CIMA LABS INC
EX-10.2 COMPENSATION AGREEMENT
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<TYPE>EX-10.2
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<FILENAME>c78994exv10w2.txt
<DESCRIPTION>EX-10.2 COMPENSATION AGREEMENT
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                                                                    EXHIBIT 10.2

                             COMPENSATION AGREEMENT

This agreement having an effective date of 22 August, 2001 is by and between
CIMA LABS, INC., a Delaware corporation, doing business at 10,000 Valley View
Road, Eden Prairie, MN 55344 (CIMA), Dr. Joseph R. Robinson, an individual,
residing at 41 Chequamegon Bay, Madison, WI 53719 (Dr. Robinson) and Dr.
Jonathan Eichman, an individual, residing at 29 North Ridge Road, Pomona, NY
10970 (Dr. Eichman).

Whereas, CIMA has developed an effervescent drug delivery system and uses this
system to develop, make and sell pharmaceutical products for itself and for its
partners,

Whereas, Dr. Robinson and Dr. Eichman are named co-inventors on four U.S. patent
applications (listed in Attachment 1) directed to effervescent drug delivery
systems and have assigned their rights to these patent applications, and all
related U.S. and foreign patent applications and patents, to CIMA,


Whereas, CIMA has expressly agreed to compensate Dr. Robinson for his assignment
of his patent rights by paying him with a percentage of sales of products that
are covered by patents that issue or are granted from the patent applications
that Dr. Robinson and Dr. Eichman have assigned to CIMA according to the terms
of a letter agreement dated January 28, 1998 (Attachment 2),

Whereas, Dr. Robinson and Dr. Eichman have agreed that any compensation that
accrues from sales of products that are covered by patents that issue or are
granted from the patent applications that Dr. Robinson and Dr. Eichman have
assigned to CIMA shall be divided equally between them according to the terms of
a letter agreement dated May 10, 1998 (Attachment 3),

Whereas, CIMA, Dr. Robinson and Dr. Eichman desire to confirm the general terms
of their earlier agreements and to provide additional details that establish
ongoing obligations and conditions between the parties as set out in this
Agreement.

In consideration of these premises and of the mutual promises set forth below,
CIMA, Dr. Robinson and Dr. Eichman agree as follows.

                                  Definitions

PATENT RIGHTS means the four U.S. patent applications listed in Attachment 1
that name Dr. Robinson and Dr. Eichman as co-inventors and that are assigned to
CIMA and any patents that are issued or granted from these patent applications
as well as any related U.S. or foreign patent applications or patents that claim
priority from these patent applications including but not limited to reissues,
reexaminations, extensions (or other administrative or governmental actions
which provide exclusive rights to a patent assignee in patented subject matter
beyond the original patent expiration date), substitutions, confirmations,
registrations,

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revalidations, additions, continuations, continuations-in-part, or divisions of
these patent applications or patents.

PRODUCT means a commercially available product containing a pharmaceutically
active ingredient that is sold by CIMA or sold by a third party that is supplied
such a product by CIMA and that is within the scope of an enforceable and valid
claim in any of the PATENT RIGHTS or such product whose method of manufacture or
use is within the scope of an enforceable and valid claim in any of the PATENT
RIGHTS.

NET SALES means (i) the amount of any payment received by CIMA from a third
party due to sales of PRODUCT to such third party or (ii) the amount invoiced
for sales of PRODUCT by CIMA less reasonable and customary deductions from these
proceeds including trade or discount allowances, returned or defective product
credits, sales or other taxes, transportation or shipping charges, and charge
back payments or rebates.

                                  Compensation

CIMA shall pay Dr. Robinson 1% of NET SALES and Dr. Eichman 1% of NET SALES
received by CIMA after the effective date of this Agreement. These payments to
Dr. Robinson and Dr. Eichman will be made two times each calendar year, one
payment due on about June 30 and another payment due on about December 31.

                               Patent Prosecution

Dr. Robinson and Dr. Eichman shall provide reasonable assistance, at CIMA's
request, to CIMA and shall execute any documents as necessary to for CIMA to
prepare, file, prosecute, maintain, enforce or defend any patent applications or
patents under PATENT RIGHTS. CIMA shall have no liability to Dr. Robinson and
Dr. Eichman for its acts or its failure to act with respect to any patent
applications or patents under PATENT RIGHTS.

                         Representations and Warranties

Dr. Robinson and Dr. Eichman represent and warrant that they have no agreements,
commitments or obligations that conflict in any way with the terms and
obligations of this Agreement and that they will not enter into any agreements,
commitments, obligations during the term of this Agreement that would conflict
with terms and obligations of this Agreement.

Dr. Robinson and Dr. Eichman represent and warrant the they have been fully
advised and represented by their own legal counsel, or that they have had the
opportunity to be advised and represented by their own legal counsel, during the
negotiation, drafting and execution of this Agreement. In interpreting and
applying the terms and obligations of this Agreement, the parties agree that no
presumption shall exist or be implied against the party that drafted such terms
and obligations.




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                                   Termination

This Agreement shall be effective as of the effective date written above and
shall continue until the expiration of the last to expire of any U.S. or foreign
patent under PATENT RIGHTS provided that no NET SALES shall accrue or be payable
to Dr. Robinson or Dr. Eichman for any PRODUCT sold in a country where any
claims in any of the PATENT RIGHTS have expired or have been determined to be
unenforceable or invalid.

                                   Arbitration

All disputes arising between the parties related to the making of or performance
under this Agreement shall be governed by binding arbitration pursuant to the
process set forth in Attachment 4.

                         Entire Agreement and Amendment

This Agreement sets forth the entire agreement between the parties relating to
the subject matter contained herein. Neither this Agreement nor any right or
obligation under this Agreement shall be modified, amended, assigned, or
discharged except as expressly stated in this Agreement or as expressly stated
in a written agreement signed by the parties to this Agreement.



 /s/ John M. Siebert                                   Dated:  August 22, 2001
----------------------------------
         CIMA


 /s/ Joseph R. Robinson                                Dated:  August 16, 2001
----------------------------------
     Joseph R. Robinson

 /s/ Jonathan Eichman                                  Dated:  August 21, 2001
----------------------------------
     Jonathan Eichman



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                                  Attachment 1


U.S. Patent Application Ser. No. 09/327,814 entitled "Sublingual Buccal
Effervescent"


U.S. Patent Application Ser. No. 09/302,105 entitled "Effervescent Drug Delivery
System for Oral Administration"


U.S. Patent Application Ser. No. 09/664,870 entitled "Pharmaceutical
Compositions for Rectal and Vaginal Administration"


U.S. Provisional Patent Application Ser. No. 60/079,652 entitled "Effervescent
Drug Delivery System for Oral Cavity"




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                                  Attachment 2


                                [CIMA Letterhead]


January 28, 1998


Joseph R. Robinson, Ph.D.
41 Chequamegon Bay
Madison, Wisconsin 53719


RE:  New Technology of Drug Delivery Systems


Joe,


Per our discussions, any patents covering inventions created individually by you
or jointly with members of CIMA staff during our interaction to develop new
enabling drug delivery technology are to be assigned to CIMA LABS INC. Once the
patent applications are on file, we would then develop and sign an agreement
which would provide you a royalty equal to 2% of all CIMA sales of products
developed covered by patents issuing from such patent applications and marketed
either by one of our partners or by CIMA itself for the life of the patent.


It is CIMA's understanding that all such inventions described above will be
owned by you and not the University of Wisconsin. If this arrangement is
acceptable to you, please signify your acceptance by signing and dating below.
Please return the original to me and keep a copy for yourself.


Sincerely,

/s/ John M. Siebert
----------------------------------
John M. Siebert, Ph.D.

JMS/cjm


/s/ Joseph R. Robinson                                3/17/98
----------------------------------              ------------------
Joseph R. Robinson, Ph.D.                              Date










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                                  Attachment 3


     AGREEMENT BETWEEN JONATHAN EICHMAN AND JOSEPH R. ROBINSON RELATIVE TO ANY
     CIMA COMMERCIAL PRODUCT, MAKING USE OF THE PATENT BY JONATHAN EICHMAN AND
     JOSEPH R. ROBINSON


                                  May 10, 1998


         Whereas Jonathan Eichman and Joseph R. Robinson have developed
patentable technology and licensed the same to CIMA laboratories, and Cima
Laboratories has agreed to pay 2% royalty on gross sales for any commercialized
product making use of this technology, both Jonathan Eichman and Joseph R.
Robinson have agreed to divide this 2% royalty on an equal basis. Thus, each
individual will receive 1% royalty on all monies that acrue from this invention.





 /s/ Jonathan Eichman                          /s/ Joseph R. Robinson
--------------------------------------         ---------------------------------
Jonathan Eichman                               Joseph R. Robinson





            May 15, 1998                                  May 10, 1998
--------------------------------------         ---------------------------------
Date                                           Date







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                                  Attachment 4


                               ARBITRATION PROCESS


         (a) Scope. All differences, disputes, claims or controversies arising
out of or in any way connected or related to this Agreement, whether arising
before or after the expiration of the term of this Agreement, and including,
without limitation, its negotiation, execution, delivery, enforceability,
performance, breach, discharge, interpretation and construction, existence,
validity and any damages resulting therefrom or the rights, privileges, duties
and obligations of the parties under or in relation to this Agreement (including
any dispute as to whether an issue is arbitrable) shall be referred to binding
arbitration in accordance with the rules set forth herein and of the American
Arbitration Association, as in effect at the time of the arbitration. The time
frames set forth herein shall control the timing of the arbitration procedure.


         (b) Parties to Arbitration. For the purposes of an arbitration under
this Agreement, CIMA Dr. Robinson or Dr. Eichman may be a party to the
arbitration.


         (c) Notice of Arbitration. A party requesting arbitration hereunder
(the "Requesting Party") shall give written notice of arbitration to the other
party (the "Non-requesting Party") containing a concise description of the
matter submitted for arbitration (a "Notice of Arbitration").


         (d) Response. The Non-requesting Party must respond in writing within
thirty (30) days of receiving a Notice of Arbitration with an explanation,
including references to the relevant provisions of the Agreement. The
Non-requesting Party may add additional issues to be resolved.


         (e) Meeting. Within fifteen (15) days of receipt of the response from
the Non-requesting Party pursuant to Paragraph (d), the parties shall meet and
discuss in good faith options for resolving the dispute. The Requesting Party
must initiate the scheduling of this resolution meeting. Each party shall make
available appropriate personnel to meet and confer with the other party during
such fifteen (15) day period.


         (f) Selection of Arbitrator. Any and all disputes that cannot be
resolved pursuant to Paragraphs (c), (d) and (e) shall be submitted to an
arbitrator (the "Arbitrator") to be selected by mutual agreement of the parties.
The Arbitrator shall be a retired judge of a state or federal court, to be
chosen from a list of such retired judges to be prepared jointly by the parties
within fifteen (15) days following the response, with each party entitled to
submit the names of three such retired judges for inclusion in the list,
provided that to the extent the dispute involves issues of patent law the
parties shall limit such list to judges from federal courts having jurisdiction
over patent law issues. Upon completion of the list, the parties shall decide
within ten (10) days thereafter which of the retired judges will be selected as
the Arbitrator. No Arbitrator appointed or selected hereunder shall be an
employee, director or



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shareholder of, or otherwise have any current or previous relationship with, any
party or its respective Affiliates. If the parties fail to agree on the
selection of the Arbitrator within the allotted time frame, the Arbitrator shall
be designated by the then President of the American Arbitration Association.


         (g) Powers of Arbitrator. The Arbitrator may determine all questions of
law and jurisdiction (including questions as to whether a dispute is arbitrable)
and all matters of procedure relating to the arbitration, except that the
Arbitrator shall be bound by the time frames set forth herein in connection with
such arbitration. The Arbitrator shall have the right to grant legal and
equitable relief (including injunctive relief and to award costs (including
reasonable legal fees and costs of arbitration) and interest. Nothing contained
herein shall be construed to permit the Arbitrator to award punitive, exemplary
or any similar damages.


         (h) Arbitration Procedure. The arbitration shall take place in
Minneapolis, MN at such place and time, consistent with the time frames set
forth herein, as the Arbitrator may fix for the purpose of hearing the evidence
and representations that the parties may present. The law applicable to the
arbitration shall be the law of the State Minnesota. No later than twenty (20)
business days after hearing the representations and evidence of the parties, the
Arbitrator shall make its determination in writing and deliver one copy to each
of the parties.


         (i) Discovery and Hearing. During the meeting referred to in Paragraph
(e), the parties shall negotiate in good faith the scope and schedule of
discovery, relating to depositions, document production and other discovery
devices, taking into account the nature of the dispute submitted for resolution.
If the parties are unable to reach agreement as to the scope and schedule of
discovery, the Arbitrator may order such discovery as it deems necessary. The
parties and the Arbitrator must adhere to the following schedule: (1) all
discovery shall be completed within sixty (60) days from the date of the
selection of the Arbitrator, and (2) the arbitration hearing shall commence
within twenty (20) days after completion of such discovery. At the arbitration
hearing, the parties may present testimony (either live witness or deposition),
subject to cross-examination, and documentary evidence. To the extent
practicable taking into account the nature of the dispute submitted for
resolution and the availability of the Arbitrator, the hearing shall be
conducted over a period not to exceed thirty (30) consecutive business days,
with each party entitled to approximately half of the allotted time.


         (j) Witness Lists. At least twenty (20) business days prior to the date
set for the hearing, each party shall submit to each other party and the
Arbitrator a list of all documents on which such party intends to rely in any
oral or written presentation to the Arbitrator and a list of all witnesses, if
any, such party intends to call at such hearing and a brief summary of each
witness' testimony. Each party shall be given the opportunity to depose any such
designated witnesses not already deposed during the discovery phase. At least
five (5) business days prior to the hearing, each party must submit to the
Arbitrator and serve on each other party a proposed findings of fact and
conclusions of law on each issue to be resolved. Following the close of
hearings, the parties shall each submit such post-hearing briefs to the


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Arbitrator addressing the evidence and issues to be resolved as may be required
or permitted by the Arbitrator.


         (k) Confidentiality. The arbitration proceedings shall be confidential
and, except as required by law, no party shall make, or instruct the Arbitrator
to make, any public announcement with respect to the proceedings or decision of
the Arbitrator without the prior written consent of the other party. The
existence of any dispute submitted to arbitration and the award of the
Arbitrator shall be kept in confidence by the parties and the Arbitrator, except
as required in connection with the enforcement of such award or as otherwise
required by law.


         (l) Awards and Appeal. Subject to the provisions of this Attachment 4,
the decision of the Arbitrator shall be final and binding upon the parties in
respect of all matters relating to the arbitration, the conduct of the parties
during the proceedings, and the final determination of the issues in the
arbitration. There shall be no appeal from the final determination of the
Arbitrator to any court, except in the case of fraud or bad faith on the part of
the Arbitrator or any party to the arbitration proceeding in connection with the
conduct of such proceedings. Judgment upon any award rendered by the Arbitrator
may be entered in any court having jurisdiction thereof.


         (m) Costs of Arbitration. The costs of any arbitration hereunder shall
be borne by the parties in the manner specified by the Arbitrator in its
determination.


         (n) Performance of the Agreement. During the pendency of the
arbitration proceedings, the parties shall continue to fully perform their
respective obligations under the Agreement. For purposes of this Paragraph (n)
the term "pendency of the arbitration proceeding" shall mean the period starting
on the date on which arbitration proceedings are commenced by a party in
accordance with Paragraph (c) of this Attachment 4 and ending on the date on
which the Arbitrator delivers its final determination in writing to the parties.





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