DEPOMED A PLAN OF ACTION TO PROVIDE
SUCH A SALES FORCE OF AT LEAST [***] REPRESENTATIVES WITHIN NINE MONTHS AFTER
THE FIRST COMMERCIAL SALE.
IF, AS OF THE NINE-MONTH ANNIVERSARY OF THE FIRST
COMMERCIAL SALE, ESPRIT HAS NOT ESTABLISHED AND MAINTAINED A PROFESSIONAL FIELD
SALES FORCE OF AT LEAST [***] REPRESENTATIVES TO COVER THE PRIMARY CARE MARKET
IN THE TERRITORY, THEN, IN DEPOMED'S SOLE DISCRETION, DEPOMED MAY, BUT SHALL
HAVE NO OBLIGATION TO, ELECT TO EITHER (I) CONVERT THE LICENSE GRANTED PURSUANT
TO SECTION 2.1 INTO A NON-EXCLUSIVE LICENSE WITH RESPECT TO THE PRIMARY CARE
MARKET (IN WHICH EVENT THE LICENSE SHALL REMAIN EXCLUSIVE WITH RESPECT TO THE
UROLOGY MARKET), OR (II) TERMINATE THE LICENSE GRANTED PURSUANT TO SECTION 2.1
WITH RESPECT TO THE PRIMARY CARE MARKET.
EITHER SUCH ELECTION SHALL TAKE EFFECT
IMMEDIATELY UPON WRITTEN NOTICE FROM DEPOMED TO ESPRIT.
IN THE EVENT THAT
DEPOMED MAKES EITHER SUCH ELECTION, THE PARTIES SHALL NEGOTIATE IN GOOD FAITH
ANY NECESSARY OR DESIRABLE MODIFICATIONS TO THIS AGREEMENT (INCLUDING WITHOUT
LIMITATION MODIFICATIONS WITH RESPECT TO THE DISTRIBUTION OF THE LICENSED
PRODUCT AND THE ELIMINATION OF DEPOMED'S NON-COMPETITION OBLIGATIONS SET FORTH
IN SECTION 4.4 ABOVE WITH RESPECT TO THE PRIMARY CARE MARKET) TO ENSURE THAT
DEPOMED RECEIVES THE ROYALTY PAYMENT REQUIRED PURSUANT TO SECTION 2.3 WITH
RESPECT TO NET SALES WITHIN THE UROLOGY MARKET AND THAT ESPRIT IS REASONABLY
COMPENSATED FOR ANY DISTRIBUTION OF LICENSED PRODUCT IN RESPECT OF SALES OF
LICENSED PRODUCT NOT MADE BY ESPRIT OR ITS SUBLICENSEES.
(B)
MAINTENANCE OF SALES FORCE.
THE PARTIES
ACKNOWLEDGE AND AGREE THAT DEPOMED SHALL HAVE THE RIGHT TO TERMINATE THIS
AGREEMENT FOR "CAUSE" PURSUANT TO SECTION 15.2 WITH RESPECT TO A BREACH BY
ESPRIT OF ITS OBLIGATION TO (I) MAINTAIN A SALES FORCE OF AT LEAST [***]
REPRESENTATIVES (AFTER THE NINE MONTH ANNIVERSARY OF THE FIRST COMMERCIAL SALE)
TO COVER THE PRIMARY CARE MARKET AS REQUIRED BY SECTION 5.1(B) OR (II) MAINTAIN
A SALES FORCE OF AT LEAST [***] REPRESENTATIVES TO COVER THE UROLOGY MARKET ONLY
AFTER DEPOMED NOTIFIES ESPRIT OF SUCH BREACH PURSUANT TO SECTION 15.2 AND ESPRIT
FAILS TO CURE SUCH BREACH WITHIN SIXTY DAYS AFTER SUCH NOTICE FROM DEPOMED, AS
CONTEMPLATED BY SECTION 15.2.
5.4
DETAILS FOLLOWING AN ESPRIT CHANGE OF
CONTROL.
FROM AND AFTER THE OCCURRENCE OF AN ESPRIT CHANGE OF CONTROL OR ANY
ASSIGNMENT OF THIS AGREEMENT BY ESPRIT PURSUANT TO ARTICLE 17, DURING EACH
CALENDAR YEAR OF THE TERM OF THIS AGREEMENT, ESPRIT (OR ITS SUCCESSOR IN
INTEREST OR ASSIGNEE, AS APPLICABLE) SHALL PROVIDE THE FOLLOWING NUMBER OF
MINIMUM CALLS: (A) [***]; (B) [***]; (C) [***]; AND (D) [***].
THE FOREGOING
MINIMUM CALL OBLIGATIONS SHALL BE PRO-RATED FOR THE CALENDAR YEAR IN WHICH THE
ESPRIT CHANGE OF CONTROL OR ASSIGNMENT OCCURS, OR ANY OTHER PARTIAL CALENDAR
YEAR OF THE TERM OF THIS AGREEMENT.
THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION.
CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
9
6.