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Exhibit 4.18
  
 DEVELOPMENT
AND
LICENSE AGREEMENT
 between
Eurand, Inc.
 And
SmithKline Beecham Corporation d/b/a GlaxoSmithKline
 For a
 ***




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DEVELOPMENT AND LICENSE AGREEMENT
 PREAMBLE
 THIS DEVELOPMENT AND LICENSE AGREEMENT st Effective Date Eurand th GSK Parties Party
       1 DEFINITIONS: including including
 1.1 AAA
 1.2 Abandoned Eurand Patent Rights
 1.3 Abandoned GSK Invention Patent Rights
 1.4 Act
 1.5 Action
 1




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1.6 Affiliate
 1.7 Agreement
 1.8 Applicable Laws
 1.9 Business Day
 1.10 Calendar Quarter st
 1.11 Calendar Year
 1.12 cGMP GMP
 1.13 Clinical Studies
 1.14 Clinical Supply Agreement
 1.15 Commercially Reasonable Commercially Reasonable Efforts
 2




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1.16 Commercial Supply Agreement
 1.17 Competing Business Entity
 1.18 Competitive Product
 1.19 Compound
 1.20 Confidential Information
 1.21 Confidentiality Agreements
 1.22 Control
 1.23 CTM
 1.24 CTM Specifications
 1.25 Cure Period
 3




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1.26 Data
 1.27 Disclosing Party
 1.28 DMF
 1.29 Drug Substance
 1.30 Drug Substance Specifications
 1.31 Effective Date
 1.32 Entity
 1.33 Eurand
 1.34 Eurand Auditor
 1.35 Eurand Data
 1.36 Eurand Development Activities
 1.37 Eurand Intellectual Property Rights
 1.38 Eurand Inventions
 1.39 Eurand Know-How
 1.40 Eurand Patent Rights
 4




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Exhibit A
 1.41 Eurand Publication
 1.42 Eurand Trademarks Exhibit B
 1.43 Existing Eurand Patent Rights
 1.44 FDA
 1.45 Field
 1.46 First Commercial Sale
 1.47 Force Majeure Event
 1.48 Formulation
 1.49 GSK
 1.50 GSK
 1.51 GSK
 1.52 GSK
 1.53 Generic Equivalent
 5




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1.54 GSK Intellectual Property Rights
 1.55 GSK Inventions
 1.56 GSK Invention Patent Rights
 1.57 GSK Know-How
 1.58 GSK Patent Rights Exhibit C
 1.59 GSK Program Rights
 1.60 GSK Publication
 1.61 GSK Trademarks
 1.62 Intellectual Property Rights
 1.63 Inventions
 1.64 Know-How
 6




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1.65 ***
 1.66 *** Agreement
 1.67 *** Patent
 1.68 *** Patent Expiration Date ***
 1.69 Materials Safety Data Sheet
 1.70 Merger Merging
 1.71 Milestone Events
 1.72 Milestone Payments
 1.73 NDA
 1.74 NDA No. ***
 1.75 NDA No. ***
 1.76 New Country License Agreement
 1.77 Net Sales
 1.77.1
 1.77.2
 1.77.3
 7




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1.77.4
 1.77.5
 1.77.6
 1.77.7
   1.78 Non-Participating Party
 1.79 Non-Competing Business Entity
 1.80 ODT Technology
 1.81 Participating Party
 1.82 Party Parties
 1.83 Patent Rights
 1.84 Potential Contaminants
 1.85 Pre-Registration Activities
 1.86 Product
 1.87 Product Specifications
 8




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1.88 Program
 1.89 Program Initiation Date
 1.90 Proposal
 1.91 Recipient
 1.92 Regulatory Approval
 1.93 Regulatory Authority
 1.94 Right of Negotiation
 1.95 Right of Negotiation Notice
 1.96 Right of Negotiation Period
 1.97 Royalties
 1.98 Steering Committee
 1.99 Term
 1.100 Territory
 1.101 Third Party
 1.102 Third Party Infringement
 1.103 Third Party Payments
 1.104 Trademarks
 9




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2 LICENSES:
 2.1 Eurands License Grants to GSK
 2.1.1
 2.1.2
 2.1.3
 2.2 GSKs License Grants to Eurand
 2.2.1
 2.2.2
 2.3 ***
 2.3.1
    10




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2.3.2
 2.4 Right to ***
 2.4.1
 2.4.2
 2.4.3
 2.4.4
 11




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2.4.5
 2.5 Affiliates
 2.6 *** Agreement
 2.6.1
 2.6.2
 2.6.3
 2.7 Reservation of Rights
 3 PROGRAM:
 3.1 Eurand Development Activities.
 12




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Exhibit D Proposal Program Initiation Date
 3.2 GSK Development Activities GSK Development
Activities
 3.3 Supply of Drug Substance for use in Eurand Development Activities
 3.3.1
 13




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3.3.2
       Potential Contaminants
 14




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3.4
 3.5 Program Changes
 4 COMMERCIALIZATION:
 4.1
 15




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4.2
 4.3 GSK Trademarks
 4.4
 5 STEERING COMMITTEE:
 5.1 Steering Committee
 5.2
 5.3
 5.4
 16




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5.5
 5.6 Resolution of Disputes
 5.6.1
 5.6.2
 5.6.3
 5.7
 6 SUPPLY OF CLINICAL AND COMMERCIAL MATERIAL:
 6.1 Generally
 17




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6.2 Clinical Supply Agreement Clinical Supply Agreement Exhibit
E
 6.3 Commercial Supply Agreement Commercial Supply Agreement Exhibit F
 6.4
 7 REGULATORY:
 7.1 Regulatory Affairs.
 7.1.1
 7.1.2
 18




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7.1.3
 7.1.4
 7.1.5
 19




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7.1.6
 8 COMPENSATION:
 8.1 Development Fees
 8.1.1
 
  
 8.1.2 Exhibit D
 8.1.3 Additional Expenses. Exhibit D
 20




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8.1.4
 8.2 Milestone Payments Milestone Payments Milestone Events
 Milestone Event
    
    Milestone Payment(i)
    
    ***
    
    U.S. ***(ii)
    
    ***
    
    U.S. ***(iii)
    
    ***
    
    U.S. ***(iv)
    
    ***
    
    U.S. ***(v)
    
    ***
    
    U.S. ***(vi)
    
    ***
    
    U.S. ***(vii)
    
    ***
    
    U.S. ***(viii)
    
    ***
    
    U.S. ***(ix)
    
    Net Sales Equal to U.S. ***
    
    U.S. ***(x)
    
    Net Sales Equal to U.S. ***
    
    U.S. ***(xi)
    
    Net Sales Equal to U.S. ***
    
    U.S. ***
 21




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8.2.1 Milestone Payment Definitions
               provided, however,
 22




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8.2.2 Milestone Payment Provisions
   8.3 Royalties
 8.3.1 Full Royalty. Royalties
 Incremental Royalty RateAggregate Net Sales in the Territory
    
    on Aggregate Net Sales in thein a Calendar Year
    
    Territory in a Calendar Year(i)   *** to U.S. ***
    
    ***%(ii)   U.S. *** to U.S. ***
    
    ***%
 23




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Incremental Royalty RateAggregate Net Sales in the Territory
    
    on Aggregate Net Sales in thein a Calendar Year
    
    Territory in a Calendar Year(iii)  U.S. *** to U.S. ***
    
    ***%(iv)  U.S. *** and above
    
    ***%
 8.3.2 *** Royalty.
    8.3.3 Commencement and Expiration of Royalty Obligations.
 8.3.4 *** to ***.
 8.3.5 ***.
 24




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***
 8.3.6 Royalty Payment Terms.
      8.4 General Payment Terms
 8.4.1
 8.4.2
 25




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8.4.3 Audit Rights
 Eurand Auditor
 GSK Auditor
 26




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9 INTELLECTUAL PROPERTY:
 9.1 Responsibility for Eurand Patent Rights Existing as of *** ***
 9.2 Responsibility for GSK Patent Rights Existing as of ***
 9.3 Ownership of Inventions
 9.3.1
 9.3.2 Inventions
 9.3.3 GSK Inventions GSK Invention Patent Rights
 27




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9.3.4 Eurand Inventions
 9.3.5
 9.3.6
 9.4 Abandoned Patent Rights
 9.4.1 Abandoned GSK Invention
Patent Rights
 28




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9.4.2 Abandoned Eurand Patent
Rights
 9.5 Commercialization of Product and Competitive Product
 9.5.1 ***
 9.5.2 Right of Negotiation Notice
 9.5.3
 9.5.4 *** Right of Negotiation Period
 29




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9.5.5
 9.5.6
    9.6 Infringement
 30




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9.6.1
    9.6.2
 9.6.3
 9.7 Third Party Infringement of Patents
 9.7.1 Third Party
Infringement
 9.7.2 Action Nonparticipating Party Participating
Party
 31




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10 REPRESENTATIONS AND WARRANTIES:
 10.1 Mutual Representations and Warranties
 10.1.1
 10.1.2
 10.1.3
 10.1.4
 10.1.5
 10.2 Eurand Representations and Warranties
 10.2.1
 32




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10.2.2
 10.2.3
 10.2.4
 10.2.5
 10.2.6
 10.3 GSKs Representations and Warranties
 10.3.1
 10.3.2
 10.4 Covenants of Eurand and GSK
 10.4.1
 10.4.2
 33




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10.4.3
 10.4.4
 10.4.5
 10.4.6
 10.5 Compliance with Laws
 10.6 Non-Competition
 10.6.1
 34




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10.6.2 Merger Merging
 10.6.3 Competing Business Entity Non-Competing Business Entity *** Party
 10.7 Limitation of Warranty
 11 TERM AND TERMINATION
 11.1 Term Term
 11.2 Termination
 35




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11.2.1 By GSK.
 11.2.2 By Either Party for Material Breach. Cure Period
 11.2.3 By Mutual Consent.
 11.2.4 By Either Party for Bankruptcy.
 11.2.5
 36




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11.3 Effects of Termination
 11.3.1
 11.3.2
 11.3.3
 11.3.4
 11.3.5 -Termination Rights of Eurand Under the *** Program Rights.
 *** to *** and *** to the ***
   *** to *** and *** the ***
  37




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*** and *** to the ***
   *** the *** and *** the ***.
   For Cause by GSK.
  38




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11.4 Survival
 11.4.1
 11.4.2
 11.4.3
  12 INDEMNIFICATION AND INSURANCE: SUBLICENSEES
 12.1 Indemnification of GSK
 12.2 Indemnification of Eurand
 39




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12.3 Notice and Legal Defense
 12.4 Consequential Damages
 12.5 Insurance
 40




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13 CONFIDENTIALITY:
 13.1 Confidential Information
 13.1.1 Disclosing
Party Recipient
 13.1.2
 13.1.3
 13.1.4 ***
 13.1.5
 13.1.6
 41




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provided, however,
 13.1.7
 13.1.8
 13.1.9 Confidentiality Agreements
 13.2 Publicity
 42




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13.3 Publication
 13.3.1 Eurand Publication
 13.3.2 GSK Publication
 13.4 Clinical Trial Registries www.ClinicalTrials.gov
 14 MISCELLANEOUS:
 14.1 Assignment
 43




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14.2 Safety Data Exchange Agreement
 14.3 No Implied Waiver
 14.4 Choice of Law
 14.5 No Third Party Beneficiaries
 14.6 Notices
  
  44




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14.7 Execution of Additional Documents
 14.8 Severability
 14.9 Captions/Headings
 14.10 Counterparts
 14.11 Independent Relationship
 45




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14.12 Entire Agreement
 14.13 Force Majeure
 14.14 Resolution of Disputes
 14.14.1
 14.14.2
 14.14.3
 [The remainder of this page is intentionally left blank.]
 46




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EURAND, INC.
    
    
    
    SMITH KLINE BEECHAM CORPORATION D/B/A GLAXOSMITHKLINEBy:
    
    /s/ John Fraher

Name: John Fraher 
Title: President,
Eurand North America
    
    
    
    By:
    
    /s/   Donal F. Parman

Name: Donald F. Parman 
Title: Vice President & Secretary
 47




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EXHIBIT A
 EURAND PATENT RIGHTS
 ***




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EXHIBIT B
 EURAND TRADEMARKS  United States
 ***
 2




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EXHIBIT C
 GSK PATENT RIGHTS
 ***
 3




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EXHIBIT D
 PROPOSAL
  Product Development Proposal
 ***
Formulation Development and Clinical Trial Materials
 ***
 4




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EXHIBIT E
 KEY TERMS FOR CLINICAL SUPPLY AGREEMENT
 ***




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EXHIBIT F
 KEY TERMS FOR COMMERCIAL SUPPLY AGREEMENT
 ***
 2




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EXHIBIT G
 ***
 3