EFFECTIVE DATE),
INCLUDING RECALLS REQUIRED BY ANY US REGULATORY AUTHORITY; PROVIDED, HOWEVER,
THAT TO THE EXTENT THAT ANY SUCH RECALL IS INVOLUNTARY AND IS ATTRIBUTABLE TO
LICENSED PRODUCT SOLD BY ESPRIT OR ITS AFFILIATES PRIOR TO THE EFFECTIVE DATE,
THEN ESPRIT SHALL REIMBURSE DEPOMED FOR ALL REASONABLE COSTS AND EXPENSES
ACTUALLY INCURRED BY DEPOMED IN CONNECTION WITH THE CONDUCT OF THE RECALL OF
SUCH LICENSED PRODUCT, INCLUDING WITHOUT LIMITATION, THE COST OF REPLACING SUCH
LICENSED PRODUCT, UNLESS DEPOMED IS REQUIRED TO BEAR SUCH COSTS AND EXPENSES
UNDER SECTION 13.3 OF THE SUPPLY AGREEMENT, IN WHICH CASE ESPRIT SHALL NOT BE
REQUIRED TO SO REIMBURSE DEPOMED.
EACH PARTY PROMPTLY (AND IN ANY EVENT WITHIN
THE TIME PERIODS REQUIRED BY LAW) SHALL NOTIFY THE OTHER PARTY IN THE EVENT THAT
THE NOTIFYING PARTY BECOMES AWARE THAT A RECALL OF LICENSED PRODUCT SOLD BY
ESPRIT IS NECESSARY.
6.
TRANSITIONAL COMMERCIAL OBLIGATIONS
6.1
TRANSITION PLAN.
ATTACHED HERETO AS EXHIBIT C IS
A PLAN (THE "TRANSITION PLAN") PURSUANT TO WHICH ESPRIT AND DEPOMED SHALL
COOPERATE IN TRANSITIONING THE MARKETING OF THE LICENSED PRODUCT FROM ESPRIT TO
DEPOMED AS EFFICIENTLY AS REASONABLY POSSIBLE.
EACH PARTY AGREES TO USE ALL
REASONABLE EFFORTS TO PERFORM ITS OBLIGATIONS AS SET FORTH IN THE TRANSITION
PLAN.
ESPRIT HEREBY DESIGNATES MARK JANOFSKY AND CHRIS BERARDI, AND DEPOMED
HEREBY DESIGNATES TOM LEE AND JILL JENE TO SERVE AS A JOINT TRANSITION COMMITTEE
(THE "JTC") CHARGED WITH OVERSEEING THE PLANNING AND IMPLEMENTATION OF THE
ACTIVITIES SET FORTH IN THE TRANSITION PLAN ON BEHALF OF ESPRIT AND DEPOMED.
EACH PARTY MAY DESIGNATE REPLACEMENT MEMBERS TO THE JTC BY NOTICE TO THE OTHER
PARTY.
THE JTC SHALL HAVE NO AUTHORITY TO AMEND THIS AGREEMENT OR TO MATERIALLY
MODIFY THE TRANSITION PLAN.
THE JTC SHALL MEET ON A MONTHLY BASIS DURING THE
SIX-MONTH PERIOD BEGINNING ON THE EFFECTIVE DATE.
ESPRIT SHALL HAVE THE RIGHT
TO DESIGNATE THE LOCATION OF THE FIRST SUCH MEETING.
THE RIGHT TO DESIGNATE THE
LOCATION OF SUBSEQUENT MEETINGS OF THE JTC SHALL THEREAFTER ALTERNATE BETWEEN
DEPOMED AND ESPRIT.
6.2
LICENSED PRODUCT POST-TERMINATION DETAILING.
COMMENCING ON THE EFFECTIVE DATE AND CONTINUING UNTIL THE EARLIER OF (A)
SEPTEMBER 15, 2007 OR (B) THE OCCURRENCE OF AN ESPRIT CHANGE OF CONTROL, ESPRIT
SHALL ASSIGN ITS FIELD SALES FORCE, CURRENTLY CONSISTING OF 158 MEMBERS, TO
MAKING DETAIL CALLS, AS SPECIFIED IN THE TRANSITION PLAN, AND SHALL IMPLEMENT
THE INCENTIVE COMPENSATION PROGRAM SPECIFIED IN THE TRANSITION PLAN.
EXCEPT IN
THE INSTANCE OF A BREACH OF SECTION 6.4, ESPRIT SHALL HAVE NO LIABILITY TO
DEPOMED WHATSOEVER IN CONNECTION WITH THE ACTS AND OMISSIONS OF ESPRIT'S FIELD
SALES FORCE IN CONNECTION WITH SUCH DETAIL CALLS.
6
6.3
DISTRIBUTION CHANNEL.
(A)
EXHIBIT D ATTACHED HERETO SETS FORTH, TO THE BEST OF ESPRIT'S
KNOWLEDGE, A TRUE AND ACCURATE RECONCILIATION (THE "DISTRIBUTION CHANNEL
RECONCILIATION"), AS OF THE EFFECTIVE DATE, OF ALL QUANTITIES OF LICENSED
PRODUCT (INCLUDING LICENSED PRODUCT SAMPLES) PURCHASED BY ESPRIT FROM DEPOMED
PURSUANT TO THE SUPPLY AGREEMENT AGAINST:
(I) THE CURRENT INVENTORY OF LICENSED
PRODUCT OWNED BY ESPRIT AND