LICENSE AGREEMENT

 

 

                                                             Exhibit 10.103

 

                              LICENSE AGREEMENT

                              -----------------

 

      This License Agreement ("Agreement") effective as of the 24th day of

December 2003 (the "Effective Date"), by and among IGI, Inc., a Delaware

corporation ("IGI"), having its principal place of business at 105 Lincoln

Avenue, Buena, New Jersey 08310, and Michael F. Holick, MD, PhD ("HOLICK"),

residing at 31 Bishop Lane, Sudbury, MA 01776, and A&D Bioscience Inc.

("A&D"), a Massachusetts corporation wholly owned by Holick, with its

principal place of at 31 Bishop Lane, Sudbury, MA 01176.

 

                                 WITNESSETH

                                 ----------

 

      WHEREAS, HOLICK represents and warrants that he is the sole owner, free

and clear of any and all liens, encumbrances, claims or other impairments, of

and to all rights, title and interest in and to certain intellectual property

and inventions (as described in the patents and patent applications set forth

on Appendix A annexed hereto and made a part of this Agreement), and

information, know-how, data, materials, trade secrets and other proprietary

information relating to Parathyroid Hormone Related Peptide ("PTH")   drugs,

formulations, methods, usage and technologies, including but not limited to

the PTH technologies developed by HOLICK useful in the treatment of psoriasis

and hair loss (designated herein as the "PTH Technologies");

 

      WHEREAS, HOLICK and A&D represent and warrant that A&D is the sole

owner by assignment of any and all rights, title and interest in and to

certain intellectual property and inventions (as described in the patent

applications set forth on Appendix B annexed hereto and made a part of this

Agreement), and information, know-how, data, materials, trade secrets and

other proprietary information relating to glycoside drugs, formulations,

methods, usage and technologies, including but not limited to the sugar

conjugate platform   technology useful for a wide family of drugs (designated

herein as the "Glycoside Technologies");

 

      WHEREAS, A&D further represents and warrants that it is in possession

of a valid and biding Assignment executed by all Inventors which by its terms

and operation fully and permanently assigns to A&D, free and clear of any and

all liens, encumbrances, claims or other impairments, any and all of his

rights, title and interest in and to the Glycoside Technologies and each and

all of the pending patent applications set forth on Appendix B annexed hereto

and made a part of this Agreement; and

 

      WHEREAS, HOLICK and A&D, respectively, represent and warrant that they

have the sole right to grant an exclusive license for the PTH Technologies

and the Glycoside Technologies under the terms and conditions set forth

herein;

 

      WHEREAS, IGI states that it is in the business of developing,

formulating, producing and manufacturing cosmetics, fragrances, consumer

products, and topical dermatological products, and desires to acquire

exclusive rights from HOLICK and A&D, respectively, in and to the PTH

Technologies and the Glycoside

 

 

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Technologies, including without limitation the products, and methods and

processes for making and using the PTH Technologies and the Glycoside

Technologies in the Field, and seeks the right to grant sublicenses of the

PTH Technologies and Glycoside Technologies to its Affiliates and to third

parties, and to grant its Affiliates and sublicensees the   right to grant

further sublicenses to third parties; and

 

      WHEREAS HOLICK and A&D, respectively, are willing to grant such an

exclusive license;

 

      NOW, THEREFORE, in consideration of the mutual promises and covenants

herein contained, and other good and valuable consideration, the receipt and

sufficiency of which is acknowledged by the parties hereto, IGI and HOLICK

and A&D agree as follows:

 

                           ARTICLE I - DEFINITIONS

                           -----------------------

 

      1.1    Licensed Technology.   The term "Licensed Technology" shall mean

any and all data, information, technologies, formulations, know-how,

processes, techniques, methods, skill, proprietary information, trade

secrets, developments, discoveries and inventions, and other proprietary

material relating to the PTH Technologies and the Glycoside Technologies,

including, but not limited to the improvements on such inventions in the

Field, which arise during the course of this Agreement .

 

      1.2    Licensed Patent Rights.   The term "Licensed Patent Rights" shall

mean each and all United States and foreign patents and patent applications

for any and all patents for the License Technology in the Field, including,

without limitation, each and all United States, Foreign and International

patents and patent applications set forth on Appendix A and Appendix B

annexed hereto and made a part of this Agreement, and all issued divisions,

continuations, continuations-in-part, reexaminations, reissues and extensions

thereof.

 

      1.3    Licensed Products.   The term "Licensed Products" shall mean any

and all products, the development, formulation, manufacture, use,

distribution or sale of which is within the scope of the Licensed Patent

Rights.

 

      1.4    Affiliates.   The term "Affiliates" shall mean any corporation or

other business entity, directly or indirectly, controlling, controlled by or

under common control with a party.

 

      1.5    Territory.   The term "Territory" shall mean all countries in the

world.

 

      1.6    Field.   The term "Field" means the any and all uses of the PTH  

Technologies and the Glycoside Technologies, including, but not limited to,

the PTH Technologies for cosmetics, consumer   products, and topical

dermatological products for treating psoriasis and hair loss, and the

processes for making the same.

 

      1.7    Sublicense Agreement.   The term "Sublicense Agreement" shall mean

a valid and enforceable written agreement fully executed by IGI and a third

party pursuant to the terms of which a sublicense is granted

 

 

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by IGI to the third party to make, have made, use and/or sell Licensed

Products in the Field using the Licensed Technology covered by a Licensed

Patent Rights.

 

      1.8    Milestone Payment.   The term "Milestone Payment" shall mean only

to include a payment of a fixed lump sum amount that a third party is

required to make to IGI under the terms of a Sublicense Agreement (as defined

in Section 1.7 above) upon either on an exact specified future date that is

at least one (1) year subsequent to the effective date of the Sublicense

Agreement, and/or upon the occurrence or happening of certain specified

events or acts contingent to the requiring that such payment be made (e.g.,

payment of $X due upon receipt of FDA approval for Drug X ), but shall

expressly exclude without limitation (i) any and all lump sum payments made

or received by IGI upon the execution of a Sublicense Agreement or at any

time within one (1) year thereafter, (ii)   any and all royalties, commissions

or other payments based on a percentage of sales made to or received at any

time by IGI under a Sublicense Agreement, (iii)   payments to IGI in

reimbursement or contribution of fees, expenses, costs or other obligations

incurred at any time under a Sublicense Agreement to protect, promote,

develop, prosecute, oversee and/or register any of the intellectual property

rights related to the development of the Licensed Technology;   and (iv) any

and all   payments made to or received at any time by IGI as consideration for

or otherwise attributed to any tangible or intangible property, assets,

goods, intellectual property or other rights of any kind acquired, licensed,

assigned, leased, sold or otherwise transferred by IGI to the third party as

part or incident to a Sublicense Agreement.

 

                             ARTICLE II - GRANT

                             ------------------

 

      2.1    Exclusive License.   HOLICK and A&D, respectively, hereby grant to

IGI an exclusive license for a term of the longer of twenty (20) years or the

life of each and all   patents for the Licensed Technology in the Field,

including, without limitation, the patents and patent applications set forth

on Appendix A and Appendix B annexed hereto and made a part of this

Agreement, with the right to grant sublicenses, as well as the right of its

sublicensees to grant further sublicenses, to make, have made, use,

distribute and sell Licensed Products in the Field using the Licensed

Technology covered by the Licensed Patent Rights throughout the Territory.

 

                     ARTICLE III - PAYMENTS AND OPTIONS

                     ----------------------------------

 

      3.1    Payments.   In consideration of the exclusive license granted to

IGI hereunder, HOLICK shall receive payments from IGI, as follows:

 

            i.     Non-refundable advance payment of $50,000 was received by

                  HOLICK from IGI upon execution of the Memorandum of

                  Agreement on September 26, 2003;

 

            ii.    Within five (5) days of the execution of a Sublicense

                  Agreement IGI shall make payment to HOLICK in the amount of

                  $236,000; provided, however, nothing contained in this

                  Agreement shall require IGI to sublicense to a third party

                  any of its rights acquired hereunder to any of the Licensed

                  Technology covered by the Licensed Patent Rights, and IGI

                  shall have no obligation to make payment to HOLICK in the

                  foregoing sum of

 

 

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                  $236,000 or any other amount if for any reason whatsoever

                  IGI does not grant a sublicense to a third party and/or

                  enter into a Sublicense Agreement.

 

      3.2    Options.   As additional consideration hereunder, within thirty

(30) days of the execution of this Agreement, IGI shall grant to HOLICK

options to purchase up to but not exceeding a total of 300,000 shares of IGI

Common Stock in accordance with and to the extent authorized under the terms

and conditions of the Company's stock options plans.    To the extent

permitted by the Company's stock options plans, the options granted to HOLICK

under this Section 3.2 shall vest at the earliest of the following:   (a)  

300,000 options upon the execution of a Sublicense Agreement relating to the

PTH Technologies, (b) 300,000 options one year after the date of grant, or

(c) 100,000 options each year after the date of grant during which and

provided Dr. Holick remains an employee of IGI.

 

      3.3    Right to Terminate As to PTH Technologies.   If following 180 days

from the Effective Date of this Agreement set forth above, IGI has not either

(a) entered into or executed a Sublicense Agreement relating to the PTH

Technologies, or (b) otherwise raised sufficient capital to provide the

necessary financial resources to fund the Phase I of the NDS ("New Drug

Study") Human Clinical Trial   for Alopecia, HOLICK shall have the right upon

ten (10) business days written notice to IGI to terminate this Agreement as

it relates to the PTH Technologies revoking all rights granted hereunder

thereto; PROVIDED, HOWEVER, that no such termination under this Section 3.3

shall be effective unless and until HOLICK returns to IGI in full (i) any and

all payments received by HOLICK under Section 3.1 of this Agreement, (ii)  

any and all unexercised options received by HOLICK from IGI under Section 3.2

of this Agreement, and (iii) any and all other amounts paid or incurred by

IGI under Sections 5.1 and/or 5.2 of this Agreement.

 

      3.4    Right to Terminate As to Glycoside Technologies.   If following 90

days from the Effective Date of this Agreement set forth above, IGI has not

entered into or executed a Sublicense Agreement relating to the Glycoside

Technologies, A&D shall have the right upon ten (10) business days written

notice to IGI to terminate this Agreement as to only the Glycoside

Technologies   revoking all rights granted hereunder thereto.

 

               ARTICLE IV --   SUBLICENSE AND ROYALTY PAYMENTS

               ----------------------------------------------

 

      4.1    Sublicense Milestone Payments.   In the event IGI grants a third

party a sublicense to make, have made, use and sell Licensed Products in the

Field using the Licensed Technology covered by a Licensed Patent Right, IGI

shall subject to its right to reimbursement under Section 4.6 of this

 

 

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Agreement pay to HOLICK and/or A&D, as the case may be relative to the

Licensed Technology at issue, 50% of the gross amount of any Milestone

Payments received by IGI from a third party as consideration for the

sublicense rights granted to such third party under a Sublicense Agreement,

less (i) 50% of any and all transactional fees and expenses incurred by IGI

relating thereto, including attorney fees, brokerage commissions, finder

fees, bonuses and awards to IGI personnel responsible for consummation of the

transaction, accounting fees, filing fees, search fees and other professional

service fees; (ii) any and all taxes; (iii) any and all liabilities and other

obligations assumed by IGI under the terms of the agreement granting the

sublicense; (iv) any and all amounts paid by IGI to HOLICK under Section 3.1

of this Agreement as of the date of the Milestone Payment at issue which have

not already been otherwise recovered by IGI under this Agreement as of such

date;   (v) any and all amounts equal to the value of the unexercised options

received by HOLICK under Section 3.2 of this Agreement as of the date of the

Milestone Payment at issue which has not already been otherwise recovered by

IGI under this Agreement as of such date;   (vi) any and all costs, fees and

other expenses made, paid, assumed or incurred by IGI under Sections 5.1

and/or 5.2 or any other provision of this Agreement as of the date of the

Milestone Payment at issue which has not already been otherwise recovered by

IGI under this Agreement as of such date; and (vii) any and all amounts of

the Milestone Payment received by IGI as consideration for or otherwise

attributed to any and all tangible or intangible property, assets, goods,

intellectual property or other rights of any kind acquired, licensed,

assigned, leased, sold or otherwise transferred by IGI to the third party as

part of or incident to the transaction and/or agreement that granted the

sublicense rights at issue.

 

      4.2    Sublicense Royalty Payments.   Subject to IGI's right to

reimbursement under Section 4.6 of this Agreement, IGI shall pay HOLICK

and/or A&D, as the case may be relative to the License Product sale at issue,

as annual royalties of 50% on the Net Sales Amount received by IGI on the

sale of Licensed Products to sublicensees from the Effective Date hereof

until the expiration of the Licensed Patent Right used to make such Licensed

Product, with no further payments of any kind be being due to HOLICK and/or

A&D, as the case may be relative to the License Product sale at issue, after

the date thereof.   For the purpose of this Agreement, "Net Sales Amount"

shall mean the gross amounts received by IGI from the sale of Licensed

Products to a sublicensee, less the aggregate of the following amounts:   (i)

discounts, including cash discounts, off-invoice allowances or rebates

actually allowed or granted, provided that IGI does not receive any payments

or consideration for such discounts, (ii) credits or allowances actually

granted by IGI upon claims or returns; (iii) freight, insurance and

transportation

 

 

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charges; (iv) all sales taxes, excise taxes and other taxes or duties; and

(v) additional delivery charges for "cash-on-delivery" orders.   Sales are

considered made for the purposes of this Agreement when invoiced by IGI to

sublicensee.

 

      4.3    Books and Records.   IGI shall, and shall maintain complete and

accurate records of sales of all Licensed Products to sublicensees and all

royalty payments due to HOLICK and/or A&D hereunder, and IGI shall deliver to

HOLICK and/or A&D, as the case may be, within forty-five (45) days after the

close of each calendar year, a true and accurate written report, certified as

true and correct by an officer of IGI, setting forth the gross dollar amounts

received by IGI for the sales of Licensed Products to sublicensees; the

calculation of the Net Sales Amount; and the computation of the royalties to

be paid to HOLICK and/or A&D, as the case may be relative to the License

Product sale at issue, by IGI for such period. Simultaneously with providing

the report required in this Section 4.3, IGI shall pay to HOLICK an/or A&D,

as the case may be,   the entire amount of royalties due to HOLICK and/or A&D,

as the case may be, for the calendar year on account of which such report is

made and submitted.

 

      4.4    Right to Audit.   HOLICK and A&D shall have the right, at his own

expense, to request an audit of any annual period ending not more than two

(2) years prior to the date of such request, and to appoint an independent

accountant to perform such audit.   The independent accountant appointed by

HOLICK and/or A&D shall have access to the business records of IGI which are

necessary or appropriate to verify the royalties payable to HOLICK and/or

A&D, as the case may be, pursuant to this Agreement.   The independent

accountant shall keep confidential all information received from IGI, except

for information necessary for disclosure to HOLICK and/or A&D, as the case

may be, to report on the accuracy of IGI's reports.   In the event that a

deficiency of ten percent (10%) or more is discovered between the actual

royalty pay