MANAGEMENT SERVICES AGREEMENT

 

THIS MANAGEMENT SERVICES AGREEMENT (this “Agreement”), effective as of the last
date provided on the signature page (the “Effective Date”), is made by and
between Eton Pharmaceuticals, Inc., a Delaware corporation (the “Company”) and
Imprimis Pharmaceuticals, Inc., a Delaware corporation (the “Manager”).

 

WHEREAS, the Company is in need of certain services in order to operate prior to
retaining the services of its own employees and third-party consultants.

 

WHEREAS, the Company wishes to retain the Manager to provide certain services to
the Company, and the Manager is willing to provide such services on the terms
set forth below.

 

NOW, THEREFORE, in consideration of the premises and the respective mutual
agreements, covenants, representations and warranties contained in this
Agreement, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:

 

1. Appointment of Manager. The Company appoints the Manager and the Manager
accepts appointment on the terms and conditions provided in this Agreement as
advisor to the Company. The parties expressly acknowledge that Manager is an
affiliate of and equity holder in the Company.

 

2. Board of Directors Supervision. The activities of the Manager to be performed
under this Agreement shall be subject to the supervision of the Board of
Director of the Company (the “Board”) or the Company’s Chief Executive Officer
and subject to reasonable policies not inconsistent with the terms of this
Agreement adopted by the Board and in effect from time to time. Where not
required by applicable law or regulation, the Manager shall not require the
prior approval of the Board to perform its duties under this Agreement.

 

3. Services of the Manager. Subject to any limitations imposed by applicable law
or regulation, the Manager, by and through itself and/or such Manager’s
successors, assigns, affiliates, officers, employees and/or representatives and
third parties, shall render or cause to be rendered general business services to
the Company as requested from time to time by the Company and agreed to by the
Manager, which services may include certain human resources activities, web
services, bookkeeping and other related services (the “Services”). The Manager
shall provide and devote to the performance of this Agreement such employees,
affiliates and agents of the Manager as the Manager shall deem appropriate to
the furnishing of the Services hereunder. The Manager will devote such time and
efforts to the performance of the Services contemplated hereby as the Manager
deems reasonably necessary or appropriate; provided, however, no minimum number
of hours is required to be devoted by the Manager on a weekly, monthly, annual
or other basis. Company acknowledges that the Manager’s Services are not
exclusive to the Company or their respective subsidiaries and that the Manager
may render similar Services to other persons and entities. The parties
understand that the Company may at times engage one or more advisers to provide
Services in addition to Services provided by the Manager under this Agreement.

 

4. Independent Contractor. The Manager shall be an independent contractor, and
nothing in this Agreement shall be deemed or construed to (i) create a
partnership or joint venture between the Company and the Manager, (ii) cause the
Manager to be responsible in any way for the debts, liabilities or obligations
of the Company or any other party, or (iii) cause the Manager or any of their
employees, partners or members to be officers, employees or agents of the
Company.

 

   

 

 

5. Expenses. The Company shall pay to the Manager on demand all Reimbursable
Expenses whether incurred prior to or following the date of this Agreement. As
used herein, “Reimbursable Expenses” means (i) all out-of-pocket expenses
incurred relating to the Services provided by the Manager to the Company from
time to time (including, without limitation, all travel related expenses), (ii)
all out-of-pocket legal expenses incurred by Manager or its affiliates in
connection with the enforcement of rights or taking of actions under this
Agreement or any related documents or instruments, and (iii) all expenses
incurred by the Manager or its affiliates on behalf of the Company, including in
connection with its management and operations, whether incurred prior to or
following the date of this Agreement.

 

6. Compensation of Manager. In consideration of the Services to be rendered, the
Company will pay to the Manager a monthly fee of Ten Thousand Dollars ($10,000)
(the “Consulting Fee”), payable on the 1st business day of each calendar month.
If any restrictions prohibit the payment of any installment of the Consulting
Fee, such Consulting Fee installment shall accrue and the Company shall make
such installment payment as soon as it is permitted to do so under such
restrictions. If the Company acquires or enters into any additional business
operations after the date of this Agreement, the Company and the Manager will,
prior to the acquisition or prior to entering into the business operations, in
good faith, determine whether and to what extent the Consulting Fee should be
increased as a result thereof. Any increase will be evidenced by a written
supplement to this Agreement signed by each of the Company and the Manager.

 

7. Term. This Agreement shall commence on the Effective Date and shall remain in
effect until terminated pursuant to this Section. Either party shall have the
right to terminate this Agreement at any time for any reason upon thirty (30)
days written notice. No termination of this Agreement, whether pursuant to this
Section or otherwise, shall affect the Company’s obligations with respect to the
fees, costs and expenses incurred by the Manager in rendering Services hereunder
and not reimbursed by the Company as of the effective date of such termination.
In addition, the provisions of Sections 8, 9, 15, 16 and 20 shall survive the
termination of this Agreement and remain binding and in effect.

 

8. Liability. The Manager (including any person or entity acting for or on
behalf of the Manager) shall not be liable for any mistakes of fact, errors of
judgment, or losses sustained by the Company or for any acts or omissions of any
kind (including acts or omissions of the Manager), except to the extent caused
by intentional misconduct of the Manager as finally determined by a court of
competent jurisdiction. In no event will Manager (including any person or entity
acting for or on behalf of the Manager) be liable to the Company or any of their
affiliates for any indirect, special, incidental or consequential damages,
including, without limitation, lost profits or savings, whether or not such
damages are foreseeable, or for any third party claims (whether based in
contract, tort or otherwise), relating to, in connection with or arising out of
this Agreement, before or after termination of this Agreement, including without
limitation the services to be provided by the Manager hereunder, or for any act
or omission that does not constitute intentional misconduct of the Manager or in
excess of the fees received by the Manager hereunder.

 

9. Indemnification of Manager. The Company hereby agrees to indemnify and hold
harmless the Manager and its present and future officers, directors, affiliates,
employees and agents (“Indemnified Parties”) from and against all third party
losses, claims, liabilities, suits, costs, damages and expenses (including
attorneys’ fees) (collectively, “Claims”) arising from their performance of
Services hereunder, except to the extent any Claims arise from the an
Indemnified Party’s intentional misconduct. The Company further agrees to
reimburse the Indemnified Parties for any cost of defending any such action or
investigation (including attorneys’ fees and expenses), subject to an
undertaking from such Indemnified Party to repay the Company if such party is
determined not to be entitled to such indemnity.

 

   

 

 

10. Assignment. Without the consent of the Manager, the Company shall not
assign, transfer or convey any of its rights, duties or interest under this
Agreement, nor shall it delegate any of its obligations or duties hereunder. The
Manager shall not assign, transfer or convey any of its rights, duties or
interest under this Agreement, nor shall it delegate any of its obligations or
duties under this Agreement, except that the Manager may transfer its rights and
delegate its obligations hereunder to its affiliates.

 

11. Notices. Any notice or other communication required or permitted to be made
or given under this Agreement to either party shall be in writing and shall be
sufficiently given if (i) hand delivered, (ii) sent by overnight guaranteed
delivery service, such as Federal Express or UPS; or (iii) sent by facsimile
transmission or electronic mail during addressee’s normal business hours, with a
duplicate copy sent by overnight delivery or certified or registered mail
(except for any notice of termination which must be sent by method (i) or (ii)),
addressed as follows:

 

If to the Company: Eton Pharmaceuticals, Inc.   12264 El Camino Real, Suite 350
  San Diego, CA 92130   Attn: Andrew R. Boll     If to the Manager: Imprimis
Pharmaceuticals, Inc.   12264 El Camino Real, Suite 350   San Diego, CA 92130  
Attn: Mark L. Baum

 

or to such other address or addressee as either party may from time to time
designate to the other by written notice. Any such notice or other communication
shall be deemed to be given as of the date it is received by the addressee.

 

12. Severability. Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal, or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality, or unenforceability will not affect
any other provision or the effectiveness or validity of any provision in any
other jurisdiction, and this Agreement will be reformed, construed, and enforced
in such jurisdiction as if such invalid, illegal, or unenforceable provision had
never been contained herein.

 

13. No Waiver. The failure by any party to exercise any right, remedy or
elections herein contained or permitted by law shall not constitute or be
construed as a waiver or relinquishment for the future exercise of such right,
remedy or election, but the same shall continue and remain in full force and
effect. All rights and remedies that any party may have at law, in equity or
otherwise upon breach of any term or condition of this Agreement, shall be
distinct, separate and cumulative rights and remedies and no one of them,
whether exercised or not, shall be deemed to be in exclusion of any other right
or remedy.

 

   

 

 

14. Advice of Counsel. Each party acknowledges that, in executing this
Agreement, such party has had the opportunity to seek the advice of independent
legal counsel, and has read and understood all of the terms and provisions of
this Agreement. This Agreement shall not be construed against any party by
reason of the drafting or preparation hereof.

 

15. Governing Law. The subject matter of this Agreement shall be governed by and
construed in accordance with the laws of the State of California (without
reference to its choice of law principles), and to the exclusion of the law of
any other forum, without regard to the jurisdiction in which any action or
special proceeding may be instituted. EACH PARTY HERETO AGREES TO SUBMIT TO THE
PERSONAL JURISDICTION AND VENUE OF THE STATE AND/OR FEDERAL COURTS LOCATED IN
SAN DIEGO COUNTY, CALIFORNIA FOR RESOLUTION OF ALL DISPUTES ARISING OUT OF, IN
CONNECTION WITH, OR BY REASON OF THE INTERPRETATION, CONSTRUCTION, AND
ENFORCEMENT OF THIS AGREEMENT, AND HEREBY WAIVES THE CLAIM OR DEFENSE THEREIN
THAT SUCH COURTS CONSTITUTE AN INCONVENIENT FORUM. AS A MATERIAL INDUCEMENT FOR
THIS AGREEMENT, EACH PARTY SPECIFICALLY WAIVES THE RIGHT TO TRIAL BY JURY OF ANY
ISSUES SO TRIABLE.

 

16. Attorneys’ Fees. Should any party hereto employ an attorney for the purpose
of enforcing or constituting this Agreement, or any judgment based on this
Agreement, in any legal proceeding whatsoever, including insolvency, bankruptcy,
arbitration, declaratory relief or other litigation, the prevailing party shall
be entitled to receive from the other party or parties thereto reimbursement for
all reasonable attorneys’ fees and all reasonable costs, including but not
limited to service of process, filing fees, court and court reporter costs,
investigative costs, expert witness fees, and the cost of any bonds, whether
taxable or not, and that such reimbursement shall be included in any judgment or
final order issued in that proceeding. The “prevailing party” means the party
determined by the court to most nearly prevail and not necessarily the one in
whose favor a judgment is rendered.

 

17. Entire Agreement; Amendment. This Agreement embodies the entire agreement
between the parties and supersedes any prior representations, communications,
understandings and agreements between the parties regarding the subject matter
hereof. There are no representations, communications, understandings or
agreements, oral or written, between the parties regarding the subject matter
hereof that are not fully expressed herein. No term or section of this Agreement
may be charged, waived, discharged, amended or modified orally or in any manner
other than in writing executed by both of the parties hereto.

 

18. Execution of the Agreement. Each party executing this Agreement has the
requisite corporate power and authority to enter into and carry out the terms
and conditions of this Agreement, as well as all transactions contemplated
hereunder. All corporate proceedings have been taken and all corporate
authorizations and approvals have been secured which are necessary to authorize
the execution, delivery and performance by each party of this Agreement. This
Agreement has been duly and validly executed and delivered by each party and
constitutes a valid and binding obligation, enforceable in accordance with the
respective terms herein. Upon delivery of this Agreement, this Agreement, and
the other agreements and exhibits referred to herein, will constitute the valid
and binding obligations of each party, and will be enforceable in accordance
with their respective terms.

 

19. Successors. This Agreement and all the obligations and benefits hereunder
shall inure to the successors and permitted assigns of the parties.

 

20. Confidentiality. The Company may not disclose the terms of this Agreement
except as may be required by applicable law or the rules of any exchange on
which the Company’s or its affiliates’ securities are traded.

 

21. Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original, but all such
counterparts taken together shall constitute one and the same Agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
facsimile or electronic delivery in PDF format shall be as effective as delivery
of a manually executed counterpart of this Agreement and shall be sufficient to
bind the parties to the terms and conditions of this Agreement.

 

***SIGNATURE PAGE FOLLOWS***

 

   

 

 

SIGNATURE PAGE

 

IN WITNESS WHEREOF, the parties hereto have caused this Management Services
Agreement to be executed and delivered as of the date first above written.

 

COMPANY   MANAGER       Eton Pharmaceuticals, Inc.   Imprimis Pharmaceuticals,
Inc.       /s/ Andrew R. Boll   /s/ Mark L. Baum By: Andrew R. Boll   By: Mark
L. Baum Its: Executive Director   Its: Chief Executive Officer           Date:
May 1, 2017   Date: May 1, 2017