EXHIBIT 10 (xxv)
LICENSE AGREEMENT
This AGREEMENT, is made and entered into as of this
29th day of February, 1996 by and between F.H. FAULDING
& CO. LIMITED, a corporation organized under the laws of
South Australia ("Licensor") and PUREPAC, INC., a
Delaware corporation ("Licensee").
W I T N E S S E T H:
WHEREAS, Faulding Holdings Inc., a wholly owned
subsidiary of Licensor ("Faulding"), and Licensee entered
into a Stock Purchase Agreement dated as of January 23,
1996 (the "Stock Purchase Agreement") pursuant to which
Licensee, as of the date hereof, purchased all of the
outstanding common stock of each of Faulding Puerto Rico,
Inc., Faulding Pharmaceutical Co. and Faulding Medical
Device Co. (collectively, the "Subsidiaries"), formerly
the wholly-owned subsidiaries of Faulding, in exchange
for certain shares of Licensee's common stock;
WHEREAS, Faulding and Licensee also entered into a
Preferred Stock Purchase Agreement dated as of January
23, 1996 pursuant to which, as of the date hereof,
Faulding purchased 150,000 shares of Licensee's Series B
Preferred Stock for a purchase price of $15,000,000 (the
"Preferred Stock Agreement") (the Stock Purchase
Agreement and the Preferred Stock Agreement are
collectively referred to as the "Faulding Transaction");
WHEREAS, as a result of the Faulding Transaction,
Faulding is a majority owner of Licensee's common stock,
giving effect to the conversion of all of the preferred
stock of Licensee owned by Faulding;
WHEREAS, as a result of the Faulding Transaction,
the Licensee intends to change its name to "Faulding
Inc." and to cause the Subsidiaries to continue to use
the name "Faulding" in their corporate names; and
WHEREAS, Licensor, as the sole owner of all the
rights, title and interest in and to the duly registered
tradename "Faulding", desires to grant, and Licensee
desires to receive, a limited license to use the
tradename "Faulding" according to the terms of this
Agreement;
NOW, THEREFORE, in consideration of these premises
and the mutual covenants herein contained, and for other
good, valuable and sufficient consideration given by each
party to the other, the receipt of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. Grant of License. Licensor hereby grants to
Licensee, and Licensee hereby accepts a non-exclusive,
royalty-free license: (i) to use and display the
tradename "Faulding" (the "Tradename") solely in
connection with Licensee's business as it is currently
configured including, but not limited to, the
development, manufacture and sale of generic drug
products ("Licensee's Business"); and (ii) for the use by
each of the Subsidiaries solely in connection with their
respective businesses as currently configured, in
accordance with the terms and provisions of this
Agreement.
2. Territory of License. Licensee may exercise
the rights granted by this license throughout the world.
3. Term of License; Termination.
a. At any time after Faulding no longer
holds more than 50% of the outstanding common stock of
Licensee on a fully diluted basis, Licensor may notify
Licensee that it has three (3) years from the date of
such notice in which to continue to use the Tradename as
provided herein. Licensee's ability to continue to use
the Tradename after such three year period will be
subject to its reaching an agreement with Licensor
governing such use.
b. Licensor may terminate this
Agreement, and the license hereby granted, on thirty (30)
days' prior written notice to Licensee in the event that
Licensee violates any of its obligations under this
Agreement or in the event that Licensee breaches any
covenant or warranty made in this Agreement.
c. Licensor may terminate this license
on thirty (30) days' prior written notice to Licensee in
the event that, in the exercise of its sole and absolute
discretion, it declines to continue using, maintaining,
or defending the validity of the Tradename. In the event
that the license terminates pursuant to this paragraph 3
c, and Licensor intends to cease use of the Tradename,
Licensee shall be entitled to purchase an assignment of
the Tradename from Licensor for one dollar ($1) by so
notifying Licensor of such intent, after receipt of
Licensor's notice and before the expiration of this
License Agreement.
4. Protection of Trademark.
a) Claims by Third Parties, Licensor's
Indemnification. In the event that Licensee or the
Subsidiaries, or any of them, is informed of any
claim, suit or demand against Licensee on account
of any alleged infringement, unfair competition, or
similar matter relating to its use of the
Tradename, Licensee shall promptly notify Licensor
of any such claim, suit or demand. Thereupon
Licensor shall promptly, take such action as may be
necessary to protect and defend Licensee against
any such claim by any third party and shall
indemnify Licensee against any losses, costs or
expenses incurred in connection therewith.
Licensee shall have no independent power or
authority to settle or compromise any such third
party claim without prior written specific
authorization from Licensor, who shall have the
right to defend, compromise or settle any such
claim, at its sole cost and expense using attorneys
of its own choosing. Licensee agrees to cooperate
fully with Licensor in connection with the defense
or settlement of any such claim.
b) Infringement by Third Parties. In the
event that Licensee, the Subsidiaries, or any of
them, believes that any third party is improperly
using a trademark, tradename or logotype
confusingly similar to the Tradename, Licensee
shall promptly notify Licensor of all facts known
to it relating to such use. Thereupon Licensor
shall conduct its own investigation of such alleged
infringing use and shall have the sole right to
take any action it deems necessary to protect the
Tradename. Licensee shall have no right to
prosecute any claim against any alleged infringer
of either the Tradename or Licensee's licensed use
thereof and shall have no right to settle or
compromise any claim against such alleged
infringer, or to participate in any litigation
against such alleged infringer. Licensee agrees to
cooperate fully with Licensor in connection with
the prosecution of any claim against such alleged
infringer which may be brought by Licensor.
c) No Contest. Licensee shall not, nor
cause the Subsidiaries to, contest or deny the
validity or enforceability of the Tradename or
oppose or seek to cancel any registration thereof
by Licensor, or aid or abet others in so doing
either during the Term of this Agreement or at
anytime thereafter.
d) Maintenance of the Tradename. Licensor at
all times during this Agreement shall maintain the
viability of the Tradename and shall undertake to make
all filings, and to take all other reasonable steps
necessary to protect the Tradename.
5. Compliance with the Laws. Licensee shall use
the Tradename, and conduct Licensee's Business
thereunder, and insure that the Subsidiaries use the
Tradename and conduct their respective businesses
thereunder, in strict compliance with all applicable
laws, rules and regulations of all applicable government
authorities. Throughout the period hereof, including the
wind-down period contemplated by paragraph 3 hereof,
Licensee shall undertake no course of action, and will
insure that the Subsidiaries undertake no course of
action, which may lead to a loss of goodwill or other
diminution in value of the Tradename, and shall use its
reasonable commercial efforts and cause the Subsidiaries
to use the same, to enhance the goodwill and value of the
Tradename.
6. Indemnification by Licensee. Licensee hereby
agrees to defend, indemnify and hold harmless Licensor
from and against any and all suits, actions, claims,
judgments, debts, obligations or rights of action of any
nature or description, and all costs, including
attorney's fees, incurred by Licensor in connection
therewith, arising out of or relating to the rights
granted to Licensee hereunder or any acts, omissions,
statements, or representations of any employee, agent,
subsidiary (including, but not limited to, the
Subsidiaries) officer or director of Licensee relating
thereto. Licensor shall notify Licensee of any such
suit, action, claim, judgment, debt, obligation or right
of action promptly upon receiving notice or being
informed of the existence thereof. Upon such notice
Licensee shall promptly take such action as may be
necessary to protect and defend Tradename against such
suit, action, claim, judgment, debt, obligation or right
of action and shall indemnify Licensor against any loss,
costs or expenses incurred in connection therewith.
Licensor shall have no power or authority to settle or
compromise any such suit, action, claim, judgment, debt,
obligation or right of action and Licensor agrees to
cooperate fully with Licensee with the defense thereof.
7. Assignment. Licensee's rights and interests
hereunder may not be assigned, pledged, conveyed or
otherwise transferred without the prior written consent
of Licensor, which consent shall not be unreasonably
withheld. Any such purported unauthorized pledge,
assignment, conveyance or transfer shall be null and
void.
8. Employment of Agents. Notwithstanding the
terms of paragraph 7 hereof, Licensee may employ or cause
any or all of the Subsidiaries to employ, the services of
distributors, throughout the Territory for and on its
behalf provided that such distributors shall not,
directly or indirectly, be assignees or sublicensees of
Licensee and provided that at all times Licensee shall be
fully responsible for the actions of such distributors
and performance which shall conform in all respects to
the requirements of this Agreement.
9. Effect of Termination. In the event of
expiration or termination of this Agreement pursuant to
paragraph 3 hereof, Licensee shall, and shall likewise
cause the Subsidiaries to, forthwith discontinue the use
of the Tradename, and the Tradename, or any symbols
deceptively similar thereto, shall thereafter not be used
in any manner, or for any purpose, directly or
indirectly, by Licensee and/or the Subsidiaries, and each
of them. Upon the termination or expiration of this
Agreement Licensee shall, and shall cause the
Subsidiaries or any of them to, promptly take all
necessary steps to sever all connection with the
Tradename including, but not limited to, amending all of
its corporate documents, stationery, brochures,
advertising materials, charter and other filings.
10. Rights of Licensor. The expiration or
termination of this Agreement shall be without prejudice
to any other rights or claims of Licensor against
Licensee or any or all of the Subsidiaries or any other
remedy available to it. Such expiration or termination
shall not relieve Licensee of any of its obligations to
Licensor existing at the time of expiration or
termination, or terminate those obligations of Licensee
which, by their nature, survive the expiration or
termination of this Agreement.
11. Miscellaneous.
a) Survival of Representations, Warranties
and Covenants. All statements contained in this
Agreement shall be deemed representations,
warranties and covenants by the Licensor or the
Licensee, as the case may be, hereunder. All
representations, warranties, covenants made by the
Licensor and by the Licensee of this Agreement, or
pursuant hereto, shall survive the termination of
this Agreement.
b) Notices. All notices, requests, demands,
or other communications with respect to this
Agreement shall be in writing and shall be (i) sent
by facsimile transmission, (ii) sent by postal
service, registered or certified mail, return
receipt requested, or (iii) personally delivered by
a nationally recognized express overnight courier
service, charges prepaid, to the following
addresses (or such other addresses as the parties
may specify from time to time in accordance with
this Section)
To the Licensee:
Faulding Inc.
200 Elmora Avenue
Elizabeth, New Jersey 07207
Attention: President
Fax No.: +1 908 355-7048
To the Licensor:
F.H. Faulding & Co. Limited
160 Greenhill Road
Parkside, So. Australia 5064
Attention: Secretary
Fax No.: +618 373 3120
Any such notice shall, when sent in accordance with
the preceding sentence, be deemed to have been
given and received on the earliest of (i) the day
delivered to such address or sent by facsimile
transmission, (ii) the tenth business day following
the date deposited with the postal service, or
(iii) 5 days after shipment by such courier
service.
c) Construction. This Agreement shall be
construed and enforced in accordance with the
internal laws of the State of New York without
giving effect to the principles of conflicts of law
thereof.
d) Counterparts. This Agreement may be
executed in two or more counterparts, each of which
shall be deemed an original, but all of which shall
together constitute one and the same Agreement.
e) No Implied Waiver; Remedies. No failure
or delay on the part of the parties hereto to
exercise any right, or privilege hereunder or under
any instrument executed pursuant hereto shall
operate as a waiver nor shall any single or partial
exercise of any right, power, or privilege preclude
any other or further exercise thereof or the
exercise of any other right, power, or privilege.
All rights, powers, and privileges granted herein
shall be in addition to other rights and remedies
to which the parties may be entitled at law or in
equity.
f) Entire Agreement. This Agreement sets
forth the entire understandings of the parties with
respect to the subject matter hereof, and it
incorporates and merges any and all previous
communications, understandings, oral or written, as
to the subject matter hereof, and cannot be amended
or changed except in writing, signed by the
parties.
g) Headings. The headings of the Sections
of this Agreement, where employed, are for the
convenience of reference only and do not form a
part hereof and in no way modify, interpret or
construe the meanings of the parties.
h) Severability. To the extent that any
provision of this Agreement shall be invalid or
unenforceable, it shall be considered deleted
hereof and the remainder of such provision and of
this Agreement shall be unaffected and shall
continue in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement the day and year first above written.
F.H. FAULDING & CO. LIMITED
By:
Dr. Edward Tweddell
Managing Director
PUREPAC, INC.
By:
Richard Moldin
Chief Executive
Officer