EXHIBIT 10.36(a)


 


February 23,
2006


 


Novartis
Consumer Heath, Inc.


200 Kimball
Drive


Parsippany, NJ
07054


Attn: Mr. Ivan
Marti


 


Dear Ivan:


 


This letter will confirm the agreement
between Novartis Consumer Health, Inc. (“Manufacturer”) and Reliant Pharmaceuticals,
Inc. (“Company’s concerning certain outstanding amounts for which payment is
due from Company to Manufacturer and such other matters as set forth herein. Capitalized
teams used but not otherwise defined have the meanings ascribed to them in the
Packaging and Supply Agreement between the parties dated March, 2004 (the “Agreement”).


 


The parties agree as follows:


 


1.                                       For
purchase orders accepted by Manufacturer and Product delivered to Company prior
to August 11, 2005, the Manufacturing Fee for each Drug Granulation containing
API manufactured by Novartis AG or its affiliates shall be $[***], consisting
of (a) a $[***] granulation service fee and (b) a Liability Fee of $[***] per
batch, which Liability Fee is in consideration of Manufacturer’s agreement
(except in cases of Manufacturer’s fraud or intentional malfeasance) to
contribute up to a limit of $200,000 per batch for replacement of lost or
damaged API in accordance with the Agreement. The Manufacturing Fee for all
Product delivered to Company on August 11, 2005 or thereafter containing API
manufactured by Novartis AG, if any, shall be $[***] ($0 Liability Fee). The
parties further agree that the Manufacturing Fee per batch for each Drug
Granulation containing API manufactured by Shasun and each Osmotic Granulation
delivered to Company at any time shall be $[***] ($0 Liability Fee). Manufacturer
shall have no liability (except in the cases of Manufacturer’s fraud or
intentional malfeasance) with respect to losses or damage to API with respect
to batches for which there is $0 Liability Fee in accordance with the Agreement.
As of February 10, 2006, the aggregate outstanding balance owed by Company to
Manufacturer is $[***]. Such amount reflects (i) $[***] in outstanding
Manufacturing Fees, (ii) $[***] in outstanding packaging fees and (iii) $[***]
in outstanding development fees. Attached as Exhibit A is a spreadsheet which
provides a detailed accounting


 






[***]: 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.


 

















 


supporting the
above amounts. Payment in the amount of $[***], shall be made within ten (10)
days of the date of this letter.


 


2.                                       Notice
is hereby given to Manufacturer that pursuant to Section 13.2 of the Agreement
effective as of August 11, 2005, the Liability Fee set forth on Schedule 6.1 to
the Agreement for each Drug Granulation without regard to whether such Drug
Granulation contains Novartis manufactured API or Shasun manufactured API shall
be $0 and that the cost per batch of each Drug Granulation shall be $[***] for
Product delivered on or after August 11, 2005. For the avoidance of doubt,
except in the case of Manufacturer’s fraud or intentional malfeasance, Manufacturer
shall have no liability for any losses or damage to API in connection with (i)
any Product delivered on or after August 11, 2005 or (ii) Product containing
Shasun API delivered at any time.


 


3.                                       In
consideration of the agreements set forth herein, including without limitation
Manufacturer’s consent to accelerate the time in which the Company may reduce
the Liability Fee under the Agreement, and such other good and valuable
consideration, the receipt and legal sufficiency of which is hereby acknowledged,
Company waives and releases Manufacturer as of the date of this letter (i) from
any claims that any Product previously delivered to Company are non-conforming
pursuant to the Agreement, except to the extent of any latent defects in the
Product not detectable as of the date of this letter, (ii) from any claims
alleging untimely delivery or invoicing by Manufacturer for Product previously
delivered. and (iii) from any claims alleging breach by Manufacturer of any of
the terms of the Agreement between the parties as of the date of this letter,
except to the extent that such causes of action could not have been discovered
as of the date of this letter upon the exercise of reasonable diligence. Company
represents that as of the date of this letter, it is unaware of any claims of
untimely delivery or invoicing of any Product for which PQ’s are currently
outstanding. Except for amounts referenced herein or in Exhibit A hereto,
Manufacturer represents and warrants that as of the date of this letter after
reasonable diligence it is unaware of any claims of non-payment of any invoices
for product previously delivered and of any claims against Company of breach or
default under the Agreement.


 


If this letter accurately sets forth our
agreement, please have a copy of this letter executed by an authorized
representative of Manufacturer and return it to me. Thank you for your
continued courtesy and cooperation in this matter.


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Michael J. Lerner

  
	
   

  	
  Vice President, Legal Affairs

  



 






[***]: 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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Agreed and
accepted this 3rd day of February           ,
2006


 


 


	
   

  	
   

  
	
  By:

  	
  Ivan Marti

  
	
  Title:

  	
  V.P., Supply
  Chain

  
	
   

  	
   

  
	
  cc:

  	
  Andrew
  Haskell, Associate General Counsel

  
			



 


3

















 


Dynacirc
Granulation Reconciliation


(9/16/05)


 









[***]: 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.