of this Agreement,
including those listed on Exhibit B, and (ii) all know-how, technology, trade
secrets, data, processes and methods, or other information owned, controlled or
licensed (with the right to sublicense) by CIMA during the term of this
Agreement.
1.6 "PROTOTYPES" shall mean the prototypes of the Products to be
developed by CIMA pursuant to the Development Plan and in accordance with the
general specifications set forth on Exhibit C, and any further specifications
agreed to by the parties.
ARTICLE 2
PROTOTYPE DEVELOPMENT
2.1 DEVELOPMENT SCHEDULE. Following the Effective Date and receipt
of the materials from Organon delineated under phase A of the Development Plan,
CIMA shall initiate development of the Prototypes. CIMA will develop the
Prototypes in one flavor, such flavor to be determined by mutual agreement as
described in Exhibit C.
CIMA and Organon each acknowledge and agree that the Development Plan is
expected to be completed within twenty four (24) weeks from the date of
initiation of phase B of the Development Plan. To that end, during the
implementation of the Development Plan, CIMA agrees to use commercially
reasonable best efforts to complete the Development Plan within the specified
time period and Organon agrees to evaluate promptly each iteration of the
Prototypes and/or report of results delivered by CIMA and respond to CIMA within
thirty (30) days of receipt thereof. Organon's response will indicate the
acceptability of such proposed Prototypes and/or the need, if any, for
modification of the specifications in light of the results of Organon's
evaluation.
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2.2 DEVELOPMENT FEES. In consideration for CIMA's development and
production of the Prototypes in accordance with this Agreement, Organon shall
make the non-refundable payments delineated in Exhibit A to CIMA within thirty
days of invoice date.
ARTICLE 3
OPTION; EXCLUSIVITY; LICENSE
3.1 OPTION. Effective upon delivery of the Option Fee described in
Section 3.3 below, CIMA hereby grants to Organon an option to acquire an
exclusive, royalty-bearing [...***...] license to utilize the
OraSolv-Registered Trademark- Technology to make, have made, use, sell, offer
for sale, import or otherwise distribute the Products in the Field [...***...]
(the "OPTION"). The term of such Option shall extend from the Effective Date
until [...***...]. Organon may exercise the Option by (i) providing CIMA with
written notice thereof, and (ii) negotiating and entering into a license
agreement (the "LICENSE AGREEMENT" with CIMA prior to the end of the Option
term. In the event that Organon fails to enter into the License Agreement by
the end of the Option term, CIMA's obligations under Section 3.2 hereof shall
terminate and CIMA shall be free to enter into any license agreement with
respect to any product in the Field with any third party, on any terms CIMA
may, in its sole discretion, deem appropriate.
3.2 EXCLUSIVITY. In consideration for the Option Fee, CIMA hereby
agrees that from the Effective Date until the expiration or termination of the
Option term set forth in Section 3.1, CIMA shall not enter into any agreements
with any third party relating to the development or commercialization of any
product in the Field.
3.3 OPTION FEE. In consideration for the exclusivity obligations set
forth in Section 3.2 and the Option granted in Section 3.1, Organon shall pay
to CIMA the sum of [...***...] on the Effective Date. The total Option Fee
payable hereunder shall be creditable against the upfront license fee payable
to CIMA upon execution of the license agreement.
3.4 COMMERCIALIZATION AND SUPPLY AGREEMENT. Simultaneously with the
execution of the License Agreement, the parties shall enter into a
commercialization and supply agreement pursuant to which CIMA shall be the
exclusive supplier of Organon's commercial requirements of the Products,
[...***...]. Such agreement shall also set forth the obligations of CIMA and
Organon with respect to finalization of development, scale-up and validation of
the Products, and the financial terms of the products' supply and technology
transfer.
3.5 FACILITIES VISITS. During the term of this Agreement, CIMA shall
allow personnel of Organon, at Organon's expense, to visit the manufacturing
and research facilities of CIMA and to consult with CIMA personnel, at mutually
agreeable times, to discuss and review the development of the Products.
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ARTICLE 4
GENERAL PROVISIONS
4.1 LIMITATIONS ON USE. Organon agrees that it shall use the
Prototypes and the Confidential Information (as defined in Section 4.3.1) of
CIMA solely for the purposes specified in this Agreement and for no other
purpose, including without limitation, use of the Prototypes in any research or
commercial activities other than those which relate directly to the purposes
specified herein. Organon's permitted use of the Prototypes shall be in
compliance with all applicable laws and regulations. Upon expiration or
termination of the Agreement, CIMA shall return or destroy, as directed by
Organon, all unused quantities of [...***...] and copies of any and all
information received from Organon under this Agreement. Upon expiration or
termination of the Agreement, Organon shall return or destroy, as directed by
CIMA, all unused quantities of the Prototypes and copies of any and all
information, data and results obtained from conduct of evaluations under this
Agreement or relating to the use of the Prototypes (the "RESULTS"). However,
following expiration or termination of this Agreement, Organon and CIMA may
retain one copy of the other party's Confidential Information, for archival
purposes only, at the offices of their legal counsel. Organon shall not sell,
transfer, disclose or otherwise provide access to the Prototypes or the
Results, any method or process relating thereto or any material that could not
have been made but for access to the foregoing, to any person or entity without
the prior expressed written consent of CIMA, except that Organon may allow
access to the Prototypes to employees, subcontractors or agents during the term
of, and solely for purposes consistent with, this Agreement. Organon will make
diligent efforts to ensure that such employees, agents and subcontractors will
use the Prototypes in a manner consistent with the terms of this Agreement.
4.2 TERM AND TERMINATION.
4.2.1 TERM. Unless sooner terminated in accordance with
Section 4.2.2 or 4.2.3 below, this Agreement shall expire upon the expiration
or termination of the Option.
4.2.2 TERMINATION FOR BREACH. CIMA may terminate this
Agreement upon sixty (60) days' written notice to Organon in the event Organon
commits a material breach of a provision of this Agreement and fails to cure
such breach prior to the end of such sixty (60) day period.
4.2.3 TERMINATION BY ORGANON. Organon shall have the right
to terminate this Agreement prior to exercise of the Option upon sixty (60)
days' written notice to CIMA.
4.2.4 EFFECT OF TERMINATION. Upon termination or expiration of
this Agreement pursuant to Sections 4.2.1, 4.2.2, or 4.2.3 above, Organon shall
not be entitled to a refund of any portion of the Option Fee. Nothing in this
Agreement shall be construed to relieve either party of any obligations
incurred by it hereunder prior to the effective date of termination hereof.
This Article 4 shall survive any termination or expiration of this Agreement.
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4.3 CONFIDENTIALITY. Each of the parties shall be bound by the
following terms and conditions:
4.3.1 Subject to the limitations set forth in Section 4.3.2
below, all information disclosed to the other party and identified by the
disclosing party as confidential shall be deemed "CONFIDENTIAL INFORMATION" of
the disclosing party. In particular, Confidential Information shall be deemed
to include, but not be limited to, the Prototypes and any documentation
relating thereto, the Results, any patent application or drawing or potential
patent claim the subject matter of which is directly or indirectly derived from
information disclosed hereunder, any trade secret, information, invention,
idea, samples, process, method, procedures, formulations, test data relating to
any research project, work in process, future development, engineering,
manufacturing, regulatory, marketing, servicing, financing, or personnel matter
relating to the disclosing party, its present or future products, sales,
suppliers, clients, customers, employees, investors or business, whether in
oral, written, graphic or electronic form.
4.3.2 The term "Confidential Information" shall not be deemed
to include information which (i) is now, or hereafter becomes, through no act
or failure to act on the part of the receiving party, generally known or
available; (ii) is known by the receiving party at the time of receiving such
information, as evidenced by its records; (iii) is hereafter furnished to the
receiving party by a third party, as a matter of right and without restriction
on disclosure; (iv) is independently developed by the receiving party without
use of Confidential Information of the other party; (v) is the subject of a
written permission to disclose provided by the disclosing party (vi) is
required to be disclosed by law; or (vii) is required to be disclosed to
establish rights or enforce obligations under this Agreement, but only to the
extent such disclosure is necessary.
4.3.3 During the term of this Agreement and for a period of
five (5) years after termination hereof (ten (10) years with respect to
information pertaining to manufacturing processes and know-how), each party
shall maintain all Confidential Information in trust and confidence and shall
not disclose any Confidential Information to any third party or use any
Confidential Information for any unauthorized purpose. Each party may use such
Confidential Information only to the extent required to accomplish the purposes
of this Agreement. Confidential Information shall not be used for any purpose
or in any manner that would constitute a violation of any laws or regulations,
including without limitation the export control laws of the United States.
Each party hereby agrees that it will not in any way attempt to obtain, either
directly or indirectly, any information regarding any Confidential Information
from any third party who has been employed by, provided consulting services to,
or received in confidence information from, the other party.
4.3.4 The parties under this Agreement shall advise their
employees who might have access to Confidential Information of the confidential
nature thereof and agree that their employees and agents shall be bound by the
terms of this Agreement. No Confidential Information shall be disclosed to any
employee who does not have a need for such information.
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4.4 OWNERSHIP. Title and ownership rights in the Prototypes and
other Confidential Information of CIMA shall remain at all times with CIMA.
Organon acknowledges that the Prototypes and such Confidential Information
shall remain the sole property of CIMA and Organon will acquire no title
thereto as a result of this Agreement. Nothing in this Agreement shall be
construed as conferring on either party an expressed or implied license or
option to license any disclosed Confidential Information, technology, or any
patent or patent application except as expressly provided herein.
4.5 INVENTIONS. 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 hereunder, then the following shall apply: Any Joint
Invention which is applicable to products containing active ingredients other
than [...***...] (whether or not such invention is also applicable to products
containing [...***...]) shall be owned by CIMA, but Organon shall have an
exclusive, [...***...], royalty-free license to use such invention in
connection with products containing [...***...] as the sole active ingredient.
Any Joint Invention which is applicable only to products containing ONLY
[...***...] shall be owned by Organon. ANY INVENTION MADE BY EMPLOYEES OF CIMA
WHICH IS APPLICABLE ONLY TO PRODUCTS CONTAINING ONLY [...***...] 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 do not include any license or right under any other patent,
technology, trade secrets, know-how or other Confidential Information owned or
licensed by either party hereto.
4.6 If, during the term of this Agreement, Organon discovers that
the combination of [...***...] and a fast-dissolve dosage form has an effect
outside the Field, then [...***...].
4.7 REPRESENTATIONS AND WARRANTIES.
4.7.1 CIMA WARRANTS THAT DEVELOPMENT AND PILOT-SCALE
MANUFACTURE BY CIMA OF THE PROTOTYPES SHALL BE CONDUCTED IN A WORKMANLIKE
MANNER AND, WHERE PROVIDED HEREIN, IN ACCORDANCE WITH CURRENT GOOD
MANUFACTURING PRACTICES PROMULGATED BY THE U.S. FDA. EXCEPT AS SET FORTH ABOVE,
THE PROTOTYPES ARE BEING SUPPLIED TO ORGANON WITH NO WARRANTIES OF ANY KIND,
EXPRESSED OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE OR THAT IT IS FREE FROM THE RIGHTFUL CLAIM OF ANY THIRD
PARTY, BY WAY OF INFRINGEMENT OR THE LIKE, OF ANY PATENT OR OTHER PROPRIETARY
RIGHTS OF SUCH PARTY.
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4.7.2 CIMA represents and warrants that:
(i) CIMA is a corporation duly organized, existing
and in good standing under the laws of the State of Delaware, 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.
(ii) 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 Certificate of Incorporation or Bylaws.
(iii) This Agreement has been duly executed and
delivered by CIMA and is a legal, valid and binding obligation enforceable
against CIMA in accordance with its terms.
4.7.3 Organon represents and warrants that:
(i) Organon is a corporation duly organized, existing
and in good standing under the laws of 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.
(ii) The execution, delivery and performance of this
Agreement do not conflict with, violate or breach any agreement to which
Organon is a party, or Organon's Certificate of Incorporation or Bylaws.
(iii) 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.
4.8 INDEMNITY.
4.8.1 CIMA agrees to and hereby does indemnify and hold Organon
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), which Organon may incur, arising out of any
third party claim of property damages or personal injury or death arising from
CIMA's negligent or willful misconduct in its performance of this Agreement or
any breach of a representation or warranty given herein by CIMA; PROVIDED,
HOWEVER, that in no event shall CIMA be liable for any such claims, damages,
losses, costs or expenses to the extent arising out of or resulting from active
ingredients supplied by Organon to CIMA, or Organon's negligence or willful
misconduct.
4.8.2 Organon agrees to and hereby does indemnify and hold CIMA
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) which CIMA may incur, arising out of any
third party claim relating to the products developed by
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CIMA for Organon hereunder or any aspect of Organon's performance of this
Agreement, to the extent such liability results from the negligence or willful
misconduct of Organon, or any breach of a representation or warranty given
herein by Organon.
4.9 INDEPENDENT CONTRACTORS. The parties shall perform their
obligations under this Agreement as independent contractors and nothing
contained in this Agreement shall be construed to be inconsistent with such
relationship or status. This agreement shall not constitute, create or in any
way be interpreted as a joint venture or partnership of any kind.
4.10 PUBLICITY. Any public disclosure of this Agreement or of the
activities or rights hereunder, including but not limited to press releases,
shall be reviewed and consented to by each party prior to such disclosure;
PROVIDED, HOWEVER, that either party may make such disclosures as may be
required by law (including securities laws) without such consent. Any consent
required hereunder shall not be untimely or unreasonably withheld by either
party.
4.11 FINAL AGREEMENT; AMENDMENTS. This Agreement sets forth the
complete and final agreement of the parties and supersedes all prior and
contemporaneous negotiations, understandings and agreements with respect to the
subject matter hereof. No subsequent amendment or modification to this
Agreement shall be binding upon the parties hereto unless reduced to writing
and signed by the respective officers of the parties hereto.
4.12 ASSIGNMENT. Except as otherwise provided herein, neither this
Agreement nor any interest hereunder will be assignable in part or in whole by
any party without the prior written consent of the other; PROVIDED, HOWEVER,
that either party may assign this Agreement to an Affiliate or any successor by
merger or sale of substantially all of its business unit to which this
Agreement relates without such consent. This Agreement will be binding upon
the successors and permitted assigns of the parties and the name of a party
appearing herein will be deemed to include the names of such party's successors
and permitted assigns to the extent necessary to carry out the intent of this
Agreement. Any assignment which is not in accordance with this Section 4.12
will be void.
4.13 MISCELLANEOUS. This Agreement shall be governed by the laws of
the State of Delaware of the United States of America. If any provision of
this Agreement is found by a proper authority to be unenforceable, that
provision shall be severed and the remainder of this Agreement will continue in
full force and effect. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original.
4.14 NOTICES. Any notices required or permitted hereunder shall be
given in writing to the appropriate party at the address specified below or at
such other address as the party shall specify in writing.
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IN WITNESS WHEREOF, the parties have by duly authorized persons,
executed this Agreement, as of the date first written above.
CIMA LABS INC. N.V. ORGANON
10000 Valley View Road KLOOSTERSTRAAT 6
Eden Prairie, Minnesota 55344 5340 AB OSS, THE NETHERLANDS
By: /s/ Jack A. Khattar By: /s/ President
----------------------------- ---------------------------------
Title: V.P., Business Development By: /s/ Managing Director, R&D
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