THE MEDIATION IN GOOD FAITH AND THAT THEY WILL SHARE EQUALLY IN
ITS COSTS; PROVIDED THAT EACH PARTY WILL BE RESPONSIBLE FOR ITS OWN ATTORNEY'S
FEES. EITHER PARTY MAY SEEK EQUITABLE RELIEF PRIOR TO THE MEDIATION TO PRESERVE
THE STATUS QUO PENDING THE COMPLETION OF THAT PROCESS. EXCEPT FOR SUCH AN ACTION
TO OBTAIN EQUITABLE RELIEF, NEITHER PARTY MAY COMMENCE A CIVIL ACTION WITH
RESPECT TO THE MATTERS SUBMITTED TO MEDIATION UNTIL AFTER THE COMPLETION OF THE
INITIAL MEDIATION SESSION, OR THIRTY DAYS AFTER DELIVERY OF THE MEDIATION
NOTICE, WHICHEVER OCCURS FIRST.
(C)
IN FURTHERANCE OF THE FOREGOING PROVISIONS OF SECTION 3.5(B), IN
CONNECTION WITH ANY MEDIATION CONDUCTED AS SET FORTH PURSUANT TO SECTION 3.5(B)
WITH RESPECT TO A DETAILING OR INCENTIVE COMPENSATION DISPUTE (AS DEFINED
BELOW), EACH PARTY SHALL SUBMIT TO THE MEDIATOR SELECTED PURSUANT TO SECTION
3.5(B) AND TO THE OTHER PARTY, AT LEAST TWO WEEKS IN ADVANCE OF THE MEDIATION
PROCEEDINGS, A BRIEF SUMMARIZING AND SUPPORTING ITS CONTENTIONS WITH RESPECT TO
THE DISPUTE FOR THE PURPOSE OF FACILITATING THE MEDIATION PROCEEDINGS. IF THE
PARTIES FAIL TO RESOLVE ANY DETAILING OR INCENTIVE COMPENSATION DISPUTE
FOLLOWING THE COMPLETION OF MEDIATION PROCEEDINGS WITH RESPECT TO SUCH DETAILING
OR INCENTIVE COMPENSATION DISPUTE (A "DETAILING OR INCENTIVE COMPENSATION
IMPASSE"), DEPOMED MAY TERMINATE THIS AGREEMENT PURSUANT TO SECTION 8.2(C). A
"DETAILING OR INCENTIVE COMPENSATION DISPUTE" IS ANY DISPUTE REGARDING EITHER
(I) THE INCENTIVE COMPENSATION PAYABLE TO THE WATSON SALES FORCE IN RESPECT OF
THE PRODUCT FOR ANY PERIOD AFTER DECEMBER 31, 2008 WHERE WATSON PROPOSES THAT
LESS THAN [***] OF THE INCENTIVE COMPENSATION PAYABLE TO WATSON SALES
REPRESENTATIVES DETAILING THE PRODUCT WILL BE DEPENDENT ON SALES OF THE PRODUCT,
OR (II) THE NUMBER OF P1 DETAILS, P2 DETAILS OR P3 DETAILS TO BE PERFORMED BY
WATSON FOR ANY PERIOD AFTER DECEMBER 31, 2009 WHERE WATSON PROPOSES TO PERFORM
FEWER THAN [***] ANNUAL PDES (ON A PRO-RATED BASIS FOR PARTIAL YEARS).
(D)
THE PARTIES AGREE THAT ITEMS THAT ARE SOLELY REVIEWED BY THE JSC,
AND NOT BOTH REVIEWED AND APPROVED BY THE JSC, ARE NOT SUBJECT TO THE DISPUTE
RESOLUTION MECHANISM SET FORTH IN THIS SECTION 3.5. ANY DISPUTES REFERRED TO THE
EXECUTIVE OFFICERS FOR RESOLUTION PURSUANT TO THIS SECTION 3.5 SHALL NOT BE
SUBJECT TO ANY DISPUTE RESOLUTION MECHANISM OR PROCEDURE UNLESS AND UNTIL THE
DISPUTE RESOLUTIONS PROCEDURES SET FORTH IN THIS SECTION 3.5 ARE EXHAUSTED.
Confidential Information, indicated by [***], has been omitted from this filing
and filed separately with the Securities Exchange Commission
ARTICLE IV
PRODUCT PROMOTION
SECTION 4.1
PRODUCT PROMOTION.
(A)
SUBJECT TO APPLICABLE LEGAL REQUIREMENTS, AS WELL AS THE
PROVISIONS OF THIS AGREEMENT, WATSON SHALL, FROM AND AFTER THE PROMOTION
COMMENCEMENT DATE, AT ITS SOLE EXPENSE, USE COMMERCIALLY REASONABLE EFFORTS TO
PROMOTE THE PRODUCT IN THE TERRITORY WITHIN THE FIELD IN ACCORDANCE WITH THE
2007 PLAN OR ANNUAL PLAN FOR SUBSEQUENT YEARS (THE "PROMOTIONAL EFFORT"). FOR
PURPOSES OF THE PRECEDING SENTENCE, WATSON'S COMMERCIALLY REASONABLE EFFORTS
SHALL MEAN AT LEAST THE SAME DEGREE OF EFFORT (INCLUDING WITH RESPECT TO