OF
ANY SUBSTANTIAL PART OF ITS PROPERTY; OR (IV) SUCH PARTY SHALL ADOPT A DIRECTORS
RESOLUTION IN FURTHERANCE OF ANY OF THE FOREGOING ACTIONS SPECIFIED IN THIS
SUBPARAGRAPH (A); OR
(B)
A DECREE OR ORDER FOR RELIEF BY A COURT OF
COMPETENT JURISDICTION SHALL BE ENTERED IN RESPECT OF SUCH PARTY IN AN
INVOLUNTARY CASE UNDER ANY APPLICABLE BANKRUPTCY, INSOLVENCY OR OTHER SIMILAR
LAW NOW OR HEREAFTER IN EFFECT, OR APPOINTING A RECEIVER, LIQUIDATOR, TRUSTEE,
SEQUESTRATOR OR OTHER SIMILAR OFFICIAL OF SUCH PARTY TO WIND UP OR LIQUIDATE ITS
AFFAIRS, AND ANY SUCH DECREE OR ORDER SHALL REMAIN UNSTAYED OR UNDISCHARGED AND
IN EFFECT FOR A PERIOD OF SIXTY DAYS.
15.3
TERMINATION BY DEPOMED.
DEPOMED SHALL BE
ENTITLED TO TERMINATE THIS AGREEMENT IMMEDIATELY UPON NOTICE TO ESPRIT IN THE
EVENT THAT ESPRIT FAILS TO MAKE TO DEPOMED THE $25,000,000 LICENSE FEE PAYMENT
REQUIRED PURSUANT TO SECTION 3(B) ON OR BEFORE THE THIRTIETH DAY AFTER THE
EFFECTIVE DATE.
15.4
TERMINATION BY ESPRIT.
BEGINNING ON THE
EFFECTIVE DATE AND ENDING AT 5:00 P.M., NEW YORK TIME, ON THE FOURTH BUSINESS
DAY AFTER THE EFFECTIVE DATE (THE "PATENT DILIGENCE PERIOD"), ESPRIT SHALL BE
PERMITTED TO CONDUCT A FREEDOM TO OPERATE ANALYSIS WITH RESPECT TO THE
16
PATENT RIGHTS (THE "FREEDOM TO OPERATE ANALYSIS").
THE FREEDOM TO OPERATE
ANALYSIS SHALL BE CONDUCTED ON ESPRIT'S BEHALF BY OUTSIDE PATENT COUNSEL TO
ESPRIT.
IF, AS A RESULT OF THE FREEDOM TO OPERATE ANALYSIS, SUCH OUTSIDE PATENT
COUNSEL PROVIDES ESPRIT WITH A WRITTEN OPINION TO THE EFFECT THAT ESPRIT'S
ABILITY TO MARKET THE LICENSED PRODUCT IN THE TERRITORY WILL BE MATERIALLY AND
ADVERSELY AFFECTED BY THE VALID, ISSUED CLAIMS OF A UNITED STATES PATENT OWNED
BY A THIRD PARTY, THEN (I) ESPRIT SHALL SO NOTIFY DEPOMED AND, UPON THE REQUEST
OF DEPOMED, SHALL IMMEDIATELY PROVIDE SUCH WRITTEN OPINION TO DEPOMED; AND
(II) AS ESPRIT'S SOLE AND EXCLUSIVE REMEDY FOR ANY BREACH OR DEFAULT OF THIS
AGREEMENT BY DEPOMED, IF ANY, ESPRIT SHALL BE ENTITLED TO TERMINATE THIS
AGREEMENT IMMEDIATELY UPON NOTICE TO DEPOMED AT ANY TIME PRIOR TO THE EXPIRATION
OF THE PATENT DILIGENCE PERIOD.
WITHIN THREE BUSINESS DAYS AFTER ANY
TERMINATION OF THIS AGREEMENT BY ESPRIT PURSUANT TO THIS SECTION 15.4, DEPOMED
SHALL RETURN TO ESPRIT THE $5,000,000 PAYMENT MADE BY ESPRIT TO DEPOMED ON THE
EFFECTIVE DATE.
ESPRIT MAY WAIVE ANY TERMINATION RIGHT UNDER THIS SECTION 15.4
BY WRITTEN NOTICE TO DEPOMED.
15.5
PAYMENT OBLIGATIONS.
TERMINATION OF THIS
AGREEMENT SHALL NOT TERMINATE THE OBLIGATIONS OF ESPRIT TO MAKE ANY PAYMENTS
THEN OWING THROUGH THE DATE OF TERMINATION OR THE OBLIGATIONS OF CONFIDENTIALITY
IMPOSED ON EITHER PARTY.
15.6
TRANSFER OF NDA AND IND.
IN THE EVENT OF ANY
TERMINATION OF THIS AGREEMENT, (A) ESPRIT SHALL WITHIN THREE DAYS PREPARE AND
SEND AN EXECUTED LETTER TO FDA AUTHORIZING THE TRANSFER OF THE NDA AND THE IND
FOR THE LICENSED PRODUCT TO DEPOMED, AND ESPRIT SHALL ALSO TRANSFER TO DEPOMED
ALL REGULATORY DOCUMENTS, A CHRONOLOGY OF DISCUSSIONS WITH FDA, AND OTHER
INFORMATION NECESSARY TO MAINTAIN COMPLIANCE WITH