CIMA LABS INC
EX-10.24 MASTER DEVELOPMENT, LICENSE & SUPPLY AGMT
<DOCUMENT>
<TYPE>EX-10.24
<SEQUENCE>3
<FILENAME>c75663exv10w24.txt
<DESCRIPTION>EX-10.24 MASTER DEVELOPMENT, LICENSE & SUPPLY AGMT
<TEXT>
<PAGE>

                                                                   EXHIBIT 10.24

                                                                  EXECUTION COPY

                MASTER DEVELOPMENT, LICENSE AND SUPPLY AGREEMENT

                                 by and between

                                 CIMA LABS INC.

                                       and

                              SCHWARZ PHARMA, INC.

                          dated as of December 18, 2001

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                                TABLE OF CONTENTS

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                                                                                  PAGE
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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 Schwarz............................................    7

    3.3       License of Schwarz 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 Schwarz's Obligations.....................   13

    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
</TABLE>

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                                TABLE OF CONTENTS

<TABLE>
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                                                                                  PAGE
<S>                                                                               <C>
    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 SCHWARZ.....................   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

    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
</TABLE>

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                                TABLE OF CONTENTS

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

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)   Schwarz Purchase Order
Schedule 5.3      Cost of Goods
Schedule 5.4(d)   Quality Assurance Addendum


                                    - iii -

<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 Schwarz Pharma, Inc., a Delaware corporation
("Schwarz").

                               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, Schwarz 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 Schwarz 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 Schwarz and Schwarz wishes to license from
CIMA rights to CIMA's DuraSolv(TM), PakSolv(TM) and OraSolv(TM) technologies for
use with such prescription products.

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

                                    SECTION 1

                                   DEFINITIONS

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

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

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

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

<PAGE>


         "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 Schwarz 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.

         "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 Schwarz 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.

                                     - 2 -

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         "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.

         "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 Schwarz

         "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;

                                     - 3 -

<PAGE>


                  (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 Schwarz (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 Schwarz The definition of Promotional Materials shall also
include press releases and other releases of information to the media regarding
the Products.

         "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.

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

         "Schwarz Technology" shall mean all of Schwarz's patents, trade
secrets, technology, know-how and all other information necessary to the
manufacture of the Products.

         "Schwarz Trademarks" shall have the meaning given in Section 9.11(c).

                                     - 4 -

<PAGE>


         "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 Schwarz an exclusive license for the
         term of this Agreement under the following assets to market, distribute
         and sell the Products, 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 Schwarz 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 Schwarz 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 Schwarz agree as follows:

                                     - 5 -

<PAGE>


         (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 Schwarz 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

         (iii) Schwarz shall provide CIMA a notice within forty-five (45) days
               of its receipt of the License Notice that either: A) Schwarz 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) Schwarz 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. Schwarz
               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 Schwarz 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, Schwarz's license to the
               Product in that country or countries will terminate in thirty
               (30) days after re-notification by CIMA that Schwarz is not in
               compliance with this Section 2.1(d)(iii).

         2.2 Sublicenses. Schwarz shall have the right to extend the licenses
granted pursuant to this Section 2 in whole or in part to any Affiliate of
Schwarz, provided that Schwarz 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 Schwarz, and the operations of the Affiliate
shall be deemed to be the operations of Schwarz and Schwarz shall account
therefor and be responsible for the performance of such Affiliate of all of its
obligations hereunder. In addition, Schwarz 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 Schwarz 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, Schwarz 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.

                                     - 6 -

<PAGE>

                                    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 Schwarz Schwarz 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 Schwarz Technology. Schwarz hereby grants to CIMA a
non-exclusive license under the Schwarz 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 Schwarz

         3.4 Additional Products. Schwarz 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
Schwarz shall be produced under cGMP and in accordance with the Specifications.
CIMA shall furnish Schwarz 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,
Schwarz 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 Schwarz 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.

                                     - 7 -

<PAGE>

                                    SECTION 4

                  ROYALTY, COST OF GOODS AND MILESTONE PAYMENTS

         4.1 Royalty and Milestone Payments.

         (a) Schwarz shall make royalty payments to CIMA, at the times, in the
amounts and subject to the conditions set forth on Schedule 4.1(a).

         (b) Schwarz 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 Schwarz
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
Schwarz 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) Schwarz 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 Schwarz's principal place of business or the principal place of business
of the appropriate Affiliate of Schwarz 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 Schwarz, for the limited purpose
of verifying Schwarz'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, Schwarz 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, and shall reimburse
CIMA for the fees and expenses paid to such accountants in connection with their
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, Schwarz

                                     - 8 -

<PAGE>

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 Schwarz 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 Schwarz In the
event that any such inspection reveals a discrepancy between CIMA's actual Costs
of Goods and that invoiced to Schwarz, 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 Schwarz 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 Schwarz 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 Schwarz, in favor of CIMA, that is less than
[***CONFIDENTIAL TREATMENT 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 Schwarz 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, Schwarz shall, within
sixty (60) days after the end of each Quarter, deliver to CIMA true and accurate
reports, certified by an authorized official of Schwarz, setting forth the
actual Annual Net Sales and total royalties due under Section 4.1(a) for such
Year. If no royalties are due, Schwarz 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 Schwarz 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 Schwarz between January 1 and
February 28 each year shall be invoiced to Schwarz at the price applicable to
Product delivered

                                     - 9 -

<PAGE>
to Schwarz during the immediately preceding calendar year. Then on or about
February 28 of each year CIMA shall transmit to Schwarz 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. Schwarz 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 EXCHANGE COMMISSION.***] prior to the Launch of each Product.
Thereafter, prior to September 30th in any year following the Launch of such
Product, Schwarz 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, Schwarz agrees to purchase
from CIMA and CIMA agrees to supply Schwarz with all of Schwarz's requirements
for the Products, Product samples and Product placebos for their subsequent use,
sale, lease or transfer by Schwarz

         (b) Schwarz 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 Schwarz'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
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

                                     - 10 -

<PAGE>

EXCHANGE COMMISSION.***] less than the maximum shelf life of such Product upon
delivery to Schwarz).

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

         (d) Schwarz 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 Schwarz'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. Schwarz may market the Products under its name,
with its packaging and logo; Schwarz 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 Schwarz name
provided Schwarz 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. Schwarz 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
PDMA or other applicable law or changes required by Schwarz, 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. Schwarz 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 Schwarz

         5.3 Trade, Sample and Placebo Product Price. CIMA shall supply
Products, Product samples and Product placebos to Schwarz at the price set forth
on Schedule 5.3.

                                     - 11 -

<PAGE>

         5.4 Forecasts, Delivery and Quality.

         (a) Schwarz 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 Schwarz'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).

         5.5 Rejection and Replacement.

         (a) In the event Schwarz 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 Schwarz [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***], Schwarz 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 Schwarz 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 Schwarz, [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***].

         (b) Upon receipt of a Notice of Rejection from Schwarz and in order to
minimize any hardship to Schwarz's customers, CIMA shall use its reasonable best
efforts to promptly supply to Schwarz a quantity of replacement Products,
Product samples or Product placebos meeting the Specifications equal to the size
of the lot or lots which Schwarz claims was Defective so that such replacement
Products shall be received by Schwarz within 30 days following CIMA's receipt of
Schwarz's Notice of Rejection. If CIMA agrees with Schwarz that such Product is
Defective then CIMA shall either replace the Defective Product at no cost to
Schwarz, or refund or credit, as designated by Schwarz, the price paid for such
Product plus any applicable delivery charges, including, without limitation,
shipping, insurance and taxes, and any reasonable and

                                     - 12 -

<PAGE>


documented out-of-pocket expense that Schwarz may have incurred, within thirty
(30) days after written notice from Schwarz If CIMA disagrees with Schwarz 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 Schwarz and CIMA. If the Product is determined by
such laboratory to meet the Specifications, then Schwarz 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 Schwarz, or refund or credit, as designated by Schwarz, 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 Schwarz may have incurred, within thirty (30) days
after written notice from Schwarz 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), Schwarz 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 Schwarz 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 Schwarz may have
incurred. Such reimbursement shall be made within thirty (30) days of such
notice.

         5.6 Invoice and Payment. Upon shipment of any Products, Product samples
or Product placebos, CIMA shall be entitled to submit invoices therefor to
Schwarz, and Schwarz 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 Schwarz 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 Schwarz 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), Schwarz shall have the right to require CIMA
         to transfer the manufacture of such Product(s) to Schwarz's Seymour
         facility or other designated Schwarz 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 Schwarz 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

                                     - 13 -

<PAGE>


         5.8 CIMA's Obligation to Continue Manufacture. If this Agreement
terminates or expires through no breach of Schwarz, CIMA shall reasonably
cooperate with Schwarz in transferring the manufacture of the Products to
Schwarz, its Affiliate or, subject to confidentiality obligations consistent
with Section 9.4, a third-party appointed by Schwarz, 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 Schwarz 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 Schwarz's Obligations. Subject to waiver as
set forth in Section 12.3, all obligations of Schwarz 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 Schwarz 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. Schwarz shall have received a
         certificate from CIMA, executed by an officer of CIMA, certifying in
         such detail as Schwarz 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.

                                     - 14 -

<PAGE>


         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 Schwarz contained in this
         Agreement or in any schedule, certificate or document delivered by
         Schwarz 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. Schwarz 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 Schwarz, executed by an officer of Schwarz, 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 Schwarz 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 Schwarz'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 Schwarz'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 Mayer, Brown & Platt, 1675 Broadway, New York, New York
         10019.

                  (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 Schwarz, then all of the rights and obligations of the parties
         under this Agreement shall terminate without liability.

                                     - 15 -

<PAGE>

                                    SECTION 7

                     REPRESENTATIONS AND WARRANTIES OF CIMA

         CIMA hereby represents and warrants to Schwarz 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 Schwarz 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
Schwarz) 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 Schwarz, 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

                                     - 16 -

<PAGE>

CIMA Trademarks. CIMA is not aware of and has not received any communications
challenging the ownership, validity or effectiveness of any of the Licensed
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 Schwarz pursuant to this Agreement.

         7.4 Technology Rights. The CIMA Technology, to the best of CIMA's
knowledge, when combined with the Schwarz 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.

                                   SECTION 8

                    REPRESENTATIONS AND WARRANTIES OF SCHWARZ

         Schwarz represents and warrants to CIMA that:

         8.1 Organization, Power and Authority. Schwarz is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Schwarz has all

                                     - 17 -

<PAGE>


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 Schwarz Technology to CIMA
pursuant hereto.

         8.2 Due Authority; No Breach. The execution, delivery and performance
by Schwarz 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 Schwarz
This Agreement is, and each agreement or instrument contemplated by this
Agreement, when executed and delivered by Schwarz 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 Schwarz, in each
case enforceable against Schwarz 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 Schwarz All persons who have executed this Agreement on behalf
of Schwarz, or who will execute on behalf of Schwarz 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 Schwarz, or any such other agreement or instrument by Schwarz, 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
Schwarz 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,
Schwarz or upon the securities, property or business of Schwarz, or (iii)
constitute a violation by Schwarz of any applicable law or regulation of any
jurisdiction as such law or regulation relates to Schwarz or to the property or
business of Schwarz, except for such conflict, acceleration, default, breach or
violation that is not reasonably likely to have a material adverse effect on
Schwarz'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 Schwarz and no Person with which Schwarz 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 Schwarz's
knowledge, threatened judicial, administrative or arbitral actions, claims,
suits or proceedings pending as of the date hereof against Schwarz which, either
individually or together with any other, will have a material adverse effect on
the ability of Schwarz 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 Schwarz 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

                                     - 18 -

<PAGE>

contemplated by this Agreement, by Schwarz or the performance by Schwarz of its
obligations contemplated hereby and thereby.

                                   SECTION 9

               ADDITIONAL COVENANTS AND AGREEMENTS OF THE PARTIES

         9.1 Governmental Filings. CIMA and Schwarz 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. Schwarz 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 Schwarz 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 Schwarz
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. Schwarz 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.
Schwarz 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 Schwarz shall be responsible for deciding the
appropriate form and content of any response with respect to any of its cited
activities.

         9.3 Recall. Schwarz 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 Schwarz.

                                     - 19 -

<PAGE>

         9.4 Confidentiality. Schwarz shall treat as confidential the Licensed
Assets, the Patents, the CIMA Technology, and all other information of CIMA of
which Schwarz becomes aware in connection with this Agreement (collectively,
"CIMA Proprietary Information"). Schwarz 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 Schwarz Technology and all other information of Schwarz of
which CIMA becomes aware in connection with this Agreement (collectively,
"Schwarz Proprietary Information"). CIMA shall neither disclose Schwarz
Proprietary Information to any third party nor use Schwarz 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. Schwarz 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 Schwarz Proprietary Information except as set forth in this Agreement.

         9.5 Expenses. CIMA and Schwarz 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.

                                     - 20 -

<PAGE>


         9.6 Reasonable Efforts. CIMA and Schwarz 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 Schwarz shall be entitled to equitable relief,
         including the remedy of specific performance, with respect to any
         breach of such covenant.

                  (b) Neither Schwarz nor any sublicensee of Schwarz 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.

                                     - 21 -

<PAGE>

         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 Schwarz 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 Schwarz 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 Schwarz, 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, Schwarz
         shall have no rights to use the CIMA Trademarks. Schwarz 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. Schwarz recognizes that
         CIMA is the owner of all CIMA Trademarks used in commerce to 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. Schwarz shall not contest the validity of the CIMA
         Trademarks or CIMA's ownership of the CIMA Trademarks. Use of the CIMA
         Trademarks by Schwarz 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) Schwarz shall be solely responsible for filing,
         prosecuting, and maintaining all trademarks it develops or owns for the
         Products (the "Schwarz Trademarks"), and Schwarz shall pay the costs
         associated therewith. All registrations, variations, logos, goodwill
         and other rights under or acquired through use of the Schwarz
         Trademarks shall accrue and belong to Schwarz CIMA shall have no rights
         to use the Schwarz 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 Schwarz Trademarks
         in use by Schwarz in a manner that is likely to cause deception or
         confusion. CIMA recognizes that Schwarz is the owner of all of the
         Schwarz Trademarks used in commerce to indicate the source of the
         Product and agrees that the Schwarz Trademarks shall remain vested in
         Schwarz both during the term of this Agreement and thereafter. CIMA
         shall not contest the validity of the Schwarz Trademarks or Schwarz's
         ownership of the Schwarz Trademarks. Use of the Schwarz Trademarks by
         Schwarz in conjunction with the manufacture, use, and sale of the
         Product and all goodwill related thereto shall

                                     - 22 -

<PAGE>

         inure to the benefit of Schwarz for purposes of building the longevity
         and extent of use of the Schwarz Trademarks.

                  (d) Schwarz 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) Schwarz as the owner of
         the Schwarz Trademarks.

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

                  (f) Any improvements to the Schwarz Technology (whether or not
         patentable) shall be owned solely by Schwarz

                  (g) Schwarz 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, Schwarz acknowledges that, for all purposes, CIMA is
         the owner of the CIMA Technology and CIMA acknowledges that, for all
         purposes, Schwarz is the owner of the Schwarz 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 Schwarz'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, Schwarz 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

                                     - 23 -

<PAGE>

         SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Schwarz'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 Schwarz, CIMA shall use its reasonable best efforts to
         procure for Schwarz the right to exercise all rights licensed under
         this Agreement without any additional payment therefor by Schwarz

         9.13 Supply of Products. CIMA shall maintain sufficient capacity
throughout the term of this Agreement to meet the requirements of Schwarz 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, Schwarz 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 Schwarz and shall promptly notify Schwarz 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 Schwarz 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 Schwarz (and its
directors, officers, employees, and Affiliates) harmless from and against any
and all Damages incurred or suffered by Schwarz (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;

                                     - 24 -

<PAGE>

                 (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
         Schwarz

         (b) Schwarz 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
                  Schwarz in this Agreement or any agreement, instrument or
                  document delivered by Schwarz pursuant to the terms of this
                  Agreement;

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

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

                                     - 25 -

<PAGE>

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 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

                                     - 26 -

<PAGE>

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 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 Schwarz 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. Schwarz 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 Schwarz Prior to Launch. Prior
         to the Launch of any Product, Schwarz will have the right to
         unilaterally terminate this Agreement

                                     - 27 -

<PAGE>

         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
         Schwarz terminates this Agreement pursuant to this Section 11.1(c),
         Schwarz'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 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
         Schwarz'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 Schwarz 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 Schwarz After Launch. Following
         the Launch of any Product, Schwarz 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 Schwarz 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 of the assets or outstanding shares of, or
merges with, Schwarz or CIMA, as the case may be.

                                     - 28 -

<PAGE>

         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 Schwarz, as follows:
                             Schwarz Pharma, Inc.
                             6140 West Executive Drive
                             Mequon, Wisconsin  53092
                             Facsimile:  262-242-1641
                             Attention:  General Counsel

                             with a copy to:

                             Mayer, Brown & Platt
                             1675 Broadway
                             New York, New York  10019
                             Facsimile:  212-262-1910
                             Attention:  Philip O. Brandes

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 Schwarz 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 Schwarz 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.

         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.

                                     - 29 -

<PAGE>

         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. Schwarz acknowledges
that it does not have, and Schwarz shall not make representations to any third
party, either directly or indirectly, indicating that Schwarz 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 Schwarz or to obligate Schwarz 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 Schwarz 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 (i) submitted
to an arbitration tribunal comprised of three (3) independent members
knowledgeable in the pharmaceutical industry, one of whom shall be selected by
Schwarz, 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

                                     - 30 -

<PAGE>

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.

                                     - 31 -

<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

                                   SCHWARZ PHARMA, INC.
                                   By: /s/ Ron Stratton
                                     ------------------------------------

                                        Name:  Ron Stratton, Ph.D.
                                        Title: President and COO

                                     - 32 -
<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, Schwarz 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.

         Schwarz 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), Schwarz 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 Schwarz of such completion and shall provide Schwarz sufficient written
materials (a "Development Phase Notice") to allow Schwarz 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, Schwarz 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) Schwarz shall also pay to CIMA the development fee payments set
forth below (each a "Development Fee Payment") within thirty (30) days of CIMA's
invoice for development work performed in accordance with this Agreement during
the applicable Quarter.

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

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

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

                             Schwarz Purchase Order

                                 [See Attached]

<PAGE>


================================================================================

SCHWARZ        SCHWARZ PHARMA MANUFACTURING, INC.          PURCHASE ORDER NO.
PHARMA         1101 C AVENUE WEST                          PURCHASE ORDER DATE
               PO BOX 328
               SEYMOUR, IN 47274
               812-523-3457

                                                              PAGE

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

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

<TABLE>
<CAPTION>
                                                                 ORIGINAL COPY
--------------------------------------------------------------------------------

   SHIP VIA    TAXABLE   TERMS DESCRIPTION                    FOB DESCRIPTION

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

RESOURCE NUMBER    RESOURCE DESCRIPTION   QUANTITY    UM    UNIT PRICE   AMOUNT
<S>                <C>                    <C>         <C>   <C>          <C>
================================================================================
</TABLE>

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

<PAGE>
                              TERMS AND CONDITIONS

1.   Definitions. (a) Buyer means Schwarz Pharma Manufacturing, Inc. (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

                                  Cost of Goods

          [***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]

<PAGE>
                              SCHWARZ PHARMA, INC.
                            6140 West Executive Drive
                             Mequon, Wisconsin 53092

                                  March 1, 2002

CIMA LABS INC.
10000 Valley View Road
Eden Prairie, Minnesota  55344
Attention:  Chief Executive Officer

Ladies and Gentlemen:

         Reference is made to the Master Development, License and Supply
Agreement, dated as of December 18, 2001 (as amended, restated or otherwise
modified from time to time, the "License Agreement"), by and between CIMA LABS
INC., a Delaware corporation ("CIMA") and Schwarz Pharma, Inc., a Delaware
corporation ("Schwarz"). Capitalized terms that are used but not defined in this
letter agreement (this "Letter Agreement") shall have the meanings given them in
the License Agreement.

         For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, each of the undersigned hereby agrees to modify
the License Agreement as follows:

         1. In order to (i) memorialize the final agreement of the parties
regarding the Milestone Payments applicable to Product #3 ([***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***]) and Product #2 ([***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***]) and (ii) replace certain of the Products, as contemplated by
Section 3.4 of the License Agreement,

(a) Schedule 3.1 of the License Agreement is hereby amended by replacing the
    Products numbered 5, 6 and 7 in the table therein with the following (the
    "Replacement Products") and by replacing the relevant portions of the table
    in Schedule 3.1 that relate to the Products numbered 5, 6 and 7 with the
    information set forth below:

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

          Schwarz and CIMA hereby agree that each of the Replacement Products
shall be deemed to be a Product under and as defined in the License Agreement.

<PAGE>
(b) Schedule 4.1(b) of the License Agreement is hereby amended such that the
    table included in paragraph (a) therein shall be deleted in its entirety and
    replaced with the table set forth in Exhibit A hereto.

         2. Schwarz and CIMA further agree that, anything to the contrary herein
or in the License Agreement notwithstanding, with respect to Product #7
([***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]) only, the date after which the
Development Phase relating to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], as
contemplated by paragraph (b) of Schedule 4.1(b) of the License Agreement, shall
be [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.***] after deadline therefor. In
addition, should CIMA determine, in its reasonable discretion, that a
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] is not suitable and a [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] is required for the [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***], the [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] referred to in this
paragraph 2 shall be extended to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***].

         3. Schwarz and CIMA further agree that, anything to the contrary herein
or in the License Agreement notwithstanding, Product #5 ([***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***]) will be developed to be packaged in bottles and
blisters; provided, however, that if, for technical or stability reasons,
bottles are not suitable, such Product may be developed to be packaged in
blisters only.

         4. Schwarz and CIMA further agree that, anything to the contrary herein
or in the License Agreement notwithstanding, with respect to Product # 6
([***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]) only, CIMA will perform an initial
formulation feasibility study ([***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]) and
provide a report its findings to Schwarz no later than [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***]. At the time of such report, should either party not
want to proceed with the development of such Product, Schwarz will pay CIMA
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]. If such Product is canceled, Schwarz
may replace Product #6 with a new


                                      -2-
<PAGE>
Product in accordance with the License Agreement. Any such replacement Product
will be assigned a Completion Date to be agreed upon by the parties.

         5. Section 12 of the License Agreement is hereby, mutatis mutandis,
incorporated by reference as though specifically set forth herein.

         6. This Letter Agreement is binding and enforceable against CIMA and
Schwarz notwithstanding any provision to the contrary in the License Agreement,
and, in the event of a conflict between this Letter Agreement and the License
Agreement, the terms of this Letter Agreement shall control.

         7. Each of the undersigned hereby ratifies the License Agreement, as
modified by this License Agreement, and agrees that the License Agreement, as
modified hereby, shall continue in full force and effect.

                             [Signatures next page]

                                      -3-
<PAGE>

         IN WITNESS WHEREOF, this Agreement is entered into by the duly
authorized representatives of CIMA and Schwarz as of the date first set forth
above.

                                    SCHWARZ PHARMA, INC.
                                         By: /s/ Klaus Veitinger
                                             -----------------------------
                                                       Name: Klaus Veitinger
                                                                  Title: CEO

ACKNOWLEDGED AND AGREED:

                                    CIMA LABS INC.
By: /s/ John M. Siebert
    -----------------------------
    Name:  John M. Siebert
    Title: President & CEO

CC:    Mayer, Brown, Rowe & Maw
       1675 Broadway
       New York, New York  10019
       Attention:  Philip O. Brandes


                                      -4-
<PAGE>

                                    EXHIBIT A

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

<PAGE>

                              SCHWARZ PHARMA, INC.
                            6140 West Executive Drive
                             Mequon, Wisconsin 53092

                                October 24, 2002

CIMA LABS INC.
10000 Valley View Road
Eden Prairie, Minnesota  55344
Attention:  Chief Executive Officer

Ladies and Gentlemen:

         Reference is made to the Master Development, License and Supply
Agreement, dated as of December 18, 2001 (as amended, restated or otherwise
modified from time to time, the "License Agreement"), by and between CIMA LABS
INC., a Delaware corporation ("CIMA") and Schwarz Pharma, Inc., a Delaware
corporation ("Schwarz"). Capitalized terms that are used but not defined in this
letter agreement (this "Letter Agreement") shall have the meanings given them in
the License Agreement.

         For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, each of the undersigned hereby agrees to modify
the License Agreement as follows:

         3. In order to memorialize (a) the replacement of the Product numbered
7 with the pharmaceutical product [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] (the
"Replacement Product"), (b) the agreement of the parties regarding changes to
the [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.***] of the Products numbered 4 and 5,
and (c) the actual delivery dates of certain API, Schedule 3.1 of the License
Agreement is hereby deleted in its entirety and replaced with Exhibit A hereto.
Schwarz and CIMA agree that the Replacement Product shall be deemed to be a
Product under and within the meaning of the License Agreement.

         4. Schedule 4.1(b) to the License Agreement is hereby amended as
follows:

(a) In order to memorialize (i) the final agreement of the parties regarding the
    Milestone Payments applicable to Product #1 ([***CONFIDENTIAL TREATMENT
    REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
    COMMISSION.***]), Product #4 ([***CONFIDENTIAL TREATMENT REQUESTED, PORTION
    OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]),
    Product #5 ([***CONFIDENTIAL TREATMENT REQUESTED, PORTION

<PAGE>

    OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***])
    and Product #6 ([***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
    SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]), (ii) the
    agreement of the parties regarding certain additional amounts that shall be
    payable to CIMA in respect of the Milestone [***CONFIDENTIAL TREATMENT
    REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
    COMMISSION.***], as set forth in the table included in paragraph (a) therein
    (the "Milestone Table") and (iii) the estimated Milestone Payments
    applicable to the Replacement Product, Schedule 4.1(b) to the License
    Agreement is amended such that the Milestone Table shall be deleted in its
    entirety and replaced with the table set forth in Exhibit B hereto.

(b) In order to memorialize the agreement of the parties regarding an increase
    in the Development Fee Payments in respect of the [***CONFIDENTIAL TREATMENT
    REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
    COMMISSION.***], Schedule 4.1(b) to the License Agreement is amended such
    that the table included in paragraph (d) therein shall be deleted in its
    entirety and replaced with the table set forth in Exhibit C hereto.

         5. Anything to the contrary herein or in the License Agreement
notwithstanding, the parties agree that the development activities described on
the Development Schedule and the payments to be made by Schwarz in respect of
such development activities contemplate CIMA conducting up to an aggregate total
of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.***] stability study pulls (the "Expected
Stability Work"). In the event that such development activities require more
than the Expected Stability Work, the parties shall negotiate in good faith
additional compensation to be paid to CIMA on a per-pull basis.

         6. Anything to the contrary in the License Agreement notwithstanding,
Schwarz and CIMA hereby agree that Schwarz will pay CIMA the sum of
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] promptly upon receipt of CIMA's invoice
therefore, which amount shall satisfy in full Schwarz's obligations to CIMA in
respect of CIMA's development efforts in connection with the pharmaceutical
product [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***] pursuant to the License
Agreement.

         5. In order to memorialize certain agreements of the parties regarding
modifications to Schwarz's obligations to supply API, the License Agreement is
hereby amended as follows:

(a) Section 1 of the License Agreement is amended by adding the following
    defined term thereto:

            "'Provide' shall have the meaning given in Section 3.2 hereof."

<PAGE>


 (b) Section 3.2 of the License Agreement is deleted in its entirety and
     replaced with the following:

                           "3.2 Supply of API.

                                    (a) The parties shall be responsible
                           for Providing API as follows:

                                         (i) CIMA shall be responsible for
                                    Providing all API consisting of
                                    [***CONFIDENTIAL TREATMENT REQUESTED,
                                    PORTION OMITTED FILED SEPARATELY WITH THE
                                    SECURITIES AND EXCHANGE COMMISSION.***] and
                                    all API that is classified as a "controlled
                                    substance" by the United States Drug
                                    Enforcement Agency ("DEA API"); provided,
                                    however, that CIMA shall notify Schwarz, at
                                    least forty-eight (48) hours prior to any
                                    order, of the quantity of such API that CIMA
                                    proposes to order. If Schwarz notifies CIMA
                                    within such forty-eight (48) hour period
                                    that Schwarz disagrees with the amount of
                                    API that CIMA proposes to order, CIMA shall
                                    postpone such order until such time as the
                                    parties shall agree upon the appropriate
                                    amount of such API.

                                         (ii) Schwarz shall be responsible for
                                    Providing all API not required to be
                                    provided by CIMA pursuant to clause (i),
                                    above.

                                    (b) The parties shall each be responsible
                           for the costs of Providing API incurred by them;
                           provided, however, that within thirty (30) days from
                           CIMA invoice date therefor, Schwarz shall, except as
                           set forth in Section 3.2(e), below,

                                         (i) reimburse CIMA for the purchase
                                    price (excluding any costs described in
                                    Section 3.2(b)(iv), below) of any API
                                    purchased by CIMA;

                                         (ii) pay CIMA a sourcing fee equal to
                                    [***CONFIDENTIAL TREATMENT REQUESTED,
                                    PORTION OMITTED FILED SEPARATELY WITH THE
                                    SECURITIES AND EXCHANGE COMMISSION.***] of
                                    the aggregate purchase price of any API
                                    consisting of [***CONFIDENTIAL TREATMENT
                                    REQUESTED, PORTION OMITTED FILED SEPARATELY
                                    WITH THE SECURITIES AND EXCHANGE
                                    COMMISSION.***] purchased by CIMA as
                                    contemplated hereby;

                                         (iii) pay CIMA a sourcing fee in
                                    respect of any DEA API equal to (A)
                                    [***CONFIDENTIAL TREATMENT REQUESTED,
                                    PORTION OMITTED FILED SEPARATELY WITH THE
                                    SECURITIES AND EXCHANGE COMMISSION.***] of
                                    the aggregate purchase price of such DEA
                                    API, until such aggregate purchase price
                                    reaches [***CONFIDENTIAL TREATMENT
                                    REQUESTED, PORTION OMITTED FILED SEPARATELY
                                    WITH THE SECURITIES


                                      -3-
<PAGE>

                                    AND EXCHANGE COMMISSION.***] in any Year and
                                    (B) [***CONFIDENTIAL TREATMENT REQUESTED,
                                    PORTION OMITTED FILED SEPARATELY WITH THE
                                    SECURITIES AND EXCHANGE COMMISSION.***] of
                                    the aggregate purchase price of such DEA
                                    API, to the extent that such aggregate
                                    purchase price exceeds [***CONFIDENTIAL
                                    TREATMENT REQUESTED, PORTION OMITTED FILED
                                    SEPARATELY WITH THE SECURITIES AND EXCHANGE
                                    COMMISSION.***] in any Year; and

                                         (iv) reimburse CIMA for
                                    [***CONFIDENTIAL TREATMENT REQUESTED,
                                    PORTION OMITTED FILED SEPARATELY WITH THE
                                    SECURITIES AND EXCHANGE COMMISSION.***]
                                    which CIMA incurs in connection with
                                    Providing API in accordance with Section
                                    3.2(a)(i).

                                    (c) As used herein, "Provide" means that the
                           applicable party shall be responsible, in respect of
                           the API which it is responsible for Providing, for
                           ordering, receiving and testing such API, paying
                           supplier invoices therefor, releasing such API for
                           use, auditing suppliers thereof for cGMP compliance
                           and keeping Schwarz's Regulatory Affairs department
                           apprised of the status of the Drug Master Files in
                           respect of such API.

                                    (d) CIMA shall, promptly following the end
                           of each Quarter, furnish to Schwarz a written report
                           of the total amount of each type of API in CIMA's
                           inventory as of the final day of such Quarter, as
                           reflected on CIMA's books and records.

                                    (e) Schwarz agrees and acknowledges that it
                           shall be responsible to CIMA for the amounts
                           described in this Section 3.2 that CIMA incurs in
                           respect of any API that is used, lost, destroyed or
                           otherwise consumed in connection with the development
                           activities described on the Development Schedule. In
                           the event, however, that any API is lost, stolen,
                           destroyed, or otherwise consumed at CIMA's facilities
                           other than in connection with such development
                           activities ("Lost API"), CIMA agrees to (i) file and
                           pursue a claim for the value of such Lost API under
                           its applicable insurance policy and (ii) promptly
                           remit to Schwarz any proceeds received from its
                           insurers in respect of such Lost API."

(c) Section 12.3 of the License Agreement is amended by deleting the last
    sentence thereof and replacing the same with the following:

                           "Except as set forth in Section 3.2(e), 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."

(d) Section 5.1(d) of the License Agreement is deleted in its entirety and
    replaced with the following:


                                      -4-

<PAGE>

                                    "(d) The parties shall be responsible for
                           Providing, in accordance with Section 3.2 and with
                           Schwarz's forecasts provided in accordance with
                           Section 5.4, quantities of API sufficient for (i) for
                           CIMA to perform its obligations pursuant to Schedule
                           3.1 and Sections 5.1 and 5.5 at least
                           [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
                           FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
                           COMMISSION.***] prior to the date of tablet
                           manufacture and (ii) [***CONFIDENTIAL TREATMENT
                           REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
                           SECURITIES AND EXCHANGE COMMISSION.***] of safety
                           stock. All API not Provided by Schwarz must conform
                           to Schwarz's then current raw materials
                           specifications. CIMA shall not be accountable for any
                           production or shipment delays due to lack of any API
                           that Schwarz is required to Provide pursuant to
                           Section 3.2."

         6. The parties hereby agree that, anything to the contrary in the
License Agreement notwithstanding, any Products that are contemplated in the
License Agreement as being packaged using "CIMA Standard" packaging and/or "CIMA
Standard" tablet size, may, at Schwarz's sole option, be packaged using child
resistant packaging ("CR Packaging") and/or utilize non-standard tablet size
tooling ("Off-Size Tooling"). In accordance with such agreement, in the event
that Schwarz elects to have any Products packaged in CR Packaging and/or utilize
Off-Size Tooling, the parties further agree as follows:

                  (a) CIMA shall be solely responsible for the development of CR
Packaging and/or Off-Size Tooling for each applicable Product in accordance with
specifications to be provided by Schwarz; provided, however, that Schwarz shall
reimburse CIMA, on a Quarterly basis and, within thirty (30) days after receipt
of invoices from CIMA, for all costs incurred by CIMA in connection with any
design and testing activities in respect of the CR Packaging that are conducted
by third parties and which are approved in advance by Schwarz.

(b) CIMA shall be responsible, subject to Schwarz's approval, not to
    unreasonably be withheld, for the purchase of any equipment needed for CR
    Packaging and Off-Size Tooling that is not then owned or leased by CIMA. The
    aggregate purchase price (the "Equipment Costs") of the equipment to be
    purchased by CIMA in order to perform its obligations under this paragraph 6
    (the "Optional Equipment") [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
    OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***].
    Such Equipment Costs shall be included, [***CONFIDENTIAL TREATMENT
    REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
    COMMISSION.***] cost included in the calculation of the Cost of Goods of
    each Product in accordance with Schedule 5.3 of the License Agreement;
    provided, however, that the portion of the Equipment Cost allocable to
    Schwarz during any Year shall be determined [***CONFIDENTIAL TREATMENT
    REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
    COMMISSION.***] for the Product(s) requiring CR Packaging or Off-Size
    Tooling, as applicable, in accordance with [***CONFIDENTIAL TREATMENT
    REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND


                                      -5-

<PAGE>

         EXCHANGE COMMISSION.***] for such Year and; provided further, that
         Schwarz shall not be responsible, during any Year, for any Equipment
         Costs to the extent that the Optional Equipment is used for products
         other than Products, determined [***CONFIDENTIAL TREATMENT REQUESTED,
         PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
         COMMISSION.***] in accordance with [***CONFIDENTIAL TREATMENT
         REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
         EXCHANGE COMMISSION.***] during such Year. In the event that Schwarz
         cancels all Products requiring CR Packaging or Off-Size Tooling in
         accordance with the terms of the License Agreement, within
         [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
         WITH THE SECURITIES AND EXCHANGE COMMISSION.***] of the cancellation of
         the last such Product requiring such packaging, Schwarz shall pay to
         CIMA the amount of the Equipment Costs related to the CR Packaging or
         the Off-Size Tooling, as applicable, that have not theretofore been
         reimbursed by Schwarz or a third party.

         7. The parties hereby agree that Schwarz shall have the right,
exercisable by delivering written notice to CIMA at any time on or prior to the
date that is [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] after the date of
this Letter Agreement, to initiate negotiations with CIMA for the development
and supply of the pharmaceutical product [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] (the "Option Product") in accordance with this paragraph 7. Upon
Schwarz's exercise of such option, the parties shall negotiate in good faith the
specific terms applicable to the Option Product, which terms shall thereupon be
memorialized in a formal license and supply agreement (the "New Agreement");
provided, however that the terms of the New Agreement shall be similar to the
terms of the License Agreement. The foregoing notwithstanding, CIMA shall be
obligated to commence development of the Option Product no later than
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] from the later of (i) the effective date
of the New Agreement and (ii) CIMA's receipt of the active ingredient required
for the Option Product.

         8. Section 12 of the License Agreement is hereby, mutatis mutandis,
incorporated by reference as though specifically set forth herein.

         9. This Letter Agreement is binding and enforceable against CIMA and
Schwarz notwithstanding any provision to the contrary in the License Agreement,
and, in the event of a conflict between this Letter Agreement and the License
Agreement, the terms of this Letter Agreement shall control.

         10. Each of the undersigned hereby ratifies the License Agreement, as
modified by this Letter Agreement, and agrees that the License Agreement, as
modified hereby, shall continue in full force and effect.

                             [Signatures next page]

                                      -6-
<PAGE>

         IN WITNESS WHEREOF, this Agreement is entered into by the duly
authorized representatives of CIMA and Schwarz as of the date first set forth
above.

                                 SCHWARZ PHARMA, INC.



                                      By: /s/ Klaus Veitinger
                                          --------------------------
                                                   Name: Klaus Veitinger
                                                              Title: CEO

ACKNOWLEDGED AND AGREED:

                                 CIMA LABS INC.



By: /s/ John M. Siebert
    ----------------------------
    Name: John M. Siebert
    Title: President & CEO

CC:      Mayer, Brown, Rowe & Maw
         1675 Broadway
         New York, New York  10019
         Attention: Philip O. Brandes

                                      -7-
<PAGE>

Exhibit A

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


<PAGE>

                                    EXHIBIT B

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


<PAGE>

Exhibit C

<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>

                              SCHWARZ PHARMA, INC.
                            6140 West Executive Drive
                             Mequon, Wisconsin 53092

                                February 18, 2003
CIMA LABS INC.
10000 Valley View Road
Eden Prairie, Minnesota  55344
Attention:  Chief Executive Officer

Ladies and Gentlemen:

         Reference is made to the Master Development, License and Supply
Agreement, dated as of December 18, 2001 (as amended, restated or otherwise
modified from time to time, the "License Agreement"), by and between CIMA LABS
INC., a Delaware corporation ("CIMA") and Schwarz Pharma, Inc., a Delaware
corporation ("Schwarz"). Capitalized terms that are used but not defined in this
letter agreement (this "Letter Agreement") shall have the meanings given them in
the License Agreement.

         For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, each of the undersigned hereby agrees to modify
the License Agreement as follows:

         7. In order to memorialize the agreement of the parties regarding
changes to the [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] of the Products
numbered 1, 4, 5 and 6 and the final determination of the [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] of Product number 7, the table set forth on Schedule
3.1 of the License Agreement is hereby deleted in its entirety and replaced with
Exhibit A hereto.

         8. In order to memorialize the agreement of the parties that
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***], Schedule 4.1(b) to the License
Agreement is hereby amended by deleting the definition of [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] and replacing such definition with the following:
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]

         9. The parties hereby agree that, anything to the contrary in the
License Agreement notwithstanding, in addition to blisters and [***CONFIDENTIAL
TREATMENT


<PAGE>
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] bottles, CIMA will develop Product # 5 ([***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***]) for packaging in [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] bottles. In consideration of the costs associated with such
additional development work, Schwarz shall pay to CIMA a supplemental
development fee equal to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] upon execution
of this Letter Agreement.

         10. Whereas, the parties have mutually determined that the development
activities heretofore completed in respect of Product # 1 ([***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***]) have been unsuccessful, the parties hereby agree that
such Product shall be redeveloped in accordance with the Master Development
Schedule contemplated therefore in the License Agreement; provided, however,
that anything to the contrary in the License Agreement notwithstanding, the
parties hereby agree that

                  (a) as part of the development activities in respect of the
New Formulation (as defined below), CIMA shall prepare two batches of each
strength of the New Formulation for filing with the FDA, each of which batches
shall be packaged in both CIMA standard blisters and [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] bottles,

(b) notwithstanding the Milestone Payments that Schwarz has heretofore made to
    CIMA pursuant to Schedule 4.1(b) of the License Agreement in respect of
    Product #1, but in lieu of any other Milestone Payments that Schwarz may be
    required to make in respect of Product #1 pursuant to the License Agreement,
    Schwarz shall make the following Milestone Payments to CIMA in accordance
    with the License Agreement and this Letter Agreement with respect to the
    development of the New Formulation:

<TABLE>
<CAPTION>
-----------------------------------------------------
                                            Milestone
Development Phase                           Payment
-----------------------------------------------------
<S>                                         <C>
[***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***], and
-----------------------------------------------------
</TABLE>

(c) CIMA shall not be eligible to receive the payment referred to in Section
    (c)(ii) on Schedule 4.1(b) of the License Agreement in respect of the New
    Formulation.

                  For purposes hereof, Product #1 ([***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***]), redeveloped as contemplated in this paragraph 4 shall be
referred to herein as the "New Formulation". The parties agree and acknowledge
that the New


                                      -2-
<PAGE>
Formulation shall for all purposes be Product # 1 and a Product within the
meaning of the License Agreement.

         11. Section 12 of the License Agreement is hereby, mutatis mutandis,
incorporated by reference as though specifically set forth herein.

         12. This Letter Agreement is binding and enforceable against CIMA and
Schwarz notwithstanding any provision to the contrary in the License Agreement,
and, in the event of a conflict between this Letter Agreement and the License
Agreement, the terms of this Letter Agreement shall control.

         13. Each of the undersigned hereby ratifies the License Agreement, as
modified by this Letter Agreement, and agrees that the License Agreement, as
modified hereby, shall continue in full force and effect.

                             [Signatures next page]

                                      -3-
<PAGE>
         IN WITNESS WHEREOF, this Agreement is entered into by the duly
authorized representatives of CIMA and Schwarz as of the date first set forth
above.

                                 SCHWARZ PHARMA, INC.



                                     By: /s/ Ron Stratton
                                         ----------------------------------
                                                         Name: Ron Stratton
                                                     Title: President & COO

ACKNOWLEDGED AND AGREED:



                                 CIMA LABS INC.

By: /s/ John M. Siebert
    ------------------------------
    Name: John M. Siebert
    Title: President & CEO

CC:      Mayer, Brown, Rowe & Maw
         1675 Broadway
         New York, New York  10019
         Attention:  Philip O. Brandes

                                      -4-
<PAGE>
Exhibit A

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


</TEXT>
</DOCUMENT>
