Common use of Transition Services During Initial Term Clause in Contracts

Transition Services During Initial Term. (i) Licensor shall, with Licensee’s good faith cooperation, provide those transition services as specifically set forth in this Agreement and the applicable Schedules hereto (“Transition Services”) in accordance with Applicable Laws and in the manner and for the periods of time described therein. (ii) Licensor shall provide such Transition Services until the date that is one (1) month following the date that Licensor completes the 510(k) Work, as defined in Section 4.1 hereof (the foregoing period shall be hereinafter referred to as the “Initial Term”). Notwithstanding the foregoing, if Licensee has not obtained the necessary regulatory clearances and permits to sell the Products in the United States under Licensee’s own quality system and labeling (“US Regulatory Transfer”) by the earlier of (i) April 30, 2012, or (ii) the date that is six (6) months following Licensor’s initial submission of the 510(k) Notification referred to in Section 4.1(a) hereof, a “Major Challenge” (as defined below) shall be deemed to have occurred under Section 4.1(d) below. (iii) The Transition Plan may be revised from time to time upon the mutual written agreement of Licensor and Licensee. Licensee acknowledges that Licensor’s ability to perform the Transition Services depends in part on Licensee’s full and timely performance and cooperation, and as such, Licensee agrees to fulfill its responsibilities and obligations with respect to the Transition Plan, to comply with Applicable Laws, and to cooperate in good faith with Licensor in the provision of Transition Services hereunder. (iv) Licensee shall pay Licensor a fee of $30,000 per month (the “Monthly Fee”) beginning in the second month following the Effective Date for the performance of Transition Services for each month until the earlier of (x) the expiration of the Initial Term or (y) one month following the last of the US Regulatory Transfer or the EU Regulatory Transfer. (v) Further, in the event that Licensor is required to pay a Person (other than Licensor, its Affiliates, or contracted employees) to perform required Transition Services that are not anticipated by the Transition Plan, not related to the 510(k) Work, or not due to Licensor’s failure to perform under this or any of the Transaction Documents (“Third Party Costs”), Licensor shall consult with Licensee to explore cost-savings measures with regard to those Third Party Costs. Following such consultation and incurring of such Third Party Costs, Licensor shall provide Licensee reasonable evidence of the Third Party Costs associated therewith. Licensor shall invoice Licensee for the foregoing Monthly Fees and Third Party Costs on a monthly basis, and Licensee shall pay each such invoice within thirty (30) days following the date thereof. Licensee shall reimburse Licensor for Third Party Costs up to an aggregate maximum of [ * * * ] during the Initial Term. If and once Third Party Costs have exceeded [ * * * ] during the Initial Term, Licensee shall have the option to terminate this Agreement pursuant to Section 9.2(c) hereof in lieu of incurring further Third Party Costs. In the event of such a termination, Licensor shall promptly refund to Licensee an amount equal to $250,000 (the “Excessive Third Party Costs Refund”). Such a termination of the Agreement will not release Licensor or Licensee from any obligation that accrued prior to the effective date of such termination, but such a termination will release Licensee of any further payment obligation for any Minimum Royalty for a partial Contract Year except as set forth in Section 9.2(d) hereof, any License Fee not then due and payable, and any obligation to purchase Transferred Prostiva Assets under the Acquisition Option Agreement or to purchase Assets under the Asset Purchase Agreement. As further described in Section 9.2(c) hereof, the Excessive Third Party Costs Refund and the foregoing termination right shall be the sole remedy available to Licensee for excessive Third Party Costs described herein, and neither party shall have any liability to other party or shall suffer any consequences as a result of Licensee’s termination pursuant to this Section, except as explicitly set forth in this Section 2.2(a)(v) or Section 9.2(c) hereof.