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Exhibit 10.32
DEVELOPMENT,
LICENSE AND SUPPLY
AGREEMENT
Dated as of January 27,
2000
between
EURAND AMERICA,
NC.
845 Center Drive
Vandalia, Ohio
45377
and
RELIANT
PHARMACEUTICALS
125 West 55th Street, 11th
floor
New York, NY 10019
for
EXTENDED RELEASE
PROPRANOLOL
THIS DEVELOPMENT, LICENSE AND
SUPPLY AGREEMENT, dated as of January 27, 2000, between EURAND
AMERICA, INC., a corporation organized under the laws of Nevada,
with its principal offices at 845 Center Drive, Vandalia, Ohio
45377 (“EURAND”), and RELIANT PHARMACEUTICALS, INC., a
corporation organized under the laws of the State of Delaware, with
its principal offices at 125 West 55th Street, 11th floor, New
York, New York (“RELIANT”);
WITNESSETH
THAT:
WHEREAS, EURAND is the owner
of original processes, patents, trademarks and know-how for the
development and manufacture of extended release pharmaceutical
products;
WHEREAS, EURAND and RELIANT
entered into a Confidentiality Agreement, (the
“Confidentiality Agreement”) dated October 15, 1999,
pursuant to which the parties exchanged confidential information
relating to this proposed cooperative effort;
WHEREAS, EURAND and RELIANT
signed a Letter of Intent dated December 16, 1999, pursuant to
which the two parties agreed upon the general business terms
relating to this Agreement:
WHEREAS, RELIANT desires that
EURAND undertake a development program directed towards producing
extended-release propranolol formulations having the specifications
agreed upon between RELIANT and EURAND;
WHEREAS, EURAND is willing to
undertake such a development program on the terms and conditions
set forth hereinafter;
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WHEREAS, RELIANT also desires
to receive a license to market and sell products containing such
extended-release products as developed and manufactured by EURAND
in the Territory (as hereinafter defined) and EURAND is willing to
grant such a license on the terms and conditions set forth
hereinafter;
NOW, THEREFORE, in
consideration of the agreements and covenants hereinafter set forth
and intending to be legally bound hereby, the parties hereto
covenant and agree as follows:
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1.1 |
“ Active Ingredient ” means propranolol
HCL. |
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1.2 |
“ Affiliate ” shall mean a Corporation or
other business entity directly or indirectly controlling,
controlled or under common control with a party to this agreement
and “control” means direct or indirect beneficial
ownership of fifty percent (50%) or more of the voting interest in
or fifty percent (50%) or greater interest in the equity of such
corporation or other business entity but such Corporation or other
business entity shall be deemed an Affiliate for only so long as
such ownership or control exists. |
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1.3 |
“
Applicable Laws ” means all laws, treaties,
ordinances, judgments, decrees, directives, injunctions, orders of
any court, arbitrator or governmental agency or authority, rules,
regulations, interpretations, authorizations and Applicable Permits
of any international, national, regional, local or other
governmental body, agency, authority, court or Person having
jurisdiction over or related to the
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development, registration,
manufacture, pricing and sale of the Finished Dosage Form, as may
be in effect from time to time.
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1.4 |
“ Applicable Permits ” means any waiver,
exemption, variance, permit, license or similar approval,
including, without limitation, product registrations by health or
other government entities, required to be obtained or maintained
under Applicable Laws in connection with the development,
registration, manufacture, pricing and sale of the Finished Dosage
Form. |
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1.5 |
“ Approval Date ” means, with respect to a
particular country in the Territory, the date on which all
Applicable Permits necessary for sale and pricing of the Finished
Dosage Form in such country have been issued. |
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1.6 |
“ Contract Year ” means, for the first
Contract Year, the period ending twelve (12) months after the date
first above written and for the second and subsequent Contract
Years, the twelve (12) month period commencing on the day following
the anniversary of the end of the first and subsequent Contract
Years, respectively. |
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1.7 |
“ FDA ” shall mean the Food and Drug
Administration in the United States and corresponding governmental
regulatory agencies in other countries within the
Territory. |
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1.8 |
“ Finished Dosage Form ” means the
composition produced by RELIANT from the Product, labeled, packaged
and ready for sale to wholesalers, hospitals or end-
users. |
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1.9 |
“ Force Majeure ” means any cause or causes
which wholly or partially prevent or delay the performance of
obligations arising under this Agreement and which are not
reasonably within the control of the non-performing party,
including acts of God, government regulations, labor disputes,
floods, fires, civil commotion, embargoes, quotas, shortage of
labor or materials or any delays in transportation or detention by
customs, health or other government authorities. |
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1.10 |
“ Know-How ” means proprietary know-how,
trade secrets, patented and unpatented inventions, data, technology
and information, which a party hereto has the lawful right to
disclose to the other party. “Know-How” shall include,
without limitation, processes and analytical methodology used in
development, testing, analysis and manufacture and medical,
clinical, toxicological testing as well as other scientific
data. |
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1.12 |
“ Primary Territory ” shall mean the United
States, Japan and Canada. |
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1.13 |
“ Product ” means an Extended-Release
Composition containing the Active Ingredient and certain
excipients, said composition being produced by EURAND and meeting
the Specifications (as hereinafter defined). |
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1.14 |
“ Product Formulation ” means the developed
formulation required to convert the Active Ingredient into
Product. |
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1.15 |
“ Net Royalties ” means royalties, net of
any withholding taxes, due on Net Sales. |
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1.16 |
“
Net Sales ” means the aggregate invoiced sales of the
Finished Dosage Form by RELIANT less returns (not to exceed 5%),
discounts and sales, excise, value
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added, consumption or
similar taxes applicable to the Finished Dosage Form, as well as
duties, customs or other governmental charges.
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1.17 |
“ Person ” means any individual,
partnership, association, joint venture or corporation. |
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1.18 |
“ Specifications ” means the specifications
for Product agreed upon in writing by the parties and set forth in
Exhibit B. |
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1.19 |
“ Territory ” means the World. |
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1.20 |
“ United States ” means the United States of
America, its territories and possessions. |
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1.21 |
“ Act ” shall mean the Federal Food, Drug
and Cosmetic Act, as amended from time to time and corresponding
legislation in other countries of the Territory. |
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1.22 |
“ cGMP ” shall mean current Good
Manufacturing Practices as defined in regulations promulgated by
the FDA under the Act and corresponding regulations in the other
countries of the Territory. |
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1.23 |
“ DMF ” shall mean the Drug Master File or
modifications to such corresponding files in other countries of the
Territory developed and filed by EURAND which relate to the
Product. |
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1.24 |
“ CMC ” shall mean current Chemistry and
Manufacturing Controls section of the IND (or NDA, as
applicable). |
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1.25 |
“ IND ” shall mean an Investigational New
Drug application under the Act seeking authorization to commence
clinical trials of the Product in humans in such country of the
Territory. |
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1.26 |
“ NDA” shall mean a New Drug Application
under the Act, a Product License Application or a corresponding
filing required in any country of the Territory seeking approval to
market the Finished Dosage Form. |
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1.27 |
“ Extended Release Composition ” shall mean
the formulation for the Product with the exception of the Active
Ingredient. |
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2.1 |
The Development Program. |
(a) RELIANT hereby engages
EURAND, and EURAND hereby agrees, to perform the work described in
Exhibit A (the “Development Program”). In connection
therewith, EURAND shall make its best efforts to carry out the
Development Program in accordance with the timetables and budgets
therein and shall make available such of its scientific,
engineering, manufacturing and other personnel, necessary to
perform its obligations in accordance with the terms hereof. Any
material change in the Development Program shall be agreed to in
writing between Eurand and RELIANT.
(b) EURAND shall receive
prior written authorization to commence each phase of the
Development Program. RELIANT may cancel the
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Development Program at the
conclusion of each phase prior to commencement of the subsequent
phase.
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2.2 |
Regulatory Filings . Upon completion of the Development
Program, RELIANT shall, to the extent required to do so by the
terms of this agreement, prepare all necessary applications to
obtain Applicable Permits to market the Finished Dosage Form in the
Primary Territory. In such other countries of the Territory RELIANT
shall file applications in its sole discretion. The Applicable
Permits shall be owned by RELIANT. EURAND shall prepare the CMC
section of the NDA and assist RELIANT as necessary in the
preparation of other sections of any other applications required to
obtain such Applicable Permits. Upon completion of the Development
Program, EURAND shall promptly open the DMF with the FDA for the
manufacture of the Product (unless RELIANT proceeds with an IND in
which case EURAND will assist RELIANT as necessary in the
preparation of the IND) and provide RELIANT with copies of all
documents filed in connection therewith. Each party shall provide
the other party with sufficient opportunity to review and comment
upon all regulatory filings prior to their submission and shall
include such changes as they relate to the Development Program as
are reasonably requested by the other party. |
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2.3 |
Payments for Development |
(a) In consideration of
EURAND’s performance in accordance with the terms and
conditions of this Agreement, RELIANT shall make the
payments
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(non refundable to RELIANT)
to EURAND in accordance with the payment schedules set forth in
Exhibit A hereto.
(b) In addition to the
payments set forth on Exhibit A hereto, RELIANT shall be
responsible for the following additional materials, development
costs and/or expenses:
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(i) |
The cost of any additional development or registration work
performed by EURAND at the request of RELIANT, above and beyond the
defined and intended scope of work of the Development
Program; |
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(ii) |
A process fee for each validation batch of Product at a cost of
EURAND’s manufacturing cost (as defined in the Exhibit C) for
Product [***]; |
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(iii) |
The cost of any bio-studies approved in advance by RELIANT and
performed in conjunction with the Development Program;
and |
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(iv) |
The reasonable out of pocket expenses associated with travel of
EURAND personnel associated with the Development Project, such
expenses having been previously authorized by RELIANT. |
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Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portions. |
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3.1 |
Grant of License . Subject to the terms set forth herein
and in consideration for the payments set forth in Articles 2.3 and
8.l hereof; EURAND hereby grants to RELIANT a sole and exclusive
royalty-bearing license under the Know-How with the right to
sublicense within the Territory to (i) use the Product in the
manufacture of the Finished Dosage Form, and (ii) use, offer for
sale, market and sell the Finished Dosage Form provided, however,
that RELIANT shall not grant sublicenses in the United States
without the consent of EURAND, which consent shall not be
unreasonably withheld. |
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3.2 |
Sublicenses . RELIANT shall have the right in its sole
discretion to sublicense the rights granted pursuant to Section 3.1
in the Territory provided, however, that (i) all non-monetary
obligations specifically placed upon RELIANT by this Agreement
shall be placed upon any sublicensee, (ii) RELIANT shall remain
responsible to EURAND for performance of its obligations under this
Agreement and the performance of any sublicensee, (iii) RELIANT
shall promptly advise EURAND of the identity of any sublicensee and
(iv) provide EURAND with a copy of the sublicense agreement and any
agreements which are directly or indirectly related to the
sublicense agreement. |
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3.3 |
Sublicenses . In addition to the conditions to
sublicensing set forth in Paragraph 3.2 above, in the event RELIANT
determines to grant any such sublicense, RELIANT shall be required
to pay to EURAND: |
(i) [***] of any additional
payments (other than royalties or other payments not made in
consideration of the rights granted pursuant to the sublicense)
received from such sublicensee, if EURAND initially solicited such
sublicensee (as evidenced by documentation in possession of
EURAND); or
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Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portions. |
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(ii) [***] of any additional
payments (other than royalties or other payments not made in
consideration of the rights granted pursuant to the sublicense)
received from such sublicense if RELIANT initially solicited each
sublicense (as evidenced by documentation in possession of
RELIANT); and
(iii) the [***] of any
royalties on Net Sales of Finished Dosage Form received by RELIANT
from such sublicensee.
3.3.1 In order to enable
EURAND and RELIANT to determine which of them has initially
solicited such sublicensees, EURAND and RELIANT shall each notify
the other in writing within 30 days if it contacts, solicits or
otherwise communicates with any third party regarding granting the
third party a sublicense in the Territory under this
Agreement.
3.3.2 With regard to sharing
additional payments under subparagraphs (i) and (ii) above, if
there is a dispute regarding whether any payments which RELIANT
receives from or on behalf of any sublicensee are in fact fully or
partially in return for such sublicense and EURAND and RELIANT are
unable to resolve that dispute, the matter shall be submitted to
arbitration upon 30 days written notice by either party and
resolved in accordance with the rules of the American Arbitration
Association. If EURAND requests arbitration, the
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Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portions. |
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arbitration shall be
conducted in New York, New York and if RELIANT requests
arbitration, the arbitration shall be conducted in Dayton,
Ohio.
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3.4 |
Exclusivity . The exclusivity of the license granted
pursuant to Paragraph 3.1 may be converted to non-exclusive in
certain countries of the Territory by operation of any of
Paragraphs 4.2(b) and 4.3(a). |
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3.5 |
Use of
EURAND’s Trademark by RELIANT . RELIANT shall market the
Finished Dose Form under its own trademark. In addition, RELIANT
shall refer to EURAND’s technology and a trademark to be
designated no later than the completion of the Development Program
by EURAND (the “Trademark”) on the pack, internal
leaflet and promotional material of the Finished Dosage Form. For
this purpose, EURAND hereby grants RELIANT a non exclusive license
to use and sublicense the right to use the Trademark (the
“Trademark License”) in the sale and marketing of
Finished Dosage Form in the Territory and to print the following
wording: “Produced with EURAND “Trademark”
technology”. Alternatively, RELIANT shall print the Trademark
after the trademark of the Finished Dosage Form. Prior to printing
the packaging, RELIANT shall send EURAND a sample of packaging for
prior approval of the above which approval shall not be
unreasonably withheld. RELIANT covenants that such use of
EURAND’s Trademarks shall be strictly in accordance with the
terms of this Agreement and that all rights to and ownership of the
EURAND Trademarks shall remain with EURAND. For the avoidance of
doubt, the Trademark License shall not extend to the sale or
marketing of Finished Dosage Form which is
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manufactured from an
Extended Release Composition which is not manufactured by
EURAND.
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| 4. |
REGISTRATION AND LAUNCH OBLIGATIONS OF
RELIANT |
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4.1 |
Registration Obligations of RELIANT |
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(a) |
RELIANT shall
exercise commercially reasonable efforts to apply for Applicable
Permits and secure Approval Dates for the Finished Dosage Form in
the Primary Territory as quickly as reasonably possible following
completion of the Development Program. Notwithstanding any
provision in this Agreement to the contrary, RELIANT shall have no
obligation to apply for or obtain Applicable Permits in any country
of the Primary Territory or the other countries of the Territory if
such registration or approval is reasonably deemed to be
unnecessary to market the Finished Dosage Form in such country or
if RELIANT determines in its reasonable business judgment that such
registration or approval in countries other than those in the
Primary Territory is not in the commercial interests of RELIANT.
RELIANT hereby agrees that exertion of “commercially
reasonable efforts” shall mean the same efforts that RELIANT
devotes to its other major pharmaceutical products in the Primary
Territory and shall include, without limitation, the submission by
RELIANT of any additional documentation on the Finished Dosage Form
required under Applicable Laws. In addition to its other
obligations hereunder, EURAND shall fully assist RELIANT in the
preparation of documents necessary and required by FDA for RELIANT
to obtain Applicable Permits and shall otherwise
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cooperate with RELIANT in
connection with RELIANT’s efforts to obtain Applicable
Permits. If RELIANT requires additional data, samples or other
information in addition to that generated within the intended scope
of the Development Program in order to obtain Applicable Permits,
subject to RELIANT’s agreement to pay EURAND for such
additional performance, EURAND and RELIANT shall promptly negotiate
in good faith an agreement regarding such additional
performance.
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(b) |
RELIANT and EURAND) shall exchange with each other copies of
any “in-vivo” clinical studies performed on the
Finished Dosage Form during the term of this Agreement. RELIANT and
EURAND may use any of such studies, including in obtaining
Applicable Permits and promotion of the Finished Dosage Form
provided that such use is not otherwise inconsistent with the terms
of this Agreement. |
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(c) |
During the term of this Agreement, RELIANT shall provide EURAND
with a report on the status of progress of all Applicable Permits
in the Territory every three (3) months following completion of the
Development Program until the Approval Date. RELIANT shall notify
EURAND of the submission date of each application for the
Applicable Permits and the Approval Date thereof not later than two
(2) weeks after said dates. |
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4.2 |
Launch of the Finished Dosage Form |
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(a) |
RELIANT shall launch the Finished Dosage Form in each country
of the Primary Territory within a reasonable time after receipt of
the Applicable Permits with respect to the sale of the Finished
Dosage Form in such country. RELIANT or its sublicensees or
subdistributors shall sell the Finished Dosage Form throughout the
Primary Territory using the same efforts that RELIANT, its
sublicensees or subdistributors devotes to the sale of other major
pharmaceutical products in the Primary Territory. |
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(b) |
RELIANT shall
apply for Applicable Permits to market and sell the Finished Dosage
Form in the Primary Territory within eighteen (18) months from the
completion date of the Development Program or completion by EURAND
of any additional development work contemplated in Section 4.1(a)
to retain the exclusivity granted under Paragraph 3.1 of this
Agreement in each specific country of the Primary Territory. Should
RELIANT fail to do so within the aforementioned eighteen (18)
months period or should such filed Applicable Permits fail to issue
within 2-1/2 years of such filing (the “Approval
Deadline”), the license under Paragraph 3.1 hereof shall
automatically convert to a non- exclusive license in the country of
the Primary Territory where either (i) RELIANT has failed to file
for the Applicable Permit or (ii) the Applicable Permit has failed
to issue. However, if RELIANT has filed an application for the
Applicable Permits within 18 months and the permits have not issued
in 2-1/2 years, but issuance of the Applicable Permits
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appears reasonably to be
forthcoming. EURAND shall agree to a reasonable extension of the
2-1/2 year term.
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4.3 |
Competing Dosage Forms . |
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(a) |
The license granted under Paragraph 3.1 hereof shall
automatically convert to non-exclusive in those countries of the
Territory should RELIANT market another product containing the
Active Ingredient in a dosage form similar or identical to the
Finished Dosage Form in such country. This restriction shall-not
apply to the marketing and distribution by RELIANT of a sustained
release formulation of propranolol HCL currently on the market
under the brand name of Inderal ®
LA.,
Inderide ® LA and
Propranolol ® LA or their generic
equivalents. |
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(b) |
During the
term of this Agreement (the “Non-compete Period”),
EURAND shall not enter into any development, license or supply
agreement with any third party in the Territory for any existing
beta- blocker compounds (excluding beta-blocker compounds which, as
of the date of the Agreement, are not yet marketed and qualify as
New Chemical Entities under the Act) indicated for treatment of
hypertension using a circadian rhythm in-vivo profile. EURAND can
terminate the Non- Compete Period on forty five (45) days written
notice (i) if RELIANT has not applied for the Applicable Permits in
the United States as provided by Section 4.1 or (ii) launched the
Finished Dosage in the United States as
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provided by Section 4.2 or
(iii) RELIANT fails to maintain the Minimum Annual Royalty set
forth in Section 12.13.
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(c) |
In the event EURAND presents documentation (including but not
limited to the identity of the third party, the chemical entity and
the deal terms) which establishes to the reasonable satisfaction of
an Independent third party, selected by mutual agreement of EURAND
and RELIANT, that EURAND has received a bona fide offer or a bona
fide opportunity to develop and manufacture an existing
beta-blocker (other than the Active Ingredient) from a third party,
RELIANT at its option either shall release EURAND from the
Non-Compete Period or pay EURAND the increased royalty rate on Net
Sales set forth in Section 8.1(b). In order to assist RELIANT in
deciding whether to release EURAND or pay the increased royalty,
EURAND shall provide RELIANT with the third party sales forecast
for the existing beta-blocker and such other non confidential
information reasonably requested by RELIANT which EURAND determines
in good faith the third party would permit EURAND to share with
RELIANT. EURAND shall not have to disclose to RELIANT the chemical
identity of the beta-blocker or the identity of EURAND’s
customer. In the event that RELIANT releases EURAND from its
obligations under this section and EURAND develops or manufactures
an extended release composition containing an existing beta-blocker
for a third party, RELIANT shall be relieved of the Minimum Annual
Royalty obligations under Section 12.13. |
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(d) |
Notwithstanding anything herein to the contrary, for a period
of 24 months from the date this Agreement is executed by both
parties, EURAND shall not negotiate, solicit, or enter into any
agreement to develop any product which under the Act is a
bioequivalent of Inderal ® LA. or Propranolol
® LA. |
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OWNERSHIP AND USE OF KNOW-HOW |
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5.1 |
Ownership . Except as specifically provided in Paragraph
5.2 below, Know-How developed by either party or jointly by the
parties during the course of the performance of this Agreement,
including patents therefor, shall be (i) the property of EURAND to
the extent it is related solely to the development and production
of the Extended Release Composition (including modifications or
improvements thereto), or (ii) the property of RELIANT to the
extent that it is related solely to the use of the Product and to
the manufacture or use of the Finished Dosage Form. Each party
shall be free to use and practice such Know- How owned by it in any
application (not inconsistent with the terms of this Agreement)
without the consent of the other and without an obligation to
notify the other party of such intended use or to pay royalties or
other compensation to the other by reason of such use; provided
however that RELIANT shall not be free to use and practice Know How
that is developed by EURAND unless RELIANT has authorized EURAND to
complete the Development Program, made all payments in accordance
with Section 2.3(a), and has commercially launched the Finished
Dosage Form in the United States. Know-How owned
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prior to the date hereof
by either party shall continue to be owned exclusively by such
party.
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5.2 |
Additional Use . In addition to EURAND’s rights
described in Section 5.1, and subject to Section 4.3(b) hereof,
EURAND and its Affiliates shall have the right to use all Know-How
developed by EURAND during the course of the performance of this
Agreement which is directed solely to the Extended Release
Composition or the Product, provided such use, disclosure or
license does not conflict with the rights granted to RELIANT under
this Agreement. |
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5.3 |
Patents . Each party shall be responsible, at its own
expense, for filing and prosecuting patent applications, as it
deems appropriate, and for paying maintenance fees on any patents
issuing therefrom, for the term of this Agreement, with respect to
inventions owned by it. Each party shall promptly render all
necessary assistance reasonably requested by the other party in
applying for and prosecuting patent applications based on
inventions owned by such other party under this Agreement. Patents
covering joint inventions shall be owned by the parties jointly,
and the parties shall share equally in the expenses of filing for
and maintaining such patents. |
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5.4 |
Infringement . Each party warrants to the oth
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