<PAGE>
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 100
Fairway Drive, Suite 134, Vernon Hills, Illinois 60061 (hereafter
referred to as
"Winston") and Sirius Laboratories, Inc., an Illinois corporation
located at 100
Fairway Drive, Suite 130, Vernon Hills, Illinois 60061 (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
<PAGE>
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
December 28, 2005
CONFIDENTIAL
Page 2 of 16
<PAGE>
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
December 28, 2005
CONFIDENTIAL
Page 3 of 16
<PAGE>
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
Page 4 of 16
<PAGE>
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
Page 5 of 16
<PAGE>
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
