<Page>
Exhibit 10.28
Portions of this Exhibit were omitted and filed separately with the Securities
and Exchange Commission pursuant to a request for confidential treatment. Such
portions are marked by a series of asterisks.
LICENSE AGREEMENT
This License Agreement (this "Agreement'), dated as of June 2, 2003, is
made by and between Zengen, Inc., a California corporation having its principal
place of business at Woodland Hills, California ("Licensor") and Prestige Brands
International, Inc., a Virginia corporation having its principal place of
business at Bonita Springs, Florida ("Licensee").
RECITALS
WHEREAS, Licensor has filed Patent Applications (as defined below)
regarding the Product (as defined below);
WHEREAS, Licensee has experience in marketing, branding and distributing
consumer products under the "Chloraseptic"(R) brand name; and
WHEREAS, Licensee desires to license from Licensor the Product (as
defined below) and the Licensed Technology (as defined below), including the
right to market and distribute the Product.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained in this Agreement and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Licensor and Licensee
agree as follows:
I. DEFINITIONS
1.1. "Affiliate" shall mean any company or other business entity
controlled by, controlling or under common control with a party, control being
presumed if there is direct or indirect ownership of at least 35% (or, if less,
the maximum permitted by applicable law) of the voting stock, equity or income
interest.
1.2. "Benzocaine" shall mean benzocaine and phenol for use as a topical
oral anesthetic.
1.3. "Commercially Exploit" shall mean to promote, market, sell and/or
otherwise generate income from the Product.
1.4. "Cost of Goods" shall mean the cost per unit of finished,
commercially saleable Product, it being understood and agreed that a "unit"
consists of two (2) plastic cassettes each containing twenty (20) strips of the
Product (40 strips total).
1.5. "FDA" shall mean the United States Food and Drug Administration
(or a successor agency).
1.6. "Field" shall mean the use of the Product in concentrations or
doses suitable for the over-the-counter market. "Field" excludes the use of the
Product (a) in concentrations or doses suitable for the prescription medicines
and/or (b) without Benzocaine and/or (c) without
<Page>
ingredients that exhibit anesthetic properties in the mouth and throat
substantially similar to that of Benzocaine. For the avoidance of doubt, only
the use of the Product with Benzocaine or ingredients that exhibit anesthetic
properties in the mouth and throat substantially similar to that of Benzocaine
and in concentrations or doses less than the projected minimum prescription
concentrations or doses shall be deemed included in Field.
1.7. "Gross Profits" shall mean Net Sales less product costs and all
costs incurred in warehousing, distributing and selling the Product.
1.8. "Licensed Technology" shall mean all Patent Rights and all
technical information and data owned or possessed by Licensor as of the date of
this Agreement relating to the development, manufacture (including manufacturing
process) and commercialization of the Product within the Field, but only to the
extent such information and data is necessary for Licensee and its sublicensees
to Commercially Exploit the Product within the Field.
1.9. "Licensor Costs" shall mean and include ***.
1.10. "Net Sales" shall mean the gross amount (regardless of whether
actually invoiced, paid or received) for the Product sold, sublicensed,
transferred or otherwise arising from the Commercial Exploitation thereof,
whether by Licensee, its Affiliates or its Sublicensees, without deduction for
any offsets, discounts, costs or taxes, less and except only the following: (a)
any trade, cash or quantity discounts, (b) credits or allowances granted upon
claims, rejections, returns or retroactive price adjustments of the Product, and
(c) customs, duties and taxes based on gross sales of the Product included in
and separately stated on the invoice, as adjusted for rebates and refunds (but
not including taxes assessed on income). Any Product sold, sublicensed or
otherwise transferred in other than an arm's-length transaction or for other
property (e.g., barter) shall be deemed invoiced at its fair market price in the
country of sale or transfer, as determined in good faith by the Licensor.
1.11. "Party" shall mean Licensee or Licensor, "Parties" shall mean
Licensee and Licensor.
1.12. "Patent Applications" shall mean United States provisions patent
application Serial No. 60-426598 filed in the USPTO on November 14, 2002 and
United States provisional patent application entitled "Method and Apparatus for
Minimizing Heat, Moisture, and Shear Damage to Medicants and Other Compositions
During Incorporation of Same with Edible Films," filed in the USPTO on March 28,
2003 (collectively, "Provisional Applications"); all United States and foreign
patents and patent applications deriving priority from the Provisional
Applications, and any divisions, continuations, continuations-in-part,
re-examinations and reissued of such patent applications.
1.13. "Patent Rights" shall mean all rights arising in connection with
the Patent Applications, and any patents ultimately issued in connection
therewith.
1.14. "PCT Application" shall mean an International Patent Application
that claims priority to one of the Provisional Applications and that is filed
under or to be filed under the Patent Cooperation Treaty.
2
<Page>
1.15. "Private Label" shall mean film strips to treat sore throats using
Benzocaine as more specifically described in the Patent Rights, but which are
sold under the trade name or house brand name of a retail store or chain.
1.16. "Product" shall mean film strips to treat sore throats using
Benzocaine, menthol or phenol, or using other ingredients that exhibit
anesthetic properties in the mouth and throat substantially similar to that of
Benzocaine, including but not limited to the products described in the Patent
Applications and/or the Patent Rights.
1.17. "Quality Assurance Requirements" shall mean the stability testing
and quality assurance requirements set forth on EXHIBIT A attached hereto.
1.18. "Sublicense" shall mean a license granted by Licensee to the
Patent Rights.
1.19. "Sublicensee" shall mean any person or entity, whether a
partnership, firm, company, corporation or otherwise, to which Licensee grants a
sublicense under Patent Rights.
1.20. "Territory" shall mean all countries of the world.
1.21. "Valid Claim" shall mean any claim not yet expired included in the
Patent Rights, which has not been denied, nor invalidated by a degree of a court
of competent jurisdiction, from which no further appeal is available.
II. LICENSE
2.1. LICENSE. Subject to the reservations set forth in Section 2.3 and
subject to the other terms of this Agreement, Licensor hereby grants to Licensee
an exclusive license within the Field in and to the Patent Rights and the
Licensed Technology (including the right to sublicense any or all of such rights
in accordance with the terms of this Agreement) to make, have made, use, offer
for sale and sell the Product within the Field in the Territory.
2.2. LIMITATIONS ON EXCLUSIVITY. In the event Licensee materially
breaches or fails to perform any provisions of this Agreement, including without
limitation a material breach of any of the payment and royalty provisions, and
such material breach or failure continues for a period of thirty (30) days after
written notice thereof is provided by Licensor, then, in addition to all other
rights and remedies under this Agreement and otherwise available at law,
Licensor shall have the right, at its option, to declare the license granted in
Section 2.1 to be nonexclusive whereupon such license shall be nonexclusive. In
such event, and without limiting any other Licensor rights and remedies,
Licensor shall have the right to grant to any person(s) or entity(ies) the right
and license to make, have made, use, offer for sale and sell the Product in the
Territory, and to do the foregoing itself. If there occurs any other or
additional material breach or failure of Licensee to perform its duties under
this Agreement within twelve (12) months after the date of the initial material
breach or failure to perform (excluding any cure period) or at any time
thereafter if the initial material breach or failure to perform remains uncured,
all rights granted to Licensee by Licensor under this Agreement (including
without limitation all Patent Rights and Product and Licensed Technology rights)
shall terminate, become null and void, and shall revert in their entirety to
Licensor.
3
<Page>
2.3. RESERVATION OF RIGHTS. Licensor reserves all rights to use the
Product, the Patent Rights and all of the Licensed Technology (a) for research
and testing, (b) to make, have made, and use the Product, the Patent Rights and
the Licensed Technology, for Licensor, Licensee or any of their Affiliates or
Sublicensees; (c) to make, have made, use, offer for sale, sell, license and
sublicense the Product, the Patent Rights and the Licensed Technology with
respect to (i) the Private Label market under the circumstances described in
Section 3.3(b), (ii) the prescription medicine market and any other market
outside the Field; and (d) to make, have made, use, offer for sale, sell,
license and sublicense any and all products that do not use or include
Benzocaine or other ingredients that exhibit anesthetic properties in the mouth
and throat substantially similar to that of Benzocaine. Nothing in this
Agreement shall constitute or be deemed to constitute a grant of any rights to
Licensee with respect to any product or technology that does not include
Benzocaine or other ingredients that exhibit anesthetic properties in the mouth
and throat substantially similar to that of Benzocaine.
2.4. REVERSION. Upon termination of this Agreement or in the event that
Licensee materially breaches its obligation to Commercially Exploit the Product,
Licensee shall return and deliver to Licensor the Patent Rights and the Licensed
Technology.
2.5. SUBLICENSING BY LICENSEE. Subject to the terms of this Section
2.5, Licensee may grant a Sublicense of its rights granted pursuant to Section
2.1. The terms of each Sublicense shall be subject to and consistent with the
applicable terms of this Agreement, and each Sublicense shall terminate upon
termination of this Agreement. Licensee shall promptly inform Licensor of the
execution, scope, amendment, and termination of each Sublicense and the name and
address of each Sublicensee. Any such Sublicense(s) will not alleviate or reduce
Licensee's obligations to product revenues sufficient to pay the amounts due
Licensor under Article III and Article IV hereof, or to otherwise Commercially
Exploit the Product, the Patent Rights and the Licensed Technology.
III. LICENSE FEE; COMMERCIALIZATION OF PRODUCT
3.1. LICENSE FEE. In consideration of the license granted herein, and
to cover Licensor's manufacturing start-up costs, Licensee shall pay ***. The
Downpayments are not creditable against royalties and other payments required
from Licensee elsewhere herein and are not refundable except as set forth in
Section 3.2 below. If Licensee fails to make any Downpayment provided for in
this Section 3.1(a) within thirty (30) days after the due date thereof as set
forth above, then at Licensor's option the license granted to Licensee hereunder
shall no longer be exclusive; and (b) within sixty (60) days after the due date
thereof as set forth above, Licensor shall be entitled to terminate this
Agreement by written notice to Licensee.
3.2. COMMERCIALLY SALEABLE PRODUCT; TESTING. Licensor shall use
commercially reasonable efforts to cause a commercially saleable Product to be
developed on or before July 31, 2003. In addition, the Product shall be
submitted to testing for Quality Assurance Requirements set forth in EXHIBIT A.
In the event that the Product has not passed the Quality Assurance Requirements,
as mutually determined by the parties, on or before July 31, 2003, then (i)
Licensor will refund, no later than August 15, 2003, that portion of the
Execution Payment that is in excess of the aggregate Licensor Costs ***, and
(ii) Licensee will not be obligated to pay the 2004 Payment to Licensor.
Licensor will thereafter use commercially reasonable efforts
4
<Page>
to alter or supplement the Product so that it will satisfy the Quality Assurance
Requirements. In the event that the Product does satisfy the Quality Assurance
Requirements, as mutually determined by the parties, on or before July 31, 2004,
then (a) Licensee will pay that portion of the Execution Payment previously
refunded to it as contemplated above and shall pay to Licensor the 2004 Payment.
In the event that the parties determine, on or after July 31, 2004, that the
Product cannot be altered or supplemented such that the Product will satisfy the
Quality Assurance Requirements, Licensee shall be entitled to terminate this
Agreement.
3.3. COMMERCIALIZATION BY LICENSEE.
(a) Licensee shall use commercially reasonable and diligent
efforts to Commercially Exploit the Product, the Patent Rights and the License
Technology in the Territory consistent with customary industry practices and
applicable legal requirements.
(b) Licensor shall have the right to market the Product as
Private label and to license and/or sublicense the Product to Private Label
manufacturers if: ***. In such event, Licensor shall, and shall require that any
such Private Label manufacturers, refrain from using in connection with the
Private Label products any trademarks, logos, trade dress, color schemes, or
packaging identical or similar to the trademarks, logos, trade dress, color
schemes, or packaging being used by Licensee with the Product at the time of
such license to the Private Label manufacturer, and also refrain by using any
statements to the effect that their Private Label products are comparable to or
similar to the Product marketed by Licensee.
IV. ROYALTIES
4.1. AMOUNT. Subject to the terms of Section 4.2 regarding Private
Label revenues, in consideration of the license granted herein, and in addition
to the license fee amounts required to be paid to Licensor pursuant to Section
3.1 hereof, throughout the term of this Agreement, Licensee shall pay Licensor
royalties at the following rates: ***.
4.2. PRIVATE LABEL SALES. Notwithstanding the terms of Section 4.1, and
in addition to the royalties required pursuant to Section 4.1, throughout the
Term of this Agreement, Licensee shall pay Licensor royalties in connection with
any Private Label transactions at a rate of ***.
4.3. PAYMENT; REPORTS.
(a) Royalties shall be paid to Licensor within 30 days after the
end of each calendar quarter throughout the term of this Agreement. Such
payments shall be without offset, and shall be free and clear of all taxes and
other withholdings. Such payments shall be made at Licensor's address listed
below, or at such other place or bank account as Licensor may specify from time
to time, and shall be in United States dollars. Interest shall accrue on any
amounts that are not paid by Licensee when due, at an annual rate of 18% from
the due date. If such interest rate exceeds the legal rate in a jurisdiction
where a claim is being asserted, the interest rate shall be reduced to the
applicable legal rate.
(b) Licensee shall prepare and provide to Licensor, no later than
the 30th day following each calendar quarter end, a written report setting forth
(i) Net Sales and the number of units of the Product sold during each month of
such quarter; (ii) a calculation of the royalties due
5
<Page>
thereon and aggregate royalties due; (iii) the amount of Sublicensee revenues
arising during that calendar quarter; (iv) the amount of accounts receivable
(and age thereof) due from Licensee's ten (10) largest customers and
Sublicensees; (v) rates charged to Licensee's ten (10) largest customers and
Sublicensees; and (vi) the identity of all of Licensee's ten (10) largest
customers and Sublicensees. Licensor acknowledges and agrees that all such
written reports and information provided by Licensee hereunder constitute
Confidential Information of Licensee.
4.4. CURRENCY CONVERSION. Royalties shall be calculated and paid in
United States dollars. For the purpose of computing the Net Sales made in a
currency other than United States dollars, Licensee shall convert such currency
from local currency to U.S. dollars on a consistent, monthly basis using an
average of exchange rates for the month published by REUTERS ending on the last
business day of the month during which a royalty payment is to be made. In the
event Licensee's policies for currency conversion change in the future, the
parties will meet and agree upon a new conversion method.
4.5. BOOKS AND RECORDS. Licensee shall keep, or cause to be kept,
accurate books and records in sufficient detail to verify the calculation of
royalties and the reports given hereunder and shall retain such books and
records at its principal place of business for at least five years after the end
of the fiscal year to which they pertain. Licensor shall have the right, at its
expense and not more frequently than once per quarter, to have its accountants
or auditors examine, during normal business hours, the books and records of
Licensee, its Affiliates and its sublicensees relating to the calculation of
royalties and reports given hereunder for any period during which Licensee is to
keep the books and records. Licensor shall provide Licensee with reasonable
advance written notice of any such proposed examination, and shall follow
Licensee's instructions in order to minimize disruption to Licensee's business.
Licensor acknowledges and agrees that all such books, records, and information
reviewed by it constitute Confidential Information of Licensee. Licensor shall
conduct any such examination using only qualified individuals, and all such
individuals, upon request by Licensee, shall execute appropriate non-disclosure
or confidentiality agreements. If such examination discovers an underpayment in
excess of 5% for the period under review, Licensee shall reimburse Licensor for
its reasonable costs of examination.
4.6. PRIVATE LABEL ROYALTIES. All of the obligations and provisions of
Sections 4.3, 4.4, and 4.5 shall apply as well to payment of royalties by
Licensee or Licensor in connection with Private Label transactions pursuant to
Section 4.2
4.7. TAXES. Licensee agrees to bear all sales and use taxes imposed as
a result of the existence or operation of this Agreement, including any tax on
or measured by any royalty or other payment required to be made hereunder.
V. LICENSED TECHNOLOGY AND PATENT RIGHTS
5.1. OWNERSHIP.
(a) All works of authorship, discoveries, improvements and
inventions made, authored, or invented by Licensor, and/or any of its Affiliates
or Sublicensees in the performance of this Agreement or which otherwise relates
to the Product, the Patent Rights and/or the
6
<Page>
Licensed Technology (collectively, "Licensor Improvements") shall be owned by
Licensor. All works of authorship, discoveries, improvements and inventions
made, authored, or invented by Licensee, and/or any of its Affiliates or
Sublicensees in the performance of this Agreement or which otherwise relate to
the Product, the Patent Rights and/or the Licensed Technology (collectively,
"Licensee Improvements") shall be owned by Licensee. Licensor shall promptly
disclose Licensor Improvements, in confidence, to Licensee, and Licensee shall
promptly disclose Licensee Improvements, in confidence to Licensor. With respect
to any such Licensor Improvements and Licensee Improvements, the Parties shall
discuss and agree in good faith whether to incorporate them into any aspect of
the Product, whether to seek intellectual property protection for them, whether
to transfer ownership of them, and any consideration t be given or exchanged for
them.
5.2. INFRINGEMENT.
(a) Each Party shall promptly notify in writing the other Party
during the term of this Agreement of any (1) known infringement or suspected
infringement of any of the Patent Rights; or (2) unauthorized use or
misappropriation of the Licensed Technology by a third party of which it becomes
aware, and shall provide the other Party with all available evidence supporting
said infringement, suspected infringement or unauthorized use or
misappropriation. Within ninety (90) days after Licensor becomes, or is made
aware of any of the foregoing, Licensor shall decide whether or not to initiate
an infringement or other appropriate action and shall notify Licensee of its
decision in writing. The failure of Licensor to inform Licensee of Licensor's
decision within such 90-day period shall be deemed a decision not to initiate an
infringement or other appropriate action.
(b) In the event that Licensor notifies Licensee of its intent to
initiate an infringement or other appropriate action within the 90-day period
provided in Section 5.2(a), provided such infringement is continuing, Licensor
shall initiate such an infringement or other appropriate action within 30 days
of the end of such 90-day period. Licensor shall be entitled to join Licensee as
a party to such suit, but Licensee shall be under no obligation to participate
except to the extent that such participation is required as the result of being
a named party to the suit or being involved in the commercialization of any
Patent Rights and/or Licensed Technology at issue. If Licensee chooses to
participate, Licensee shall have the right to be represented by its own counsel
at its own expense. Licensor shall not settle any such suite involving rights of
Licensee nor make an admission of liability on behalf of Licensee without
obtaining the prior written consent of Licensee, which consent shall not be
unreasonably withheld. In the event Licensor initiates proceedings pursuant to
this Section 5.2(c), Licensor shall be entitled to 100% of any and all amounts
recovered in such suit, whether through judgment, settlement or otherwise,
including without limitation, any punitive damages that may be awarded, up to
the amount of Licensor's costs of suit, and Licensor and Licensee shall each be
entitled to 50% of all amounts recovered in such suit, whether through judgment,
settlement or otherwise, including without limitation, any punitive damages that
may be awarded, in excess of Licensor's costs of suit.
(c) In the vent that Licensor decides not to initiate, or is
deemed to have not decided to initiate an infringement or other appropriate
action within the 90-day period provided in Section 5.2(a), or does not initiate
such an infringement or other appropriate action within 30
7
<Page>
days of such 90-day period as provided in Section 5.2(b), Licensee shall have
the right, at its expense, to initiate an infringement or other appropriate
action, and shall be entitled to join Licensor has a party to such suit, but
Licensor shall be under no obligation to participate except to the extent that
such participation is required as a result of its being a named party to the
suit or being the owner of any Patent Rights and/or Licensed Technology at
issue. Notwithstanding the foregoing, in the event that Licensor is engaged at
the end of said 90-day period in negotiations for the settlement of said patent
infringement which has been the subject of notice from Licensee to Licensor and
has advised Licensee in writing of such negotiations, then the above mentioned
right and option of Licensee to bring suit shall be exercised only with the
written consent of Licensor which will not be unreasonably withheld. If Licensor
chooses to participate in any suit initiated by Licensee, Licensor shall have
the right to be represented in any such suit by its own counsel at its own
expense. Licensee shall not settle any such suit involving rights of Licensor
nor make an admission of liability on behalf of Licensor without obtaining the
prior written consent of Licensor, which consent shall not be unreasonably
withheld. In the event Licensee initiates proceedings pursuant to this Section
5.2(c), Licensee shall be entitled to 100% of any and all amounts recovered in
such suit, whether through judgment, settlement or otherwise, including without
limitation, any punitive damages that may be awarded, up to the amount of
Licensee's costs of suit, and Licensor and Licensee shall each be entitled to
50% of all amounts recovered in such suit, whether through judgment, settlement
or otherwise, including without limitation, any punitive damages that may be
awarded, in excess of Licensee's costs of suit.
(d) Nothing herein contained shall be construed to require either
party to expend money in litigation or in the enforcing of Patent Rights and/or
Licensed Technology rights unless it so elects and in the event a party proceeds
with litigation in the name of the other party in any cause in which such other
party is not voluntarily a party, as evidenced by written notice, such party
shall and agrees to hold the other party harmless from any and all liabilities
arising thereunder, including, but not limited to, attorney's fees, court costs,
and damages arising out of counterclaims, cross-claims and the like.
5.3. CLAIMED INFRINGEMENT.
(a) In the event that a Valid Claim included in the Patent Rights
is finally held to be invalid by a court of competent jurisdiction from which
appeal can no longer be taken, Licensee shall thereafter be permanently
relieved, to the extent of such holding of invalidity, from any further
obligation to pay accrued unpaid royalties under this Agreement, unless the
Product is covered by another Valid Claim within the Patent Rights licensed
hereunder which have not been held to be invalid or limited in scope as provided
above.
(b) Licensor makes no warranty, and hereby expressly disclaims
nay warranty, that the Product, the Patent Rights, the Licensed Technology, the
Licensee, its Sublicensees, Affiliates, and/or successors or assigns are free
from infringement of any intellectual property rights of others. Licensor shall
not be obligated to assist or defend the Licensee, its Sublicensees, Affiliates,
successors or assigns in any action alleging infringement of such intellectual
property rights of others. Licensor shall not be liable to Licensee, its
Sublicensees, Affiliates, successors or assigns for or on account of any damages
which may be assessed in any such infringement action, or any expenses or costs
incurred in connection therewith. Nothing in this Agreement shall be construed
as: (i) a warranty as to validity of any
8
<Page>
Patent Rights; (ii) a warranty that the Product, Patent Rights, and/or Licensed
Technology are not covered in whole or in party by patents or other intellectual
property rights held by third-parties; (iii) an obligation of Licensor to
initiate or prosecute any infringement suits with respect to any Product, Patent
Rights and/or Licensed Technology; (iv) an obligation of Licensor to furnish any
technical assistance to Licensee, its Sublicensees or Affiliates; or (v) a grant
of any rights under patents of Licensor or its Affiliates other than the Patent
Rights. Except as expressly set forth in this Agreement, Licensor makes no
representations and extends no warranties of any kind with respect to the
Product, Patent Rights and/or Licensed Technology or to the use, sale, or other
disposition by Licensee, its Sublicensees and/or Affiliates.
(c) Notwithstanding the provisions of Section 5.3(b), Licensor
agrees that in the event that the Product becomes subject to royalty payments or
licensing fees to a third party as a result of a court order or negotiated
settlement agreement arising out of a third party intellectual property claim
against the Product, subsequent royalty payments to Licensor under this
agreement shall be reduced by 50% of the third party royalty payments or
licensing fees.
(d) In the event that the Product is finally held by a court of
competent jurisdiction to infringe on any United States or foreign patent,
copyright, trade secret or other intellectual property right of any third party,
Licensor shall in its sole discretion and option, either (i) release Licensee
from any further obligation to pay accrued or future owing royalties under this
Agreement, or (ii) secure for Licensee the right to continue using the Product,
or (iii) replace or modify the Product to be non-infringement without material
impairment of existing function.
(e) The provisions of Section 5.3(c) notwithstanding, Licensor
shall not have any liability or obligation under Section 5.3(c) to the extent
that any infringement or claim results from (i) the use of the Product, Patent
Rights or Licensed Technology in combination with some other product or
pharmaceutical formulation not supplied by Licensor where the Product, Patent
Rights or Licensed Technology itself would not be infringing; or (ii)
modifications of the Product, Patent Rights or Licensed Technology where the
Patent Rights or Licensed Technology, if not modified by or for Licensee, would
not be infringing.
5.4. ASSISTANCE. Each party shall provide to the other Party reasonable
assistance as necessary for the Parties to exploit its rights under this Article
V.
VI. WARRANTIES AND COVENANTS
6.1. MUTUAL WARRANTIES. Each Party represents and warrants to the other
party that (a) it has full right, power and authority to enter into this
Agreement and to carry out the provisions hereof, (b) it has all necessary
corporate approvals for its execution, delivery and performance of this
Agreement, and (c) it has not, and will not during the term of this Agreement,
grant any rights or enter into any agreement that would conflict with the terms
of this Agreement.
6.2. PATENT PROSECUTION. Licensor represents and warrants that its has
filed the Provision Applications with the USPTO, and Licensor agrees to use
commercially reasonable efforts to file and prosecute utility patent
applications deriving priority from the Provisional
9
<Page>
Applications including but not limited to: (a) converting each of the
Provisional Applications to one or more utility patent applications prior to the
one year anniversary of the filing date of the respective Provisional
Application, Licensor and Licensee having cooperated to assure that all Product
embodiments as of the filing date(s) of the utility applications are disclosed
and claimed as appropriate; and (b) filing a PCT Application for each of the
Provisional Applications prior to the one year anniversary of the filing date of
the respective Provisional Application. Licensor shall provide to Licensee
complete copies of the Patent Applications and all related correspondence with
the USPTO and any other patent offices. Licensor shall keep Licensee advised of
and shall cooperate with Licensee with respect to the prosecution of the Patent
Applications, including but not limited to revising or supplementing such Patent
Applications so that they reflect the form of the Product as it may be revised
or supplemented by Licensor or Licensee. Licensor shall pay for the expenses and
costs relating to preparation, prosecution and maintenance of the Patent
Applications and all patents issuing therefrom.
6.3. MARKING. Licensee agrees that each and every Product Commercially
Exploited by it and its Sublicensees hereunder shall be marked with statutory
patent marking. Licensee agrees to comply with all other reasonable directions
from Licensor regarding this notice provision.
6.4. QUALITY STANDARDS. Licensee agrees to maintain reasonable quality
standards for the Product. Licensee agrees to use commercially reasonable
efforts to comply with all applicable federal, state and local laws, and
governmental orders and regulations, including without limitation all FDA
requirements, as they may be in effect from time to time, relating to the
manufacturing, packaging, storage, sale, advertising, promotion, marketing and
distribution of the Product. Licensee's failure to comply with the foregoing
sentence shall not be deemed a breach of this Agreement provided that Licensee,
upon becoming aware of nay failure to comply, takes prompt and commercially
reasonable efforts to come into compliance. Licensee shall have a continuing
obligation to notify Licensor of any citation by any government body, or agency
thereof, for violation of any laws, orders or regulations which remains
uncorrected for a period beyond that permitted by said government body or agency
or of any recall of any of the Product whether undertaken voluntarily by
Licensee or required by any government body or agency. Licensee shall
immediately notify Licensor of any citation not corrected within the said period
permitted. It is understood and agreed that during the term of this Agreement,
Licensor's representative shall have access, no more than once per calendar
month upon reasonable notice and during regular business hours, to the
facilities where any Product is manufactured, packaged and stored for the
purpose of determining that the foregoing quality standards are being
maintained. The expense of such quality control inspections shall be borne by
Licensor. Licensor acknowledges and agrees that all such information reviewed or
obtained by Licensor in any such inspection constitutes Confidential Information
of Licensee. Licensor shall conduct any such inspection using only qualified
individuals, and all such individuals, upon request by Licensee, shall execute
appropriate non-disclosure or confidentiality agreements.
VII. CONFIDENTIAL INFORMATION
7.1. CONFIDENTIAL INFORMATION. Except as otherwise provided in this
Article VII, during the term of this Agreement and for a period of five (5)
years thereafter, each Party shall keep confidential and not disclose or use
(except as contemplated by this Agreement) any
10
<Page>
proprietary or confidential information received from the other Party. This
restriction shall not apply to any information to the extent it (a) is already
known to the recipient at the time of disclosure, (b) is or becomes public
knowledge through no fault of the recipient, (c) is received without an
obligation of confidentiality from a third party having the lawful right to
disclose same, or (d) was independently developed or discovered by the receiving
party without the use of the information disclosed by the disclosing Party.
7.2. PUBLIC ANNOUNCEMENTS. Except to the extent required by applicable
law or regulations, in the reasonable judgment of a Party, or to the extent the
substance thereof has previously been reviewed and released by the Parties or is
in the public domain through no fault of the originating Party, neither Party
shall make any announcement, news release, public statement, publication or
presentation regarding the material terms of this Agreement without the prior
written consent of the other Party, which consent shall not be unreasonably
withheld. The Parties will consult with one another regarding the provisions of
this Agreement to be redacted in any filing made by the parties with regulatory
agencies (e.g., Securities and Exchange Commission) or as otherwise required by
law. The Parties will use commercially reasonable efforts to coordinate the
initial announcement or press release relating to this Agreement such that each
Party's initial announcement or press release may be made contemporaneously.
VIII. TERMINATION
8.1. TERM. Unless terminated earlier, this Agreement shall terminate
upon expiration or termination of all Patent Rights in all jurisdictions;
PROVIDED, HOWEVER, that if no U.S. patent has issued from the Patent
Applications within seven (7) years of the date of the Agreement, Licensee may,
at its option, terminate this Agreement.
8.2. TERMINATION FOR BREACH.
(a) BY LICENSEE. Licensee shall be entitled to terminate this
Agreement by written notice to Licensor in the event that Licensor shall be in
material default of any of its obligations hereunder and shall fail to remedy
any such default within sixty (60) days after written notice thereof by
Licensee.
(b) BY LICENSOR. Licensor shall be entitled to terminate this
Agreement by written notice to Licensee in the event that Licensee shall be in
material default of any of its obligations hereunder and shall fail to remedy
any such default within sixty (60) days after written notice thereof by
Licensor.
8.3. EFFECT OF TERMINATION. Termination of this Agreement shall not
relieve either party of its obligations incurred up to the date of termination.
Upon termination, all rights in the Product, the Patent Rights and Licensed
Technology shall revert to and automatically be assigned to and owned by
Licensor. Upon termination, Licensor shall be the sole proprietor of all rights
in the Product, the Patent Rights and the Licensed Technology. Upon termination
of this Agreement, no Party shall be relieved of any obligations, including any
liability for breach of this Agreement, incurred prior to such termination.
Notwithstanding the foregoing, after the termination of this Agreement, Licensee
shall have the right to make, have made, use, offer for
11
<Page>
sale, sell, and sublicense the Product and the Licensed Technology in such
jurisdiction, and shall owe no royalties to Licensor with respect to such
jurisdictions.
8.4. TERMINATION FOR INSOLVENCY. If either Party shall become insolvent
or make an assignment for the benefit of creditors, or if proceedings in
voluntary or involuntary bankruptcy shall be instituted on behalf of or against
such Party, or if a receiver or trustee of such Party's property shall be
appointed, the other Party shall have the right to immediately terminate this
Agreement at any time by written notice to the insolvent Party.
8.5. SURVIVAL OF OBLIGATIONS; RETURN OF CONFIDENTIAL INFORMATION.
Notwithstanding any termination of this Agreement, the obligations of the
Parties with respect to Claimed Infringement (Section 5.3) and Confidential
Information (Article VII), as well as any other provisions which by their nature
are intended to survive any such termination, shall survive and continue to be
enforceable. Upon any termination of this Agreement, each Party shall promptly
return to each other Party all written Confidential Information, and all copies
thereof, of such other Party.
IX. MISCELLANEOUS
9.1. GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with the laws of the United States of America and the State of
Florida without regard to its rules governing conflicts of law. The parties
hereto, their successors and assigns, consent to the jurisdiction of the United
States District Court for the Middle District of Florida or the appropriate
state court sitting in the State of Florida, Hillsborough County, with respect
to all legal proceedings arising out of or relating to this Agreement and the
parties waive any objection to the proprietary or convenience of venue in such
events.
9.2. WAIVER. The waiver by any Party of a breach or a default of any
provision of this Agreement by any other Party shall not be construed as a
waiver of any succeeding breach of the same or any other provision, nor shall
any delay or omission on the party of a Party to exercise or fail itself of any
right, power or privilege that it has or may have hereunder operate as a waiver
of any right, power or privilege by such Party.
9.3. NOTICES. Any notice or other communication in connection with this
Agreement must be in writing and if by mail, by certified mail, return receipt
requested, and shall be effective when delivered to the addressee at the address
listed below or such other address as the addressee shall have specified in a
notice actually received by the addressor.
If to Licensor: Zengen, Inc.
21800 Oxnard Street
Suite 980
Woodland Hills, CA 91367
Attn: Matthew Burns
Facsimile: 818-887-3883
12
<Page>
If to Licensee: Prestige Brands International, Inc.
26811 South Bay Drive
Suite 300
Bonita Springs, FL 34134
Facsimile: 239-948-8551
9.4. ENTIRE AGREEMENT. This Agreement contains the full understanding
of the Parties with respect to the subject matter hereof and supersedes all
prior understandings and writings relating hereto. No waiver, alteration or
modification of any of the provisions hereof shall be bonding unless made in
writing and signed by the Parties.
9.5. HEADINGS. The headings contained in this Agreement are for
convenience of reference only and shall not be considered in construing this
Agreement.
9.6. SEVERABILITY. In the event that any provision of this Agreement is
held by a court of competent jurisdiction to be unenforceable because it is
invalid or in conflict with any law of any relevant jurisdiction, the validity
of the remaining provisions shall not be affected.
9.7. ASSIGNMENT. Either Party shall have the right to transfer all of
its rights under this Agreement to any successor or assign of all, or
substantially all, such Party's assets or equity interests; PROVIDED, HOWEVER,
that the proposed successor or assign agrees in writing to remain bound by the
terms of this Agreement, including the continued payment of royalties. Other
than as set forth above, neither Party may assign its rights or obligations
hereunder without the prior written consent of each other Party.
9.8. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the Parties hereto and their successors and permitted
assigns.
9.9. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of such together
shall constitute one and the same instrument.
9.10. FORCE MAJEURE. No Party to this Agreement shall be responsible to
the other Party for nonperformance or delay in performance of the terms or
conditions of this Agreement due to acts of God, acts of government, war, riots,
strikes, accidents in transportation, or other causes beyond the reasonable
control of such Party.
9.11. NO PARTNERSHIP. This Agreement does not constitute and shall not
be construed as constituting an agency, partnership or joint venture
relationship between Licensee and Licensor. Licensee shall have no right to
obligate or bind Licensor in any manner whatsoever, and nothing herein contained
shall give or is intended to give any rights of any kind to any third persons.
9.12. COSTS. In the event of any litigation arising out of or with
respect to this Agreement, the non-prevailing party shall pay the costs of the
prevailing party including its reasonable attorneys' fees incurred in connection
therewith through and including the costs of any appeals and appellate costs
relating thereto, and the reasonable attorneys' fees and costs incurred in
connection with any bankruptcy proceeding.
13
<Page>
IN WITNESS WHEREOF, each Party hereto has caused this Agreement to be
executed in their name and by their properly and duly authorized officer or
representative and this Agreement shall be effective and create a binding
obligation of such Party as of the date first above written.
LICENSOR:
ZENGEN, INC., A CALIFORNIA CORPORATION
By: /s/ R. STEVEN DAVIDSON
-----------------------------------
Name: R. Steven Davidson
Title: Chief Executive Officer
Date: 6/03/03
-----------------------------------
LICENSEE:
PRESTIGE BRANDS INTERNATIONAL, INC.,
A VIRGINIA CORPORATION
By: /s/ ELISE DONAHUE
-----------------------------------
Name: Elise Donahue
Title: President/COO
Date: 6/03/03
-----------------------------------
14
<Page>
Portions of this Exhibit were omitted and filed separately with the Securities
and Exchange Commission pursuant to a request for confidential treatment. Such
portions are marked by a series of asterisks.
EXHIBIT A
STABILITY TESTING AND QUALITY ASSURANCE REQUIREMENTS
<Page>
EXHIBIT A
STABILITY TESTING AND QUALITY ASSURANCE REQUIREMENTS
<Table>
<Caption>
PROJECT STATUS
- --------------------------------------------------------------------------------
A. RESEARCH OBJECTIVE: To invent/formulate a quick
dissolving medicated strip for oral use that is capable of
delivering and stabilizing Benzocaine for temporary relief of
sore throat. COMPLETED
B. PROJECT SCOPE: Begin with a comprehensive background
check using experienced patent attorneys. Develop and apply a
patent application strategy that may offer product protection
from competition while meeting medical/sensory needs. Conduct
research & development at Zengen's laboratories to meet all
necessary criteria to accomplish objective above. COMPLETED
C. LABORATORY FORMULATION:
1. Run comprehensive laboratory experiments to identify
an appropriate film forming material. COMPLETED
2. Modify the film forming material/structure to
stabilize actives while maintaining a balance of acceptable
mouth feel and dissolution rates that meet necessary
medicinal and texture and appearance requirements. COMPLETED
3. Identify flavor suppliers and implement an adequate
flavor development program to ensure proper flavor
characteristics and stability. Test prototypes in house using
internal sensory panel to ensure proper flavor balance while
identifying any flavor or product off notes. COMPLETED
4. Identify intense sweeteners for use in medicinal/OTC
products and optimize sweetness profile levels and blends
there of to ensure a quality taste thus increasing product
use compliance and ultimately sales by the consumer. COMPLETED
5. Identify USP quality-cooling agents, menthol,
Benzocaine, fillers, plastisizers, drying agent's
emulsifiers, colors and stabilizers to ensure the proper
matrix for optimum product stability and product processing. COMPLETED
6. Develop mixing and forming procedures for product
scale up and sensory/stability testing. COMPLETED
7. Identify a certified lab that has the capability of
doing USP testing of menthol and Benzocaine. Test prototype
sample formula's made in the Zengen laboratories for active
load levels etc. COMPLETED
</Table>
<Page>
EXHIBIT A
STABILITY TESTING AND QUALITY ASSURANCE REQUIREMENTS
<Table>
8. Design a stability protocol to test experimental
production formula for degradation of menthol and Benzocaine.
Protocol to include testing of primary packaging, microbial
activity, moisture content and hydroscopicity. Identify any
flavor oxidation or adverse product blocking (excessive
sticking of strips to each other). Assure that analytical
test methods are validated and shown to be stability
indicating for benzocaine and menthol. COMPLETED
9. Assist Prestige and Acupac in doing a risk assessment
in regards to product positioning and dosage form (OTC
category), and more specifically in regards to the monograph. COMPLETED
D. MANUFACTURING OBJECTIVE:
1. Source a cGMP manufacturer either in the US or
overseas that could meet strict cGMP compliance for the
manufacture of an OTC drug product while meeting projected
volume requirements. Choose a facility that would ultimately
be approved by our prospective partner Prestige. COMPLETED
2. Assist manufacturer to help ensure that IP, OQ, and PQ
are being addressed in a timely and accurate fashion. COMPLETED
3. Begin a transfer exchange of intellectual property
between Acupac and Zengen R&D to help facilitate a fast and
accurate development program (Stage Two). COMPLETED
4. Disclose and turnover a formula to Acupac
(manufacturer) for review and comment. COMPLETED
5. Run scale-up batches using several formula
modifications to identify the optimal thin film formula to be
approved by Prestige. COMPLETED
6. Oversee processing line modifications to include the
ability to dust thin film with either an active or a
partitioning agent. Zengen researched and purchased the
processing equipment necessary to perform dusting to
facilitate and adhere to a very tight time line. COMPLETED
7. Support, help develop, modify and ensure
implementation of process procedures to ensure proper product
weighing, mixing, storage and processing. COMPLETED
8. Assist in the development of finished product
specifications to ensure product conformance and
reproducibility. COMPLETED
9. Meet with analytical laboratory management, Gibraltar
Labs in NJ (manufacturer's choice) to review project scope
and analytical needs for project/product testing requirements
including stability protocol and future Certificate of
Analysis testing. COMPLETED
</Table>
17
<Page>
EXHIBIT A
STABILITY TESTING AND QUALITY ASSURANCE REQUIREMENTS
<Table>
10. Run experimental production scale-up batches for the
purpose of product stability testing. COMPLETED
11. Run additional production trials to identify process
parameters to ensure a smooth production start up and process
validation. COMPLETED
E. FINISHED PRODUCT SUPPORT:
1. Assist in the transfer of necessary data including raw
material suppliers (proper contacts), MSDS, formula and
process procedures. IN-PROGRESS
2. Ensure proper QC/QA checks have been identified with
the support of Alex Terranova. IN-PROGRESS
3. Help facilitate and or support the manufacturer as
requested to procure and ensure quality product components. IN-PROGRESS
4. Monitor/audit manufacturer during initial product
production to help ensure compliance to cGMP and finished
product specifications. IN-PROGRESS
5. Monitor and notify Prestige of any product stability
abnormalities.
* Note: To date: 40/Ambient, 12 week testing has shown
the product to be stable. IN PROGRESS
</Table>
Assure the first three production batches are process validated.
Perform ongoing, routine stability testing as required.
Assure each production batch complies with predetermined specifications
prior to release.
18