Document:

exv10w58

 

EXHIBIT 10.58

STEVENSON-WYDLER (15 USC 3710)

COOPERATIVE RESEARCH AND DEVELOPMENT

AGREEMENT (hereinafter “CRADA”) No. ORNL00-0579

Development of Economically Attractive Gas Centrifuge Machine and Process

BETWEEN

UT-Battelle, LLC

under its U.S. Department of Energy Contract

No. DE-AC05-00OR2275 hereinafter (“Contractor”)

AND

United States Enrichment Corporation

(hereinafter “Participant”),

both being hereinafter jointly referred to as the “Parties”

ARTICLE I: DEFINITIONS

	 	 	 
	A.	 	
“Government” means the United States of America and agencies thereof.
 
	B.	 	
“DOE” means the Department of Energy, an agency of the United States of
America.
 
	C.	 	
“Contracting Officer” means the DOE employee administering the
Contractor’s DOE contract.
 
	D.	 	
“Generated Information” means information produced in the performance of
this CRADA.
 
	E.-1	 	
“Proprietary Information” means information which embodies (i) trade
secrets or (ii) commercial or financial information which is
privileged or confidential under the Freedom of Information Act (5
USC 552 (b)(4)), either of which is developed at private expense
outside of this CRADA and marked as Proprietary Information
 
	E-2	 	
“Business Sensitive Information” means information which was
transferred to Participant pursuant to the USEC Privatization Act
(P.L. 104-134) and marked by Participant as Business Sensitive
Information which embodies (i) trade secrets or (ii) commercial or
financial information which may be privileged or confidential under
the Freedom of Information Act (5 USC 552 (b)(4)), and will be
presumed to be appropriately marked and treated as such by DOE and
Contractor. However, DOE and Contractor reserve the right to
challenge such markings.
 
	F.	 	
“Protected CRADA Information” means Generated Information which is marked
as being Protected CRADA Information by a Party to this CRADA and which
would have been Proprietary Information had it been obtained from a
non-federal entity.
 
	G.	 	
“Subject Invention” means any invention of the Contractor or Participant
conceived or first actually reduced to practice in the performance of work
under this CRADA.
 
	H.	 	
“Intellectual Property” means patents, Trademarks, copyrights, Mask
Works, Protected CRADA Information and other forms of comparable property
rights protected by Federal Law and other foreign counterparts.

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	I.	 	
“Trademark” means a distinctive mark, symbol or emblem used in commerce
by a producer or manufacturer to identify and distinguish its goods or
services from those of others.
 
	J.	 	
“Service Mark” means a distinctive word, slogan, design, picture, symbol
or any combination thereof, used in commerce by a person to identify and
distinguish its services from those of others.
 
	K.	 	
“Mask Work” means a series of related images, however fixed or encoded,
having or representing the predetermined, three-dimensional pattern of
metallic, insulating or semiconductor material present or removed from the
layers of a semiconductor chip product; and in which series the relation
of the images to one another is that each image has the pattern of the
surface of one form of the semiconductor chip product. (17 USC 901(a)(2)).
 
	L.	 	
“RD&D” means research, development and demonstration performed by the
Contractor and the Participant under this CRADA.
 
	M.	 	
“Background Intellectual Property” means the Contractor-owned
Intellectual Property rights in the items identified by the Parties in
Appendix C-1, UT-Battelle (Contractor) Background Intellectual Property,
which items were conceived by Contractor or Contractor’s predecessor(s)
outside of this CRADA and not first actually reduced to practice under
this CRADA. For Contractor-owned inventions conceived outside of this
CRADA and first actually reduced to practice under this CRADA, Contractor
will retain ownership of such inventions and agrees to provide the
Government with an irrevocable, exclusive, paid-up, world-wide license
with the right to sublicense, in the field of use of uranium enrichment,
unless preexisting licensing proposals, contractual commitments or
obligations preclude granting of such license by Contractor. Although the
Contractor-owned Intellectual Property Rights are presently unclassified,
new applications of such rights may become Classified Information or
Unclassified Controlled Nuclear Information during the performance of work
under this CRADA, subject to the DOE security and classification
provisions applicable to this CRADA. Licensing of Background Intellectual
Property, shall be the subject of separate licensing agreements.
Background Intellectual Properties are not Subject Inventions or DOE-Owned
Related Intellectual Property (See Article XXXIII).
 
	N.	 	
Pursuant to 48 CFR 904.404(d) (1) and 48 CFR 952.204-2 the following
definitions are also noted:

	 	(1)	 	Definition of Classified Information. The term “Classified
Information” means Restricted Data, Formerly Restricted Data, or
National Security Information.
 
	 
	 	(2)	 	Definition of Restricted Data. The term “Restricted Data”
means all data concerning (1) design, manufacture, or utilization of
atomic weapons; (2) the production of special nuclear material; or
(3) the use of special nuclear material in the production of energy,
but shall not include data declassified or removed from the
Restricted Data category pursuant to Section 142 of the Atomic
Energy Act of 1954, as amended.
 
	 
	 	(3)	 	Definition of Formerly Restricted Data. The term “Formerly
Restricted Data” means all data removed from the Restricted Data
category under section 142 d. of the Atomic Energy Act of 1954, as
amended.
 
	 
	 	(4)	 	Definition of National Security Information. The term
“National Security Information” means any information or material
regardless of its physical form or characteristics, that

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	 	 	 	is owned
by, produced for or by, or is under the control of the United States
government
that has been determined pursuant to Executive Order 12356 or prior
Orders to require protection against unauthorized disclosure, and
which is so designated.
 
	 
	 	(5)	 	Definition of Special Nuclear Material (SNM). “SNM” means
(1) plutonium, uranium enriched in the isotope 233 or in the isotope
235, and any other material which pursuant to the provision of
Section 51 of the Atomic Energy Act of 1954, as amended, has been
determined to be special nuclear material, but does not include
source material or (2) any material artificially enriched by any of
the foregoing, but does not include source material.

	 	 	 
	O.	 	
Pursuant to 48 CFR 952.204-73 the following definitions are also noted:

	 	 	 
	(a)	 	
“Foreign Interest” is defined as any of the following:
 
	 	 	
(1)      A foreign government, foreign government agency, or
representative of a foreign government.
 
	 	 	
(2)      Any form of business enterprise or legal entity organized,
chartered or incorporated under the laws of any country other than
the United States or its possessions and the trust territories;
 
	 	 	
(3)      Any form of business enterprise organized or incorporated under
the laws of the U.S., or a State or other jurisdiction within the
U.S., which is owned, controlled, or influenced by a foreign
government, agency, firm, corporation, or person; or
 
	 	 	
(4)      Any person who is not a U.S. citizen or national
of the United States.
 
	(b)	 	
“Foreign Ownership, Control, or Influence (FOCI)” means the
situation where the degree of ownership, control, or influence over
a contractor by a foreign interest is such that a reasonable basis
exists for concluding that compromise of classified information or
special nuclear material may result.

	 	 	 
	P.	 	
Pursuant to 10 CFR 1017.3 the following definitions are also noted:

	 	 	 
		 	
“Unclassified Controlled Nuclear Information (UCNI)” means certain
unclassified Government information prohibited from unauthorized
dissemination under Section 148 of the Atomic Energy Act as
amended, such as information:

	 	 	 
	(1)	 	
Which concerns atomic energy defense programs;
 
	(2)	 	
Which pertains to:

	 	 	 
	(i)	 	
The design of production facilities or utilization
facilities;
 
	(ii)	 	
Security measures (including security
plans, procedures, and equipment) for the physical
protection of -

	 	 	 
	(A)	 	
Production or utilization facilities;
 
	(B)	 	
Nuclear material contained in such facilities; or
 
	(C)	 	
Nuclear material in transit; or

	 	 	 
	(iii)	 	
The design, manufacture, or
utilization of any nuclear weapon component if the
design, manufacture, or utilization of such weapon or
component was contained in any information declassified
or removed from the Restricted Data category by the
Assistant Secretary for Defense

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Programs (or the head of the predecessor agency of the
Department of Energy) pursuant to Section 142 of the
Atomic Energy Act; and

	 	 	 
	(3)	 	
Whose unauthorized dissemination, as determined
by a Controlling Official, could reasonably be expected to
have a significant adverse effect on the health and safety of
the public or the common defense and security by significantly
increasing the likelihood of -

	 	 	 
	(i)	 	
Illegal production of nuclear weapons; or
 
	(ii)	 	
Theft, diversion, or sabotage of
nuclear materials, equipment or facilities.

	 	 	 
		 	
“Controlling Official” means an individual authorized under 10 CFR
1017.7 (a) to make a determination that specific Government
information is, is not, or is no longer UCNI, such determination
serving as the basis for determinations by a Reviewing Official
that a document or material contains, does not contain, or no
longer contains UCNI.
 
	 	 	
“Reviewing Official” means an individual authorized under 10 CFR
1017.12 (a) to make a determination, based on guidelines which
reflect decisions of Controlling Officials, that a document or
material contains UCNI.

	 	 	 
	Q.	 	
“Exceptional Circumstance Subject Invention” means any Subject Invention
in a technical field determined by DOE to be subject to an exceptional
circumstance under Section 35 USC 202 (a)(ii)

ARTICLE II: STATEMENT OF WORK

Appendix A, Statement of Work, is hereby incorporated into this CRADA by
reference.

ARTICLE III: TERM, FUNDING AND COSTS

	 	 	 
	A.	 	
The effective date of this CRADA shall be the latter date of (1) the date
on which it is signed by the last of the Parties hereto, (2) the date on
which it is approved by DOE, or (3) the date on which the advance funding
referred to in Article IIIE is received by the Contractor. The work to be
performed under this CRADA shall be completed within twelve (12) months
from the effective date.
 
	B.	 	
The total value of this CRADA is $4,000,000. The Participant’s estimated
contribution to this effort is $4,000,000 (with $1,860,000 of that amount
being total funds-in to ORNL). The Government’s estimated contribution,
which is provided through the Contractor’s contract with DOE, is $0.
Additionally, the Participant’s funds-in contribution is usually subject
to Federal Administrative Charges in the amount of 3 percent. This charge
for Participant is waived until October 1, 2000, at which time its
continuation will require the approval of the DOE CFO. The total
authorized amount to be expended on this CRADA by the Contractor is
$1,860,000, of which $0 is programmatic funds, and $1,860,000 is funds-in
from the Participant.
 
	C.	 	
Neither Party shall have an obligation to continue or complete
performance of its work at a contribution in excess of its estimated
contribution as contained in Article III B above, including any subsequent
amendment.
 
	D.	 	
Each Party agrees to provide at least thirty (30) days’ notice to the
other Party if the actual cost to complete performance will exceed its
estimated cost.

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	E.	 	
The Participant will provide $310,000 in advanced funding at the
execution of this CRADA and then provide funding the first of each month
thereafter according to the schedule outlined in Appendix A, Statement of
Work. Failure by the Participant to provide funding as agreed in Appendix
A will result in the Contractor immediately stopping work.

ARTICLE IV: PERSONAL PROPERTY

All tangible personal property produced or acquired under this CRADA shall
become the property of the Participant or the Government depending upon whose
funds were used to obtain it. Such property is identified in Appendix A,
Statement of Work. Personal property shall be disposed of as directed by the
owner at the owner’s expense. All jointly funded property shall be owned by
the Government.

ARTICLE V: DISCLAIMER

THE GOVERNMENT, THE PARTICIPANT, AND THE CONTRACTOR MAKE NO EXPRESS OR IMPLIED
WARRANTY AS TO THE CONDITIONS OF THE RESEARCH OR ANY INTELLECTUAL PROPERTY OR
PRODUCT MADE, OR DEVELOPED UNDER THIS CRADA, OR THE OWNERSHIP, MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE OF THE RESEARCH OR RESULTING PRODUCT.
NEITHER THE GOVERNMENT, THE PARTICIPANT, NOR THE CONTRACTOR SHALL BE LIABLE FOR
SPECIAL, CONSEQUENTIAL OR INCIDENTAL DAMAGES ATTRIBUTED TO SUCH RESEARCH OR
RESULTING PRODUCT, INTELLECTUAL PROPERTY, OR PRODUCT MADE OR DEVELOPED UNDER
THIS CRADA.

ARTICLE VI: PRODUCT LIABILITY

Except for any liability covered by any indemnification under the Price
Anderson Act, 42 USC 2210, and any liability resulting from any negligent acts
or omissions of Contractor, Participant indemnifies the Government and the
Contractor for all damages, costs and expenses, including attorney’s fees,
arising from personal injury or property damage occurring as a result of the
making, using or selling of a product, process or service by or on behalf of
the Participant, its assignees or licensees, which was derived from the work
performed under this CRADA. In respect to this Article, neither the Government
nor the Contractor shall be considered assignees or licensees of the
Participant, as a result of reserved Government and Contractor rights. The
indemnity set forth in this paragraph shall apply only if Participant shall
have been informed as soon and as completely as practical by the Contractor
and/or the Government of the action alleging such claim and shall have been
given an opportunity, to the maximum extent afforded by applicable laws, rules,
or regulations, to participate in and control its defense, and the Contractor
and/or Government shall have provided all reasonably available information and
reasonable assistance requested by Participant. No settlement for which
Participant would be responsible shall be made without Participant’s consent
unless required by final decree of a court of competent jurisdiction.

For licenses granted or assignments made by Contractor to any third party in
Intellectual Property derived from Generated Information, such licenses shall
include the requirement that the third party shall indemnify the Government,
Contractor, and Participant for all damages, costs and expenses, including
attorney’s fees, arising from personal injury or property damage occurring as a
result of the making, using or selling of a product, process or service by or
on behalf of such third party, its assignees or licensees, provided however,
such third parties shall not be required to indemnify the Participant for any
negligent or intentional acts or omissions of the Participant.

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ARTICLE VII: OBLIGATIONS AS TO PROPRIETARY INFORMATION OR BUSINESS SENSITIVE INFORMATION

	 	 	 
	A.	 	
If Proprietary Information or Business Sensitive Information is orally
disclosed to a Party, it shall be identified as such, orally, at the time
of disclosure and confirmed in a written summary thereof appropriately
marked by the disclosing party within thirty (30) days as being
Proprietary Information or Business Sensitive Information.
 
	B.	 	
Each Party agrees to not disclose Proprietary Information or Business
Sensitive Information provided by another Party to anyone other than the
CRADA Participant and Contractor without written approval of the providing
Party, except to Government employees who are subject to the statutory
provisions against disclosure of confidential information set forth in the
Trade Secrets Act (18 USC 1905).
 
	C.	 	
All Proprietary Information or Business Sensitive Information shall be
returned to the provider thereof, upon request by the disclosing Party at
the conclusion of this CRADA at the provider’s expense.
 
	D.	 	
All Proprietary Information or Business Sensitive Information shall be
protected for a period of five (5) years from the date of execution of
this CRADA, unless and until such Proprietary Information or Business
Sensitive Information shall become publicly known without the fault of the
recipient, shall come into recipient’s possession without breach of any of
the obligations set forth herein by the recipient, or shall be
independently developed by recipient’s employees who did not have access
to such Proprietary Information or Business Sensitive Information.
 
	E.	 	
In no case shall the Contractor provide Proprietary Information or
Business Sensitive Information of Participant to any person or entity for
commercial purposes, unless otherwise agreed to in writing by such
Participant.
 
	F.	 	
Obligations of the Parties with respect to protection of Classified
Information or Unclassified Controlled Nuclear Information shall survive
as required by DOE security and classification provisions until expressly
relieved of that obligation by the appropriate DOE classification
authority.

ARTICLE VIII: OBLIGATIONS AS TO PROTECTED CRADA INFORMATION

	 	 	 
	A.	 	
Each Party may designate as Protected CRADA Information, as defined in
Article I, any Generated Information produced by its employees and, with
the agreement of the other Party, designate any Generated Information
produced by the other Party’s employees. All such designated Protected
CRADA Information shall be appropriately marked.
 
	B.	 	
For a period of five (5) years from the date Protected CRADA Information
is produced, Parties agree not to further disclose such Protected CRADA
Information except:

	 	 	 
	(1)	 	
as necessary to perform this CRADA;
 
	(2)	 	
as provided in Article XI [REPORTS AND ABSTRACTS];
 
	(3)	 	
as requested by the DOE Contracting Officer to be provided to
other DOE facilities for use only at those DOE facilities with the
same protection in place; or
 
	(4)	 	
as mutually agreed by the Parties in advance; or

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	(5)	 	
as required to comply with the requirements of reporting and
filing Subject Inventions under Articles XIV and XVI.

	 	 	 
	C.	 	
The obligations of (B) above shall end sooner for any Protected CRADA
Information which shall become publicly known without fault of either
Party, shall come into a Party’s possession without breach by that Party
of the obligations of (B) above, or shall be independently developed by a
Party’s employees who did not have access to the Protected CRADA
Information.
 
	D.	 	
Obligations of the Parties with respect to protection of Classified
Information or Unclassified Controlled Nuclear shall survive as required
by DOE security and classification provisions until expressly relieved of
that obligation by the appropriate DOE classification authority.

ARTICLE IX: RIGHTS IN GENERATED INFORMATION

The Government shall have unlimited rights in all Generated Information
produced or provided by the Parties under this CRADA, except for information
which is disclosed in a Subject Invention disclosure being considered for
patent protection, protected as a mask work right, or marked as being
copyrighted, Protected CRADA Information, or Proprietary Information. The
Government does not have unlimited rights in the identified classes of
information until their respective periods of protection provided for in the
Agreement have expired.

ARTICLE X: EXPORT CONTROL/FOREIGN OWNERSHIP, CONTROL OR INFLUENCE

	 	 	 
	A.	 	
THE PARTIES UNDERSTAND THAT MATERIALS AND INFORMATION RESULTING FROM THE
PERFORMANCE OF THIS CRADA MAY BE SUBJECT TO EXPORT CONTROL LAWS AND THAT
EACH PARTY IS RESPONSIBLE FOR ITS OWN COMPLIANCE WITH SUCH LAWS. THE
PARTIES ARE HEREBY PUT ON NOTICE THAT EXPORT OF SUCH MATERIAL AND
INFORMATION FROM THE UNITED STATES OR DISCLOSURE TO ANY NON-RESIDENT
ALIEN MAY REQUIRE SOME FORM OF EXPORT LICENSE FROM THE UNITED STATES
GOVERNMENT. FAILURE TO OBTAIN NECESSARY EXPORT LICENSES MAY RESULT IN
CRIMINAL LIABILITY.
 
	B.	 	
The Participant has a continuing obligation to provide the Contractor
written notice of any changes in the nature and extent of Foreign
Ownership, Control, or Influence over the Participant which would affect
the Participant’s answers to the previously completed FOCI certification.
Participant asserts such FOCI certification is on file with DOE.

ARTICLE XI: REPORTS AND ABSTRACTS

	 	 	 
	A.	 	
The Parties agree to produce the following deliverables:

	 	 	 
	(1)	 	
an initial abstract suitable for public release at the time
the CRADA is approved by DOE;
 
	(2)	 	
other abstracts (final when work is complete, and others as
substantial changes in scope and dollars occur);
 
	(3)	 	
a final report, upon completion or termination of this CRADA,
to include a list of Subject Inventions;

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	(4)	 	
other topical/periodic reports where the nature of research
and magnitude of dollars justify; and
 
	(5)	 	
computer software in source and executable object code format
as defined within the Statement of Work or elsewhere within the
CRADA documentation.

	 	 	 
	B.	 	
It is understood that the Contractor has the responsibility to provide
the above information at the time of its completion to the DOE Office of
Scientific and Technical Information.
 
	C.	 	
Participant agrees to provide the above information to the Contractor to
enable full compliance with paragraph B. of this Article.
 
	D.	 	
It is understood that the Contractor and the Department of Energy have a
need to document the long-term economic benefit of the cooperative
research being done under this agreement. Therefore, the Participant
acknowledges a responsibility to respond to reasonable requests, during
the term of this CRADA and for a period of two (2) years thereafter from
the Contractor for pertinent information.

ARTICLE XII: PRE-PUBLICATION REVIEW

	 	 	 
	A.	 	
The Parties agree to secure pre-publication approval from each other
which shall not be unreasonably withheld or denied beyond thirty (30)
days. The only basis for not approving a publication shall be that it
contains and would disclose Proprietary Information or Protected CRADA
Information or would create potential statutory bars to filing the U.S. or
corresponding foreign patent applications, or would disclose Classified
Information or Unclassified Controlled Nuclear Information.
 
	B.	 	
The Parties agree that neither will use the name of the other Party or
its employees in any promotional activity, such as advertisements, with
reference to any product or service resulting from this CRADA, without
prior written approval of the other Party.

ARTICLE XIII: COPYRIGHTS

	 	 	 
	A.	 	
The Parties may assert copyright in any of their Generated Information
except for Generated Information which discloses Classified Information or
Unclassified Controlled Nuclear Information. Assertion of copyright
generally means to enforce or give any indication of an intent or right to
enforce such as by marking or securing Federal registration.
 
	B.	 	
Copyrights arising under this CRADA which are authored solely by
employees of Participant shall be owned by Participant.
 
	 	 	
Where copyrights have been authored solely by employees of Contractor and
where DOE has granted Contractor the right to assert copyright, such
copyrights shall be owned by Contractor.
 
	 	 	
For copyrights arising under this CRADA authored by employees of both
Parties, each Party shall have undivided rights in ownership of such
copyrights, provided the copyrights are generated with the intention that
the Parties’ contributions be merged into inseparable or independent
parts of a unitary whole. Jointly owned rights in copyrights shall be
without accounting.

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	C.	 	
For Generated Information, the Parties acknowledge that the Government
has for itself and others acting on its behalf, a royalty-free,
nontransferable, nonexclusive, irrevocable worldwide copyright license to
reproduce, prepare derivative works, distribute copies to the public, and
perform publicly and display publicly, by or on behalf of the Government,
all copyrightable works produced in the performance of this CRADA, subject
to the restrictions this CRADA places on publication of Proprietary
Information and Protected CRADA Information.
 
	D.	 	
For all copyrighted computer software produced in the performance of this
CRADA the Party owning the copyright will provide source code, an expanded
abstract as described in Appendix B, and the object code and the minimum
support documentation needed by a competent user to understand and use the
software to DOE’s Energy Science and Technology Software Center, P.O. Box
1020, Oak Ridge, TN 37831. The expanded abstract will be treated in the
same manner as Generated Information in subparagraph C of this Article.
The only basis for not providing such source code and expanded abstract
shall be that it contains or would disclose Classified Information or
Unclassified Controlled Nuclear Information.
 
	E.	 	
The Contractor and the Participant agree that, with respect to any
copyrighted computer software produced in the performance of this CRADA,
DOE has the right, at the end of the period set forth in paragraph B of
Article VIII hereof and at the end of each two-year interval thereafter,
to request the Contractor and the Participant and any assignee or
exclusive licensee of the copyrighted software to grant a nonexclusive,
partially exclusive, or sole commercial license to a responsible applicant
upon terms that are reasonable under the circumstances, provided such
grant does not cause a termination of any licensee’s right to use the
copyrighted computer software. If the Contractor or the Participant or
any assignee or exclusive licensee refuses such request, the Contractor
and the Participant agree that DOE has the right to grant the license if
DOE determines that the Contractor, the Participant, assignee, or licensee
has not made a satisfactory demonstration that it is actively pursuing
commercialization of the copyrighted computer software.
 
	 	 	
Before requiring licensing under this paragraph E, DOE shall furnish the
Contractor/Participant written notice of its intentions to require the
Contractor/Participant to grant the stated license, and the
Contractor/Participant shall be allowed thirty (30) days (or such longer
period as may be authorized by the cognizant DOE Contracting Officer for
good cause shown in writing by the Contractor/Participant) after such
notice to show cause why the license should not be required to be
granted.
 
	 	 	
The Contractor/Participant shall have the right to appeal the decision by
the DOE to the grant of the stated license to the Invention Licensing
Appeal Board as set forth in paragraphs (b)-(g) of 10 CFR 781.65,
“Appeals”.
 
	F.	 	
The Parties agree to place copyright and other notices, as appropriate
for the protection of copyright in Generated Information which do not
include Classified Information or UCNI, in human readable form onto all
physical media, and in digitally encoded form in the header of machine
readable information recorded on such media such that the notice will
appear in human readable form when the digital data are off-loaded or the
data are accessed for display or printout.

ARTICLE XIV: REPORTING SUBJECT INVENTIONS

	 	 	 
	A.	 	
The Parties agree to disclose to each other and maintain in confidence
each and every Subject Invention which may be patentable or otherwise
protectable under the Patent Act sufficient to preserve U.S. and foreign
filing rights as necessary. The Parties acknowledge that the Contractor
will disclose all Subject Inventions to the DOE within two (2) months
after the inventor first

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discloses the Subject Invention in writing to the person(s) responsible
for patent matters of the disclosing Party. The Participant agrees that
it will promptly disclose its Subject Inventions to Contractor to
facilitate disclosure of such Subject Inventions by the Contractor to DOE
within the above stated period.
 
	B.	 	
These disclosures should be in such detail as to be capable of enabling
one skilled in the art to make and use the Subject Invention under 35 USC
112. The disclosure shall also identify any known actual or potential
statutory bars, i.e., printed publications describing the Subject
Invention or the public use or on sale of the Subject Invention in this
country. The Parties further agree to disclose to each other any
subsequently known actual or potential statutory bar that occurs for a
Subject Invention disclosed but for which a patent application has not
been filed. All Subject Invention disclosures shall be marked as
confidential under 35 USC 205.

ARTICLE XV: TITLE TO SUBJECT INVENTIONS

Whereas the Participant and the Contractor have been granted the right to elect
to retain title to Subject Inventions, except those by the Contractor which are
Exceptional Circumstance Subject Inventions. For such Contractor Exceptional
Circumstance Subject Inventions the DOE will retain title. For all other
Subject Inventions wherein the Contractor and/or Participant have the right to
obtain title:

	 	 	 
	A.	 	
Each Party shall have the first option to elect to retain title to any
Subject Invention made by its employees where the Party has an ownership
interest in the Subject Invention. If a Party elects not to retain title
to any Subject Invention of its employees, then the other Party shall have
the second option to obtain title by assignment of such Subject Invention.
The DOE shall retain title to any Subject Invention which is not retained
by any Party. Each Party shall have the option to elect to retain title
to its undivided rights in any Subject Invention made jointly by employees
of Contractor and employees of Participant.
 
	B.	 	
The Parties acknowledge that the DOE may obtain title to each Subject
Invention reported under Article XIV for which a patent application or
applications are not filed pursuant to Article XVI and for which any
issued patents are not maintained by any Party to this CRADA.
 
	C.	 	
The Parties acknowledge that the Government retains a nonexclusive,
nontransferable, irrevocable, paid-up license to practice or to have
practiced for or on behalf of the United States every Subject Invention
throughout the world.
 
	 	 	
Any patent license agreements shall be subject to all applicable DOE
classification and security restrictions as well as nonproliferation
safeguards including DOE certification and approval prior to field
testing or deployment of gas centrifuge technology or distribution of
materials or information resulting from this CRADA outside of DOE
safeguarded facilities. The U.S. Competitiveness Clause shall apply to
all such Agreements.
 
	 	 	
All disclosures of Subject Inventions and corresponding patent
applications shall be reviewed to determine whether they contain
Classified Information or Unclassified Controlled Nuclear Information in
accordance with established DOE standards and procedures and shall be
subject to all applicable classification and security restrictions
including Secrecy Orders where appropriate.

ARTICLE XVI: FILING PATENT APPLICATIONS

	 	 	 
	A.	 	
The Parties agree that the Party initially indicated as having an
ownership interest in any Subject Inventions (Inventing Party) shall have
the first opportunity to file U.S. and foreign patent applications. If the
Contractor or Participant does not file such applications within one year
after

10

 

	 	 	 
	 	 	
election, then the other Party to this CRADA exercising an option
pursuant to Article XV may file patent applications on such Subject
Inventions. If a patent application is filed by the other party (Filing
Party), the Inventing Party shall reasonably cooperate and assist the
Filing Party, at the Filing Party’s expense, in executing a written
assignment of the Subject Invention to the Filing Party and in otherwise
perfecting the patent application, and the Filing Party shall have the
right to control the prosecution of the patent application. The Parties
shall agree between themselves as to who will file patent applications on
any joint Subject Invention. The Parties shall share equally in the costs
for the prosecution, filing and maintenance of joint Subject Inventions
where both Parties elect to retain title to their undivided rights.
 
	B.	 	
The Parties agree that DOE has the right to file patent applications in
any country if neither Party desires to file a patent application for any
Subject Invention. Notification of such negative intent shall be made in
writing to the DOE Contracting Officer within three (3) months of the
decision of the non-inventing party to not file a patent application for
the Subject Invention pursuant to Article XV, or not later than 60 days
prior to the time when any statutory bar might foreclose filing of a U.S.
patent application.
 
	C.	 	
A Party electing title or filing a patent application in the United
States or in any foreign country shall advise the other Party and the DOE
if it no longer desires to continue prosecution or retain title in the
United States or any foreign country. The other Party and then the DOE
will be afforded the opportunity to take title and retain the patent
rights in the United States or any such foreign country.
 
	D.	 	
Every twelve (12) months from the date of the CRADA, each Party shall
deliver to the other Party interim reports listing the Subject Inventions,
if any, it has produced during the preceding twelve (12) month period. If
a Party has produced no Subject Invention for any twelve (12) month
period, the Party’s interim report for that period will explicitly state
so.

ARTICLE XVII: TRADEMARKS

The Parties may seek to obtain Trademark/service mark protection on products or
services generated under this CRADA in the United States or foreign countries.
The Parties hereby acknowledge that the Government shall have the right to
indicate on any similar goods or services produced by or for the Government
that such goods or services were derived from and are a DOE version of the
goods or services protected by such Trademark/service mark with the
Trademark/service mark and the owner thereof being specifically identified. In
addition, the Government shall have the right to use such Trademark/service
mark in print or communications media.

ARTICLE XVIII: MASK WORKS

The Parties may seek to obtain legal protection for Mask Works fixed in
semiconductor products generated under this CRADA as provided by Chapter 9 of
Title 17 of the United States Code. The Parties hereby acknowledge that the
Government or others acting on its behalf shall retain a nonexclusive, paid-up,
worldwide, irrevocable, nontransferable license to reproduce, import, or
distribute the covered semiconductor product by or on behalf of the Government,
and to reproduce and use the Mask Work by or on behalf of the Government.

ARTICLE XIX: COST OF INTELLECTUAL PROPERTY PROTECTION

Each Party shall be responsible for payment of all costs relating to copyright,
Trademark and Mask Work filing, U.S. and foreign patent application filing and
prosecution, and all costs relating to maintenance fees for U.S. and foreign
patents hereunder which are owned by that Party. Government/DOE laboratory

11

 

funds contributed as DOE’s cost share to a CRADA cannot be given to Participant
for payment of Participant’s costs of filing and maintaining patents or filing
for copyrights, Trademarks and Mask Works.

ARTICLE XX: REPORTS OF SUBJECT INVENTION USE

Participant agrees to submit, for a period of two (2) years and upon request of
DOE, a non-proprietary report no more frequently than annually on efforts to
utilize any Intellectual Property arising under the CRADA.

ARTICLE XXI: DOE MARCH-IN RIGHTS

The Parties acknowledge that the DOE has certain march-in rights to any Subject
Inventions in accordance with 48 CFR 27.304-1(g) and 15 USC 3710a (b)(1)(B) and
(C).

ARTICLE XXII: U.S. COMPETITIVENESS

The Parties agree that a purpose of this CRADA is to provide substantial
benefit to the U.S. economy.

In exchange for the benefits received under this CRADA, the Participant
therefore agrees to the following:

	 	 	 
	A.	 	
Products embodying Intellectual Property developed under this CRADA shall
be substantially manufactured in the United States;
 
	B.	 	
Processes, services, and improvements thereof which are covered by
Intellectual Property developed under this CRADA shall be incorporated
into the Participant’s manufacturing facilities in the United States
either prior to or simultaneously with implementation outside the United
States. Such processes, services, and improvements, when implemented
outside the U.S., shall not result in reduction of the use of the same
processes, services, or improvements in the United States; and
 
	C.	 	
The Contractor agrees to a U.S. Industrial Competitiveness clause in
accordance with its prime contract with respect to any licensing and
assignments of its intellectual property arising from this CRADA, except
that any licensing or assignment of its intellectual property rights to
the Participant shall be in accordance with the terms of Paragraphs A. and
B. of this Article.

ARTICLE XXIII: ASSIGNMENT OF PERSONNEL

	 	 	 
	A.	 	
It is contemplated that each Party may assign personnel to the other
Party’s facility as part of this CRADA to participate in or observe the
research to be performed under this CRADA. Such personnel assigned by the
assigning Party shall not during the period of such assignments be
considered employees of the receiving Party for any purpose.
 
	B.	 	
The receiving Party shall have the right to exercise routine
administrative and technical supervisory control of the occupational
activities of such personnel during the assignment period and shall have
the right to approve the assignment of such personnel and/or to later
request their removal by the assigning Party.
 
	C.	 	
The assigning Party shall bear any and all costs and expenses with regard
to its personnel assigned to the receiving Party’s facilities under this
CRADA. The receiving Party shall bear facility costs of such assignments.

12

 

	 	 	 
	D.	 	
Participant agrees that only employees and others acting on its behalf
who are U.S. citizens with proper security clearances and a valid “need to
know” will have access to Classified Information or UCNI in this CRADA,
and if any such employees or others acting on its behalf have dual
citizenship, those employees will be especially advised of the Export
Control restrictions applicable to this CRADA. Participant will also
provide access to Classified Information and UCNI to DOE and other Federal
personnel as required by relevant DOE security and classification
provisions.

ARTICLE XXIV: FORCE MAJEURE

No failure or omission by Contractor or Participant in the performance of any
obligation under this CRADA shall be deemed a breach of this CRADA or create
any liability if the same shall arise from any cause or causes beyond the
control of Contractor or Participant, including but not limited to the
following, which, for the purpose of this CRADA, shall be regarded as beyond
the control of the Party in question: Acts of God, acts or omissions of any
government or agency thereof, compliance with requirements, rules, regulations,
or orders of any governmental authority or any office, department, agency, or
instrumentality thereof, fire, storm, flood, earthquake, accident, acts of the
public enemy, war, rebellion, insurrection, riot, sabotage, invasion,
quarantine, restriction, transportation embargoes, or failures or delays in
transportation.

ARTICLE XXV: ADMINISTRATION OF CRADA

It is understood and agreed that this CRADA is entered into by the Contractor
under the authority of its prime contract with DOE. The Contractor is
authorized to and will administer this CRADA in all respects unless otherwise
specifically provided for herein. Administration of this CRADA may be
transferred from the Contractor to DOE or its designee with notice of such
transfer to the Participant, and the Contractor shall have no further
responsibilities except for the confidentiality, use and/or nondisclosure
obligations of this CRADA.

ARTICLE XXVI: RECORDS AND ACCOUNTING FOR GOVERNMENT PROPERTY

The Participant shall maintain records of receipts, expenditures, and the
disposition of all Government property in its custody related to the CRADA.

ARTICLE XXVII: NOTICES

	 	 	 
	A.	 	
Any communications required by this CRADA, if given by postage prepaid
first class U.S. Mail addressed to the Party to receive the communication,
shall be deemed made as of the day of receipt of such communication by the
addressee, or on the date given if by verified facsimile. Address changes
shall be given in accordance with this Article and shall be effective
thereafter. All such communications, to be considered effective, shall
include the number of this CRADA.
 
	B.	 	
The addresses, telephone numbers and facsimile numbers for the Parties
are as follows:

	 	 	 
	Contractor:	 	 
	Business Manager	 	
Telephone:
	Technology Transfer and Economic Development	 	
(865) 574-4495
	UT-Battelle, LLC	 	
Facsimile:
	P. O. Box 2008	 	(865) 576-9465
	Oak Ridge, Tennessee 37831-6499	 	 

13

 

	 	 	 
	Participant:	 	 
	J. William Bennett	 	Telephone:
	Vice President Advanced Technology	 	
(301) 564-3307
	United States Enrichment Corporation	 	
Facsimile No.
	6903 Rockledge Drive	 	
(301) 897-3143
	Bethesda, Maryland 20817	 	 

ARTICLE XXVIII: DISPUTES

The Parties shall attempt to jointly resolve all disputes arising from this
CRADA. If the Parties are unable to jointly resolve a dispute within a
reasonable period of time, the dispute shall be decided by the DOE Contracting
Officer, who shall reduce his/her decision to writing within sixty (60) days
of receiving, in writing, the request for a decision by either Party to this
CRADA. The DOE Contracting Officer shall mail or otherwise furnish a copy of
the decision to the Parties. The decision of the DOE Contracting Officer is
final unless, within one hundred and twenty (120) days, the Participant brings
an action for adjudication in a court of competent jurisdiction in the State
of Tennessee. To the extent that there is no applicable U.S. Federal law,
this CRADA and performance thereunder shall be governed by the law of the
State of Tennessee.

ARTICLE XXIX: ENTIRE CRADA AND MODIFICATIONS

	 	 	 
	A.	 	
It is expressly understood and agreed that this CRADA with its Appendices
contains the entire agreement between the Parties with respect to the
subject matter hereof and that all prior representations or agreements
relating hereto have been merged into this document and are thus
superseded in totality by this CRADA. This CRADA shall not be effective
until approved by DOE.
 
	B.	 	
Any agreement to materially change any terms or conditions of this CRADA
or the Appendices shall be valid only if the change is made in writing,
executed by the Parties hereto, and approved by DOE.

ARTICLE XXX: TERMINATION

This CRADA may be terminated by either Party upon thirty (30) days written
notice to the other Party. This CRADA may also be terminated by the Contractor
in the event of failure by the Participant to provide the necessary advance
funding, as agreed in Article III.

In the event of termination by either Party, each Party shall be responsible
for its share of the costs incurred through the effective date of termination,
as well as its share of the costs incurred after the effective date of
termination, and which are related to the termination. The confidentiality,
use, and/or nondisclosure obligations and provisions concerning Intellectual
Property of this CRADA shall survive any termination of this CRADA.

ARTICLE XXXI: (SECURITY OCT. 1987)

Pursuant to 48 CFR 904.404(d)(1) and 48 CFR 952.204-2, the following provisions
are also made a part of this CRADA:

	 	 	 
	A.	 	
Responsibility. It is the Contractor’s and Participant’s duty to
safeguard all Classified Information, special nuclear material (SNM),
UCNI, and other DOE property. The Contractor and Participant shall, in
accordance with DOE security regulations and requirements, be responsible
for safeguarding all Classified Information, UCNI, and protection against
sabotage,

14

 

	 	 	 
	 	 	
espionage, loss and theft, of the classified documents and material in
the Contractor’s and Participant’s possession in connection with the
performance of work under this CRADA. Except as otherwise expressly
provided in this CRADA, the Contractor and Participant shall, upon
completion or termination of this CRADA, transmit to DOE any classified
matter or UCNI in the possession of the Contractor or Participant or any
person under the Contractor’s or Participant’s control in connection with
performance of this CRADA. If retention by the Contractor or Participant
of any classified or UCNI matter is required after the completion or
termination of the CRADA and such retention is approved by the
Contracting Officer, the Contractor or Participant will complete a
certificate of possession to be furnished to DOE specifying the
classified or UCNI matter to be retained. The certification shall
identify the items and types of categories of matter retained, the
conditions governing the retention of the matter, and the period of
retention, if known. If the retention is approved by the Contracting
Officer, the security provisions of the CRADA will continue to be
applicable to the matter retained. Special nuclear material (SNM) will
not be retained after the completion or termination of the CRADA.
 
	B.	 	
Regulations. The Contractor and Participant agree to conform to all
security regulations and requirements of DOE.
 
	C-G.	 	
These definitions are included above in Sections N-P of Article I.
 
	H.	 	
Security clearance of personnel. The Contractor or Participant shall not
permit any individual to have access to any Classified Information, except
in accordance with the Atomic Energy Act of 1954, as amended, Executive
Order 12958 and 12968 and the DOE’s regulations or requirements applicable
to the particular level and category of Classified Information to which
access is required.
 
	I.	 	
Criminal liability. It is understood that disclosure of any Classified
Information relating to the work or services ordered hereunder to any
person not entitled to receive it, or failure to safeguard any Classified
Information that may come to the Contractor or Participant or any person
under the Contractor’s or Participant’s control in connection with work
under this CRADA, may subject the Contractor or Participant, its their
agents, employees, or subcontractors to criminal liability under the laws
of the United States. (See the Atomic Energy Act of 1954, as amended 42
U.S.C. 2011 et seq.; 18 U.S.C. 793 and 794; and E.O. and 12968.)
 
	J.	 	
Subcontractors and purchase orders. Except as otherwise authorized in
writing by the Contracting Officer, the Contractor and Participant shall
insert provisions similar to the foregoing in all subcontracts and
purchase orders under this CRADA.

ARTICLE XXXII: CLASSIFICATION (APR. 1984) AND UNCLASSIFIED CONTROLLED NUCLEAR INFORMATION

	 	 	 
	A.	 	
Pursuant to 48 CFR 904.404(d)(2) and 48 CFR 952.204-70 the following
provisions are also made a part of this CRADA:
 
	 	 	
In the performance of the work under this CRADA, the Contractor and
Participant shall ensure that an Authorized Original Classifier or
Derivative Classifier shall assign classifications to all documents,
material, and equipment originated or generated under the CRADA in
accordance with classification regulations and guidance furnished to the
Contractor and Participant by the DOE. Every subcontract and purchase
order issued hereunder involving the origination or generation of
classified documents, material, or equipment shall include a provision to
the effect that in the performance of such subcontract or purchase order,
the subcontractor or supplier shall

15

 

	 	 	 
	 	 	
ensure that an Authorized Original Classifier or Derivative Classifier
shall assign classifications to all such documents, materials, and
equipment in accordance with classification regulations and guidance
furnished to such subcontractor or supplier by the Contractor or
Participant.
 
	B.	 	
(1) Participant agrees that should it receive or generate any
Unclassified Controlled Nuclear Information it will abide by the
restrictions for its access, protection, and transmittal in accordance
with 10 CFR 1017.
 
	 	 	
(2) It is understood that any person who violates Section 148 of the
Atomic Energy Act or any regulation or order of the Secretary issued
under Section 148 of the Atomic Energy Act, including regulations
regarding Unclassified Controlled Nuclear Information, is subject to a
civil penalty. The Assistant Secretary for Defense Programs may
recommend to the Secretary imposition of this civil penalty, which shall
not exceed $110,000 for each violation.

ARTICLE XXXIII: DOE-OWNED RELATED INTELLECTUAL PROPERTY

The Participant acknowledges that there exists a series of DOE-owned invention
disclosures as well as DOE-owned patent applications related to the subject of
this CRADA which have been filed with the U.S. Patent Office (USPTO) by the
Department of Energy. Many of these have received Notice of Allowability from
the USPTO but patent issuance is being withheld pending declassification and
removal of Secrecy Orders. The processes and/or products disclosed and/or
claimed in these patent applications and/or disclosures may be disclosed and
identified to the Participant during the performance of this CRADA. The
Parties agree to refrain from disclosure to others, practice, or use of this
Related Intellectual Property except as required for performance under this
CRADA.

Contractor hereby reaffirms that it does not presently own or control any of
the DOE-owned Related Intellectual Property. Contractor does not make any
advance representation as to what, if any rights to practice or license DOE’s
Related Intellectual Property might be granted to Contractor or Participant in
the future.

ARTICLE XXXIV: FACILITY CLEARANCE

NOTICES

Statute prohibits the award of a contract under a national security program to
a company owned by an entity controlled by a foreign government unless a waiver
is granted by the Secretary of Energy.

If the Participant has either a Department of Defense or Department of Energy
facility clearance, the Participant generally needs not resubmit the following
FOCI information unless specifically requested to do so, instead, provide your
DOE facility clearance code or your DOD assigned commercial and government
entity (CAGE) code.

	 	 	 
	(a)	 	
Use of the Certificate Pertaining to Foreign Interests, FOCI
Certification

	 	 	 
	(1)	 	
The work anticipated in this CRADA will require
access to classified information or special nuclear material.
Such access will require a facility clearance for the
Participant and access authorizations (security clearances)
for Participant personnel working with the classified
information or special nuclear material. For such facility
clearance the Participant has on file with DOE a FOCI
Certification.
 
	(2)	 	
Information submitted by the Participant in
response to the FOCI Certification

16

 

	 	 	 
	 	 	
shall be used solely for the purposes of evaluating FOCI and
shall be treated by the DOE, to the extent permitted by law,
as business or financial information submitted in confidence.
 
	(3)	 	
Participant shall immediately submit to the
Contractor and Contracting Officer written notification of any
changes in the extent and nature of FOCI which could affect
the Participant’s answers to the questions in the FOCI
Certification. Notice of changes in ownership or control
which are required to be reported to the Securities and
Exchange Commission, the Federal Trade Commission, or the
Department of Justice shall also be furnished concurrently to
the Contractor and Contracting Officer.

	 	 	 
	(b)	 	
These definitions are included above in Section O of Article I.
 
	(c)	 	
A “Facility Clearance” is an administrative determination
that a facility is eligible for access to classified information or
special nuclear materials. A Facility Clearance shall be based upon
a determination that satisfactory safeguards and security measures
are afforded the activities being performed at the facility. It is
DOE policy that all Parties requiring access to classified
information or special nuclear material be processed for a Facility
Clearance at the level appropriate to the activities being performed
at the facility. Approval for a Facility Clearance shall be based
upon:

	 	 	 
	(1)	 	
A Favorable foreign ownership, control, or
influence (FOCI) determination. This determination will be
based upon the Participant’s response to the questions in FOCI
Certification and any supporting data provided by the
Participant. Prior to execution of the CRADA, the DOE must
determine that execution of a CRADA with the Participant will
not pose an undue risk to the common defense and security as a
result of it’s access to classified information or special
nuclear material in the performance of the CRADA. The
Contracting Officer may require the Participant to submit such
additional information as deemed pertinent to this
determination.
 
	(2)	 	
A CRADA containing the appropriate security
clauses.
 
	(3)	 	
Approved safeguards and security plans which
describe protective measures appropriate to the classified
activities being performed at the facility.
 
	(4)	 	
If access to nuclear materials is involved, an
established Reporting Identification Symbol code for the
Nuclear Materials Management and Safeguards Reporting System.
 
	(5)	 	
For a facility to possess classified matter or
special nuclear material at its location, a survey conducted
no more than 6 months before the facility clearance date, with
a composite facility rating of satisfactory.
 
	(6)	 	
Appointment of a Facility Security Officer, and,
if applicable, a Materials Control and Accountability
Representative. The Facility Security Officer must possess an
access authorization equivalent to the Facility Clearance.

17

 

	 	 	 
	(7)	 	
Access authorizations for key management personnel. Key
management personnel, who will be determined on a
case-by-case basis, must possess access authorizations
equivalent to the level of the Facility Clearance.

	 	 	 
	(d)	 	
A Facility Clearance is required even for contracts which do
not require Participant’s offices to receive, process, reproduce,
store, transmit, or handle classified information or special nuclear
material, but which require DOE access authorizations for the
Participant’s employees to perform work at a DOE location. This
type facility is identified as a non-possessing facility.
 
	(e)	 	
Facility Clearances are required prior to the granting of an
access authorization under a contract.
 
	(f)	 	
Except as otherwise authorized in writing by the Contracting
Officer, the Contractor and Participant shall insert provisions
similar to the foregoing in all subcontracts and purchase orders.
Any subcontractors requiring access authorizations for access to
classified information or special nuclear material shall be directed
to provide responses to the questions in Standard Form 328 of this
provision directly to the local Office of Safeguards and Security
cognizant of the prime contract.

ARTICLE XXXV: AWARDS/COMPENSATION

Participant agrees that it will not assert a claim for pecuniary award or
compensation under the provisions of the Atomic Energy Act of 1954, as amended,
or apply for compensation or damage under Section 183 of 35 U.S.C. for any
damage caused by issuance of a secrecy order with respect to any invention or
discovery made or conceived in the course of or under this CRADA. In addition,
Participant understands that future commercialization efforts involving gas
centrifuge technology may be severely curtailed as a result of DOE
classification, safeguards and nonproliferation considerations and agrees that
it will not assert a claim for pecuniary award or compensation based on DOE or
Contractor actions arising out of such considerations.

ARTICLE XXXVI: UNDERSTANDING CONCERNING FUTURE LICENSING OF
INTELLECTUAL PROPERTY TO PARTICIPANT

It is the understanding of the Parties and DOE that, prior to or upon a
decision to proceed with commercial use of the gas centrifuge technology to
enrich uranium by Participant, DOE will provide Participant with at least a
nonexclusive license to DOE-owned Related Intellectual Property and any
Contractor-owned Intellectual Property in which DOE has been granted an
exclusive license with the right to sublicense (See Article I, Paragraph M) in
the field of use of gas centrifuge technology for the production of enriched
uranium. Separate license agreements between Contractor and Participant will
include any Contractor Subject Invention, and Contractor Background
Intellectual Property if there are no pre-existing licensing proposals,
contractual commitments or obligations by Contractor with a third party in such
Background Intellectual Property. Determinations concerning ownership of
Contractor Subject Inventions and negotiation of appropriate royalty provisions
will be deferred pending future commercialization decisions.

ARTICLE XXXVII: IDENTIFICATION OF CONTRACTOR BACKGROUND/DOE OWNED
RELATED INTELLECTUAL PROPERTY

The Contractor and DOE agree that efforts will be made to compile a complete
list of Contractor Background Intellectual Property and DOE-Owned Related
Intellectual Property which may be useful in

18

 

performance of this CRADA and of possible interest to Participant for future
licensing in the event that a decision is made to proceed with commercial use
of the gas centrifuge to enrich uranium. Such list will be provided to
Participant no later than twelve (12) months from the date of execution of this
Agreement.

FOR CONTRACTOR:

By: /s/ Janis E. Haerer

Name:         Janis E. Haerer                          

                    Director, Technology Transfer

Title:           and Economic Development      

Date: June 23, 2000

FOR PARTICIPANT:

By: /s/ J.W. Bennett

Name: J.W. Bennett

Title: Vice President, Advanced Technology

Date: June 30, 2000

19

 

AMENDMENT A

To

COOPERATIVE RESEARCH AND DEVELOPMENT AGREEMENT

(hereinafter “CRADA”) No. ORNL00-0579

Development of an Economically Attractive Gas Centrifuge Machine and Enrichment Process

By and Between

UT-Battelle, LLC

Under its U. S. Department of Energy (DOE) Contract No. DE-AC05-00OR22725

(hereinafter “Contractor”)

And

USEC Inc. (hereinafter “Participant”)

both being hereinafter jointly referred to as the “Parties.”

The Parties agree to amend the CRADA No. ORNL00-0579 as follows:

	 	 	 
	1.	 	
Appendix A, Statement of Work dated June 30, 2000, is deleted and
replaced by Appendix A Statement of Work Amendment A attached hereto.
 
	2.	 	
ARTICLE III, TERM FUNDING AND COSTS, Paragraph A, last sentence is
amended to read as follows:
 
	 	 	
“The work to be performed under this CRADA shall be completed within
twenty-four (24) months from the effective date with an expiration date
of September 30, 2002.”
 
	3.	 	
ARTICLE III, TERM FUNDING AND COSTS, Paragraph B is amended to read as
follows:
 
	 	 	
The total value of this CRADA is $7,000,000. The Participant’s estimated
contribution to this effort is $7,000,000 (with a maximum $3,710,000 of
that amount being total funds-in to the Contractor). The Government’s
estimated contribution, which is provided through the Contractor’s
contract with DOE, is $0. Additionally, the Participant’s funds-in
contribution is usually subject to Federal Administrative Charges in the
amount of 3 percent. This charge for Participant has been waived until
October 1, 2001, and upon approval of the DOE CFO will continue to be
waived until September 30, 2002. The total authorized amount to be
expended on this CRADA by the Contractor cannot exceed $3,710,000 of
which $0 is programmatic funds, and $3,710,000 is funds-in from the
Participant.

1

 

	 	 	 
	4.	 	
ARTICLE III, TERM FUNDING AND COSTS, Paragraph E is amended by deleting
the entire Paragraph E,
 
	 	 	
“The Participant will provide $310,000 in advanced funding at the
execution of this CRADA and then provide funding the first of each month
thereafter according to the schedule outlined in Appendix A, Statement of
Work. Failure by the Participant to provide funding as agreed in
Appendix A will result in the Contractor immediately stopping work.”
 
	 	 	
and adding the following new paragraph E,
 
	 	 	
“The Contractor acknowledges the Participant has provided $310,000 in
advanced funding at the execution of this CRADA and then provided funding
the first of each month thereafter according to the schedule outlined in
the original Appendix A, Statement of Work. For the duration of
Amendment “A” the Participant will provide a minimum of $135,000 no later
than the first of each month. In the event additional expenditures are
anticipated beyond such minimum, Contractor will supply Participant with
a funding request specifying the amount the Participant needs to wire
along with an explanation plus actual expenditures from the previous
month. Failure by the Participant to provide funding as agreed will
result in the Contractor immediately stopping work.”
 
	5.	 	
ARTICLE IV, PERSONAL PROPERTY, is amended by deleting the first sentence,
 
	 	 	
“All tangible personal property produced or acquired under this CRADA
shall become the property of the Participant or the Government depending
upon whose funds were used to obtain it.”
 
	 	 	
and adding the following sentence at the beginning of the paragraph,
 
	 	 	
“All tangible personal property used in the performance of this CRADA
will be presumed to be owned by the Government unless documentation is
provided by the Participant showing its funds were used to obtain it.”
 
	6.	 	
ARTICLE VIII, OBLIGATIONS AS TO PROTECTED CRADA INFORMATION, Paragraph B
subparagraph (4) is amended by deleting the word “or” at the end of the
sentence.
 
	7.	 	
ARTICLE VIII, OBLIGATIONS AS TO PROTECTED CRADA INFORMATION, Paragraph B
subparagraph (5) is amended by deleting the period “.” and adding “; or”
at the end of the sentence.
 
	8.	 	
ARTICLE VIII, OBLIGATIONS AS TO PROTECTED CRADA INFORMATION, Paragraph B
is amended by adding the new sub paragraph (6) which reads as follows:
 
	 	 	
"(6) as deemed necessary by the DOE to initiate a Government centrifuge
program. Use and disclosure, for commercial purposes, of Participant’s
Protected CRADA Information, during its period of protection, shall be
for reasonable compensation.”
 

2

 

	 	 	 
	9.	 	
ARTICLE XXXVI, UNDERSTANDING CONCERNING FUTURE LICENSING OF
INTELLECTUAL PROPERTY TO PARTICIPANT, is amended by:

	 	 	 
	(a)	 	
changing the Article XXXVI title to “UNDERSTANDING CONCERNING
FUTURE LICENSING OF INTELLECTUAL PROPERTY TO PARTICIPANT AND BY
PARTICIPANT” and,
 
	(b)	 	
at the end of the paragraph adding the following sentences,
“In the event that DOE initiates a Government sponsored centrifuge
program, Participant’s Subject Inventions will be subject to the
Government license as set forth in Article XV of this Agreement.
For subsequent nongovernmental use, Participant agrees to license,
for reasonable compensation to participants in the Government
program.”

	 	 	 
	10.	 	
ARTICLE XXVII, NOTICES, Paragraph B is amended by changing Participant’s
contact as follows:

	 	 	 
	Participant:	 	 
	Daniel P. Stout	 	
Telephone:
	Director, Enrichment Technology	 	
(301) 564-3350
	United States Enrichment Corporation Inc.	 	
Facsimile No:
	6903 Rockledge Drive	 	
(301) 564-3208
	Bethesda, Maryland 20817	 	 

	 	 	 
	11.	 	
ARTICLE XXXVII, IDENTIFICATION OF CONTRACTOR BACKGROUND/DOE OWNED RELATED
INTELLECTUAL PROPERTY, is amended by deleting the last sentence,
 
	 	 	
“Such list will be provided to Participant no later than twelve (12)
months from the date of execution of this Agreement.”
 
	 	 	
and adding the following sentence at the end of the paragraph,
 
	 	 	
“Such list will be provided to Participant no later than one (1) month
after the completion or termination of this Agreement.”
 
	12.	 	
New ARTICLE XXXVIII, is added as follows:
 
	 	 	
“ARTICLE XXXVIII: WORK ASSIGNMENTS OF CONTRACTOR PERSONNEL IN THE EVENT
OF A GOVERNMENT CENTRIFUGE PROGRAM
 
	 	 	
Participant acknowledges that in the event a future Government centrifuge
program is established, the Contractor has a right to assign employees to
perform similar or identical services as described in the statement of
work for other participants in that program as long as the Participant’s
Proprietary Information is not utilized.”
 
	13.	 	
ARTICLE XXIX, ENTIRE CRADA AND MODIFICATIONS, is amended by adding new
paragraph “C” as follows:

	 	 	 
	“C	 	
Notwithstanding any other provision of this CRADA, this CRADA
is subject to the provisions of the Agreement between the U.S.
Department of Energy (“DOE”) and USEC Inc., (“USEC”), dated June 17,
2002 (the “Agreement of June 17, 2002”). In the event of

3

 

	 	 	 
	 	 	
any inconsistency between the Agreement of June 17, 2002 and this
CRADA, the Agreement of June 17, 2002 shall take precedence.”

	 	 	 
	14.	 	
All other terms of the CRADA remain unchanged. This Amendment shall be
effective on the later of the dates of: (1) the signatures below or, (2)
until approved by DOE.

		
	 	              IN WITNESS WHEREOF, the Parties have executed two originals of this
Amendment through their duly authorized representatives.

FOR CONTRACTOR:

By:        /s/
Janis E. Haerer                                     

Name:          Janis E. Haerer, Director                               

Title:   Technology Transfer and Economic Development

Date:        July 12, 2002                                     

FOR PARTICIPANT:

By:                /s/  Dennis Spurgeon                                

Name:                   Dennis Spurgeon                                

                            Executive Vice President

Title:                 and Chief Operating Officer                  

Date:        June 28, 2002                                     

4

 

AMENDMENT B

To

COOPERATIVE RESEARCH AND DEVELOPMENT AGREEMENT

(hereinafter “CRADA”) No. ORNL00-0579

Development of an Economically Attractive Gas Centrifuge Machine and Enrichment Process

By and Between

UT-Battelle, LLC

Under its U. S. Department of Energy (DOE) Contract No. DE-AC05-00OR22725

(hereinafter “Contractor”)

And

USEC Inc. (hereinafter “Participant”)

both being hereinafter jointly referred to as the “Parties.”

The Parties agree to amend the CRADA No. ORNL00-0579 as follows:

	 	 	 
	1.	 	
Appendix A, Statement of Work “Amendment A,” is deleted and replaced by
Appendix A Statement of Work “Amendment B” attached hereto.
 
	2.	 	
ARTICLE II, STATEMENT OF WORK, is amended by adding the following sentence at the end of the paragraph:
 
	 	 	
“The Parties recognize that Participant’s operations in buildings K-1600 and K-101
at the East Tennessee Technology Park in support of this CRADA do not
extend beyond January 2006 or such later date as may
be provided in the DOE lease for those buildings.”
 
	3.	 	
ARTICLE III, TERM FUNDING AND COSTS, Paragraph A, last sentence is
amended to read as follows:
 
	 	 	
“The work to be performed under this CRADA shall be completed within
eighty-four (84) months from the effective date.”
 
	4.	 	
ARTICLE III, TERM FUNDING AND COSTS, Paragraph B is amended to read as
follows:
 
	 	 	
The total value of this CRADA is $121,000,000. The Participant’s
estimated contribution to this effort is $121,000,000 (with a maximum
$28,520,000 of that amount being total funds-in to the Contractor). The
Government’s estimated contribution, which is provided through the
Contractor’s contract with DOE, is $0. Additionally, the Participant’s
funds-in contribution is usually subject to Federal Administrative
Charges in the amount of three percent. This charge for Participant is
waived until June 30, 2003, at which time its continuation will require
approval of the DOE CFO. The total authorized amount to be expended on
this CRADA by the Contractor cannot exceed $28,520,000 of which $0 is
programmatic funds, and $28,520,000 is funds-in from the Participant.
 
	5.	 	
ARTICLE III, TERM FUNDING AND COSTS, Paragraph E is amended by deleting
the entire Paragraph E,

1

 

	 	 	 
	 	 	
“The Contractor acknowledges the Participant has provided $310,000 in
advanced funding at the execution of this CRADA and then provided funding
the first of each month thereafter according to the schedule outlined in
the original Appendix A, Statement of Work. For the duration of
Amendment “A” the Participant will provide a minimum of $135,000 no later
than the first of each month. In the event additional expenditures are
anticipated beyond such minimum, Contractor will supply Participant with
a funding request specifying the amount the Participant needs to wire
along with an explanation plus actual expenditures from the previous
month. Failure by the Participant to provide funding as agreed will
result in the Contractor immediately stopping work.”
 
	 	 	
and adding the following new paragraph E,
 
	 	 	
The Participant will provide $750,000 in advanced funding at the
execution of this Amendment B and then provide $375,000 no later than the
first of each month thereafter according to the schedule in Appendix A,
Statement of Work “Amendment B.” Failure by the Participant to provide
funding as agreed in Appendix A will result in the Contractor immediately
stopping work except that, in the event that the Contractor is unable to provide
the requisite appropriate number of personnel, a corresponding reduction in funding
by Participant will not be considered a failure to provide funding.
 
	6.	 	
ARTICLE IV, PERSONAL PROPERTY, is amended by deleting the first sentence,
 
	 	 	
“All tangible personal property used in the performance of this CRADA
will be presumed to be owned by the Government unless documentation is
provided by the Participant showing its funds were used to obtain it.”
 
	 	 	
and adding the following sentence at the beginning of the paragraph,
 
	 	 	
“All tangible personal property produced or acquired under this CRADA
shall become the property of the Participant or the Government depending
upon whose funds were used to obtain it.”
 
	7.	 	
ARTICLE XXIX, ENTIRE CRADA AND MODIFICATIONS, Paragraph C, is
amended by adding the following language at the end of the first
sentence: “and any modifications to the DOE-USEC June 17,
2002, Agreement that have been agreed to in writing by the Parties.”

2

 

	 	 	 
	8.	 	
ARTICLE XXIX, ENTIRE CRADA AND MODIFICATIONS, Paragraph C, is
amended by adding the following language at the end of the paragraph:
	 	 	
“A copy of the Agreement is attached as Appendix D.”

	 	 	 
	9.	 	
ARTICLE XXVII, NOTICES, Paragraph B is amended by changing Participant’s
contact as follows:

	 	 	 
	Participant:	 	 
	Daniel P. Stout	 	
Telephone:
	Director, Enrichment Technology	 	
(301) 564-3350
	United States Enrichment Corporation Inc.	 	
Facsimile No:
	6903 Rockledge Drive	 	
(301) 564-3208
	Bethesda, Maryland 20817	 	 

	 	 	 
	10.	 	
ARTICLE XXXVI, UNDERSTANDING CONCERNING FUTURE LICENSING OF
INTELLECTUAL PROPERTY TO PARTICIPANT AND BY PARTICIPANT, is amended by deleting the language “prior to or” in the first sentence of the paragraph, and
at the end of the paragraph deleting the last sentence:

“For subsequent nongovernmental use,
Participant agrees to license, for reasonable compensation to participants in the Government program.”

and at the end of the paragraph adding the following sentence:

“For subsequent nongovernmental use, Participant agrees to license to participants in the Government program, pursuant to appropriate terms and conditions, including reasonable compensation.”

	 	 	 
	11.	 	
Appendix D entitled:

“AGREEMENT BETWEEN THE U.S. DEPARTMENT OF ENERGY (“DOE”)

AND

USEC INC. (“USEC”)”

		
	 	        is attached.

3

 

		
	 	        IN WITNESS WHEREOF, the Parties have executed two originals of this
Amendment through their duly authorized representatives.

FOR CONTRACTOR:

By: /s/ Lee L. Riedinger

Name: Lee L. Riedinger

Title: Deputy for Science and Technology

Date:                September
11, 2002                                

FOR PARTICIPANT:

By:                /s/ Dennis Spurgeon                                

Name:                   Dennis Spurgeon                                

                            Executive Vice President

Title:                 and Chief Operating Officer                  

Date:                September
11, 2002                                

4<PAGE>

                                                                   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

<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                PAGE
<S>     <C>       <C>                                                                                           <C>

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>

<PAGE>
                               TABLE OF CONTENTS
                                  (continued)

<TABLE>
<CAPTION>
                                                                                                               PAGE
<S>     <C>       <C>                                                                                          <C>
         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
</TABLE>

                                      -2-

<PAGE>

                               TABLE OF CONTENTS
                                  (continued)

<TABLE>
<CAPTION>
                                                                                                               PAGE
<S>     <C>       <C>                                                                                          <C>
         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
</TABLE>

                                      -3-

<PAGE>

                               TABLE OF CONTENTS
                                  (continued)

<TABLE>
<CAPTION>
                                                                                                               PAGE
<S>     <C>       <C>                                                                                          <C>
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
</TABLE>

                                      -4-

<PAGE>

                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:

<PAGE>

         "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-

<PAGE>

         "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-
<PAGE>

         "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-

<PAGE>

         "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-

<PAGE>

         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-

<PAGE>

         (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-

<PAGE>

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-

<PAGE>

         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-

<PAGE>

         (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-

<PAGE>

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-

<PAGE>

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-

<PAGE>

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-

<PAGE>

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-

<PAGE>

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-

<PAGE>

         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-

<PAGE>

[***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-

<PAGE>

         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-

<PAGE>

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-

<PAGE>

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-

<PAGE>

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-

<PAGE>

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-

<PAGE>

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-

<PAGE>

                                   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-

<PAGE>

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-

<PAGE>

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-

<PAGE>

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-

<PAGE>

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-

<PAGE>

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-

<PAGE>

         (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-

<PAGE>

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-

<PAGE>

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-

<PAGE>

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-

<PAGE>

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-

<PAGE>

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-

<PAGE>

         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-

<PAGE>

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-

<PAGE>

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-

<PAGE>

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-

<PAGE>

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-

<PAGE>

         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-

<PAGE>

(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-

<PAGE>

         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.***]

<PAGE>

                                                                 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.***].

<PAGE>

                                                              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.

<PAGE>

                                                              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

<PAGE>

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

<TABLE>
<CAPTION>
------------------------------------------------- -------------------------
TIME PERIOD                                           DEVELOPMENT FEE
------------------------------------------------- -------------------------
<S>                                               <C>
[***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.***]
---------------------------------------------------------------------------
</TABLE>

<PAGE>

                                                              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]

<PAGE>

<TABLE>
<S><C>
---------------------------------------------------- ------------------------------- ----------------------------------

[***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: __________________________________
</TABLE>

<PAGE>

                              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.

<PAGE>

                                                                 Schedule 5.3 to
                                                             Master Development,
                                                    License and Supply Agreement

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

<PAGE>

                                                              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]

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