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EXHIBIT 10.31
EXECUTION COPY
LICENSE AGREEMENT
THIS LICENSE AGREEMENT ("Agreement") is entered into and effective as
of February 27, 1998 (the "Effective Date") in duplicate originals and is by and
among XXXXXX-XXXXXXX COMPANY, a corporation organized and existing under the
laws of the State of Delaware, and having an office and place of business at 000
Xxxxx Xxxx, Xxxxxx Xxxxxx, XX 00000 ("WL"), PARKE, DAVIS & COMPANY, a
corporation organized and existing under the laws of the State of Michigan and
having an office and place of business at 000 Xxxxx Xxxx, Xxxxxx Xxxxxx, Xxx
Xxxxxx 00000 ("PD"), and PARKEDALE PHARMACEUTICALS, INC., a corporation
organized and existing under the laws of the State of Michigan, and having an
office and place of business at 000 Xxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxx 00000
("Licensee"). Capitalized terms not otherwise defined herein have the meanings
ascribed to them in Article I. For purposes of this Agreement, the term
"Licensor" shall refer to WL as to all matters contained herein relating to the
Anusol Trademark, the Anusol Mold and the Steri-Dose Trademark and shall refer
to PD as to all matters contained herein relating to the Steri-Vial Trademark.
RECITALS
A. WL is engaged in developing, manufacturing and marketing, among
other things, pharmaceutical and over-the-counter consumer healthcare products
in the United States and throughout the world. WL is the owner of the Anusol
Trademark, the Steri-Dose Trademark in the Territory and the Anusol Mold. PD is
the owner of the Steri-Vial Trademark.
B. The Anusol Trademark and the Anusol Mold are used in connection with
the Anusol Products and the Other Trademarks are used in connection with certain
prescription products of WL. Licensee desires to use the Anusol Trademark in
connection with the Anusol Products in the Territory, the Anusol Mold in
connection with Anusol Products and the Other Trademarks in connection with the
Other Products.
NOW THEREFORE, in consideration of the mutual promises and covenants
contained herein, and for good and valuable consideration, it is agreed as
follows:
ARTICLE I - DEFINITIONS
1.1 As used in this Agreement, the following defined terms have the
meanings indicated below:
"Advertising Materials" shall mean all materials used in connection
with the advertising, marketing, sale and promotion of any Products
bearing the Anusol Trademark or the Other Trademarks in any form or
media.
"Affiliate" shall mean any person that directly, or indirectly through
one or more intermediaries, controls or is controlled by or is under
common control with the person specified. For purposes of this
definition, control of a person means ownership of fifty percent (50%)
or more of the voting or income interest in such person.
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"Anusol Mold" shall mean the mold used to manufacture the tips of the
applicator sold with the Anusol antipruritic hydrocortisone cream
pharmaceutical product and the over the counter consumer healthcare
product as of February 26, 1998.
"Anusol Products" shall mean the prescription antipruritic
hydrocortisone cream and prescription hemorrhoidal suppository
products marketed by WL under the Anusol Trademark as of February 26,
1998 and any prescription product extensions or reformulations thereof.
"Anusol Trademark" shall mean the ANUSOL-HC(R) trademark, U.S.
Registration No. 811621.
"Business Materials" shall mean all stationery, letterheads,
envelopes, business cards, invoices and all other business materials
used by Licensee which bear the Anusol Trademark or any of the Other
Trademarks.
"Licensed Right" shall mean Licensee's right to use each of the Anusol
Trademark, the Anusol Mold, and the Other Trademarks (each a Licensed
Right and collectively the Licensed Rights).
"Other Products" shall mean any product marketed by WL, as of February
26, 1998, under any of the Other Trademarks and which are used in
connection with trademarks that will be assigned to Licensee in
accordance with the terms of the PAPA and any prescription product
extensions or reformulations thereof.
"Other Trademarks" shall mean the Steri-Dose Trademark and the
Steri-Vial Trademark.
"Packaging Materials" shall mean all tags, labels, cartons,
containers, wrapping and other materials used in connection with the
Products.
"PAPA" shall mean the Product Asset Purchase Agreement dated as of the
date hereof between WL and Licensee.
"Products" shall mean, collectively, the Anusol Products and the Other
Products.
"Territory" shall mean the United States of America, its territories
and possessions, the District of Columbia and United States military
bases worldwide.
"Steri-Dose Trademark" shall mean the Steri-Dose(R) trademark, U.S.
Registration No. 986792.
"Steri-Vial Trademark" shall mean the Steri-Vial(R) trademarks, U.S.
Registration Nos. 375423 and 549403.
"Style Sheet" shall mean a document containing the specifications
(i.e., style, appearance, distinctness) with respect to Licensee's use
of the Anusol Trademark and the Other Trademarks.
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1.2 The definitions in this Article I shall apply equally to both the
singular and plural forms of the terms defined. The words "include",
"includes" and "including" shall be deemed to be followed by the
phrase "without limitation". All references herein to Articles,
Sections, paragraphs and clauses shall be deemed references to
Articles, Sections, paragraphs and clauses of this Agreement unless
the context shall otherwise require.
ARTICLE II - GRANT OF LICENSE
2.1 Licensor hereby grants to Licensee an exclusive, royalty-free right
and license to use the Anusol Trademark in connection with the
development, manufacture, distribution, advertising, promotion and
sale of any Anusol Products in the Territory for the term and under
the terms and conditions hereinafter set forth. Except as set forth in
Section 13.5, Licensee shall not have the right to transfer or assign
this License to any person. Licensee agrees that unless authorized or
required by Licensor, it will not make, or authorize to be made, any
use, directly or indirectly, of the Anusol Trademark outside of the
Territory or on or in connection with any other articles of any
description or in any other manner other than as provided for herein.
2.2 Licensor hereby grants to Licensee an exclusive, royalty-free right
and license to use the Other Trademarks solely in connection with the
development, manufacture, distribution, advertising, promotion and
sale of any Other Products for the term and under the terms and
conditions hereinafter set forth. Except as set forth in Section 13.5,
Licensee shall not have the right to transfer or assign this License
to any person. Licensee agrees that unless authorized or required by
Licensor, it will not make, or authorize to be made, any use, directly
or indirectly, of the Other Trademarks outside of the Territory or on
or in connection with any other articles of any description or in any
other manner other than as provided for herein.
2.3 Licensor hereby grants to Licensee an exclusive, royalty-free right
and license to use the Anusol Mold solely in connection with the
manufacture of applicator tips for use with any Anusol Product and the
sale of any Anusol Product together with such applicator tips in the
Territory for the term and under the terms and conditions hereinafter
set forth. Except as set forth in Section 13.5, Licensee shall not
have the right to transfer or assign this License to any person.
Licensee agrees that unless authorized or required by Licensor, it
will not make or authorize to be made, any use, directly or
indirectly, of the Anusol Mold outside of the Territory or with
respect to any other product.
2.4 Unless authorized by Licensor, Licensee may not use the Anusol
Trademark or Other Trademarks as part of a corporate name or as part
of the composite name of a division or related company of Licensee.
However, Licensee may use the Anusol Trademark and Other Trademarks on
invoices, order forms, stationery and telephone directory listings, in
compliance with the requirements of the Style Sheet, which shall be
prepared by WL and agreed to by the parties no later than sixty (60)
days after the date hereof. Licensee may not use the Anusol Trademark
or Other Trademarks as a domain name on the Internet. Any use of the
Anusol Trademark or Other Trademarks in any content material contained
with other materials of Licensee on the Internet must be reviewed and
approved in writing by Licensor.
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ARTICLE III - TERM
3.1 This Agreement shall become effective on the Effective Date and shall
continue for a term of forty (40) years, unless sooner terminated as
provided for herein. Following the initial forty-year term, this
Agreement shall be automatically renewed for successive five (5) year
periods.
ARTICLE IV - QUALITY CONTROL
4.1 Licensee agrees that the Products and the Packaging Materials,
Business Materials and Advertising Materials bearing the Anusol
Trademark and the Other Trademarks shall be of the highest standard
and of such style, appearance, distinctiveness and quality and that
the manufacture, use and sale of the Products and the applicator tips
made from the Anusol Mold will adhere to all standards required by any
applicable governmental laws, regulations or rules, including all
current good manufacturing practices.
4.2 Licensee agrees that the Anusol Trademark and the Other Trademarks
have an established prestige and goodwill, and are well recognized by
the trade and purchasing public. In addition, Licensee acknowledges
that Licensor owns other trademarks containing the word "Anusol" and
permutations thereof which are used in over-the-counter products in
the Territory and in prescription and over-the-counter products
outside of the Territory. Accordingly, Licensee agrees that its use
thereof shall be in a commercially acceptable and responsible manner
and style to protect and enhance the prestige of Licensor.
4.3 When requested, but in no event more than on a quarterly basis,
Licensee shall submit to Licensor samples of the Packaging Materials,
Business Materials, Advertising Materials, Products and the applicator
tips made from the Anusol Mold to allow Licensor to confirm Licensee's
performance of its obligations hereunder. All such materials shall be
deemed approved if Licensor has not responded within thirty (30) days
after receipt of such item. Any material changes to the Packaging
Materials, Business Material or Advertising Materials shall be
submitted to Licensor in writing and shall not be used without
Licensor's prior written consent, which shall not be unreasonably
withheld. If Licensor has not responded within thirty (30) days after
receipt of such item, it shall be deemed approved.
4.4 Licensee shall not voluntarily recall any Products without first
notifying Licensor sufficiently in advance of such recall and then
discussing with Licensor the reasons for and the manner and timing of
such recall. Licensee shall provide Licensor with written notice
immediately after it becomes aware of any facts or circumstances from
which it could reasonably be calculated that a recall may occur or be
required by any governmental or regulatory agency, including, without
limitation, any significant adverse events. Licensee shall further
provide Licensor with a copy of all summaries of adverse events
required to be submitted to any regulatory or governmental agency.
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ARTICLE V - BEST EFFORTS & DISTRIBUTION
5.1 Licensee covenants and agrees that, during the term of this Agreement,
it will give and devote its reasonable commercial efforts consistent
with accepted pharmaceutical industry business practices to the
diligent promotion, sale and distribution of Products in the
Territory.
5.2 Licensee agrees that the Products shall be sold only through channels
of trade that are consistent with the prestige and reputation of the
Anusol Trademark and the Other Trademarks, as the case may be, and
will enhance and protect Licensor's goodwill therein.
ARTICLE VI - PROPERTY OF LICENSOR
6.1 Licensee recognizes and acknowledges that the Anusol Trademark and the
Other Trademarks and the goodwill associated therewith are the
property of Licensor and are not transferred pursuant to this
Agreement. Upon ninety (90) days prior written notice, Licensee may
request that Licensor register a trademark which adds a suffix to the
Anusol Trademark, in connection with any prescription line extension or
reformulation of the Anusol Product by Licensee. Licensor may grant
Licensee's request if the trademark requested by Licensee does not
conflict with any registered trademark or trademark application of
Licensor or its Affiliates which has been filed in any jurisdiction at
the time of such request. All costs associated with the registration
of a trademark which adds a suffix to the Anusol Trademark as provided
in this Section 6.1 shall be borne by Licensee. Licensee shall be
responsible for the initial determination of the availability of the
trademark related to such line extension and all associated costs.
ARTICLE VII - TRADEMARK PROTECTION
7.1 Licensee agrees to assist Licensor at Licensor's cost and expense, to
the extent reasonably necessary, or as otherwise agreed upon, to
protect any of Licensor's rights in and to the Anusol Trademark, the
Anusol Mold and the Other Trademarks. Licensor may prosecute any
claims or suits to protect the Anusol Trademark, the Anusol Mold and
the Other Trademarks in the name of Licensee or join Licensee as a
party (at Licensor's expense), and Licensor is entitled to retain the
full sum of any settlement, judgment or jury award.
7.2 Each party shall promptly notify the other in writing of any uses in
the Territory which may come to such party's attention which may
constitute infringement or imitation by others of the Anusol Trademark
or the Other Trademarks. Licensor shall have the right to determine
whether or not any action shall be taken against any such infringement
or imitation, and Licensee shall not institute any suit or take any
action on account of such infringement or imitation on its own. If
Licensor does not pursue a notification by Licensee of a use in the
Territory which may constitute infringement or imitation by others of
the Anusol Trademark or the Other Trademarks, within sixty (60) days
of such written notification, then Licensee shall have the right to
take any action on account of such infringement or imitation on its
own and at its own expense, provided, however, that Licensor shall
have the right to participate in any such action.
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ARTICLE VIII - WARRANTIES AND REPRESENTATIONS
8.1 Licensor warrants and represents to Licensee that it owns and/or has
the rights to the Anusol Trademark, the Anusol Mold and the Other
Trademarks in the Territory, and that it has the right to grant the
license granted herein. To the best of Licensor's knowledge, title to
the Anusol Trademark, Anusol Mold and the Other Trademarks is held by
Licensor free and clear of all adverse claims, liens, security
interests, restrictions, and other encumbrances and there are no
circumstances to indicate that there is any reasonable basis to
believe that any person or governmental or regulatory authority could
or would assert or support a claim of ownership, right of possession
or use in any way adverse to Licensee's or its Affiliates' rights in
and to the Licensed Rights. Licensor agrees to indemnify and hold
Licensee harmless against any losses incurred by Licensee as a result
of any claim by a third party that Licensee's use of the Licensed
Rights in accordance with the provisions hereof infringes the rights
of such third party. Licensee shall advise Licensor of any such claims
and Licensor shall have sole control over the defense and settlement
of any such allegations through counsel of its own choosing.
8.2 Licensor agrees not to disclose to any third party any proprietary
information of Licensee obtained pursuant to this Agreement.
ARTICLE IX - [INTENTIONALLY OMITTED]
ARTICLE X - [INTENTIONALLY OMITTED]
ARTICLE XI - TERMINATION FOR BREACH OR CHANGE OF OWNERSHIP OR CONTROL OF
LICENSEE
11.1 If Licensee shall violate any of the material obligations under this
Agreement, Licensor shall have the right to terminate this Agreement
by giving Licensee written notice of such breach and its intent to
terminate this Agreement with respect to the Licensed Right which is
the subject of such breach and any other Licensed Right. Unless
Licensee shall cure such breach within sixty (60) days after receipt
of such written notice of breach and termination from Licensor, this
Agreement shall automatically terminate on the sixtieth (60th) day
from such written notice of breach with respect to the Licensed Right
which is the subject of such breach and any other Licensed Right.
Termination of this Agreement shall be without prejudice to any rights
or remedies which Licensor may otherwise have against Licensee.
11.2 [Intentionally Omitted].
11.3 In the event of a change of majority ownership in or majority control
of Licensee, Licensee shall be obligated to inform Licensor
immediately of any such change, and Licensor shall have the option to
terminate this Agreement in whole or in part by giving written notice
of such termination to Licensee within ninety (90) days after
receiving such notice of change in ownership or control from Licensee.
Such termination shall take effect thirty (30) days after receipt by
Licensee of such notice.
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11.4 Licensee may terminate this Agreement with respect to any Licensed
Right upon sixty (60) days written notice of such termination to
Licensor or if Licensor shall violate any of the material obligations
under this Agreement, Licensee shall have the right to terminate this
Agreement with respect to the Licensed Right which is the subject of
such breach and any other Licensed Right by giving Licensor written
notice of such breach and its intent to terminate this Agreement.
Unless Licensor shall cure such breach within sixty (60) days after
receipt of such written notice of breach and termination from
Licensee, this Agreement shall automatically terminate on the sixtieth
(60th) day from such written notice of breach with respect to the
Licensed Right which is the subject of such breach and any other
Licensed Right.
ARTICLE XII - CONSEQUENCES OF EXPIRATION OR TERMINATION OF THIS AGREEMENT
12.1 Upon and after the expiration or termination of this Agreement for
whatever reason, all rights granted to Licensee hereunder to use the
Licensed Rights shall cease immediately.
12.2 Upon and after the expiration or termination of this Agreement, all
rights granted to Licensee hereunder shall forthwith revert to
Licensor.
12.3 Upon and after the expiration or termination of this Agreement,
Licensee will refrain from any further use of the Licensed Rights or
of anything deemed by Licensor to be confusingly similar to, the
Anusol Trademark or the Other Trademarks.
12.4 In the event of expiration or termination of this Agreement, Licensor
shall have the prior right and option to purchase any or all of the
Products bearing the Anusol Trademark or the Other Trademarks, and
Packaging Materials, Business Materials and Advertising Materials used
in connection therewith (the "Assets") at Licensee's cost as carried
on its books of account. Upon such termination or expiration, the
parties hereto shall jointly and immediately cause physical
inventories to be taken of:
(1) Products bearing the Anusol Trademark or the Other Trademarks
on hand;
(2) All Packaging Materials bearing the Anusol Trademark or the
Other Trademarks; and
(3) All Business Materials and Advertising Materials used on or
in connection with said merchandise;
which physical inventories shall be reduced to writing in a form
acceptable to Licensor and copies thereof shall be signed by each
party.
If Licensor exercises its option to purchase the Assets, Licensor
shall pay for such Assets no later than thirty (30) days after receipt
of such Assets accompanied by an appropriate invoice.
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12.5 Licensee recognizes that any sale of the Products, upon termination or
expiration of this Agreement, through other than primary channels of
distribution would cause irreparable damage to the prestige of
Licensor, to the Anusol Trademark and the Other Trademarks, and the
related goodwill. Accordingly, Licensee covenants and agrees that the
Products sold by Licensee, upon termination or expiration as provided
below, will be offered for sale or sold only in accordance with the
following terms and conditions:
In the event Licensor does not exercise the option stated in paragraph
12.4, upon the termination or expiration of this Agreement, Licensee
shall have six (6) months to sell off any merchandise bearing the
Anusol Trademark or the Other Trademarks. Thereafter, Licensee will
not sell or offer for sale any merchandise bearing the Anusol
Trademark or Other Trademarks, or any trademarks similar thereto.
Licensee agrees to remove all tags and labels bearing the Anusol
Trademark or the Other Trademarks from such merchandise and to destroy
all remaining Packaging Materials or, if Licensor so requests, to
deliver said Packaging Materials, Business Materials and Advertising
Materials to Licensor at Licensor's expense at the end of such six (6)
month period.
ARTICLE XIII - MISCELLANEOUS
13.1 All notices, requests, consents, approvals or other communications
shall be deemed to have been duly given, made or served if in writing
and delivered personally or sent by overnight courier, or by telex or
telecopier with receipt confirmed, to the respective parties to this
Agreement as follows:
If to WL:
Xxxxxx-Xxxxxxx Company
000 Xxxxx Xxxx
Xxxxxx Xxxxxx, Xxx Xxxxxx 00000
U.S.A.
Attn: Vice President, Corporate Development and Licensing
If to PD:
Parke, Davis & Company
000 Xxxxx Xxxx
Xxxxxx Xxxxxx, Xxx Xxxxxx 00000
U.S.A.
Attn: Vice President, Corporate Development and Licensing
Copies of all notices to WE and PD shall be sent to:
Xxxxxx-Xxxxxxx Company
000 Xxxxx Xxxx
Xxxxxx Xxxxxx, Xxx Xxxxxx 00000
U.S.A
Attn: Vice President and General Counsel
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If to Licensee:
Parkedale Pharmaceuticals, Inc.
000 Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: President
With a copy to:
King Pharmaceuticals, Inc.
000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Attn: Executive Vice President and General Counsel
13.2 The parties shall not be liable for failure of performance hereunder
if occasioned by war, declared or undeclared, fire, flood,
interruption of transportation, embargo, accident, explosion,
inability to procure or shortage of supply of materials, equipment or
production facilities, prohibition of import or export of the
Products, governmental orders, regulations, restrictions, strikes,
lockouts, or other labor troubles or any other cause beyond the
control of the parties. Any suspension of performance by reason of
this paragraph shall be limited to the period during which such cause
of failure exists, but such suspension shall not affect the running of
the term of this Agreement.
13.3 Nothing herein contained shall be construed to place the parties in a
relationship of partners or joint venturers and Licensee shall have no
power to obligate or bind Licensor in any manner whatsoever.
13.4 Licensee hereby indemnifies Licensor and undertakes to defend and hold
Licensor harmless from any claims, suits, loss and damage (including
reasonable attorneys' fees) arising out of any allegedly unauthorized
use by Licensee of the Licensed Rights, which indemnification shall
survive the termination of this Agreement.
13.5 (a) This Agreement is personal to Licensee and, except as set forth in
this Section 13.5, neither this Agreement nor any of the rights or
duties hereunder may be assigned, sublicensed or otherwise encumbered
by Licensee or by operation of law, nor may Licensee give up any
control over the subject matter of this Agreement except that Licensee
may assign any or all of its rights, interests and obligations
hereunder to an Affiliate of Licensee, provided that any such
Affiliate agrees in writing to be bound by all of the terms,
conditions and provisions contained herein, but in the event of any
such assignment referred to herein Licensee's ultimate parent entity,
King Pharmaceuticals Inc., a Tennessee corporation, shall guaranty the
fulfillment of all obligations of Licensee and its assignees
hereunder.
(b) Notwithstanding the provisions of Section 13.5(a), Licensee shall
have the right to grant a security interest in this Agreement to any
financial institution that is a lender to Licensee. Any such lender to
Licensee or any trustee, receiver, administrator or representative in
bankruptcy (whether voluntary or involuntary) of Licensee, who holds
an interest in this Agreement shall be permitted a one time right to
sublicense or assign this Agreement with the consent of Licensor,
which consent shall not be unreasonably withheld. No such sublicensee
or assignee shall have the right to sublicense or assign this
Agreement to any other person.
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(c) Subject to the terms of this Section 13.5, this Agreement is
binding upon, inures to the benefit of and is enforceable by the
parties hereto and their respective successors and assigns.
13.6 None of the terms of this Agreement shall be deemed to be waived or
modified, nor shall this Agreement be renewed, extended, terminated or
discharged except as set forth in Section 3.1 or by an agreement in
writing signed by or on behalf of both parties. There are no
representations, promises, warranties, covenants or undertakings,
other than those contained in this Agreement, which Agreement
represents the entire understanding of the parties.
13.7 Any provision or provisions of this Agreement which are held to be
invalid or unenforceable in any way, shall be deemed separable and
shall not affect any other provision of this Agreement.
13.8 This Agreement is made pursuant to and shall be governed by and
construed in accordance with the laws of the State of New York.
13.9 The failure of any party at any time to require performance by the
other of any provision hereof shall in no way affect the full right to
require such performance at any time thereafter. Nor shall the waiver,
indulgence or toleration by one party of a breach of any provision
hereof by the other be taken or held to be a waiver, indulgence or
toleration of the breach itself. The termination for any reason or
expiration of this Agreement shall be without prejudice to the rights
of either party to any remedies of a party in respect of any previous
breach of any of the covenants contained herein.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed and effective as of the date first written above.
XXXXXX-XXXXXXX COMPANY PARKE, DAVIS & COMPANY
By: /s/ Xxxxxxx X. Van Dvyne By: /s/ Xxxxxxx X. Van Dvyne
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Name: Xxxxxxx X. Van Dvyne Name: Xxxxxxx X. Van Dvyne
Title: Vice President Corporate Title: Power of Attorney
Development and Licensing
PARKEDALE PHARMACEUTICALS, INC.
By: /s/ Xxxxxxxxx X. Xxxxxxx
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Name: Xxxxxxxxx X. Xxxxxxx
Title: President
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