*** TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. Sections 200.80(B)(4),
200.83 AND 240.24B-2
LICENSE AGREEMENT
BETWEEN
XXXXXXX-XXXXX SQUIBB COMPANY
AND
CIMA LABS, INC.
______________
JUNE 26, 1997
31
TABLE OF CONTENTS
PAGE
ARTICLE I - DEFINED TERMS ............................................... 1
1.1 Defined Terms ........................................... 1
ARTICLE II - GRANT OF LICENSES ......................................... 4
2.1 BMS Licenses ............................................ 4
2.2 License Term ............................................ 4
ARTICLE III - INTELLECTUAL PROPERTY RIGHTS ............................. 4
3.1 Improvements ............................................ 4
3.2 Patent Prosecution and Maintenance ...................... 5
3.3 Third Party Infringers .................................. 5
ARTICLE IV - PAYMENTS ................................................... 6
4.1 Royalty Payments ........................................ 6
4.2 Permissible Royalty Rate ................................ 7
4.3 Payment ................................................. 7
4.4 Reduction in Royalty Due to Payments to Third-Party ..... 7
4.5 Books and Records ....................................... 7
4.6 Exchange Conversion ..................................... 7
4.7 Exchange Control ........................................ 7
4.8 Commencement of Royalty Payments ........................ 8
4.9 Reduction in Royalty Rate ............................... 8
ARTICLE V - ADDITIONAL COVENANTS ........................................ 8
5.1 General ................................................. 8
5.2 Obligations of BMS ...................................... 8
ARTICLE VI - REPRESENTATIONS AND WARRANTIES ............................. 9
6.1 CIMA Representations .................................... 9
6.2 BMS Representations ..................................... 11
6.3 Limitation .............................................. 11
ARTICLE VII - INDEMNIFICATION ........................................... 11
7.1 Losses .................................................. 11
7.2 Indemnification by CIMA ................................. 11
7.3 Indemnification by BMS .................................. 12
7.4 Procedure ............................................... 12
7.5 Survival ................................................ 12
7.6 Limitation .............................................. 13
32
Table of Contents
(continued)
PAGE
ARTICLE VIII - EVENTS IF FORCE MAJEURE ................................. 13
8.1 Meaning ................................................. 13
8.2 Excused Performance ..................................... 13
8.3 Limitations ............................................. 13
ARTICLE IX - TERM AND TERMINATION .................................... 13
9.1 Termination by BMS ...................................... 13
9.2 Termination Due to a Material Breach .................... 14
9.3 Insolvency .............................................. 14
ARTICLE X - CONFIDENTIALITY ............................................. 14
10.1 Confidential Information ................................ 14
10.2 Non-Disclosure .......................................... 15
10.3 Non-Confidential Information ............................ 15
10.4 Additional Measures ..................................... 15
ARTICLE XI - GENERAL .................................................... 15
11.1 Remedies ................................................ 15
11.2 Assignment .............................................. 15
11.3 Governing Law ........................................... 16
11.4 Notice .................................................. 16
11.5 Waiver .................................................. 17
11.6 Entire Agreement ........................................ 17
11.7 Severability ............................................ 17
11.8 Titles to Sections for Convenience Only ................. 17
11.9 Counterparts ............................................ 17
11.10 Publicity ............................................... 17
11.11 Further Assurances ...................................... 18
11.12 No Third Party Beneficiaries ............................ 18
33
LICENSE AGREEMENT (this "Agreement"), dated as of June 26, 1997, by and
between CIMA LABS, INC., a corporation organized under the laws of the State of
Delaware and having its principal place of business at 00000 Xxxxxx Xxxx Xxxx,
Xxxx Xxxxxxx XX 00000-0000 ("CIMA"), and the WORLDWIDE CONSUMER MEDICINES
DIVISION OF XXXXXXX-XXXXX SQUIBB COMPANY, a corporation organized under the
laws of the State of Delaware having its principal place of business at 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("BMS") .
RECITALS
WHEREAS, CIMA is the owner or licensee of certain patent rights pertaining
to an effervescent, fast-dissolving, oral drug-delivery tablet technology; and
WHEREAS, BMS is interested in obtaining and licensing the rights to make,
have made, use and sell products including such technology.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereby agree as
follows, for themselves and their respective successors and assigns:
ARTICLE I
DEFINED TERMS
1.1 DEFINED TERMS. For purposes of this Agreement, the following terms
shall have the meanings indicated:
1.1.1 "[...*...] MARKET" means indicated, labelled, packaged
and/or marketed other than specifically for the [...*...] Market.
1.1.2 "AFFILIATE" means a company or corporation, more than 50%
of the voting stock of which is owned or controlled, directly, by any party
hereto; any company or corporation directly or indirectly owning or controlling
more than 50% of the voting stock of either party hereto; or any majority-owned
subsidiary of such company or corporation, other than a party hereto.
1.1.3 "AGREEMENT" is defined in the opening paragraph.
1.1.4 "BMS" is defined in the opening paragraph.
1.1.5 "CIMA" is defined in the opening paragraph.
1.1.6 "CONFIDENTIAL INFORMATION" is defined in Section 10.
1.1.6 "DISCLOSER" Is defined in Section 10.1.
1.1.7 "EFFECTIVE DATE" shall be the date specified in the opening
paragraph.
1.1.8 "FORCE MAJEURE" is defined in Section 8.1.
34
1.1.9 "IMPROVEMENTS" means any change, modification or
enhancement to any Licensed Product disclosed in the Licensed Patents as they
existed as of the Effective Date; provided such change, modification or
enhancement is based to a material extent upon the Licensed Patents as they
exist as of the Effective Date.
1.1.10 "IMPROVEMENT CUTOFF DATE" means the earlier to occur of (i)
the date which is [...*...] after the Effective Date or (ii) the end of the
Licensed Term, with respect to each country in the Territory.
1.1.11 "INDEMNITEE" is defined in Section 7.1.
1.1.12 "INDEMNITOR" is defined in Section 7.4.
1.1.13 "INTELLECTUAL PROPERTY" refers collectively to all
proprietary information including, patents, copyrights, trade secrets, trade or
service marks, know-how, test methods, data, studies, reports, process and
manufacturing information, including improvements thereon, marketing strategies
and tactics and all other proprietary rights.
1.1.14 "LICENSED FIELD" means the [...*...] market for sale of any
Licensed Product in the [...*...] Market or the [...*...] Market, as the case
may be, as set forth in Schedule 1.1.17 in each applicable country or region
set forth in Schedule 1.1.17.
1.1.15 "LICENSED PATENTS" means those patents and patent
applications (and any and all patents issued in connection therewith) listed on
Schedule 1.1.16 hereto, and all divisions, continuations, continuations-in-
part, reexaminations, reissues, additions, substitutions. registrations,
confirmations, renewals and patent term extensions thereof, and any foreign
counterparts thereof in the Territory. Licensed Patents shall also include any
additional patent applications and patents which: (i) are owned or controlled
by CIMA so that CIMA has the right to grant licenses without payment or
accounting to others, (ii) have an effective filing date or priority date
before the Improvement Cutoff Date and (iii) claim any Improvement.
1.1.16 "LICENSED PRODUCTS" means a product comprised of an
effervescent agent together with microparticles of either:
(i) where a Licensed Product is listed on Schedule 1.1.17 by
active ingredient, any active ingredient listed for the relevant country or
region in the Territory which, as of the Effective Date, is approved by the
appropriate regulatory agency for sale in the [...*...] market in such country
or region of the Territory; and
(ii) where a Licensed Product is listed on Schedule 1.1.17 by
product category (e.g. "[...*...]"), one or more active ingredients used or
useful in such product category (e.g. [...*...]), provided that, as of the
Effective Date, all such active ingredients are approved by the appropriate
regulatory agency for sale in the [...*...] market in the relevant country or
region of the Territory, coated by a rupturable or non-rupturable coating
material, such product being adapted to dissolve in the mouth of a human being
and to provide a distinct sensation of effervescence on dissolution, the
manufacture, use or sale of which would, but for this Agreement, constitute
infringement of Licensed Patents.
1.1.17 "LICENSE TERM" is defined in Section 2.2.
1.1.18 "LITIGATION" is defined in Section 7.4.
1.1.19 "LOSS" is defined in Section 7.1.
35
1.1.20 "MINIMUM ROYALTY PAYMENT AMOUNT" is defined in
Section 4.1.3.
1.1.21 "NET SALES" means the gross proceeds on sales of Licensed
Products to independent customers of BMS who are not its Affiliates or
sublicensees, expressed in U.S. dollars and recorded in accordance with U.S.
generally accepted accounting principles, less (i) [...*...] actually paid or
credited by BMS, (ii) [...*...] paid by BMS, (iii) [...*...] paid or credited
by BMS, (iv) [...*...] paid or credited by BMS, (v) [...*...] paid by BMS on
shipments to customers and (vi) [...*...] days or more during the applicable
reporting period, less such [...*...] days or more which are received or
recovered during such reporting period.
1.1.22 "NOTICE" is defined in Section 7.4.
1.1.23 "[...*...]" means [...*...] use [...*...] for the same from
a physician or other professional (including products offered through [...*...]
distribution channels).
1.1.24 "[...*...] MARKET" means suitable for, and specifically
indicated, labelled, packaged and/or marketed, for use [...*...].
1.1.25 "RECIPIENT" is defined in Section 10.1.
1.1.26 "TERRITORY" shall mean, with respect to each Licensed
Product, all countries (including territories and possessions, unless otherwise
specified) and/or, as the case may be, all countries in any continent or region
specified on Schedule 1.1.17 for such Licensed Product.
ARTICLE II
GRANT OF LICENSES
2.1 BMS LICENSES. CIMA hereby grants to BMS under the Licensed
Patents, the non-exclusive (except as provided below), license and right to
make, have made, use and sell each Licensed Product in the Licensed Field and
in the Territory set forth for such Licensed Product in Schedule 1.1.17.
Such license to BMS shall also include the right to: (i) subject to the
confidentiality provisions of Article X, allow access to any information or
technology relating to the Licensed Products known to BMS by third party
consultants who have been engaged by BMS in connection with the rights
granted to BMS hereunder, (ii) subcontract the manufacture, marketing,
distribution and/or sale of Licensed Products through BMS's normal
distribution channels and (iii) sublicense the right to make, have made, use
and sell Licensed Products in the Licensed Field in the Territory to any
Affiliate of BMS for so long as such entity remains an Affiliate of BMS.
2.1.1 [...*...] EXCLUSIVITY. Notwithstanding anything contained
herein to the contrary, until [...*...], the license granted by Section 2.1
hereof shall be an exclusive license with respect to Licensed Products in the
[...*...] Market in the [...*...] and [...*...] (including any territories or
possessions thereof other than [...*...]).
2.2 LICENSE TERM. The term of the licenses granted hereunder (the
"License Term") with respect to Licensed Patents shall begin upon the date
hereof and shall extend in each country in the Territory until the earlier of
(i) expiration of the last-to-expire of the Licensed Patents in each such
country (ii) an acknowledgement by CIMA of the invalidity of the last
Licensed Patent in effect in such country or (iii) a determination of
invalidity (which cannot be further appealed or reviewed) with respect to the
last Licensed Patent in effect in such country.
36
ARTICLE III
INTELLECTUAL PROPERTY RIGHTS
3.1 IMPROVEMENTS.
3.1.1 CIMA IMPROVEMENTS. CIMA shall own all Improvements, as
well as any Intellectual Property rights in and to any Improvements invented
solely by CIMA.
3.1.2 BMS IMPROVEMENTS. BMS shall own all Improvements, as well
as all Intellectual Property rights in and to any Improvements, invented solely
by BMS.
3.2 PATENT PROSECUTION AND MAINTENANCE.
3.2.1 APPLICATION INITIATED BY BMS. If requested by BMS, BMS and
CIMA shall consult from time-to-time with regard to utility of CIMA filing a
patent application with respect to an invention disclosed in the Licensed
Patents or any CIMA Improvements in any country in the Territory in which
patent protection has not previously been obtained or for additional patent
protection in any country in the Territory with any effective Licensed Patents.
Any patents allowed pursuant to an application filed pursuant to this
Section 3.2.1 shall be Licensed Patents for purposes of this Agreement.
3.2.2 APPLICATIONS INITIATED BY CIMA. CIMA shall promptly
deliver to BMS a copy of any filings it has made to obtain patent protection
with respect to the invention disclosed in the Licensed Patents or any
Improvements in any country in the Territory or to obtain additional patent
protection in any country in the Territory in which any Licensed Patents have
been filed.
3.2.3 COMMENT BY BMS. CIMA shall supply BMS with copies of
patent office actions in the [...*...] and [...*...] with respect to filings
made pursuant to this Section 3.2 in sufficient time to enable BMS to comment
on and advise CIMA with respect thereto prior to any response by CIMA. In the
event BMS elects to so comment and advise, BMS shall reimburse CIMA for any
incremental additional out of pocket expenses incurred by CIMA solely as the
result of such commentary or advice.
2.3 THIRD PARTY INFRINGERS.
3.3.1 PROSECUTION BY CIMA. In the event that, in the judgment of
BMS, a third party appears to be infringing one or more Licensed Patents, BMS
shall notify CIMA of the same, and CIMA shall, at its own expense, take
whatever steps in its sole discretion it deems advisable, including, but not
limited to, settlement or the filing of a suit for damages or to enjoin such
sales or offers for sale by such third party. BMS agrees, upon reasonable
notice, to cooperate with and, to the extent deemed necessary or desirable by
CIMA and at CIMA's expense, participate in any suit to enjoin such
infringement.
3.3.2 REDUCTION IN ROYALTY. If (i) a third party is making,
having made, using or selling, in any country in the Territory, any product
that is competitive with a Licensed Product and which infringes any rights
embodied in the Licensed Patents and (ii) the dollar value of sales of such
infringing product in such country constitutes more than [...*...] of sales of
Licensed Products in such country, then subsequent royalties payable to CIMA
with respect to sales of Licensed Products in such country shall be reduced by
[...*...] for as long as such third party continues to make, have made, use or
sell such infringing product in such country and CIMA does not
37
diligently seek to enforce its rights by prosecuting an infringement suit in
such country against such third party. Notwithstanding the provisions of
this Section 3.3.2, while CIMA is pursuing the enforcement of the Licensed
Patents by prosecuting an infringement suit, BMS agrees to pay full royalties
to CIMA in accordance with Section 4.1.
ARTICLE IV
PAYMENTS
4.1 ROYALTY PAYMENTS.
4.1.1 ROYALTIES. BMS shall pay CIMA a royalty in the amount set
forth in this Section 4.1 with respect to the aggregate of all "Net Sales" of
Licensed Products sold by BMS or a BMS Affiliate (or any other sublicensee) in
each country in the Territory set forth for such Licensed Product in Schedule
1.1.17 (including Licensed Products purchased from CIMA pursuant to the Supply
Agreement, made and entered into as of the 10th day of October, 1996 by and
between BMS and CIMA). For purposes of this Agreement, Licensed Products shall
be considered "sold" upon the issuance by BMS or its Affiliate (or any
sublicensee), as the case may be of an invoice to a non-Affiliated third party
with respect to such Licensed Products including, without limitation, sales to
any third party distributor in any portion of the Territory in which BMS uses a
distributor to market a Licensed Product. Notwithstanding anything contained
herein to the contrary, samples of Licensed Products distributed without charge
for promotional purposes shall not be considered "sold" for purposes of this
Agreement and no royalty shall be payable in respect thereof.
4.1.2 ROYALTY RATES. The applicable marginal royalty rate shall
be:
[...*...] of annual Net Sales of Licensed
Products not in excess of [...*...];
[...*...] of annual Net Sales of Licensed
Products in excess of [...*...], but not in excess of
[...*...]; and
[...*...] of annual Net Sales of Licensed
Products in excess of [...*...].
4.1.3 MINIMUM ROYALTY AMOUNTS. In each of the years specified
below, the Minimum Royalty Payment Amount payable pursuant to this Section 4.1
shall be the amount specified below with respect to each such year:
Year Minimum Royalty Payment Amount
[...*...] $ [...*...]
[...*...] $ [...*...]
[...*...] $ [...*...]
[...*...] $ [...*...]
38
4.1.4 ADVANCE ROYALTY PAYMENT. Simultaneously with the execution
of this Agreement, BMS shall pay CIMA an advance Royalty Payment in the amount
of [...*...]. Any payment amounts due and owing pursuant to Sections 4.1.1,
4.1.2 and 4.1.3 hereof shall be reduced by [...*...] until such time as the
advance Royalty Payment made pursuant to this Section 4.1.4 shall have been
fully recovered.
4.2 PERMISSIBLE ROYALTY RATE. Notwithstanding anything contained herein
to the contrary, if the Royalty Rate specified in this Agreement should
exceed the permissible rate established in any country in the Territory, the
Royalty Rate for Net Sales in such country shall be adjusted to the highest
legally permissible or government-approved rate.
4.3 PAYMENT. BMS shall make the applicable royalty payments required
pursuant to Section 4.1 hereof not later than sixty (60) business days after
the end of each calendar quarter during the License Term.
4.4 REDUCTION IN ROYALTY DUE TO PAYMENTS TO THIRD-PARTY. If, the
manufacture, use or sale of any Licensed Product results in the infringement
of any patent owned or controlled by any third party that dominates any
Licensed Patent (other than U.S. Patent No. 5,225,197) and, solely as a
result thereof, BMS shall be required to pay to such third party any
royalties or other fees, the amount of royalties payable to CIMA pursuant to
Section 4.1 hereof shall be reduced by (i) the amount of BMS's [...*...] and
(ii) [...*...] of the amount of such third party payments. Without limiting
the generality of the foregoing, the reduction specified in the immediately
preceding sentence shall not reduce any quarterly royalty payment by more
than [...*...]; any reduction not given effect due to this limitation shall
be carried forward to succeeding quarters. As used in this Section 4.4 a
third party patent shall be deemed to "dominate" a Licensed Patent only if
BMS cannot practice the rights granted to it by CIMA pursuant to this
Agreement without infringement of such patent.
4.5 BOOKS AND RECORDS. BMS shall maintain accurate books and records
with respect to its Net Sales of Licensed Products and all amounts to be
shared between the parties or reimbursable to BMS by CIMA pursuant to this
Agreement. Upon request, BMS shall permit CIMA or its independent certified
public accountants (at CIMA's sole cost and expense) access, not more than
once each year during the License Term, during regular business hours and
upon reasonable advance prior notice to inspect and copy such records, to the
extent necessary to verify the information contained in royalty reports
provided by BMS to CIMA.
4.6 EXCHANGE CONVERSION. All payments of royalties shall be made in
U.S. dollars. Royalties shall based on Net Sales converted to U.S. dollars
in accordance with internal BMS reporting policies applied on a company-wide
basis.
4.7 EXCHANGE CONTROL. Notwithstanding the foregoing, if applicable
governmental regulations in any country in the Territory prevent prompt
remittances from such country with respect to sales made in that country
(including, without limitation, remittance of royalty payment amounts or
purchase price of Licensed Product), BMS shall have the right, in its sole
discretion to make payment in such country by depositing the amount thereof
in the local currency in an account established by CIMA in a bank or other
depository institution in such country. Any amounts required under the laws
of any governmental authority to be withheld by BMS will be paid by BMS to
such authorities, as appropriate, (for and on behalf of CIMA, if applicable)
and BMS will furnish CIMA with copies of appropriate evidence of payment
thereof.
4.8 COMMENCEMENT OF ROYALTY PAYMENTS. Notwithstanding anything
contained herein to the contrary, no payment shall be required under this
Article IV in respect of Net Sales of any product in any country in the
Territory unless and until a Licensed Patent shall have issued in such
country; and, no amount shall be payable
39
pursuant to this Article IV in respect of Net Sales of any product in any
country in the Territory after the last of any Licensed Patents covering such
product shall have expired in such country.
4.9 REDUCTION IN ROYALTY RATE. Notwithstanding anything contained
herein to the contrary, in the event that CIMA shall license to any third
party (not an Affiliate of CIMA) the right to make, have made, use, market or
sell any product substantially identical to any Licensed Product in the same
region or country in the Territory as is Licensed to BMS, but at a royalty
rate that is less than the royalty rates specified in Section 4.1.2 hereof,
the royalty rates specified in Section 4.1.2 shall [...*...]. The provisions
of this Section 4.9(a) shall not be applicable to any transaction or series
of related transactions in which CIMA derives substantial revenue other than
(or in addition to) the receipt of royalties or similar payments (e.g. profit
by CIMA on the manufacture and sale of products to any such third party).
ARTICLE V
ADDITIONAL COVENANTS
5.1 GENERAL. In addition to the agreements, covenants and obligations
contained elsewhere in this Agreement, the parties shall have the additional
obligations contained in this Article V.
5.2 OBLIGATIONS OF BMS. BMS shall have the following obligations:
5.2.1 COMMERCIALIZATION. BMS will use its reasonable efforts to
commercialize or cause to be commercialized the Licensed Products in the
Territory, in a manner consistent with standard industry practices. BMS will
advertise and promote the Licensed Products in a commercially reasonable manner
consistent with industry practices. Notwithstanding anything contained herein
to the contrary, BMS shall have [...*...] of Licensed Products in any country
in the Territory. BMS will provide CIMA written notice of any new launch of
any Licensed Product in any country or region of the Territory within thirty
(30) days following such launch.
5.2.2 MANUFACTURING.
(a) In the event that BMS elects not to manufacture (either
directly or through any Affiliate) any Licensed Product utilizing a formulation
owned or controlled by BMS or any Affiliate of BMS, CIMA shall have the right
to manufacture BMS's requirements of such Licensed Product for sale to BMS;
provided that BMS shall determine that (i) CIMA has the capability to
manufacture the requirements of BMS for such Licensed Product in accordance
with such timing, quantity, quality control and other requirements as BMS, in
its sole discretion, shall deem appropriate and (ii) the proposed terms of sale
(including, without limitation, pricing, packaging and delivery dates), are
acceptable to BMS in its sole discretion.
(b) In the event BMS elects not to manufacture a Licensed
Product as described above, BMS shall notify CIMA thereof. CIMA shall
thereafter have [...*...] to provide BMS with a written proposal containing all
of the material terms pursuant to which CIMA proposes to manufacture such
Licensed Product for sale to BMS. Nothing contained herein shall be construed
to require either BMS or CIMA to negotiate with respect to any such agreement
for a period greater than [...*...]. If CIMA fails to submit a manufacturing
proposal within the [...*...] period specified above, or BMS and CIMA are
unable for any reason to reach an agreement with respect to such manufacture
within the [...*...] period specified above on terms acceptable to BMS in its
sole discretion, BMS may contract with any other party for such manufacture.
5.2.3 PATENT MARKING. BMS shall xxxx the Licensed Products
sold in the United States with the United States patent numbers of all
applicable Licensed Patents in a manner provided by 35 U.S.C. Section 287, as
CIMA shall specify from time-to-time in written notice provided to BMS. BMS
shall xxxx all Licensed Products sold in countries outside of the United
States in such manner as to conform with applicable patent laws of such
40
country of sale as CIMA shall specify from time-to-time in written notice
provided to BMS. BMS shall provide CIMA with sufficient formulation
information with respect to Licensed Products, sufficiently in advance of
BMS's finalization of applicable packaging and labeling, to enable CIMA to
provide BMS with notice required by this Section 5.2.3.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1 CIMA REPRESENTATIONS. For the purposes of this Section 6.1, "to
the best of CIMA's knowledge" means current or prior actual knowledge of any
of CIMA's officers and/or senior scientists. CIMA hereby represents, warrants
and covenants to BMS as of the Effective Date that:
6.1.1 CIMA is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware and has the
requisite corporate power and authority to carry on its business as now being
conducted and has the requisite corporate power and authority to enter into
this Agreement and to consummate the transactions contemplated hereby.
6.1.2 Neither CIMA nor any of its Affiliates is a party to,
subject to, or bound by any agreement or judgment, award, order writ,
injunction or decree of any court, governmental body or arbitrator which would
prevent the carrying out of this Agreement, and that there is (i) no action,
suit, dispute or governmental, administrative, arbitration or regulatory
proceeding pending or, to CIMA's best knowledge, threatened nor (ii) to CIMA's
best knowledge, any investigation pending or threatened against or relating to
CIMA which, in each case, could prevent CIMA from carrying out its obligations
under this Agreement.
6.1.3 Neither CIMA nor any of its Affiliates is a party to any
material agreement or understanding which would conflict with or be breached by
the execution, delivery or performance of this Agreement by CIMA.
6.1.4 CIMA is the sole and exclusive owner of the Licensed
Patents other than U.S. Patent No. 5,225,197. To the best of CIMA's knowledge,
having undertaken no investigation, SmithKline Xxxxxxx is the sole and
exclusive owner of U.S. Patent No. 5,225,197. CIMA has all the necessary
rights and authority to grant the licenses granted pursuant to this Agreement
and extend to BMS immunity from any Losses predicated upon any infringement of
any Licensed Patent and U.S. Patent No. 5,225,197 and its foreign counterparts.
6.1.5 To the best of CIMA's knowledge, the Licensed Patents
(other than U.S. Patent No. 5,225,197) are valid and enforceable and CIMA or,
to the best of CIMA's knowledge, having undertaken no investigation, SmithKline
Xxxxxxx, as the case may be, has taken all necessary actions to maintain the
registration thereof.
6.1.6 CIMA has no knowledge of any "prior art" which CIMA
believes would render any of the Licensed Patents invalid in whole or in part.
6.1.7 No consent, approval or authorization of, or filing,
registration or qualification with, any governmental authority or any other
person is required on the part of CIMA in connection with the execution,
delivery and performance of this Agreement.
6.1.8 The patents and patent applications listed on Schedule
1.1.16 hereto are all of the patents or patent applications relating to the
technology described in the Licensed Patents.
41
6.1.9 The practice of the inventions and know-how embodied in the
Licensed Patents do not presently (to the best of CIMA's knowledge) infringe
any valid patents or other proprietary rights owned by any third party.
6.1.10 CIMA has no knowledge of any infringement by any third
party of any Licensed Patents, and CIMA is not subject to any outstanding
order, judgment or decree of any court or administrative agency, and each has
not entered into any stipulation or agreement restricting its use of the
technology embodied in the Licensed Patents.
6.1.11 None of the know-how embodied in the Licensed Patents was,
and none of the know-how embodied in any Improvements developed by CIMA, will
be, obtained by CIMA in violation of any contractual or fiduciary obligation to
which CIMA or any of its Affiliates, employees, contractors or agents is or was
a party, or by misappropriation of the trade secrets of any third party.
6.2 BMS REPRESENTATIONS. BMS hereby represents, warrants and covenants
to CIMA that:
6.2.1 BMS is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and has full power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby.
6.2.2 Neither BMS nor any of its Affiliates is a party to,
subject to, or bound by any agreement or any judgment, award, order, writ,
injunction or decree of any court, governmental body or arbitrator which could
prevent the carrying out of this Agreement, and that there is (i) no action,
suit, dispute or governmental, administrative, arbitration or regulatory
proceeding pending or, to BMS's best knowledge, threatened nor (ii) to BMS's
best knowledge, any investigation pending or threatened against or relating to
BMS which, in either case, could prevent BMS from carrying out obligations
under this Agreement.
6.2.3 No consent, approval or authorization of, or filing,
registration or qualification with, any governmental authority or any other
person is required on the part of BMS in connection with the execution,
delivery and performance of this Agreement.
6.3 LIMITATION. EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT,
CIMA MAKES NO WARRANTIES TO BMS OF ANY KIND CONCERNING THE LICENSED PATENTS
OR LICENSED PRODUCTS, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
ARTICLE VII
INDEMNIFICATION
7.1 LOSSES. For purposes of this Agreement, the terms "Loss" or
"Losses" shall mean each and all of the following items, namely, claims,
losses, liabilities, damages, fines, penalties, costs and expenses
(including, without limitation, interest which may be imposed in connection
therewith), reasonable fees and disbursements of counsel and other experts,
and the cost to the person seeking indemnification (the "Indemnitee") or any
funds expended by reason of the occurrence of any of the events enumerated in
Section 7.2 hereof or Section 7.3 hereof, as the case may be, or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof or in enforcing the provisions of this Agreement, without giving
effect to any insurance reimbursement which may inure to the Indemnitee.
42
7.2 INDEMNIFICATION BY CIMA. CIMA shall indemnify and hold harmless
BMS, its affiliates, their respective officers, directors, employees, agents
and representatives from and against any and all Losses arising out of or
resulting from: (i) any breach of any of the representations or warranties
made by CIMA in this Agreement; (ii) any failure by CIMA to perform any of
its covenants or agreements contained in this Agreement; and (iii)
misappropriation or infringement of the trade secrets of any third party as
the result of information conveyed by CIMA to BMS or employed by CIMA in
development of the invention described in any of the Licensed Patents.
7.3 INDEMNIFICATION BY BMS. BMS shall indemnify and hold harmless
CIMA, its affiliates, their respective officers, directors, employees, agents
and representatives from and against any and all Losses arising out of or
resulting from: (i) any breach of any of the representations or warranties
made by BMS in this Agreement; (ii) any failure by BMS to perform any of its
covenants or agreements contained in this Agreement and (iii) the making,
manufacture or sale of Licensed Products by BMS or its Affiliates, excluding,
however, Losses arising from any claim of infringement for which BMS is
entitled to indemnification by CIMA pursuant to this Agreement or otherwise.
7.4 PROCEDURE.
(a) In the event that an Indemnitee shall suffer a Loss which is not
the subject of a claim, demand, action, suit, proceeding, arbitration,
investigation or inquiry (each and all of the foregoing items being herein
referred to as "Litigation"), the Indemnitee shall give written notice thereof
to the party from whom such indemnification is being sought (the "Indemnitor").
(b) (i) Promptly after receipt by an Indemnitee of written notice
of the assertion or the commencement of any Litigation with respect to any
matter referred to in Section 7.2 or 7.3 hereof, the Indemnitee shall give
written notice thereof (the "Notice") to the Indemnitor and shall thereafter
keep the Indemnitor reasonably informed with respect thereto, provided that
failure of the Indemnitee to give the Indemnitor prompt notice as provided
herein shall not relieve the Indemnitor of any of its obligations hereunder
unless such failure to give prompt notice results in material prejudice to
Indemnitor. In case any such Litigation is brought against any Indemnitee, the
Indemnitor shall be entitled to assume and control the defense thereof, by
written notice to the Indemnitee within 30 calendar days after receipt of the
Notice of its intention to do so, with counsel reasonably satisfactory to the
Indemnitee at the Indemnitor's own expense. If the Indemnitor shall assume the
defense of such Litigation, it shall not settle such Litigation unless such
settlement includes as an unconditional term thereof the giving by the claimant
or the plaintiff of a release of the Indemnitee, to the reasonable satisfaction
of the Indemnitee, from all liability with respect to such Litigation.
(ii) If the Indemnitor shall fail to notify the Indemnitee of
its desire to assume the defense of any such Litigation within the prescribed
period of time, or shall notify the Indemnitee that it will not assume the
defense of any such Litigation, then the Indemnitee shall be entitled to assume
and control the defense of any such Litigation, in which event it may do so in
such manner as it may deem appropriate, and the Indemnitor shall be bound by
any determinations made in such Litigation or any settlement thereof effected
by the Indemnitee.
7.5 SURVIVAL. The provisions of this Article VII shall survive the
termination of this Agreement, without limitation as to time.
43
7.6 LIMITATION. IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY
INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES, INCLUDING LOSS OF
PROFITS, REVENUE OR USE, INCURRED BY THE OTHER PARTY, WHETHER IN CONTRACT OR
TORT OR BASED ON A WARRANTY, EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. SOME STATES AND JURISDICTIONS OUTSIDE THE UNITED
STATES DO NOT ALLOW THE LIMITATION OF LIABILITY FOR INCIDENTAL OR
CONSEQUENTIAL DAMAGES, SO THE ABOVE LIMITATION MAY NOT APPLY. BMS
ACKNOWLEDGES THAT THE ALLOCATION OF RISKS AND BENEFITS UNDER THIS AGREEMENT
IS BASED ON AND THE AMOUNTS PAID UNDER THIS AGREEMENT WOULD BE GREATER IN THE
ABSENCE OF, THE LIMITATIONS DESCRIBED ABOVE.
ARTICLE VIII
EVENTS IF FORCE MAJEURE
8.1 MEANING. "Force Majeure" shall mean any cause which is beyond the
reasonable control of the party invoking Force Majeure and which, by the
exercise of reasonable diligence, such party is unable to prevent, including
but not limited to, and whether or not of the same class or kind as, the
following: any law, decree, regulation, order, or request of any governmental
authority (national, state, or regional), nationalization, expropriation,
confiscation, requisition, riot, war, hostilities, public disturbance, act of
the public enemy, act of terrorism, strike, lockout or other labor dispute,
fire, flood, earthquake, storm, tidal wave, explosion, Act of God, accident
of navigation, breakdown or failure of transportation or transportation
facilities.
8.2 EXCUSED PERFORMANCE. If either party is prevented from or delayed
in carrying out any provision of this Agreement by reason of Force Majeure,
the party whose performance is so prevented, delayed, interfered with or
restricted, upon prompt written notice thereof to the other party, shall be
excused from such performance to the extent and during the period of such
prevention, delay, interference or restriction.
8.3 LIMITATIONS. The provisions of this
Article VIII shall not be available to a party if such party fails to use
reasonable diligence to remedy the applicable situation described in Section
8.1 above in an adequate manner and with all reasonable dispatch or if such
applicable situation is caused by such party, except that this Section 8.3
shall not require the settlement of strikes or labor controversies by
acceding to the demand of the opposing party or parties.
ARTICLE IX
TERM AND TERMINATION
9.1 TERMINATION BY BMS. BMS, at its sole discretion, may terminate
this Agreement with respect to one or more Licensed Products and/or with
respect to any or all applicable countries in the Territory at any time, with
or without cause, upon [...*...] written notice.
9.1.1 In the event of the termination of this Agreement by BMS
with respect to all, but not less than all, of the Licensed Products and
Territory pursuant to the terms of this Section 9.1 during any year in which a
Minimum Royalty Payment Amount shall be payable, BMS shall pay CIMA a
termination fee in an amount equal to [...*...] hereof during such year.
Notwithstanding anything contained herein to the contrary, no termination fee
shall be payable pursuant to this Section 9.1.1, in the event of any
termination of this Agreement (i) by BMS pursuant to Section 9.2 or (ii)
pursuant to Section 9.3.
44
9.2 TERMINATION DUE TO A MATERIAL BREACH. Either CIMA or BMS may
terminate this Agreement upon a material breach of the terms of this
Agreement by the other, provided that (i) the non-breaching party provides
written notice to the breaching party detailing the nature of the breach; and
(ii) the breaching party fails to remedy the breach within [...*...] calendar
days of receipt of notice from the non-breaching party and, further provided,
that in the event a breach by BMS relates to less than the entire Territory,
CIMA shall have the right to terminate this Agreement only with respect to
such country of the Territory to which such breach relates. Upon the
termination of this Agreement neither party shall have continuing obligations
to the other, except for payment obligations accrued prior to the date of
such termination and as otherwise expressly provided for herein.
9.3 INSOLVENCY. This Agreement may be terminated by either BMS or CIMA
(a) in the event that a case or proceeding shall be commenced and continue
undismissed or unstayed for a period of [...*...] calendar days against the
other (the "Insolvent Party") or such Insolvent Party shall commence a
voluntary case, in either case seeking relief under the bankruptcy laws or
any other law relating to bankruptcy, insolvency, reorganization, winding up
or composition or adjustment of debts, in each case as now or hereafter in
effect, or (b) the Insolvent Party shall apply for, consent to, or fail to
contest, the appointment of a receiver, liquidator, custodian, trustee or the
like for such party or for all or any part of its property, or (c) the
Insolvent Party shall make a general assignment for the benefit of its
creditors, or (d) either party shall fail to, or admit in writing its
inability to, pay, or generally not be paying, its debts as they become due.
9.3.1 In the event of the termination of this Agreement pursuant
to the terms of this Section 9.3, the non-Insolvent Party may, in its sole
discretion, decide whether to terminate this Agreement. If the non-Insolvent
Party terminates this Agreement, the license granted herein shall terminate and
neither party shall have any obligations to the other, except for payment
obligations which had accrued prior to the termination or as otherwise
expressly set forth in this Agreement.
ARTICLE X
CONFIDENTIALITY
10.1 CONFIDENTIAL INFORMATION. Except as provided below, each party to
this Agreement shall keep secret and confidential the information, data and
materials of the others disclosed to it prior to and during the term of this
Agreement (collectively, the "Confidential Information"). In addition, the
Confidential Information shall include the terms and conditions of this
Agreement. For purposes of this Article X, a party or parties receiving
Confidential Information shall be termed the "Recipient" and the party
providing the Confidential Information to the Recipient shall be termed the
"Discloser." The obligations of the parties hereunder shall survive for a
period of [...*...] years following termination or expiration of this
Agreement.
10.2 NON-DISCLOSURE. Recipient shall safeguard and hold confidential
the Confidential Information with the same degree of care (but not less than
a reasonable standard of care) it customarily employs with its own
proprietary information, and shall not cause or permit the disclosure to, or
use by, any person of such information, except as expressly permitted in
writing by the Discloser or as specifically permitted in this Section 10.2.
Recipient shall limit disclosure of the Discloser's Confidential Information
to those of its officers, employees, agents and representatives who shall
have a need to know such information and have, directly or indirectly, agreed
to safeguard and maintain such Confidential Information of the other and not
to disclose or use such Confidential Information of the other.
45
10.3 NON-CONFIDENTIAL INFORMATION. The obligations of this Article X
shall not apply to information that: (a) is publicly known prior to or after
disclosure hereunder other than through acts or omissions attributable to the
Recipient or its employees or representatives; (b) as demonstrated by prior
written records, is already known to Recipient or any of its Affiliates at
the time of disclosure hereunder; (c) is disclosed in good faith to Recipient
or any of its Affiliates (without obligation as to confidentiality) by a
third party having a lawful right to do so; (d) is independently developed by
Recipient or any of its Affiliates which independent development can be
documented by Recipient; (e) is required to be disclosed pursuant to a court
order, or order of other governmental authority; or (f) is disclosed
verbally, unless such information is reduced to writing and identified as
Confidential Information within 30 days of its initial disclosure.
10.4 ADDITIONAL MEASURES. Recipient shall take such actions as
Discloser may reasonably request from time to time to safeguard the
confidentiality of any information subject to the terms of this Article X.
ARTICLE X
GENERAL
11.1 REMEDIES. Each of the parties hereto acknowledges and agrees that
in the event of a breach or threatened breach of Sections 2.1 and 10 of this
Agreement, the other party has no adequate remedy at law and, accordingly
shall be entitled to injunctive and other equitable remedies against such
breach or threatened breach in addition to any remedy it might have at law or
in equity.
11.2 ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective assigns and successors in
interest; provided, however, that no party shall assign or otherwise transfer
its interest or any part thereof under this Agreement to any other person or
entity without the written consent of the other parties, which consent shall
not be unreasonably withheld, except (a) in connection with the transfer of
all or substantially all of the assets of the transferring party or the
transfer of the line of business of the transferring party through which
Licensed Products are sold, to any other person or entity, whether by means
of a merger, asset or stock sale or otherwise, or (b) to a wholly-owned
subsidiary or Affiliate, provided that the transferring party shall guarantee
its transferee-subsidiary's or transferee-Affiliate's performance and
compliance hereunder and shall notify the other party in writing of such
transfer.
11.3 GOVERNING LAW. The validity, interpretation and construction of
this Agreement shall be governed by the laws of the State of New York. THE
PARTIES ALSO HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH
THEY ARE BOTH PARTIES, INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT. Each of the
parties agrees that, prior to initiating litigation in connection with any
dispute arising under this agreement or the subject matter hereof, such
parties shall meet to attempt to negotiate resolution of any such dispute.
46
11.4 NOTICE. All notices required or permitted hereunder shall be in
writing and shall be sufficiently given if: (a) hand delivered (in which case
the notice shall be effective upon delivery); (b) telecopied, provided that
in such case a copy of such notice shall be concurrently sent by registered
or certified mail, return receipt requested, postage prepaid (in which case
the notice shall be effective two calendar days following dispatch); (c)
delivered by Express Mail, FedEx or other nationally recognized overnight
courier service (in which case the notice shall be effective one business day
following dispatch); or (d) delivered or mailed by registered or certified
mail, return receipt requested, postage prepaid (in which case the notice
shall be effective three calendar days following dispatch), to the parties at
the following addresses and/or telecopier numbers, or to such other address
or number as a party shall specify by written notice to the others in
accordance with this Section.
If to CIMA:
CIMA Labs, Inc.
00000 Xxxxxx Xxxx Xxxx
Xxxx Xxxxxxx, XX 00000-0000
Xxxx Xxxxxxx Vice President Business Development
Telecopier No.: (000) 000-0000
with a copy to:
Xxxxxxx X. Xxxxxx, Esq.
Xxxxxx Godward LLP
5 Palo Alto Square
0000 Xx Xxxxxx Xxxx
Xxxx Xxxx, XX 00000-0000
Telecopier No.: (000) 000-0000
If to BMS:
Xxxxxxx-Xxxxx Squibb Company
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. XxXxxxxx
Telecopier No.: (000) 000-0000
with a copy to:
Xxxxx X. Xxxxxxx, Esq.
Xxxxxxx-Xxxxx Squibb Company
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopier No.: (000) 000-0000
11.5 WAIVER. No failure or delay of any party hereto to exercise any
power or right granted hereunder, and no custom or practice of the parties
with regard to the terms of performance hereof, shall constitute a waiver of
the rights of such party to demand full and exact compliance with the terms
of this Agreement.
11.6 ENTIRE AGREEMENT. This Agreement, including the Schedules and
Exhibits hereto, sets forth the entire understanding of the parties with
respect to the transactions contemplated thereby, and supersedes any prior
oral or written agreements or understandings relating to the subject matter
hereof. This Agreement shall not be
47
amended, modified or changed except by the written agreement of each party
whose rights or responsibilities are being affected thereby.
11.7 SEVERABILITY. In the event that any provision of this Agreement
shall be found in violation of public policy or illegal or unenforceable in
law or equity, the balance of such provision and this Agreement shall
continue in full force and effect, as if such provision or portion thereof
had been deleted or rendered inapplicable to the situations to which such
provision cannot be legally applied.
11.8 TITLES TO SECTIONS FOR CONVENIENCE ONLY. The titles to Sections of
this Agreement are used solely for the convenience of the parties and do not
constitute part of the agreement of the parties hereunder.
11.9 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute the same agreement.
11.10 PUBLICITY. CIMA and BMS agree that upon execution of this
Agreement, CIMA shall issue a press release in the form attached hereto as
Annex A. Except as provided in the immediately preceding sentence or as may
be otherwise required by applicable law, each party agrees that it will not
disclose to the press or any third party or otherwise advertise to the
communications media the terms of this Agreement including the existence
hereof, or the consummation of the transactions contemplated hereby. In the
event CIMA is the party required by law to disclose, it shall give BMS no
less than five (5) days' advance written notice of its intent to disclose and
the contents of such proposed disclosure which contents shall be subject to
the prior written approval of BMS (which approval shall not be unreasonably
withheld or delayed).
11.11 FURTHER ASSURANCES. At any time and from time-to-time, upon
reasonable request, each party hereto shall promptly execute and deliver, or
cause to be executed and delivered, all such documents as either party may
reasonably request in order to carry out or evidence the terms of this
Agreement.
11.12 NO THIRD PARTY BENEFICIARIES. Nothing contained in this
Agreement shall be construed to create any third party beneficiaries hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
XXXXXXX-XXXXX SQUIBB COMPANY CIMA LABS, INC.
By: /s/ XXXXXXX X. BEAR By: /s/ XXXX XXXXXXX
----------------------------- ----------------------------
Xxxxxxx X. Bear Xxxx Xxxxxxx
President-Worldwide Vice President-
Consumer Medicines Business Development
48
SCHEDULE 1.1.16
LICENSED PATENTS
[...*...]
49
SCHEDULE 1.1.17
TERRITORY/PRODUCT CATEGORIES
COUNTRY/REGION MARKET PRODUCT INGREDIENT AND/OR CATEGORY
-------------- --------- ----------------------------------
[...*...]* [...*...] [...*...]
[...*...] [...*...]
[...*...] [...*...]
[...*...] [...*...]
[...*...] [...*...]
[...*...] [...*...]
[...*...] [...*...]
[...*...] [...*...]
[...*...] [...*...]
[...*...] [...*...]
[...*...] [...*...]
[...*...] [...*...]
[...*...] [...*...]
[...*...] [...*...]***
[...*...] [...*...]
[...*...]** [...*...] [...*...]
[...*...] [...*...]***
[...*...] [...*...]
[...*...] [...*...]
[...*...] [...*...]
[...*...] [...*...]
[...*...] [...*...]
[...*...] [...*...]
[...*...] [...*...]
[...*...] [...*...] [...*...]
[...*...] [...*...]
* For purposes of this Agreement, [...*...] shall consist of the area
bordered in black on Annex 1.1.17A attached to this Schedule 1.1.17.
** The Territory shall not include [...*...] with respect to [...*...] in the
[...*...].
*** [...*...], and any combination of the foregoing.
50
ANNEX 1.1.17A
[...*...]PRESS RELEASE ANNEX A
11201/00050
CIMA LABS INC. (NASDAQ: CIMA) today announced the signing of a global,
non-exclusive license agreement with Xxxxxxx-Xxxxx Squibb (NYSE: BMY). The
agreement covers multiple products to be developed by Xxxxxxx-Xxxxx Squibb,
applying or utilizing 0raSolv-Registered Trademark-, CIMA's patented oral
dosage technology which incorporates microencapsulated drug ingredients into
tablets that dissolve quickly in the mouth. In exchange for the license,
CIMA will receive royalties on the sale of licensed products.
In May of this year, CIMA announced the U.S. introduction of an
OraSolv-Registered Trademark- dosage form of Tempra, Xxxxxxx-Xxxxx Squibb's
pediatric analgesic. OraSolv is designed to improve taste acceptance, while
offering a convenient oral dosage form that can be taken without water,
thereby increasing patient compliance.
"We believe this alliance offer" both CIMA LABS and Xxxxxxx-Xxxxx Squibb
an excellent opportunity to pursue the development of innovative new drug
delivery technologies," commented Xxxx X. Xxxxxxx, Ph.D., President and Chief
Executive Officer of CIMA LABS, INC.
CIMA LABS INC. is a drug delivery company that develops and manufactures
products based upon its OraSolv-Registered Trademark- technology for
marketing by multinational pharmaceutical companies. CIMA was founded in
1986 and has been publicly held since July 1994. The Company's corporate
headquarters and manufacturing facility is located in Eden Prairie, MN and
its Research and Development facility is located in Brooklyn Park, MN.
51
