Note: Certain portions of this document have been marked "[C.I.]" to indicate
that confidential treatment has been requested for this confidential
information. The confidential portions have been omitted and filed separately
with the Securities and Exchange Commission.
EXHIBIT 10(G)
2006 MICANOL LICENSE AGREEMENT
THIS AGREEMENT, made and entered into as of this 30 day of January 2006 by and
between Winston Laboratories, Inc., a Delaware Corporation located at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereafter referred to as
"Winston") and Sirius Laboratories, Inc., an Illinois corporation located at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter referred to
as "Sirius") and:
WITNESSETH THAT:
WHEREAS, Winston and Sirius entered into a License Agreement dated February
12, 2004 (the "2004 License Agreement"), which terminates automatically on
January 31, 2006, and Winston and Sirius mutually desire to enter into a new
Agreement herein.
WHEREAS, Winston desires to grant and Sirius desires to obtain an exclusive
license to the Products referred to herein, and to all Proprietary Rights in the
Territory as hereinafter defined.
NOW, THEREFORE, in consideration of the premises and mutual benefits to be
derived hereunder, Winston and Sirius agree that each intending to be legally
bound, hereby agree as follows:
ARTICLE 1 - DEFINITIONS
For the purpose of this Agreement, the following terms shall be defined as
follows:
1.1 "Affiliate(s)" shall mean an entity (i) which directly or indirectly
through one or more intermediaries controls, or is controlled by, or is under
common control with, Winston or Sirius respectively, (ii) which beneficially
owns or holds [c.i.] percent ([c.i.]%) or more of any
class of the Voting Stock of Sirius or Winston, respectively, or (iii) [c.i.]
percent ([c.i.]%) or more of the Voting Stock (or in the case of a Person which
is not a corporation, [c.i.] percent ([c.i.]%) or more of the equity interest)
of which is beneficially owned or held by Sirius or Winston, respectively. The
term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of an entity,
whether through the ownership of Voting Stock, by contract or otherwise.
1.2 "Confidential Information" shall mean any and all written information,
know-how and data, technical and/or non-technical, designated as confidential
and which relates to Products (or the manufacture or use thereof) or Proprietary
Rights.
1.3 "Effective Date" shall be February 1, 2006.
1.4 "Exclusive License" shall mean a license whereby Sirius's rights in the
Territory shall be sole and entire and shall operate to exclude all others
including Winston.
1.5 "Improvements" shall mean all improvements, modifications, line
extensions, including a shampoo containing anthralin, or adaptations to any part
of the Products which have been formulated in a stable form and are intended to
enhance the performance of any of the Products or which might be of commercial
interest in the manufacture, supply or other dealings of or in the Products.
1.6 "Minimum Royalty" shall have the definition set forth in paragraph 3.3.
1.7 "Net Sales" shall mean the gross receipts from sales of Product to
third parties less deductions for (i) [c.i.] and any other [c.i.]; (ii) [c.i.];
and (iii) [c.i.] shall be [c.i.] from computation of Net Sales, but Net Sales
shall [c.i.].
1.8 "Products" or "Product" shall mean all products and all Improvements of
such products containing anthralin, owned, controlled or licensed by Winston or
all Improvements of
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such Products by Sirius, either currently marketed or which could be marketed,
including the existing Psoriatec Product.
1.9 "Proprietary Rights" shall mean any and all intellectual property
rights, including without limitation, patent rights and the Trademarks, in, to,
or covering the Products (including without limitation Improvements), and their
composition, their manufacture or their use in the Territory, including but not
be limited to inventions, ideas, know-how, technology and trade secrets.
1.10 "Quarterly Period" shall mean each of the periods ending on the last
day of April, July, November and January during the term of this Agreement.
1.11 "Royalty Year" shall mean the twelve-month period from February 1 to
January 31.
1.12 "Territory" shall mean the United States of America and its
territories.
1.13 "Trademarks" shall mean the trademarks, brief particulars of which are
set forth in Annexes I and II.
ARTICLE 2 - LICENSE; REPRESENTATION
2.1 During the term of this Agreement, Winston hereby grants to Sirius and
its Affiliates an Exclusive License under the Proprietary Rights owned or
controlled by Winston in the Territory, to make, have made, use, market, sell
and distribute the Products. During the term of this Agreement, Sirius may not
grant sublicenses to the Products in the Territory without Winston's prior
written consent.
2.2 Winston hereby represents and warrants to Sirius and its Affiliates
that it has not licensed, granted, sold, placed any lien upon or otherwise
transferred any rights to the Products or any Proprietary Rights which at any
time have been held by Winston, other than to Sirius
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under this or a previous agreement with Sirius.
ARTICLE 3 - ROYALTIES AND PURCHASE OPTION
3.1 As to Products licensed to Sirius pursuant to Article 2, Sirius shall
pay Winston a royalty equal to 25% of Net Sales of Product sold by Sirius and
its affiliates in the Territory for the first $1,000,000 in yearly Net Sales and
15% on all Net Sales exceeding $1,000,000 each year for the entire term of this
Agreement, subject to the minimum royalty provisions contained in paragraph 3.2
below.
3.2 In the event that earned royalties payable to Winston under Section 3.1
of this Agreement shall fail to amount to the Minimum Royalty, as defined below
in Section 3.3 of this Agreement, in any Royalty Year, Sirius [c.i.] and [c.i.];
provided however in the event any Product sold by Sirius hereunder in any
Royalty Year is subject to Competition from a newly introduced Generic Product,
then in the event the earned royalty does not meet the Minimum Royalty, [c.i.]
and [c.i.] with respect to such Royalty Year. "Competition" shall be deemed to
exist if [c.i.] after the [c.i.], the total unit sales of the Product by Sirius
[c.i.] compared to the [c.i.] sales of the Product. "Generic Product" shall mean
a [c.i.] anthralin cream product that [c.i.], or is represented to the trade
[c.i.], Product.
3.3 The Minimum Royalty shall be three hundred thousand ($300,000) each
Royalty Year, payable [c.i.] as per Article 6.1 of this Agreement.
3.4 Between from [c.i.] and until [c.i.] (so long as the Minimum Royalty
for 2006 exceeds [c.i.] of the Net Sales for the calendar year 2006), on the one
hand, and also from [c.i.] and until [c.i.], on the other hand, Sirius, [c.i.],
can purchase from Winston all rights to Products
December 28, 2005 CONFIDENTIAL
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for a cash payment [c.i.] (a) [c.i.] or (b) [c.i.]. If Sirius does not [c.i.]
during either such time period specified above, Winston will then [c.i.]. Sirius
may [c.i.] by given written notice to Winston of such exercise within such time
periods together with remitting the applicable payment to Winston. Upon Sirius
making such payment to Winston, this Agreement shall terminate and (X) Sirius
shall be assigned by Winston and Sirius shall own all right, title and interest
in and to Product and the Proprietary Rights which had been licensed to Sirius
hereunder, and (Y) Sirius shall owe Winston no further amounts or royalties
regarding the Products whatsoever, and (Z) Winston agrees to execute such
documents, make such filings and take such other actions as are necessary or
useful to give full effect to all of the foregoing. If the later of the two
option dates described in this Article 3.4 has not been exercised by such time,
this Article 3.4 shall survive the expiration of this Agreement under Article
10.1 and continue pursuant to its terms. However, this Article 3.4 shall
terminate in its entirety in the event of a termination of this Agreement under
Article 10.2 occurring prior to the exercise of an option described in this
Article 3.4.
December 28, 2005 CONFIDENTIAL
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ARTICLE 4 - PROMOTION
4.1 During the term of this Agreement, Sirius agrees to [c.i.] to maintain
trade distribution of the Products.
ARTICLE 5 - INVENTORY
5.1 Sirius shall be responsible for the production and manufacturing of all
Product inventory sold and distributed under the Agreement. Upon termination of
this Agreement Sirius shall [c.i.] and [c.i.] to Winston [c.i.]. Winston shall
not be [c.i.] any [c.i.] or [c.i.] with an expiration date that is within [c.i.]
of the [c.i.] of such inventory by Winston from Sirius.
ARTICLE 6 - PAYMENTS AND RECORDS
6.1 On or before the last day of February, May, August and November of each
year during the term of this Agreement, Sirius shall provide Winston with a
complete written statement ("Report") showing the [c.i.]. Each Report shall
specify the [c.i.] and [c.i.], together with [c.i.] which shall have [c.i.]. The
[c.i.] sold shall be [c.i.] in (i) [c.i.], and (ii) [c.i.]. Sirius shall include
with this Report a [c.i.] to Winston [c.i.].
In the event Sirius or its affiliates [c.i.] in accordance with this
Section 6.1, then Sirius shall [c.i.] at the rate of [c.i.] percentage points
over the [c.i.] from the date [c.i.] is due.
6.2 During the term of this Agreement and for a period of [c.i.] years
after termination, Sirius shall keep true records and books of accounts of all
operations subject to this
December 28, 2005 CONFIDENTIAL
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Agreement, including all data necessary for calculation of royalties payable to
Winston hereunder, and shall permit such records and books of account to be
examined, from time to time, during the regular business hours by a Certified
Public Accountant to such extent as may be reasonably necessary for Winston to
determine the accuracy of such calculation.
ARTICLE 7 - PATENTS AND TRADEMARKS
7.1 It is agreed and understood that all of Winston's copyrights and
trademarks used in conjunction with Products including literature, trade dress
and labeling, is and shall remain the property of Winston.
7.2 It is agreed that upon termination of this Agreement, Sirius shall
assign to Winston, [c.i.], all trademarks owned by Sirius solely relating to the
Products, including those listed in Annex II of this Agreement.
ARTICLE 8 - GENERAL LIABILITY AND PRODUCT LIABILITY
8.1 Sirius and its Affiliates shall indemnify, defend and hold Winston and
its Affiliates harmless against any and all [c.i.] including [c.i.], which
Winston or its Affiliates may hereinafter incur, suffer or be required to pay in
respect of any claims arising out of [c.i.] or [c.i.] under any [c.i.] or [c.i.]
following Sirius's completed purchase from Winston of the rights to the Products
and which results in [c.i.] of any person or animal caused or alleged to have
been caused by the use, sale, or manufacture of the Products by Sirius or its
Affiliates. This obligation shall survive expiry or any termination of this
Agreement.
8.2 Sirius shall [c.i.] maintain with a reputable insurance company during
the life of this Agreement, and for the duration Sirius continues to market
Products following termination of this Agreement and for up to [c.i.],
appropriate product liability insurance covering the
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warehousing, use, distribution, marketing, promotion and sale of the Products,
such insurance to provide cover to the extent required by local laws or
pharmaceutical industry practice, whichever is the higher, but in any case
[c.i.] dollars (US [c.i.]). Upon request of Winston, Sirius shall provide
Winston with a copy of the policy under which such insurance cover is provided
together with a copy of the most recent renewal receipt.
ARTICLE 9 - CONFIDENTIAL INFORMATION
9.1 Winston and Sirius expressly acknowledge and agree that the
Confidential Information is highly valuable confidential and trade secret
information of each of the parties, and that the unauthorized disclosure by
Winston or Sirius of any part of the Confidential Information would cause
substantial and irreparable injury to the other party.
9.2 Winston and Sirius shall both use their reasonable efforts and
diligence to safeguard the Confidential Information of the other party and to
protect it against disclosure, misuse, espionage, loss and/or theft. Neither
Winston nor Sirius shall disclose any of the Confidential Information of the
other party to any third party other than an Affiliate or marketing partner or a
prospective alternative supplier of the Products, except pursuant to
confidentiality agreements which impose no lesser obligations of confidentiality
than those set out in this Agreement. Neither Winston nor Sirius shall use any
of the Confidential Information of the other party except as permitted by this
Agreement. If either party is required by law or court order to disclose any
Confidential Information, it shall: (i) notify the other party in writing as
soon as possible, but in no event less than [c.i.] prior to any such disclosure,
if practicable; and (ii) use [c.i.] to preserve the confidentiality of such
Confidential Information consistent with applicable law and to limit any such
disclosure to the minimum disclosure necessary to comply
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with such law or court order. Notwithstanding anything to the contrary contained
herein, Winston or Sirius may, if necessary for purposes of filing for,
obtaining or maintaining regulatory approval of a Product or if otherwise
required by governmental authority, disclose Confidential Information to a
governmental authority for such purposes or if so required; provided, however,
that either party shall (i) notify the other party in writing no less than
[c.i.] prior to any such disclosure, if practicable, of the purpose for, and
Confidential Information to be included in, such disclosure; and (ii) take all
steps [c.i.] to limit any such disclosure as shall be reasonably necessary or
required and to request such governmental authority to maintain the
confidentiality of any information so disclosed.
9.3 The obligations of this Article 9 do not apply to any information that:
(1) is or becomes publicly known or publicly disclosed or in the public domain
through no fault of the receiving party; (2) is already known to the receiving
party at the time of disclosure; (3) is independently developed by the receiving
party without the use of the information provided by the disclosing party; or
(4) is received by the receiving party from a third party under no obligation of
confidentiality to the disclosing party.
9.4 Notwithstanding the foregoing confidentiality obligations, Sirius shall
not be deemed to have disclosed Confidential Information of Winston due to the
fact that such Confidential Information can be discerned from a Product, either
through reverse engineering or observation or due to the nature of the Product
itself.
9.5 The obligations of this Article 9 shall survive any termination or
expiration of this Agreement and remain in full force and effect.
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ARTICLE 10 - TERMINATION
10.1 Unless terminated earlier as provided in this Article 10 or under
Section 3.4, this Agreement shall expire on January 31, 2008, unless extended by
mutual written consent of both parties.
10.2 Either party may terminate this Agreement upon the occurrence of any
of the following by giving the other party [c.i.] days' written notice:
(i) Upon or after bankruptcy, insolvency, or dissolution of the other
party (except upon merger into a surviving corporation); or
(ii) Upon or after the material breach of any provision of this
Agreement by the other party if the breach is not cured within
[c.i.] days after written notice thereof to the party in default.
10.3 In the event of termination under Article 10.2: (a) all Confidential
Information supplied by either party to the other shall be returned forthwith to
the originating party; (b) the Proprietary Rights licensed to Sirius hereunder
shall forthwith rest with Winston; and (c) Winston agrees that it shall not use
the name or designation of Sirius or any of its Affiliates or, subject to
Section 7.2, any trademark owned or controlled by Sirius or any of its
Affiliates, in any marketing, promotional or sales activities relating to the
Products.
10.4 Termination shall not extinguish any rights or obligations of the
parties which accrued prior to termination or either party's rights under
Section 3.4.
ARTICLE 11 - MISCELLANEOUS PROVISIONS
11.1 Notice - Except as otherwise expressly provided herein, any notice,
consent or document required or permitted hereunder shall be given in writing
and it or any certificates or
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other documents delivered hereunder shall be deemed effectively given or
delivered (as the case may be) upon personal delivery (professional courier
permissible) or upon facsimile transmission (with receipt confirmed by
telephone), or on the third Business Day after being sent by United States
certified or registered mail (postage prepaid, return receipt requested) or the
seventh Business Day after being sent by international certified or registered
airmail (postage prepaid, return receipt requested). Such certificates,
documents or notice may be personally delivered to an authorized representative
of Sirius or Winston (as the case may be) at any address where such authorized
representative is present and otherwise shall be sent to the following address:
If to Winston: Winston Laboratories, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇ ▇▇▇▇
Attn: ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇, MD
If to Sirius: Sirius Laboratories, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇
11.2 Entire Agreement - This Agreement (including the schedules and
exhibits attached hereto) and the documents delivered pursuant hereto constitute
the entire agreement and understanding between the parties, and supersedes any
and all prior agreements and understandings relating to (a) the license,
purchase or sale of the Products or Proprietary Rights and (b) the subject
matter of this Agreement and the transactions contemplated thereby.
11.3 Governing Law - This Agreement shall be interpreted, construed and
enforced in accordance with the laws of the [c.i.]. Jurisdiction for any legal
action brought under this Agreement will be in the [c.i.] and both parties agree
not to contest such jurisdiction.
11.4 Force Majeure - The failure of either party to perform any term of
this Agreement when caused by or resulting from fire, floods, embargoes,
government regulations, wars, acts of
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war (whether war be declared or not), insurrections, riots, civil commotions,
strikes, lockouts, job actions, acts of God, or any other cause beyond the
control of such party, and which is a result thereof, shall not constitute a
default or breach under any term of this Agreement.
11.5 Successors and Assigns - This Agreement shall be binding upon and
inure to the benefit of Winston and its successors and assigns and shall be
binding upon and inure to the benefit of Sirius and its successors and assigns;
provided, however, that neither party shall assign this Agreement or any of its
respective rights, duties or obligations hereunder without the prior written
consent of the other party, which consent shall not be unreasonably withheld;
provided that Sirius may assign this Agreement to its Affiliates. A merger or
acquisition involving Sirius or any of its Affiliates shall not be deemed to be
an assignment.
11.6 Severability - Should any part of this Agreement for any reason be
declared invalid or unenforceable, such decision shall not affect the validity
or enforceability of any remaining portion, which remaining portion shall remain
in force and effect as if this Agreement had been executed with the invalid or
unenforceable portion thereof eliminated and it is hereby declared that the
intention of the parties hereto that they would have executed the remaining
portion of this Agreement without including therein any such part, parts, or
portion which may, for any reason, be hereafter declared invalid or
unenforceable. The parties shall endeavor to carry out the purpose of the
invalid or unenforceable portion to the extent permitted by law.
11.7 Survival - Articles 7, 8 and 9 and any other provisions required to
interpret and enforce the parties' rights and obligations under this Agreement
shall survive the termination of this Agreement to the extent required for full
observation and performance of this Agreement by the parties in accordance with
its terms.
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11.8 Arbitration. In the event of any dispute or difference arising out of
or relating to this Agreement, the parties hereto shall use their best endeavors
to settle such dispute or differences. To this effect they shall consult and
negotiate with each other, on good faith and understanding of their mutual
interests, to reach a just and equitable solution satisfactory to all parties.
If they do not reach such a solution within a period of [c.i.] days after notice
by one party to the other, then the disputes or differences shall be finally
settled by arbitration in accordance with Rules of [c.i.]. The arbitration shall
be conducted by [c.i.] selected and agreed by the parties hereto, or, in the
event that the parties are not able to agree on the selection of [c.i.] will
be appointed by the American Arbitration Association. The arbitration shall take
place in [c.i.]. The arbitration award [c.i.] on the parties, [c.i.] and shall
deal with the question of the costs of arbitration and all matters related
thereto. Judgement upon the award rendered may be entered in any court having
jurisdiction.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate the day and year first above written.
WINSTON LABORATORIES, INC. SIRIUS LABORATORIES, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------- ------------------------------------
Title: CEO Title: President & CEO
Date: 1/30/06 Date: 1/30/06
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ANNEX I
U.S. TRADEMARKS
Trademark Number Class Next renewal date
--------- ------- ----- ------------------
Micanol 2003319 5 September 24, 2006
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ANNEX II
TRADEMARKS OWNED BY SIRIUS
Trademark Number Class Next renewal date
--------- ------ ----- -----------------
Psoriatec 2780636 005 November 4, 2013
December 28, 2005 CONFIDENTIAL
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