Exhibit 10.39

 

TERMINATION AND ASSIGNMENT AGREEMENT

 

This Termination and Assignment Agreement (the “Agreement”) is made and entered
into this 29th day of October 2007 (the “Effective Date”), by and between
Depomed, Inc., a California corporation (“Depomed”), and King
Pharmaceuticals, Inc., a Tennessee corporation (“King”).

 

BACKGROUND

 

A.                                   Depomed and King are parties to that
certain Promotion Agreement, dated as of June 27, 2006 (the “Promotion
Agreement”).  Capitalized terms used herein without definition shall have the
meanings ascribed to them in the Promotion Agreement, as in effect immediately
prior to the execution of this Agreement.

 

B.                                     The parties desire to terminate the
Promotion Agreement on the terms set forth herein.

 

It is therefore agreed as follows:

 

1.                                      TERMINATION OF PROMOTION AGREEMENT;
RELEASE

 

1.1                                 ADDITIONAL DEFINITIONS:

 

(a)           “Joint Transition Committee” or “JTC” shall refer to the committee
established pursuant to the Transition Plan described herein.

 

(b)           “Transition Period” shall refer to the period beginning on the
Effective Date and ending on December 31, 2007.

 

(c)           “Transition Plan” shall have the meaning given to it in
Section 5.1, herein.

 

1.2                                 TERMINATION OF PROMOTION AGREEMENT.  THE
PROMOTION AGREEMENT IS HEREBY TERMINATED IN ITS ENTIRETY, PROVIDED THAT (A) THE
FOLLOWING PROVISIONS OF THE PROMOTION AGREEMENT SHALL SURVIVE THE TERMINATION OF
THE PROMOTION AGREEMENT, AS CONTEMPLATED THEREBY:  SECTION 7.2 (MAINTENANCE OF
RECORDS), ARTICLE 11 (INDEMNIFICATION; LIMITATION ON LIABILITY), ARTICLE 12
(CONFIDENTIALITY AND PUBLICITY); ARTICLE 14 (NOTICES) AND ARTICLE 15
(INSURANCE); AND (B) THE FOLLOWING PROVISIONS OF THE PROMOTION AGREEMENT SHALL
SURVIVE UNTIL THE SECOND ANNIVERSARY OF THE EFFECTIVE DATE:  SECTION 7.3
(PAYMENTS); AND SECTION 4.4(D) (RELATED TO OWNERSHIP OF PROMOTIONAL MATERIAL
COPYRIGHTS).

 

1.3                                 CONFLICTING TERMS.  NOTWITHSTANDING THE
PROVISIONS OF THE FOREGOING SECTION 1.2, TO THE EXTENT THAT ANY SURVIVING RIGHTS
AND OBLIGATIONS OF THE PARTIES UNDER THE PROMOTION AGREEMENT DIRECTLY CONFLICT
WITH THE EXPRESS RIGHTS AND OBLIGATIONS OF THE PARTIES PROVIDED HEREIN, THE
TERMS OF THIS AGREEMENT SHALL GOVERN.

 

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1.4           MUTUAL RELEASES.  EACH OF THE PARTIES, BY AND FOR ITSELF AND ON
BEHALF OF ITS EMPLOYEES, AGENTS, OTHER REPRESENTATIVES, OFFICERS, DIRECTORS,
STOCKHOLDERS, PARTNERS, MEMBERS, AFFILIATES, SUBSIDIARIES, PREDECESSORS,
SUCCESSORS, AND ASSIGNS, FULLY RELEASES AND DISCHARGES THE OTHER PARTY AND ITS
EMPLOYEES, AGENTS, OTHER REPRESENTATIVES, OFFICERS, DIRECTORS, STOCKHOLDERS,
PARTNERS, MEMBERS, AFFILIATES, SUBSIDIARIES, PREDECESSORS, SUCCESSORS, AND
ASSIGNS, FROM ANY AND ALL CLAIMS, RIGHTS, DEMANDS, LIABILITIES, OBLIGATIONS,
DAMAGES, ACTIONS, AND CAUSES OF ACTION, OF EVERY KIND AND NATURE, IN LAW,
EQUITY, OR OTHERWISE, KNOWN AND UNKNOWN, SUSPECTED AND UNSUSPECTED, DISCLOSED
AND UNDISCLOSED, ARISING OUT OF ANY ACT, OMISSION, EVENT, TRANSACTION OR
OCCURRENCE ON OR BEFORE THE EFFECTIVE DATE THAT RELATES TO THE PRODUCT OR THE
OBLIGATIONS UNDER THE PROMOTION AGREEMENT; PROVIDED THAT THIS RELEASE SHALL NOT
AFFECT THE SURVIVING RIGHTS AND OBLIGATIONS UNDER THE PROMOTION AGREEMENT AS SET
FORTH IN SECTION 1.2, OR ANY RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT
INCLUDING BUT NOT LIMITED TO DEPOMED’S PRODUCT LIABILITY INDEMNIFICATION
OBLIGATIONS AS SET FORTH IN SECTION 8.1(D) (AND ANY EXHIBIT HERETO).

 

2.                                      PAYMENTS

 

2.1           Termination Payments.  King shall make a termination payment to
Depomed equal to Twenty-Eight Million Dollars ($28,000,000) on the Effective
Date, by wire transfer of immediately available funds to a Depomed account
pursuant to wire transfer instructions provided to King by Depomed on or before
the Effective Date.

 

2.2           Books and Records.  Each party shall maintain complete and
accurate books and records in sufficient detail, in accordance with GAAP and all
applicable laws, rules, ordinances and regulations, to enable verification of
the performance of such party’s payment obligations under this Agreement.  Such
records shall be maintained for a period of twenty-four (24) months after the
end of the Term or longer if required by applicable law.

 

2.3           Marketing Expenses.

 

(A)           Q3 EXPENSE RECONCILIATION REPORT.  THE JCC HAS PRODUCED THE REPORT
FOR THE AGREEMENT QUARTER ENDED SEPTEMBER 30, 2007 RELATED TO ADVERTISING/
MARKETING/EDUCATIONAL EXPENSES REQUIRED BY SECTION 7.5(B) OF THE PROMOTION
AGREEMENT (THE “Q3 EXPENSE RECONCILIATION REPORT”).  THE Q3 EXPENSE
RECONCILIATION REPORT INDICATES THAT KING INCURRED THREE MILLION EIGHT HUNDRED
THIRTY-EIGHT THOUSAND TWO HUNDRED FORTY-THREE DOLLARS AND FORTY-TWO CENTS
($3,838,243.42) IN ADVERTISING/MARKETING/EDUCATIONAL EXPENSES INCURRED BY KING
IN THE AGREEMENT QUARTER ENDED SEPTEMBER 30, 2007, AND THAT DEPOMED IS REQUIRED
TO MAKE A PAYMENT TO KING EQUAL TO ONE MILLION EIGHTY-SIX THOUSAND SEVENTY-TWO
DOLLARS AND THIRTY-FOUR CENTS ($1,086,072.34) PURSUANT TO THE TERMS OF THE
PROMOTION AGREEMENT IN RESPECT OF ADVERTISING/MARKETING/EDUCATIONAL EXPENSES
INCURRED BY KING IN THE AGREEMENT QUARTER ENDING SEPTEMBER 30, 2007.  THIS
PAYMENT WAS MADE BY DEPOMED ON OCTOBER 26, 2007 BY WIRE TRANSFER.

 

(B)           FINAL EXPENSE RECONCILIATION.  EXHIBIT A ATTACHED HERETO SETS
FORTH (A) ADVERTISING/MARKETING/EDUCATIONAL EXPENSES INCURRED BY KING DURING THE
PERIOD BEGINNING ON OCTOBER 1, 2007 AND ENDING ON THE EFFECTIVE DATE, AND
(B) CERTAIN ADJUSTMENTS TO ADVERTISING/MARKETING/EDUCATIONAL EXPENSES INCURRED
BY KING THAT HAVE

 

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BEEN MUTUALLY AGREED TO BY THE PARTIES (THE “FINAL EXPENSE RECONCILIATION
REPORT”).  THE FINAL EXPENSE RECONCILIATION REPORT INDICATES, AND THE PARTIES
HAVE AGREED, THAT KING HAS INCURRED FIVE HUNDRED NINETY-NINE THOUSAND,
FORTY-THREE DOLLARS AND NINETY-NINE CENTS ($599,043.99) OF
ADVERTISING/MARKETING/EDUCATIONAL EXPENSES DURING THE PERIOD COVERED BY IT,
AFTER GIVING EFFECT TO THE ADJUSTMENTS SET FORTH THEREIN.

 

(C)           KING 2007 MARKETING EXPENSES.  THE “KING 2007 MARKETING EXPENSES”
ARE EQUAL TO SIX MILLION TWO HUNDRED TWELVE THOUSAND SIX HUNDRED FIFTY-TWO
DOLLARS AND EIGHTY-TWO CENTS ($6,212,652.82), WHICH AMOUNT IS THE SUM OF
(A) FIVE MILLION SIX HUNDRED THIRTEEN THOUSAND, FOUR HUNDRED SIXTY-ONE DOLLARS
AND EIGHTY-THREE CENTS. ($5,613,461.83) (WHICH IS EQUAL TO KING’S SHARE OF
ADVERTISING/MARKETING/EDUCATIONAL EXPENSES FOR THE THREE AGREEMENT QUARTER
PERIOD ENDED SEPTEMBER 30, 2007, AS REFLECTED IN THE REPORTS FOR THOSE AGREEMENT
QUARTERS PRODUCED PURSUANT TO SECTION 7.5(B) OF THE PROMOTION AGREEMENT); AND
(B) THE AMOUNT SET OUT IN THE FINAL EXPENSE RECONCILIATION REPORT AND
SECTION 2.2(B), ABOVE.

 

(D)           PAYMENT OF REMAINING BUDGET FOR ADVERTISING/MARKETING/EDUCATIONAL
EXPENSES.  ON THE EFFECTIVE DATE, KING SHALL MAKE A PAYMENT TO DEPOMED EQUAL TO
ONE MILLION NINE HUNDRED TWELVE THOUSAND THREE HUNDRED FORTY-SEVEN DOLLARS AND
EIGHTEEN CENTS ($1,912,347.18), WHICH IS THE REMAINDER OF (A) EIGHT MILLION ONE
HUNDRED TWENTY-FIVE THOUSAND DOLLARS ($8,125,000), MINUS (B) THE KING 2007
MARKETING EXPENSES, BY WIRE TRANSFER OF IMMEDIATELY AVAILABLE FUNDS TO A DEPOMED
ACCOUNT PURSUANT TO WIRE TRANSFER INSTRUCTIONS PROVIDED TO KING BY DEPOMED ON OR
BEFORE THE EFFECTIVE DATE.

 

(E)           NO ADDITIONAL MARKETING EXPENSES.  NEITHER PARTY SHALL HAVE ANY
OBLIGATION TO THE OTHER IN RESPECT OF ADVERTISING/MARKETING/EDUCATIONAL EXPENSES
FROM AND AFTER THE EFFECTIVE DATE.  AFTER THE EFFECTIVE DATE EACH PARTY IS
SOLELY RESPONSIBLE FOR EXPENSES INCURRED IN FULFILLING ITS REMAINING OBLIGATIONS
UNLESS OTHERWISE SET FORTH IN THE TRANSITION PLAN ATTACHED HERETO.

 

(F)                                    POST TRANSITION PERIOD EXPENSE
RECONCILIATION.

 

(I)            AS IDENTIFIED IN THE TRANSITION PLAN, AND ONLY WITH THE APPROVAL
OF THE JTC, CERTAIN EXPENSES WILL BE PAID BY KING DURING THE TRANSITION PERIOD. 
THE FINAL RECONCILIATION REPORT INCLUDES ADJUSTMENTS FOR THE ANTICIPATED AMOUNT
OF THOSE EXPENSES.  AFTER THE EFFECTIVE DATE, KING SHALL NOT INCUR ADDITIONAL
EXPENSE UNLESS APPROVED BY THE JTC.  IN THE EVENT THAT THE JTC APPROVES THE
PAYMENT OF EXPENSES TO BE PAID BY KING DURING THE TRANSITION PERIOD THAT ARE NOT
REFLECTED IN THE FINAL RECONCILIATION REPORT, DEPOMED SHALL REIMBURSE KING FOR
SUCH EXPENSES ON PRESENTATION OF AN INVOICE, AS DESCRIBED BELOW.  THE SIGNATURES
OF DEPOMED’S JTC MEMBERS ON A FORM DESCRIBING SUCH EXPENSE SHALL BE CONCLUSIVE
EVIDENCE THAT DEPOMED HAS AGREED TO REIMBURSE KING FOR SUCH EXPENSE.

 

(II)           NOT LATER THAN DECEMBER 31, 2007, THE JTC WILL PREPARE A
RECONCILIATION OF EXPENSES INCURRED BY KING DURING THE TRANSITION PERIOD, AND
ANY FURTHER ADJUSTMENTS TO THE EXPENSES REFLECTED IN THE FINAL RECONCILIATION
REPORT FOR EXPENSES DISCOVERED BY KING FOR THE PERIOD COVERED BY IT (AS
EVIDENCED BY REASONABLE DOCUMENTATION TO THE JTC

 

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DESCRIBING SUCH ADDITIONAL EXPENSES), OR REDUCTIONS OF ESTIMATED EXPENSES
REFLECTED IN THE FINAL RECONCILIATION REPORT (AS EVIDENCED BY REASONABLE
DOCUMENTATION TO THE JTC DESCRIBING SUCH REDUCED EXPENSES).  THE JTC SHALL
EXECUTE A FORM DESCRIBING SUCH RECONCILIATION, AND APPROVING THE REIMBURSEMENT
TO KING OR DEPOMED (AS APPLICABLE) OF THE NET AMOUNT PAYABLE PURSUANT TO SUCH
RECONCILIATION.  THE PARTY RESPONSIBLE FOR REIMBURSING THE OTHER PARTY PURSUANT
TO THIS SECTION 2.3(F)(II) (THE “REIMBURSING PARTY”) SHALL DO SO NOT LATER THAN
JANUARY 10, 2008; PROVIDED, HOWEVER, THAT IN NO EVENT SHALL THE REIMBURSING
PARTY BE OBLIGATED TO REIMBURSE THE OTHER PARTY IN AN AMOUNT IN EXCESS OF TWO
HUNDRED THOUSAND DOLLARS ($200,000).

 

2.4           PROMOTION FEES.

 

(A)           Q3 PROMOTION FEES.  DEPOMED HAS PROVIDED TO KING THE REPORT
REQUIRED BY SECTION 7.1(B) OF THE PROMOTION AGREEMENT IN RESPECT OF THE
AGREEMENT QUARTER ENDED SEPTEMBER 30, 2007, WHICH REPORT INDICATES THAT DEPOMED
IS REQUIRED TO PAY KING $2,150,330.43 IN PROMOTION FEES FOR THE AGREEMENT
QUARTER ENDED SEPTEMBER 30, 2007.  THIS AMOUNT WAS PAID TO KING BY WIRE TRANSFER
ON OCTOBER 26, 2007.

 

(B)           Q4 PROMOTION FEES.  DEPOMED SHALL HAVE NO OBLIGATION TO PAY KING
PROMOTION FEES FOR ANY PERIOD SUBSEQUENT TO THE AGREEMENT QUARTER ENDED
SEPTEMBER 30, 2007.

 

3.                                      REGULATORY MATTERS

 

Pharmacovigilance, including adverse event information, medical inquiries and
complaint exchange, shall be governed by the Safety Agreement executed between
the parties on March 23, 2007, as may be amended from time to time by the
parties.  The parties agree to amend the Safety Agreement not later than
November 15, 2007 such that Depomed will no longer have an obligation to deliver
adverse event and complaint information to King and King shall share appropriate
information with Depomed after the Effective Date.

 

4.                                      INTELLECTUAL PROPERTY MATTERS; PRODUCT
DOCUMENTATION

 

4.1           TERMINATION OF RIGHTS AND LICENSES; REVERSION OF RIGHTS.  WITHOUT
LIMITING THE GENERALITY OF SECTION 1, ALL OF KING’S RIGHTS AND LICENSES UNDER
THE PROMOTION AGREEMENT SHALL, INCLUDING THE RIGHTS SET FORTH IN SECTION 2.1 OF
THE PROMOTION AGREEMENT, TERMINATE AS OF THE EFFECTIVE DATE AND AUTOMATICALLY
REVERT TO DEPOMED; PROVIDED, HOWEVER, THAT DEPOMED SHALL HAVE A LIMITED ,
NON-ASSIGNABLE, NON-SUBLICENSABLE, NON-EXCLUSIVE, ROYALTY-FREE RIGHT AND LICENSE
TO USE THE KING TRADEMARKS IN THE TERRITORY SOLELY IN CONNECTION WITH DEPOMED’S
PROMOTION OF THE PRODUCT DURING THE TRANSITION PERIOD OR AS OTHERWISE EXPRESSLY
CONTEMPLATED BY THE TRANSITION PLAN.  FURTHERMORE, UNTIL JUNE 30, 2008, DEPOMED
SHALL HAVE A LIMITED, NON-ASSIGNABLE, NON-SUBLICENSABLE, NON-EXCLUSIVE,
ROYALTY-FREE RIGHT AND LICENSE TO USE THE KING TRADEMARKS IN THE TERRITORY
SOLELY TO THE EXTENT NECESSARY FOR DEPOMED TO DISTRIBUTE THE “STARTER KITS” AND
“PHARMACY MATS” AS DESCRIBED IN THE TRANSITION PLAN.  DEPOMED ACKNOWLEDGES THE
VALIDITY OF KING’S RIGHT, TITLE AND INTEREST IN AND TO THE KING TRADEMARKS AND
SHALL NOT HAVE, ASSERT OR ACQUIRE ANY RIGHT, TITLE OR INTEREST IN OR TO ANY OF
THE KING TRADEMARKS.  ALSO, KING SHALL HAVE A LIMITED, NONASSIGNABLE,
NON-SUBLICENSABLE, NON-EXCLUSIVE, ROYALTY-FREE RIGHT AND LICENSE TO USE THE

 

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DEPOMED TRADEMARKS IN THE TERRITORY SOLELY IN CONNECTION WITH KING’S PERFORMANCE
OF ITS POST-TERMINATION OBLIGATIONS DURING THE TRANSITION PERIOD.

 

4.2           Ownership of Intellectual Property.  King hereby represents and
warrants to Depomed that: (i) to the best of King’s knowledge, none of King’s
employees, agents, or other persons acting under its authority, developed,
conceived or reduced to practice any inventions, discoveries or know-how
relating to the Product (collectively, “Inventions”), (ii) that in the event
that any Inventions were so developed, conceived or reduced to practice by any
such parties, King does hereby assign all of its right, title and interest
therein to Depomed and (iii) that in the event that King becomes aware of the
existence of any such Inventions, it will provide prompt written notice to
Depomed of same, including a written description of such Invention, and it will
take such actions as Depomed shall reasonably request to evidence such
assignment and to enable Depomed to understand and exploit such Invention.

 

4.3           Promotional Material Copyright Assignment.  King hereby assigns to
Depomed King’s right, title and interest in and to all copyrights to all
Promotional Materials created by or on behalf of King (including Promotional
Materials currently under development by or on behalf of King) during the Term
of this Agreement or the Promotion Agreement in connection with the Promotion of
the Product.  King shall deliver to Depomed copies of such materials (including
in electronic form) as contemplated by the Transition Plan.

 

5.                                      TRANSITIONAL COMMERCIAL OBLIGATIONS;
COMPLIANCE

 

5.1           TRANSITION PLAN.  (A) AS DEPOMED IS TO ASSUME FULL CONTROL AND
RESPONSIBILITY OF PROMOTING THE PRODUCT AS OF THE EFFECTIVE DATE, AND FULL
RESPONSIBILITY FOR ANY DETAILS THAT OCCUR ON OR AFTER JANUARY 1, 2008, THE
PARTIES HAVE DEVELOPED AND AGREED UPON THE TRANSITION PLAN ATTACHED HERETO AS
EXHIBIT B.  THE PARTIES SHALL HAVE NO OBLIGATION TO UNDERTAKE ANY TRANSITION
ACTIVITIES NOT SET FORTH IN THE TRANSITION PLAN.  THE COSTS OF TRANSITIONING
MARKETING AND RELATED MATERIALS SHALL INCLUDE ONLY THOSE ACTIVITIES SPECIFICALLY
IDENTIFIED IN THE TRANSITION PLAN.  EACH PARTY IS RESPONSIBLE FOR ASSUMING ONE
HUNDRED PERCENT (100%) OF THE COSTS INCURRED BY IT ASSOCIATED WITH THE ORDERLY
TRANSITION OF KEY MARKETING PROGRAMS, MATERIALS AND OTHER IDENTIFIED MATTERS
FROM KING TO DEPOMED, AS SET FORTH IN THE TRANSITION PLAN.

 

5.2           COMPLIANCE.  IN PERFORMING ITS DUTIES HEREUNDER, EACH PARTY SHALL,
AND SHALL CAUSE ITS EMPLOYEES AND AGENTS TO, COMPLY WITH ALL LEGAL REQUIREMENTS,
INCLUDING THE FDA’S REGULATIONS AND GUIDELINES CONCERNING THE ADVERTISING OF
PRESCRIPTION DRUG PRODUCTS, DDMAC’S PROMOTIONAL GUIDELINES, THE DEPARTMENT OF
HEALTH AND HUMAN SERVICES OFFICE OF THE INSPECTOR GENERAL COMPLIANCE PROGRAM
GUIDANCE FOR PHARMACEUTICAL MANUFACTURERS, THE AMERICAN MEDICAL ASSOCIATION’S
GUIDELINES ON GIFTS TO PHYSICIANS, THE PHRMA CODE ON INTERACTIONS WITH
HEALTHCARE PROVIDERS, THE PRESCRIPTION DRUG MARKETING ACT OF 1987, AS AMENDED,
AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER, THE ACCME STANDARDS FOR
COMMERCIAL SUPPORT OF CONTINUING MEDICAL EDUCATION, EQUAL EMPLOYMENT,
NON-DISCRIMINATION AND FEDERAL AND STATE ANTI-KICKBACK LEGAL REQUIREMENTS, LEGAL
REQUIREMENTS WITH RESPECT TO SUBMISSION OF FALSE CLAIMS TO GOVERNMENTAL OR
PRIVATE HEALTH CARE PAYORS, AND ALL INDUSTRY AND PROFESSIONAL STANDARDS, WHICH
MAY BE APPLICABLE TO THE ACTIVITIES (INCLUDING THE WAREHOUSING, HANDLING AND
DISTRIBUTION OF SAMPLES) TO BE PERFORMED BY SUCH PARTY HEREUNDER.  NONE OF KING,
DEPOMED, OR EITHER PARTY’S EMPLOYEES AND AGENTS SHALL OFFER, PAY, SOLICIT OR
RECEIVE ANY REMUNERATION TO OR FROM

 

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PROFESSIONALS IN ORDER TO INDUCE REFERRALS OF OR PURCHASE OF THE PRODUCT.  THE
KING SALES FORCE SHALL HAVE NO DIRECT CONTACT WITH, NOR SHALL THE KING SALES
FORCE BE INVOLVED WITH THE DELIVERY OF PRODUCT TO PATIENTS, OTHER THAN DELIVERY
OF SAMPLES DIRECTLY TO PROFESSIONALS AUTHORIZED TO PRESCRIBE THE PRODUCT.  THE
KING SALES FORCE WAS TRAINED IN CONNECTION WITH COMPLIANCE WITH SEC. 1128B(B) OF
THE SOCIAL SECURITY ACT AND THE AMA GUIDELINES ON GIFTS TO PHYSICIANS FROM
INDUSTRY PRIOR TO ENGAGING IN PROMOTION OF THE PRODUCT.

 

6.                                      CONFIDENTIALITY AND PUBLICITY

 

6.1           CONFIDENTIALITY.  PURSUANT TO THIS AGREEMENT AND THE PROMOTION
AGREEMENT, A PARTY RECEIVING PROPRIETARY INFORMATION FROM THE OTHER, DIRECTLY OR
INDIRECTLY, WILL TREAT SUCH PROPRIETARY INFORMATION AS CONFIDENTIAL, WILL USE
SUCH PROPRIETARY INFORMATION ONLY FOR THE PURPOSES OF THE PROMOTION AGREEMENT
AND THIS AGREEMENT AND WILL NOT DISCLOSE, AND WILL TAKE ALL REASONABLE
PRECAUTIONS TO PREVENT THE DISCLOSURE OF, SUCH PROPRIETARY INFORMATION TO
(A) ANY OF ITS OFFICERS, DIRECTORS, MANAGERS, EQUITY HOLDERS, EMPLOYEES, AGENTS,
REPRESENTATIVES, AFFILIATES OR CONSULTANTS WHO ARE NOT REQUIRED TO KNOW SUCH
PROPRIETARY INFORMATION OR WHO ARE NOT BOUND BY A LIKE OBLIGATION OF
CONFIDENTIALITY OR (B) THIRD PARTIES.  THE TERMS AND CONDITIONS OF THIS
AGREEMENT SHALL BE CONSIDERED TO BE THE PROPRIETARY INFORMATION OF BOTH PARTIES
AND SHALL BE TREATED BY EACH PARTY AS SUCH.

 

6.2           DISCLOSURES REQUIRED BY LAW.  IN THE EVENT THE RECIPIENT PARTY IS
REQUIRED UNDER APPLICABLE LEGAL REQUIREMENTS TO DISCLOSE PROPRIETARY INFORMATION
IN CONNECTION WITH BONA FIDE LEGAL PROCESS (INCLUDING IN CONNECTION WITH ANY
BONA FIDE DISPUTE HEREUNDER) OR IS REQUIRED TO DISCLOSE PROPRIETARY INFORMATION
UNDER THE RULES OF THE SECURITIES EXCHANGE UPON WHICH ITS SECURITIES ARE TRADED,
THE RECIPIENT PARTY MAY DO SO ONLY IF IT LIMITS DISCLOSURE TO THAT PURPOSE AFTER
GIVING THE DISCLOSING PARTY PROMPT WRITTEN NOTICE OF ANY INSTANCE OF SUCH A
REQUIREMENT IN REASONABLE TIME FOR THE DISCLOSING PARTY TO ATTEMPT TO OBJECT TO
OR TO LIMIT SUCH DISCLOSURE.  IN THE EVENT OF DISCLOSURES REQUIRED UNDER
APPLICABLE LEGAL REQUIREMENTS, THE RECIPIENT PARTY SHALL COOPERATE WITH THE
DISCLOSING PARTY AS REASONABLY REQUESTED THEREBY.

 

6.3           PUBLICITY.  NEITHER PARTY WILL ORIGINATE ANY PUBLICITY, NEWS
RELEASE, PUBLIC COMMENT OR OTHER PUBLIC ANNOUNCEMENT, WHETHER TO THE PRESS, TO
STOCKHOLDERS, OR OTHERWISE, RELATING TO THIS AGREEMENT, WITHOUT THE CONSENT OF
THE OTHER PARTY, EXCEPT FOR SUCH ANNOUNCEMENT WHICH, IN ACCORDANCE WITH THE
ADVICE OF LEGAL COUNSEL TO THE PARTY MAKING SUCH ANNOUNCEMENT, IS REQUIRED BY
LAW.  EXCEPT AS OTHERWISE PERMITTED PURSUANT TO THE IMMEDIATELY PRECEDING
SENTENCE, ANY PARTY MAKING ANY ANNOUNCEMENT WHICH IS REQUIRED BY LAW WILL,
UNLESS PROHIBITED BY LAW, GIVE THE OTHER PARTY AN OPPORTUNITY TO REVIEW THE FORM
AND CONTENT OF SUCH ANNOUNCEMENT AND COMMENT BEFORE IT IS MADE.  EITHER PARTY
SHALL HAVE THE RIGHT TO MAKE SUCH FILINGS WITH GOVERNMENTAL AGENCIES, INCLUDING
THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION, AS TO THE CONTENTS AND
EXISTENCE OF THIS AGREEMENT AS IT SHALL REASONABLY DEEM NECESSARY OR
APPROPRIATE.  THE PARTIES HAVE AGREED UPON THE FORM AND CONTENT OF A JOINT PRESS
RELEASE TO BE ISSUED BY THE PARTIES PROMPTLY FOLLOWING THE EXECUTION OF THIS
AGREEMENT.  ONCE SUCH PRESS RELEASE OR ANY OTHER WRITTEN STATEMENT IS APPROVED
FOR DISCLOSURE BY BOTH PARTIES, EITHER PARTY MAY MAKE SUBSEQUENT PUBLIC
DISCLOSURE OF THE CONTENTS OF SUCH STATEMENT WITHOUT THE FURTHER APPROVAL OF THE
OTHER PARTY.

 

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6.4                                 SURVIVAL.  THE PROVISIONS OF THIS ARTICLE 6
SHALL REMAIN IN EFFECT UNTIL THE THIRD ANNIVERSARY OF THE EFFECTIVE DATE.

 

7.                                      REPRESENTATIONS AND WARRANTIES

 

7.1                                 BY KING.  KING HEREBY REPRESENTS AND
WARRANTS TO DEPOMED AS FOLLOWS:

 

(A)           IT IS A CORPORATION DULY ORGANIZED, VALIDLY EXISTING AND IN GOOD
STANDING UNDER THE LAWS OF THE JURISDICTION OF ITS INCORPORATION.  IT HAS ALL
REQUISITE POWER AND AUTHORITY TO CARRY ON ITS BUSINESS AND TO OWN AND OPERATE
ITS PROPERTIES AND ASSETS.  THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS
AGREEMENT HAVE BEEN DULY AUTHORIZED BY ALL NECESSARY CORPORATE ACTION ON ITS
PART.  IT HAS OBTAINED ALL AUTHORIZATIONS, CONSENTS AND APPROVALS, GOVERNMENTAL
OR OTHERWISE, NECESSARY FOR THE EXECUTION AND DELIVERY OF THIS AGREEMENT, AND TO
OTHERWISE PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT.

 

(B)           THERE IS NO PENDING OR, TO ITS KNOWLEDGE, THREATENED LITIGATION
INVOLVING IT WHICH WOULD HAVE ANY MATERIAL ADVERSE EFFECT ON THIS AGREEMENT OR
ON ITS ABILITY TO PERFORM ITS OBLIGATIONS HEREUNDER.

 

(C)           THERE IS NO INDENTURE, CONTRACT, OR AGREEMENT TO WHICH IT IS A
PARTY OR BY WHICH IT IS BOUND WHICH PROHIBITS OR WOULD PROHIBIT THE EXECUTION
AND DELIVERY BY IT OF THIS AGREEMENT OR THE PERFORMANCE OR OBSERVANCE BY IT OF
ANY MATERIAL TERM OR CONDITION OF THIS AGREEMENT.

 

(D)           TO ITS KNOWLEDGE, IT HAS PAID DEPOMED ALL AMOUNTS DUE AND PAYABLE
BY IT TO DEPOMED PURSUANT TO THE PROMOTION AGREEMENT.

 

7.2                                 BY DEPOMED.  DEPOMED HEREBY REPRESENTS AND
WARRANTS TO KING AS FOLLOWS:

 

(A)           IT IS A CORPORATION DULY ORGANIZED, VALIDLY EXISTING AND IN GOOD
STANDING UNDER THE LAWS OF THE JURISDICTION OF ITS INCORPORATION.  IT HAS ALL
REQUISITE POWER AND AUTHORITY TO CARRY ON ITS BUSINESS AND TO OWN AND OPERATE
ITS PROPERTIES AND ASSETS.  THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS
AGREEMENT HAVE BEEN DULY AUTHORIZED BY ALL NECESSARY CORPORATE ACTION ON ITS
PART.  IT HAS OBTAINED ALL AUTHORIZATIONS, CONSENTS AND APPROVALS, GOVERNMENTAL
OR OTHERWISE, NECESSARY FOR THE EXECUTION AND DELIVERY OF THIS AGREEMENT, AND TO
OTHERWISE PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT.

 

(B)           THERE IS NO PENDING OR, TO ITS KNOWLEDGE, THREATENED LITIGATION
INVOLVING IT WHICH WOULD HAVE ANY MATERIAL ADVERSE EFFECT ON THIS AGREEMENT OR
ON ITS ABILITY TO PERFORM ITS OBLIGATIONS HEREUNDER.

 

(C)           THERE IS NO INDENTURE, CONTRACT, OR AGREEMENT TO WHICH IT IS A
PARTY OR BY WHICH IT IS BOUND WHICH PROHIBITS OR WOULD PROHIBIT THE EXECUTION
AND DELIVERY BY IT OF THIS AGREEMENT OR THE PERFORMANCE OR OBSERVANCE BY IT OF
ANY MATERIAL TERM OR CONDITION OF THIS AGREEMENT.

 

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(D)           TO ITS KNOWLEDGE, IT HAS PAID KING ALL AMOUNTS DUE AND PAYABLE BY
IT TO KING PURSUANT TO THE PROMOTION AGREEMENT.

 

8.                                      INDEMNIFICATION

 

8.1                                 INDEMNIFICATION.  EACH PARTY WILL DEFEND, AT
ITS OWN EXPENSE, INDEMNIFY AND HOLD HARMLESS THE OTHER PARTY AND ITS AFFILIATES
FROM AND AGAINST ANY AND ALL DAMAGES, LIABILITIES, LOSSES, COSTS, AND EXPENSES,
INCLUDING REASONABLE ATTORNEYS’ FEES, ARISING OUT OF ANY THIRD PARTY CLAIM, SUIT
OR PROCEEDING BROUGHT AGAINST THE OTHER PARTY OR ITS AFFILIATES TO THE EXTENT
SUCH CLAIM, SUIT, OR PROCEEDING IS BASED UPON A CLAIM ARISING OUT OF OR RELATING
TO (I) ANY BREACH OR VIOLATION OF, OR FAILURE TO PERFORM, ANY COVENANT OR
AGREEMENT MADE BY SUCH INDEMNIFYING PARTY IN THIS AGREEMENT, UNLESS WAIVED IN
WRITING BY THE INDEMNIFIED PARTY; (II) ANY BREACH OF THE REPRESENTATIONS OR
WARRANTIES MADE BY SUCH INDEMNIFYING PARTY IN THIS AGREEMENT; OR (III) THE
NEGLIGENCE OR WILLFUL MISCONDUCT OF THE INDEMNIFYING PARTY, EXCEPT (UNDER ANY OF
(I) OR (II)) TO THE EXTENT ARISING OUT OF THE BREACH, VIOLATION, FAILURE,
NEGLIGENCE OR WILLFUL MISCONDUCT OF THE INDEMNIFIED PARTY.  IN ADDITION, DEPOMED
WILL DEFEND, AT ITS OWN EXPENSE, INDEMNIFY AND HOLD HARMLESS KING AND ITS
AFFILIATES FROM AND AGAINST ANY AND ALL DAMAGES, LIABILITIES, LOSSES, COSTS, AND
EXPENSES, INCLUDING REASONABLE ATTORNEYS’ FEES, ARISING OUT OF ANY THIRD PARTY
CLAIM, SUIT OR PROCEEDING BROUGHT AGAINST KING OR ITS AFFILIATES TO THE EXTENT
SUCH CLAIM, SUIT OR PROCEEDING IS BASED UPON A CLAIM ARISING OUT OF OR RELATING
TO (A) ANY ACTIONS OF SALES REPRESENTATIVES EMPLOYED BY DEPOMED, OR A THIRD
PARTY ENGAGED BY DEPOMED, TO PROMOTE THE PRODUCT, (INCLUDING ANY FALSE OR
MISLEADING REPRESENTATIONS TO PROFESSIONALS, CUSTOMERS OR OTHERS REGARDING KING
OR THE PRODUCT); (B) ANY AGREEMENT BETWEEN DEPOMED AND BLS; (C) ANY CLAIM MADE
BY ANY PERSON THAT THE MANUFACTURE, USE OR SALE OF THE PRODUCT INFRINGES OR
MISAPPROPRIATES THE PATENT, TRADEMARK, OR OTHER INTELLECTUAL PROPERTY RIGHTS OF
SUCH PERSON, EXCEPT WITH RESPECT TO ANY CLAIM RELATING TO THE KING TRADEMARKS;
AND/OR (D) ANY PRODUCT LIABILITY CLAIM MADE BY ANY PERSON WITH RESPECT TO THE
PRODUCT, EXCEPT TO THE EXTENT LIABILITY IS BASED ON A BREACH BY KING OF
SECTION 4.2 OF THE PROMOTION AGREEMENT.   EACH PARTY AGREES THAT IT SHALL
PROMPTLY NOTIFY THE OTHER IN WRITING OF ANY SUCH CLAIM OR ACTION AND GIVE THE
INDEMNIFYING PARTY FULL INFORMATION AND ASSISTANCE IN CONNECTION THEREWITH.  THE
INDEMNIFYING PARTY SHALL HAVE THE SOLE RIGHT TO CONTROL THE DEFENSE AND THE SOLE
RIGHT TO SETTLE OR COMPROMISE ANY SUCH CLAIM OR ACTION, EXCEPT THAT THE PRIOR
WRITTEN CONSENT OF THE OTHER PARTY SHALL BE REQUIRED IN CONNECTION WITH ANY
SETTLEMENT OR COMPROMISE WHICH COULD (I) PLACE ANY OBLIGATION ON OR REQUIRE ANY
ACTION OF SUCH OTHER PARTY; (II) ADMIT OR IMPLY ANY LIABILITY OR WRONGDOING OF
SUCH OTHER PARTY; OR (III) ADVERSELY AFFECT THE GOODWILL OR PUBLIC IMAGE OF SUCH
OTHER PARTY.  NOTWITHSTANDING THE FOREGOING, THE INDEMNIFIED PARTY MAY
PARTICIPATE THEREIN THROUGH COUNSEL OF ITS CHOICE, BUT THE COST OF SUCH COUNSEL
SHALL BE BORNE SOLELY BY THE INDEMNIFIED PARTY.  THE PROVISIONS OF THIS
SECTION 8.1 SHALL SURVIVE UNTIL THE THIRD ANNIVERSARY OF THE EFFECTIVE DATE
(EXCEPT AS TO CLAIMS AS TO WHICH A PARTY HAS NOTIFIED THE OTHER IN WRITING PRIOR
TO THE THIRD ANNIVERSARY OF THE EFFECTIVE DATE, IN WHICH EVENT, THE INDEMNIFYING
PARTY’S OBLIGATIONS UNDER THIS SECTION 8.1 SHALL SURVIVE WITH RESPECT TO ANY
SUCH CLAIM UNTIL ITS RESOLUTION).

 

8.2           CONSEQUENTIAL DAMAGES.  NEITHER KING NOR DEPOMED (WHICH FOR THE
PURPOSES OF THIS SECTION 8.2 SHALL INCLUDE THEIR RESPECTIVE AFFILIATES,
DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS) SHALL HAVE ANY LIABILITY TO THE OTHER
FOR ANY PUNITIVE DAMAGES, SPECIAL, INCIDENTAL, CONSEQUENTIAL OR INDIRECT
DAMAGES, OR LOSS OF PROFITS,

 

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RELATING TO OR ARISING FROM THIS AGREEMENT, EVEN IF SUCH DAMAGES MAY HAVE BEEN
FORESEEABLE; PROVIDED THAT SUCH LIMITATION SHALL NOT APPLY IN THE CASE
OF FRAUD OR WILLFUL MISCONDUCT.

 

9.                                      NOTICES

 

ALL NOTICES REQUIRED OR PERMITTED HEREUNDER SHALL BE GIVEN IN WRITING AND SENT
BY FACSIMILE TRANSMISSION (WITH A COPY SENT BY FIRST-CLASS MAIL), OR MAILED
POSTAGE PREPAID BY CERTIFIED OR REGISTERED MAIL (RETURN RECEIPT REQUESTED), OR
SENT BY A NATIONALLY RECOGNIZED EXPRESS COURIER SERVICE, OR HAND-DELIVERED AT
THE FOLLOWING ADDRESS:

 

If to Depomed:

 

Depomed, Inc.

1360 O’Brien Drive

Menlo Park, California  94025

Attention:  President

Fax No.:  (650) 462-9991

 

With a copy to:

Heller Ehrman LLP

275 Middlefield Road

Menlo Park, CA  94025

Attention:  Julian Stern

Fax No:  (650) 324-0638

 

If to King:

 

King Pharmaceuticals, Inc.

501 Fifth Street

Bristol, Tennessee 37620

Attn: Legal Department

Facsimile: (423) 990-2566

 

All notices shall be deemed made upon receipt by the addressee as evidenced by
the applicable written receipt.

 

10.                               MISCELLANEOUS

 

10.1         HEADINGS.  THE TITLES, HEADINGS OR CAPTIONS AND PARAGRAPHS IN THIS
AGREEMENT ARE FOR CONVENIENCE ONLY AND DO NOT DEFINE, LIMIT, EXTEND, EXPLAIN OR
DESCRIBE THE SCOPE OR EXTENT OF THIS AGREEMENT OR ANY OF ITS TERMS OR CONDITIONS
AND THEREFORE SHALL NOT BE CONSIDERED IN THE INTERPRETATION, CONSTRUCTION OR
APPLICATION OF THIS AGREEMENT.

 

10.2         SEVERABILITY.  IN THE EVENT THAT ANY OF THE PROVISIONS OR A PORTION
OF ANY PROVISION OF THIS AGREEMENT IS HELD TO BE INVALID, ILLEGAL, OR
UNENFORCEABLE BY A COURT OF COMPETENT JURISDICTION OR A GOVERNMENTAL AUTHORITY,
SUCH PROVISION OR PORTION OF PROVISION WILL BE CONSTRUED AND ENFORCED AS IF IT
HAD BEEN NARROWLY DRAWN SO AS NOT TO BE INVALID, ILLEGAL, OR UNENFORCEABLE,

 

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AND THE VALIDITY, LEGALITY, AND ENFORCEABILITY OF THE ENFORCEABLE PORTION OF ANY
SUCH PROVISION AND THE REMAINING PROVISIONS WILL NOT BE ADVERSELY AFFECTED
THEREBY.

 

10.3         ENTIRE AGREEMENT.  THIS AGREEMENT AND THE PROMOTION AGREEMENT,
TOGETHER WITH ANY EXHIBIT HERETO OR THERETO, CONTAIN ALL OF THE TERMS AGREED TO
BY THE PARTIES REGARDING THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR
AGREEMENTS, UNDERSTANDINGS, OR ARRANGEMENTS BETWEEN THEM, WHETHER ORAL OR IN
WRITING.

 

10.4         AMENDMENTS.  THIS AGREEMENT MAY NOT BE AMENDED, MODIFIED, ALTERED,
OR SUPPLEMENTED EXCEPT BY MEANS OF A WRITTEN AGREEMENT OR OTHER INSTRUMENT
EXECUTED BY BOTH OF THE PARTIES HERETO.  NO COURSE OF CONDUCT OR DEALING BETWEEN
THE PARTIES WILL ACT AS A MODIFICATION OR WAIVER OF ANY PROVISIONS OF THIS
AGREEMENT.

 

10.5         COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED IN ANY NUMBER OF
COUNTERPARTS, EACH OF WHICH WILL BE DEEMED AN ORIGINAL AS AGAINST THE PARTY
WHOSE SIGNATURE APPEARS THEREON, BUT ALL OF WHICH TAKEN TOGETHER WILL CONSTITUTE
BUT ONE AND THE SAME INSTRUMENT.  FURTHERMORE, THIS AGREEMENT MAY BE EXECUTED BY
FACSIMILE OR .PDF SIGNATURE AND SUCH FACSIMILE OR .PDF SIGNATURE SHALL BE AS
BINDING AS THE ORIGINAL SIGNATURES OF THE PARTIES.

 

10.6         WAIVER.  THE FAILURE OF EITHER PARTY TO ENFORCE OR TO EXERCISE, AT
ANY TIME OR FOR ANY PERIOD OF TIME, ANY TERM OF OR ANY RIGHT ARISING PURSUANT TO
THIS AGREEMENT DOES NOT CONSTITUTE, AND WILL NOT BE CONSTRUED AS, A WAIVER OF
SUCH TERM OR RIGHT, AND WILL IN NO WAY AFFECT THAT PARTY’S RIGHT LATER TO
ENFORCE OR EXERCISE SUCH TERM OR RIGHT.

 

10.8         SUCCESSORS AND ASSIGNS.  SUBJECT TO SECTION 10.9, THIS AGREEMENT
SHALL BE BINDING UPON AND SHALL INURE TO THE BENEFIT OF THE PARTIES HERETO AND
THEIR RESPECTIVE SUCCESSORS AND ASSIGNS PERMITTED UNDER THIS AGREEMENT.

 

10.9         ASSIGNMENT.  THIS AGREEMENT AND THE RIGHTS GRANTED HEREIN SHALL NOT
BE ASSIGNABLE BY EITHER PARTY HERETO WITHOUT THE PRIOR WRITTEN CONSENT OF THE
OTHER PARTY.  ANY ATTEMPTED ASSIGNMENT WITHOUT CONSENT SHALL BE VOID. 
NOTWITHSTANDING THE FOREGOING, A PARTY MAY TRANSFER, ASSIGN OR DELEGATE ITS
RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT WITHOUT CONSENT TO (A) AN AFFILIATE
OR (B) A SUCCESSOR TO ALL OR SUBSTANTIALLY ALL OF ITS BUSINESS OR ASSETS OF THE
ASSIGNING PARTY TO WHICH THIS AGREEMENT RELATES, WHETHER BY SALE, MERGER,
CONSOLIDATION, ACQUISITION, TRANSFER, OPERATION OF LAW OR OTHERWISE OR (C) IN
THE CASE OF EITHER PARTY, TO ONE OR MORE FINANCIAL INSTITUTIONS PROVIDING
FINANCING TO SUCH PARTY PURSUANT TO THE TERMS OF A SECURITY AGREEMENT RELATING
TO SUCH FINANCING.

 

10.10       CONSTRUCTION.  THE PARTIES ACKNOWLEDGE AND AGREE THAT: (A) EACH
PARTY AND ITS REPRESENTATIVES HAVE REVIEWED AND NEGOTIATED THE TERMS AND
PROVISIONS OF THIS AGREEMENT AND HAVE CONTRIBUTED TO ITS REVISION; AND (B) THE
TERMS AND PROVISIONS OF THIS AGREEMENT WILL BE CONSTRUED FAIRLY AS TO EACH PARTY
HERETO AND NOT IN FAVOR OF OR AGAINST EITHER PARTY REGARDLESS OF WHICH PARTY WAS
GENERALLY RESPONSIBLE FOR THE PREPARATION OR DRAFTING OF THIS AGREEMENT.  UNLESS
THE CONTEXT OF THIS AGREEMENT OTHERWISE REQUIRES: (I) WORDS OF ANY GENDER
INCLUDE EACH OTHER GENDER; (II) WORDS USING THE SINGULAR OR PLURAL NUMBER ALSO
INCLUDE THE PLURAL OR SINGULAR NUMBER, RESPECTIVELY; (III) THE TERMS “HEREOF,”
“HEREIN,” “HEREBY,” AND DERIVATIVE OR SIMILAR WORDS REFER TO THIS ENTIRE
AGREEMENT; (IV) THE TERMS “ARTICLE,” “SECTION,” OR “EXHIBIT” REFER TO THE
SPECIFIED

 

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ARTICLE, SECTION, OR EXHIBIT OF THIS AGREEMENT; (V) “OR” IS DISJUNCTIVE BUT NOT
NECESSARILY EXCLUSIVE; AND (VI) THE TERM “INCLUDING” OR “INCLUDES” MEANS
“INCLUDING WITHOUT LIMITATION” OR “INCLUDES WITHOUT LIMITATION.”  WHENEVER THIS
AGREEMENT REFERS TO A NUMBER OF DAYS, SUCH NUMBER SHALL REFER TO CALENDAR DAYS
UNLESS BUSINESS DAYS ARE SPECIFIED.

 

10.11       GOVERNING LAW.  THIS AGREEMENT WILL BE CONSTRUED UNDER AND IN
ACCORDANCE WITH, AND GOVERNED IN ALL RESPECTS BY, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO ITS CONFLICTS OF LAW PRINCIPLES.

 

10.12       EQUITABLE RELIEF.  EACH PARTY ACKNOWLEDGES THAT A BREACH BY IT OF
THE PROVISIONS OF THIS AGREEMENT MAY NOT REASONABLY OR ADEQUATELY BE COMPENSATED
IN DAMAGES IN AN ACTION AT LAW AND THAT SUCH A BREACH MAY CAUSE THE OTHER PARTY
IRREPARABLE INJURY AND DAMAGE.  BY REASON THEREOF, EACH PARTY AGREES THAT THE
OTHER PARTY IS ENTITLED TO SEEK, IN ADDITION TO ANY OTHER REMEDIES IT MAY HAVE
UNDER THIS AGREEMENT OR OTHERWISE, PRELIMINARY AND PERMANENT INJUNCTIVE AND
OTHER EQUITABLE RELIEF TO PREVENT OR CURTAIL ANY BREACH OF THIS AGREEMENT BY THE
OTHER PARTY; PROVIDED, HOWEVER, THAT NO SPECIFICATION IN THIS AGREEMENT OF A
SPECIFIC LEGAL OR EQUITABLE REMEDY WILL BE CONSTRUED AS A WAIVER OR PROHIBITION
AGAINST THE PURSUING OF OTHER LEGAL OR EQUITABLE REMEDIES IN THE EVENT OF SUCH A
BREACH. EACH PARTY AGREES THAT THE EXISTENCE OF ANY CLAIM, DEMAND, OR CAUSE OF
ACTION OF IT AGAINST THE OTHER PARTY, WHETHER PREDICATED UPON THIS AGREEMENT, OR
OTHERWISE, WILL NOT CONSTITUTE A DEFENSE TO THE ENFORCEMENT BY THE OTHER PARTY,
OR ITS SUCCESSORS OR ASSIGNS, OF THE COVENANTS CONTAINED IN THIS AGREEMENT.

 

10.13       RELATIONSHIP BETWEEN PARTIES.  THE PARTIES HERETO ARE ACTING AND
PERFORMING AS INDEPENDENT CONTRACTORS, AND NOTHING IN THIS AGREEMENT CREATES THE
RELATIONSHIP OF PARTNERSHIP, JOINT VENTURE, SALES AGENCY, OR PRINCIPAL AND
AGENT.  NEITHER PARTY IS THE AGENT OF THE OTHER, AND NEITHER PARTY MAY HOLD
ITSELF OUT AS SUCH TO ANY OTHER PARTY.  ALL FINANCIAL OBLIGATIONS ASSOCIATED
WITH EACH PARTY’S BUSINESS WILL BE THE SOLE RESPONSIBILITY OF SUCH PARTY.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly
executed by their duly authorized officers on the date first above written.

 

DEPOMED, INC.

 

By:

/s/ Carl A. Pelzel

 

 

 

Carl A. Pelzel

 

President and Chief Executive Officer

 

 

 

KING PHARMACEUTICALS, INC.

 

By:

/s/ Brian A. Markinson

 

 

 

Brian A. Markinson

 

President and Chief Executive Officer

 

 

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