Document:

exv10w2

Exhibit 10.2

[ *** ] CERTAIN INFORMATION CONTAINED IN THIS DOCUMENT MARKED BY BRACKETS HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES AND EXCHANGE ACT OF 1934 AS AMENDED.

June 25, 2010

Mr. Remi Barbier

Chairman, President & CEO

Pain Therapeutics, Inc.

2211 Bridgepointe Parkway

Suite 500

San Mateo, CA 94404

     Re: Amendments to License and Collaboration Agreements

Dear Remi:

This letter agreement reflects our recent communications and understandings. We have agreed to the
following matters, which are intended to supersede any terms that may be inconsistent in the
License and Collaboration Agreements:

	 	1.	 	Up Front Payment: In consideration for the agreements
made in this letter agreement, King will make a non-refundable cash payment to
PTI of $5,000,000 no later than July 31, 2010. It is agreed that this payment
is not a Collaboration Cost and is not subject to offset against any
obligations or other amounts which may be owed by King to PTI.
	 
	 	2.	 	Royalties:  King will pay PTI a flat royalty of 10% on
all Net Sales made in ROW. ROW Net Sales will be excluded from the
calculation of the step-up in royalty after cumulative Net Sales of $1 billion
under Section 6.1.1 of the License Agreement. For clarity, this paragraph
shall not affect any amounts payable by King to PTI as a result of King
sublicensing to a Third Party under Section 6.1.4 (Sublicensing
Revenue) of the License Agreement. For further clarity, this paragraph
shall not affect any calculation of any amounts payable by King to PTI as set
forth in Section 6.1.3 (Amounts Payable Under the DLA) of the License
Agreement.
	 
	 	3.	 	[ *** ]: King and PTI hereby approve
the Development Plan and Budget for the Development of
[ *** ] by PTI up to the submission of an IND as set
forth in Appendix A. [*** ]

 

			
	***	 	Confidential treatment requested pursuant to a request for confidential treatment filed with the
Securities and Exchange Commission. Omitted portions have been filed separately with the
Commission.

 

 

	 	4.	 	[
*** ]: PTI hereby grants to King
the right to exercise in the same manner that King assumed the Development of
Remoxy under the Election Agreement, all of PTI’s rights and obligations under
the Collaboration Agreement to Develop [ ***
]and King hereby accepts such grant and agrees to Develop
[ *** ]in accordance with the Collaboration
Agreement and in a manner consistent with PTI’s obligations under the DLA.
The cost of Development by King shall be a Collaboration Cost.
	 
	 	5.	 	$100,000,000 Amount: PTI and King expressly reserve
their rights in relation to the $100,000,000 amount specified in
Section 3.3.2(c) of the Collaboration Agreement and any payment by King of
Collaboration Costs as a result of this letter agreement in excess of that
amount shall not affect any of King’s rights under Section 3.3.2(c) and shall
not be deemed to be a waiver of any such rights or an estoppel or laches to
bar any assertion of rights or defenses by King under Section 3.3.2(c).
	 
	 	6.	 	e-Room:_King shall establish and maintain a
confidential electronic room into which King and PTI shall upload all final
data/technical reports, regulatory filings and other related information for
Remoxy and all other Products under the Collaboration and License Agreements.
PTI shall have unlimited electronic access to such e-Room, including the right
to make copies of all such material.
	 
	 	7.	 	Giving Effect:  In order to give effect to the
contents of this letter agreement, save as expressly reserved in this letter
agreement, King and PTI may each propose to suspend, amend and/or revise
certain provisions of the Collaboration and License Agreements. King and PTI
shall discuss in good faith and attempt to agree on the terms of such
suspension, amendment and/or revisions. Should the Parties not agree in good
faith, such disagreement(s) shall not be construed or interpreted to relieve a
Party of its existing duties or obligations under the Collaboration Agreement
or the License Agreement, as amended by this letter agreement.
	 
	 	8.	 	Defined Terms: Defined terms used in this letter
agreement have the same meaning as they do in the Collaboration Agreement
and/or in the License Agreement, as applicable.
	 
	 	9.	 	No Other Changes: Save as may be affected by the
provisions of this letter, all other terms of the Collaboration and License
Agreements shall remain in full force and effect and shall not be altered by
the terms of this letter agreement

	 	10.	 	No Breaches: [ *** ] PTI expressly reserves its
rights in relation to the actions and failure to take actions by King prior to
the date hereof which may constitute a breach of the Collaboration and/or
License Agreements and this letter agreement shall not be deemed to be a
waiver of any rights of PTI or an estoppel or laches to bar any assertion of
rights or defenses by PTI under the Collaboration and License Agreements.

 

			
	***	 	Confidential treatment requested pursuant to a request for confidential treatment filed with the
Securities and Exchange Commission. Omitted portions have been filed separately with the
Commission.

 

 

	 	11.	 	Minimum Annual Spend: King agrees to reimburse PTI
for its 2010 minimum annual spend (i.e., $750,000) under the DLA, irrespective
of the status of approved budgets under the Collaboration Agreement.

Please sign below to acknowledge your acceptance and agreement to this letter agreement.

	 	 	 	 	 
	 	Sincerely,

 	 
	 	  	/s/ Brian A. Markison
 	 
	 	 	Brian A. Markison 	 
	 	 	President and Chief Executive Officer 	 

Accepted and Agreed:

PAIN THERAPEUTICS, INC.

	 	 	 	 	 
	 	 	 
	 	/s/ Remi Barbier
 	 
	 	Remi Barbier 	 
	 	President & Chief Executive Officer 	 
	 

 

			
	***	 	Confidential treatment requested pursuant to a request for confidential treatment filed with the
Securities and Exchange Commission. Omitted portions have been filed separately with the
Commission.

 

 

Appendix A

JOC [ *** ] Plan & Budget

	 	 	 
	Goal: PTI to [ *** ]	 	 
	 	 	Cost
	Tech Ops — CMC
	 	 
	1. [ *** ]
	 	[ *** ]
	a. [ *** ]
	 	[ *** ]
	2. [ *** ]
	 	 
	a. [ *** ]
	 	 
	b. [ *** ]
	 	 
	c. [ *** ]
	 	[ *** ]
	3. [ *** ]
	 	[ *** ]
	4 [ *** ]
	 	[ *** ]
	Pharm Tox
	 	 
	5. [ *** ]
	 	[ *** ]
	a. [ *** ]
	 	[ *** ]
	b [ *** ]
	 	[ *** ]
	c. [ *** ]
	 	[ *** ]
	6. [ *** ]
	 	[ *** ]
	a. [ *** ]
	 	[ *** ]
	b. [ *** ]
	 	[ *** ]
	Regulatory
	 	 
	7. [ *** ]
	 	[ *** ]
	Miscellaneous Activities/Expenses
	 	 
	[ *** ]project mgmt and [ *** ]
	 	[ *** ]
	[ *** ]
	 	[ *** ]
	Total [ *** ]: 
	 	[ *** ]

 

			
	***	 	Confidential treatment requested pursuant to a request for confidential treatment filed
with the Securities and Exchange Commission. Omitted portions have been filed separately with the
Commission.exv10w3

Exhibit 10.3

INDEMNIFICATION AGREEMENT

     This
Indemnification Agreement is made this ___ day of ______, 20___, between King
Pharmaceuticals, Inc., a Tennessee corporation (the “Company”), and                                         , a director of
the Company (the “Director”).

     WHEREAS, the Company desires to continue to benefit from the services of highly-qualified and
experienced persons such as the Director;

     WHEREAS, the substantial increase in corporate litigation subjects directors to expensive
litigation risks at the same time that the uncertainties relating to directors’ and officers’
liability insurance and to indemnification are increasing;

     WHEREAS, the Director desires to serve the Company as a director for so long as the Company is
able to provide on an acceptable basis adequate and reliable indemnification against certain
liabilities and expenses which may be incurred by the Director in connection with such service;

     WHEREAS, the Tennessee Business Corporation Act (the “Act”) provides for the indemnification
of directors under certain circumstances and the charter and bylaws of the Company provide for the
indemnification of directors in accordance with applicable Tennessee law;

     WHEREAS, the Director does not regard the protection available to directors under the Act and
under the Company’s charter, bylaws and directors’ and officers’ liability insurance as adequate in
all circumstances; and

     WHEREAS, the Act specifically provides that the indemnification provided thereunder is not
exclusive and contemplates that indemnification agreements may be entered into between Tennessee
corporations and their directors.

     NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein,
the parties hereby agree as follows:

     Section 1. Service by Director. The Director agrees to continue to serve as a director of the
Company for so long as he or she is duly elected or appointed or until the effective time of his or
her resignation in accordance with the Company’s charter and bylaws. Notwithstanding anything
herein to the contrary, this Agreement shall not provide the Director the right to be nominated or
elected as a director of the Company or affect the right of the Company’s shareholders to remove
him or her or the rights of the Company or shareholders to seek judicial removal of the Director.

     Section 2. Indemnification.

          (a) To the maximum extent permitted by law, but subject to the limitations contained in
Section 4 or otherwise in this Agreement, the Company shall indemnify the Director against any
Liability or Expense actually and reasonably incurred by the Director in a Proceeding by reason of
(or arising in part out of) an Indemnifiable Event, except that the

 

 

Company shall not be required to indemnify the Director for any Liabilities or Expenses
incurred in a Proceeding initiated by or on behalf of the Director or to which the Director
voluntarily becomes a party unless (i) the Company has joined in or the board of directors of the
Company (the “Board”) has consented to the initiation of such Proceeding; (ii) the Proceeding is
one to enforce indemnification rights in connection with any other Proceeding in which the Director
actually incurs Liabilities or Expenses by reason of (or arising in part out of) an Indemnifiable
Event; or (iii) otherwise required under the Act. If the Director is entitled under any provision
of this Agreement to indemnification by the Company for some or a portion of any Liability or
Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify
the Director for the portion thereof to which the Director is entitled. Notwithstanding any other
provision of this Agreement, to the extent that the Director is a party to and has been successful,
on the merits or otherwise, in the defense of any Proceeding relating in whole or in part to an
Indemnifiable Event, the Director shall be indemnified to the maximum extent permitted by law
against all Liabilities and Expenses actually and reasonably incurred by the Director or on the
Director’s behalf in connection therewith. If the Director is not wholly successful in such
Proceeding but is successful, on the merits or otherwise, as to one or more but less than all
issues or matters in such Proceeding, the Company shall indemnify the Director against all Expenses
actually and reasonably incurred by him or her, or on his or her behalf, in connection with each
successfully resolved issue or matter.

          (b) The Company acknowledges that a settlement or other disposition prior to final judgment
may be successful if it permits a party to avoid expense, delay, distraction, disruption and
uncertainty. If any Proceeding or any issue or matter therein is disposed of, on the merits or
otherwise (including a disposition without prejudice), prior to final judgment without (i) the
disposition being adverse to the Director, (ii) a plea of guilty
or nolo contendere by the Director
or (iii) a finding that any of the circumstances described in clauses (c) through (e) of Section 4
hereof exist, the Director shall be considered for the purposes hereof to have been wholly
successful with respect thereto.

     Section 3. Expense Advances.

          (a) Subject to Section 10 hereof, if so requested by the Director the Company shall advance
the reasonable Expenses incurred by the Director (which, for the avoidance of doubt, need not have
been already paid by the Director) in a Proceeding by reason of (or arising in part out of) an
Indemnifiable Event, except that the Company shall not be required to advance Expenses to the
Director for any Expenses incurred in a Proceeding initiated by or on behalf of the Director or to
which the Director voluntarily becomes a party unless (i) the Company has joined in or the Board
has consented to the initiation of such Proceeding; (ii) the Proceeding is one to enforce
indemnification rights in connection with any other Proceeding in which the Director actually
incurs Liabilities or Expenses by reason of (or arising in part out of) an Indemnifiable Event; or
(iii) otherwise required under the Act.

          (b) Subject to Section 10 hereof, Expense advancements shall be provided within 60 days of the
Director furnishing the Company a request for such advance or advances, and:

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               (i) a written affirmation, personally signed by or on behalf of the Director, of his or her
good faith belief that he or she (A) is not liable (I) for a breach of his or her duty of loyalty
to the Company or its shareholders, (II) for any acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (III) for any unlawful distributions
to the Company’s shareholders, (IV) for profits made from the purchase or sale by the Director of
securities of the Company pursuant to the provisions of Section 16(b) of the Securities Exchange
Act of 1934 (the “Exchange Act”) or any similar provisions of any federal or state statutes or
regulations, or (V) in respect of any Proceeding charging improper personal benefit to the
Director, on the basis that personal benefit was improperly received by the Director, and (B) is
entitled to advancement of Expenses under the terms of this Agreement; and

               (ii) a written undertaking (in the form of an unlimited general obligation of the Director,
which need not be secured), personally signed by or on behalf of the Director, to repay any
advances, if it is ultimately determined that the Director is not entitled to indemnification by
the Company in respect of such Proceeding.

          (c) All Expense advances pursuant to this Section 3 are deemed to be an obligation of the
Company to the Director hereunder and shall in no event be deemed a personal loan.

     Section 4. Limitations on Indemnification. No indemnification pursuant to this Agreement may
be made:

          (a) in advance of a final judgment with respect to, or other final disposition of, the
Proceeding for which indemnification is sought;

          (b) for any Liability or Expenses for which the Director has been reimbursed by insurance,
indemnification other than pursuant to this Agreement or otherwise;

          (c) in respect of any issue or matter as to which the Director shall have been adjudged to be
liable to the Company in any Proceeding by or in the right of the Company;

          (d) in respect of any Proceeding charging improper personal benefit to the Director, whether
or not involving action in the Director’s official capacity, in which the Director was adjudged
liable on the basis that personal benefit was improperly received by the Director; or

          (e) if a judgment or other final adjudication adverse to the Director establishes his or her
liability for (i) a breach of his or her duty of loyalty to the Company or its shareholders,
(ii) any acts or omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) any unlawful distributions to the Company’s shareholders or (iv) profits
made from the purchase or sale by the Director of securities of the Company pursuant to the
provisions of Section 16(b) of the Exchange Act or any similar provisions of any federal or state
statutes or regulations.

- 3 -

 

     Section 5. Contribution.

          (a) Whether or not the indemnification provided in Section 2 hereof is available, but subject
to Section 4, in respect of any Proceeding in which the Company is jointly liable with the Director
(or would be if joined in such Proceeding), then the Company shall contribute to the amount of
Liabilities and Expenses actually and reasonably incurred and paid or payable by the Director in
proportion to the relative benefits received by the Company and all officers, directors or
employees of the Company, other than the Director, who are jointly liable with the Director (or
would be if joined in such Proceeding), on the one hand, and the Director, on the other hand, from
the Indemnifiable Event from which such Proceeding arose; provided, however, that the proportion
determined on the basis of relative benefit may, to the extent necessary to conform to applicable
law, be further adjusted by reference to the relative fault of the Company and all officers,
directors or employees of the Company, other than the Director, who are jointly liable with the
Director (or would be if joined in such Proceeding), on the one hand, and the Director, on the
other hand, in connection with the Indemnifiable Event that resulted in such Liabilities or
Expenses, as well as any other equitable considerations which applicable law may require to be
considered. The relative fault of the Company and all officers, directors or employees of the
Company, other than the Director, who are jointly liable with the Director (or would be if joined
in such Proceeding), on the one hand, and the Director, on the other hand, shall be determined by
reference to, among other things, the degree to which their actions were motivated by intent to
gain personal profit or advantage, the degree to which their liability is primary or secondary and
the degree to which their conduct is active or passive.

          (b) Subject to Section 4 hereof, the Company hereby agrees to fully indemnify and hold the
Director harmless from any claims of contribution which may be brought by officers, directors or
employees of the Company, other than the Director, who may be jointly liable with the Director.

          (c) To the fullest extent permissible under applicable law, if the indemnification provided
for in this Agreement is unavailable to the Director for any reason other than the application of
any limitation set forth in Section 4 hereof, the Company, in lieu of indemnifying the Director,
shall contribute to the amount incurred by the Director, whether for Liabilities or Expenses, in
connection with any Proceeding relating to an Indemnifiable Event under this Agreement, in such
proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding
in order to reflect (i) the relative benefits received by the Company and the Director as a result
of the Indemnifiable Event giving cause to such Proceeding; or (ii) the relative fault of the
Company (and its directors, officers, employees and agents (other than the Director)) and the
Director in connection with such event(s) or transaction(s).

     Section 6. Indemnification for Expenses of a Witness. Notwithstanding any other provision of
this Agreement other than Section 4, to the extent that the Director is, by reason of his or her
official capacity with the Company, a witness, or is made (or asked to) respond to discovery
requests, in any Proceeding to which the Director is not a party, the Director shall be indemnified
against all Expenses actually and reasonably incurred by him or her, or on his or her behalf, in
connection therewith.

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     Section 7. Non-Exclusive Rights. The Director’s rights to indemnification and advancement of
Expenses under this Agreement are intended to be cumulative and not exclusive of other rights to
which the Director may be entitled under any insurance policy, the Act, the charter or bylaws of
the Company or a resolution of shareholders or directors providing for indemnification. No
amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or
restrict any right of the Director under this Agreement in respect of any Indemnifiable Event that
occurs prior to such amendment, alteration or repeal. To the extent that a change in the Act,
whether by statute or judicial decision, permits greater indemnification than would be afforded
currently under the Company’s charter or bylaws or this Agreement, it is the intent of the parties
hereto that the Director shall enjoy by this Agreement the greater benefits so afforded by such
change.

     Section 8. Liability Insurance. To the extent that the Company maintains an insurance policy
or policies providing liability insurance for directors, officers, employees, or agents or
fiduciaries of the Company or of any other corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise that such person serves at the request of the Company, the
Director shall be covered by such policy or policies in accordance with its or their terms. If, at
the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company has
directors’ and officers’ liability insurance in effect, the Company shall give prompt notice of the
commencement of such Proceeding to the insurers in accordance with the procedures set forth in the
respective policies. The Company shall thereafter take all necessary or desirable action to cause
such insurers to pay, on behalf of the Director, all amounts payable as a result of such Proceeding
in accordance with the terms of such policies.

     Section 9. Notification and Defense of Claim. If a claim is to be made against the Company
with respect to any Proceeding under this Agreement, the Director shall notify the Company of the
commencement of such Proceeding promptly after receipt by the Director of notice of the
commencement thereof and provide the Company with copies of all documents relating to such
Proceeding with which the Director is served. With respect to any such Proceeding as to which the
Director notifies the Company of the commencement thereof, (a) the Company shall be entitled to
participate therein at its own expense and (b) except as otherwise provided below, shall be
entitled to assume the defense thereof, with counsel reasonably satisfactory to the Director.
After notice from the Company to the Director of its election to assume the defense thereof, the
Company shall not be liable to the Director under this Agreement for any legal expenses
subsequently incurred by the Director in connection with the defense thereof, except as provided
below. The Director shall have the right to employ his or her own counsel in such Proceeding, but
the fees and expenses of such counsel incurred after notice from the Company of its assumption of
the defense thereof shall be at the expense of the Director, unless (i) the employment of such
counsel by the Director has been authorized by the Company, (ii) counsel for the Director shall
have reasonably concluded that there may be a conflict of interest between the Company and the
Director in the conduct of his or her defense in such Proceeding or (iii) the Company shall have
failed to promptly employ its counsel to assume the defense in such Proceeding, in each of which
cases the fees and expenses of the Director’s counsel shall be paid by the Company. The Company
shall not be entitled, without the consent of the Director, to assume the defense in any Proceeding
brought by or on behalf of the Company as to which counsel for the Director shall have reasonably
concluded that there may be a conflict of interest between the Company and the Director in the
conduct of his or her defense.

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     Section 10. Procedure for Indemnification.

          (a) In order to obtain indemnification or advancement of Expenses pursuant to Section 2, 3 or
6 of this Agreement, the Director shall submit to the Company a written request, including in such
request such documentation and information as is reasonably available to the Director and is
reasonably necessary to determine whether and to what extent the Director is entitled to
indemnification or advancement of Expenses. In the case of a request for Expense advancement
pursuant to Section 3, the Director also shall submit to the Company the documents required under
Section 3(b). The Secretary of the Company shall, promptly upon receipt of such a request for
indemnification, advise the Board in writing that the Director has requested indemnification.
Notwithstanding the foregoing, any failure of the Director to provide such a request to the
Company, or to provide such a request in a timely fashion, shall not relieve the Company of any
liability that it may have to the Director unless, and to the extent that, such failure actually
and materially prejudices the interests of the Company.

          (b) Any such indemnification or advancement of Expenses shall be made promptly, and in any
event within 60 days after receipt by the Company of the written request of the Director, unless
the Company determines within such 60-day period that the Director did not meet the applicable
standard of conduct set forth herein. Such determination shall be made in each instance:

               (i) by a majority vote of the directors of the Company consisting of persons who are not at
that time parties to the Proceeding (“Disinterested Directors”), to the extent such Disinterested
Directors constitute a quorum of the Board;

               (ii) if such a quorum does not then exist, by a majority vote of a committee of two or more
Disinterested Directors that is designated by a majority vote of the Board;

               (iii) by independent legal counsel (which may, to the extent permitted by applicable law, be
regular legal counsel to the Company), in a written opinion to the Board (a copy of which shall be
provided to the Director), appointed at the discretion of (x) a majority of the Disinterested
Directors, to the extent such Disinterested Directors constitute a quorum of the Board, (y) if such
a quorum does not then exist, a majority vote of a committee of two or more Disinterested Directors
that is designated by a majority vote of the Board or (z) if a quorum of the Board cannot be
obtained under clause (x) and a committee cannot be designated under clause (y), a majority vote of
the full Board; or

               (iv) if so directed by the Board, by a majority vote of a quorum of the outstanding shares of
stock of all classes entitled to vote for directors, voting as a single class, which quorum shall
consist of shareholders who are not at that time parties to the Proceeding.

          (c) The Company shall not settle any claim in any manner which would impose any penalty or any
injunctive relief restricting the activities of the Director without the Director’s written
consent. The Director shall not unreasonably withhold his or her consent to any proposed
settlement which does not impose a fine or injunctive relief, if the Company

- 6 -

 

pays all amounts due under such settlement immediately upon such settlement becoming
effective.

     Section 11. Cooperation of Director. The Director shall cooperate with the person or persons
making the determination on behalf of the Company with respect to the Director’s entitlement to
indemnification under this Agreement, including providing any documentation or information which is
not privileged or otherwise protected from disclosure and which is reasonably available to the
Director and relevant to such determination. Any costs and expenses (including reasonable
attorneys’ fees and disbursements) actually and reasonably incurred by the Director in providing
such cooperation shall be borne by the Company (irrespective of the determination as to the
Director’s entitlement to indemnification).

     Section 12. Certain Presumptions and Burden of Proof. The right to indemnification or
advancement of Expenses as provided by this Agreement shall be enforceable by the Director in any
court of competent jurisdiction if the Company denies such request, in whole or in part, or if no
disposition thereof is made within the 60-day period referred to above in Section 10; provided,
however, such 60-day period may be extended for a reasonable time, not to exceed an additional 30
days in the case the Board or a committee thereof is making such determination, if the person or
persons making the determination decide in good faith that additional time is required for
obtaining or evaluating documentation or other relevant information. In any suit by the Director
to enforce his or her rights under this Agreement, (a) the Director shall be presumed to be
entitled to indemnification, subject to the Company’s ability to rebut such presumption, and (b)
the termination of a proceeding by a judgment, order, settlement, conviction or upon a plea of nolo
contendere or its equivalent is not, of itself, determinative that the Director did not act in good
faith, did not meet a particular standard of conduct, did not have any particular belief, or that a
court has determined that indemnification is not permitted by applicable law. For purposes of any
determination of good faith, the Director shall be presumed to have acted in good faith if he or
she relied on information, opinions, reports or statements, including financial statements or other
financial data prepared or presented by one or more officers or employees of the Company whom the
Director reasonably believes to be reliable and competent in the matters presented or by legal
counsel, public accountants or other persons as to matters the Director reasonably believes are
within the person’s professional or expert competence; provided, however, the Director shall not be
presumed to be acting in good faith if he or she has actual knowledge concerning the matter in
question that makes such reliance unwarranted. A director’s conduct with respect to an employee
benefit plan for a purpose such director reasonably believes to be in the interests of the
participants in, and beneficiaries of, such plan shall be deemed conduct not opposed to the
Company’s best interests.

     Section 13. Securities Act Liabilities. The Director understands and agrees that with respect
to certain liabilities incurred under the Securities Act of 1933 (the “Securities Act”), the
Company’s obligations hereunder may be subject to undertakings contained in various registration
statements filed by it pursuant to the Securities Act, as those undertakings relate to the possible
need for court review of indemnification for such liabilities.

     Section 14. Subrogation. The Company shall be subrogated to the extent of any payment to the
Director under this Agreement to all of the rights of recovery of the Director with respect to such
payments against third parties (including the insurer under any insurance

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policy, if applicable). The Director shall do everything reasonably necessary to secure such
rights, including the execution of such documents as may be necessary or desirable to enable the
Company to bring suit to enforce such rights.

     Section 15. Duration of Agreement. This Agreement shall continue in effect during the period
the Director is a director of the Company and shall continue until the final disposition of all
Proceedings for Indemnifiable Events, whether or not such Proceedings are instituted prior to the
Director ceasing to serve as a director of the Company.

     Section 16. Severability. The provisions of this Agreement shall be severable in the event
any of the provisions hereof are held by a court of competent jurisdiction to be invalid, void or
otherwise unenforceable, and the remaining provisions shall remain enforceable to the fullest
extent permitted by law and, to the fullest extent possible, shall be construed so as to give
effect to the intent manifested by the provision held invalid, illegal or unenforceable.

     Section 17. Notices. All notices which are required or permitted hereunder shall be in
writing and sufficient if (a) delivered personally (effective on the date delivered), (b) delivered
by United States registered or certified mail, return receipt requested (effective on the date
received as evidenced by return receipt), or (c) sent by United States Express Mail or overnight
courier (effective on the next business day), in each case to the Parties at the following
addresses with postage or delivery charges prepaid.

	 	 	 	 	 

	 

	 	If to the Director, to:	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 

or to such other address as may be furnished to the Company by the Director by notice similarly
given; or

	 	 	 	 	 

	 

	 	If to the Company, to:
	 
	 	 
	 

	 	King Pharmaceuticals, Inc.
	 

	 	501 Fifth Street
	 

	 	Bristol, Tennessee 37620
	 

	 	Attention: Secretary

or to such other address as may be furnished to the Director by the Company by notice similarly
given.

     Section 18. Governing Law. This Agreement shall be governed by, and be construed and enforced
in accordance with, the laws of the State of Tennessee applicable to contracts made and to be
performed in such State without giving effect to the principles of conflicts of laws.

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     Section 19. Consent to Jurisdiction. The Company and the Director each irrevocably consent to
the jurisdiction of the courts of the State of Tennessee for all purposes in connection with any
action or proceeding which arises out of or relates to this Agreement and agree that any action
instituted under this Agreement shall be brought only in the courts of the State of Tennessee.

     Section 20. Binding Effect. This Agreement shall be binding upon and inure to the benefit of
and be enforceable by and against the parties hereto and their respective successors and assigns,
including any direct or indirect successor by purchase, merger, consolidation or otherwise to all
or substantially all of the business or assets of the Company and the spouse, heirs and personal
representatives of the Director. The Company shall require any successor to all or substantially
all of the business or assets of the Company, by written agreement in form and substance
satisfactory to the Director, to expressly assume this Agreement.

     Section 21. Subsequent Amendments. No amendment, termination or repeal of any provision of
the charter or bylaws of the Company, or any respective successors thereto, or of any relevant
provision of any applicable law, unless in the case such amendment or change in law permits the
Company to provide broader indemnification rights than were permitted prior thereto, shall affect
or diminish in any way the rights of the Director to indemnification, or the obligations of the
Company, arising under this Agreement, whether the alleged actions or conduct of the Director
giving rise to the necessity of such indemnification arose before or after any such amendment,
termination or repeal.

     Section 22. Modification and Waiver. This Agreement supersedes in its entirety any existing
or prior agreement between the Company and the Director pertaining to indemnification and
advancement rights, other than the provisions of the Act and the Company’s charter and bylaws. No
supplement, modification, amendment, termination or assignment of this Agreement shall be effective
unless in writing signed by both parties hereto. No waiver of any provisions of this Agreement
shall be binding unless executed in writing by the party making the waiver.

     Section 23. Definitions.

          (a) “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service fees and all other disbursements or
expenses of the types customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating or being or preparing to be a witness in a Proceeding. Expenses
shall also include Expenses incurred in connection with any appeal resulting from any Proceeding,
including the premium, security for, and other costs relating to any cost bond, supersedeas bond,
or other appeal bond or its equivalent. In addition, Expenses shall include any expenses of
establishing a right to indemnification.

          (b) “Indemnifiable Event” means any event or occurrence that takes place either prior to or
after the execution of this Agreement, related to the fact that the Director is or was a director
of the Company, or while the Director is or was serving at the request of the

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Company as a director, officer, employee or agent of another foreign or domestic corporation,
partnership, joint venture, employee benefit plan, trust, or other enterprise, or related to
anything done or not done by the Director in any such capacity, whether or not the basis of the
Proceeding is alleged action in an official capacity as a director or in any other capacity while
serving as a director of the Company, as described above.

          (c) “Liability” means the obligation to pay a judgment, settlement, penalty or fine (including
an excise tax or penalty assessed with respect to an employee benefit plan).

          (d) “Proceeding” means any threatened, pending or completed action, suit, arbitration,
alternative dispute mechanism, inquiry, administrative or legislative hearing, investigation or any
other actual, threatened or completed proceeding, including any and all appeals, whether conducted
by the Company or any other party, whether civil, criminal, administrative, investigative, or
other, whether formal or informal, and in each case whether or not commenced prior to the date of
this Agreement, that relates to an Indemnifiable Event.

     Section 24. Descriptive Headings; Certain Interpretations.

          (a) The descriptive headings are for convenience only and shall not control or affect the
meaning or construction of any provision of this Agreement.

          (b) Except as otherwise expressly provided in this Agreement or as the context otherwise
requires, the following rules of interpretation apply to this Agreement: (i) the singular includes
the plural and the plural includes the singular; (ii) “or” is used in the inclusive sense (and/or)
and the words “include” and “including,” and variations thereof, shall not be deemed to be terms of
limitation, but rather shall be deemed to be followed by the words “without limitation”; (iii) a
reference in this Agreement to a Section is to the referenced Section of this Agreement; and (iv)
“hereunder,” “hereof,” and words of similar import shall be deemed references to this Agreement as
a whole and not to any particular Section or other provision.

     Section 25. Counterparts. This Agreement (and each amendment, modification and waiver in
respect of it) may be executed in any number of counterparts, and each such counterpart hereof
shall be deemed to be an original instrument, but all such counterparts together shall constitute
but one instrument. Delivery of an executed counterpart of a signature page of this Agreement (and
each amendment, modification and waiver in respect of it) by facsimile or other electronic
transmission shall be effective as delivery of a manually executed original counterpart of each
such instrument.

[Remainder of page intentionally blank. Signature page follows.]

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first set forth above.

	 	 	 	 	 	 	 

	 	 	KING PHARMACEUTICALS, INC.
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	[Name of Director]

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