10-K/A

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K/A
Amendment No. 1

(Mark One)

[X]	Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2001
or
[   ]	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from        to

Commission File Number 0-24424

CIMA LABS INC.

(Exact name of registrant as specified in its charter)

Delaware	41-1569769
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
10000 Valley View Road, Eden Prairie,	(952) 947-8700
MN 55344-9361	(Registrant’s telephone number, including area code)
(Address of principal executive offices and zip code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.01 par value

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days.

Yes [X] No [   ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [   ]

Aggregate market value of common stock held by non-affiliates of Registrant, based upon the last sale price of the Common Stock reported on the Nasdaq National Market tier of The Nasdaq Stock Market on March 21, 2002 was $277,566,789. Common stock outstanding at March 21, 2002 was 14,226,154 shares.

Documents Incorporated by Reference

Portions of the Registrant’s definitive Proxy Statement to be filed with the Securities and Exchange Commission in connection with the solicitation of proxies for the Registrant’s Annual Meeting of Stockholders to be held on June 5, 2002 are incorporated by reference in Part III, Items 10, 11, 12 and 13.

TABLE OF CONTENTS

	ITEM 1. BUSINESS
	ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
SIGNATURES
CERTIFICATIONS
EX-10.25 Master Development License & Supply Agmnt
EX-99.1 Certification of Chief Executive Officer
EX-99.2 Certification of Chief Financial Officer

Explanatory Note:

This Amendment No. 1 on Form 10-K/A is being filed to amend two paragraphs of the business section in Item 1 of Part I of the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001, filed on March 28, 2002 (the “Original 10-K”) and to amend Item 14(a)(3) of Part IV and Exhibit 10.25 of the Original 10-K in response to comments that we received from the Securities and Exchange Commission. The first full paragraph on page 7 of the Original 10-K which begins with “Named pharmaceutical companies...” and the last paragraph on page 10 of the Original 10-K immediately following the heading “Unnamed Pharmaceutical Company” have both been revised to disclose additional information with respect to the aggregate fees that we may receive under our development, license and supply agreement with the unnamed pharmaceutical company. This Amendment No. 1 also updates Item 14(a)(3) and revises Exhibit 10.25 to disclose additional provisions for which we had originally requested confidential treatment. In addition, we have included the certifications of the chief executive officer and chief financial officer required by Section 906 of the Sarbanes-Oxley Act as Exhibits 99.1 and 99.2 and have included the certifications of such officers pursuant to Section 302 of the Sarbanes-Oxley Act. Other than these amendments, Item 1 and Item 14 remain in the same form as initially filed. This report continues to speak as of the date of the Original 10-K, and we have not updated the disclosure in this report to speak as of a later date.

Item 1 of Part I of the Original 10-K is amended in its entirety as follows:

ITEM 1. BUSINESS

Company Overview

     We were incorporated in Delaware in 1986. Our executive offices are located at 10000 Valley View Road, Eden Prairie, Minnesota 55344-9361. Our telephone number is (952) 947-8700 and our web site is www.cimalabs.com. The information on our website is not incorporated into and is not intended to be a part of this report. Unless the context otherwise indicates, all references to the “Registrant,” the “Company,” or “CIMA” in this Form 10-K relate to CIMA LABS INC.

     All other trademarks used in this report are the property of their respective owners. We have registered “CIMA®,” “CIMA LABS INC.®,” “OraSolv®,” “OraVescent®,” “DuraSolv®” and “PakSolv®” as trademarks with the U.S. Patent and Trademark Office. We also use the trademarks “OraSolv®SR/CR,” “OraVescent®SL/BL” and “OraVescent®SS.” “Triaminic®” and “Softchews®” are trademarks of Novartis. “Zomig®,” “Zomig-ZMT®” and “Rapimelt™” are trademarks of AstraZeneca. “Remeron®” and “SolTab™” are trademarks of Organon. “Tempra®” is a registered trademark of a Canadian affiliate of Bristol-Myers Squibb. “FirsTabs™” is a trademark of Bristol-Myers Squibb. “NuLev™” is a trademark of Schwarz Pharma. “Actiq®” is a registered trademark of Anesta Corporation. “Claritin®” and “Reditabs®” are registered trademarks of Schering Corporation. “Maxalt-MLT®” is a registered trademark of Merck & Co., Inc. “Zydis®” is a registered trademark of Cardinal Health, Inc. “FlashDose®” is a registered trademark of Biovail Corporation. “WOWTab®” is a registered trademark of Yamanouchi Pharma Technologies, Inc. “Flashtab®” is a registered trademark of Ethypharm.

     We develop and manufacture fast dissolve and enhanced-absorption oral drug delivery systems. OraSolv and DuraSolv, our proprietary fast dissolve technologies, are oral dosage forms that dissolve quickly in the mouth without chewing or the need for water. We currently manufacture five pharmaceutical brands utilizing our DuraSolv and OraSolv fast dissolve technologies: three prescription brands and two over-the counter brands. These brands include Triaminic Softchews for Novartis, Tempra FirsTabs for Bristol-Myers Squibb, AstraZeneca’s Zomig-ZMT and its equivalent for the European market, Zomig Rapimelt, Remeron SolTab for Organon and NuLev for Schwarz Pharma. The U.S. Food and Drug Administration, or FDA is currently reviewing Wyeth’s (formerly known as American Home Products) regulatory submission for a product we developed, an orally disintegrating dosage form of loratadine, which is expected to be marketed as a generic alternative to Claritin Reditabs.

     We believe that the attributes of our OraSolv and DuraSolv fast dissolve technologies may enable consumers in certain age groups or with limited ability to swallow conventional tablets to receive medication in an oral dosage form that is more convenient than traditional tablet-based oral dosage forms. Both OraSolv and DuraSolv technologies are capable of incorporating taste masked active drug ingredients into tablets that have the following potential benefits:

• ease of administration;

• improved dosing compliance; and

• increased dosage accuracy compared to liquid formulations.

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     We generate revenue from net sales of products we manufacture for pharmaceutical companies using our proprietary fast dissolve technologies; product development fees and licensing revenues for development activities we conduct through collaborative agreements with pharmaceutical companies; and royalties on the sales of products we manufacture, which are sold by pharmaceutical companies under licenses from us. Net sales of products we manufacture for and the royalties we receive from Novartis for Triaminic Softchews are seasonal in nature and can be affected by the strength and duration of the cough, cold or allergy season in the U.S.

     Our proprietary technologies enable our pharmaceutical company partners to differentiate their products from competing products. In addition to providing a competitive advantage in the marketplace, our proprietary technologies also may enable our pharmaceutical company partners to extend the product life cycles of their patented drug compounds beyond existing patent expiration dates of those compounds. Our technologies may also provide benefits to the healthcare system more generally. For example, improved compliance can enhance therapeutic outcomes and potentially reduce overall costs. Named pharmaceutical partners with which we have significant collaborative agreements include AstraZeneca, Bristol-Myers Squibb, Organon, Novartis, Schwarz Pharma and Wyeth.

     In addition to our proprietary OraSolv and DuraSolv fast dissolve technologies, we are developing several new drug delivery technologies. One new technology is our sustained release technology, which adds sustained release properties to the fast dissolve and taste masking attributes available with our DuraSolv and OraSolv technologies. We also are developing new OraVescent drug delivery technologies that include OraVescent SL for drug delivery under the tongue and OraVescent BL for drug delivery between the gum and the cheek. An additional OraVescent technology, OraVescent SS, is designed for site-specific administration, which may allow for an active drug ingredient to be transported to a specific part of the gastrointestinal tract where it is released for absorption. We originally designed and continue to design our OraVescent technologies to improve the transport of poorly absorbed active drug ingredients across mucosal membranes in the oral cavity or the gastrointestinal tract. In addition, our microemulsions technology is a proprietary technology that we are evaluating which may improve the bioavailability of a wide range of active drug ingredients, which may otherwise not be suitable for administration in a solid oral dosage form.

Industry Overview

Drug Delivery Methods

     Historically, pharmaceutical products were available primarily through two delivery methods, oral dosage forms or injections. Recently, drug delivery technologies have been developed for the enhanced delivery of a variety of therapeutic compounds, improving safety, efficacy, ease of patient use and patient compliance. In addition, drug delivery technologies can be used to expand markets for existing products, as well as to develop new products. Industry analysts have estimated the total sales of branded products using drug delivery technologies at approximately $12.7 billion in 2001, of which $7.8 billion were derived from orally administered products. These same sources also predict that net revenues to the drug delivery industry could nearly triple from 2001 through 2005.

     Fast dissolve technology has recently emerged as an important type of drug delivery technology that enables tablets to dissolve quickly in the mouth without the use of water or chewing. Children and the elderly, as well as others with certain physiological or medical conditions, frequently experience difficulty in swallowing tablets. Although our fast dissolve technology does not generally affect the speed the of absorption, it may improve compliance with a prescribed drug regimen, as fast dissolve medications are easier to swallow and may taste better than non-taste masked alternatives. In addition, fast dissolve technology may improve dosing accuracy relative to liquid formulations. Finally, and most importantly, fast dissolve technology may provide a significant commercial benefit, as studies we have conducted indicate that patients often prefer it to conventional tablets and other formulations.

Trends Affecting the Drug Delivery Industry

     Several significant trends in the health care industry have important implications for drug delivery companies. These trends include:

     Drug Patent Expirations. Based on an industry source, eighteen branded prescription products with 1999 worldwide sales exceeding $1 billion each will lose patent protection between 2000 and 2005. In order to maintain their revenues, large pharmaceutical companies are defending against generic competition by enhancing existing drug products with drug delivery technologies. These enhancements may include increased efficacy, reduced side effects and more convenient administration. We believe that pharmaceutical companies will use drug delivery systems to preserve or increase market share, enhance therapeutic performance and, in some cases, extend product life cycles.

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     Direct-to-Consumer Marketing. An industry source reported that pharmaceutical companies spent an estimated $1.4 billion in the U.S. during the first six months of 2001 on direct-to-consumer marketing and promotion of prescription medications. We expect direct-to-consumer marketing and promotion spending to increase significantly in the future. We also believe that the significant trend towards direct-to-consumer marketing may focus consumers on patient-friendly pharmaceutical products, including products that incorporate innovative drug delivery technologies, such as fast dissolve technology. This focus may encourage pharmaceutical companies to develop products incorporating these technologies.

     Influence of Managed Care. Many managed care plans and other insurers actively manage the costs of prescription drugs for their clients by monitoring patient dosing compliance as well as the efficacy, quality and cost of medications. Payors have demonstrated acceptance of drug delivery technologies, such as fast dissolve and taste masking, that improve patient compliance.

Our Oral Drug Delivery Products and Technologies

     Our proprietary products and technologies focus on innovative oral drug delivery methods that meet the needs of consumers for convenient and effective medications and the needs of pharmaceutical companies for differentiated products and accurate dosing methods. Our most developed technologies are our OraSolv and DuraSolv fast dissolve drug delivery technologies. We have developed all of our fast dissolve technologies internally. We currently manufacture five pharmaceutical brands incorporating our proprietary fast dissolve technologies, of which three products use our OraSolv technology and two products use our DuraSolv technology. We are developing a product incorporating our DuraSolv technology for Wyeth, an orally disintegrating dosage form of loratadine, which is expected to be marketed as a generic alternative to Claritin Reditabs. We are also developing innovative transmucosal oral drug delivery technologies. These technologies include OraVescent SL for drug delivery under the tongue, OraVescent BL for drug delivery between the gum and the cheek and OraVescent SS for swallowable site-specific drug delivery in the gastrointestinal tract. In addition, we are evaluating our microemulsions technology, which may be useful in improving the bioavailability of a wide range of active drug ingredients that may otherwise not be suitable for oral administration in a solid oral dosage form.

Fast Dissolve Technologies

     Our two primary fast dissolve oral drug delivery technologies are OraSolv and DuraSolv. Our OraSolv technology incorporates active drug ingredients in lightly compacted fast dissolve tablets. The low level of compaction pressure applied to OraSolv tablets allows larger amounts of taste masked active drug ingredients to be compressed into the tablets without damage to the taste masked active drug ingredients. The low level of compaction pressure applied to OraSolv tablets also allows for a minimal portion of the tablet’s contents to be dedicated to effervescent and other fast dissolve agents, allowing for high doses of taste masked active ingredients. Our DuraSolv technology uses higher compaction pressures to produce fast dissolve tablets incorporating active drug ingredients in a more durable fast dissolve tablet. Due to their greater durability, DuraSolv tablets are easier to handle and package, and may cost less to produce, than OraSolv tablets. DuraSolv is best suited for applications involving low doses of active drug ingredients.

     OraSolv. Our OraSolv technology is an oral dosage form that combines taste masked drug ingredients with a fast dissolving, low-effervescence system. The OraSolv tablet dissolves quickly in the mouth without chewing or the need for water. We have developed and manufacture several important OraSolv formulations, which include Triaminic Softchews for Novartis, Tempra FirsTabs for Bristol-Myers Squibb and Remeron SolTab for Organon.

     To create our fast dissolving tablets, we combine the taste masked active drug ingredients with fast dissolving tablet materials, which can include a variety of flavoring, coloring and sweetening agents, all of which are generally recognized as safe materials, and commonly used tablet ingredients, such as binding agents and lubricants. We add an effervescent system, composed of a dry acid and a dry base, to the tablet formulation to cause a mild effervescent reaction when the tablet contacts saliva. This reaction accelerates the disintegration of the tablet through the release of carbon dioxide. As our OraSolv tablet dissolves, it releases the coated particles of the drug into the saliva, forming a suspension of the drug in the saliva, which is then swallowed. The core U.S. patent for our OraSolv technology was granted in 1993.

     We mask the taste of the active drug ingredients in our OraSolv products to prevent or minimize unpleasant tastes. The active drugs are taste masked using a variety of coating techniques. The coating materials prevent the active drug substance in the OraSolv tablet from contacting the patient’s taste buds, and provide for the immediate or controlled release of the active ingredient in the stomach. The taste masking process is effective with a wide variety of active ingredients, in both prescription and non-prescription products.

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     DuraSolv. The fast dissolve, taste masking and sustained release attributes of OraSolv are also available with our DuraSolv technology. DuraSolv is a fast dissolve oral dosage system that we designed to improve manufacturing efficiency, provide more packaging options and reduce production costs. DuraSolv is a higher compaction, more durable, solid oral dosage system formulated to achieve the primary benefits of the OraSolv fast dissolve dosage form. However, DuraSolv is capable of being packaged in conventional packaging such as foil pouches or bottles at much higher production rates and with lower packaging costs. DuraSolv is an appropriate technology for drug products requiring lower levels of active drug ingredient. Consumer testing by us and our pharmaceutical company partners has demonstrated high acceptability of this technology. The core U.S. patent for our DuraSolv technology was granted in 2000.

     We have developed and manufacture several important DuraSolv formulations, which include Zomig-ZMT and Zomig Rapimelt for AstraZeneca and NuLev for Schwarz Pharma. In addition, we are currently developing a DuraSolv formulation of loratadine for Wyeth. In December 2001, we announced that we are developing seven new prescription products based on our DuraSolv fast dissolve drug delivery system.

     Sustained Release. Our OraSolv and DuraSolv technologies may be combined with a sustained release formulation to extend the period of an active drug ingredient’s effectiveness. We incorporate time-release beads into our tablets, to provide the benefits of a sustained release of an active drug ingredient with the improved convenience of a fast dissolve dosage form. To date, we have not commercialized a product incorporating our sustained release technology.

     PakSolv. PakSolv is our proprietary packaging system for soft, brittle tablets. PakSolv is a light and moisture-proof packaging system that is used for all of our OraSolv products. The U.S. Patent and Trademark Office issued two patents for our PakSolv packaging system in 2001.

Transmucosal Technologies

     Our OraVescent technologies are based on an enhanced-absorption oral drug delivery system intended to improve the transport of active drug ingredients across mucosal membranes. These technologies may improve the bioavailability, and accelerate the onset of action, of some drugs. The U.S. Patent and Trademark Office issued two patents for our OraVescent technologies, one in 2001 and the other in 2002. We also have several foreign patent applications pending for our OraVescent technologies.

Microemulsions Technology

     Microemulsions technology is a proprietary technology that may improve the bioavailability of a wide range of active drug ingredients, which otherwise may not be suitable for administration in a solid oral dosage form. The U.S. Patent and Trademark Office issued a patent for our microemulsions technology in 2002. We are currently evaluating applications for this new technology.

Business Strategy

     Our objective is to become a leader in fast dissolve and other innovative oral drug delivery technologies. Our strategy to achieve this objective incorporates the following principal elements:

     Partner with pharmaceutical companies to market our technologies. We pursue collaborative relationships that leverage the sales and marketing capability of our pharmaceutical company partners, allowing us to focus on technology development and manufacturing. We believe that pharmaceutical companies are attracted to our technologies for their significant advantages over our competition. Those advantages include excellent taste masking, applicability to a wide range of pharmaceutical compounds, enhanced convenience and other patient benefits. Our technologies also may enable pharmaceutical companies to differentiate their products in the market, facilitating the extension of product life cycles. By demonstrating the advantages and benefits of our technologies through our collaborations with leading pharmaceutical companies, we intend to establish our technology as the preferred fast dissolve drug delivery solution.

     Maximize the value of OraSolv and DuraSolv fast dissolve technologies. We leverage our technologies by actively identifying and marketing to pharmaceutical companies whose prescription products would benefit by incorporating our fast dissolve technologies. We believe there are a large number of pharmaceutical products that could benefit from our technologies. At times, in an effort to expand the market for our technologies, we develop what we believe will be promising applications using active ingredients that have already been successfully marketed by leading pharmaceutical companies. When these development efforts produce positive results, we market the new formulation to the pharmaceutical companies.

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     Develop and commercialize new, innovative drug delivery technologies. We intend to develop new drug delivery technologies based on our expertise in fast dissolve, taste masking and sustained release technologies. Our OraVescent and microemulsions technologies represent an extension of this expertise and we intend to continue developing these and other novel drug delivery technologies. We also intend to acquire or license attractive new technologies as we encounter such opportunities. In addition, we will seek patents and other intellectual property protection for new technologies to enhance our ability to commercialize them.

     Enhance and expand our manufacturing capabilities. In an effort to control our technologies and the quality of our products, we manufacture all of our products internally. We currently have two manufacturing lines at our Eden Prairie facility in order to meet production requirements for our current pharmaceutical company partners. On the basis of expected future partnerships and the associated increased volume requirements, we plan to develop a second manufacturing site at our Brooklyn Park facility. Adding a second manufacturing site will help mitigate manufacturing risks and will enhance our ability to market our products and services to pharmaceutical companies that desire or require dual-site production.

Collaborations With Pharmaceutical Company Partners

     Our core business is focused on entering into collaborative development, licensing and manufacturing supply agreements with pharmaceutical companies. These agreements provide that the collaborating pharmaceutical company is responsible for marketing and distributing the developed products either worldwide or in specified markets or territories. Our collaborative agreements typically begin with a product prototyping phase. If successful, this phase may be followed by an agreement to complete development of the product. We subsequently enter into license and manufacturing supply agreements to commercialize the product. In some cases, we may develop product prototypes internally and enter directly into development, manufacturing or license agreements for commercialization of those products.

     Named pharmaceutical companies with which we currently have development and license agreements include AstraZeneca, Bristol-Myers Squibb, Organon, Novartis, Schwarz Pharma and Wyeth. In December 2001, we entered into a development, license and supply agreement with an unnamed pharmaceutical company. In each of these agreements, we have received an up-front fee, which is typically a non-refundable payment for future product development activities. We have also received milestone and development payments under each of these agreements for achieving certain product development milestone events and for completing certain predetermined product development activities, as defined in the agreements. In the aggregate for all of our agreements with pharmaceutical companies, we reported approximately $14.3 million, $10.5 million and $8.6 million in 2001, 2000 and 1999, respectively, for up-front fees, milestone and development payments and royalties. Our development, license and supply agreement with the unnamed pharmaceutical company provides for license and product development fees and milestone payments in the aggregate amount of $15 million. This is the greatest amount of such fees and payments that we may receive under this agreement. We could receive a substantially smaller amount of fees and payments for many reasons, including if we fail to achieve certain milestones or if the unnamed pharmaceutical company exercises its option to terminate the agreement. The aggregate amount of development fees and milestone payments set forth in the agreement should not be viewed as guaranteed future payments.

     We have manufacturing supply agreements in place with Organon for Remeron SolTab, Novartis for Triaminic, Wyeth for loratadine, Schwarz Pharma for NuLev, AstraZeneca for fast dissolve dosage forms of Zomig and with an unnamed pharmaceutical company for seven products. We do not have a manufacturing supply agreement with Bristol-Myers Squibb for Tempra. Generally, the supply agreements define the terms by which we will manufacture and release for shipment a product for a pharmaceutical company partner and the obligations both parties have relating to payment for products and services, as well as defining the communication process, the expected production requirements and other economic terms for product supply. These agreements have varying terms of duration ranging from three to ten years. In general, our pharmaceutical company partners direct our production and shipments. In the pharmaceutical industry, parties to manufacturing supply agreements generally consider these arrangements long-term due to the complexity and lead-time required to qualify a new manufacturer with the FDA. The qualification of a new manufacturer can take up to a year while the new manufacturer completes scale-up, produces validation lots and implements stability programs. We do not consider the backlog for our products to be significant.

     We currently manufacture five pharmaceutical brands using our fast dissolve technologies for five major pharmaceutical company partners. Revenues from sales of our products were approximately 55%, 56% and 36% of our total revenue in 2001, 2000 and 1999, respectively. We also receive revenue from royalties on product sales from these five pharmaceutical company partners, which were approximately 17%, 7% and 5% of our total revenue in 2001, 2000 and 1999. Our revenue also includes product development fees and licensing revenue for development activities from a number of pharmaceutical companies, which were approximately 28%, 37% and 58% of our total revenue in 2001, 2000 and 1999, respectively. Less than 10% of our total revenues in 2001, 2000 and 1999 were derived from activities outside the U.S.

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     The table below sets forth the partner, product brand name or active ingredient, therapeutic application, technology and current status for each of our major collaborative agreements.

	PRODUCT
PHARMACEUTICAL	BRAND NAME	THERAPEUTIC		CURRENT
COMPANY PARTNER	OR ACTIVE INGREDIENT	APPLICATION	TECHNOLOGY	STATUS
AstraZeneca	Zomig-ZMT and Rapimelt	Anti-migraine	DuraSolv	Commercially available in the U.S. and Europe
Bristol-Myers Squibb	Tempra FirsTabs	Pediatric pain reliever	OraSolv	Commercially available in Canada
Organon	Remeron SolTab	Anti-depression	OraSolv	Commercially available in the U.S. and subject to mutual recognition approval procedures in Europe.
Novartis	Triaminic Softchews	Pediatric cold, cough and allergy	OraSolv	Commercially available in the U.S. and Canada
Schwarz Pharma	NuLev	Gastrointestinal	DuraSolv	Commercially available in the U.S.
Wyeth (formerly American Home Products)	Loratadine	Non-sedating antihistamine	DuraSolv	Regulatory submission accepted by the FDA
Unnamed pharmaceutical company	Seven undisclosed products	Undisclosed	DuraSolv and OraSolv	In development

AstraZeneca

     In May 1999, we entered into a definitive global license agreement with an affiliate of AstraZeneca for a DuraSolv formulation of AstraZeneca’s Zomig (zolmitriptan) tablets. Under the license agreement, which is exclusive for the class of anti-migraine compounds of which Zomig is a member, we receive license and product development fees, payments upon achieving specific milestones, and royalties on any sales of the prescription product. Based on the anticipated life of our patents, we expect the license agreement to expire for the U.S. market in 2018. However, the license agreement may be terminated by AstraZeneca after a notice of 180 days or by either party upon the occurrence of a default event, such as a material breach of the agreement, that is not cured by the defaulting party within 30 days. In addition, we have the right to terminate the license agreement if AstraZeneca fails to meet certain regulatory and commercialization obligations. Upon the failure of AstraZeneca to meet minimum sales requirements, or to pay the difference between the royalty amount due on the minimum sales requirement and the royalty amount due on actual sales, we may convert AstraZeneca’s exclusive license into a non-exclusive license. In June 1999, AstraZeneca received its first European regulatory approval for Zomig Rapimelt. In September 1999, AstraZeneca launched Zomig Rapimelt in Europe and it is currently marketed in over 20 markets outside the United States. In August 2001, we entered into a supply agreement with an affiliate of AstraZeneca, which expires on a country-by-country basis at the same time as the definitive global license agreement expires. However, the supply agreement may be terminated by either party upon the occurrence of a default event, such as a material breach of the agreement, which is not cured by the defaulting party within 45 days of notice, or by CIMA in the event AstraZeneca commercializes another fast dissolve formulation of Zomig (zolmitriptan) with a third party. AstraZeneca received FDA approval to market both the 2.5 and 5.0 milligram strengths of Zomig-ZMT in February and September of 2001, respectively. AstraZeneca announced the U.S. market launch of its 2.5 and 5.0 milligram strengths of Zomig-ZMT in the second and fourth quarters of 2001, respectively. For the three years ending December 31, 2001, we reported approximately $12.7 million in net sales of products, up-front fees, milestone and development payments attributable to our agreements with AstraZeneca. In 2001, these revenues represented 22% of our total revenues.

Bristol-Myers Squibb

     In June 1997, we entered into a multi-country, non-exclusive license agreement with Bristol-Myers Squibb, covering multiple products to be developed using the OraSolv technology. We began manufacturing commercial quantities of the OraSolv dosage form

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of Tempra, Bristol-Myers Squibb’s pediatric pain reliever, in 1997. Mead Johnson, an affiliate of Bristol-Myers Squibb, introduced Tempra in Canada during 1997. During 1998, Bristol-Myers Squibb decided to discontinue marketing Tempra in the U.S., but expects to continue marketing Tempra in Canada through Mead Johnson. In the fourth quarter of 1998, the license agreement was amended to return to us the rights to pediatric pain relievers in the U.S. The license agreement provides that upon the occurrence of a default event, such as a material breach of the agreement, which is not cured by the defaulting party within 60 days, either party may terminate the agreement. In November 2000, we agreed with Bristol-Myers Squibb to amend the June 1997 license agreement again. The amendment provides that Bristol-Myers Squibb may not terminate the license agreement before December 31, 2005, and afterwards may terminate for any reason by giving us 60 days written notice and paying us any royalty payments accruing through the termination date. We expect to continue to receive at least minimum royalty payments in connection with sales in Canada through 2005. For the three years ending December 31, 2001, we reported approximately $1.6 million in net sales of products, development payments, and royalties attributable to our agreement with Bristol-Myers Squibb. In 2001, these revenues represented 1% of our total revenues.

Organon

     In December 1999, we entered into a definitive global license agreement with affiliates of Akzo Nobel NV, Organon International AB and NV Organon, for an OraSolv formulation of Remeron (mirtazapine), a prescription anti-depression product. Under the license agreement, we receive license and product development fees, milestone payments upon achieving specific milestones, and royalties on any sales of the prescription product. The license agreement expires upon expiration of all patents covered under the agreement. Based on the anticipated life of our existing patents, we expect the license agreement to expire in the U.S. market in 2010. However, the license agreement may be terminated by either party upon the occurrence of a default event, such as a material breach of the agreement, which is not cured by the defaulting party within 90 days. In July 2000, we entered into a supply agreement with Organon Inc., a U.S. affiliate Akzo Nobel NV, which has an initial term of five years and automatic renewal provisions. However, the supply agreement may be terminated by either party upon the occurrence of a default event, such as a material breach of the agreement, which is not cured by the defaulting party within 60 days of notice. In January 2001, Organon Inc. received FDA approval to market Remeron SolTab. In February 2001, Organon announced the U.S. market launch of Remeron SolTab and its agreement with Solvay Pharmaceuticals to co-promote this product through their respective sales forces. In July 2001, Organon announced its first European approval of Remeron SolTab by the Dutch Medicines Evaluation Board, which is expected to trigger mutual recognition procedures in other European countries. Organon is expected to launch Remeron SolTab in selected European markets in 2002. For the three years ending December 31, 2001, we reported approximately $19.3 million in net sales of products, up-front fees, milestone and development payments attributable to these agreements with Organon. In 2001, these revenues represented 25% of our total revenues.

Novartis

     In July 1998, we entered into a license and a supply agreement with Novartis Consumer Health, granting to Novartis exclusive rights to use of our OraSolv technology with Novartis’ Triaminic non-prescription pediatric cold, cough and allergy product line in the U.S. and Canada. Triaminic products that have been formulated using our OraSolv fast dissolve delivery system are marketed under the trade name Softchews. The license agreement, which was amended in April 2001, expires on a country-by-country basis upon the later of January 12, 2010 or the expiration of all patents covered by the agreement. Based on the anticipated life of our patents, we expect the license agreement to expire in the U.S. market in 2010. The July 1998 supply agreement was superseded by a new supply agreement in 2001, which has a term of five years and includes an automatic renewal provision subject to agreement on product pricing for the renewal periods. The supply agreement may be terminated by Novartis by providing a 90 day notice to CIMA prior to the end of the initial five year term or any renewal period. In addition, either of the license or the supply agreement may be terminated by either party upon the occurrence of a default event, such as a material breach, which is not cured by the defaulting party within 90 days for the license agreement or within 60 days for the supply agreement. In addition, Novartis may terminate the license agreement on or after July 1, 2003, after giving us a notice of nine months and paying us a termination fee of $200,000 plus all accrued amounts owed to us under the agreement. Under various individual product development agreements, which apply to specific Triaminic products, we receive product development payments, and under the license agreement, we receive royalties on sales of Softchews products. In July 1999, Novartis launched three Softchews products nationally, followed by a fourth Softchews product launch during the third quarter of 2000 and three more Softchews product launches during the second half of 2001. For the three years ending December 31, 2001, we reported approximately $23.7 million in net sales of products, up-front fees, milestone and development payments, and royalties attributable to these agreements with Novartis. In 2001, these revenues, which were principally product sales, represented 33% of our total revenues.

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Schwarz Pharma

     In June 2000, we entered into an exclusive development, license and supply agreement with Schwarz Pharma, Inc. to develop and manufacture NuLev, our DuraSolv formulation of a hyoscyamine sulfate prescription product, which is used to treat irritable bowel syndrome. The agreement allows us, upon the failure of Schwarz Pharma to meet minimum sales requirements, to convert Schwarz Pharma’s exclusive license into a non-exclusive license. Based on the anticipated life of our patents, we expect the agreement to expire in the U.S. in 2018. However, the agreement may be terminated by either party upon the occurrence of a default event, such as a material breach of the agreement, which is not cured by the defaulting party within 60 days. Under the agreement, we will receive milestone payments upon achieving specific milestones and will receive manufacturing revenue and royalties on sales of the prescription product. A U.S. regulatory submission for NuLev is not required. Schwarz Pharma commenced the U.S. marketing launch of NuLev in March 2001. For the two years ending December 31, 2001, we reported approximately $3.2 million in net sales of products, up-front fees, milestone and development payments attributable to this agreement with Schwarz Pharma. In 2001, these revenues represented 6% of our total revenues.

Wyeth, formerly American Home Products

     In January 2000, we entered into an exclusive development and license agreement and a supply agreement with an affiliate of Wyeth for a fast dissolve formulation of loratadine, a non-sedating prescription antihistamine product. Loratadine is the active drug compound in Claritin and Claritin Reditabs, for which Schering Corporation has several U.S. patents, the first of which is scheduled to expire in December 2002. Wyeth is expected to market our DuraSolv formulation of loratadine as a generic alternative to Claritin Reditabs in 2003, unless Schering is successful in its efforts to secure extended exclusive rights to market Claritin. Based on the anticipated life of our patents, we expect the development and license agreement to expire in the U.S. market in 2018. The supply agreement expires on the tenth anniversary of the first commercial shipment of product. However, either agreement may be terminated by Wyeth after a six month notice or by either party upon the occurrence of a default event, such as a material breach of the agreement, which is not cured by the defaulting party within 60 days. Under the development and license agreement, we receive development and milestone payments upon achieving specific milestones and will receive royalties on any sales of the prescription product. Under the supply agreement, we receive payments based on our costs of manufacturing the products. The U.S. regulatory submission for our DuraSolv formulation of loratadine was accepted for filing by the FDA in the second quarter of 2000. For the three years ending December 31, 2001, we reported approximately $2.7 million in up-front fees, milestone and development payments attributable to these agreements with Wyeth. In 2001, these revenues represented less than 1% of our total revenues.

Unnamed Pharmaceutical Company

     In December 2001, we entered into an exclusive development, license and supply agreement with an unnamed pharmaceutical company to develop and manufacture seven undisclosed prescription products based primarily on our DuraSolv fast dissolve drug delivery system. Based on the anticipated life of our patents, we expect the agreement to expire in the U.S. in 2018. However, the agreement may be terminated by either party upon the occurrence of a default event, such as a material breach of the agreement, which is not cured by the defaulting party. In addition, the unnamed pharmaceutical company may unilaterally terminate the agreement, in its entirety or in part, at any time prior to the market launch of any or all of the seven products by providing notice to CIMA and reimbursing CIMA for its development activities. The agreement provides that we will receive manufacturing revenue and royalties on sales of the products that we develop. The unnamed pharmaceutical company will be required to obtain FDA approval for each of the seven products prior to the marketing of such products. We expect the first of these products could be approved by the FDA and launched in the U.S. during the first half of 2004. For the year ending December 31, 2001, we reported approximately $583,000 in up-front fees, milestone and development payments attributable to this agreement. In 2001, these revenues represented 2% of our total revenues. The agreement provides for license and product development fees and milestone payments in the aggregate amount of $15 million. This is the greatest amount of such fees and payments that we may receive under this agreement. We could receive a substantially smaller amount of fees and payments for many reasons, including if we fail to achieve certain milestones or if the unnamed pharmaceutical company exercises its option to terminate the agreement. The aggregate amount of development fees and milestone payments set forth in the agreement should not be viewed as guaranteed future payments.

Proprietary Product Development

     In addition to entering into collaborations with pharmaceutical companies, we also expect to leverage our oral drug delivery technologies by actively identifying promising applications using active drug ingredients that have already been successfully marketed by leading pharmaceutical companies. We are selecting, funding and developing products on an internal basis and will be responsible for securing FDA approvals for such products. We plan to sell or license the marketing rights to these products to pharmaceutical companies with the appropriate sales and marketing organizations. We believe this strategy represents an important opportunity for

9

CIMA because it eliminates the need for a collaborative agreement before developing additional products for our product pipeline. Equally important, we expect to retain a greater proportion of the economic value of those proprietary products that we successfully develop.

     To date, we have selected four proprietary products based on major active drug ingredients that are either off-patent or expected to become off-patent within the next few years. These proprietary products fall within the therapeutic categories of anti-infectives, cardiovascular, gastrointestinal and pain. Based on our current development schedule, we estimate the first of these products, OraVescent fentanyl, could be approved by the FDA for marketing in the U.S. in the second half of 2004.

     We have conducted three studies in humans with OraVescent fentanyl, a potential proprietary product for the treatment of breakthrough cancer pain. Our first study in humans compared our OraVescent BL formulation to a similar formulation without the absorption enhancing characteristics and to Actiq, a commercially available prescription product. Actiq (oral transmucosal fentanyl citrate) is indicated for breakthrough cancer pain in patients already receiving, and tolerant to, opioid therapy for underlying, persistent cancer pain. We believe this first study in humans demonstrates OraVescent BL’s superior absorption characteristics across mucosal membranes when compared to Actiq and to the other formulation without absorption enhancing characteristics. Our second study in humans compared our OraVescent SL to our OraVescent BL formulation using the same active drug ingredient contained in Actiq, fentanyl citrate. We believe this second study demonstrates a quicker onset of action with OraVescent SL when compared to our OraVescent BL formulation. Our third study in humans compared Actiq with OraVescent BL and OraVescent SL under simulated self-administration conditions. We believe preliminary results from the third study confirmed the results from our first two studies in humans. In November 2001, we participated in a pre-Investigational New Drug meeting with the FDA to discuss our OraVescent fentanyl human data and a possible clinical development path. We expect to perform additional studies in humans and animals in 2002.

     Our progress to date on the three other proprietary products has not gone beyond the pilot study phase, which includes acquiring active drug ingredients and preliminary planning. We do not expect to begin substantive work on one or more of these three proprietary products until late in 2002, or early 2003. These proprietary products would incorporate active drug ingredients with one of our proprietary oral drug delivery technologies. However, the active drug ingredients for these three products are currently protected by U.S. patents registered to third parties, of which the first is expected to expire in early 2005.

Intellectual Property

     We actively seek, when appropriate, to protect our products and proprietary information by means of U.S. and foreign patents, trademarks and contractual arrangements. We hold 14 issued U.S. patents and 15 issued foreign patents covering our technologies. The core U.S. and European patents relate to our fast dissolve and taste masking technologies. We also have over 45 U.S. and foreign patent applications pending.

     A description of our more important issued U.S. patents and their dates of expiration are set forth in the table below. The majority of these patents are composition-of-matter patents. The actual scope of coverage for a patent is governed by the specific claims applicable to the patent. The descriptions set forth below are intended solely to identify patents relevant to various technologies and are not intended to represent the scope of these patents.

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PATENTED TECHNOLOGIES	EXPIRATION DATE
Core OraSolv fast-dissolve and taste-masking technology		2010
The production of compressed effervescent and non-effervescent tablets using a tableting aid developed by us		2010 and 2012
The formulation of a base coated, acid effervescent mixture manufactured by controlled acid base reaction. The obtained mixture can be used in the formulation of acid sensitive compounds with OraSolv technology or other effervescent based products		2013
Taste-masking of micro-particles for oral dosage forms		2015
Core DuraSolv fast-dissolve and taste-masking technology		2018
Blister package and packaged tablet		2018
Core OraVescent oral transmucosal drug delivery technology		2019
Core OraVescent gastrointestinal drug delivery technology		2019
Microemulsions as solid oral dosage forms		2019
PakSolv technology covering part of packaging system		2019
PakSolv technology covering additional aspects of packaging system		2019

     Our success will depend in part on our ability to obtain and enforce patents for our products, processes and technology, to preserve our trade secrets and other proprietary information and to avoid infringing the patents or proprietary rights of others.

     In addition to patents, we rely on trade secrets and proprietary know-how to protect our products, processes and technologies. To protect our rights to trade secrets and proprietary know-how, we require all employees, consultants and advisors to sign confidentiality agreements that prohibit the disclosure or use of confidential information to or by any third party. These agreements also require disclosure and assignment to us of discoveries and inventions made by these individuals while devoted to our activities.

Research and Development

     Our research and product development efforts are focused on developing new product applications for our drug delivery technologies and expanding our technology platform to new areas of drug delivery. As of December 31, 2001, we had 54 scientists and other technicians working on research and product development. In August 2001, we purchased for $5.2 million the building in Brooklyn Park, Minnesota, which we use for our research and development center. Based on the strength of our product development portfolio of both collaborative and internal projects, we expect to end the year 2002 with approximately 80 scientists and other technicians, and to complete a renovation and expansion of our Brooklyn Park facility at an estimated capital cost of $10.0 million.

     Our research and product development personnel, support systems and facilities are organized to develop drug delivery formulations from bench-scale through full-scale commercial production under current good manufacturing practice conditions. The key goals for our research and product development efforts include:

• developing innovative drug delivery products and systems that fulfill pharmaceutical companies’ needs;

• developing, expanding and supporting systems to fulfill good manufacturing practice production at commercial levels required by pharmaceutical company partners;

• recruiting and training high-quality technical and scientific personnel; and

• supporting our intellectual property portfolio development.

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     For the years ended December 31, 2001, 2000 and 1999, we spent approximately $6.4 million, $5.0 million and $4.4 million, respectively, on research and product development. We estimate that most of these expenditures were directly related to product development activities for which we received fees and licensing revenues from our pharmaceutical company partners.

Business Development

     We market directly to leading pharmaceutical companies for products that we believe would benefit from our fast dissolve technologies. Our strategy has been to leverage the brand names, marketing and sales capabilities of these pharmaceutical companies to maximize the value of our fast dissolve drug delivery technologies. We build our credibility with major pharmaceutical companies by speaking at technical seminars, publishing in technical journals and hosting booths at pharmaceutical and drug delivery conferences.

     We pursue agreements with leading pharmaceutical companies to fund the development of new products incorporating our drug delivery technologies. Once specific milestones have been met under these agreements, we generally enter into license and supply agreements.

Manufacturing

     Currently, our only manufacturing facility is located at our headquarters in Eden Prairie, Minnesota. We have two production lines, which collectively have an estimated production capacity in excess of 500 million tablets a year. We anticipate that our existing manufacturing capacity is more than adequate to meet the production requirements of our pharmaceutical partners in 2002. We plan to construct a second manufacturing site at our Brooklyn Park facility and expect the new manufacturing site to be operational in 2003.

     In 2000, we completed construction of a coating unit to provide taste masked active ingredients for our pharmaceutical company partners. During the third quarter of 2000, we commercialized our first coated active drug ingredient, mirtazapine, which is the active drug ingredient in Remeron SolTab. We believe our in-house coating capability will be a key factor in signing new agreements related to prescription pharmaceutical drugs. In 2002, we expect to begin using our coating unit in Eden Prairie to taste mask selected active drug ingredients for our non-prescription products.

     We currently purchase taste masked active drug ingredients for each of our non-prescription products from single sources of supply. We believe that all other ingredients used in the manufacture of our products are readily available from multiple suppliers or from our pharmaceutical company partners.

     We are currently adding a second coating unit and a high shear granulation unit to our Eden Prairie manufacturing facility. We expect that the high shear granulation unit, coupled with the additional coating unit, will enable us to develop, and ultimately commercialize, a broader range of prescription products. The types of products that would require these additional manufacturing capabilities are those with taste masking challenges based on the particle size of the active drug ingredient, as well as products requiring a high dose of active drug ingredient into a smaller tablet. We expect to complete the installation of this equipment by the end of 2002 at an expected capital cost of approximately $6.5 million.

     PakSolv, our proprietary packaging process, allows high-speed packing of soft, brittle tablets without breakage, into specially designed protective, child resistant packages and normal blister packages. We believe that this technology, which has two issued patents, gives us a competitive advantage.

     We plan our manufacturing cycles in advance of actual production in order to address lead times our suppliers may require. We generally do not stock significant quantities of raw materials for a product in excess of a partner’s orders nor do we manufacture finished product in excess of a partner’s orders.

Competition

     Competition among pharmaceutical products and drug delivery systems is intense. Our primary competitors for developing drug delivery systems and manufacturing the products we develop include other drug delivery, biotechnology and pharmaceutical companies. Many of these competitors have substantially greater financial, technological, manufacturing, marketing, managerial and research and development resources and experience than we have. Our products compete not only with products employing advanced drug delivery systems, but also with products employing conventional dosage forms. These competing products may obtain governmental approval or gain market acceptance more rapidly than our products. New drugs or future developments in alternative drug delivery technologies also may provide therapeutic or cost advantages over our current or future products.

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     Fast dissolve tablet technologies that compete with our OraSolv and DuraSolv technologies include the Zydis technology developed by R.P. Scherer Corporation, a wholly-owned subsidiary of Cardinal Health, Inc., the WOWTab technology developed by Yamanouchi Pharma Technologies, the Flashtab technology developed by Ethypharm and the FlashDose technology developed by Fuisz Technologies Ltd., a wholly-owned subsidiary of Biovail Corporation. The Zydis technology is a fast dissolving oral drug delivery system based on a freeze-dried gelatin tablet. The WOWTab and Flashtab technologies are fast dissolving technologies used in an oral fast dissolving tablet, which are similar to our DuraSolv tablet. R.P. Scherer has commercialized its Zydis technology in several major prescription products in the U.S., including Claritin Reditabs and Maxalt-MLT. We believe that other pharmaceutical companies may be developing fast dissolve tablet technologies, which may compete with our technology in the future.

     The principal competitive factors in the market for fast dissolving tablet technologies are compatibility with taste masking techniques, packaging, dosage capacity, drug compatibility, cost, ease of manufacture, patient acceptance and required capital investment for manufacturing. We believe that our fast dissolving tablet technologies compete favorably with respect to each of these factors. In a 1997 quantitative consumer study that we conducted, consumers generally preferred the OraSolv formulation to the Zydis formulation of the same active drug ingredient. Our 1997 study was confirmed by an August 2001 study we sponsored that measured migraine sufferers’ preferences between Zomig-ZMT, a CIMA DuraSolv formulation, and Maxalt-MLT, a R.P. Scherer Zydis formulation. The 2001 study indicated that 70% of the study subjects preferred CIMA’s DuraSolv formulation, compared to 27% favoring the Zydis formulation. We also believe that we offer pharmaceutical companies the largest selection of oral fast dissolve drug delivery technologies.

Government Regulation

     Numerous governmental authorities in the U.S. and other countries extensively regulate the activities of pharmaceutical manufacturers. In the U.S., pharmaceutical products are subject to rigorous regulation by the Food and Drug Administration. The Federal Food, Drug, and Cosmetic Act and other federal and state statutes and regulations govern, among other things, the research, development, testing, manufacture, safety, storage, record keeping, labeling advertising, promotion, marketing and distribution of pharmaceutical products. If we fail to comply with the applicable requirements, we may be subject to administrative or judicially imposed sanctions such as warning letters, fines, injunctions, product seizures or recalls, total or partial suspension of production, or FDA refusal to approve pending pre-market approval applications or supplements to approved applications, as well as criminal prosecution.

     FDA approval generally is required before a new drug product may be marketed in the U.S. Many over-the-counter, or OTC, drug products are exempt, however, from the FDA’s pre-marketing approval requirements. Whether or not products require FDA approval, drug products remain subject to various ongoing FDA regulations, including good manufacturing practice requirements, labeling requirements and warning statements, advertising restrictions related to product labeling and drug ingredient specifications. Products and their manufacturing facilities are subject to FDA inspection, and failure to comply with applicable regulatory requirements may lead to administrative or judicially imposed penalties.

     We expect that our pharmaceutical company partners will seek any required FDA approvals in connection with the introduction of new products we develop for them under a collaborative agreement. The FDA submission and approval process may require significant commitments of our time and resources. The FDA approval process may delay or prevent the marketing of our products. We cannot be sure that approvals will be obtained, or that any such approvals will have the scope necessary for successful commercialization of these products. Even after an addendum or supplement to a new drug application is approved, existing FDA procedures may delay initial product shipment and materially reduce the period during which there is an exclusive right to exploit patented products or technologies.

     Prior to marketing a product internationally, we are likely to be required to obtain foreign regulatory approval. Foreign approval procedures vary from country to country and the time required for approval may result in delays in, or ultimately prevent, the marketing of a product. We expect our pharmaceutical company partners to obtain any necessary government approvals in foreign countries. However, we may have to spend considerable amounts of time and resources to support the submission and approval of these foreign filings. In addition, our manufacturing facility may be subject to inspections by foreign agencies, similar to the FDA, to allow for the marketing of our products in a foreign country.

     Our manufacturing facility is registered with the FDA. We must inform the FDA of every drug product we have in commercial distribution and keep an updated list of those drugs. Our manufacturing facility also is inspected by the FDA and must comply with good manufacturing practices regulations at all times during the manufacture and processing of drug products. The FDA completed pre-approval inspections of our Eden Prairie and Brooklyn Park facilities in August 2000. We were not cited for any significant shortcomings relating to the pre-approval inspections nor were we cited for any significant shortcomings in compliance with good

13

manufacturing practices regulations. We cannot guarantee that any future FDA inspections will proceed without any compliance issues requiring time and resources to resolve. Our facilities also must be inspected by, and we have received a license from, the Minnesota Board of Pharmacy for the manufacture of drug products.

     We are subject to regulation under various federal, state and local laws, rules, regulations and policies regarding, among other things, occupational safety, environmental protection, the use, generation, manufacture, storage, air emission, effluent discharge, handling and disposal of certain regulated materials and wastes, including controlled substances, and product advertising and promotion. We believe that we have complied with these laws and regulations in all material respects, and we have not been required to take any action to correct any material noncompliance. We do not currently anticipate that any material capital expenditures will be required in order to comply with these laws or that compliance with these laws will have a material effect on our business or financial condition. We are unable to predict, however, the impact on our business of any changes that may be made in these laws or of any new laws or regulations that may be imposed in the future. We cannot be sure that we will not be required to incur significant compliance costs or be held liable for damages resulting from any violation of these laws and regulations.

Employees

     As of March 1, 2002, we had 171 full-time employees, with 115 employees in Eden Prairie and 56 in Brooklyn Park. Of these employees, 88 are engaged in manufacturing and quality assurance, 54 in research and development and 29 in executive management and office support. None of our employees is subject to a collective bargaining agreement nor have we ever experienced a work stoppage. We believe our employee relations are good.

Executive Officers of the Registrant

     Our executive officers and their ages as of March 1, 2002 are as follows:

Name	Age		Title
John M. Siebert, Ph.D.		61	Chief Executive Officer and President
John H. Hontz, Ph.D.		45	Chief Operating Officer
David A. Feste		50	Vice President, Chief Financial Officer and Secretary

     Each of our executive officers has an employment agreement. There are no family relationships between or among any of our executive officers or directors.

     John M. Siebert, Ph.D. has been our President and Chief Executive Officer since September 1995, President and Chief Operating Officer from July 1995 to September 1995, and has served as a director since May 1992. From 1992 to 1995, Dr. Siebert was Vice President, Technical Affairs at Dey Laboratories, Inc., a pharmaceutical company. From 1988 to 1992, Dr. Siebert worked at Bayer Corporation. Dr. Siebert has also been employed by E.R. Squibb & Sons, Inc., G.D. Searle & Co. and The Procter & Gamble Company. On March 18, 2002, Dr. Siebert announced that he will retire from the Company at the end of 2003. Our Board of Directors has appointed a search committee to identify and recruit a new President and Chief Executive Officer. At the appointment of his successor, Dr. Siebert will become the Chairman of the Board of Directors and will serve as Chairman until December 31, 2003.

     John Hontz, Ph.D. has been our Chief Operating Officer since January 2000. From 1997 to January 2000, Dr. Hontz was our Vice President of Research and Development. From 1995 to 1997, Dr. Hontz was senior Group Leader of Product Development at Glaxo Wellcome plc, a pharmaceutical company. From 1987 to 1995, Dr. Hontz was with Burroughs-Wellcome, which was acquired by Glaxo in 1995, most recently as Section Head of Product Development.

     David A. Feste has been our Vice President, Chief Financial Officer and Secretary since February 2000. From 1995 to 1999, Mr. Feste was Vice President and Chief Financial Officer for Orphan Medical, Inc., a pharmaceutical company. From 1992 to 1995, Mr. Feste was self-employed as a financial consultant. From 1985 to 1991, Mr. Feste was with Tonka Corporation, most recently as its Corporate Vice President of Financial Services and Audit.

14

Item 14 of the Original 10-K is amended in its entirety to read as follows:

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)(1). Financial Statements

		Page Number
		in this
Description		Annual Report
Audited Financial Statements:
	Report of Independent Auditors	F-1
	Balance Sheets	F-2
	Statements of Operations	F-3
	Statements of Cash Flows	F-4
	Statement of Changes in	F-5
	Stockholders’ Equity
	Notes to Financial Statements	F-6 to F-17

(a)(2). Financial Statement Schedules

     The following financial statement schedule should be read in conjunction with the Audited Financial Statements referred to under Item 14 (a)(1) above. Financial statement schedules not included in this Form 10-K have been omitted because they are not applicable or the required information is shown in the Audited Financial Statement or Notes thereto.

	Page Number
	in this
Description	Annual Report
Schedule II – Valuation and Qualifying Accounts: Years Ended December 31, 2001, 2000 and 1999	F-18

(a)(3). Listing of Exhibits

Exhibit		Method of
Number	Description	Filing
3.1	Fifth Restated Certificate of Incorporation of CIMA, as amended		(13	)
3.2	Third Restated Bylaws of CIMA		(8	)
4.1	Form of Certificate for Common Stock		(1	)
4.2	Amended and Restated Rights Agreement dated June 26, 2001, between the Registrant and Wells Fargo Bank Minnesota, N.A. as Rights Agent.		(15	)
4.3	Form of Stock Purchase Agreement dated March 13, 2000 between CIMA and certain institutional investors.		(9	)
10.1	Letter Agreement, dated January 28, 1998, between CIMA and Joseph R. Robinson, Ph.D.*#		(6	)
10.2	Equity Incentive Plan, as amended and restated.#		(8	)
10.3	1994 Directors’ Stock Option Plan, as amended.#		(2	)
10.4	Form of Director and Officer Indemnification Agreement		(1	)
10.5	License Agreement, dated July 1, 1998, between Novartis Consumer Health Inc. and CIMA.*		(7	)
10.6	Supply Agreement, dated July 1, 1998, between Novartis Consumer Health Inc. and CIMA.*		(7	)
10.7	License Agreement, dated January 28, 1994, between SRI International and CIMA.*		(1	)
10.8	Non-Employee Directors’ Fee Option Grant Program.#		(3	)
10.9	License Agreement, dated June 26, 1997, between Bristol-Myers Squibb Company and CIMA.*		(4	)
10.10	Development and Option Agreement, dated August 11, 1997, between Schering Corporation and CIMA.*		(5	)
10.11	License Agreement dated May 28, 1999, between IPR Pharmaceuticals, Inc. and CIMA.*		(8	)
10.12	License Agreement dated December 29, 1999 between Organon International AG and N.V. Organon, and CIMA.*		(9	)
10.13	Development and License Agreement dated January 14, 2000 between CIMA and American Home Products Corporation.*		(9	)
10.14	Supply Agreement dated January 14, 2000 between CIMA and American Home Products Corporation.*		(9	)

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Exhibit		Method of
Number	Description	Filing
10.15	Employment Agreement, dated June 30, 2000, between CIMA and John M. Siebert, Ph.D.#		(10	)
10.16	Development, License and Supply Agreement by and between CIMA and Schwarz Pharma, Inc. dated June 30, 2000*		(10	)
10.17	Employment Agreement, dated August 23, 2000, between CIMA and John Hontz, Ph.D.#		(11	)
10.18	Employment Agreement, dated January 26, 2001, between CIMA and David Feste.#		(12	)
10.19	2001 Stock Incentive Plan, as amended.#		(13	)
10.20	Employee Stock Purchase Plan.#		(14	)
10.21	Toll Manufacturing Agreement between Organon Inc. and CIMA.*		(12	)
10.22	Supply Agreement, dated August 31, 2001, between CIMA and AstraZeneca UK Limited.*		(16	)
10.23	Supply Agreement, dated January 1, 2001, and executed September 2, 2001, between Novartis Consumer Health, Inc. and CIMA.*		(16	)
10.24	License Agreement Amendment No. 1, executed September 2, 2001, by and between Novartis Consumer Health, Inc. and CIMA, amending that certain License Agreement dated July 1, 1998, between Novartis and CIMA.*		(16	)
10.25	Master Development License & Supply Agreement, dated December 18, 2001, between CIMA LABS INC. and an unnamed pharmaceutical company.*+		Filed herewith
23.1	Consent of Ernst & Young LLP		(17	)
24.1	Power of Attorney		(17	)
99.1	Certification of Chief Executive Officer		Filed herewith
99.2	Certification of Chief Financial Officer		Filed herewith

*	Denotes confidential information that has been omitted from the exhibit and filed separately, accompanied by a confidential treatment request, with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934.
+	Previously filed with the Commission as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2001, filed on March 28, 2002. Pursuant to a confidential treatment request filed with the Commission, certain portions of this exhibit were omitted from our prior filing. The current filing reflects comments of the Commission regarding our confidential treatment request.
#	Management contract, compensatory plan or arrangement required to be filed as an exhibit to this Form 10-K.
(1)	Filed as an exhibit to CIMA’s Registration Statement on Form S-1, File No. 33-80194, and incorporated herein by reference.
(2)	Filed as an exhibit to CIMA’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1996, File No. 0-24424, and incorporated herein by reference.
(3)	Filed as an exhibit to CIMA’s Quarterly Report on Form 10-Q for the quarter ended March 31, 1997, File No. 0-24424, and incorporated by reference.
(4)	Filed as an exhibit to CIMA’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1997, File No. 0-24424, and incorporated herein by reference.
(5)	Filed as an exhibit to CIMA’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1997, File No. 0-24424, and incorporated herein by reference.
(6)	Filed as an exhibit to CIMA’s Annual Report on Form 10-K for the year ended December 31, 1997, File No. 0-24424, and incorporated herein by reference.
(7)	Filed as an exhibit to CIMA’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1998, File No. 0-24424, and incorporated herein by reference.
(8)	Filed as an exhibit to CIMA’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1999, File No. 0-24424, and incorporated herein by reference.

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(9)	Filed as an exhibit to CIMA’s Annual Report on Form 10-K for the year ended December 31, 1999, File No. 0-24424, and incorporated herein by reference.
(10)	Filed as an exhibit to CIMA’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2000, File No. 0-24424, and incorporated herein by reference.
(11)	Filed as an exhibit to CIMA’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2000, File No. 0-24424, and incorporated herein by reference.
(12)	Filed as an exhibit to CIMA’s Annual Report on Form 10-K for the year ended December 31, 2000, File No. 0-24424, and incorporated herein by reference. (13 ) Filed as an exhibit to CIMA’s Registration Statement on Form S-8, filed June 13, 2001, File No. 333-62954, and incorporated herein by reference.
(14)	Filed as an exhibit to CIMA’s Registration Statement on Form S-8, filed June 14, 2001, File No. 333-63026, and incorporated herein by reference.
(15)	Incorporated by reference to Exhibit 1 to the Registrant’s Amendment No. 1 to Registration Statement on Form 8-A/A, filed July 18, 2001, File No. 0-24424.
(16)	Filed as an exhibit to CIMA’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2001, File No. 0-24424, and incorporated herein by reference.
(17)	Previously filed with the Commission and incorporated herein by reference from the identically numbered exhibit to the Company’s Annual Report on Form 10-K, filed March 28, 2002, File No. 0-24424.

(b). Reports on Form 8-K
None.

(c). Exhibits
See Item 14(a)(3) above.

(d). Financial Statement Schedules
See Item 14(a)(2) above.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized, in the City of Eden Prairie, Minnesota, on the 31st day of October, 2002.

CIMA LABS INC.

By: /s/ David A. Feste
David A. Feste
Vice President and Chief Financial Officer

CERTIFICATIONS

I, John M. Siebert, certify that:

1.	I have reviewed this annual report on Form 10-K of CIMA LABS INC.;
2.	Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; and
3.	Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report.

Date: October 31, 2002

/s/ John M. Siebert
John M. Siebert
President and Chief Executive Officer

I, David A. Feste, certify that:

1.	I have reviewed this annual report on Form 10-K of CIMA LABS INC.;
2.	Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; and
3.	Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report.

Date: October 31, 2002

/s/ David A. Feste
David A. Feste
Vice President and Chief Financial Officer

18 EX-10.25 3 c71450a1exv10w25.txt EX-10.25 MASTER DEVELOPMENT LICENSE & SUPPLY AGMNT EXHIBIT 10.25 EXECUTION COPY MASTER DEVELOPMENT, LICENSE AND SUPPLY AGREEMENT by and between CIMA LABS INC. and [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] dated as of December 18, 2001 TABLE OF CONTENTS

PAGE SECTION 1 DEFINITIONS................................................................................1 SECTION 2 GRANT OF LICENSES; LICENSE OPTION..........................................................5 2.1 Grant of Licenses..............................................................................5 2.2 Sublicenses....................................................................................6 2.3 Marketing, Distribution and Sale...............................................................6 SECTION 3 PRODUCT DEVELOPMENT........................................................................6 3.1 Obligations of CIMA............................................................................6 3.2 Obligations of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]...............................................7 3.3 License of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Technology.........................................7 3.4 Additional Products............................................................................7 3.5 Regulatory Matters.............................................................................7 SECTION 4 ROYALTY, COST OF GOODS AND MILESTONE PAYMENTS..............................................7 4.1 Royalty and Milestone Payments.................................................................7 4.2 Records and Audit..............................................................................8 4.3 Quarterly Reports of Royalties.................................................................9 4.4 Annual Reports of Costs of Goods...............................................................9 4.5 Sales and Marketing Estimates..................................................................9 SECTION 5 SUPPLY OF PRODUCT..........................................................................9 5.1 Supply of Product..............................................................................9 5.2 Identification................................................................................10 5.3 Trade, Sample and Placebo Product Price.......................................................11 5.4 Forecasts, Delivery and Quality...............................................................11 5.5 Rejection and Replacement.....................................................................11 5.6 Invoice and Payment...........................................................................12 5.7 Supply Disruption; Alternate Manufacturing Site...............................................12 5.8 CIMA's Obligation to Continue Manufacture.....................................................12 SECTION 6 CONDITIONS PRECEDENT TO THE CLOSING; CLOSING DATE.........................................13 6.1 Conditions Precedent to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]'s Obligations.....................13

TABLE OF CONTENTS (continued)

PAGE 6.2 Conditions Precedent to CIMA's Obligations....................................................13 6.3 Closing Date..................................................................................14 SECTION 7 REPRESENTATIONS AND WARRANTIES OF CIMA....................................................14 7.1 Organization, Power and Authority.............................................................14 7.2 Due Authority; No Breach......................................................................15 7.3 Intellectual Property.........................................................................15 7.4 Technology Rights.............................................................................15 7.5 Litigation....................................................................................16 7.6 Governmental Approval.........................................................................16 7.7 Brokerage.....................................................................................16 7.8 Supply........................................................................................16 SECTION 8 REPRESENTATIONS AND WARRANTIES OF [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***].................16 8.1 Organization, Power and Authority.............................................................16 8.2 Due Authority; No Breach......................................................................16 8.3 Brokerage.....................................................................................17 8.4 Litigation....................................................................................17 8.5 Governmental Approval.........................................................................17 SECTION 9 ADDITIONAL COVENANTS AND AGREEMENTS OF THE PARTIES........................................17 9.1 Governmental Filings..........................................................................17 9.2 Compliance with Law...........................................................................18 9.3 Recall........................................................................................18 9.4 Confidentiality...............................................................................18 9.5 Expenses......................................................................................19 9.6 Reasonable Efforts............................................................................19 9.7 Publicity.....................................................................................19 9.8 Cooperation...................................................................................19 9.9 Competition; No Sale for Resale...............................................................20 9.10 Conflicting Rights............................................................................20 9.11 Patent and Trademark Maintenance..............................................................20

-2- TABLE OF CONTENTS (continued)

PAGE 9.12 Infringement; Enforcement of Proprietary Rights...............................................22 9.13 Supply of Products............................................................................22 9.14 Liability Insurance...........................................................................22 9.15 Referral of Orders and Inquiries..............................................................22 9.16 Deemed Breach of Covenant.....................................................................23 SECTION 10 INDEMNIFICATION...........................................................................23 10.1 Indemnification...............................................................................23 10.2 Notice and Opportunity To Defend..............................................................23 10.3 Indemnification Payment Obligation............................................................24 10.4 Indemnification Payment Adjustments...........................................................24 10.5 Indemnification Payment.......................................................................25 10.6 Survival......................................................................................25 SECTION 11 TERMINATION...............................................................................25 11.1 Termination...................................................................................25 SECTION 12 MISCELLANEOUS.............................................................................27 12.1 Successors and Assigns........................................................................27 12.2 Notices.......................................................................................27 12.3 Waiver; Remedies..............................................................................28 12.4 Survival of Representations...................................................................28 12.5 Independent Contractors.......................................................................28 12.6 Entire Agreement..............................................................................28 12.7 Amendment.....................................................................................28 12.8 Counterparts..................................................................................28 12.9 Governing Law.................................................................................28 12.10 Arbitration...................................................................................28 12.11 Captions......................................................................................29 12.12 No Third-Party Rights.........................................................................29 12.13 Severability..................................................................................29 12.14 Attachments...................................................................................29 12.15 Force Majeure.................................................................................29 12.16 Consents......................................................................................29

-3- TABLE OF CONTENTS (continued)

PAGE SCHEDULES Schedule 3.1......Master Development Schedule Schedule 4.1(a)...Royalty Rates Schedule 4.1(b)...Development Fee and Milestone Payments Schedule 5.1(b)...[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Purchase Order Schedule 5.3......Cost of Goods Schedule 5.4(d)...Quality Assurance Addendum

-4- MASTER DEVELOPMENT, LICENSE AND SUPPLY AGREEMENT This MASTER DEVELOPMENT, LICENSE AND SUPPLY AGREEMENT (this "Agreement"), dated as of December 18, 2001, is by and between CIMA LABS INC., a Delaware corporation ("CIMA"), and [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], a Delaware corporation ("[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]"). W I T N E S S E T H WHEREAS, CIMA is engaged, among other things, in the business of research, development, manufacturing and commercialization of pharmaceutical products through its proprietary drug delivery technologies; WHEREAS, [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] is engaged, among other things, in the business of marketing and selling of pharmaceutical products; WHEREAS, subject to the terms and conditions set forth in this Agreement, CIMA and [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] wish to collaborate in the development, registration, marketing and sale of certain prescription products; and WHEREAS, subject to the terms and conditions set forth in this Agreement, CIMA wishes to license to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] and [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] wishes to license from CIMA rights to CIMA's DuraSolv(TM), PakSolv(TM) and OraSolv(TM) technologies for use with such prescription products. NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows: SECTION 1 DEFINITIONS For purposes of this Agreement, the following terms shall have the meanings set forth below: "Activities" shall mean the development, manufacturing, marketing, selling and distributing of the Products in the Territory as contemplated by this Agreement. "Affiliates" shall mean, with respect to any Person, any Persons directly or indirectly controlling, controlled by, or under common control with, such other Person. For purposes hereof, the term "controlled" (including the terms "controlled by" and "under common control with"), as used with respect to any Person, shall mean the direct or indirect ability or power to direct or cause the direction of management policies of such Person or otherwise direct the affairs of such Person, whether through ownership of voting securities or otherwise. "Annual Net Sales" shall mean, for any Year, the Net Sales for such Year. "API" for each Product shall mean the active ingredient specified on Schedule 3.1 hereto with respect to such Product. "cGMP" shall mean current Good Manufacturing Practices, as determined by the FDA from time to time. "CIMA" shall have the meaning given in the preamble and shall include its Affiliates. "CIMA Intellectual Property" shall mean, collectively, (i) the CIMA Patents, (ii) the CIMA Technology, (iii) the CIMA Trademarks, and (iv) the CIMA Marketing Materials. "CIMA Marketing and Market Research Data" shall mean, with respect to the Products, all CIMA marketing data, studies, market research data and reports that pertain to the Products, and any further market research data that pertains to the Products whose disclosure to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] is not prohibited by confidentiality obligations under agreements, dated prior to the date hereof, between CIMA and Persons who are not Affiliates of CIMA. "CIMA Marketing Materials" shall mean all labeling, marketing and promotional materials and inserts currently used by CIMA that are useful in connection with the Activities. "CIMA Patents" shall mean United States patent nos. 6,024,981 and 6,221,392 (Rapidly Dissolving Robust Dosage Form) and any patents and patent applications resulting therefrom, including any extension, reissue, renewal, reexamination or continuation-in-part of such patent or patent application. To the extent that the OraSolv(R) and PakSolv(TM) technology is used with respect to any Product pursuant to Schedule 3.1, the term "CIMA Patents" shall, with respect to such Product, be deemed to include United States patent nos. 5,178,878, 6,155,423, 6,269,615 and 6,311,462 and any patents and patent applications resulting therefrom, including any extension, reissue, renewal, reexamination or continuation-in-part of such patent or patent application. "CIMA Technology" shall mean all of the CIMA Patents and all of CIMA's trade secrets, technology, know-how and all other information necessary for the manufacture of the Products including, without limitation, that relate to CIMA's DuraSolv(R), PakSolv(TM) and OraSolv(R) technologies. -2- "CIMA Trademarks" shall mean the CIMA(R), DuraSolv(R), PakSolv(TM) , OraSolv(R) and Meltabs(R) trademarks. "Closing Date" shall have the meaning given in Section 6.3 hereof. "Completion Date" shall mean, with respect to any Product, the date on which [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] determines, in its reasonable discretion, such Product is ready for submission to the FDA with three months stability data on the pilot scale (equal to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], whichever is greater). "Cost of Goods" shall have the meaning set forth on Schedule 5.3 hereto. "Damages" shall mean any and all actions, costs, losses, claims, liabilities, fines, penalties, demands, damages and expenses, court costs, and reasonable fees and disbursements of counsel, consultants and expert witnesses incurred by a party hereto (including interest which may be imposed in connection therewith), but excluding any punitive, exemplary or consequential damages. "Defective" shall mean, as to the Product, the failure of such to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] conform to the Specifications, this Agreement and all applicable law, including, without limitation, the FFDCA and the PDMA. "Development Schedule" shall mean the schedule of development activities set forth on Schedule 3.1 hereto. "FDA" shall mean the United States Food and Drug Administration. "FFDCA" the United State Federal Food, Drug and Cosmetic Act, as amended from time to time, together with any rules or regulations promulgated thereunder. "Force Majeure" shall mean acts of God, explosion, fire, flood, tornadoes, thunderstorms, earthquake or tremor, war whether declared or not, terrorism, civil strife, riots, embargo, losses or shortages of power, labor stoppage, substance shortages, damage to or loss of product in transit, currency restrictions, or events caused by reason of laws, regulations or orders by any government, governmental agency or instrumentality or by any other supervening or unforeseeable circumstances reasonably beyond the control of each party. "GAAP" shall mean generally accepted accounting practices in the United States as in effect from time to time. "Indemnified Party" shall have the meaning given in Section 10.2 hereof. "Indemnifying Party" shall have the meaning given in Section 10.2 hereof. -3- "Latent Defect" shall mean a defect that results in a recall under Section 9.3. "Launch or Launched" shall mean, with respect to each Product, the date when such Product is first made commercially available by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] "Licensed Assets" shall have the meaning set forth in Section 2.1 hereof. "Net Sales" shall mean, with respect to the Products, the gross amount invoiced to unrelated third parties for the Products in the Territory, less: (a) trade and reasonable and customary cash discounts allowed; (b) refunds, rebates, chargebacks, retroactive price adjustments and any other allowances which effectively reduce the net selling price; (c) returns, credits and allowances; and (d) freight, taxes and insurance. Such amounts shall be determined from books and records maintained in accordance with GAAP, consistently applied. "PDMA" shall mean the Prescription Drug Marketing Act of 1987, as amended from time to time, together with any rules or regulations promulgated thereunder. "Person" shall mean a natural person, a corporation, a partnership, a trust, a joint venture, a limited liability company, any governmental authority or any other entity or organization. "Product" shall mean any of the pharmaceutical products described on Schedule 3.1, it being understood that additional products may be added to Schedule 3.1 after the date hereof in accordance with Section 3.4. "Promotional Materials" shall mean any advertising and promotional labeling bearing a name (trade name or generic name) used in the promotion of any of the Products, including, without limitation, promotional materials produced by or on behalf of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] (examples include, but are not limited to, journal ads, brochures, service items, managed care pull through sheets, formulary presentations, price lists, monographs, Internet pages and telephone or television advertisements) and materials produced by outside sources (examples include, but are not limited to, medical reprints, textbooks and CME materials) to the extent funded by, created in cooperation with, reviewed, or distributed by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]. The definition of Promotional Materials shall also include press releases and other releases of information to the media regarding the Products. -4- "Quarter" shall mean, as the case may be, the three months ending on March 31, June 30, September 30 or December 31 in any Year. "Satisfactory Completion" shall mean, with respect to any Development Phase for any Product, the completion of such Development Phase in a manner that is: (i) appropriate to support the commercialization of the Product; (ii) appropriate for the completion of the development of such Product on, prior to, or within [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] of the target Completion Date set forth in respect of such Product on Schedule 3.1; and (iii) consistent with this Agreement. "[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]" shall have the meaning given in the preamble and shall include its Affiliates. "[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Technology" shall mean all of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]'s patents, trade secrets, technology, know-how and all other information necessary to the manufacture of the Products. "[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Trademarks" shall have the meaning given in Section 9.11(c). "Specifications" shall mean with respect to any Product, at any time, the specifications for such Product that are included in the Quality Assurance Addendum set forth on Schedule 5.4(d). "Territory" shall mean Canada, Mexico and the fifty (50) states, the District of Columbia and the territories and possessions comprising the United States of America, including Puerto Rico. "Year" shall mean a calendar year during the term of this Agreement. SECTION 2 GRANT OF LICENSES; LICENSE OPTION 2.1 Grant of Licenses. (a) CIMA hereby grants to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] an exclusive license for the term of this Agreement under the following assets to market, distribute and sell the Products, -5- for all indications and for all agreed upon Product line extensions, in the Territory (such assets are referred to herein collectively as the "Licensed Assets"): (i) all current and future regulatory filings, approvals, registrations and governmental authorizations that relate to the Products in the Territory; (ii) the CIMA Intellectual Property; and (iii) the CIMA Marketing and Market Research Data. (b) CIMA grants to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] an exclusive, royalty bearing license to use the CIMA Trademarks to market, distribute and sell the Products, during the term of this Agreement, for all indications and for all agreed upon Product line extensions in the Territory. (c) The license to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] will be exclusive in that CIMA will not grant any licenses of the Licensed Assets or the CIMA Trademarks (i) in the Territory to any other Person with respect to the Products or any other products containing the same active ingredient [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] as any Product or (ii) anywhere in the world with respect to any products having an identical formulation as any Product, in each case, during the term of this Agreement (d) In the event that a third party is interested in developing, manufacturing or marketing an equivalent formulation of a Product outside the Territory, CIMA and [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] agree as follows: (i) CIMA shall be entitled to solicit interest and enter initial discussions with any third parties for making a product having a formulation equivalent to that of a Product commercially available in any country or countries outside the Territory; (ii) upon receiving a bona fide proposal from a third party for the development and/or license of a formulation equivalent to that of a Product, but prior to initiating development activities or granting a license to such third party for such equivalent formulation, CIMA shall provide [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] a notice (a "License Notice") of its intent to initiate development activities or grant such license in a specific country or countries which shall identify such country or countries and shall describe in detail the formulation proposed to be licensed; and -6- (iii) [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall provide CIMA a notice within forty-five (45) days of its receipt of the License Notice that either: A) [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] does not intend to market the Product in such country or countries, in which case CIMA shall be free to initiate development activities and/or license the formulation described in the License Notice to a third party; or B) [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] does intend to market the Product in such country or countries, in which case this Agreement shall be amended to include such country or countries in the Territory and to allow CIMA to perform any necessary development work. [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall have one (1) year from the date of its notice to CIMA to demonstrate significant progress towards bringing the Product to market in such country or countries. If [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] fails to demonstrate significant progress within one (1) year or fails thereafter to demonstrate continued activities to market the Product in such country or countries, [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]'s license to the Product in that country or countries will terminate in thirty (30) days after re-notification by CIMA that [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] is not in compliance with this Section 2.1(d)(iii). 2.2 Sublicenses. [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall have the right to extend the licenses granted pursuant to this Section 2 in whole or in part to any Affiliate of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], provided that [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] is not then in default with respect to any of its obligations to CIMA under this Agreement. All the terms and provisions of this Agreement shall apply to the Affiliate to which this license has been extended to the same extent as they apply to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], and the operations of the Affiliate shall be deemed to be the operations of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] and [***CONFIDENTIAL TREATMENT REQUESTED, PORTION -7- OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall account therefor and be responsible for the performance of such Affiliate of all of its obligations hereunder. In addition, [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall have the right to extend the licenses granted pursuant to this Section 2 in whole or in part to Persons who are not Affiliates of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] with the prior written consent of CIMA, which consent shall not unreasonably be withheld or delayed. 2.3 Marketing, Distribution and Sale. After each Launch, [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall use its commercially reasonable efforts to market, distribute and sell the launched Product in the Territory. Such efforts shall be consistent with industry norms, given the product profile, product potential and the state of the market at Launch. SECTION 3 PRODUCT DEVELOPMENT 3.1 Obligations of CIMA. CIMA shall be responsible for the satisfactory performance of each of the development activities set forth on Schedule 3.1 at least by the times set forth on Schedule 3.1. 3.2 Obligations of [***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.***] shall, in a timely fashion, supply CIMA or cause CIMA to be supplied with sufficient quantities of API for CIMA to perform the development activities described on Schedule 3.1 and the supply activities described in Sections 5.1 and 5.5. 3.3 License of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Technology. [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] hereby grants to CIMA a non-exclusive license under the [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Technology so that CIMA may carry out its obligations under Section 3.1. Such license may not be sublicensed without the prior written consent of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]. -8- 3.4 Additional Products. [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] may, with the prior written consent of CIMA, such consent not to be unreasonably withheld, supplement Schedule 3.1 after the date hereof by adding additional products thereto in order to increase the number of Products subject to this Agreement or to replace any Product previously terminated under Section 11.1 (c) or (d), in which case each such additional product(s) shall be deemed a "Product" within the meaning hereof, provided that any Product added pursuant to this Section 3.4 shall be subject to terms, including development schedules, comparable to then existing Products. This Agreement shall be amended as necessary to accommodate such additional or replacement Products and terms related thereto. 3.5 Regulatory Matters. All Product, other than Prototypes, supplied to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall be produced under cGMP and in accordance with the Specifications. CIMA shall furnish [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] with a Certificate of Analysis with a cGMP statement to demonstrate that each shipment of Product has been manufactured under cGMP and other FDA guidelines and in accordance with the Specifications. In addition, [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] reserves the right, at its own expense, to audit the facility of CIMA, including its processes, records and other facets of the operation as may be necessary to assure that all applicable regulations have been complied with, and the Specifications have been met. CIMA shall permit duly authorized representatives of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] to audit all manufacturing and processing operations at reasonable times with a prior appointment. The right to audit shall commence with the effective date of this Agreement. These audits will be conducted to assure compliance with all pertinent acts, regulations, and guidelines promulgated by the FDA and other regulatory authorities, as well as standards then in effect in the regulatory environment. Such audits will be permitted during normal business hours and will be performed with a minimum of disruption. SECTION 4 ROYALTY, COST OF GOODS AND MILESTONE PAYMENTS 4.1 Royalty and Milestone Payments. (a) [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall make royalty payments to CIMA, at the times, in the amounts and subject to the conditions set forth on Schedule 4.1(a). -9- (b) [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall make Milestone Payments and Development Fee Payments to CIMA as set forth on Schedule 4.1(b). (c) In the event of (i) any patent infringement of the CIMA Technology that has a materially adverse effect on any Product, and/or (ii) the occurrence of an interruption in the supply of any Product for a period of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] or more, then, in each case, the obligation of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] to make any payments pursuant to Sections 4.1(a) or 4.1(b) or Schedules 4.1(a) or 4.1(b) shall, in each case, terminate with respect to such Product(s) and be deemed waived by CIMA and shall be promptly renegotiated in good faith by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] and CIMA. Any renegotiated obligations pursuant to this Section 4.1(c) shall be retroactively effective to the date the applicable event described above occurred. 4.2 Records and Audit. (a) [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] and its Affiliates shall keep full, true and accurate books of account containing all particulars that may be necessary for the purpose of showing the amounts payable to CIMA hereunder. Such books of account shall be kept at [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]'s principal place of business or the principal place of business of the appropriate Affiliate of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] to which this Agreement relates. Such books and the supporting data shall be open, at all reasonable times and upon reasonable notice during the term of this Agreement and for 2 years after its termination, to the inspection by a firm of certified public accountants selected by CIMA and reasonably acceptable to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], for the limited purpose of verifying [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]'s royalty statements; provided, however, that such examination shall not take place more often than once each Year and shall not cover more than the preceding 3 Years, with no right to audit any period previously audited. Except as otherwise provided in this Section, the cost of any such examination shall be paid by CIMA. In the event that any such inspection reveals a deficiency in excess of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] of the reported royalty for the period covered by the inspection, [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall promptly pay CIMA the deficiency, plus interest at the -10- rate of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] per annum, and shall reimburse CIMA for the fees and expenses paid to such accountants in connection with their inspection. In the event that any such inspection reveals a deficiency that is less than [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] of the reported royalty for the period covered by the inspection, [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall promptly pay CIMA the deficiency, plus interest at the rate of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] per annum. The parties agree that neither party shall be required to retain books and records with respect to the above other than books and records relating to the current Year and the immediately preceding 3 Years. (b) CIMA shall keep full, true and accurate books and records that may be necessary for the purpose of determining the actual Costs of Goods incurred by CIMA as contemplated hereunder. Such books and records shall be kept at CIMA's principal place of business. Such books and records and the supporting data shall be open, at all reasonable times and upon reasonable notice during the term of this Agreement and for 2 years after its termination, to inspection by a firm of certified public accountants selected by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] and reasonably acceptable to CIMA, for the limited purpose of verifying CIMA's Costs of Goods; provided, however, that such examination shall not take place more often than once each Year and shall not cover more than the preceding 3 Years, with no right to audit any period previously audited. Except as otherwise provided in this Section, the cost of any such examination shall be paid by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]. In the event that any such inspection reveals a discrepancy between CIMA's actual Costs of Goods and that invoiced to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], in favor of CIMA, in excess of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] of the reported Costs of Goods for the period covered by the inspection, CIMA shall promptly pay [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] the amount of such discrepancy, plus interest at the rate of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] per annum, and shall reimburse [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] for the fees and expenses paid to such accountants in connection with their inspection. In the event that any such inspection reveals a discrepancy between CIMA's actual Costs of Goods and that invoiced to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], in favor of CIMA, that is less than [***CONFIDENTIAL TREATMENT -11- REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] of the reported Cost of Goods for the period covered by the inspection, CIMA shall promptly pay [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] the amount of such discrepancy, plus interest at the rate of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] per annum. The parties agree that neither party shall be required to retain books and records with respect to the above other than books and records relating to the current Year and the immediately preceding 3 Years. 4.3 Quarterly Reports of Royalties. In any Year, [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall, within sixty (60) days after the end of each Quarter, deliver to CIMA true and accurate reports, certified by an authorized official of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], setting forth the actual Annual Net Sales and total royalties due under Section 4.1(a) for such Year. If no royalties are due, [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall so report. 4.4 Annual Reports of Costs of Goods. CIMA shall, not later than 60 days prior to the Launch of each Product and, thereafter, not later than 60 days after January 1 of each Year, deliver to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] true and accurate reports, certified by an authorized official of CIMA, setting forth in reasonable detail the information necessary to calculate the Cost of Goods for each Product in accordance with Schedule 5.3. Product delivered to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] between January 1 and February 28 each year shall be invoiced to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] at the price applicable to Product delivered to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] during the immediately preceding calendar year. Then on or about February 28 of each year CIMA shall transmit to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] a corrected invoice for Product delivered between January 1 and February 28 of each year taking into account the final amount of any such price increase or decrease, and setting forth the applicable additional charges or credits. 4.5 Sales and Marketing Estimates. [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall provide CIMA with a non-binding estimate of its Annual Net Sales by quarter for each Product [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND -12- EXCHANGE COMMISSION.***] prior to the Launch of each Product. Thereafter, prior to September 30th in any year following the Launch of such Product, [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall provide CIMA with non-binding estimate of its Annual Net Sales of such Product by quarter for the following year. SECTION 5 SUPPLY OF PRODUCT 5.1 Supply of Product. (a) For the term of this Agreement, or for as long as CIMA manufactures any of the Products hereunder, whichever is shorter, [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] agrees to purchase from CIMA and CIMA agrees to supply [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] with all of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]'s requirements for the Products, Product samples and Product placebos for their subsequent use, sale, lease or transfer by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]. (b) [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] agrees to initiate purchases of the Products, Product samples and Product placebos hereunder by issuing CIMA binding purchase orders not less than [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] prior to the required shipping date set forth therein. CIMA agrees to accept any order issued in accordance with this Section 5.1(b) and to meet the delivery dates specified thereon. All purchase orders hereunder shall be on [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]'s standard purchase order form (a copy of which is attached as Schedule 5.1(b) hereto and which shall not, for purposes of this Agreement only, be modified in any material respect without CIMA's prior written consent, such consent not to be unreasonably withheld or delayed) and shall be directed to CIMA at the address set forth below. The terms and conditions of purchase enumerated on the reverse side of such standard purchase order form shall prevail over any inconsistent or conflicting language as may exist on invoices, confirmation or order acknowledgment forms of CIMA, provided, however, that in the event any terms thereof are in conflict, or are inconsistent with any terms of this Agreement, the terms and conditions hereof shall prevail. No Product delivered by CIMA shall have a shelf life that is more than [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE -13- COMMISSION.***] less than the maximum shelf life of such Product (other than batches that were under investigation and batches for validation which shall have not more than [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] less than the maximum shelf life of such Product upon delivery to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]). (c) Purchase order quantities shall be in full batch sizes that are mutually agreed by the parties. (d) [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall cause the amount of API that CIMA requires to perform its obligations pursuant to Schedule 3.1 and Sections 5.1 and 5.5 to be provided at no charge to CIMA [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] prior to date of tablet manufacture, as well as [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] of safety stock. API must conform to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]'s then current raw materials specifications. CIMA shall not be accountable for production or shipment delays due to lack of API. (e) EXCEPT AS SPECIFICALLY PROVIDED HEREIN, INCLUDING, WITHOUT LIMITATION, SECTION 7.8, THE PRODUCT WILL BE SUPPLIED BY CIMA WITH NO WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABLILITY OR FITNESS FOR A PARTICULAR PURPOSE. 5.2 Identification. [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] may market the Products under its name, with its packaging and logo; [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] will, however, identify CIMA as the supplier in a fair manner, reasonably acceptable to CIMA. CIMA will bear all the costs of labeling the Product so as to appropriately display the [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] name provided [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] supplies all the appropriate graphics, designs, logos and related and appropriate artwork at least a reasonable amount of time in advance of any Product being manufactured. [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall reimburse CIMA for any reasonable and documented costs incurred by CIMA in making changes to the packaging required to manufacture the Products in accordance with changes to the -14- PDMA or other applicable law or changes required by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], including, but not limited to plate and die charges due to label changes and product identification requirements, and for any packaging components rendered obsolete by the changes. In addition, CIMA shall pay for all initial one-time set-up charges incurred by CIMA in respect of packaging each Product. [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] may use CIMA's name and derivations thereof in promoting, marketing and selling the Products in the Territory; provided, however, that the particular formulation of any reference to CIMA's name in any Promotional Material shall be subject to CIMA's review and consent; and provided, further, that once the formulation of any such reference has been reviewed and consented to by CIMA, any subsequent reference to CIMA's name using such formulation shall not be subject to the further review or consent of CIMA. All samples shall be clearly marked "for sample use only" or some similar phrasing suggested by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]. 5.3 Trade, Sample and Placebo Product Price. CIMA shall supply Products, Product samples and Product placebos to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] at the price set forth on Schedule 5.3. 5.4 Forecasts, Delivery and Quality. (a) [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall provide CIMA with 12-month non-binding forecasts within 15 days after the end of each Quarter. Such forecasts shall be revised and extended in each succeeding Quarter. (b) Delivery of the Products, Product samples and Product placebos shall be in accordance with the means of transportation, destination and dates set forth in [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]'s purchase order. Delivery shall be EXW (Incoterms 2000) CIMA and CIMA shall load Products on to collecting vehicle at CIMA's risk. (c) All deliveries of the Products hereunder shall include a Certificate of Analysis provided by the quality control manager of CIMA attesting to the fact that such Products (i) have been manufactured by a process which complies with cGMP and (ii) are of quality which is in accordance with criteria established in the Specifications and all FDA requirements. (d) The Products, Product samples and Product placebos supplied hereunder shall have been manufactured by a process which complies with the quality assurance addendum set forth on Schedule 5.4(d). -15- 5.5 Rejection and Replacement. (a) In the event [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] determines that any Products, Product samples or Product placebos as manufactured and/or packaged by CIMA is Defective, then, within [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] after delivery of such Products, Product samples or Product placebos to [***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.***] shall provide to CIMA a written notice of rejection, specifying in reasonable detail the manner in which the Products are Defective (the "Notice of Rejection"). If no written Notice of Rejection is given to CIMA by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] within such [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] period, such Products, Product samples or Product placebos shall be deemed to have been accepted by [***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.***]. (b) Upon receipt of a Notice of Rejection from [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] and in order to minimize any hardship to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] 's customers, CIMA shall use its reasonable best efforts to promptly supply to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] a quantity of replacement Products, Product samples or Product placebos meeting the Specifications equal to the size of the lot or lots which [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] claims was Defective so that such replacement Products shall be received by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] within 30 days following CIMA's receipt of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]'s Notice of Rejection. If CIMA agrees with [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] that such Product is Defective then CIMA shall either replace the Defective Product at no cost to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], or refund or credit, as designated by -16- [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], the price paid for such Product plus any applicable delivery charges, including, without limitation, shipping, insurance and taxes, and any reasonable and documented out-of-pocket expense that [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] may have incurred, within thirty (30) days after written notice from [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]. If CIMA disagrees with [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] as to whether such Product is Defective, the parties shall cooperate to have the Product in dispute analyzed by an independent testing laboratory of recognized repute jointly selected by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] and CIMA. If the Product is determined by such laboratory to meet the Specifications, then [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall bear the cost of the independent laboratory testing and pay for the Product in accordance with this Agreement. If the Licensed Product is determined not to have met the Specifications at time of delivery, then CIMA shall bear the cost of the independent laboratory testing. In addition, CIMA shall either replace the Defective Product within thirty (30) days after the date of such determination, at no cost to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], or refund or credit, as designated by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], the price paid for such Product plus any applicable delivery charges, including, without limitation, shipping, insurance and taxes, and any reasonable and documented out-of-pocket expense that [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] may have incurred, within thirty (30) days after written notice from [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]. If CIMA is unable to replace any such Product within thirty (30) days (or at any time that CIMA fails to deliver the replacement Product at an agreed upon date), [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall have the right, at its sole discretion, to extend the timeframe for delivery of replacement Product to a mutually agreed upon date, or, in the alternative, to require CIMA to reimburse [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] for the price paid for such Product plus any applicable delivery charges, including, without limitation, shipping, insurance and taxes and any reasonable and documented out-of-pocket expense [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] may have incurred. Such reimbursement shall be made within thirty (30) days of such notice. -17- 5.6 Invoice and Payment. Upon shipment of any Products, Product samples or Product placebos, CIMA shall be entitled to submit invoices therefor to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], and [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] agrees to remit payment within thirty (30) days from CIMA's invoice date. 5.7 Supply Disruption; Alternate Manufacturing Site. (a) CIMA shall use its best efforts to supply [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] with the Products in a timely manner in accordance with the orders and forecasts received by CIMA pursuant to Sections 5.1(b) and 5.4(a), respectively. In any consecutive [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] period, should CIMA fail to supply [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] with a Product ordered for such [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] period pursuant to Section 5.1(b) (other than for reason of Force Majeure), [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall have the right to require CIMA to transfer the manufacture of such Product(s) to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]'s [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] facility or other designated [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] facility. Should CIMA cure its failure to supply any Product so transferred, CIMA shall have the right to resume the manufacture of such Product and [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] and CIMA shall transfer the manufacture of such Product back to CIMA within a commercially reasonable amount of time. (b) CIMA shall, [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] establish a second manufacturing plant as an alternate FDA-approved manufacturing site for the Products however, the second manufacturing plant is not required to contain a bottling capability 5.8 CIMA's Obligation to Continue Manufacture. If this Agreement terminates or expires through no breach of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION -18- OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], CIMA shall reasonably cooperate with [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] in transferring the manufacture of the Products to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], its Affiliate or, subject to confidentiality obligations consistent with Section 9.4, a third-party appointed by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], the parties shall develop a timing and payment schedule for the transfer of the manufacture of the Products and CIMA shall continue to supply the Products to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] pursuant to the terms of this Agreement until [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] from the date this Agreement is terminated or expires pursuant to Section 11.1. SECTION 6 CONDITIONS PRECEDENT TO THE CLOSING; CLOSING DATE 6.1 Conditions Precedent to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]'s Obligations. Subject to waiver as set forth in Section 12.3, all obligations of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] to close the transactions contemplated under this Agreement are subject to the fulfillment or satisfaction of each of the following conditions precedent: (a) Representations and Warranties True as of the Closing Date. The representations and warranties of CIMA contained in this Agreement or in any schedule, certificate or document delivered by CIMA to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] pursuant to the provisions hereof shall have been true on the date hereof and shall be true on the Closing Date with the same effect as though such representations and warranties were made as of such date. (b) Compliance with this Agreement. CIMA shall have performed and complied with all agreements and conditions required by this Agreement to be performed or complied with by it prior to or by the Closing Date. (c) Closing Certificate. [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall have received a certificate -19- from CIMA, executed by an officer of CIMA, certifying in such detail as [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] may reasonably request that the conditions specified in Sections 6.1(a) and 6.1(b), above, have been fulfilled and certifying that CIMA has obtained all consents and approvals required hereunder. (d) No Threatened or Pending Litigation. On the Closing Date, no suit, action or other proceeding, or injunction or final judgment relating thereto, shall, to the best of CIMA's knowledge, be threatened or be pending before any court or governmental or regulatory official, body or authority in which it is sought to restrain or prohibit or to obtain damages or other relief in connection with this Agreement or the consummation of the transactions contemplated hereby, and no investigation that might result in any such suit, action or proceeding shall be pending or, to the best of CIMA's knowledge, threatened. 6.2 Conditions Precedent to CIMA's Obligations. Subject to waiver as set forth in Section 12.3, all obligations of CIMA to close the transactions contemplated under this Agreement are subject to the fulfillment or satisfaction of each of the following conditions precedent: (a) Representations and Warranties True as of the Closing Date. The representations and warranties of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] contained in this Agreement or in any schedule, certificate or document delivered by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] to CIMA pursuant to the provisions hereof shall have been true on the date hereof and shall be true on the Closing Date with the same effect as though such representations and warranties were made as of such date. (b) Compliance with this Agreement. [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall have performed and complied with all agreements and conditions required by this Agreement to be performed or complied with by it prior to or by the Closing Date. (c) Closing Certificate. CIMA shall have received a certificate from [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], executed by an officer of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], certifying in such detail as CIMA may reasonably request that the conditions specified in Sections 6.2(a) and 6.2(b), above, have been fulfilled and certifying that [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND -20- EXCHANGE COMMISSION.***] has obtained all consents and approvals required hereunder. (d) No Threatened or Pending Litigation. On the Closing Date, no suit, action or other proceeding, or injunction or final judgment relating thereto, shall, to the best of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]'s knowledge, be threatened or be pending before any court or governmental or regulatory official, body or authority in which it is sought to restrain or prohibit or to obtain damages or other relief in connection with this Agreement or the consummation of the transactions contemplated hereby, and no investigation that might result in any such suit, action or proceeding shall be pending or, to the best of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]'s knowledge, threatened. 6.3 Closing Date. (a) Subject to Section 6.3(b), below, the closing of the transactions contemplated by this Agreement shall take place at 10:00 a.m., local time, on December 18, 2001, or on such other date as may be mutually agreed upon in writing by the parties (the "Closing Date"), at the offices of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]. (b) Each party hereby agrees to use its best efforts to consummate the transactions contemplated herein, as modified, on or before December 18, 2001; provided, however, that if the parties are unable to close the transactions contemplated hereby by January 31, 2002, or such later date as shall be mutually agreed to in writing by CIMA and [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], then all of the rights and obligations of the parties under this Agreement shall terminate without liability. SECTION 7 REPRESENTATIONS AND WARRANTIES OF CIMA CIMA hereby represents and warrants to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] that: 7.1 Organization, Power and Authority. CIMA is a corporation duly organized and validly existing under the laws of the State of Delaware. CIMA has all necessary corporate power and authority to enter into, and be bound by the terms and conditions of, this Agreement, and to license the Licensed Assets and the CIMA Trademarks to [***CONFIDENTIAL -21- TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] pursuant hereto. 7.2 Due Authority; No Breach. The execution, delivery and performance by CIMA of this Agreement and each agreement or instrument contemplated by this Agreement, and the performance of the transactions contemplated hereby and thereby, have been duly authorized by all necessary corporate action by CIMA. This Agreement is, and each agreement or instrument contemplated by this Agreement, when executed and delivered by CIMA in accordance with the provisions hereof, will be (assuming the due execution and delivery hereof and thereof by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]) the legal, valid and binding obligation of CIMA, in each case enforceable against CIMA in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization, or similar laws from time to time in effect which affect the enforcement of creditors' rights generally and by legal and equitable limitations on the availability of specific performance and other equitable remedies against CIMA. All persons who have executed this Agreement on behalf of CIMA, or who will execute on behalf of CIMA any agreement or instrument contemplated by this Agreement, have been duly authorized to do so by all necessary corporate action. Neither the execution and delivery of this Agreement or any such other agreement or instrument by CIMA, nor the performance of the obligations contemplated hereby or thereby, will (i) conflict with or result in any violation of or constitute a breach of any of the terms or provisions of, or result in the acceleration of any obligation under, or constitute a default under any provision of the articles of incorporation or by-laws of CIMA or any material contract or any other material obligation to which CIMA is a party or to which it is subject or bound, or (ii) violate any judgment, order, injunction, decree or award of any court, administrative agency, arbitrator or governmental body against, or affecting or binding upon, CIMA or upon the securities, property or business of CIMA, or (iii) constitute a violation by CIMA of any applicable law or regulation of any jurisdiction as such law or regulation relates to CIMA, or to the property or business of CIMA except for such conflict, acceleration, default, breach or violation that is not reasonably likely to have a material adverse effect on CIMA's ability to perform its obligations under this Agreement or under any agreement or instrument contemplated hereby. 7.3 Intellectual Property. CIMA is the lawful owner of the Licensed Assets and CIMA Trademarks, CIMA can license the Licensed Assets and CIMA Trademarks without the consent of any third party in the Territory, there is no pending or overtly threatened claim against CIMA asserting that any of the Licensed Assets or CIMA Trademarks infringes or violates the rights of third parties in the Territory or that [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], by practicing under the Licensed Assets and CIMA Trademarks in performing the Activities, would violate any of the intellectual property rights of any third party in the Territory, and nothing has come to the attention of CIMA which has, or reasonably should have, led CIMA to believe that any of the Licensed Assets and CIMA Trademarks infringes or violates the right of third parties in the Territory. CIMA has not given any notice to any third parties asserting infringement by such third parties upon any of the Licensed Assets and CIMA Trademarks. CIMA is not aware of and has not received any communications challenging the ownership, validity or effectiveness of any of the Licensed -22- Assets and CIMA Trademarks. CIMA has not granted any right to any third party relating to the Activities which would violate the terms of or conflict with the rights granted to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] pursuant to this Agreement. 7.4 Technology Rights. The CIMA Technology, to the best of CIMA's knowledge, when combined with the [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Technology, includes all the technology, patents, know-how, trade secrets and other intellectual property necessary to manufacture the Products. 7.5 Litigation. There are no pending or, to the best of CIMA's knowledge, threatened judicial, administrative or arbitral actions, claims, suits or proceedings pending as of the date hereof against CIMA relating to the Activities, the Licensed Assets or the CIMA Trademarks which, either individually or together with any other, would have a material adverse effect on the Activities, the Licensed Assets, the CIMA Trademarks or the ability of CIMA to perform its obligations under this Agreement or any agreement or instrument contemplated hereby. There are no pending, and CIMA does not presently contemplate bringing, any actions or suits relating to the Activities, the Licensed Assets or the CIMA Trademarks against others. 7.6 Governmental Approval. No consent, approval, waiver, order or authorization of, or registration, declaration or filing with, any governmental authority is required in connection with the execution, delivery and performance of this Agreement, or any agreement or instrument contemplated by this Agreement, by CIMA or the performance by CIMA of its obligations contemplated hereby and thereby. 7.7 Brokerage. No broker, finder or similar agent has been employed by or on behalf of CIMA, and no Person with which CIMA has had any dealings or communications of any kind is entitled to any brokerage commission, finder's fee or any similar compensation, in connection with this Agreement or the transactions contemplated hereby. 7.8 Supply. All finished Products supplied by CIMA under Section 5 shall (i) have been manufactured by a process which complies with cGMP and the Quality Assurance Addendum set forth on Schedule 5.4(d) and (ii) be of a quality which is in accordance with criteria established by the specifications established by the Specifications and all FDA requirements. -23- SECTION 8 REPRESENTATIONS AND WARRANTIES OF [***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.***] represents and warrants to CIMA that: 8.1 Organization, Power and Authority. [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] has all necessary corporate power and authority to enter into, and be bound by the terms and conditions of, this Agreement, to license the Licensed Assets, the Patents and the CIMA Technology from CIMA, and to license the [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Technology to CIMA pursuant hereto. 8.2 Due Authority; No Breach. The execution, delivery and performance by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] of this Agreement, and each agreement or instrument contemplated by this Agreement, and the performance of the transactions contemplated hereby and thereby, have been duly authorized by all necessary corporate action by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]. This Agreement is, and each agreement or instrument contemplated by this Agreement, when executed and delivered by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] in accordance with the provisions hereof, will be (assuming due execution and delivery hereof and thereof by CIMA) the legal, valid and binding obligation of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], in each case enforceable against [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization, or similar laws from time to time in effect which affect the enforcement of creditors' rights generally and by legal and equitable limitations on the availability of specific performance and other equitable remedies against [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]. All persons who have executed this Agreement on behalf of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], or who will execute on behalf of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE -24- SECURITIES AND EXCHANGE COMMISSION.***] any agreement or instrument contemplated by this Agreement, have been duly authorized to do so by all necessary corporate action. Neither the execution and delivery of this Agreement by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], or any such other agreement or instrument by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], nor the performance of the obligations contemplated hereby and thereby, will (i) conflict with or result in any violation of or constitute a breach of any of the terms or provisions of, or result in the acceleration of any obligation under, or constitute a default under any provision of its articles of incorporation or by-laws or any material contract or any other material obligation to which [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] is a party or to which it is subject or bound, or (ii) violate any judgment, order, injunction, decree or award of any court, administrative agency, arbitrator or government body against, or affecting or binding upon, [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] or upon the securities, property or business of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], or (iii) constitute a violation by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] of any applicable law or regulation of any jurisdiction as such law or regulation relates to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] or to the property or business of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], except for such conflict, acceleration, default, breach or violation that is not reasonably likely to have a material adverse effect on [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]'s ability to perform its obligations under this Agreement or any agreement or instrument contemplated hereby. 8.3 Brokerage. No broker, finder or similar agent has been employed by or on behalf of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] and no Person with which [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] has had any dealings or communications of any kind is entitled to any brokerage commission, finder's fee or any similar compensation, in connection with this Agreement or the transactions contemplated hereby. 8.4 Litigation. There are no pending or, to the best of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]'s knowledge, threatened judicial, administrative or arbitral actions, claims, suits or proceedings pending as of the date hereof against [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED -25- SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] which, either individually or together with any other, will have a material adverse effect on the ability of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] to perform its obligations under this Agreement or any agreement or instrument contemplated hereby or affect adversely the grant to CIMA of the non-exclusive license of the [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Technology pursuant to Section 3.3. 8.5 Governmental Approval. No consent, approval, waiver, order or authorization of, or registration, declaration or filing with, any governmental authority is required in connection with the execution, delivery and performance of this Agreement, or any agreement or instrument contemplated by this Agreement, by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] or the performance by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] of its obligations contemplated hereby and thereby. SECTION 9 ADDITIONAL COVENANTS AND AGREEMENTS OF THE PARTIES 9.1 Governmental Filings. CIMA and [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] each agree to prepare and file whatever filings, listings, requests or applications are required to be filed with any governmental authority in connection with this Agreement or the Products and to cooperate with one another as reasonably necessary to accomplish the foregoing. 9.2 Compliance with Law. [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] and CIMA shall each comply with all federal, state and local laws and regulations applicable to developing, approving, manufacturing, marketing and selling the Products in the Territory, the Licensed Assets, the Patents and the Technology or the performance of their respective obligations hereunder. CIMA and [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] each shall keep all records and reports required to be kept by applicable laws and regulations, and each shall make its facilities available at reasonable times during business hours for inspection by representatives of governmental agencies. CIMA and [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] each shall notify the other within forty-eight (48) hours of receipt of any notice or any other indication whatsoever of any FDA or other governmental agency inspection, investigation or other inquiry, or other material notice or communication of any type, involving any Product. [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED -26- FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] and CIMA shall cooperate with each other during any such inspection, investigation or other inquiry including, but not limited to, allowing upon request a representative of the other to be present during the applicable portions of any such inspection, investigation or other inquiry and providing copies of all relevant documents. [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] and CIMA shall discuss any written response to observations or notifications received in connection with any such inspection, investigation or other inquiry and each shall give the other an opportunity to comment upon any proposed response before it is made. In the event of disagreement concerning the form or content of such response, however, CIMA shall be responsible for deciding the appropriate form and content of any response with respect to any of its cited activities and [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall be responsible for deciding the appropriate form and content of any response with respect to any of its cited activities. 9.3 Recall. [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] and CIMA shall consult with one another as to all decisions concerning recall or withdrawal of any Product from the market, including, but not limited to, determining whether or not to make any such recall or withdrawal, the timing and scope thereof, and the means of conducting any recall or withdrawal. The party requesting any recall or withdrawal must receive the prior written consent of the other party, such consent not to be unreasonably withheld, prior to initiating such recall or withdrawal. No consent shall be necessary if the recall or withdrawal is requested by the FDA or other governmental authority. CIMA shall bear the costs (including but not limited to, shipping and product credits) for any recall or withdrawal primarily due to CIMA's failure to comply with this Agreement. The costs for any other recall or withdrawal shall be the responsibility of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]. 9.4 Confidentiality. [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall treat as confidential the Licensed Assets, the Patents, the CIMA Technology, and all other information of CIMA of which [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] becomes aware in connection with this Agreement (collectively, "CIMA Proprietary Information"). [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall neither disclose CIMA Proprietary Information to any third party nor use CIMA Proprietary Information for any purpose other than as set forth in this Agreement. CIMA shall treat as confidential the [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Technology and all other information of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] of which CIMA becomes aware in connection with this Agreement (collectively, "[***CONFIDENTIAL -27- TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Proprietary Information"). CIMA shall neither disclose [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Proprietary Information to any third party nor use [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Proprietary Information for any purpose other than as set forth in this Agreement. Nothing contained herein will in any way restrict or impair either party's (the "Using Party's") right to use, disclose or otherwise deal with any Proprietary Information of the other party which: (a) at the time of disclosure is known to the public or thereafter becomes known to the public by publication or otherwise through no fault of the Using Party; (b) the Using Party can establish was in its possession prior to the time of the disclosure and was not obtained directly or indirectly from the other party; (c) is independently made available as a matter of right to the Using Party by a third party who is not thereby in violation of a confidential relationship with the other party; (d) is developed by the Using Party independently of the Proprietary Information received from the other party and the Using Party can establish such development; or (e) is information required to be disclosed by legal or regulatory process; provided, in each case the Using Party timely informs the other party and uses reasonable efforts to limit the disclosure and maintain confidentiality to the extent possible and permits the other party to intervene and contest or attempt to limit the disclosure. Nothing in the foregoing, however, shall prohibit a party from making such disclosures to the extent deemed necessary under applicable federal or state securities laws or any applicable rule or regulation of any nationally recognized securities exchange including, without limitation, NASDAQ. In such event, however, the disclosing party shall use good faith efforts to consult with the other party prior to such disclosure and, where applicable, shall request confidential treatment to the extent available. [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall obtain no right or license of any kind under the CIMA Proprietary Information except as set forth in this Agreement. CIMA shall obtain no right or license of any kind under the [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Proprietary Information except as set forth in this Agreement. 9.5 Expenses. CIMA and [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE -28- COMMISSION.***] shall each bear their own direct and indirect expenses incurred in connection with the negotiation and preparation of this Agreement and, except as set forth in this Agreement, the performance of the obligations contemplated hereby. 9.6 Reasonable Efforts. CIMA and [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] each hereby agrees to use all reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done all things necessary or proper to make effective the transactions contemplated by this Agreement, including such actions as may be reasonably necessary to obtain approvals and consents of governmental Persons and other Persons. 9.7 Publicity. Each of the parties agrees that no publicity release or announcement concerning the transactions contemplated hereby shall be issued without the advance written consent of the other, except as such release or announcement may be required by law, in which case the party making the release or announcement shall, before making any such release or announcement, afford the other party a reasonable opportunity to review and comment upon such release or announcement. 9.8 Cooperation. If either party shall become engaged in or participate in any investigation, claim, litigation or other proceeding with any third party, including the FDA, relating in any way to the Products or any of the Licensed Assets, the Patents or the Technology, the other party shall cooperate in all reasonable respects with such party in connection therewith, including, without limitation, using its reasonable efforts to make available to the other such employees who may be helpful with respect to such investigation, claim, litigation or other proceeding, provided that, for purposes of this provision, reasonable efforts to make available any employee shall be deemed to mean providing a party with reasonable access to any such employee at no cost for a period of time not to exceed 24 hours (e.g., three 8-hour business days). Thereafter, any such employee shall be made available for such time and upon such terms and conditions (including, but not limited to, compensation) as the parties may mutually agree. 9.9 Competition; No Sale for Resale. (a) CIMA agrees that, commencing on the Closing Date and continuing for the period ending [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] after the term of this Agreement, it shall not directly or indirectly, develop or manufacture for sale within the Territory any Product described on Schedule 3.1 on the date hereof or engage in the marketing, selling or distributing of any such Product in the Territory except as contemplated by this Agreement. It is further understood that the remedies at law are inadequate in the case of any breach of this covenant and that [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall be entitled to equitable relief, including the remedy of specific performance, with respect to any breach of such covenant. -29- (b) Neither [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] nor any sublicensee of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall knowingly directly or indirectly sell any Product to anyone in the Territory for subsequent distribution or resale outside the Territory and each shall take all reasonable precautions to prevent such distribution or resale outside the Territory. Neither CIMA nor any of its Affiliates shall knowingly directly or indirectly sell any Product to anyone in the Territory or outside the Territory for subsequent distribution or resale in the Territory and each shall take all reasonable precautions to prevent such distribution or resale in the Territory. 9.10 Conflicting Rights. CIMA shall not grant any right to any third party relating to the Activities which would violate the terms of or conflict with the rights granted to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] pursuant to this Agreement. 9.11 Patent and Trademark Maintenance. (a) CIMA shall be solely responsible for filing, prosecuting, and maintaining all of the CIMA Patents, and CIMA shall pay the costs associated therewith. CIMA shall file, prosecute, and maintain all CIMA Patents so as to fully continue the benefits under the licenses granted to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] hereunder. CIMA may, however, discontinue prosecuting and maintaining any CIMA Patent if (i) CIMA has a valid business reason to do so, and (ii) obtains the prior written approval of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], such approval not to be unreasonably withheld or delayed. (b) CIMA shall be solely responsible for filing, prosecuting, and maintaining all CIMA Trademarks, and CIMA shall pay the costs associated therewith. All registrations, variations, logos, goodwill and other rights under or acquired through use of the CIMA Trademarks shall accrue and belong to CIMA. Except as provided herein, [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall have no rights to use the CIMA Trademarks. [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] will not use in its business, in or outside of the Territory, any other mark or name which is similar to or nearly resembles any of the CIMA Trademarks in use by CIMA to indicate the source and origin of the CIMA Technology as to be likely to cause deception or confusion. [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] recognizes that CIMA is the owner of all CIMA Trademarks used in commerce to -30- indicate the source of the CIMA Technology and agrees that the CIMA Trademarks shall remain vested in CIMA both during the term of this Agreement and thereafter. [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall not contest the validity of the CIMA Trademarks or CIMA's ownership of the CIMA Trademarks. Use of the CIMA Trademarks by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] in conjunction with the manufacture, use, and sale of the Product and all goodwill related thereto shall inure to the benefit of CIMA for purposes of building the longevity and extent of use of the CIMA Trademarks. (c) [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall be solely responsible for filing, prosecuting, and maintaining all trademarks it develops or owns for the Products (the "[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Trademarks"), and [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall pay the costs associated therewith. All registrations, variations, logos, goodwill and other rights under or acquired through use of the [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Trademarks shall accrue and belong to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] CIMA shall have no rights to use the [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Trademarks, including, without limitation, in connection with any product subsequently developed by CIMA. CIMA will not use in its business, in or outside of the Territory, any other mark or name which is similar to or nearly resembles the [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Trademarks in use by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] in a manner that is likely to cause deception or confusion. CIMA recognizes that [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] is the owner of all of the [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Trademarks used in commerce to indicate the source of the Product and agrees that the [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Trademarks shall remain vested in [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] both during the term of this -31- Agreement and thereafter. CIMA shall not contest the validity of the [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Trademarks or [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]'s ownership of the [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Trademarks. Use of the [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Trademarks by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] in conjunction with the manufacture, use, and sale of the Product and all goodwill related thereto shall inure to the benefit of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] for purposes of building the longevity and extent of use of the [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Trademarks. (d) [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] and CIMA agree that, where applicable, all packaging of the Products shall identify (i) the number of the CIMA Patents and CIMA as the owner thereof and (ii) [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] as the owner of the [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Trademarks. (e) Any improvements to the CIMA Technology (whether or not patentable) shall be owned solely by CIMA. (f) Any improvements to the [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Technology (whether or not patentable) shall be owned solely by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]. (g) [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall have full ownership rights to the Products with the exception of any improvements to the CIMA Technology as contemplated by Section 9.11(e). (h) Any provisions in this Agreement to the contrary notwithstanding, [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED -32- SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] acknowledges that, for all purposes, CIMA is the owner of the CIMA Technology and CIMA acknowledges that, for all purposes, [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] is the owner of the [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Technology. 9.12 Infringement; Enforcement of Proprietary Rights. (a) Infringement of Patent Rights. Each party shall promptly notify the other of any alleged infringement by third parties of any CIMA Patent and provide any information available to that party relating to such alleged infringement. CIMA shall have the responsibility to investigate such alleged infringement and act diligently, [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], to end any infringement of such rights that materially affect [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]'s rights pursuant to this Agreement, including, but not limited to, bringing suit against such third party infringer. In the event that CIMA does not bring suit against such third party infringer, [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] may, at its own expense, bring suit against such third party infringer on CIMA's behalf. (b) Procedures. No settlement, consent judgment or other voluntary final disposition of any suit contemplated by Section 9.12(a) may be entered into without the consent of each party, which consent shall not be unreasonably withheld or delayed. Any recovery of damages in any such suit shall be retained by the party bearing the costs of such suit. In the event of any infringement suit against a third party brought by either party pursuant to this Section 9.12, the party not bringing such suit shall cooperate in all respects, execute any documents reasonably necessary to permit the other party to prosecute such suit, and to the extent reasonable shall make available its employees and relevant records to provide evidence for such suit. (c) Infringement of Third Party Rights. If, during the term of this Agreement, [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]'s marketing or selling of the Product hereunder infringes on a third party patent based upon claims that dominate claims in the CIMA Patents, within [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] after notice by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], CIMA shall use its reasonable best efforts to procure for [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH -33- THE SECURITIES AND EXCHANGE COMMISSION.***] the right to exercise all rights licensed under this Agreement without any additional payment therefor by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]. 9.13 Supply of Products. CIMA shall maintain sufficient capacity throughout the term of this Agreement to meet the requirements of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] for the supply of Products hereunder. 9.14 Liability Insurance. At and after each Launch, CIMA shall use its best efforts to obtain and carry in full force and effect product liability insurance in respect of the applicable Product in the amount of $1,000,000 per occurrence and in the aggregate and policies of $10,000,000 of excess coverage in the aggregate. At and after each Launch, [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall use its best efforts to obtain and carry in full force and effect product liability insurance in respect of the applicable Product in the amount of $1,000,000 per occurrence and in the aggregate and policies of $10,000,000 of excess coverage in the aggregate. 9.15 Referral of Orders and Inquiries. CIMA shall refer all Persons sending orders or making inquiries regarding the Products within the Territory to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] and shall promptly notify [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] of the name of each such Person and the nature of the inquiry of such Person. 9.16 Deemed Breach of Covenant. Neither CIMA nor [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall be deemed to be in breach of any covenant contained in this Section 9 if such party's deemed breach is the result of any action or inaction on the part of the other party. SECTION 10 INDEMNIFICATION 10.1 Indemnification. (a) CIMA shall indemnify, defend and hold [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] (and its directors, officers, employees, and Affiliates) harmless from and against any and all Damages incurred or suffered by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE -34- SECURITIES AND EXCHANGE COMMISSION.***] (and its directors, officers, employees, and Affiliates) as a consequence of: (i) any breach of any representation or warranty made by CIMA in this Agreement or any agreement, instrument or document delivered by CIMA pursuant to the terms of this Agreement; (ii) any failure to perform duly and punctually any covenant, agreement or undertaking on the part of CIMA contained in this Agreement; (iii) any act or omission of CIMA with respect to the operation of CIMA's business, or the handling, manufacturing or development of the Products by CIMA; or (iv) the infringement of the Licensed Assets, the Patent or the Technology of any patent, trademark, copyright, trade secret or other intellectual property right of any person other than CIMA or [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]. (b) [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall indemnify, defend and hold CIMA (and its directors, officers, employees, and Affiliates) harmless from and against any and all Damages incurred or suffered by CIMA (and its directors, officers, employees, and Affiliates) as a consequence of: (i) any breach of any representation or warranty made by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] in this Agreement or any agreement, instrument or document delivered by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] pursuant to the terms of this Agreement; (ii) any failure to perform duly and punctually any covenant, agreement or undertaking on the part of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] contained in this Agreement; or (iii) [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] with respect to the operation of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]'s business or the handling, marketing or sale -35- of the Products by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], including [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]'s supply of API hereunder. 10.2 Notice and Opportunity To Defend. Promptly after receipt by a party hereto of notice of any claim which could give rise to a right to indemnification pursuant to Section 10.1. such party (the "Indemnified Party") shall give the other party (the "Indemnifying Party") written notice describing the claim in reasonable detail. The failure of an Indemnified Party to give notice in the manner provided herein shall not relieve the Indemnifying Party of its obligations under this Section, except to the extent that such failure to give notice materially prejudices the Indemnifying Party's ability to defend such claim. The Indemnifying Party shall have the right, at its option, to compromise or defend, at its own expense and by its own counsel, any such matter involving the asserted liability of the party seeking such indemnification. If the Indemnifying Party shall undertake to compromise or defend any such asserted liability, it shall promptly (and in any event not less than 10 days after receipt of the Indemnified Party's original notice) notify the Indemnified Party in writing of its intention to do so, and the Indemnified Party agrees to cooperate fully with the Indemnifying Party and its counsel in the compromise or defense against any such asserted liability. All reasonable costs and expenses incurred in connection with such cooperation shall be borne by the Indemnifying Party. If the Indemnifying Party elects not to compromise or defend the asserted liability, fails to notify the Indemnified Party of its election to compromise or defend as herein provided, fails to admit its obligation to indemnify under this Agreement with respect to the claim, or, if in the reasonable opinion of the Indemnified Party, the claim could result in the Indemnified Party becoming subject to injunctive relief or relief other than the payment of money damages that could materially adversely affect the ongoing business of the Indemnified Party in any manner, the Indemnified Party shall have the right, at its option, to pay, compromise or defend such asserted liability by its own counsel and its reasonable costs and expenses shall be included as part of the indemnification obligation of the Indemnifying Party hereunder. Notwithstanding the foregoing, neither the Indemnifying Party nor the Indemnified Party may settle or compromise any claim over the objection of the other; provided, however, that consent to settlement or compromise shall not be unreasonably withheld. In any event, the Indemnified Party and the Indemnifying Party may participate, at their own expense, in the defense of such asserted liability. If the Indemnifying Party chooses to defend any claim, the Indemnified Party shall make available to the Indemnifying Party any books, records or other documents within its control that are necessary or appropriate for such defense. Notwithstanding anything to the contrary in this Section 10.2, (i) the party conducting the defense of a claim shall (A) keep the other party informed on a reasonable and timely basis as to the status of the defense of such claim (but only to the extent such other party is not participating jointly in the defense of such claim), and (B) conduct the defense of such claim in a prudent manner, and (ii) the Indemnifying Party shall not cease to defend, settle or otherwise dispose of any claim without the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld). 10.3 Indemnification Payment Obligation. No Indemnifying Party will have any obligations under Sections 10.1(a) or 10.1(b) until the cumulative aggregate amount of Damages -36- incurred or suffered by the Indemnified Party which the Indemnifying Party is otherwise subject to under this Agreement exceeds [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] at which time the entire cumulative aggregate amount of such Damages shall be covered. The provisions of this Section 10.3 shall not limit or otherwise affect the obligations of any Indemnifying Party under any other Section of this Agreement. 10.4 Indemnification Payment Adjustments. The amount of any Damages for which indemnification is provided under this Section 10 shall be reduced to take account of any net tax benefit and shall be increased to take account of any net tax detriment arising from the incurrence or payment of any such Damages or from the receipt of any such indemnification payment and shall be reduced by the insurance proceeds received and any other amount recovered, if any, by the Indemnified Party with respect to any Damages; provided, however, that an Indemnified Party shall not be subject to an obligation to pursue an insurance claim relating to any Damages for which indemnification is sought hereunder. If any Indemnified Party shall have received any payment pursuant to this Section 10 with respect to any Damages and shall subsequently have received insurance proceeds or other amounts with respect to such Damages, then such Indemnified Party shall pay to the Indemnifying Party an amount equal to the difference (if any) between (i) the sum of the amount of those insurance proceeds or other amounts received and the amount of the payment by such Indemnifying Party pursuant to this Section 10 with respect to such Damages and (ii) the amount necessary to fully and completely indemnify and hold harmless such Indemnified Party from and against such Damages; provided, however, in no event will such Indemnified Party have any obligation pursuant to this sentence to pay to such Indemnifying Party an amount greater than the amount of the payment by such Indemnifying Party pursuant to this Section 10 with respect to such Damages. 10.5 Indemnification Payment. Upon the final determination of liability and the amount of the indemnification payment under this Section 10, the appropriate party shall pay to the other, as the case may be, within 10 business days after such determination, the amount of any claim for indemnification made hereunder. 10.6 Survival. The provisions of Section 10 shall survive any termination of this Agreement. Each Indemnified Party's rights under Section 10 shall not be deemed to have been waived or otherwise affected by such Indemnified Party's waiver of the breach of any representation, warranty, agreement or covenant contained in or made pursuant this Agreement, unless such waiver expressly and in writing also waives any or all of the Indemnified Party's right under Section 10. SECTION 11 TERMINATION 11.1 Termination. The term of this Agreement shall begin upon the Closing Date and, unless sooner terminated as hereinafter provided, shall end with respect to each Product upon the expiration of the last CIMA Patent applicable to such Product to expire or, if later, the expiration -37- of any other patent resulting from the development process contemplated hereby. Notwithstanding the foregoing, this Agreement may be terminated as follows: (a) Termination for Insolvency. If either [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] or CIMA (i) makes a general assignment for the benefit of creditors or becomes insolvent; (ii) files an insolvency petition in bankruptcy; (iii) petitions for or acquiesces in the appointment of any receiver, trustee or similar officer to liquidate or conserve its business or any substantial part of its assets; (iv) commences under the laws of any jurisdiction any proceeding involving its insolvency, bankruptcy, reorganization, adjustment of debt, dissolution, liquidation or any other similar proceeding for the release of financially distressed debtors; or (v) becomes a party to any proceeding or action of the type described above in (iii) or (iv) and such proceeding or action remains undismissed or unstayed for a period of more than 60 days, then the other party may by written notice terminate this Agreement in its entirety with immediate effect. (b) Termination for Default. [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] and CIMA each shall have the right to terminate this Agreement for default upon the other's failure to comply in any material respect with the terms and conditions of this Agreement. At least ninety (90) days prior to any such termination for default, the party seeking to so terminate shall give the other written notice of its intention to terminate this Agreement in accordance with the provisions of this Section 11.1(b), which notice shall set forth the default(s) which form the basis for such termination. If the defaulting party fails to correct such default(s) within ninety (90) days after receipt of notification, then such party immediately may terminate this Agreement. This Section 11.1(b) shall not be exclusive and shall not be in lieu of any other remedies available to a party hereto for any default hereunder on the part of the other party. (c) Unilateral Termination by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Prior to Launch. Prior to the Launch of any Product, [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] will have the right to unilaterally terminate this Agreement either in its entirety or with respect to one or more specific Products at any time and in its sole discretion upon the delivery of written notice to CIMA. Any provision herein notwithstanding, in the event that [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] terminates this Agreement pursuant to this Section 11.1(c), [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]'s sole obligation under this Agreement shall be to reimburse CIMA for the costs and expenses actually incurred by CIMA (i) in performing the development activities set forth on Schedule 4.1(b) hereto in respect of such -38- terminated Product(s) prior to CIMA's receipt of such notice of termination and (ii) in connection with the orderly close out of such development activities; provided, however, that [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]'s reimbursement obligations pursuant to this Section 11.1(c) in respect of any terminated Product(s) shall exclude the costs and expenses incurred by CIMA in connection with any Development Phase for which [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] has made a Development Fee Payment and shall in no event exceed the Development Fee Payment associated with the Development Phase on which CIMA is then working, as set forth on Schedule 4.1(b). (d) Unilateral Termination by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] After Launch. Following the Launch of any Product, [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] will have the right to unilaterally terminate this Agreement either in its entirety or with respect to one or more specific Products and in its sole discretion upon the delivery of written notice to CIMA. Termination of the Agreement either in its entirety or with respect to one or more specific Products will be effective with respect to such Product or Products one hundred eighty (180) days following such written notice to CIMA. (e) Continuing Obligations. Termination of this Agreement for any reason shall not relieve the parties of any obligation accruing prior thereto with respect to any Product and any ongoing obligations hereunder with respect to the remaining Products and shall be without prejudice to the rights and remedies of either party with respect to any antecedent breach of the provisions of this Agreement. Without limiting the generality of the foregoing, no termination of this Agreement, whether by lapse of time or otherwise, shall serve to terminate the obligations of the parties hereto under Sections 5.8, 9.3, 9.4, 9.5, 9.7, 9.9(a), 10, 11.1(c), 11.1(d), 11.1(e) and 12 hereof, and such obligations shall survive any such termination. SECTION 12 MISCELLANEOUS 12.1 Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns; provided, however, that neither CIMA nor [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] may assign any of its rights, duties or obligations hereunder without the prior written consent of the other, which consent shall not be unreasonably withheld, except that no prior written consent shall be required in the event that a third party acquires substantially all -39- of the assets or outstanding shares of, or merges with, [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] or CIMA, as the case may be. 12.2 Notices. All notices or other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand or facsimile and confirmed in writing, or mailed first class, postage prepaid, by registered or certified mail, return receipt requested (mailed notices and notices sent by facsimile shall be deemed to have been given on the date received) as follows: If to CIMA, as follows: CIMA LABS INC 10000 Valley View Road Eden Prairie, MN 55344 Facsimile: 952-947-8770 Attention: Chief Executive Officer If to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], as follows: [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Attention: General Counsel with a copy to: [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] or in any case to such other address or addresses as hereafter shall be furnished as provided in this Section 12.2 by any party hereto to the other party. 12.3 Waiver; Remedies. Any term or provision of this Agreement may be waived at any time by the party entitled to the benefit thereof by a written instrument executed by such party. No delay on the part of CIMA or [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of either CIMA or [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] of any right, power or privilege hereunder operate as a waiver of any other right, power or privilege hereunder nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder. The indemnification provided in Section 10 shall be the sole remedy available for any Damages arising out of or in connection with this Agreement except for any rights or remedies which the parties hereto may otherwise have in equity. -40- 12.4 Survival of Representations. Each of the representations and warranties made in this Agreement shall continue for the term of this Agreement and shall thereafter be extinguished. 12.5 Independent Contractors. The parties hereto are independent contractors and nothing contained in this Agreement shall be deemed to create the relationship of partners, joint venturers, or of principal and agent, franchisor and franchisee, or of any association or relationship between the parties other than as expressly provided in this Agreement. [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] acknowledges that it does not have, and [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall not make representations to any third party, either directly or indirectly, indicating that [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] has any authority to act for or on behalf of CIMA or to obligate CIMA in any way whatsoever. CIMA acknowledges that it does not have, and it shall not make any representations to any third party, either directly or indirectly, indicating that it has any authority to act for or on behalf of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] or to obligate [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] in any way whatsoever. 12.6 Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements including, without limitation the Feasibility Agreement entered by CIMA and [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] on November 30, 2001, or understandings of the parties relating thereto. 12.7 Amendment. This Agreement may be modified or amended only by written agreement of the parties hereto. 12.8 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute a single instrument. 12.9 Governing Law. This Agreement shall be governed and construed in accordance with the laws of the State of New York excluding any choice of law rules which may direct the application of the law of another state. 12.10 Arbitration. Any dispute, controversy or claim arising out of or in connection with this Agreement shall be determined and settled by arbitration in New York, New York, pursuant to the Rules of Arbitration then in effect of the American Arbitration Association. Any award rendered shall be final and conclusive upon the parties and a judgment thereon may be entered in a court having competent jurisdiction. Any arbitration hereunder shall be -41- (i) submitted to an arbitration tribunal comprised of three (3) independent members knowledgeable in the pharmaceutical industry, one of whom shall be selected by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], one of whom shall be selected by CIMA, and one of whom shall be selected by the other two arbitrators; (ii) allow for the parties to request discovery pursuant to the rules then in effect under the Federal Rules of Civil Procedure for a period not to exceed 90 days; and (iii) require the award to be accompanied by findings of fact and a statement of reasons for the decision. Each party shall bear its own costs and expenses, including attorney's fees incurred in any dispute which is determined and/or settled by arbitration pursuant to this Section. Except where clearly prevented by the area in dispute, both parties agree to continue performing their respective obligations under this Agreement while the dispute is being resolved. Arbitration shall not prevent any party from seeking injunctive relief where such remedy is an appropriate form of remedy under the circumstances. 12.11 Captions. All section titles or captions contained in this Agreement, in any Schedule referred to herein or in any Exhibit annexed hereto, and the table of contents, if any, to this Agreement are for convenience only, shall not be deemed a part of this Agreement and shall not affect the meaning or interpretation of this Agreement. 12.12 No Third-Party Rights. No provision of this Agreement shall be deemed or construed in any way to result in the creation of any rights or obligation in any Person not a party or not affiliated with a party to this Agreement. 12.13 Severability. If any provision of this Agreement is found or declared to be invalid or unenforceable by any court or other competent authority having jurisdiction, such finding or declaration shall not invalidate any other provision hereof, and this Agreement shall thereafter continue in full force and effect. 12.14 Attachments. All Schedules, Exhibits and other attachments to this Agreement are by this reference incorporated herein and made a part of this Agreement. 12.15 Force Majeure. In the event that a party is prevented from carrying out its obligations under this Agreement by an event of Force Majeure, then such party's performance of its obligations under this Agreement shall be excused during the period of such event and for a subsequent reasonable period of recovery. 12.16 Consents. Where this Agreement requires the consent of any party and specifies that such consent is not to be unreasonably withheld, the determination of whether such consent may be withheld shall be based upon the facts and circumstances of the business of the party whose consent is requested, it being understood that it is reasonable to withhold the requested consent if granting the requested consent would have an adverse impact on such party's business activities. -42- IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered on the day and year first above written. CIMA LABS INC. By: /s/ John Hontz ------------------------------------- Name: John Hontz Title: Chief Operating Officer [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] By: /s/ [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Name: [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Title: [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Schedule 3.1 to Master Development, License and Supply Agreement Master Development Schedule [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]. Schedule 4.1(a) to Master Development, License and Supply Agreement Royalty Rates In any Year, [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall pay to CIMA a royalty in the amount of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] of the Annual Net Sales, if any, actually recorded during such Year. [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall pay the royalty payment due in respect of any Quarter (a "Quarterly Installment") by remitting a check, together with the report required by Section 4.3, to CIMA within 60 days after the end of each Quarter during such Year. For purposes of determining the royalty payment pursuant to this Schedule 4.1(a) the amount of each Quarterly Installment shall be calculated based on actual Net Sales recorded during such Quarter. Schedule 4.1(b) to Master Development, License and Supply Agreement Development Fee And Milestone Payments (a) Subject to paragraph (b) of this Schedule 4.1(b), [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall pay to CIMA any of the milestone payments set forth below (each a "Milestone Payment") promptly after CIMA demonstrates the Satisfactory Completion (as defined below) of the research and development phases (each a "Development Phase") set forth opposite such Milestone Payment: [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] (b) Promptly after the completion of each Development Phase, CIMA shall notify [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] of such completion and shall provide [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] sufficient written materials (a "Development Phase Notice") to allow [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] to evaluate whether or not such Development Phase has been Satisfactorily Completed. [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] (c) In addition to the Milestone Payments described above, in connection with each Product, [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall pay CIMA an amount equal to (i) [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] in the event the actual Completion Date for such Product precedes the target Completion Date therefor set forth on Schedule 3.1 by at least [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] or (ii) [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] in the event the actual Completion Date for such Product precedes the target Completion Date therefor set forth on Schedule 3.1 by at least [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]. (d) [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall also pay to CIMA the development fee payments set forth below (each a "Development Fee Payment") within thirty (30) days of CIMA's invoice for development work performed in accordance with this Agreement during the applicable Quarter.

- ------------------------------------------------- ------------------------- TIME PERIOD DEVELOPMENT FEE - ------------------------------------------------- ------------------------- [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Quarter ending December 31, 2001 $500,000 [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] - ---------------------------------------------------------------------------

Schedule 5.1(b) to Master Development License and Supply Agreement [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Purchase Order [See Attached] - ---------------------------------------------------- ------------------------------- ---------------------------------- [***CONFIDENTIAL TREATMENT REQUESTED, PORTION PURCHASE ORDER NO. OMITTED FILED SEPARATELY WITH THE SECURITIES AND PURCHASE ORDER DATE EXCHANGE COMMISSION.***] PAGE ------------------------------------------ ------------------------------------------- VENDOR: SHIP TO: ------------------------------------------ ------------------------------------------- ORIGINAL COPY - ----------------- ------------- ------------------------------------------- ------------------------------------------- SHIP VIA TAXABLE TERMS DESCRIPTION FOB DESCRIPTION - ----------------- ------------- ------------------------------------------- ------------------------------------------- RESOURCE NUMBER RESOURCE DESCRIPTION QUANTITY UM UNIT PRICE AMOUNT - --------------------------- ------------------------------- --------------- ---------- ----------------- -------------- THE TERMS AND CONDITIONS ON THE REVERSE SIDE ARE PART OF THIS PURCHASE ORDER. BY: __________________________________ TERMS AND CONDITIONS 1. Definitions. (a) Buyer means [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] (b) Seller means any person, firm, or corporation to whom this Purchase Order is directed. 2. Terms: This Purchase Order constitutes any order to buy goods, equipment, material, supplies, or services according to the description and other terms set forth on its face and reverse side. No additional or different terms offered by the Seller shall be or become part of this order, nor shall this order be modified without the express written approval of Buyer. 3. Shipping Instructions: All shipments must contain packing lists giving descriptions of material, quantity and purchase order number. If shipment is not made F.O.B. destination, the original bill of lading must be furnished with invoices. Buyer's count will be accepted as final on all shipments not accompanied by packing lists. 4. Risk of Loss: The risk of loss from any casualty to the goods regardless of the cause, shall be on Seller until the goods have been received, inspected and accepted by the company. 5. Delays in Delivery: Time is of the essence. If Seller for any reason does not comply with the buyer's delivery schedule, Buyer in addition to remedies provided by law, at its option may either approve and revise delivery schedule or, may terminate the order without liability on account thereof. 6. Warranty: Seller expressly warrants that all goods, equipment, material, supplies or services covered by this order will conform to the specification, drawings, samples or other description furnished or specified by the Buyer, shall be of good material and workmanship and free from defects. 7. Rejections: If any of the goods, equipment, material or supplies are found within a reasonable time after delivery to the Buyer to be defective in material or workmanship or otherwise not in conformity with the requirements of the order, Buyer, in addition to any other rights which it may have under warranties or otherwise, shall have the right to reject and return such goods at Seller's expense, such goods not to be replaced without suitable written authorization from Buyer. 8. Patent Infringements: Seller shall pay costs and damages finally awarded in any suit against the Buyer or its vendees to the extent based upon a finding that the design or construction of articles as furnished infringes a United States Patent (except infringement occurring as a result of incorporating a design or modification at the request of Buyer); provided the Buyer promptly notifies Seller of any charge of such infringement and the Seller is given the right at its expense to settle such charge and to defend or control the defense of any suit based upon such charge, this paragraph sets forth the Seller's exclusive liability with respect to patents. 9. Compliance with Laws: Seller shall comply with all applicable State, Federal and local laws, rules and regulations. 10a. Termination: The Buyer may terminate work on this order for its own convenience in whole or in part by written or telegraphic notice at any time. In the event, any claim arising out of such termination shall be settled by negotiation on the basis of the Seller's costs and commitments properly incurred or made, with due allowance for salvage value. 10b. If the Seller ceases to conduct its operations in the normal course of business including liability to meet its obligations as they mature of if any proceeding under the bankruptcy or insolvency laws is brought by or against the Seller, a receiver for the Seller is appointed or applied for or an assignment for the benefit of Creditors is made by the Seller, Buyer may terminate order without liability except for the deliveries previously made or for goods covered by the order then completed and subsequently delivered in accordance with the terms of the order. 11. Nondiscrimination in Employment. Seller will not discriminate against any employee or applicant for employment because of race, religion, color, sex, age, or national origin. 12. Non-Waiver. Any waiver of strict compliance with the provisions of this order shall not be deemed a waiver of the Buyer's rights to insist upon strict compliance thereafter. 13. Subcontracting. In the event the Seller subcontracts all or any part of this order, Seller remains completely responsible for price, delivery and quality. Schedule 5.3 to Master Development, License and Supply Agreement [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Schedule 5.4(d) to Master Development License and Supply Agreement Quality Assurance Addendum [To be mutually agreed by parties on or prior to each Launch] EX-99.1 4 c71450a1exv99w1.txt EX-99.1 CERTIFICATION OF CHIEF EXECUTIVE OFFICER EXHIBIT 99.1 CIMA LABS INC. CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with Amendment No. 1 on Form 10-K/A to the Annual Report of CIMA LABS INC. (the "Company") for the fiscal year ended December 31, 2001 filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, John M. Siebert, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ John M. Siebert ------------------------------------- John M. Siebert, President and Chief Executive Officer (Principal Executive Officer) EX-99.2 5 c71450a1exv99w2.txt EX-99.2 CERTIFICATION OF CHIEF FINANCIAL OFFICER EXHIBIT 99.2 CIMA LABS INC. CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with Amendment No. 1 on Form 10-K/A to the Annual Report of CIMA LABS INC. (the "Company") for the fiscal year ended December 31, 2001 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, David A. Feste, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ David A. Feste ------------------------------- David A. Feste, Chief Financial Officer (Principal Financial Officer) -----END PRIVACY-ENHANCED MESSAGE-----

EX-10.25

                                                                   EXHIBIT 10.25



                                                                  EXECUTION COPY











                MASTER DEVELOPMENT, LICENSE AND SUPPLY AGREEMENT


                                 by and between


                                 CIMA LABS INC.


                                       and


          [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
          SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]


                          dated as of December 18, 2001





                               TABLE OF CONTENTS




                                                                                                                PAGE
                                                                                                       

SECTION 1             DEFINITIONS................................................................................1

SECTION 2             GRANT OF LICENSES; LICENSE OPTION..........................................................5

         2.1      Grant of Licenses..............................................................................5

         2.2      Sublicenses....................................................................................6

         2.3      Marketing, Distribution and Sale...............................................................6

SECTION 3             PRODUCT DEVELOPMENT........................................................................6

         3.1      Obligations of CIMA............................................................................6

         3.2      Obligations of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.***]...............................................7

         3.3      License of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH
                  THE SECURITIES AND EXCHANGE COMMISSION.***] Technology.........................................7

         3.4      Additional Products............................................................................7

         3.5      Regulatory Matters.............................................................................7

SECTION 4             ROYALTY, COST OF GOODS AND MILESTONE PAYMENTS..............................................7

         4.1      Royalty and Milestone Payments.................................................................7

         4.2      Records and Audit..............................................................................8

         4.3      Quarterly Reports of Royalties.................................................................9

         4.4      Annual Reports of Costs of Goods...............................................................9

         4.5      Sales and Marketing Estimates..................................................................9

SECTION 5             SUPPLY OF PRODUCT..........................................................................9

         5.1      Supply of Product..............................................................................9

         5.2      Identification................................................................................10

         5.3      Trade, Sample and Placebo Product Price.......................................................11

         5.4      Forecasts, Delivery and Quality...............................................................11

         5.5      Rejection and Replacement.....................................................................11

         5.6      Invoice and Payment...........................................................................12

         5.7      Supply Disruption; Alternate Manufacturing Site...............................................12

         5.8      CIMA's Obligation to Continue Manufacture.....................................................12

SECTION 6             CONDITIONS PRECEDENT TO THE CLOSING; CLOSING DATE.........................................13

         6.1      Conditions Precedent to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
                  SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]'s Obligations.....................13





                               TABLE OF CONTENTS
                                  (continued)



                                                                                                               PAGE
                                                                                                      
         6.2      Conditions Precedent to CIMA's Obligations....................................................13

         6.3      Closing Date..................................................................................14

SECTION 7             REPRESENTATIONS AND WARRANTIES OF CIMA....................................................14

         7.1      Organization, Power and Authority.............................................................14

         7.2      Due Authority; No Breach......................................................................15

         7.3      Intellectual Property.........................................................................15

         7.4      Technology Rights.............................................................................15

         7.5      Litigation....................................................................................16

         7.6      Governmental Approval.........................................................................16

         7.7      Brokerage.....................................................................................16

         7.8      Supply........................................................................................16

SECTION 8             REPRESENTATIONS AND WARRANTIES OF [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
                      OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***].................16

         8.1      Organization, Power and Authority.............................................................16

         8.2      Due Authority; No Breach......................................................................16

         8.3      Brokerage.....................................................................................17

         8.4      Litigation....................................................................................17

         8.5      Governmental Approval.........................................................................17

SECTION 9             ADDITIONAL COVENANTS AND AGREEMENTS OF THE PARTIES........................................17

         9.1      Governmental Filings..........................................................................17

         9.2      Compliance with Law...........................................................................18

         9.3      Recall........................................................................................18

         9.4      Confidentiality...............................................................................18

         9.5      Expenses......................................................................................19

         9.6      Reasonable Efforts............................................................................19

         9.7      Publicity.....................................................................................19

         9.8      Cooperation...................................................................................19

         9.9      Competition; No Sale for Resale...............................................................20

         9.10     Conflicting Rights............................................................................20

         9.11     Patent and Trademark Maintenance..............................................................20


                                      -2-




                               TABLE OF CONTENTS
                                  (continued)



                                                                                                               PAGE
                                                                                                      
         9.12     Infringement; Enforcement of Proprietary Rights...............................................22

         9.13     Supply of Products............................................................................22

         9.14     Liability Insurance...........................................................................22

         9.15     Referral of Orders and Inquiries..............................................................22

         9.16     Deemed Breach of Covenant.....................................................................23

SECTION 10            INDEMNIFICATION...........................................................................23

         10.1     Indemnification...............................................................................23

         10.2     Notice and Opportunity To Defend..............................................................23

         10.3     Indemnification Payment Obligation............................................................24

         10.4     Indemnification Payment Adjustments...........................................................24

         10.5     Indemnification Payment.......................................................................25

         10.6     Survival......................................................................................25

SECTION 11            TERMINATION...............................................................................25

         11.1     Termination...................................................................................25

SECTION 12            MISCELLANEOUS.............................................................................27

         12.1     Successors and Assigns........................................................................27

         12.2     Notices.......................................................................................27

         12.3     Waiver; Remedies..............................................................................28

         12.4     Survival of Representations...................................................................28

         12.5     Independent Contractors.......................................................................28

         12.6     Entire Agreement..............................................................................28

         12.7     Amendment.....................................................................................28

         12.8     Counterparts..................................................................................28

         12.9     Governing Law.................................................................................28

         12.10    Arbitration...................................................................................28

         12.11    Captions......................................................................................29

         12.12    No Third-Party Rights.........................................................................29

         12.13    Severability..................................................................................29

         12.14    Attachments...................................................................................29

         12.15    Force Majeure.................................................................................29

         12.16    Consents......................................................................................29



                                      -3-





                               TABLE OF CONTENTS
                                  (continued)



                                                                                                               PAGE
                                                                                                      
SCHEDULES
Schedule 3.1......Master Development Schedule
Schedule 4.1(a)...Royalty Rates
Schedule 4.1(b)...Development Fee and Milestone Payments
Schedule 5.1(b)...[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Purchase Order
Schedule 5.3......Cost of Goods
Schedule 5.4(d)...Quality Assurance Addendum





                                      -4-






                MASTER DEVELOPMENT, LICENSE AND SUPPLY AGREEMENT

         This MASTER DEVELOPMENT, LICENSE AND SUPPLY AGREEMENT (this
"Agreement"), dated as of December 18, 2001, is by and between CIMA LABS INC., a
Delaware corporation ("CIMA"), and [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], a
Delaware corporation ("[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]").

                               W I T N E S S E T H

         WHEREAS, CIMA is engaged, among other things, in the business of
research, development, manufacturing and commercialization of pharmaceutical
products through its proprietary drug delivery technologies;

         WHEREAS, [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] is engaged, among
other things, in the business of marketing and selling of pharmaceutical
products;

         WHEREAS, subject to the terms and conditions set forth in this
Agreement, CIMA and [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] wish to collaborate
in the development, registration, marketing and sale of certain prescription
products; and

         WHEREAS, subject to the terms and conditions set forth in this
Agreement, CIMA wishes to license to [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] and [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] wishes to license
from CIMA rights to CIMA's DuraSolv(TM), PakSolv(TM) and OraSolv(TM)
technologies for use with such prescription products.

         NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:


                                    SECTION 1

                                   DEFINITIONS

         For purposes of this Agreement, the following terms shall have the
meanings set forth below:








         "Activities" shall mean the development, manufacturing, marketing,
selling and distributing of the Products in the Territory as contemplated by
this Agreement.

         "Affiliates" shall mean, with respect to any Person, any Persons
directly or indirectly controlling, controlled by, or under common control with,
such other Person. For purposes hereof, the term "controlled" (including the
terms "controlled by" and "under common control with"), as used with respect to
any Person, shall mean the direct or indirect ability or power to direct or
cause the direction of management policies of such Person or otherwise direct
the affairs of such Person, whether through ownership of voting securities or
otherwise.

         "Annual Net Sales" shall mean, for any Year, the Net Sales for such
Year.

         "API" for each Product shall mean the active ingredient specified on
Schedule 3.1 hereto with respect to such Product.

         "cGMP" shall mean current Good Manufacturing Practices, as determined
by the FDA from time to time.

         "CIMA" shall have the meaning given in the preamble and shall include
its Affiliates.

         "CIMA Intellectual Property" shall mean, collectively, (i) the CIMA
Patents, (ii) the CIMA Technology, (iii) the CIMA Trademarks, and (iv) the CIMA
Marketing Materials.

         "CIMA Marketing and Market Research Data" shall mean, with respect to
the Products, all CIMA marketing data, studies, market research data and reports
that pertain to the Products, and any further market research data that pertains
to the Products whose disclosure to [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] is not prohibited by confidentiality obligations under
agreements, dated prior to the date hereof, between CIMA and Persons who are not
Affiliates of CIMA.

         "CIMA Marketing Materials" shall mean all labeling, marketing and
promotional materials and inserts currently used by CIMA that are useful in
connection with the Activities.

         "CIMA Patents" shall mean United States patent nos. 6,024,981 and
6,221,392 (Rapidly Dissolving Robust Dosage Form) and any patents and patent
applications resulting therefrom, including any extension, reissue, renewal,
reexamination or continuation-in-part of such patent or patent application. To
the extent that the OraSolv(R) and PakSolv(TM) technology is used with respect
to any Product pursuant to Schedule 3.1, the term "CIMA Patents" shall, with
respect to such Product, be deemed to include United States patent nos.
5,178,878, 6,155,423, 6,269,615 and 6,311,462 and any patents and patent
applications resulting therefrom, including any extension, reissue, renewal,
reexamination or continuation-in-part of such patent or patent application.

         "CIMA Technology" shall mean all of the CIMA Patents and all of CIMA's
trade secrets, technology, know-how and all other information necessary for the
manufacture of the Products including, without limitation, that relate to CIMA's
DuraSolv(R), PakSolv(TM) and OraSolv(R) technologies.


                                      -2-






         "CIMA Trademarks" shall mean the CIMA(R), DuraSolv(R), PakSolv(TM) ,
OraSolv(R) and Meltabs(R) trademarks.

         "Closing Date" shall have the meaning given in Section 6.3 hereof.

         "Completion Date" shall mean, with respect to any Product, the date on
which [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***] determines, in its reasonable
discretion, such Product is ready for submission to the FDA with three months
stability data on the pilot scale (equal to [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***], whichever is greater).

         "Cost of Goods" shall have the meaning set forth on Schedule 5.3
hereto.

         "Damages" shall mean any and all actions, costs, losses, claims,
liabilities, fines, penalties, demands, damages and expenses, court costs, and
reasonable fees and disbursements of counsel, consultants and expert witnesses
incurred by a party hereto (including interest which may be imposed in
connection therewith), but excluding any punitive, exemplary or consequential
damages.

         "Defective" shall mean, as to the Product, the failure of such to
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] conform to the Specifications, this
Agreement and all applicable law, including, without limitation, the FFDCA and
the PDMA.

         "Development Schedule" shall mean the schedule of development
activities set forth on Schedule 3.1 hereto.

         "FDA" shall mean the United States Food and Drug Administration.

         "FFDCA" the United State Federal Food, Drug and Cosmetic Act, as
amended from time to time, together with any rules or regulations promulgated
thereunder.

         "Force Majeure" shall mean acts of God, explosion, fire, flood,
tornadoes, thunderstorms, earthquake or tremor, war whether declared or not,
terrorism, civil strife, riots, embargo, losses or shortages of power, labor
stoppage, substance shortages, damage to or loss of product in transit, currency
restrictions, or events caused by reason of laws, regulations or orders by any
government, governmental agency or instrumentality or by any other supervening
or unforeseeable circumstances reasonably beyond the control of each party.

         "GAAP" shall mean generally accepted accounting practices in the United
States as in effect from time to time.

         "Indemnified Party" shall have the meaning given in Section 10.2
hereof.

         "Indemnifying Party" shall have the meaning given in Section 10.2
hereof.


                                      -3-





         "Latent Defect" shall mean a defect that results in a recall under
Section 9.3.

         "Launch or Launched" shall mean, with respect to each Product, the date
when such Product is first made commercially available by [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***]

         "Licensed Assets" shall have the meaning set forth in Section 2.1
hereof.

         "Net Sales" shall mean, with respect to the Products, the gross amount
invoiced to unrelated third parties for the Products in the Territory, less:

                  (a) trade and reasonable and customary cash discounts allowed;

                  (b) refunds, rebates, chargebacks, retroactive price
         adjustments and any other allowances which effectively reduce the net
         selling price;

                  (c) returns, credits and allowances; and

                  (d) freight, taxes and insurance.

Such amounts shall be determined from books and records maintained in accordance
with GAAP, consistently applied.

         "PDMA" shall mean the Prescription Drug Marketing Act of 1987, as
amended from time to time, together with any rules or regulations promulgated
thereunder.

         "Person" shall mean a natural person, a corporation, a partnership, a
trust, a joint venture, a limited liability company, any governmental authority
or any other entity or organization.

         "Product" shall mean any of the pharmaceutical products described on
Schedule 3.1, it being understood that additional products may be added to
Schedule 3.1 after the date hereof in accordance with Section 3.4.

         "Promotional Materials" shall mean any advertising and promotional
labeling bearing a name (trade name or generic name) used in the promotion of
any of the Products, including, without limitation, promotional materials
produced by or on behalf of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]
(examples include, but are not limited to, journal ads, brochures, service
items, managed care pull through sheets, formulary presentations, price lists,
monographs, Internet pages and telephone or television advertisements) and
materials produced by outside sources (examples include, but are not limited to,
medical reprints, textbooks and CME materials) to the extent funded by, created
in cooperation with, reviewed, or distributed by [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***]. The definition of Promotional Materials shall also include
press releases and other releases of information to the media regarding the
Products.



                                      -4-






         "Quarter" shall mean, as the case may be, the three months ending on
March 31, June 30, September 30 or December 31 in any Year.

         "Satisfactory Completion" shall mean, with respect to any Development
Phase for any Product, the completion of such Development Phase in a manner that
is: (i) appropriate to support the commercialization of the Product; (ii)
appropriate for the completion of the development of such Product on, prior to,
or within [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***] of the target Completion Date
set forth in respect of such Product on Schedule 3.1; and (iii) consistent with
this Agreement.

         "[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***]" shall have the meaning given
in the preamble and shall include its Affiliates.

         "[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Technology" shall mean all of
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]'s patents, trade secrets, technology,
know-how and all other information necessary to the manufacture of the Products.

         "[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Trademarks" shall have the
meaning given in Section 9.11(c).

         "Specifications" shall mean with respect to any Product, at any time,
the specifications for such Product that are included in the Quality Assurance
Addendum set forth on Schedule 5.4(d).

         "Territory" shall mean Canada, Mexico and the fifty (50) states, the
District of Columbia and the territories and possessions comprising the United
States of America, including Puerto Rico.

         "Year" shall mean a calendar year during the term of this Agreement.

                                   SECTION 2

                        GRANT OF LICENSES; LICENSE OPTION

         2.1 Grant of Licenses.


                  (a) CIMA hereby grants to [***CONFIDENTIAL TREATMENT
         REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
         EXCHANGE COMMISSION.***] an exclusive license for the term of this
         Agreement under the following assets to market, distribute and sell the
         Products,



                                      -5-






         for all indications and for all agreed upon Product line extensions, in
         the Territory (such assets are referred to herein collectively as the
         "Licensed Assets"):

                           (i) all current and future regulatory filings,
                  approvals, registrations and governmental authorizations that
                  relate to the Products in the Territory;

                           (ii) the CIMA Intellectual Property; and

                           (iii) the CIMA Marketing and Market Research Data.

                  (b) CIMA grants to [***CONFIDENTIAL TREATMENT REQUESTED,
         PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
         COMMISSION.***] an exclusive, royalty bearing license to use the CIMA
         Trademarks to market, distribute and sell the Products, during the term
         of this Agreement, for all indications and for all agreed upon Product
         line extensions in the Territory.

                  (c) The license to [***CONFIDENTIAL TREATMENT REQUESTED,
         PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
         COMMISSION.***] will be exclusive in that CIMA will not grant any
         licenses of the Licensed Assets or the CIMA Trademarks (i) in the
         Territory to any other Person with respect to the Products or any other
         products containing the same active ingredient [***CONFIDENTIAL
         TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
         SECURITIES AND EXCHANGE COMMISSION.***] as any Product or (ii) anywhere
         in the world with respect to any products having an identical
         formulation as any Product, in each case, during the term of this
         Agreement

                  (d) In the event that a third party is interested in
         developing, manufacturing or marketing an equivalent formulation of a
         Product outside the Territory, CIMA and [***CONFIDENTIAL TREATMENT
         REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
         EXCHANGE COMMISSION.***] agree as follows:

         (i)      CIMA shall be entitled to solicit interest and enter initial
                  discussions with any third parties for making a product having
                  a formulation equivalent to that of a Product commercially
                  available in any country or countries outside the Territory;

         (ii)     upon receiving a bona fide proposal from a third party for the
                  development and/or license of a formulation equivalent to that
                  of a Product, but prior to initiating development activities
                  or granting a license to such third party for such equivalent
                  formulation, CIMA shall provide [***CONFIDENTIAL TREATMENT
                  REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
                  SECURITIES AND EXCHANGE COMMISSION.***] a notice (a "License
                  Notice") of its intent to initiate development activities or
                  grant such license in a specific country or countries which
                  shall identify such country or countries and shall describe in
                  detail the formulation proposed to be licensed; and



                                      -6-






         (iii)    [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
                  SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]
                  shall provide CIMA a notice within forty-five (45) days of its
                  receipt of the License Notice that either: A) [***CONFIDENTIAL
                  TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
                  SECURITIES AND EXCHANGE COMMISSION.***] does not intend to
                  market the Product in such country or countries, in which case
                  CIMA shall be free to initiate development activities and/or
                  license the formulation described in the License Notice to a
                  third party; or B) [***CONFIDENTIAL TREATMENT REQUESTED,
                  PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
                  EXCHANGE COMMISSION.***] does intend to market the Product in
                  such country or countries, in which case this Agreement shall
                  be amended to include such country or countries in the
                  Territory and to allow CIMA to perform any necessary
                  development work. [***CONFIDENTIAL TREATMENT REQUESTED,
                  PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
                  EXCHANGE COMMISSION.***] shall have one (1) year from the date
                  of its notice to CIMA to demonstrate significant progress
                  towards bringing the Product to market in such country or
                  countries. If [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
                  OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
                  COMMISSION.***] fails to demonstrate significant progress
                  within one (1) year or fails thereafter to demonstrate
                  continued activities to market the Product in such country or
                  countries, [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
                  OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
                  COMMISSION.***]'s license to the Product in that country or
                  countries will terminate in thirty (30) days after
                  re-notification by CIMA that [***CONFIDENTIAL TREATMENT
                  REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
                  SECURITIES AND EXCHANGE COMMISSION.***] is not in compliance
                  with this Section 2.1(d)(iii).

         2.2 Sublicenses. [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall have the
right to extend the licenses granted pursuant to this Section 2 in whole or in
part to any Affiliate of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], provided that
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] is not then in default with respect to
any of its obligations to CIMA under this Agreement. All the terms and
provisions of this Agreement shall apply to the Affiliate to which this license
has been extended to the same extent as they apply to [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***], and the operations of the Affiliate shall be deemed to be the
operations of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] and [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION



                                      -7-






OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall
account therefor and be responsible for the performance of such Affiliate of all
of its obligations hereunder. In addition, [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] shall have the right to extend the licenses granted pursuant to
this Section 2 in whole or in part to Persons who are not Affiliates of
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] with the prior written consent of CIMA,
which consent shall not unreasonably be withheld or delayed.

         2.3 Marketing, Distribution and Sale. After each Launch,
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] shall use its commercially reasonable
efforts to market, distribute and sell the launched Product in the Territory.
Such efforts shall be consistent with industry norms, given the product profile,
product potential and the state of the market at Launch.

                                   SECTION 3

                               PRODUCT DEVELOPMENT

         3.1 Obligations of CIMA. CIMA shall be responsible for the satisfactory
performance of each of the development activities set forth on Schedule 3.1 at
least by the times set forth on Schedule 3.1.

         3.2 Obligations of [***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.***] shall, in a timely fashion, supply CIMA
or cause CIMA to be supplied with sufficient quantities of API for CIMA to
perform the development activities described on Schedule 3.1 and the supply
activities described in Sections 5.1 and 5.5.

         3.3 License of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Technology.
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] hereby grants to CIMA a non-exclusive
license under the [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Technology so that
CIMA may carry out its obligations under Section 3.1. Such license may not be
sublicensed without the prior written consent of [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***].


                                      -8-







         3.4 Additional Products. [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] may,
with the prior written consent of CIMA, such consent not to be unreasonably
withheld, supplement Schedule 3.1 after the date hereof by adding additional
products thereto in order to increase the number of Products subject to this
Agreement or to replace any Product previously terminated under Section 11.1 (c)
or (d), in which case each such additional product(s) shall be deemed a
"Product" within the meaning hereof, provided that any Product added pursuant to
this Section 3.4 shall be subject to terms, including development schedules,
comparable to then existing Products. This Agreement shall be amended as
necessary to accommodate such additional or replacement Products and terms
related thereto.

         3.5 Regulatory Matters. All Product, other than Prototypes, supplied to
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] shall be produced under cGMP and in
accordance with the Specifications. CIMA shall furnish [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] with a Certificate of Analysis with a cGMP statement to
demonstrate that each shipment of Product has been manufactured under cGMP and
other FDA guidelines and in accordance with the Specifications. In addition,
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] reserves the right, at its own expense,
to audit the facility of CIMA, including its processes, records and other facets
of the operation as may be necessary to assure that all applicable regulations
have been complied with, and the Specifications have been met. CIMA shall permit
duly authorized representatives of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] to
audit all manufacturing and processing operations at reasonable times with a
prior appointment. The right to audit shall commence with the effective date of
this Agreement. These audits will be conducted to assure compliance with all
pertinent acts, regulations, and guidelines promulgated by the FDA and other
regulatory authorities, as well as standards then in effect in the regulatory
environment. Such audits will be permitted during normal business hours and will
be performed with a minimum of disruption.

                                   SECTION 4

                  ROYALTY, COST OF GOODS AND MILESTONE PAYMENTS

         4.1 Royalty and Milestone Payments.


         (a) [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall make royalty
payments to CIMA, at the times, in the amounts and subject to the conditions set
forth on Schedule 4.1(a).



                                      -9-






         (b) [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall make Milestone
Payments and Development Fee Payments to CIMA as set forth on Schedule 4.1(b).

         (c) In the event of (i) any patent infringement of the CIMA Technology
that has a materially adverse effect on any Product, and/or (ii) the occurrence
of an interruption in the supply of any Product for a period of [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] or more, then, in each case, the obligation of
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] to make any payments pursuant to
Sections 4.1(a) or 4.1(b) or Schedules 4.1(a) or 4.1(b) shall, in each case,
terminate with respect to such Product(s) and be deemed waived by CIMA and shall
be promptly renegotiated in good faith by [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] and CIMA. Any renegotiated obligations pursuant to this Section
4.1(c) shall be retroactively effective to the date the applicable event
described above occurred.

         4.2 Records and Audit.

         (a) [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] and its Affiliates
shall keep full, true and accurate books of account containing all particulars
that may be necessary for the purpose of showing the amounts payable to CIMA
hereunder. Such books of account shall be kept at [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***]'s principal place of business or the principal place of business
of the appropriate Affiliate of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] to
which this Agreement relates. Such books and the supporting data shall be open,
at all reasonable times and upon reasonable notice during the term of this
Agreement and for 2 years after its termination, to the inspection by a firm of
certified public accountants selected by CIMA and reasonably acceptable to
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***], for the limited purpose of verifying
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]'s royalty statements; provided, however,
that such examination shall not take place more often than once each Year and
shall not cover more than the preceding 3 Years, with no right to audit any
period previously audited. Except as otherwise provided in this Section, the
cost of any such examination shall be paid by CIMA. In the event that any such
inspection reveals a deficiency in excess of [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] of the reported royalty for the period covered by the
inspection, [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall promptly pay
CIMA the deficiency, plus interest at the



                                      -10-






rate of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***] per annum, and shall reimburse
CIMA for the fees and expenses paid to such accountants in connection with their
inspection. In the event that any such inspection reveals a deficiency that is
less than [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***] of the reported royalty for the
period covered by the inspection, [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall
promptly pay CIMA the deficiency, plus interest at the rate of [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] per annum. The parties agree that neither party shall
be required to retain books and records with respect to the above other than
books and records relating to the current Year and the immediately preceding 3
Years.

         (b) CIMA shall keep full, true and accurate books and records that may
be necessary for the purpose of determining the actual Costs of Goods incurred
by CIMA as contemplated hereunder. Such books and records shall be kept at
CIMA's principal place of business. Such books and records and the supporting
data shall be open, at all reasonable times and upon reasonable notice during
the term of this Agreement and for 2 years after its termination, to inspection
by a firm of certified public accountants selected by [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] and reasonably acceptable to CIMA, for the limited purpose of
verifying CIMA's Costs of Goods; provided, however, that such examination shall
not take place more often than once each Year and shall not cover more than the
preceding 3 Years, with no right to audit any period previously audited. Except
as otherwise provided in this Section, the cost of any such examination shall be
paid by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***]. In the event that any such
inspection reveals a discrepancy between CIMA's actual Costs of Goods and that
invoiced to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], in favor of CIMA,
in excess of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] of the reported
Costs of Goods for the period covered by the inspection, CIMA shall promptly pay
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] the amount of such discrepancy, plus
interest at the rate of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] per annum, and
shall reimburse [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] for the fees and
expenses paid to such accountants in connection with their inspection. In the
event that any such inspection reveals a discrepancy between CIMA's actual Costs
of Goods and that invoiced to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], in
favor of CIMA, that is less than [***CONFIDENTIAL TREATMENT



                                      -11-






REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] of the reported Cost of Goods for the period covered by the
inspection, CIMA shall promptly pay [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] the amount of such discrepancy, plus interest at the rate of
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] per annum. The parties agree that
neither party shall be required to retain books and records with respect to the
above other than books and records relating to the current Year and the
immediately preceding 3 Years.

         4.3 Quarterly Reports of Royalties. In any Year, [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] shall, within sixty (60) days after the end of each
Quarter, deliver to CIMA true and accurate reports, certified by an authorized
official of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], setting forth the
actual Annual Net Sales and total royalties due under Section 4.1(a) for such
Year. If no royalties are due, [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall
so report.

         4.4 Annual Reports of Costs of Goods. CIMA shall, not later than 60
days prior to the Launch of each Product and, thereafter, not later than 60 days
after January 1 of each Year, deliver to [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] true and accurate reports, certified by an authorized official
of CIMA, setting forth in reasonable detail the information necessary to
calculate the Cost of Goods for each Product in accordance with Schedule 5.3.
Product delivered to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] between January 1
and February 28 each year shall be invoiced to [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] at the price applicable to Product delivered to [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] during the immediately preceding calendar year. Then on
or about February 28 of each year CIMA shall transmit to [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] a corrected invoice for Product delivered between
January 1 and February 28 of each year taking into account the final amount of
any such price increase or decrease, and setting forth the applicable additional
charges or credits.

         4.5 Sales and Marketing Estimates. [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] shall provide CIMA with a non-binding estimate of its Annual Net
Sales by quarter for each Product [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND



                                      -12-







EXCHANGE COMMISSION.***] prior to the Launch of each Product. Thereafter, prior
to September 30th in any year following the Launch of such Product,
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] shall provide CIMA with non-binding
estimate of its Annual Net Sales of such Product by quarter for the following
year.


                                   SECTION 5

                                SUPPLY OF PRODUCT

         5.1 Supply of Product.


         (a) For the term of this Agreement, or for as long as CIMA manufactures
any of the Products hereunder, whichever is shorter, [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] agrees to purchase from CIMA and CIMA agrees to supply
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] with all of [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***]'s requirements for the Products, Product samples and Product
placebos for their subsequent use, sale, lease or transfer by [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***].

         (b) [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] agrees to initiate
purchases of the Products, Product samples and Product placebos hereunder by
issuing CIMA binding purchase orders not less than [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] prior to the required shipping date set forth therein. CIMA
agrees to accept any order issued in accordance with this Section 5.1(b) and to
meet the delivery dates specified thereon. All purchase orders hereunder shall
be on [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***]'s standard purchase order form
(a copy of which is attached as Schedule 5.1(b) hereto and which shall not, for
purposes of this Agreement only, be modified in any material respect without
CIMA's prior written consent, such consent not to be unreasonably withheld or
delayed) and shall be directed to CIMA at the address set forth below. The terms
and conditions of purchase enumerated on the reverse side of such standard
purchase order form shall prevail over any inconsistent or conflicting language
as may exist on invoices, confirmation or order acknowledgment forms of CIMA,
provided, however, that in the event any terms thereof are in conflict, or are
inconsistent with any terms of this Agreement, the terms and conditions hereof
shall prevail. No Product delivered by CIMA shall have a shelf life that is more
than [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE


                                      -13-






COMMISSION.***] less than the maximum shelf life of such Product (other than
batches that were under investigation and batches for validation which shall
have not more than [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] less than the
maximum shelf life of such Product upon delivery to [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***]).

         (c) Purchase order quantities shall be in full batch sizes that are
mutually agreed by the parties.

         (d) [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall cause the
amount of API that CIMA requires to perform its obligations pursuant to Schedule
3.1 and Sections 5.1 and 5.5 to be provided at no charge to CIMA
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] prior to date of tablet manufacture, as
well as [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***] of safety stock. API must
conform to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]'s then current raw
materials specifications. CIMA shall not be accountable for production or
shipment delays due to lack of API.

         (e) EXCEPT AS SPECIFICALLY PROVIDED HEREIN, INCLUDING, WITHOUT
LIMITATION, SECTION 7.8, THE PRODUCT WILL BE SUPPLIED BY CIMA WITH NO WARRANTIES
OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABLILITY OR
FITNESS FOR A PARTICULAR PURPOSE.

         5.2 Identification. [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] may
market the Products under its name, with its packaging and logo;
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] will, however, identify CIMA as the
supplier in a fair manner, reasonably acceptable to CIMA. CIMA will bear all the
costs of labeling the Product so as to appropriately display the
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] name provided [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] supplies all the appropriate graphics, designs, logos and
related and appropriate artwork at least a reasonable amount of time in advance
of any Product being manufactured. [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall
reimburse CIMA for any reasonable and documented costs incurred by CIMA in
making changes to the packaging required to manufacture the Products in
accordance with changes to the



                                      -14-






PDMA or other applicable law or changes required by [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***], including, but not limited to plate and die charges due to
label changes and product identification requirements, and for any packaging
components rendered obsolete by the changes. In addition, CIMA shall pay for all
initial one-time set-up charges incurred by CIMA in respect of packaging each
Product. [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***] may use CIMA's name and
derivations thereof in promoting, marketing and selling the Products in the
Territory; provided, however, that the particular formulation of any reference
to CIMA's name in any Promotional Material shall be subject to CIMA's review and
consent; and provided, further, that once the formulation of any such reference
has been reviewed and consented to by CIMA, any subsequent reference to CIMA's
name using such formulation shall not be subject to the further review or
consent of CIMA. All samples shall be clearly marked "for sample use only" or
some similar phrasing suggested by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***].

         5.3 Trade, Sample and Placebo Product Price. CIMA shall supply
Products, Product samples and Product placebos to [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] at the price set forth on Schedule 5.3.

         5.4 Forecasts, Delivery and Quality.

         (a) [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall provide CIMA
with 12-month non-binding forecasts within 15 days after the end of each
Quarter. Such forecasts shall be revised and extended in each succeeding
Quarter.

         (b) Delivery of the Products, Product samples and Product placebos
shall be in accordance with the means of transportation, destination and dates
set forth in [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]'s purchase order.
Delivery shall be EXW (Incoterms 2000) CIMA and CIMA shall load Products on to
collecting vehicle at CIMA's risk.

         (c) All deliveries of the Products hereunder shall include a
Certificate of Analysis provided by the quality control manager of CIMA
attesting to the fact that such Products (i) have been manufactured by a process
which complies with cGMP and (ii) are of quality which is in accordance with
criteria established in the Specifications and all FDA requirements.

         (d) The Products, Product samples and Product placebos supplied
hereunder shall have been manufactured by a process which complies with the
quality assurance addendum set forth on Schedule 5.4(d).



                                      -15-






         5.5 Rejection and Replacement.

         (a) In the event [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] determines
that any Products, Product samples or Product placebos as manufactured and/or
packaged by CIMA is Defective, then, within [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] after delivery of such Products, Product samples or Product
placebos to [***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.***] shall provide to CIMA a written notice of rejection,
specifying in reasonable detail the manner in which the Products are Defective
(the "Notice of Rejection"). If no written Notice of Rejection is given to CIMA
by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.***] within such [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] period, such Products, Product samples or Product
placebos shall be deemed to have been accepted by [***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.***].

         (b) Upon receipt of a Notice of Rejection from [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] and in order to minimize any hardship to
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] 's customers, CIMA shall use its
reasonable best efforts to promptly supply to [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] a quantity of replacement Products, Product samples or Product
placebos meeting the Specifications equal to the size of the lot or lots which
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] claims was Defective so that such
replacement Products shall be received by [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] within 30 days following CIMA's receipt of [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***]'s Notice of Rejection. If CIMA agrees with
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] that such Product is Defective then CIMA
shall either replace the Defective Product at no cost to [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***], or refund or credit, as designated by



                                      -16-






[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***], the price paid for such Product plus
any applicable delivery charges, including, without limitation, shipping,
insurance and taxes, and any reasonable and documented out-of-pocket expense
that [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.***] may have incurred, within thirty
(30) days after written notice from [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***]. If CIMA disagrees with [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] as to whether such Product is Defective, the parties shall
cooperate to have the Product in dispute analyzed by an independent testing
laboratory of recognized repute jointly selected by [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] and CIMA. If the Product is determined by such laboratory to
meet the Specifications, then [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall
bear the cost of the independent laboratory testing and pay for the Product in
accordance with this Agreement. If the Licensed Product is determined not to
have met the Specifications at time of delivery, then CIMA shall bear the cost
of the independent laboratory testing. In addition, CIMA shall either replace
the Defective Product within thirty (30) days after the date of such
determination, at no cost to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], or
refund or credit, as designated by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], the
price paid for such Product plus any applicable delivery charges, including,
without limitation, shipping, insurance and taxes, and any reasonable and
documented out-of-pocket expense that [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] may have incurred, within thirty (30) days after written notice
from [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.***]. If CIMA is unable to replace any
such Product within thirty (30) days (or at any time that CIMA fails to deliver
the replacement Product at an agreed upon date), [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] shall have the right, at its sole discretion, to extend the
timeframe for delivery of replacement Product to a mutually agreed upon date,
or, in the alternative, to require CIMA to reimburse [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] for the price paid for such Product plus any applicable delivery
charges, including, without limitation, shipping, insurance and taxes and any
reasonable and documented out-of-pocket expense [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] may have incurred. Such reimbursement shall be made within
thirty (30) days of such notice.


                                      -17-






         5.6 Invoice and Payment. Upon shipment of any Products, Product samples
or Product placebos, CIMA shall be entitled to submit invoices therefor to
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***], and [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] agrees to remit payment within thirty (30) days from CIMA's
invoice date.

         5.7 Supply Disruption; Alternate Manufacturing Site.

         (a) CIMA shall use its best efforts to supply [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] with the Products in a timely manner in accordance with
the orders and forecasts received by CIMA pursuant to Sections 5.1(b) and
5.4(a), respectively. In any consecutive [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] period, should CIMA fail to supply [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] with a Product ordered for such [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] period pursuant to Section 5.1(b) (other than for reason of
Force Majeure), [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall have the right
to require CIMA to transfer the manufacture of such Product(s) to
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]'s [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] facility or other designated [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] facility. Should CIMA cure its failure to supply any Product so
transferred, CIMA shall have the right to resume the manufacture of such Product
and [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.***] and CIMA shall transfer the
manufacture of such Product back to CIMA within a commercially reasonable amount
of time.

         (b) CIMA shall, [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] establish a
second manufacturing plant as an alternate FDA-approved manufacturing site for
the Products however, the second manufacturing plant is not required to contain
a bottling capability

         5.8 CIMA's Obligation to Continue Manufacture. If this Agreement
terminates or expires through no breach of [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION


                                      -18-






OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], CIMA
shall reasonably cooperate with [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] in
transferring the manufacture of the Products to [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***], its Affiliate or, subject to confidentiality obligations
consistent with Section 9.4, a third-party appointed by [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***], the parties shall develop a timing and payment
schedule for the transfer of the manufacture of the Products and CIMA shall
continue to supply the Products to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]
pursuant to the terms of this Agreement until [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] from the date this Agreement is terminated or expires pursuant
to Section 11.1.

                                    SECTION 6

                      CONDITIONS PRECEDENT TO THE CLOSING;
                                  CLOSING DATE

         6.1 Conditions Precedent to [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***]'s Obligations. Subject to waiver as set forth in Section 12.3,
all obligations of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] to close the
transactions contemplated under this Agreement are subject to the fulfillment or
satisfaction of each of the following conditions precedent:

         (a) Representations and Warranties True as of the Closing Date. The
representations and warranties of CIMA contained in this Agreement or in any
schedule, certificate or document delivered by CIMA to [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] pursuant to the provisions hereof shall have been true
on the date hereof and shall be true on the Closing Date with the same effect as
though such representations and warranties were made as of such date.

         (b) Compliance with this Agreement. CIMA shall have performed and
complied with all agreements and conditions required by this Agreement to be
performed or complied with by it prior to or by the Closing Date.

         (c) Closing Certificate. [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall
have received a certificate


                                      -19-






from CIMA, executed by an officer of CIMA, certifying in such detail as
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] may reasonably request that the
conditions specified in Sections 6.1(a) and 6.1(b), above, have been fulfilled
and certifying that CIMA has obtained all consents and approvals required
hereunder.

         (d) No Threatened or Pending Litigation. On the Closing Date, no suit,
action or other proceeding, or injunction or final judgment relating thereto,
shall, to the best of CIMA's knowledge, be threatened or be pending before any
court or governmental or regulatory official, body or authority in which it is
sought to restrain or prohibit or to obtain damages or other relief in
connection with this Agreement or the consummation of the transactions
contemplated hereby, and no investigation that might result in any such suit,
action or proceeding shall be pending or, to the best of CIMA's knowledge,
threatened.

         6.2 Conditions Precedent to CIMA's Obligations. Subject to waiver as
set forth in Section 12.3, all obligations of CIMA to close the transactions
contemplated under this Agreement are subject to the fulfillment or satisfaction
of each of the following conditions precedent:

         (a) Representations and Warranties True as of the Closing Date. The
representations and warranties of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]
contained in this Agreement or in any schedule, certificate or document
delivered by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] to CIMA pursuant to
the provisions hereof shall have been true on the date hereof and shall be true
on the Closing Date with the same effect as though such representations and
warranties were made as of such date.

         (b) Compliance with this Agreement. [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] shall have performed and complied with all agreements and
conditions required by this Agreement to be performed or complied with by it
prior to or by the Closing Date.

         (c) Closing Certificate. CIMA shall have received a certificate from
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***], executed by an officer of
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***], certifying in such detail as CIMA may
reasonably request that the conditions specified in Sections 6.2(a) and 6.2(b),
above, have been fulfilled and certifying that [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND



                                      -20-






EXCHANGE COMMISSION.***] has obtained all consents and approvals required
hereunder.

         (d) No Threatened or Pending Litigation. On the Closing Date, no suit,
action or other proceeding, or injunction or final judgment relating thereto,
shall, to the best of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]'s knowledge,
be threatened or be pending before any court or governmental or regulatory
official, body or authority in which it is sought to restrain or prohibit or to
obtain damages or other relief in connection with this Agreement or the
consummation of the transactions contemplated hereby, and no investigation that
might result in any such suit, action or proceeding shall be pending or, to the
best of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***]'s knowledge, threatened.

         6.3 Closing Date.


         (a) Subject to Section 6.3(b), below, the closing of the transactions
contemplated by this Agreement shall take place at 10:00 a.m., local time, on
December 18, 2001, or on such other date as may be mutually agreed upon in
writing by the parties (the "Closing Date"), at the offices of [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***].

         (b) Each party hereby agrees to use its best efforts to consummate the
transactions contemplated herein, as modified, on or before December 18, 2001;
provided, however, that if the parties are unable to close the transactions
contemplated hereby by January 31, 2002, or such later date as shall be mutually
agreed to in writing by CIMA and [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], then
all of the rights and obligations of the parties under this Agreement shall
terminate without liability.

                                   SECTION 7

                     REPRESENTATIONS AND WARRANTIES OF CIMA

         CIMA hereby represents and warrants to [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] that:

         7.1 Organization, Power and Authority. CIMA is a corporation duly
organized and validly existing under the laws of the State of Delaware. CIMA has
all necessary corporate power and authority to enter into, and be bound by the
terms and conditions of, this Agreement, and to license the Licensed Assets and
the CIMA Trademarks to [***CONFIDENTIAL



                                      -21-






TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] pursuant hereto.

         7.2 Due Authority; No Breach. The execution, delivery and performance
by CIMA of this Agreement and each agreement or instrument contemplated by this
Agreement, and the performance of the transactions contemplated hereby and
thereby, have been duly authorized by all necessary corporate action by CIMA.
This Agreement is, and each agreement or instrument contemplated by this
Agreement, when executed and delivered by CIMA in accordance with the provisions
hereof, will be (assuming the due execution and delivery hereof and thereof by
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]) the legal, valid and binding obligation
of CIMA, in each case enforceable against CIMA in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, moratorium, reorganization, or similar laws from time to time in
effect which affect the enforcement of creditors' rights generally and by legal
and equitable limitations on the availability of specific performance and other
equitable remedies against CIMA. All persons who have executed this Agreement on
behalf of CIMA, or who will execute on behalf of CIMA any agreement or
instrument contemplated by this Agreement, have been duly authorized to do so by
all necessary corporate action. Neither the execution and delivery of this
Agreement or any such other agreement or instrument by CIMA, nor the performance
of the obligations contemplated hereby or thereby, will (i) conflict with or
result in any violation of or constitute a breach of any of the terms or
provisions of, or result in the acceleration of any obligation under, or
constitute a default under any provision of the articles of incorporation or
by-laws of CIMA or any material contract or any other material obligation to
which CIMA is a party or to which it is subject or bound, or (ii) violate any
judgment, order, injunction, decree or award of any court, administrative
agency, arbitrator or governmental body against, or affecting or binding upon,
CIMA or upon the securities, property or business of CIMA, or (iii) constitute a
violation by CIMA of any applicable law or regulation of any jurisdiction as
such law or regulation relates to CIMA, or to the property or business of CIMA
except for such conflict, acceleration, default, breach or violation that is not
reasonably likely to have a material adverse effect on CIMA's ability to perform
its obligations under this Agreement or under any agreement or instrument
contemplated hereby.

         7.3 Intellectual Property. CIMA is the lawful owner of the Licensed
Assets and CIMA Trademarks, CIMA can license the Licensed Assets and CIMA
Trademarks without the consent of any third party in the Territory, there is no
pending or overtly threatened claim against CIMA asserting that any of the
Licensed Assets or CIMA Trademarks infringes or violates the rights of third
parties in the Territory or that [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], by
practicing under the Licensed Assets and CIMA Trademarks in performing the
Activities, would violate any of the intellectual property rights of any third
party in the Territory, and nothing has come to the attention of CIMA which has,
or reasonably should have, led CIMA to believe that any of the Licensed Assets
and CIMA Trademarks infringes or violates the right of third parties in the
Territory. CIMA has not given any notice to any third parties asserting
infringement by such third parties upon any of the Licensed Assets and CIMA
Trademarks. CIMA is not aware of and has not received any communications
challenging the ownership, validity or effectiveness of any of the Licensed



                                      -22-







Assets and CIMA Trademarks. CIMA has not granted any right to any third party
relating to the Activities which would violate the terms of or conflict with the
rights granted to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] pursuant to this
Agreement.

         7.4 Technology Rights. The CIMA Technology, to the best of CIMA's
knowledge, when combined with the [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]
Technology, includes all the technology, patents, know-how, trade secrets and
other intellectual property necessary to manufacture the Products.

         7.5 Litigation. There are no pending or, to the best of CIMA's
knowledge, threatened judicial, administrative or arbitral actions, claims,
suits or proceedings pending as of the date hereof against CIMA relating to the
Activities, the Licensed Assets or the CIMA Trademarks which, either
individually or together with any other, would have a material adverse effect on
the Activities, the Licensed Assets, the CIMA Trademarks or the ability of CIMA
to perform its obligations under this Agreement or any agreement or instrument
contemplated hereby. There are no pending, and CIMA does not presently
contemplate bringing, any actions or suits relating to the Activities, the
Licensed Assets or the CIMA Trademarks against others.

         7.6 Governmental Approval. No consent, approval, waiver, order or
authorization of, or registration, declaration or filing with, any governmental
authority is required in connection with the execution, delivery and performance
of this Agreement, or any agreement or instrument contemplated by this
Agreement, by CIMA or the performance by CIMA of its obligations contemplated
hereby and thereby.

         7.7 Brokerage. No broker, finder or similar agent has been employed by
or on behalf of CIMA, and no Person with which CIMA has had any dealings or
communications of any kind is entitled to any brokerage commission, finder's fee
or any similar compensation, in connection with this Agreement or the
transactions contemplated hereby.

         7.8 Supply. All finished Products supplied by CIMA under Section 5
shall (i) have been manufactured by a process which complies with cGMP and the
Quality Assurance Addendum set forth on Schedule 5.4(d) and (ii) be of a quality
which is in accordance with criteria established by the specifications
established by the Specifications and all FDA requirements.


                                      -23-






                                   SECTION 8

         REPRESENTATIONS AND WARRANTIES OF [***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.***] represents and warrants to CIMA
that:

         8.1 Organization, Power and Authority. [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] has all necessary corporate power and authority to enter into,
and be bound by the terms and conditions of, this Agreement, to license the
Licensed Assets, the Patents and the CIMA Technology from CIMA, and to license
the [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.***] Technology to CIMA pursuant hereto.

         8.2 Due Authority; No Breach. The execution, delivery and performance
by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.***] of this Agreement, and each
agreement or instrument contemplated by this Agreement, and the performance of
the transactions contemplated hereby and thereby, have been duly authorized by
all necessary corporate action by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]. This
Agreement is, and each agreement or instrument contemplated by this Agreement,
when executed and delivered by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] in
accordance with the provisions hereof, will be (assuming due execution and
delivery hereof and thereof by CIMA) the legal, valid and binding obligation of
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***], in each case enforceable against
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
moratorium, reorganization, or similar laws from time to time in effect which
affect the enforcement of creditors' rights generally and by legal and equitable
limitations on the availability of specific performance and other equitable
remedies against [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]. All persons who
have executed this Agreement on behalf of [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***], or who will execute on behalf of [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE



                                      -24-






SECURITIES AND EXCHANGE COMMISSION.***] any agreement or instrument contemplated
by this Agreement, have been duly authorized to do so by all necessary corporate
action. Neither the execution and delivery of this Agreement by [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***], or any such other agreement or instrument by
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***], nor the performance of the obligations
contemplated hereby and thereby, will (i) conflict with or result in any
violation of or constitute a breach of any of the terms or provisions of, or
result in the acceleration of any obligation under, or constitute a default
under any provision of its articles of incorporation or by-laws or any material
contract or any other material obligation to which [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] is a party or to which it is subject or bound, or (ii) violate
any judgment, order, injunction, decree or award of any court, administrative
agency, arbitrator or government body against, or affecting or binding upon,
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] or upon the securities, property or
business of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], or (iii) constitute
a violation by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] of any applicable
law or regulation of any jurisdiction as such law or regulation relates to
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] or to the property or business of
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***], except for such conflict, acceleration,
default, breach or violation that is not reasonably likely to have a material
adverse effect on [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]'s ability to perform
its obligations under this Agreement or any agreement or instrument contemplated
hereby.

         8.3 Brokerage. No broker, finder or similar agent has been employed by
or on behalf of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] and no Person with
which [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***] has had any dealings or
communications of any kind is entitled to any brokerage commission, finder's fee
or any similar compensation, in connection with this Agreement or the
transactions contemplated hereby.

         8.4 Litigation. There are no pending or, to the best of
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]'s knowledge, threatened judicial,
administrative or arbitral actions, claims, suits or proceedings pending as of
the date hereof against [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED


                                      -25-






SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] which, either
individually or together with any other, will have a material adverse effect on
the ability of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] to perform its
obligations under this Agreement or any agreement or instrument contemplated
hereby or affect adversely the grant to CIMA of the non-exclusive license of the
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] Technology pursuant to Section 3.3.

         8.5 Governmental Approval. No consent, approval, waiver, order or
authorization of, or registration, declaration or filing with, any governmental
authority is required in connection with the execution, delivery and performance
of this Agreement, or any agreement or instrument contemplated by this
Agreement, by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] or the performance
by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.***] of its obligations contemplated
hereby and thereby.

                                   SECTION 9

               ADDITIONAL COVENANTS AND AGREEMENTS OF THE PARTIES

         9.1 Governmental Filings. CIMA and [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] each agree to prepare and file whatever filings, listings,
requests or applications are required to be filed with any governmental
authority in connection with this Agreement or the Products and to cooperate
with one another as reasonably necessary to accomplish the foregoing.

         9.2 Compliance with Law. [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] and
CIMA shall each comply with all federal, state and local laws and regulations
applicable to developing, approving, manufacturing, marketing and selling the
Products in the Territory, the Licensed Assets, the Patents and the Technology
or the performance of their respective obligations hereunder. CIMA and
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] each shall keep all records and reports
required to be kept by applicable laws and regulations, and each shall make its
facilities available at reasonable times during business hours for inspection by
representatives of governmental agencies. CIMA and [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] each shall notify the other within forty-eight (48) hours of
receipt of any notice or any other indication whatsoever of any FDA or other
governmental agency inspection, investigation or other inquiry, or other
material notice or communication of any type, involving any Product.
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED


                                      -26-






FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] and CIMA shall
cooperate with each other during any such inspection, investigation or other
inquiry including, but not limited to, allowing upon request a representative of
the other to be present during the applicable portions of any such inspection,
investigation or other inquiry and providing copies of all relevant documents.
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] and CIMA shall discuss any written
response to observations or notifications received in connection with any such
inspection, investigation or other inquiry and each shall give the other an
opportunity to comment upon any proposed response before it is made. In the
event of disagreement concerning the form or content of such response, however,
CIMA shall be responsible for deciding the appropriate form and content of any
response with respect to any of its cited activities and [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] shall be responsible for deciding the appropriate form
and content of any response with respect to any of its cited activities.

         9.3 Recall. [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] and CIMA shall
consult with one another as to all decisions concerning recall or withdrawal of
any Product from the market, including, but not limited to, determining whether
or not to make any such recall or withdrawal, the timing and scope thereof, and
the means of conducting any recall or withdrawal. The party requesting any
recall or withdrawal must receive the prior written consent of the other party,
such consent not to be unreasonably withheld, prior to initiating such recall or
withdrawal. No consent shall be necessary if the recall or withdrawal is
requested by the FDA or other governmental authority. CIMA shall bear the costs
(including but not limited to, shipping and product credits) for any recall or
withdrawal primarily due to CIMA's failure to comply with this Agreement. The
costs for any other recall or withdrawal shall be the responsibility of
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***].

         9.4 Confidentiality. [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall
treat as confidential the Licensed Assets, the Patents, the CIMA Technology, and
all other information of CIMA of which [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] becomes aware in connection with this Agreement (collectively,
"CIMA Proprietary Information"). [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall
neither disclose CIMA Proprietary Information to any third party nor use CIMA
Proprietary Information for any purpose other than as set forth in this
Agreement. CIMA shall treat as confidential the [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] Technology and all other information of [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] of which CIMA becomes aware in connection with this
Agreement (collectively, "[***CONFIDENTIAL


                                      -27-






TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] Proprietary Information"). CIMA shall neither disclose
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] Proprietary Information to any third
party nor use [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Proprietary
Information for any purpose other than as set forth in this Agreement.

         Nothing contained herein will in any way restrict or impair either
party's (the "Using Party's") right to use, disclose or otherwise deal with any
Proprietary Information of the other party which:

                  (a) at the time of disclosure is known to the public or
         thereafter becomes known to the public by publication or otherwise
         through no fault of the Using Party;

                  (b) the Using Party can establish was in its possession prior
         to the time of the disclosure and was not obtained directly or
         indirectly from the other party;

                  (c) is independently made available as a matter of right to
         the Using Party by a third party who is not thereby in violation of a
         confidential relationship with the other party;

                  (d) is developed by the Using Party independently of the
         Proprietary Information received from the other party and the Using
         Party can establish such development; or

                  (e) is information required to be disclosed by legal or
         regulatory process; provided, in each case the Using Party timely
         informs the other party and uses reasonable efforts to limit the
         disclosure and maintain confidentiality to the extent possible and
         permits the other party to intervene and contest or attempt to limit
         the disclosure.

Nothing in the foregoing, however, shall prohibit a party from making such
disclosures to the extent deemed necessary under applicable federal or state
securities laws or any applicable rule or regulation of any nationally
recognized securities exchange including, without limitation, NASDAQ. In such
event, however, the disclosing party shall use good faith efforts to consult
with the other party prior to such disclosure and, where applicable, shall
request confidential treatment to the extent available. [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] shall obtain no right or license of any kind under the
CIMA Proprietary Information except as set forth in this Agreement. CIMA shall
obtain no right or license of any kind under the [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] Proprietary Information except as set forth in this Agreement.

         9.5 Expenses. CIMA and [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE



                                      -28-






COMMISSION.***] shall each bear their own direct and indirect expenses incurred
in connection with the negotiation and preparation of this Agreement and, except
as set forth in this Agreement, the performance of the obligations contemplated
hereby.

         9.6 Reasonable Efforts. CIMA and [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] each hereby agrees to use all reasonable efforts to take, or
cause to be taken, all actions and to do, or cause to be done all things
necessary or proper to make effective the transactions contemplated by this
Agreement, including such actions as may be reasonably necessary to obtain
approvals and consents of governmental Persons and other Persons.

         9.7 Publicity. Each of the parties agrees that no publicity release or
announcement concerning the transactions contemplated hereby shall be issued
without the advance written consent of the other, except as such release or
announcement may be required by law, in which case the party making the release
or announcement shall, before making any such release or announcement, afford
the other party a reasonable opportunity to review and comment upon such release
or announcement.

         9.8 Cooperation. If either party shall become engaged in or participate
in any investigation, claim, litigation or other proceeding with any third
party, including the FDA, relating in any way to the Products or any of the
Licensed Assets, the Patents or the Technology, the other party shall cooperate
in all reasonable respects with such party in connection therewith, including,
without limitation, using its reasonable efforts to make available to the other
such employees who may be helpful with respect to such investigation, claim,
litigation or other proceeding, provided that, for purposes of this provision,
reasonable efforts to make available any employee shall be deemed to mean
providing a party with reasonable access to any such employee at no cost for a
period of time not to exceed 24 hours (e.g., three 8-hour business days).
Thereafter, any such employee shall be made available for such time and upon
such terms and conditions (including, but not limited to, compensation) as the
parties may mutually agree.

         9.9 Competition; No Sale for Resale.

         (a) CIMA agrees that, commencing on the Closing Date and continuing for
the period ending [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] after the term of
this Agreement, it shall not directly or indirectly, develop or manufacture for
sale within the Territory any Product described on Schedule 3.1 on the date
hereof or engage in the marketing, selling or distributing of any such Product
in the Territory except as contemplated by this Agreement. It is further
understood that the remedies at law are inadequate in the case of any breach of
this covenant and that [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall be
entitled to equitable relief, including the remedy of specific performance, with
respect to any breach of such covenant.



                                      -29-






         (b) Neither [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] nor any sublicensee
of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.***] shall knowingly directly or
indirectly sell any Product to anyone in the Territory for subsequent
distribution or resale outside the Territory and each shall take all reasonable
precautions to prevent such distribution or resale outside the Territory.
Neither CIMA nor any of its Affiliates shall knowingly directly or indirectly
sell any Product to anyone in the Territory or outside the Territory for
subsequent distribution or resale in the Territory and each shall take all
reasonable precautions to prevent such distribution or resale in the Territory.

         9.10 Conflicting Rights. CIMA shall not grant any right to any third
party relating to the Activities which would violate the terms of or conflict
with the rights granted to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] pursuant to
this Agreement.

         9.11 Patent and Trademark Maintenance.

         (a) CIMA shall be solely responsible for filing, prosecuting, and
maintaining all of the CIMA Patents, and CIMA shall pay the costs associated
therewith. CIMA shall file, prosecute, and maintain all CIMA Patents so as to
fully continue the benefits under the licenses granted to [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] hereunder. CIMA may, however, discontinue prosecuting
and maintaining any CIMA Patent if (i) CIMA has a valid business reason to do
so, and (ii) obtains the prior written approval of [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***], such approval not to be unreasonably withheld or delayed.

         (b) CIMA shall be solely responsible for filing, prosecuting, and
maintaining all CIMA Trademarks, and CIMA shall pay the costs associated
therewith. All registrations, variations, logos, goodwill and other rights under
or acquired through use of the CIMA Trademarks shall accrue and belong to CIMA.
Except as provided herein, [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall have no
rights to use the CIMA Trademarks. [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] will
not use in its business, in or outside of the Territory, any other mark or name
which is similar to or nearly resembles any of the CIMA Trademarks in use by
CIMA to indicate the source and origin of the CIMA Technology as to be likely to
cause deception or confusion. [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]
recognizes that CIMA is the owner of all CIMA Trademarks used in commerce to



                                      -30-






indicate the source of the CIMA Technology and agrees that the CIMA Trademarks
shall remain vested in CIMA both during the term of this Agreement and
thereafter. [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall not contest
the validity of the CIMA Trademarks or CIMA's ownership of the CIMA Trademarks.
Use of the CIMA Trademarks by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] in
conjunction with the manufacture, use, and sale of the Product and all goodwill
related thereto shall inure to the benefit of CIMA for purposes of building the
longevity and extent of use of the CIMA Trademarks.

         (c) [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall be solely
responsible for filing, prosecuting, and maintaining all trademarks it develops
or owns for the Products (the "[***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]
Trademarks"), and [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall pay the costs
associated therewith. All registrations, variations, logos, goodwill and other
rights under or acquired through use of the [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] Trademarks shall accrue and belong to [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] CIMA shall have no rights to use the [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] Trademarks, including, without limitation, in connection with
any product subsequently developed by CIMA. CIMA will not use in its business,
in or outside of the Territory, any other mark or name which is similar to or
nearly resembles the [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Trademarks in use by
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] in a manner that is likely to cause
deception or confusion. CIMA recognizes that [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] is the owner of all of the [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] Trademarks used in commerce to indicate the source of the
Product and agrees that the [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]
Trademarks shall remain vested in [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] both
during the term of this



                                      -31-






Agreement and thereafter. CIMA shall not contest the validity of the
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] Trademarks or [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***]'s ownership of the [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]
Trademarks. Use of the [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Trademarks by
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] in conjunction with the manufacture,
use, and sale of the Product and all goodwill related thereto shall inure to the
benefit of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] for purposes of
building the longevity and extent of use of the [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] Trademarks.

         (d) [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] and CIMA agree that,
where applicable, all packaging of the Products shall identify (i) the number of
the CIMA Patents and CIMA as the owner thereof and (ii) [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] as the owner of the [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] Trademarks.

         (e) Any improvements to the CIMA Technology (whether or not patentable)
shall be owned solely by CIMA.

         (f) Any improvements to the [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] Technology (whether or not patentable) shall be owned solely by
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***].

         (g) [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall have full
ownership rights to the Products with the exception of any improvements to the
CIMA Technology as contemplated by Section 9.11(e).

         (h) Any provisions in this Agreement to the contrary notwithstanding,
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED



                                      -32-






SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] acknowledges that,
for all purposes, CIMA is the owner of the CIMA Technology and CIMA acknowledges
that, for all purposes, [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] is the owner
of the [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Technology.

         9.12 Infringement; Enforcement of Proprietary Rights.

         (a) Infringement of Patent Rights. Each party shall promptly notify the
other of any alleged infringement by third parties of any CIMA Patent and
provide any information available to that party relating to such alleged
infringement. CIMA shall have the responsibility to investigate such alleged
infringement and act diligently, [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], to
end any infringement of such rights that materially affect [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***]'s rights pursuant to this Agreement, including, but not
limited to, bringing suit against such third party infringer. In the event that
CIMA does not bring suit against such third party infringer, [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] may, at its own expense, bring suit against such third
party infringer on CIMA's behalf.

         (b) Procedures. No settlement, consent judgment or other voluntary
final disposition of any suit contemplated by Section 9.12(a) may be entered
into without the consent of each party, which consent shall not be unreasonably
withheld or delayed. Any recovery of damages in any such suit shall be retained
by the party bearing the costs of such suit. In the event of any infringement
suit against a third party brought by either party pursuant to this Section
9.12, the party not bringing such suit shall cooperate in all respects, execute
any documents reasonably necessary to permit the other party to prosecute such
suit, and to the extent reasonable shall make available its employees and
relevant records to provide evidence for such suit.

         (c) Infringement of Third Party Rights. If, during the term of this
Agreement, [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]'s marketing or
selling of the Product hereunder infringes on a third party patent based upon
claims that dominate claims in the CIMA Patents, within [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] after notice by [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***], CIMA shall use its reasonable best efforts to procure for
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH



                                      -33-






THE SECURITIES AND EXCHANGE COMMISSION.***] the right to exercise all rights
licensed under this Agreement without any additional payment therefor by
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***].

         9.13 Supply of Products. CIMA shall maintain sufficient capacity
throughout the term of this Agreement to meet the requirements of
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] for the supply of Products hereunder.

         9.14 Liability Insurance. At and after each Launch, CIMA shall use its
best efforts to obtain and carry in full force and effect product liability
insurance in respect of the applicable Product in the amount of $1,000,000 per
occurrence and in the aggregate and policies of $10,000,000 of excess coverage
in the aggregate. At and after each Launch, [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] shall use its best efforts to obtain and carry in full force and
effect product liability insurance in respect of the applicable Product in the
amount of $1,000,000 per occurrence and in the aggregate and policies of
$10,000,000 of excess coverage in the aggregate.

         9.15 Referral of Orders and Inquiries. CIMA shall refer all Persons
sending orders or making inquiries regarding the Products within the Territory
to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.***] and shall promptly notify
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] of the name of each such Person and the
nature of the inquiry of such Person.

         9.16 Deemed Breach of Covenant. Neither CIMA nor [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] shall be deemed to be in breach of any covenant
contained in this Section 9 if such party's deemed breach is the result of any
action or inaction on the part of the other party.

                                   SECTION 10

                                 INDEMNIFICATION

         10.1 Indemnification.

         (a) CIMA shall indemnify, defend and hold [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] (and its directors, officers, employees, and Affiliates)
harmless from and against any and all Damages incurred or suffered by
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE



                                      -34-






SECURITIES AND EXCHANGE COMMISSION.***] (and its directors, officers, employees,
and Affiliates) as a consequence of:

                  (i) any breach of any representation or warranty made by CIMA
         in this Agreement or any agreement, instrument or document delivered by
         CIMA pursuant to the terms of this Agreement;

                  (ii) any failure to perform duly and punctually any covenant,
         agreement or undertaking on the part of CIMA contained in this
         Agreement;

                  (iii) any act or omission of CIMA with respect to the
         operation of CIMA's business, or the handling, manufacturing or
         development of the Products by CIMA; or

                  (iv) the infringement of the Licensed Assets, the Patent or
         the Technology of any patent, trademark, copyright, trade secret or
         other intellectual property right of any person other than CIMA or
         [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
         WITH THE SECURITIES AND EXCHANGE COMMISSION.***].

         (b) [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall indemnify,
defend and hold CIMA (and its directors, officers, employees, and Affiliates)
harmless from and against any and all Damages incurred or suffered by CIMA (and
its directors, officers, employees, and Affiliates) as a consequence of:

                  (i) any breach of any representation or warranty made by
         [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
         WITH THE SECURITIES AND EXCHANGE COMMISSION.***] in this Agreement or
         any agreement, instrument or document delivered by [***CONFIDENTIAL
         TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
         SECURITIES AND EXCHANGE COMMISSION.***] pursuant to the terms of this
         Agreement;

                  (ii) any failure to perform duly and punctually any covenant,
         agreement or undertaking on the part of [***CONFIDENTIAL TREATMENT
         REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
         EXCHANGE COMMISSION.***] contained in this Agreement; or

                  (iii) [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
         FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] of
         [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
         WITH THE SECURITIES AND EXCHANGE COMMISSION.***] with respect to the
         operation of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
         FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]'s
         business or the handling, marketing or sale



                                      -35-






         of the Products by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
         OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
         COMMISSION.***], including [***CONFIDENTIAL TREATMENT REQUESTED,
         PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
         COMMISSION.***]'s supply of API hereunder.

         10.2 Notice and Opportunity To Defend. Promptly after receipt by a
party hereto of notice of any claim which could give rise to a right to
indemnification pursuant to Section 10.1. such party (the "Indemnified Party")
shall give the other party (the "Indemnifying Party") written notice describing
the claim in reasonable detail. The failure of an Indemnified Party to give
notice in the manner provided herein shall not relieve the Indemnifying Party of
its obligations under this Section, except to the extent that such failure to
give notice materially prejudices the Indemnifying Party's ability to defend
such claim. The Indemnifying Party shall have the right, at its option, to
compromise or defend, at its own expense and by its own counsel, any such matter
involving the asserted liability of the party seeking such indemnification. If
the Indemnifying Party shall undertake to compromise or defend any such asserted
liability, it shall promptly (and in any event not less than 10 days after
receipt of the Indemnified Party's original notice) notify the Indemnified Party
in writing of its intention to do so, and the Indemnified Party agrees to
cooperate fully with the Indemnifying Party and its counsel in the compromise or
defense against any such asserted liability. All reasonable costs and expenses
incurred in connection with such cooperation shall be borne by the Indemnifying
Party. If the Indemnifying Party elects not to compromise or defend the asserted
liability, fails to notify the Indemnified Party of its election to compromise
or defend as herein provided, fails to admit its obligation to indemnify under
this Agreement with respect to the claim, or, if in the reasonable opinion of
the Indemnified Party, the claim could result in the Indemnified Party becoming
subject to injunctive relief or relief other than the payment of money damages
that could materially adversely affect the ongoing business of the Indemnified
Party in any manner, the Indemnified Party shall have the right, at its option,
to pay, compromise or defend such asserted liability by its own counsel and its
reasonable costs and expenses shall be included as part of the indemnification
obligation of the Indemnifying Party hereunder. Notwithstanding the foregoing,
neither the Indemnifying Party nor the Indemnified Party may settle or
compromise any claim over the objection of the other; provided, however, that
consent to settlement or compromise shall not be unreasonably withheld. In any
event, the Indemnified Party and the Indemnifying Party may participate, at
their own expense, in the defense of such asserted liability. If the
Indemnifying Party chooses to defend any claim, the Indemnified Party shall make
available to the Indemnifying Party any books, records or other documents within
its control that are necessary or appropriate for such defense. Notwithstanding
anything to the contrary in this Section 10.2, (i) the party conducting the
defense of a claim shall (A) keep the other party informed on a reasonable and
timely basis as to the status of the defense of such claim (but only to the
extent such other party is not participating jointly in the defense of such
claim), and (B) conduct the defense of such claim in a prudent manner, and (ii)
the Indemnifying Party shall not cease to defend, settle or otherwise dispose of
any claim without the prior written consent of the Indemnified Party (which
consent shall not be unreasonably withheld).

         10.3 Indemnification Payment Obligation. No Indemnifying Party will
have any obligations under Sections 10.1(a) or 10.1(b) until the cumulative
aggregate amount of Damages



                                      -36-






incurred or suffered by the Indemnified Party which the Indemnifying Party is
otherwise subject to under this Agreement exceeds [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] at which time the entire cumulative aggregate amount of such
Damages shall be covered. The provisions of this Section 10.3 shall not limit or
otherwise affect the obligations of any Indemnifying Party under any other
Section of this Agreement.

         10.4 Indemnification Payment Adjustments. The amount of any Damages for
which indemnification is provided under this Section 10 shall be reduced to take
account of any net tax benefit and shall be increased to take account of any net
tax detriment arising from the incurrence or payment of any such Damages or from
the receipt of any such indemnification payment and shall be reduced by the
insurance proceeds received and any other amount recovered, if any, by the
Indemnified Party with respect to any Damages; provided, however, that an
Indemnified Party shall not be subject to an obligation to pursue an insurance
claim relating to any Damages for which indemnification is sought hereunder. If
any Indemnified Party shall have received any payment pursuant to this Section
10 with respect to any Damages and shall subsequently have received insurance
proceeds or other amounts with respect to such Damages, then such Indemnified
Party shall pay to the Indemnifying Party an amount equal to the difference (if
any) between (i) the sum of the amount of those insurance proceeds or other
amounts received and the amount of the payment by such Indemnifying Party
pursuant to this Section 10 with respect to such Damages and (ii) the amount
necessary to fully and completely indemnify and hold harmless such Indemnified
Party from and against such Damages; provided, however, in no event will such
Indemnified Party have any obligation pursuant to this sentence to pay to such
Indemnifying Party an amount greater than the amount of the payment by such
Indemnifying Party pursuant to this Section 10 with respect to such Damages.

         10.5 Indemnification Payment. Upon the final determination of liability
and the amount of the indemnification payment under this Section 10, the
appropriate party shall pay to the other, as the case may be, within 10 business
days after such determination, the amount of any claim for indemnification made
hereunder.

         10.6 Survival. The provisions of Section 10 shall survive any
termination of this Agreement. Each Indemnified Party's rights under Section 10
shall not be deemed to have been waived or otherwise affected by such
Indemnified Party's waiver of the breach of any representation, warranty,
agreement or covenant contained in or made pursuant this Agreement, unless such
waiver expressly and in writing also waives any or all of the Indemnified
Party's right under Section 10.

                                   SECTION 11

                                   TERMINATION

         11.1 Termination. The term of this Agreement shall begin upon the
Closing Date and, unless sooner terminated as hereinafter provided, shall end
with respect to each Product upon the expiration of the last CIMA Patent
applicable to such Product to expire or, if later, the expiration


                                      -37-






of any other patent resulting from the development process contemplated hereby.
Notwithstanding the foregoing, this Agreement may be terminated as follows:

         (a) Termination for Insolvency. If either [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] or CIMA (i) makes a general assignment for the benefit of
creditors or becomes insolvent; (ii) files an insolvency petition in bankruptcy;
(iii) petitions for or acquiesces in the appointment of any receiver, trustee or
similar officer to liquidate or conserve its business or any substantial part of
its assets; (iv) commences under the laws of any jurisdiction any proceeding
involving its insolvency, bankruptcy, reorganization, adjustment of debt,
dissolution, liquidation or any other similar proceeding for the release of
financially distressed debtors; or (v) becomes a party to any proceeding or
action of the type described above in (iii) or (iv) and such proceeding or
action remains undismissed or unstayed for a period of more than 60 days, then
the other party may by written notice terminate this Agreement in its entirety
with immediate effect.

         (b) Termination for Default. [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] and CIMA each shall have the right to terminate this Agreement
for default upon the other's failure to comply in any material respect with the
terms and conditions of this Agreement. At least ninety (90) days prior to any
such termination for default, the party seeking to so terminate shall give the
other written notice of its intention to terminate this Agreement in accordance
with the provisions of this Section 11.1(b), which notice shall set forth the
default(s) which form the basis for such termination. If the defaulting party
fails to correct such default(s) within ninety (90) days after receipt of
notification, then such party immediately may terminate this Agreement. This
Section 11.1(b) shall not be exclusive and shall not be in lieu of any other
remedies available to a party hereto for any default hereunder on the part of
the other party.

         (c) Unilateral Termination by [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] Prior to Launch. Prior to the Launch of any Product,
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] will have the right to unilaterally
terminate this Agreement either in its entirety or with respect to one or more
specific Products at any time and in its sole discretion upon the delivery of
written notice to CIMA. Any provision herein notwithstanding, in the event that
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] terminates this Agreement pursuant to
this Section 11.1(c), [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]'s sole
obligation under this Agreement shall be to reimburse CIMA for the costs and
expenses actually incurred by CIMA (i) in performing the development activities
set forth on Schedule 4.1(b) hereto in respect of such


                                      -38-






terminated Product(s) prior to CIMA's receipt of such notice of termination and
(ii) in connection with the orderly close out of such development activities;
provided, however, that [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]'s
reimbursement obligations pursuant to this Section 11.1(c) in respect of any
terminated Product(s) shall exclude the costs and expenses incurred by CIMA in
connection with any Development Phase for which [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] has made a Development Fee Payment and shall in no event exceed
the Development Fee Payment associated with the Development Phase on which CIMA
is then working, as set forth on Schedule 4.1(b).

         (d) Unilateral Termination by [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] After Launch. Following the Launch of any Product,
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] will have the right to unilaterally
terminate this Agreement either in its entirety or with respect to one or more
specific Products and in its sole discretion upon the delivery of written notice
to CIMA. Termination of the Agreement either in its entirety or with respect to
one or more specific Products will be effective with respect to such Product or
Products one hundred eighty (180) days following such written notice to CIMA.

         (e) Continuing Obligations. Termination of this Agreement for any
reason shall not relieve the parties of any obligation accruing prior thereto
with respect to any Product and any ongoing obligations hereunder with respect
to the remaining Products and shall be without prejudice to the rights and
remedies of either party with respect to any antecedent breach of the provisions
of this Agreement. Without limiting the generality of the foregoing, no
termination of this Agreement, whether by lapse of time or otherwise, shall
serve to terminate the obligations of the parties hereto under Sections 5.8,
9.3, 9.4, 9.5, 9.7, 9.9(a), 10, 11.1(c), 11.1(d), 11.1(e) and 12 hereof, and
such obligations shall survive any such termination.

                                   SECTION 12

                                  MISCELLANEOUS

         12.1 Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and permitted assigns; provided, however, that neither CIMA nor [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] may assign any of its rights, duties or obligations
hereunder without the prior written consent of the other, which consent shall
not be unreasonably withheld, except that no prior written consent shall be
required in the event that a third party acquires substantially all



                                      -39-






of the assets or outstanding shares of, or merges with, [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] or CIMA, as the case may be.

         12.2 Notices. All notices or other communications required or permitted
to be given hereunder shall be in writing and shall be deemed to have been duly
given if delivered by hand or facsimile and confirmed in writing, or mailed
first class, postage prepaid, by registered or certified mail, return receipt
requested (mailed notices and notices sent by facsimile shall be deemed to have
been given on the date received) as follows:

         If to CIMA, as follows:

                  CIMA LABS INC
                  10000 Valley View Road
                  Eden Prairie, MN 55344
                  Facsimile: 952-947-8770
                  Attention:  Chief Executive Officer

         If to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], as follows:
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] Attention: General Counsel

         with a copy to:

         [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***]

or in any case to such other address or addresses as hereafter shall be
furnished as provided in this Section 12.2 by any party hereto to the other
party.

         12.3 Waiver; Remedies. Any term or provision of this Agreement may be
waived at any time by the party entitled to the benefit thereof by a written
instrument executed by such party. No delay on the part of CIMA or
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any waiver on
the part of either CIMA or [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] of any right,
power or privilege hereunder operate as a waiver of any other right, power or
privilege hereunder nor shall any single or partial exercise of any right, power
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder. The indemnification
provided in Section 10 shall be the sole remedy available for any Damages
arising out of or in connection with this Agreement except for any rights or
remedies which the parties hereto may otherwise have in equity.



                                      -40-






         12.4 Survival of Representations. Each of the representations and
warranties made in this Agreement shall continue for the term of this Agreement
and shall thereafter be extinguished.

         12.5 Independent Contractors. The parties hereto are independent
contractors and nothing contained in this Agreement shall be deemed to create
the relationship of partners, joint venturers, or of principal and agent,
franchisor and franchisee, or of any association or relationship between the
parties other than as expressly provided in this Agreement. [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] acknowledges that it does not have, and
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] shall not make representations to any
third party, either directly or indirectly, indicating that [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] has any authority to act for or on behalf of CIMA or to
obligate CIMA in any way whatsoever. CIMA acknowledges that it does not have,
and it shall not make any representations to any third party, either directly or
indirectly, indicating that it has any authority to act for or on behalf of
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] or to obligate [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] in any way whatsoever.

         12.6 Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior agreements including, without limitation the Feasibility Agreement entered
by CIMA and [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] on November 30,
2001, or understandings of the parties relating thereto.

         12.7 Amendment. This Agreement may be modified or amended only by
written agreement of the parties hereto.

         12.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which
together shall constitute a single instrument.

         12.9 Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of New York excluding any choice of law
rules which may direct the application of the law of another state.

         12.10 Arbitration. Any dispute, controversy or claim arising out of or
in connection with this Agreement shall be determined and settled by arbitration
in New York, New York, pursuant to the Rules of Arbitration then in effect of
the American Arbitration Association. Any award rendered shall be final and
conclusive upon the parties and a judgment thereon may be entered in a court
having competent jurisdiction. Any arbitration hereunder shall be



                                      -41-






(i) submitted to an arbitration tribunal comprised of three (3) independent
members knowledgeable in the pharmaceutical industry, one of whom shall be
selected by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], one of whom shall
be selected by CIMA, and one of whom shall be selected by the other two
arbitrators; (ii) allow for the parties to request discovery pursuant to the
rules then in effect under the Federal Rules of Civil Procedure for a period not
to exceed 90 days; and (iii) require the award to be accompanied by findings of
fact and a statement of reasons for the decision. Each party shall bear its own
costs and expenses, including attorney's fees incurred in any dispute which is
determined and/or settled by arbitration pursuant to this Section. Except where
clearly prevented by the area in dispute, both parties agree to continue
performing their respective obligations under this Agreement while the dispute
is being resolved. Arbitration shall not prevent any party from seeking
injunctive relief where such remedy is an appropriate form of remedy under the
circumstances.

         12.11 Captions. All section titles or captions contained in this
Agreement, in any Schedule referred to herein or in any Exhibit annexed hereto,
and the table of contents, if any, to this Agreement are for convenience only,
shall not be deemed a part of this Agreement and shall not affect the meaning or
interpretation of this Agreement.

         12.12 No Third-Party Rights. No provision of this Agreement shall be
deemed or construed in any way to result in the creation of any rights or
obligation in any Person not a party or not affiliated with a party to this
Agreement.

         12.13 Severability. If any provision of this Agreement is found or
declared to be invalid or unenforceable by any court or other competent
authority having jurisdiction, such finding or declaration shall not invalidate
any other provision hereof, and this Agreement shall thereafter continue in full
force and effect.

         12.14 Attachments. All Schedules, Exhibits and other attachments to
this Agreement are by this reference incorporated herein and made a part of this
Agreement.

         12.15 Force Majeure. In the event that a party is prevented from
carrying out its obligations under this Agreement by an event of Force Majeure,
then such party's performance of its obligations under this Agreement shall be
excused during the period of such event and for a subsequent reasonable period
of recovery.

         12.16 Consents. Where this Agreement requires the consent of any party
and specifies that such consent is not to be unreasonably withheld, the
determination of whether such consent may be withheld shall be based upon the
facts and circumstances of the business of the party whose consent is requested,
it being understood that it is reasonable to withhold the requested consent if
granting the requested consent would have an adverse impact on such party's
business activities.


                                      -42-






         IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered on the day and year first above written.




                                    CIMA LABS INC.


                                    By:  /s/ John Hontz
                                        -------------------------------------
                                        Name:  John Hontz
                                        Title:  Chief Operating Officer




                                    [***CONFIDENTIAL TREATMENT REQUESTED,
                                    PORTION OMITTED FILED SEPARATELY WITH THE
                                    SECURITIES AND EXCHANGE COMMISSION.***]




                                    By: /s/ [***CONFIDENTIAL TREATMENT
                                    REQUESTED, PORTION OMITTED FILED SEPARATELY
                                    WITH THE SECURITIES AND EXCHANGE
                                    COMMISSION.***]

                                    Name: [***CONFIDENTIAL TREATMENT REQUESTED,
                                    PORTION OMITTED FILED SEPARATELY WITH THE
                                    SECURITIES AND EXCHANGE COMMISSION.***]

                                    Title: [***CONFIDENTIAL TREATMENT REQUESTED,
                                    PORTION OMITTED FILED SEPARATELY WITH THE
                                    SECURITIES AND EXCHANGE COMMISSION.***]









                                                                 Schedule 3.1 to
                                                             Master Development,
                                                    License and Supply Agreement


                           Master Development Schedule

         [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***].













                                                              Schedule 4.1(a) to
                                                             Master Development,
                                                    License and Supply Agreement


                                  Royalty Rates

         In any Year, [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall pay to
CIMA a royalty in the amount of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] of the
Annual Net Sales, if any, actually recorded during such Year.

         [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall pay the royalty payment
due in respect of any Quarter (a "Quarterly Installment") by remitting a check,
together with the report required by Section 4.3, to CIMA within 60 days after
the end of each Quarter during such Year. For purposes of determining the
royalty payment pursuant to this Schedule 4.1(a) the amount of each Quarterly
Installment shall be calculated based on actual Net Sales recorded during such
Quarter.













                                                              Schedule 4.1(b) to
                                                             Master Development,
                                                    License and Supply Agreement


                     Development Fee And Milestone Payments

         (a) Subject to paragraph (b) of this Schedule 4.1(b), [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] shall pay to CIMA any of the milestone payments set
forth below (each a "Milestone Payment") promptly after CIMA demonstrates the
Satisfactory Completion (as defined below) of the research and development
phases (each a "Development Phase") set forth opposite such Milestone Payment:

[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]

         (b) Promptly after the completion of each Development Phase, CIMA shall
notify [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***] of such completion and shall
provide [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***] sufficient written materials (a
"Development Phase Notice") to allow [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] to evaluate whether or not such Development Phase has been
Satisfactorily Completed. [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]

         (c) In addition to the Milestone Payments described above, in
connection with each Product, [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall
pay CIMA an amount equal to (i) [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] in the
event the actual Completion Date for such Product precedes the target Completion
Date therefor set forth on Schedule 3.1 by at least [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] or (ii) [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] in the event
the actual Completion Date for such Product precedes the target Completion Date
therefor set forth on Schedule 3.1 by at least [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***].

         (d) [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall also pay to
CIMA the development fee payments set forth below (each a "Development Fee







Payment") within thirty (30) days of CIMA's invoice for development work
performed in accordance with this Agreement during the applicable Quarter.



- ------------------------------------------------- -------------------------
TIME PERIOD                                           DEVELOPMENT FEE
- ------------------------------------------------- -------------------------
                                               
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***]
Quarter ending December 31, 2001              $500,000
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***]
- ---------------------------------------------------------------------------













                                                              Schedule 5.1(b) to
                                                              Master Development
                                                    License and Supply Agreement


[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
             SECURITIES AND EXCHANGE COMMISSION.***] Purchase Order

                                 [See Attached]








- ---------------------------------------------------- ------------------------------- ----------------------------------


[***CONFIDENTIAL TREATMENT REQUESTED, PORTION                                            PURCHASE ORDER NO.
OMITTED FILED SEPARATELY WITH THE SECURITIES AND                                        PURCHASE ORDER DATE
EXCHANGE COMMISSION.***]

                                                                                           PAGE




                  ------------------------------------------                -------------------------------------------
VENDOR:                                                         SHIP TO:





                  ------------------------------------------                -------------------------------------------


                                                                                   ORIGINAL COPY
- ----------------- ------------- ------------------------------------------- -------------------------------------------

SHIP VIA           TAXABLE       TERMS DESCRIPTION                           FOB DESCRIPTION


- ----------------- ------------- ------------------------------------------- -------------------------------------------

 RESOURCE NUMBER               RESOURCE DESCRIPTION          QUANTITY        UM         UNIT PRICE        AMOUNT
















- --------------------------- ------------------------------- --------------- ---------- ----------------- --------------


THE TERMS AND CONDITIONS ON THE REVERSE SIDE ARE PART OF THIS PURCHASE ORDER.    BY: __________________________________








                              TERMS AND CONDITIONS

1.       Definitions. (a) Buyer means [***CONFIDENTIAL TREATMENT REQUESTED,
         PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
         COMMISSION.***] (b) Seller means any person, firm, or corporation to
         whom this Purchase Order is directed.

2.       Terms: This Purchase Order constitutes any order to buy goods,
         equipment, material, supplies, or services according to the description
         and other terms set forth on its face and reverse side. No additional
         or different terms offered by the Seller shall be or become part of
         this order, nor shall this order be modified without the express
         written approval of Buyer.

3.       Shipping Instructions: All shipments must contain packing lists giving
         descriptions of material, quantity and purchase order number. If
         shipment is not made F.O.B. destination, the original bill of lading
         must be furnished with invoices. Buyer's count will be accepted as
         final on all shipments not accompanied by packing lists.

4.       Risk of Loss: The risk of loss from any casualty to the goods
         regardless of the cause, shall be on Seller until the goods have been
         received, inspected and accepted by the company.

5.       Delays in Delivery: Time is of the essence. If Seller for any reason
         does not comply with the buyer's delivery schedule, Buyer in addition
         to remedies provided by law, at its option may either approve and
         revise delivery schedule or, may terminate the order without liability
         on account thereof.

6.       Warranty: Seller expressly warrants that all goods, equipment,
         material, supplies or services covered by this order will conform to
         the specification, drawings, samples or other description furnished or
         specified by the Buyer, shall be of good material and workmanship and
         free from defects.

7.       Rejections: If any of the goods, equipment, material or supplies are
         found within a reasonable time after delivery to the Buyer to be
         defective in material or workmanship or otherwise not in conformity
         with the requirements of the order, Buyer, in addition to any other
         rights which it may have under warranties or otherwise, shall have the
         right to reject and return such goods at Seller's expense, such goods
         not to be replaced without suitable written authorization from Buyer.

8.       Patent Infringements: Seller shall pay costs and damages finally
         awarded in any suit against the Buyer or its vendees to the extent
         based upon a finding that the design or construction of articles as
         furnished infringes a United States Patent (except infringement
         occurring as a result of incorporating a design or modification at the
         request of Buyer); provided the Buyer promptly notifies Seller of any
         charge of such infringement and the Seller is given the right at its
         expense to settle such charge and to defend or control the defense of
         any suit based upon such charge, this paragraph sets forth the Seller's
         exclusive liability with respect to patents.

9.       Compliance with Laws: Seller shall comply with all applicable State,
         Federal and local laws, rules and regulations.

10a.     Termination: The Buyer may terminate work on this order for its own
         convenience in whole or in part by written or telegraphic notice at any
         time. In the event, any claim arising out of such termination shall be
         settled by negotiation on the basis of the Seller's costs and
         commitments properly incurred or made, with due allowance for salvage
         value.

10b.     If the Seller ceases to conduct its operations in the normal course of
         business including liability to meet its obligations as they mature of
         if any proceeding under the bankruptcy or insolvency laws is brought by
         or against the Seller, a receiver for the Seller is appointed or
         applied for or an assignment for the benefit of Creditors is made by
         the Seller, Buyer may terminate order without liability except for the
         deliveries previously made or for goods covered by the order then
         completed and subsequently delivered in accordance with the terms of
         the order.

11.      Nondiscrimination in Employment. Seller will not discriminate against
         any employee or applicant for employment because of race, religion,
         color, sex, age, or national origin.

12.      Non-Waiver. Any waiver of strict compliance with the provisions of this
         order shall not be deemed a waiver of the Buyer's rights to insist upon
         strict compliance thereafter.

13.      Subcontracting. In the event the Seller subcontracts all or any part of
         this order, Seller remains completely responsible for price, delivery
         and quality.








                                                                 Schedule 5.3 to
                                                             Master Development,
                                                    License and Supply Agreement


[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
                    SECURITIES AND EXCHANGE COMMISSION.***]













                                                              Schedule 5.4(d) to
                                                              Master Development
                                                    License and Supply Agreement


                           Quality Assurance Addendum

                      [To be mutually agreed by parties on
                            or prior to each Launch]

EX-99.1

                                                                    EXHIBIT 99.1

                                 CIMA LABS INC.

                CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

         In connection with Amendment No. 1 on Form 10-K/A to the Annual Report
of CIMA LABS INC. (the "Company") for the fiscal year ended December 31, 2001
filed with the Securities and Exchange Commission on the date hereof (the
"Report"), I, John M. Siebert, President and Chief Executive Officer of the
Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906
of the Sarbanes-Oxley Act of 2002, that:

         (1)      The Report fully complies with the requirements of section
                  13(a) or 15(d) of the Securities Exchange Act of 1934; and

         (2)      The information contained in the Report fairly presents, in
                  all material respects, the financial condition and results of
                  operations of the Company.


                                          /s/ John M. Siebert
                                          -------------------------------------
                                          John M. Siebert,
                                          President and Chief Executive Officer
                                          (Principal Executive Officer)

EX-99.2

                                                                    EXHIBIT 99.2

                                 CIMA LABS INC.

                CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

         In connection with Amendment No. 1 on Form 10-K/A to the Annual Report
of CIMA LABS INC. (the "Company") for the fiscal year ended December 31, 2001 as
filed with the Securities and Exchange Commission on the date hereof (the
"Report"), I, David A. Feste, Chief Financial Officer of the Company, certify,
pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the
Sarbanes-Oxley Act of 2002, that:

         (1)      The Report fully complies with the requirements of section
                  13(a) or 15(d) of the Securities Exchange Act of 1934; and

         (2)      The information contained in the Report fairly presents, in
                  all material respects, the financial condition and results of
                  operations of the Company.


                                              /s/ David A. Feste
                                              -------------------------------
                                              David A. Feste,
                                              Chief Financial Officer
                                              (Principal Financial Officer)