Exhibit 10.1

 

FINAL EXECUTION COPY

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [***],
HAS BEEN OMITTED BECAUSE IT IS NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE
HARM TO THE COMPANY IF PUBLICLY DISCLOSED

 

EXCLUSIVE LICENSE AGREEMENT

This Exclusive License Agreement (this “Agreement”) is entered into as of August
7, 2020 (the “Effective Date”) by and between Lytix Biopharma AS, a company
incorporated in Norway, with its principal place of business at Hoffsveien 4,
02775 Oslo, Norway (“Lytix”), and Verrica Pharmaceuticals, Inc., a Delaware
corporation, with its principal place of business at 10 North High Street, Suite
200, West Chester, Pennsylvania 19380 United States (“Verrica”). Lytix and
Verrica are sometimes referred to herein individually as a “Party” and
collectively as the “Parties”.

RECITALS

Whereas, Verrica is a biopharmaceutical company focused on development of
products for various dermatological indications;

Whereas, Lytix is a biopharmaceutical company that possesses certain
intellectual property rights related to oncolytic peptides known LTX-315 for use
in immuno-oncology; and

Whereas, Lytix desires to grant Verrica an exclusive license under such
intellectual property rights, and Verrica desires to obtain a license under such
intellectual property rights, to research, develop and commercialize the
Products in the Licensed Field in the Territory (each capitalized term as
defined below), subject to the terms and conditions set forth herein.

AGREEMENT

Now, Therefore, in consideration of the foregoing premises and the mutual
promises, covenants and conditions contained in this Agreement, the receipt and
sufficiency of which are acknowledged, the Parties agree as follows:

Article 1
Definitions

1.1“Accounting Standards” means (a) United States generally accepted accounting
principles (GAAP) or (b) Norwegian Generally Accepted Accounting Principles; in
each case, as consistently applied throughout the organization of a particular
entity and its Affiliates.

1.2“Act” means, as applicable, the United States Federal Food, Drug and Cosmetic
Act, 21 U.S.C. §§301 et seq., and all related rules, regulations and guidelines,
as any of the foregoing may be amended from time to time.

1.3“Additional Indications” means any Dermatological Indications for which a
license has been requested by Verrica pursuant to Section 2.3.

1.

 

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CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [***],
HAS BEEN OMITTED BECAUSE IT IS NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE
HARM TO THE COMPANY IF PUBLICLY DISCLOSED

 

1.4“Adverse Event” means any untoward medical occurrence in a patient or human
clinical investigation subject administered Product, including occurrences that
do not necessarily have a causal relationship with Product.

1.5“Affiliate” means, with respect to any Entity (including a Party to this
Agreement), any other Entity controlled by, controlling, or under common control
with such Entity. For the purposes of this definition, the term “control”
(including, with correlative meanings, the terms “controlled by” and “under
common control with”) means direct or indirect ownership, including ownership by
one or more trusts with substantially the same beneficial interests, of 50% or
more of the outstanding voting and equity rights of such Entity, or possession
of the power to direct the management and policies of such Entity. [***]

1.6“Anti-Corruption Laws” means the U.S. Foreign Corrupt Practices Act (15
U.S.C. §§78dd-1, et. seq.), as amended, the Organization for Economic
Co-operation and Development (OECD) Convention on combating bribery of foreign
public officials in international business transactions, and any other
applicable anti-corruption laws.

1.7“API” means, with respect to any Product, the active pharmaceutical
ingredient of such Product.

1.8“Applicable Laws” means the applicable provisions of any and all national,
supranational, regional, state and local laws, treaties, statutes, rules,
regulations, administrative codes, guidances, ordinances, judgments, decrees,
directives, injunctions, orders, permits of or from any court, arbitrator,
Regulatory Authority or governmental agency or authority having jurisdiction
over or related to the subject item, including the Act, and Anti-Corruption
Laws.

1.9“Business Day” means a day other than Saturday, Sunday or a day on which
banking institutions in (a) West Chester, Pennsylvania, United States or (b)
Oslo, Norway are required or permitted to be closed.

1.10“Calendar Quarter” means the period beginning on the Effective Date and
ending on the last day of the Calendar Quarter in which the Effective Date
falls, and thereafter each successive period of three (3) consecutive calendar
months ending on the last day of March, June, September, or December,
respectively; provided that the final Calendar Quarter ends on the last day of
the Term.

1.11“Calendar Year” means the period beginning on the Effective Date and ending
on December 31 of the Calendar Year in which the Effective Date falls, and
thereafter each successive period of twelve (12) consecutive calendar months
beginning on January 1 and ending on December 31; provided that the final
Calendar Year ends on the last day of the Term.

1.12“Change of Control” means with respect to either Party: (a) the acquisition
by a Third Party, in one transaction or a series of related transactions, of
direct or indirect beneficial ownership of more than fifty percent (50%) of the
then outstanding voting equity securities or other voting interests of such
Party (excluding, for clarity, an acquisition by a Third Party where the
stockholders of such acquired Entity immediately prior to such transaction hold
a majority of the voting shares of outstanding capital stock of the surviving
entity immediately following such

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CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [***],
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HARM TO THE COMPANY IF PUBLICLY DISCLOSED

 

transaction); (b) any merger, reorganization, consolidation or business
combinations involving such Party, as a result of which a Third Party acquires
direct or indirect beneficial ownership of more than fifty percent (50%) of the
voting power of the surviving entity immediately after such merger,
reorganization or consolidation; or (c) a sale of all or substantially all of
the assets of such Party in one transaction or a series of related transactions
to a Third Party. The acquiring or combining Third Party in any of (a), (b) or
(c), and any of such Third Party’s Affiliates (whether in existence as of or any
time following the applicable transaction, but other than the acquired Party and
its Affiliates as in existence prior to the applicable transaction or Affiliates
it controls after the applicable transaction) are referred to collectively
herein as the “Acquirer”.

1.13“Clinical Trial” means any human clinical trial including any Phase 1
Clinical Trial, Phase 2 Clinical Trial, Phase 3 Clinical Trial, any study
incorporating more than one of these phases, or any human clinical trial
commenced after Regulatory Approval.

1.14“Combination Product” means: (a) a pharmaceutical product that consists of a
Product and at least one other clinically active ingredient that is not a
Product in a fixed dose combination; or (b) any combination of a Product and
another pharmaceutical product that contains at least one other clinically
active ingredient that is not a Product, where such products are not formulated
together but are sold together as a single product in a single package and
invoiced as one product. The other clinically active ingredient(s) in clause (a)
and the other pharmaceutical product(s) in clause (b) are each referred to as
the “Other Product(s)”.

1.15“Commercialization” means any and all activities undertaken before and after
obtaining Regulatory Approvals relating specifically to the pre-launch, launch,
promotion, detailing, medical education and medical liaison activities,
marketing, pricing, reimbursement, sale, and distribution of Products, including
strategic marketing, sales force detailing, advertising, Product support, all
customer support, Product distribution and invoicing and sales activities;
provided, however, “Commercialization” shall exclude any activities relating to
the Manufacture of Product. “Commercialize” and “Commercializing” shall have the
correlative meanings.

1.16“Commercially Reasonable Efforts” means, with respect to the efforts and
resources to be expended, or considerations to be undertaken by a Party with
respect to any objective, activity, or decision to be undertaken hereunder with
respect to the Development, Manufacture, or Commercialization of Product, the
reasonable efforts and resources to accomplish such objective, activity or
decision that would be comparable with the efforts and resources normally used
by a similarly situated company in the pharmaceutical industry in the exercise
of its reasonable business discretion to accomplish a similar objective,
activity or decision for a compound or product owned by it, or to which it has
similar rights, which compound or product is at a similar stage in its
development or product life, is in a similar therapeutic and disease area and is
of similar market potential, and in all cases taking into account: (i) the
expected and actual competitiveness of alternative products (including generic
or biosimilar products) under development or sold in the marketplace; (ii) the
nature and extent of expected and actual market exclusivity (including patent
coverage, regulatory and other exclusivity) of Product; (iii) the likelihood of
Regulatory Approval given the regulatory structure involved, including
regulatory or data exclusivity; and (iv) other relevant factors, including
legal, medical, scientific, technical and commercial factors.

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CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [***],
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HARM TO THE COMPANY IF PUBLICLY DISCLOSED

 

1.17“Competing Product” means [***]

1.18“Competing Program” has the meaning set forth in Section 0.

1.19“Confidential Information” of a Party means any and all Information of such
Party that is disclosed to the other Party under this Agreement, whether in
oral, written, graphic, or electronic form. In addition, all Information
disclosed by Verrica pursuant to the [***] (the “Confidentiality Agreement”) is
deemed to be Verrica’s Confidential Information disclosed hereunder, and all
Information disclosed by Lytix pursuant to the Confidentiality Agreement is
deemed to be Lytix’s Confidential Information disclosed hereunder; provided that
any use or disclosure of any Information that is authorized under 0 shall not be
restricted by, or be deemed a violation of, the Confidentiality Agreement.

1.20“Control” means, with respect to any product, Know-How, Patents or other
intellectual property rights, possession by a Party of the ability (whether by
ownership, license or other right, other than pursuant to a license granted to
such Party under this Agreement) to grant access to, to grant use of, or to
grant a license or a sublicense to, such Know-How, Patents or intellectual
property rights without violating the terms of any agreement or other
arrangement with any Entity.

1.21“Cost of Goods” means, with respect to Product:

(a)in the case of Product (or any precursuor or intermediate thereof)
manufactured by one or more Third Parties, the actual costs of such
Manufacturing invoiced by such Third Party manufacturer to Lytix, [***]; and

(b)in the case of Product manufactured by a Party or its Affiliate, the (i)
actual fully allocated cost of manufacturing such Product, determined in
accordance with Accounting Standards, [***].

1.22“Cover” means, with respect to a Patent and a Product, that the manufacture,
use, offer for sale, sale or import of a Product, absent a license to such
Patent or Product, would infringe a Valid Claim in such Patent; provided,
however, that in determining whether a claim of a pending Patent application
would be infringed, it is treated as if issued in the form then currently being
prosecuted. “Covered” and “Covering” have the correlative meanings.

1.23“Dermatological Indication” means any Indication for disorders or diseases
of the skin, hair or nails.

1.24“Development” means all activities conducted after the Effective Date
relating to preclinical and clinical trials, toxicology testing, statistical
analysis, publication and presentation of study results with respect to
Products, and the reporting, preparation and submission of regulatory
applications for obtaining, registering and maintaining Regulatory Approval of
Products; provided, however, “Development” shall exclude any activities relating
to the Manufacture of Product. “Develop” and “Developing” shall have the
correlative meanings.

1.25“Development Plan” has the meaning set forth in Section 0.

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CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [***],
HAS BEEN OMITTED BECAUSE IT IS NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE
HARM TO THE COMPANY IF PUBLICLY DISCLOSED

 

1.26“Dispute” has the meaning set forth in Section 0.

1.27“Distributor” means a Third Party distributor of Product that: (a) has no
royalty or other payment obligations to Verrica or any of its Affiliates that
are calculated based on amounts invoiced or received by such Third Party for
sales of Product; or (b)(i) does not take title to Product, (ii) does not
invoice Product sales to Third Party customers, and (iii) is responsible only
for inventory management and distribution with respect to Product on behalf of
Verrica or its Affiliate.

1.28“Divestiture” means the sale or transfer of rights to the Competing Program
or Competing Product, as applicable, to a Third Party without receiving a
continuing share of profit, royalty payment or other economic interest in the
success of such Competing Program or Competing Product, as applicable.

1.29“Dollar” means a U.S. dollar, and “$” shall be interpreted accordingly.

1.30“Drug Master File” means a drug master file document or right of reference
to a drug master file (if the applicable Party does not have a copy of the
underlying drug master file) containing detailed information about the
manufacturing of the Product, including information describing the manufacturing
site, the manufacturing facility, the operating procedures, the personnel, the
Manufacture, storage and control of the Product, starting materials and
intermediates.

1.31“Drug Product” means, with respect to any Product, the filled, finished and
packaged form of such Product.

1.32“EMA” means the European Medicines Agency or the equivalent Regulatory
Authority with competent jurisdiction in the United Kingdom or any successor
entity to either of the foregoing.

1.33“EU” means the European Union member states as then constituted. As of the
Effective Date, the European Union member states are Austria, Belgium, Bulgaria,
Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany,
Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta,
Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, and Sweden.

1.34“Entity” means any corporation, general partnership, limited partnership,
limited liability partnership, joint venture, estate, trust, company (including
any limited liability company or joint stock company), firm or other enterprise,
association, organization or entity.

1.35“Exclusive License” has the meaning set forth in Section 2.3(a).

1.36“Exclusive Negotiation Period” has the meaning set forth in Section 2.3(b).

1.37“Executive Officer” means, with respect to Lytix, its Chief Executive
Officer, and with respect to Verrica, its Chief Executive Officer, or, in either
case, a designee with senior decision-making authority.

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CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [***],
HAS BEEN OMITTED BECAUSE IT IS NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE
HARM TO THE COMPANY IF PUBLICLY DISCLOSED

 

1.38“FD&C Act” means the U.S. Federal Food, Drug and Cosmetic Act, as amended.

1.39“FDA” means the United States Food and Drug Administration, or any successor
agency thereto in the United States

1.40“First Commercial Sale” means, with respect to a Product in the Licensed
Field in the Territory, the first commercial transfer or disposition for value
of such Product by or on behalf of Verrica to a Third Party in the Licensed
Field in the Territory after such Product has received Regulatory Approval in
the Licensed Field in the Territory.

1.41“GCP” means current good clinical practices as established by the FDA and as
interpreted by relevant ICH guidelines; in each case, as amended from time to
time.

1.42“GLP” means current good laboratory practices as established by the FDA and
as interpreted by relevant ICH guidelines; in each case, as amended from time to
time.

1.43“GMP” means current good manufacturing practices and standards for the
production of drugs and finished pharmaceuticals, as set forth in 21 C.F.R.
Parts 210 and 211, as amended from time to time and as interpreted by relevant
ICH guidelines.

1.44“Governmental Authority” means any multi-national, national, federal, state,
local, municipal, provincial or other governmental authority of any nature
(including any governmental division, prefecture, subdivision, department,
agency, bureau, branch, office, commission, council, court or other tribunal).

1.45“ICH” means the International Conference on Harmonisation of Technical
Requirements for Registration of Pharmaceuticals for Human Use.

1.46“IND” means an investigational new drug application, clinical trial
application, clinical trial exemption, or similar application or submission
filed with or submitted to a Regulatory Authority in a jurisdiction that is
necessary to commence human clinical trials in such jurisdiction, including any
such application filed with the FDA pursuant to 21 C.F.R. Part 312.

1.47“Indemnified Party” has the meaning set forth in Section 0.

1.48“Indemnifying Party” has the meaning set forth in Section 0.

1.49“Indication” means a separately defined, well-categorized class of human
disease or condition for which a separate MAA (including any extensions or
supplements) is required to be filed with a Regulatory Authority. For clarity,
if an MAA is approved for a Product in a particular Indication and patient
population, a label expansion for such Product to include such Indication in a
different patient population shall not be considered a separate Indication.

1.50“Information” means any data, results, technology, business or financial
information or information of any type whatsoever, in any tangible or intangible
form, including know-how, trade secrets, practices, techniques, methods,
processes, inventions, developments, specifications, formulations, formulae,
software, algorithms, marketing reports, expertise,

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CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [***],
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technology, test data (including pharmacological, biological and chemical,
biochemical, clinical test data and data resulting from non-clinical studies),
CMC information, stability data and other study data and procedures.

1.51“Infringement” has the meaning set forth in Section 0.

1.52“Initial Indication” means all malignant and pre-malignant Dermatological
Indications, other than the Retained Field.

1.53“Initiation” means, with respect to a clinical trial, first dosing of the
first subject in such clinical trial.

1.54“Invention” means any invention or discovery, whether or not patentable,
that is made, conceived, generated or reduced to practice, in whole or in part,
in the course and as a result of the conduct of the activities contemplated by
this Agreement.

1.55“Joint Invention” means any Invention made jointly by (a) on the one hand,
one or more employees, consultants or contractors of Verrica or any of its
Affiliates or Sublicensees, and (b) on the other hand, one or more employees,
consultants or contractors of Lytix or any of its Affiliates.

1.56“Joint Patents” means Patents claiming Joint Inventions.

1.57“JSC” has the meaning set forth in Section 0.

1.58“Know-How” means any and all tangible and intangible (a) techniques,
technology, practices, trade secrets, inventions (whether patentable or not),
methods, knowledge, know-how, skill, experience, data and results (including
pharmacological, toxicological and clinical test data and results), analytical
and quality control data, results or descriptions, software and algorithms, and
(b) compositions of matter, cells, cell lines, assays, animal models and
physical, biological or chemical material; that, in each case, are not in the
public domain.

1.59“Licensed Field” means the treatment of (a) the Initial Indication and (b)
any Additional Indications the Parties agree to include hereunder pursuant to
Section 0. For the avoidance of doubt, Licensed Field does not include the
Retained Field.

1.60“Licensed Know-How” means all Know-How that (a) is Controlled by Lytix or
its Affiliates as of the Effective Date or during the Term, and (b) is necessary
or reasonably useful for the research, Development, Manufacture, or
Commercialization of Product in the Licensed Field in the Territory. For
clarity, Licensed Know-How includes Lytix Inventions, but excludes Know-How that
is specific to the Manufacture of API.

1.61“Licensed Patent” means any Patent that (a) is Controlled by Lytix or its
Affiliates as of the Effective Date or during the Term, and (b) Covers (i) a
Product or (ii) the Manufacture of a Product. A list of Licensed Patents as of
the Effective Date is set forth on Exhibit 0.

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CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [***],
HAS BEEN OMITTED BECAUSE IT IS NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE
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1.62“Licensed Technology” means the Licensed Know-How, Licensed Patents, and
Licensed Marks.

1.63“Licensed Marks” means all Trademarks that (a) are Controlled by Lytix or
its Affiliates as of the Effective Date or during the Term and (b) are used by
or on behalf of Lytix as of the Effective Date or during them Term to Develop,
Manufacture, or Commercialize Product. A list of Licensed Marks as of the
Effective Date is set forth on Exhibit 0.

1.64“LTX-315” means Lytix’s oncolytic peptide known as of the Effective Date as
LTX-315, as more particularly described on Exhibit 0.

1.65“Lytix Indemnitees” has the meaning set forth in Section 0.

1.66“Lytix Inventions” means any Invention made solely by or on behalf of Lytix,
its employees, consultants or contractors, or any of its Affiliates or licensees
(other than Verrica).

1.67“MAA” means an application or submission for approval to market a
pharmaceutical product filed with the governing Regulatory Authority.

1.68“Manufacture” and “Manufacturing” means any activities directed to
producing, manufacturing, processing, filling, finishing, packaging, labeling,
quality control, quality assurance testing and release, post-marketing
validation testing, inventory control and management, storing, shipping, and
transporting any Product, including oversight and management of vendors
therefor. For clarity, manufacturing process development activities are included
within the scope of Manufacturing.

1.69“Metastatic Melanoma” means a skin cancer that began in melanocyte cells and
that has metastasized to an internal organ of a patient.

1.70“Metastatic Merkel Cell Carcinoma” means a neuroendocrine carcinoma of the
skin that has metastasized to an internal organ of a patient.

1.71“NDA” means a New Drug Application (as more fully defined in 21 CFR 314.5,
et seq.) filed with the FDA, or any successor application thereto in the United
States.

1.72“Net Sales” means, with respect to any Product, the gross amounts invoiced
by Verrica and its Affiliates for sales or other dispositions of such Product in
the Licensed Field to Third Parties, less the following deductions provided to
entities and actually allowed and taken:

[***]

Notwithstanding the foregoing, amounts received or invoiced by Verrica or its
Affiliates for the sale of Products among Verrica and its Affiliates shall not
be included in the computation of Net Sales hereunder. Net Sales shall be
accounted for in accordance with the selling party’s Accounting Standards,
consistently applied.

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CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [***],
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Notwithstanding the foregoing, “Net Sales” shall also include any amount
received by Verrica or its Affiliates from a Distributor, [***].

Notwithstanding the foregoing, “Net Sales” excludes any amounts invoiced for
sales of Products supplied for [***].

For purposes of calculating the Net Sales for Products sold as bundled products,
deductions shall be apportioned across all products in the bundle on a fair and
reasonable basis, provided that the percentage rebate or discount apportioned to
the Product shall not exceed the percentage rebate or discount applied in total
to the bundled products. Similarly, the total price payable for a bundled
product shall be apportioned between Product and other product within the bundle
and determined by the Parties in good faith.

Net Sales for a Combination Product in a country shall be calculated as follows:

(i)If the Product and Other Product(s) each are sold separately in such country,
Net Sales will be calculated by multiplying the total Net Sales (as described
above) of the Combination Product by the fraction A/(A+B), [***].

(ii)If the Product is sold independently of the Other Product(s) in such
country, but the public or list price of the Other Product(s) cannot be
determined, Net Sales will be calculated by multiplying the total Net Sales (as
described above) of such Combination Product by the fraction A/C, where A is the
public or list price in such country of such Product sold independently and C is
the public or list price in such country of the Combination Product.

(iii)If the Other Product(s) are sold independently of the Product therein in
such country, but the public or list price of such Product cannot be determined,
Net Sales will be calculated by multiplying the total Net Sales (as described
above) of such Combination Product by the fraction 1-B/C, where B is the (sum of
the) public or list price(s) in such country of the Other Product(s) and C is
the gross amount invoiced in such country of the Combination Product.

(iv)If neither the Product nor the Other Product(s) is sold independently in
such country a market price for the Product and the Other Product(s) shall be
negotiated by the Parties in good faith based upon the allocation of costs,
overhead and profit as are then incurred for such Combination Product.

1.73“Offer” has the meaning set forth in Section 2.3(b).

1.74“Patents” means (a) all national, regional and international patents and
patent applications filed in any country or jurisdiction, including provisional
patent applications, (b) all patent applications filed either from such patents
and patent applications or from a patent application claiming priority from
either of these, including any continuation, continuation-in-part, division,
provisional, converted provisional and continued prosecution applications, or
any substitute applications, (c) any patent issued with respect to or in the
future issued from any such patent applications including utility models, petty
patents and design patents and certificates of invention, and (d) any and all
extensions or restorations by existing or future extension or restoration
mechanisms, including revalidations, reissues, reexaminations and extensions
(including any supplementary protection certificates and the like) of the
foregoing patents or patent applications.

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1.75“Phase 1 Clinical Trial” means a human clinical trial, that generally
provides for the first introduction of a pharmaceutical or biologic product in
humans with a purpose of determining safety, metabolism, and pharmacokinetic
properties and clinical pharmacology of such product, consistent with the
requirements of U.S. 21 C.F.R. § 312.21(a) or (for trial conducted outside the
United States) its equivalents in the applicable non-United States
jurisdictions.

1.76“Phase 2 Clinical Trial” means a human clinical trial, the principal purpose
of which is to explore a variety of doses, dose response, and duration of
effect, and to generate evidence of clinical safety, effectiveness and dose
ranging for a particular indication or indications in a target patient
population, consistent with the requirements of U.S. 21 C.F.R. § 312.21(b) or
(for trial conducted outside the United States) its equivalents in the
applicable non-United States jurisdictions.

1.77“Phase 3 Clinical Trial” means a human clinical trial, the principal purpose
of which is to establish that a product is safe and efficacious for its
indicated use, define contraindications, warnings, precautions and adverse
reactions that are associated with the product in the dosage range to be
prescribed, to support the filing of an application for Regulatory Approval for
such product, consistent with the requirements of U.S. 21 C.F.R. §312.21(c) or
(for trial conducted outside the United States) its equivalents in the
applicable non-United States jurisdictions.

1.78“Product” means, LTX-315, in the form and formulation existing as of the
Effective Date or any form and formulation such compound and any salt, ester,
hydrate, solvate, prodrug, free acid form, free base form, crystalline form,
co-crystalline form, amorphous form, polymorph, chelate, isomer, enantiomer,
racemate, stereoisomer, or tautomer of any of the foregoing.

1.79“Product Marks” has the meaning set forth in Section 0.

1.80“Region” means each of the following regions: (a) the United States, Mexico,
and Canada, (b) Europe (including Russia), (c) South America, (d) Central
America, other than Mexico, (e) Greater China (mainland China, Hong Kong, Macau,
and Taiwan), Japan, South Korea, and India, (f) MENA (Middle East, Turkey, and
North Africa), (g) Africa, other than MENA, (h) Oceania, and (i) Asia, other
than Russia, Greater China, Japan, South Korea, India and Oceania.

1.81“Regulatory Approval” means, with respect to a pharmaceutical product in a
particular jurisdiction, all approvals or other permissions from the applicable
Regulatory Authority in such jurisdiction necessary to market and sell such
product in such jurisdiction, including pricing and reimbursement approvals if
required prior to the first marketing or sale of such product in such
jurisdiction.

1.82“Regulatory Authority” means any applicable Governmental Authority having
the administrative authority to regulate the manufacturing, development,
commercialization, reimbursement or pricing, as applicable, for the Product,
including Regulatory Approvals, including the FDA and the EMA.

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CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [***],
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1.83“Regulatory Exclusivity” means any exclusive marketing rights or data
exclusivity rights conferred by any Regulatory Authority with respect to a
pharmaceutical product other than a Patent, including orphan drug exclusivity,
new chemical entity exclusivity, data exclusivity, or pediatric exclusivity.

1.84“Regulatory Filings” means all INDs, NDAs, MAAs, Regulatory Approvals, and
other filings (including any Drug Master File (if any)) with, and formal
submissions to, Regulatory Authorities, in each case, with respect to Product in
any country or other jurisdiction.

1.85“Retained Field” means Metastatic Melanoma and Metastatic Merkel Cell
Carcinoma and all other Indications that are not Dermatological Indications.

1.86“Right of Reference” means: (a) in the United States, a “right of reference
or use,” as such term is defined in 21 C.F.R. 314.3(b); or (b) in any other
country or jurisdiction, the equivalent authority to rely upon, and otherwise
use, an investigation for the purpose of filing, and conducting a clinical trial
under, an IND, or obtaining approval of an NDA, MAA or other Regulatory
Approval, including the ability to make available the underlying raw data from
the investigation for audit by the applicable Regulatory Authority in such
country or other jurisdiction, if necessary.

1.87“Royalty Term” has the meaning set forth in Section 0.

1.88“Sublicensee” means any Affiliate or Third Party that has received a
sublicense of the rights granted to Verrica under Section 0, directly or
indirectly through one or more tiers, from Verrica or its Affiliate.  As used in
this Agreement, “Sublicensee” excludes a Distributor.

1.89“Supply Agreement” means, as applicable, the Clinical API Supply Agreement
and the Commercial API Supply Agreement.

1.90“Term” has the meaning set forth in Section 0.

1.91“Territory” means all countries of the world.

1.92“Third Party” means any Entity other than Verrica or Lytix or an Affiliate
of Verrica or Lytix.

1.93“Trademark” means any word, name, symbol, color, shape, designation or
device or any combination thereof, including any trademark, service mark, trade
name, trade dress, brand name, product configuration, domain name, logo, design
or business symbol, that functions as an identifier of source, origin or
membership, whether or not registered, and all statutory and common law rights
therein, and all registrations and applications therefor, together with all
goodwill associated with, or symbolized by, any of the foregoing.

1.94“U.S.” means the United States of America, including all possessions and
territories thereof.

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1.95“Valid Claim” means (a) a claim of an issued, unexpired patent within the
Licensed Patents that has not been revoked, disclaimed, abandoned or held
invalid or unenforceable by a court or other body of competent jurisdiction in
an unappealed or unappealable decision and (b) a claim of any patent application
within a Licensed Patent which has not been abandoned or finally disallowed
without the possibility of appeal or re-filing of the application and has not
been pending for a period of more than [***] years.

1.96“Verrica Indemnitees” has the meaning set forth in Section 0.

1.97“Verrica Inventions” means any Invention made solely by or on behalf of
Verrica, its employees, consultants or contractors, or any of its Affiliates or
Sublicensees.

Article 2
LICENSES AND EXCLUSIVITY

2.1License to Verrica.

(a)License to Verrica. Subject to the terms and conditions of this Agreement,
Lytix hereby grants Verrica an exclusive (even as to Lytix and its Affiliates),
royalty-bearing license, with the right to sublicense through multiple tiers in
accordance with Section 0, under the Licensed Technology to research, Develop,
Manufacture, have Manufactured, use, sell, have sold, offer for sale, import,
and otherwise Commercialize Products in the Licensed Field in the Territory,
provided, however, that the foregoing license shall exclude the right to
Manufacture and having Manufactured the API except as set forth in any Supply
Agreement.

(b)Sublicenses.

(i)Verrica shall have a right to grant sublicenses under the Licensed
Technology, to its Affiliates and to Third Parties.

(ii)Each agreement in which Verrica grants a sublicense under the Licensed
Technology shall be consistent with the terms and conditions of this Agreement
applicable to the scope of the sublicense granted to a Sublicensee and Verrica
shall ensure that its Sublicensees comply with the applicable terms and
conditions of this Agreement.  

(iii)Notwithstanding any such sublicense, Verrica shall remain solely liable for
the performance of its obligations hereunder, regardless of whether such
obligation is delegated, subcontracted, or sublicensed to any of its Affiliates,
Subcontractors or Sublicensees.

(iv)Verrica shall provide Lytix with (w) a then-current copy of the proposed
term sheet with a Sublicensee at least [***] Business Days prior to the expected
execution or finalization of such term sheet, (x) a then-current copy of each
proposed sublicense agreement with a Sublicensee at least [***] Business Days
prior to the expected execution of such sublicense agreement and (y) a true and
complete copy of each sublicense agreement with a Sublicensee within [***] days
after the execution of such sublicense agreement; provided, that, in each case,
Verrica may redact certain terms of any such sublicense agreement if such terms
are not

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(i) related to either Party’s rights or obligations under this Agreement, or
(ii) necessary for Lytix to verify Verrica’s compliance with this Agreement.

(c)Subcontractors. Verrica may appoint Distributors and engage subcontractors
(including contract research organizations) for the purpose of performing
Verrica’s obligations, subject to Section 2.1(b)(iii), with respect to the
Development, Manufacture, and Commercialization of Product in the Licensed Field
in the Territory.

2.2Exclusivity.

(a)Obligations. During the Term, Lytix shall not, and shall ensure that its
Affiliates do not, independently or for, or with, any Third Party, research,
develop, make, have made, use, sell, have sold, offer for sale, import, or
otherwise commercialize any product for use in Dermatological Indications, or
license, sell, assign, or otherwise grant rights to any Third Party to do any of
the foregoing provided, that the obligations under this Section 0 shall not
apply to any product in the Retained Field anywhere, or to any product in the
Licensed Field in any Region terminated by Verrica pursuant to Section 0, or by
Lytix pursuant to 0.

(b)Acquisition of Competing Program. If a Third Party becomes an Affiliate of
Lytix after the Effective Date through merger, acquisition, consolidation or
other similar transaction, and, as of the closing date of such transaction, such
Third Party is engaged in the research, Development, Manufacture or
Commercialization of a product that, if conducted by such Third Party, would
cause Lytix to be in breach of its exclusivity obligations set forth in
Section 0 (a “Competing Program”), then:

(i)if such transaction results in a Change of Control of Lytix, then such new
Affiliate may continue such Competing Program and such continuation will not
constitute a breach of Lytix’s exclusivity obligations set forth above; provided
that such new Affiliate conducts such Competing Program independently of the
activities of this Agreement and does not use or access any of Verrica’s
intellectual property rights or Confidential Information in the conduct of such
Competing Program; and

(ii)if such transaction does not result in a Change of Control of Lytix, then
Lytix and its new Affiliate will have [***] months from the closing date of such
transaction to wind down or complete the Divestiture of such Competing Program,
and Lytix’s new Affiliate’s conduct of such Competing Program during such
[***]-month period will not be deemed a breach of Lytix’s exclusivity
obligations set forth above; provided that such new Affiliate conducts such
Competing Program during such [***]-month period independently of the activities
of this Agreement and does not use or access any of Verrica’s intellectual
property rights or Confidential Information in the conduct of such Competing
Program.

2.3Option to License Additional Indication.

(a)Right. Lytix hereby grants to Verrica an exclusive option to negotiate an
exclusive license, under the applicable Patents and Information Controlled by
Lytix, to develop, use, sell, offer for sale import and commercialize the
Product for any Dermatological Indication as an Additional Indication (such
license, an “Exclusive License”), subject to the remainder of this Section 0.

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(b)Exercise and Negotiation. Verrica may exercise its exclusive negotiation
right under Section 0 by submitting to Lytix a written offer for the proposed
terms of such Exclusive License, including the material financial terms and a
high-level development plan for the development and commercialization of the
Product in the Territory in the applicable Dermatological Indication (an
“Offer”). If Verrica submits an Offer to Lytix, then Lytix and Verrica shall
enter into exclusive good-faith negotiations regarding the commercially
reasonable terms for such license for a period of [***] days following Lytix’s
receipt of such Offer (“Exclusive Negotiation Period”). If the Parties agree on
commercially reasonable terms for such Exclusive License, then the Parties shall
promptly amend this Agreement to include such Exclusive License and reflect such
agreed terms associated with such Exclusive License.  

(c)Notice of Third Party Term Sheet. If a Third party provides Lytix with a
written term sheet for obtaining a license to develop and commercialize a
Product for Metastatic Melanoma or Metastatic Merkel Cell Carcinoma, then Lytix
shall provide Verrica with (x) a copy of the proposed term sheet with a Third
Party at least [***] Business Days prior to the expected execution or
finalization of such term sheet.

2.4No Implied Licenses. Except as explicitly set forth in this Agreement,
neither Party shall be deemed by estoppel or implication to have granted the
other Party any license or other right to any intellectual property of such
Party.

2.5Transfer of Licensed Know-How. Promptly after the Effective Date, pursuant to
a transfer plan agreed to by the Parties through the JSC, Lytix shall provide
Verrica with complete and accurate copies of all Licensed Know-How in writing
and existence as of the Effective Date. On an ongoing basis thereafter, at least
Calendar Quarterly, Lytix shall promptly provide Verrica with complete and
accurate copies in writing of all Licensed Know-How generated since the last
such transfer under this Section 0, copies of which shall be provided in
writing. In addition, Lytix shall, provide reasonable consultation, and
assistance for the purpose of transferring to Verrica all such Licensed Know‑How
to the extent necessary or reasonably useful for Verrica to Develop,
Manufacture, or Commercialize Product in the Licensed Field in the Territory,
and Verrica shall be responsible for any and all Third Party costs related to
such consultation and assistance.

Article 3
GOVERNANCE

3.1Joint Steering Committee.

(a)Formation and Role. Promptly, and in any event within [***] days after the
Effective Date, the Parties shall establish a joint steering committee (the
“JSC”) to coordinate, oversee, review and discuss the Parties’ activities with
respect to the research, Development, and Commercialization of Products. For
that purpose and to the extent reasonably necessary, the JSC will:

(i)discuss the status, progress and results of all Development activities
conducted by or on behalf of either Party with respect to Product, both in and
outside the Licensed Field, in the Territory;

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(ii)facilitate communications and discussions between the Parties with respect
to the Development Plan;

(iii)review, discuss, and approve any proposed amendments or revisions to the
Development Plan;

(iv)oversee, coordinate, and discuss the status, progress and results of all
Manufacturing activities (including process development) conducted by or on
behalf of either Party with respect to Product;

(v)oversee technology transfer from Lytix to Verrica;

(vi)review and discuss significant correspondence to or from a Regulatory
Authority (including submissions of Regulatory Filings) that are relevant to
Product in both the Licensed Field and the Retained Field;

(vii)discuss and oversee Commercialization of Products, including the tracking
of sales of Products under Section 0; and

(viii)perform such other functions as appropriate to further the purposes of
this Agreement, as expressly set forth in this Agreement or as determined by the
Parties in writing.

The JSC shall have only the powers expressly assigned to it in this Section 0
and elsewhere in this Agreement, and shall have no power to amend, modify, or
waive compliance with this Agreement.

(b)Members. Verrica shall appoint [***] representatives to the JSC, and Lytix
shall appoint [***] representatives to the JSC. Each JSC representative may be
an officer, employee, or representative of the applicable Party having
sufficient experience and knowledge of matters arising within the scope of the
JSC’s responsibilities to make decisions with respect thereto. Each Party may
replace its representatives at any time upon written notice to the other Party.
The JSC shall have an alternating chairperson selected by the Parties on an
annual basis, with the first chairperson convening the initial meeting selected
by Lytix. The role of the chairperson shall be to convene and preside at the
meetings of the JSC and to ensure the preparation of meeting minutes, but,
except as set forth in Section 0, the chairperson shall have no additional
powers or rights beyond those held by other JSC representatives.

(c)Meetings. The JSC shall meet at least one (1) time per Calendar Quarter,
unless the Parties mutually agree in writing to a different frequency for such
meetings or no further development is contemplated. Either Party may also call a
special meeting of the JSC (by videoconference or teleconference) by at least
[***] Business Days’ (or fewer, if the Parties agree) prior written notice to
the other Party in the event such Party reasonably believes that a significant
matter must be addressed prior to the next regularly scheduled meeting, and such
Party shall provide the JSC, no later than [***] Business Days prior to the
special meeting, with materials reasonably adequate to enable an informed
decision. No later than [***] Business Days prior to any meeting of the JSC, the
chairperson of the JSC shall prepare and circulate an agenda for such

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meeting; provided, however, that either Party may propose additional topics to
be included on such agenda, either prior to or in the course of such meeting.
The JSC may meet in person, by videoconference or by teleconference, as the
Parties agree. Each Party shall bear the expense of its respective JSC members’
participation in JSC meetings. A reasonable number of additional representatives
of a Party may attend meetings of the JSC in a non-voting capacity, provided
that such additional members are bound in writing by obligations of
confidentiality at least as restrictive as those contained in this Agreement.
Meetings of the JSC are effective only if at least one (1) representative of
each Party is present or participating in such meeting. The chairperson of the
JSC is responsible for preparing reasonably detailed written minutes of all JSC
meetings that reflect, without limitation, all material decisions made at such
meetings. The JSC chairperson shall send draft meeting minutes to each member of
the JSC for review and approval within [***] Business Days after each JSC
meeting. Such minutes will be deemed approved unless one or more members of the
JSC object to the accuracy of such minutes within [***] Business Days of
receipt.

(d)Decision-Making. The JSC shall act by unanimous consent of the Parties. The
representatives from each Party will each have collectively one (1) vote. If
after reasonable discussion and good faith consideration of each Party’s view on
a particular matter before the JSC, the JSC cannot reach a unanimous decision as
to such matter within [***] days after such matter was brought to the JSC for
resolution, then such matter shall be referred to Executive Officers for
resolution. If the issue is not resolved within [***] days following the
referral of such issue to the Executive Officers, then (i) Verrica shall have
final decision-making authority with respect to any matters relating solely to,
or that solely impact, the Development, Manufacturing, and Commercialization of
the Product (but not the API) in the Licensed Field ([***]), and (ii) Lytix
shall have final decision-making authority with respect to (A) any matters
relating solely to, or that solely impact, the Development, Manufacturing, and
Commercialization of the Product outside the Licensed Field, (B) any matters
related to the prosecution of the Licensed Patent, or (C) any matters relating
to the Manufacture or supply of API ([***]. For clarity, the Parties shall
continue to perform all obligations of this Agreement during the foregoing
decision-making process.

3.2Scope of Authority. Notwithstanding the establishment and existence of the
JSC or any subcommittee, each Party shall retain the rights, powers and
discretion granted to it hereunder, and neither the JSC nor any subcommittee is
delegated or vested with rights, powers or discretion unless such delegation or
vesting is expressly provided herein. The JSC has no decision-making authority
with regard to any expansion of the Development or Commercialization activities
under this Agreement.

3.3Subcommittees. From time to time, the JSC may establish additional
subcommittees to oversee particular projects or activities within the scope of
authority of the JSC, as it deems necessary or advisable. Each subcommittee will
be composed of an equal number of representatives of each Party, as the JSC
determines is appropriate from time to time, and will meet with such frequency
as the JSC determines. If, with respect to a matter that is subject to a
subcommittee’s decision-making authority, the subcommittee cannot reach
unanimity, the subcommittee will refer the matter to the JSC for resolution.

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Article 4
DEVELOPMENT

4.1Development.

(a)In the Licensed Field. Verrica has the exclusive right to conduct, and is
solely responsible for all aspects of, the Development of Product, including
conducting Clinical Trials for Product, in the Licensed Field. As between the
Parties, Verrica shall bear all of its costs and expenses incurred in connection
with such Development activities.

(b)Development Plan. Verrica shall Develop Product in the Licensed Field in the
Territory pursuant to the Development Plan. Verrica shall provide Lytix with an
initial, high level development plan (the “Initial Development Plan”) within
[***] days after the Effective Date. Within [***] days after the Effective Date,
Verrica will prepare and submit to the JSC a detailed plan containing the
strategy, activities, study designs, timeline and budget for research and
Development of the Product in the Licensed Field (the “First Supplemental
Development Plan,” and together with the Initial Development Plan and any
subsequent updates pursuant to this Section 4.1, the “Development Plan”). The
First Supplemental Development Plan shall include among other things, all
non-clinical and clinical studies, and regulatory activities with respect to the
Product to be conducted by or on behalf of Verrica or its Affiliates or their
respective sublicensees in the Licensed Field.  

(c)Amendments to the Development Plan. From time to time during the Term, but at
least every [***] months, Verrica shall propose amendments to the Development
Plan and submit such proposed amended Development Plan to the JSC for review,
discussion, and approval in accordance with Section 0. Each amended Development
Plan becomes effective on the date of approval by the JSC. References to the
“Development Plan” in this Agreement refer to the Development Plan as then in
effect (including all amendments thereto).

(d)In the Retained Field. Lytix has the exclusive right to conduct, and is
solely responsible for all aspects of, the Development of Product, including
conducting Clinical Trials for Product, in the Retained Field. As between the
Parties, Lytix shall bear all of its costs and expenses incurred in connection
with such Development activities.

4.2Development Diligence.

(a)Verrica, itself or through its Affiliates, Sublicensees, or Subcontractors,
shall use Commercially Reasonable Efforts, at its sole cost and expense, to
Develop the Product in the Licensed Field in the Territory, including to achieve
the development milestone events by certain target dates contained in the
Development Plan. Verrica shall, and Verrica shall cause its Affiliates,
Sublicensees and its Subcontractors to, conduct all Development under this
Agreement in a professional manner and in compliance with all Applicable Laws,
including applicable GLP, cGMP and GCP.

(b)Lytix may terminate this Agreement in its entirety if Verrica, itself or
through one or more of its Affiliates, Sublicensees, or Third-Party service
providers, fails to submit for a pre-IND meeting with the FDA within [***]
months after Lytix’s IND with the FDA for the

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Product has been opened. Lytix may terminate this Agreement in its entirety if
Verrica, itself or through one or more of its Affiliates, Sublicensees, or
Third-Party service providers, is not Actively Developing the Product in the
Licensed Field anywhere in the Territory. “Actively Developing” a Product means
that Verrica, or any of its Affiliates, Sublicensees, or Third-Party service
providers, are engaging in or have engaged within the preceding [***] months in
one or more Development-related activities for the Product.

4.3Development Updates. Each Party shall keep the other Party reasonably
informed, through the JSC, of the status, progress, and results of all
Development activities for Product, both in and outside the Licensed Field, in
the Territory. Each Party shall promptly respond to reasonable requests of the
other Party for additional Information with respect to such other Party’s
Development activities for Product, both in and outside the Licensed Field, in
the Territory.

4.4Records and Reports. Each Party shall prepare and maintain, or shall cause to
be prepared and maintained, in conformity with standard pharmaceutical and
biotechnology industry practices and the terms and conditions of this Agreement,
complete and accurate written records, accounts, notes, reports and data with
respect to all Development activities with respect to Product. Such records
shall fully and properly reflect, in good scientific manner appropriate for
regulatory and patent purposes, all work done and results achieved in the
performance of all Development activities for Product, both in and outside the
Licensed Field, in the Territory. Each Party shall document all non-clinical
studies and clinical trials in formal written study records, and shall document
all manufacturing activities for Products, in each case in accordance with
Applicable Laws, including applicable national and international guidelines such
as ICH, GCP, GLP and GMP. The Parties shall discuss the status, progress and
results of all Development activities with respect to Product, both in and
outside the Licensed Field, in the Territory at such JSC meetings.

4.5Development Data.

(a)Each Party shall solely own all data, records and reports generated by or on
behalf of such Party, its Affiliates or Sublicensees (with respect to Verrica),
in the non-clinical and clinical Development of the Product (the “Product
Data”); provided, that neither Party is deemed to conduct Development of the
Product on behalf of the other Party.  Notwithstanding any provision of this
Agreement to the contrary, Product Data that a Party is required to deliver to
the other Party under this Agreement shall be limited to Product Data that is
(a) Controlled by such Party and (b) that is necessary or reasonably useful to
support the Development, Regulatory Approval or Commercialization of the
Products.

(b)Each Party, shall, on a Calendar Quarterly basis and at no charge to the
other Party, as permitted under Applicable Law (including GCP), provide the
other Party with a summary of all Product Data not previously transferred under
this Section 0. Lytix may disclose and provide copies of such Product Data
Controlled by Verrica to Lytix’s Affiliates and Third Party licensees that have
agreed in writing to share development data with Lytix and Verrica on terms
substantially similar to the terms of this Section 4.5.  Verrica may disclose
and provide copies of such Product Data Controlled by Lytix to Verrica’s
Affiliates and Sublicensees that have agreed in writing to share development
data with Lytix and Verrica on terms substantially similar to the terms of this
Section 4.5.  

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4.6Standards of Conduct. Each Party shall perform, and shall ensure that its
Affiliates, Sublicensees and Third-Party contractors perform, the Development
activities with respect to Product in good scientific manner, and in compliance
in all material respects with the requirements of Applicable Law.

Article 5
REGULATORY

5.1Overview.

(a)In the Licensed Field. Verrica has the exclusive right to conduct, and
subject to the remainder of this 0, is solely responsible for all aspects of,
activities related to (a) setting the regulatory strategy for seeking Regulatory
Approvals (including any pricing approvals) for Products in the Licensed Field
in the Territory, and (b) seeking and obtaining Regulatory Approvals in the
Licensed Field in the Territory. As between the Parties, Verrica shall bear all
of its costs and expenses incurred in connection with such regulatory
activities.

(b)In the Retained Field. Lytix has the exclusive right to conduct, and subject
to the remainder of this 0, is solely responsible for all aspects of, activities
related to (a) setting the regulatory strategy for seeking Regulatory Approvals
(including any pricing approvals) for Products in the Retained Field in the
Territory, and (b) seeking and obtaining Regulatory Approvals in the Retained
Field in the Territory. As between the Parties, Lytix shall bear all of its
costs and expenses incurred in connection with such regulatory activities.

5.2Regulatory Responsibilities and Rights of Reference.

(a)In the Licensed Field. Verrica shall prepare, submit, and own all Regulatory
Filings for Product in the Licensed Field in the Territory, at Verrica’s sole
cost and expense. Lytix hereby grants to Verrica a Right of Reference to all
Regulatory Filings pertaining to Product submitted by or on behalf of Lytix,
including any such Regulatory Filings that are in the possession of any Third
Party, subject to the prior written consent of such Third Party. Verrica may use
such Right of Reference to Lytix’s Regulatory Filings solely for the purpose of
seeking, obtaining, and maintaining Regulatory Approval of Product in Licensed
Field in the Territory, including in interactions with any Regulatory Authority
in connection with Development or Regulatory Approval of Product in the Licensed
Field in the Territory. Lytix shall support Verrica, as reasonably requested by
Verrica and at Verrica’s expense, in seeking, obtaining, and maintaining
Regulatory Approvals in the Licensed Field in the Territory, including providing
necessary documents or other materials required by Applicable Law to seek,
obtain, or maintain Regulatory Approval in the Licensed Field, all in accordance
with the terms and conditions of this Agreement. Verrica shall lead all
interactions with Regulatory Authorities with respect to Products in the
Licensed Field in the Territory. Verrica shall keep Lytix reasonably informed of
any material regulatory developments related to Products in the Licensed Field
in the Territory. At each regularly scheduled JSC meeting, Verrica shall provide
Lytix with a list and schedule of any in-person meeting or teleconference with
the applicable Regulatory Authorities (or related advisory committees) in the
Territory planned for the next Calendar Quarter that relates to any Product in
the Licensed Field. In addition, Verrica shall notify Lytix as soon as
reasonably possible (but in

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no event later than [***] Business Days if possible) after Verrica becomes aware
of any additional such meetings or teleconferences that become scheduled for
such Calendar Quarter. Lytix shall provide all assistance and documentation
reasonably requested by Verrica to prepare for any such meeting or
teleconference, including making available competent personnel to attend any
such meeting or teleconference, at Verrica’s reasonable request. To the extent
permitted by Applicable Laws and by the Regulatory Authorities (as reasonably
determined by Verrica), Lytix shall have the right to attend and observe such
meetings and teleconferences, and, upon the mutual agreement of the Parties,
participate in such meetings and teleconferences, in each case at Lytix’s cost
(unless such attendance and participation was requested by Verrica).

(b)In the Retained Field. As between the Parties, Lytix shall prepare, submit,
and own all Regulatory Filings for Product in the Retained Field in the
Territory, at Lytix’s sole cost and expense. Verrica hereby grants to Lytix a
Right of Reference to all Regulatory Filings pertaining to Product submitted by
or on behalf of Verrica. Lytix may use such Right of Reference to Verrica’s
Regulatory Filings solely for the purpose of seeking, obtaining, and maintaining
Regulatory Approval of Product in Retained Field in the Territory, including in
interactions with any Regulatory Authority in connection with Development or
Regulatory Approval of Product in the Retained Field in the Territory. Verrica
shall support Lytix, as reasonably requested by Lytix and at Lytix’s expense, in
seeking, obtaining, and maintaining Regulatory Approvals in the Retained Field
in the Territory, including providing necessary documents or other materials
required by Applicable Law to seek, obtain, or maintain Regulatory Approval in
the Retained Field, all in accordance with the terms and conditions of this
Agreement. Lytix shall lead all interactions with Regulatory Authorities with
respect to Products in the Retained Field in the Territory. Lytix shall keep
Verrica reasonably informed of any material regulatory developments related to
Products in the Retained Field in the Territory. At each regularly scheduled JSC
meeting, Lytix shall provide Verrica with a list and schedule of any in-person
meeting or teleconference with the applicable Regulatory Authorities (or related
advisory committees) in the Territory planned for the next Calendar Quarter that
relates to any Product in the Retained Field. In addition, Lytix shall notify
Verrica as soon as reasonably possible (but in no event later than [***]
Business Days if possible) after Lytix becomes aware of any additional such
meetings or teleconferences that become scheduled for such Calendar Quarter.
Verrica shall provide all assistance and documentation reasonably requested by
Lytix to prepare for any such meeting or teleconference, including making
available competent personnel to attend any such meeting or teleconference, at
Lytix’s reasonable request.

5.3Regulatory Authority Inspection.

(a)Inspections of Verrica. Verrica shall immediately notify Lytix as soon as
Verrica becomes aware of any Regulatory Authority inspections relating to any
Product in the Licensed Field in the Territory. Lytix may be present at any such
inspections and Verrica shall provide Lytix the opportunity to review and
comment on any responses that may be required. If Verrica does not receive prior
notice of any such inspection, Verrica shall notify Lytix as soon as practicable
after such inspection and shall provide Lytix with copies of all materials,
correspondence, statements, forms and records received or generated pursuant to
any such inspection.

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(b)Inspections of Lytix. Lytix shall immediately notify Verrica as soon as Lytix
becomes aware of any Regulatory Authority inspections relating to any Product in
the Retained Field in the Territory. If Lytix does not receive prior notice of
any such inspection, Lytix shall notify Verrica as soon as practicable after
such inspection and shall provide Verrica with copies of all materials,
correspondence, statements, forms and records received or generated pursuant to
any such inspection.

5.4Regulatory Cooperation.

(a)Each Party shall use Commercially Reasonable Efforts to provide the other
Party with all reasonable assistance and take all actions reasonably requested
by such other Party, without changing the allocation of responsibilities set
forth in this Article 5, that are necessary or desirable to enable: (a) Verrica
to seek, obtain, and maintain Regulatory Approvals for Product in the Licensed
Field in the Territory; and (b) Lytix to seek, obtain, and maintain Regulatory
Approvals for Product in the Retained Field in the Territory. Each Party shall
cooperate with any inspection by any Regulatory Authority relating to Product,
including any inspection prior to approval of an application for Regulatory
Approval for Product.

(b)The Parties shall share on a timely basis through the JSC (or an applicable
subcommittee) significant correspondence to or from a Regulatory Authority
(including submissions of Regulatory Filings) that are relevant to Product. The
Parties shall share and review such correspondence to or from a Regulatory
Authority to assure that the Parties provide consistent responses to the
Regulatory Authorities with respect to inquiries relevant to Product.
Additionally, to the extent that Lytix prepares a Drug Master File for the
Product, then Lytix shall provide Verrica with a draft of such Drug Master File
at least [***] days prior to completion thereof (as well as a final copy of such
Drug Master File upon completion), as well as any modifications or amendments
thereto. Verrica shall have the right to review and comment on any draft of the
Drug Master File (as well as any modifications or amendments thereto) and shall
provide Lytix with such comments within [***] days of receipt thereof. Lytix
shall consider any such comments in good faith.

5.5Notice of Regulatory Action. If any Third Party, including a Regulatory
Authority, takes or gives notice of its intent to take any regulatory action
with respect to any activity of a Party pursuant to this Agreement, which
regulatory action could reasonably be expected to materially adversely affect
any Development, Manufacture, or Commercialization activities with respect to
Product in the Licensed Field or in the Retained Field in the Territory, then
such Party shall promptly notify the other Party of such notice or action, and
the Parties shall discuss an appropriate response in good faith.

5.6Remedial Actions. Each Party shall notify the other immediately, and promptly
confirm such notice in writing, if it obtains information indicating that any
Product may be subject to any recall, corrective action, or other regulatory
action by any Governmental Authority or Regulatory Authority (a “Remedial
Action”). The Parties shall assist each other in gathering and evaluating such
information as is necessary to determine the necessity of conducting a Remedial
Action. Verrica has sole discretion with respect to any matters relating to any
Remedial Action with respect to Product that Verrica, its Affiliates, or its
Sublicensees distributed, including the

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decision to commence such Remedial Action and the control over such Remedial
Action. Lytix has sole discretion with respect to any matters relating to any
Remedial Action with respect to Product that Lytix, its Affiliates, or their
licensees (excluding Verrica, its Affiliates, or its Sublicensees) distributed,
including the decision to commence such Remedial Action and the control over
such Remedial Action. Each Party shall bear all costs and expenses of any
Remedial Action conducted by it pursuant to this Section 0. Each Party shall,
and shall ensure that its Affiliates and Sublicensees or licensees, as
applicable, will, maintain adequate records to permit the Parties to trace the
distribution, sale and use of Products in the Territory. Each Party shall
provide the other Party, at the other Party’s expense, with such assistance in
connection with a Remedial Action as may be reasonably requested by such other
Party. Notwithstanding the foregoing, any Remedial Action that relates to the
Manufacture and supply of Products by Lytix to Verrica is governed by the terms
and conditions of the applicable Supply Agreement.

5.7Adverse Event Reporting; SDEA; Global Pharmacovigilance Database.

(a)As between the Parties and in accordance with Section 0: (a) Verrica is
responsible for the timely reporting to the appropriate Regulatory Authorities
of all Adverse Events and any other information concerning the safety of Product
in the Licensed Field, and (b) Lytix is responsible for the timely reporting to
the appropriate Regulatory Authorities of all Adverse Events and any other
information concerning the safety of Product in the Retained Field. The Party
that owns the Regulatory Approval for the applicable Product has the right to
make the final decision with respect to any Adverse Event filing with a
Regulatory Authority with respect to such Product in the event of a dispute and
where a decision must be made in order to comply with applicable time filing
requirements.

(b)Subject to the terms of this Agreement, and reasonably prior to the
Initiation of any Clinical Trial by or on behalf of Verrica, Lytix and Verrica
(under the guidance of their respective Pharmacovigilance Departments, or
equivalent thereof) shall define and finalize the responsibilities of the
Parties to protect patients and promote their well-being in connection with the
use of Product pursuant to a written agreement between the Parties (the “Safety
Data Exchange Agreement”). The Safety Data Exchange Agreement will (a) include
mutually acceptable guidelines and procedures for the receipt, investigation,
recordation, communication, and exchange (as between the Parties) and regulatory
submission of Adverse Event reports, reports of exposure during pregnancy, and
any other information concerning the safety of Product, (b) be in accordance
with, and enable the Parties, their Affiliates, and Sublicensees to fulfill,
local and international regulatory reporting obligations to Governmental
Authorities, and (c) be consistent with relevant ICH guidelines, except where
said guidelines may conflict with existing local regulatory safety reporting
requirements, in which case local reporting requirements shall prevail. Further,
the Safety Data Exchange Agreement will provide for the following: Lytix shall
control the global pharmacovigilance database with respect to Product worldwide.

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Article 6
COMMERCIALIZATION

6.1Commercialization Responsibilities.

(a)Licensed Field. Verrica has the exclusive right to conduct, and is solely
responsible for all aspects of, the Commercialization of Products in the
Licensed Field in the Territory, including: (a) developing and executing a
commercial launch and pre-launch plan, (b) negotiating with applicable
Governmental Authorities regarding the price and reimbursement status of
Products; (c) marketing and promotion; (d) booking sales and distribution and
performance of related services; (e) handling all aspects of order processing,
invoicing and collection, inventory and receivables; and (f) providing customer
support, including handling medical queries, and performing other related
functions, in each case of (a)–(f) with respect to the Licensed Field; provided,
that such decisions are consistent with the express terms and conditions of this
Agreement. As between the Parties, Verrica shall bear all of its costs and
expenses incurred in connection with such Commercialization activities.

(b)Retained Field. Lytix has the exclusive right to conduct, and is solely
responsible for all aspects of, the Commercialization of Products in the
Retained Field in the Territory, including: (a) developing and executing a
commercial launch and pre-launch plan, (b) negotiating with applicable
Governmental Authorities regarding the price and reimbursement status of
Products; (c) marketing and promotion; (d) booking sales and distribution and
performance of related services; (e) handling all aspects of order processing,
invoicing and collection, inventory and receivables; and (f) providing customer
support, including handling medical queries, and performing other related
functions, in each case of (a)–(f) with respect to the Retained Field; provided,
that such decisions are consistent with the express terms and conditions of this
Agreement. As between the Parties, Lytix shall bear all of its costs and
expenses incurred in connection with such Commercialization activities.

6.2Commercial Diligence.

(a)Verrica shall (a) use Commercially Reasonable Efforts to Commercialize
Product for which it has obtained Regulatory Approval to achieve the First
Commercial Sale of Product by certain target dates and (b) achieve certain sales
targets, in each case as is contained in the Commercialization Plan.

(b)Lytix may terminate this Agreement in its entirety if Verrica, itself or
through one or more of its Affiliates, Sublicensees, or Third-Party service
providers is not using Commercially Reasonable Efforts to Commercialize Product
or fails to demonstrate to Lytix that it has used Commercially Reasonable
Efforts to Commercialize Product for which it has obtained Regulatory Approval
to achieve the First Commercial Sale of Product by certain dates or achieve
certain sales targets, in each case as is contained in the Commercialization
Plan.

6.3Commercialization Plans. Verrica shall establish plans for Commercialization
of Product in the Licensed Field in each of the [***] in accordance with its
normal business practices and consistent with the form and detail that Verrica
normally provides for its internal products at a similar stage and shall provide
the final version of such commercialization plan (the

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“Commercialization Plan”) to Lytix for its review and comment. After
establishment of the initial commercialization plan for Product in the Licensed
Field, Verrica shall update such commercialization plan at least annually and
provide such updated commercialization plan to Lytix for its review and comment.
Verrica shall establish such other plans for Commercialization of Product in
other countries of the Territory in accordance with its normal business
practices and shall include a summary of such plans in each update to Lytix
under this Section 0.

6.4Standards of Conduct. Each Party shall perform, and shall ensure that its
Affiliates, (sub)licensees and Third Party contractors perform, all
Commercialization activities in a good scientific and ethical business manner
and in compliance with Applicable Laws. Verrica and its Sublicensees (and their
respective Affiliates) shall not knowingly promote or sell (or encourage or
facilitate the sale of) any Product for use in the Retained Field. Verrica and
its Sublicensees (and their respective Affiliates) shall not provide funding to
or otherwise support continuing education programs for sales representatives or
medical professionals in which information is provided about the use of any
Product for use in the Retained Field. Lytix and its licensees (and their
respective Affiliates) shall not knowingly promote or sell (or encourage or
facilitate the sale of) any Product for use in the Licensed Field. Lytix shall
not provide funding to or otherwise support continuing education programs for
its sales representatives or medical professionals in which information is
provided about the use of any Product in the Licensed Field. Each Party
represents that it has established or will establish, and shall follow, its own
internal policies, procedures and standards for promotion, Clinical Trials,
Medical Education Activities and other sales and marketing activities for
Products in the Licensed Field (with respect to Verrica) and the Retained Field
(with respect to Lytix), to ensure compliance with Applicable Laws.

6.5Tracking of Sales of Product.

(a)Tracking. The Parties recognize the possibility that customers or other Third
Parties may purchase Product that has received Regulatory Approval for and is
sold for use in the Licensed Field and in the Retained Field. In the case where
Product is sold in the Licensed Field and in the Retained Field in the same
country in the Territory, upon the request of either Party, the Parties, through
the JSC, shall establish a process and methodology for the tracking of sales of
such Product to determine the extent of sales in each of the Licensed Field and
Retained Field. For this purpose, the Parties through the JSC shall agree on (i)
the acquisition of one or more prescription data services or other relevant
market research generally recognized in the pharmaceutical industry as having a
high degree of accuracy and reliability in the tracking of sales of Product
attributable to the Licensed Field and the Retained Field (e.g., the IQVIA
prescription claims database) (the “Data Services”), (ii) the methodology for
applying any such resulting data and information to the Net Sales of Product
(including use of random sampling, use of data regarding distribution channels
as proxy for indication-specific sales and development of mathematical models
for approximating indication-specific sales) (the “Sales Tracking Methodology”),
and (iii) a mechanism for addressing prescriptions that are tracked back to sole
source purchasing agreements. All costs associated with the acquisition and
application of such Data Services and Sales Tracking Methodology shall be shared
equally by the Parties and specific details negotiated by the Parties at such a
time when necessary.

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(b)If the JSC determines that (i) a Product sold by or on behalf of Lytix is
actually used for the treatment of indications in the Licensed Field in a
country in the Territory at a level exceeding, on a product-unit sales basis
during a Calendar Year, [***] of the product unit sales for such Product in the
Licensed Field in such Calendar Year period for such country, or (ii) a Product
sold by or on behalf of Verrica is actually used for the treatment of
indications in the Retained Field in a country in the Territory at a level
exceeding, on a product-unit sales basis during a Calendar Year, [***] of the
product unit sales for such Product in the Retained Field in such Calendar Year
period for such country, then the Parties shall negotiate in good faith a manner
in which a Party will financially compensate the other Party for such off-label
sales.

(c)Disputes. If the JSC cannot agree: (i) on the Data Services and the Sales
Tracking Methodology; (ii) on the extent to which sales of Product sold by or on
behalf of Verrica for off-label use in the Retained Field exceeds the applicable
[***] threshold set forth above; (iii) on the extent to which sales of Product
sold by or on behalf of Lytix for off-label use in the Licensed Field exceeds
the applicable [***] threshold set forth above; or (iv) the manner in which the
Parties are to financially resolve such off-label use; then, in each case, at
the election of either Party, such dispute shall be finally resolved through
binding baseball arbitration in accordance with Section 0.

Article 7
MANUFACTURING

7.1General. Subject to the terms and conditions of this Agreement and the
applicable Supply Agreement, Verrica has the sole right to conduct, and is
solely responsible for all aspects of, the Manufacture of Drug Product (other
than the API) in the Licensed Field in the Territory. Subject to the terms and
conditions of this Agreement and the applicable Supply Agreement, Verrica has
the right to request Lytix to Manufacture and supply Verrica with API for use in
the Licensed Field in the Territory.  On and after First Commercial Sale of the
Product in the Licensed Field, Lytix shall maintain safety stock of API in an
amount sufficient to meet [***] months of Verrica’s requirements for API as
forecasted by Verrica in accordance with the Commercial API Supply Agreement.
Verrica shall be responsible for [***], and Lytix shall be responsible for
[***], of the Third Party out-of-pocket cost of such safety stock of
API.  Verrica shall reimburse Lytix for its share of such costs upon receipt of
reasonably adequate documentation indicating such Third Party costs and evidence
of payment by Lytix to such Third Party.  Verrica’s reimbursement of such costs
shall be credited against amounts subsequently payable under the applicable
Supply Agreement for the supply of such API.  If such safety stock of API at any
time falls below the amount sufficient to meet Verrica’s [***] API requirements,
then Lytix shall (a) within [***] months thereafter, establish a second source
of supply for API for use in the Licensed Field with a Third Party contract
manufacturer selected by Lytix and (b) within [***] months thereafter, begin to
obtain supply of API for use in the Licensed Field from such Third Party
contract manufacturer. Lytix shall provide any technology transfer necessary or
reasonable in order for such supplier to be operational to provide API
acceptable for commercial use in the Territory; provided, that any such
technology transfer (including, for the avoidance of doubt, CMC and registration
activities) to such supplier shall be exclusively at Lytix’s cost.

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7.2Lytix Supply Obligation. Lytix shall, subject to the limitations set forth in
7.2(b), Manufacture and supply, or cause to be supplied, to Verrica, and Verrica
shall exclusively purchase from Lytix, any or all of Verrica’s, its Affiliates’
and its and their Sublicensees’ requirements of API for (a) clinical trials and
other non-clinical Development and registration activities in the Licensed Field
in the Territory; and (b) commercial distribution in the Licensed Field in the
Territory, in each case as described in additional detail in Section 0. Lytix
shall supply Verrica with API in: (i) the form that have been developed as of
the Effective Date; or (ii) any form that, at the time of supply, is being
Developed or Commercialized by or on behalf of Lytix in the Retained Field, or
(iii) any form requested by Verrica and reasonably agreed by Lytix, in each
case, as is set forth in the Clinical API Supply Agreement or Commercial API
Supply Agreement, as applicable. Verrica is responsible, at Verrica’s sole cost
and expense, for any cartoning, packaging, for development of any requested
formulations of the Product, and labeling of Product in accordance with the
Applicable Laws in the Territory. Verrica is responsible, at Verrica’s sole cost
and expense, for the distribution of Products in the Licensed Field in the
Territory. On a quarterly basis, Lytix shall provide Verrica with copies of
relevant CMC information generated by or on behalf of Lytix with respect to API,
including data and information related to the development of the Manufacturing
process necessary for Verrica’s regulatory processes. Verrica shall have the
right to review, comment on, and approve any proposed Manufacturing process
development activities for API for supply to Verrica.

7.3Supply Agreements.

(a)Clinical Supply. Lytix shall Manufacture and supply, to the extent requested
by Verrica, or have Manufactured and have supplied, (i) API to Verrica for use
in clinical trials and other Development and registration activities and (ii)
Product being Developed or Commercialized by or on behalf of Lytix for use in
Verrica’s initial clinical studies, with respect to Product in the Licensed
Field in the Territory, in accordance with a written clinical supply agreement
to be negotiated in good faith and entered into by the Parties as soon as
practicable following the Effective Date and in accordance with the principles
and terms set forth in Exhibit 0 (the “Clinical API Supply Agreement”). The
Clinical API Supply Agreement will contain other normal and customary terms and
conditions for such supply arrangement. Verrica shall pay Lytix for API supplied
by or on behalf of Lytix to Verrica under the Clinical API Supply Agreement at a
price equal to Lytix’s Cost of Goods plus a [***] premium.

(b)Commercial Supply. Lytix shall Manufacture and supply, to the extent
requested by Verrica, or have Manufactured and have supplied, API to Verrica for
commercial distribution in the Territory, in accordance with a written
commercial supply agreement to be negotiated in good faith and entered into by
the Parties within [***] months after the execution of the Clinical API Supply
Agreement and in accordance with the principles and terms set forth in Exhibit 0
(the “Commercial API Supply Agreement”). The Commercial API Supply Agreement
will contain other normal and customary terms and conditions for such supply
arrangement. Verrica shall pay Lytix for API supplied by or on behalf of Lytix
to Verrica under the Commercial API Supply Agreement at a price equal to Lytix’s
Cost of Goods plus a [***] premium.

7.4Manufacturing Process Exchange. On an ongoing basis during the Term, upon the
request of either Party (the “Transferee”), the other Party (the “Manufacturing
Party”) shall

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transfer to the Transferee or a Third Party manufacturer designated by the
Transferee all Know-How as of the date of such request that is necessary for
Transferee or such Third Party manufacturer (as appropriate) to replicate the
process employed by or on behalf of the Manufacturing Party as of such date to
Manufacture the Drug Product (but not the API). Promptly after receiving an
invoice therefor, the Transferee shall reimburse the Manufacturing Party’s
reasonable external expenses incurred in carrying out such transfer. In
addition, the Manufacturing Party shall make available to the Transferee, on a
reasonable consultation basis, advice of its technical personnel as may
reasonably be requested by the Transferee in connection with such transfer of
Know-How or otherwise in connection with the Manufacture of the Drug Product
(but not the API). The Transferee shall reimburse the Manufacturing Party for
the reasonable charges for the time and expenses of such personnel when
consulting for the Transferee.

Article 8
COMPENSATION

8.1Upfront Payments. Within [***] Business Days after the Effective Date,
Verrica shall pay to Lytix a one-time upfront payment of Two Hundred Fifty
Thousand Dollars ($250,000).

8.2IND Clearance. Within [***] days after Lytix receives a “study may proceed”
letter from the FDA for the Product in the Retained Field, Verrica shall pay to
Lytix a one-time payment of Two Million Two Hundred Fifty Thousand Dollars
($2,250,000).

8.3Development Milestone Payments. Verrica shall notify Lytix within [***] days
after the first achievement by Verrica, its Affiliates, or Sublicensees of the
following development milestone events. Verrica shall make the corresponding
milestone payment concurrently with such notice.

Development Milestone Event

Milestone Payment

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

Each milestone payment is payable one time only, regardless of the number of
times the corresponding milestone event is achieved by a Product and regardless
of the number of Products to achieve such milestone event. Under no
circumstances shall Verrica be obligated to pay Lytix more than [***] in the
aggregate pursuant to this Section 0.

8.4Sales Milestones. Verrica shall notify Lytix within [***] days after the end
of the Calendar Year in which the cumulative annual Net Sales of all Product by
Verrica and its Affiliates and Sublicensees (including amounts deemed Net Sales
pursuant to Section 0) first reaches each

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of the amounts specified below. Verrica shall make the corresponding milestone
payment concurrently with such notice.

Milestone Event

Milestone Payment

Cumulative Net Sales of Product exceed [***]

[***]

Cumulative Net Sales of Product exceed [***]

[***]

Cumulative Net Sales of Product exceed [***]

[***]

Cumulative Net Sales of Product exceed [***]

[***]

Cumulative Net Sales of Product exceed [***]

[***]

Each such sales milestone payment is payable one time only. Under no
circumstances shall Verrica be obligated to pay Lytix more than [***] in the
aggregate pursuant to this Section 0.

8.5Royalties.

(a)Royalty Rates. Subject to Sections 0, 8.5(c) and 0, Verrica shall pay to
Lytix royalties on aggregate annual Net Sales (including amounts deemed Net
Sales pursuant to Section 0) of all Products in the Licensed Field in the
Territory during the applicable Royalty Term, as calculated by multiplying the
applicable royalty rate below by the corresponding amount of incremental Net
Sales of all Products in the Licensed Field in the Territory in each Calendar
Year.

Annual Net Sales of Products in the Territory

Royalty Rate

For that portion of annual aggregate Net Sales of Products less than [***]

[***]

For that portion of annual aggregate Net Sales of Products greater than or equal
to [***]

[***]

For that portion of annual aggregate Net Sales of Products greater than [***]

[***]

For that portion of annual aggregate Net Sales of Products greater than [***]

[***]

(b)Royalty Term. Verrica shall pay royalties under this Section 0, on a
country-by-country and Product-by-Product basis, on Net Sales during the period
of time beginning on the First Commercial Sale of such Product in such country
and continuing until the later of: (i) the expiration or abandonment of the
last-to-expire Licensed Patent Covering such Product anywhere in the Territory
and (ii) the expiration of Regulatory Exclusivity for the Product in such
country (the “Royalty Term”).

(c)No Valid Claim. During the Royalty Term, on a country-by-country basis, if
Product is not Covered by a Valid Claim of a Licensed Patent in such country,
then the royalty

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rate set forth in Section 0 will be reduced by [***], effective as of the date
such Product is no longer Covered by a Valid Claim of a Licensed Patent in such
country.

(d)[INTENTIONALLY OMITTED].

(e)Royalty Reports and Payments. Within [***] days after the end of each
Calendar Quarter during the Royalty Term, Verrica shall deliver to Lytix a
written royalty report specifying, on a country-by-country and
Product-by-Product basis, the amount of gross sales and Net Sales of Products
during the applicable Calendar Quarter, a calculation of the amount of royalty
payment due on such sales for such Calendar Quarter, any applicable royalty
offsets under Section 0, and a revised calculation of the payment due after the
application of such offsets. Concurrently with the delivery of such royalty
report, Verrica shall pay all royalties due to Lytix with respect to Net Sales
by Verrica, its Affiliates or their respective Sublicensees for each such
Calendar Quarter. For clarity, Verrica shall have no obligation to make royalty
reports or payments to Lytix for Net Sales of Product achieved by any
Sublicensee, other than as set forth in Section 8.7.

8.6Third Party Payments. If Verrica obtains a license or other rights to any
Third Party intellectual property right that is necessary or reasonably useful
to exploit any Product, then, during the Royalty Term, Verrica may deduct from
any royalty payments to Lytix under Section 0 [***] of any payments otherwise
due by Verrica or its Affiliates or Sublicensees to Third Parties for any such
license or grant of rights.

8.7Sublicense Income. If Verrica grants a sublicense to one or more Sublicensees
under the Licensed Technology, any upfront fees or milestone payments (but
excluding royalties) received by Verrica or its Affiliates from or on behalf of
each such Sublicensee for activities anywhere in the Territory shall be treated
as Net Sales for the purposes of Section 0 and Section 0; provided, that, with
respect to any milestone payments received from a Sublicensee that are due based
on the achievement of a development milestone event described in Section 8.3,
only amounts received by Verrica in excess of the amount due to Lytix under
Section 8.3 for such development milestone event shall be treated as Net Sales
for the purposes of Section 0 and Section 0. If Verrica grants a sublicense to
one or more Sublicensees under the Licensed Technology, any royalties received
by Verrica or its Affiliates from or on behalf of each such Sublicensee
applicable to Net Sales anywhere in the Territory shall be shared by the Parties
as follows:

Sublicense Granted

Royalty Sharing

[***]

50% (Verrica)/50% (Lytix)

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

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provided, that, Lytix’s share of such royalties shall not be less than [***] of
the amount of such Net Sales achieved by such Sublicensee nor shall it exceed
[***] of the amount of such Net Sales achieved by such Sublicensee. For clarity,
Verrica shall have no other payment obligations to Lytix in connection with any
other payments received from or on behalf of a Sublicensee.

8.8Foreign Exchange. The rate of exchange to be used in computing the amount of
currency equivalent in Dollars of Net Sales invoiced in other currencies shall
be the rate used by Verrica in its financial reporting in accordance with
Accounting Standards, as applicable.

8.9Manner and Place of Payment. All payments owed by Verrica under this
Agreement shall be made by wire transfer in immediately available funds to a
bank and account designated in writing by Lytix.

8.10Records; Audits. Verrica and its Affiliates and Sublicensees will maintain
complete and accurate records in reasonably sufficient detail to permit Lytix to
confirm the accuracy of the calculation of royalty payments and the achievement
of sales milestone events. Upon reasonable prior notice, such records shall be
available during regular business hours for a period of [***] years from the end
of the Calendar Year to which they pertain for examination, not more often than
once each Calendar Year, by an independent certified public accountant selected
by the auditing Party and reasonably acceptable to the audited Party, for the
sole purpose of verifying the accuracy of the financial reports furnished by the
other Party pursuant to this Agreement. Any such auditor shall enter into a
confidentiality agreement with the audited Party and shall not disclose the
audited Party’s Confidential Information, except to the extent, such disclosure
is necessary to verify the accuracy of the financial reports furnished by the
audited Party or the amount of payments due by one Party to the other Party
under this Agreement. Any amounts shown to be owed but unpaid shall be paid, and
any amounts showed to be overpaid will be refunded, within [***] days from the
accountant’s report. The auditing Party shall bear the full cost of such audit
unless such audit discloses an underpayment or overcharge by the audited Party
of more than [***] of the amount due, in which case the audited Party shall bear
the full cost of such audit.

8.11Taxes.

(a)Taxes on Income. Except as otherwise provided in this Section 8.11, each
Party shall be solely responsible for the payment of all taxes imposed on its
share of income arising directly or indirectly from the efforts of the Parties
under this Agreement, including taxes asserted or collected through withholding.
In the event of a determination by a tax authority that an amount should have
been withheld from a payment to Lytix (but no such amount was withheld), Lytix
shall indemnify Verrica for the withholding tax. Notwithstanding anything to the
contrary in this Agreement, Lytix shall timely pay and be responsible for (and
shall indemnify Verrica for) any transfer, documentary, sales, use, stamp,
registration, value added, goods and services tax or other similar tax that is
imposed with respect to the transactions, payments or the related transfer of
rights or other property pursuant to the terms of this Agreement. Verrica shall
be entitled to offset any

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taxes for which Verrica is indemnified pursuant to this Section 8.11 from
amounts otherwise owed to Lytix under this Agreement.

(b)Withholding Tax. The Parties agree to cooperate with one another and use
reasonable efforts to reduce or eliminate tax withholding or similar obligations
in respect of royalties, milestone payments, and other payments made by Verrica
to Lytix under this Agreement. To the extent Verrica is required to deduct and
withhold taxes on any payment to Lytix, Verrica shall pay the amounts of such
taxes to the proper Governmental Authority in a timely manner and promptly
transmit to Lytix an official tax certificate or other evidence of such
withholding sufficient to enable Lytix to claim such payment of taxes. Any such
amounts deducted or withheld by Verrica shall be treated as having been paid to
Lytix for purposes of this Agreement. On or prior to the Effective Date, Lytix
shall deliver to Verrica a properly completed Internal Revenue Service Form
W-8BEN-E. Each Party shall provide the other with reasonable assistance to
enable the recovery, as permitted by applicable Laws, of withholding taxes,
value added taxes, or similar obligations resulting from payments made under
this Agreement, such recovery to be for the benefit of the Party bearing such
withholding tax or value added tax.

Article 9
INTELLECTUAL PROPERTY MATTERS

9.1Ownership of Inventions.

(a)Inventions. Each Party owns all rights, title, and interests in and to any
and all Know-How or Inventions made solely by or on behalf of such Party or its
Affiliates in connection with the performance of such Party’s activities under
this Agreement and any Patents claiming any such Know-How or Inventions. The
Parties jointly own any and all Joint Inventions and Joint Patents. All
determinations of inventorship under this Agreement will be made in accordance
with U.S. patent law.

(b)Disclosure. (i) Each Party shall promptly disclose to the other Party all
Inventions, and (ii) each Party shall promptly disclose to the other Party all
Joint Inventions, in each case ((i) of (ii)), prior to the filing of any patent
application with respect to such Inventions, including all invention disclosures
or other similar documents submitted to such Party by its or its Affiliates’
employees, agents, or independent contractors relating thereto. Each Party shall
also promptly respond to reasonable requests from the other Party for additional
information relating thereto.

(c)Licenses. Verrica shall and hereby does grant to Lytix a royalty-free, fully
paid-up, exclusive (even as to Verrica and its Affiliates), perpetual,
irrevocable license (with the right to grant sublicenses through multiple tiers)
under Verrica Inventions to research, Develop, make, have made, use, sell, have
sold, offer for sale, import, and otherwise Commercialize Product in the
Retained Field in the Territory, subject to the terms and conditions of this
Agreement.

9.2Patent Prosecution and Maintenance. For purposes of this Section 0, the terms
“prosecution” and “maintenance” (including variations such as “prosecute” and
“maintain”) means, with respect to a Patent, the preparation, filing,
prosecution (including conducting all correspondence and interactions with any
patent office and seeking, conducting and defending all

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any interferences, inter partes reviews, reissue proceedings, reexaminations,
and oppositions and similar proceedings) and maintenance (including payment of
any patent annuity fees) of such Patent, as well as re-examinations, reissues,
appeals, post grant reviews (PGR), inter partes reviews (IPR) and requests for
patent term adjustments, patent term extensions, supplementary protection
certificates, or their equivalents with respect to such Patent, together with
the initiation or defense of interferences, oppositions and other similar
proceedings with respect to the particular Patent, and any appeals therefrom.
For clarity, “prosecution” and “maintenance” (including variations such as
“prosecute” and “maintain”) exclude any enforcement action with respect to a
Patent.

(a)Prosecution of Licensed Patents. Lytix has the first right, but not the
obligation, to prosecute and maintain the Licensed Patents (other than Joint
Patents, which are addressed in Section 0) in the Territory using counsel of its
own choice, at Lytix’s sole expense. Lytix shall keep Verrica reasonably
informed of progress with respect to the prosecution and maintenance of such
Licensed Patents in the Territory. In addition, Lytix shall provide Verrica with
drafts of all proposed substantive filings and correspondence to any patent
authority with respect to any Licensed Patent for Verrica’s review and comment
prior to the submission of such proposed filings and correspondence. Lytix shall
consider in good faith Verrica’s comments related to such Licensed Patent prior
to submitting such filings and correspondence. If Lytix decides to abandon any
Licensed Patent in its entirety, Verrica may assume Lytix’s rights and
responsibilities under this Section 0 with respect to such Licensed Patent.
Verrica will thereafter be responsible for the prosecution and maintenance of
such Licensed Patent.

(b)Joint Patents. The Parties shall establish the patent strategy for the
prosecution and maintenance of any Joint Patents, and shall determine, on an
Invention-by-Invention basis, which Party shall be responsible for the
prosecution and maintenance of such Patents (such Party, the “Prosecuting
Party”). In determining the Prosecuting Party, the Parties shall take into
account each Party’s intellectual property or Patent position with respect to
the relevant Invention. The Prosecuting Party shall keep the other Party
reasonably informed of progress with regard to its prosecution and maintenance
of any Patents described in this Section 0, including by providing such other
Party with drafts of all proposed substantive filings and correspondence to any
relevant patent authority for such other Party’s review and comment prior to the
submission of such proposed filings and correspondence. The Prosecuting Party
shall consider in good faith the other Party’s comments related to such Patents
prior to submitting such filings and correspondence, provided that the other
Party provides such comments to the Prosecuting Party within [***] days (or a
shorter period reasonably designated by the Prosecuting Party if [***] days is
not practicable given the filing deadline) of receiving the draft filings and
correspondence from the Prosecuting Party. If the Prosecuting Party seeks to
abandon or cease the prosecution or maintenance of any Patent described in this
Section 0 (without initiation of the prosecution and maintenance of a
substitution therefor), then the Prosecuting Party shall provide reasonable
prior written notice to the other Party of such intention to abandon or cease
such prosecution or maintenance (which notice shall be given no later than
[***] days prior to the next deadline for any action that must be taken with
respect to any such Joint Patent with the patent office). In such case, at the
other Party’s sole discretion, upon written notice to the Prosecuting Party,
such other Party may elect to continue the prosecution and maintenance of any
such Patent described in this Section 0, and will thereafter be the Prosecuting
Party with respect to such Joint Patent. The Parties shall mutually agree on the
percentage of expenses that each Party shall bear

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with respect to the prosecution of Joint Patents (which in the absence of any
other agreement between the Parties shall be borne by the Prosecuting Party).

(c)Cooperation of the Parties. Each Party shall cooperate fully in the
preparation, filing, prosecution and maintenance of the Licensed Patents and
Joint Patents pursuant to this Section 0. Such cooperation includes
(a) executing all papers and instruments, or requiring its employees or
contractors, to execute such papers and instruments, so as to effectuate the
ownership of Inventions as set forth in Section 0, and Patents claiming or
disclosing such Inventions, and as to enable the other Party to apply for and to
prosecute patent applications in any country as permitted by Section 0, and
(b) promptly informing the other Party of any matters coming to such Party’s
attention that may affect the prosecution and maintenance of any such patent
applications.

9.3Enforcement.

(a)Notice; Procedures. Each Party shall notify the other Party within [***]
Business Days of becoming aware of any alleged or threatened infringement by a
Third Party of (i) Joint Patents anywhere in the world or (ii) Licensed Patents
(other than Joint Patents) if infringement of such Licensed Patents adversely
affects or is expected to adversely affect any Product the Territory, and in
each case of (i) and (ii), any related declaratory judgment or equivalent action
alleging the invalidity, unenforceability or non-infringement of such Patents
(collectively “Infringement”). For clarity, any Infringement excludes those
adversarial proceedings that are addressed in Section 0.

(b)Enforcement Rights.

(i)Licensed Patents. As between the Parties, Verrica has the first right, but
not the obligation, to bring and control any legal action to enforce any
Licensed Patents against any Infringement in the Licensed Field in the
Territory, at its own expense as it reasonably determines appropriate, and
Verrica shall consider in good faith the interests of Lytix in such enforcement
of any such Patents. If Verrica or its designee fails to file an action to abate
such Infringement within [***] days after a written request from Lytix to do so,
or if Verrica discontinues the prosecution of any such action after filing
without abating such infringement, then if such Infringement has not otherwise
been abated by Verrica or its designee, Lytix may enforce any Licensed Patent
against the relevant Infringement in the Territory, at its own expense as it
reasonably determines appropriate, provided that Verrica does not provide
reasonable rationale for not doing so or continuing to do so (including a
substantive concern regarding counter-claims by the infringing Third Party).

(ii)Joint Patents. If either Party becomes aware of any alleged or threatened
Infringement by a Third Party of any Joint Patent, then such Party shall so
notify the other Party, and the Parties shall promptly confer and determine (1)
whether to bring such an enforcement action against such Third Party, (2) the
strategy to be employed in connection with any such action, or (3) the manner in
which to settle such action. Unless otherwise agreed, Verrica has the first
right, but not the obligation, to bring and control any legal action to enforce
any Joint Patents against any Infringement in the Licensed Field, at its own
expense as it reasonably determines appropriate, and Verrica shall consider in
good faith the interests of Lytix in such

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enforcement of any such Patents. Unless otherwise agreed, if Verrica or its
designee fails to file an action to abate such Infringement within [***] days
after a written request from Lytix to do so, or if Verrica discontinues the
prosecution of any such action after filing without abating such infringement,
then if such Infringement has not otherwise been abated by Verrica or its
designee, Lytix may enforce any Joint Patent against the relevant Infringement,
at its own expense as it reasonably determines appropriate, provided that
Verrica does not provide reasonable rationale for not doing so or continuing to
do so (including a substantive concern regarding counter-claims by the
infringing Third Party). The Party not bringing an action under this Section 0
will be entitled to separate representation in such proceeding by counsel of its
own choice and at its own expense and will cooperate fully with the Party
bringing such action. Notwithstanding the foregoing, each Party shall discuss
any such action it intends to bring under this Section 0 with the other Party,
and shall not take any substantive position in any such enforcement proceeding
or take any action in such enforcement proceeding that such Party reasonably
believes in good faith would have the potential to adversely affect or limit the
scope, validity, or enforceability of any claim in any Patent Controlled by such
Party or its Affiliate that relates to Product.

(c)Cooperation. If a Party brings an infringement action in accordance with this
Section 0 (such Party, the “Enforcing Party”), the other Party shall cooperate
fully, including, if required to bring such action, furnishing a power of
attorney or being named as a party to such infringement action. The Enforcing
Party shall not enter into any settlement or compromise of any action under this
Section 0: (i) in a manner that would diminish the rights or interests of the
other Party without the written consent of such other Party, not be unreasonably
withheld, conditioned, or delayed; or (ii) that would impose any cost or
liability on the other Party, or admit the invalidity or unenforceability of any
Patent Controlled by the other Party, without such other Party’s prior written
consent, which may be withheld in such other Party’s sole discretion.

(d)Recovery. Except as otherwise agreed by the Parties in connection with a
cost-sharing arrangement, any recovery as a result of any action or proceeding
pursuant to Section 0, whether by way of settlement or otherwise, will be first
used to reimburse the Enforcing Party for its documented, out-of-pocket costs
and expenses (including court, attorneys’ and professional fees) incurred in
connection with such action or proceeding, and then to reimburse the other Party
for its documented, out-of-pocket costs and expenses (including court,
attorneys’ and professional fees) incurred in connection with such action or
proceeding (to the extent not previously reimbursed by the Enforcing Party), and
any remainder of the recovery after reimbursement of the litigation costs and
expenses of the Parties, will be retained by the Enforcing Party, provided, that
any such amounts retained by Verrica will be treated as Net Sales and subject to
payments to Lytix in accordance with Section 0.

9.4Infringement of Third-Party Rights. Each Party shall promptly notify the
other in writing of any allegation by a Third Party that Manufacture, use or
sale of Product infringes or may infringe the intellectual property rights of
such Third Party. Except as otherwise provided in 0, (a) Verrica has the sole
right to control any defense of any such claim involving alleged infringement of
Third Party rights by Verrica’s activities at its own expense and by counsel of
its own choice, and Lytix may, at its own expense, be represented in any such
action by counsel of its own choice if such intellectual property rights pertain
to the Territory and (b) Lytix has the sole right to control any defense of any
such claim involving alleged infringement of Third Party rights

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by Lytix’s activities at its own expense and by counsel of its own choice, and
Verrica may, at its own expense, be represented in any such action by counsel of
its own choice. Except as otherwise provided in 0, neither Party may settle any
patent infringement litigation under this Section 0 in a manner that diminishes
the rights or interests of the other Party without the written consent of such
other Party (which shall not be unreasonably withheld, conditioned, or delayed).

9.5Patent Term Extensions. Lytix will cooperate with Verrica, at Verrica’s
request, in seeking and obtaining patent term extensions (including any
pediatric exclusivity extensions as may be available) or supplemental protection
certificates or their equivalents in any country with respect to any Licensed
Patents and Products. If elections with respect to obtaining such patent term
extensions are to be made, Verrica shall have the right to make such elections
with respect to the Product with Lytix’s prior written consent.

9.6Trademarks.

(a)Product Marks. Verrica may brand Product in the Licensed Field in the
Territory using trademarks, logos, and trade names it determines appropriate
(the “Product Marks”). Verrica owns all rights in the Product Marks and shall
register and maintain the Product Marks that it determines reasonably necessary,
at Verrica’s cost and expense.

(b)Licensed Marks. As between the Parties, Lytix owns and retains all right,
title, and interest in and to all trademarks associated with any trademarks
Controlled by Lytix that are associated solely with Products (each, a “Licensed
Mark”). Lytix shall register and maintain all Licensed Marks at Lytix’s cost and
expense, and all goodwill in any such Licensed Mark shall accrue to Lytix. Lytix
hereby grants Verrica an exclusive (even as to Lytix), fully paid-up,
royalty-free, sublicensable license to use the Licensed Marks to research,
Develop, make, have made, use, sell, have sold, offer for sale, import, and
otherwise Commercialize Products in the Licensed Field in the Territory.

(c)Corporate Marks. Notwithstanding anything to the contrary, to the extent
required by Applicable Law, (i) Verrica may include Lytix’s name and corporate
logo on the Product label, packaging, promotional/marketing materials to
indicate that the Product is in-licensed from Lytix, and (ii) Lytix hereby
grants to Verrica a non-exclusive, fully paid-up, royalty free, sublicensable
license to use Lytix’s name and corporate logo for the Commercialization of
Product in the Territory to the extent consistent with this Section 0.

Article 10
REPRESENTATIONS AND WARRANTIES; COVENANTS

10.1Mutual Representations and Warranties. Each Party represents and warrants to
the other Party, as of the Effective Date, that: (a) it is duly organized and
validly existing under the laws of its jurisdiction of incorporation or
formation, and has full corporate or other power and authority to enter into
this Agreement and to carry out the provisions hereof; (b) it is duly authorized
to execute and deliver this Agreement and to perform its obligations hereunder,
and the person or persons executing this Agreement on its behalf has been duly
authorized to do so by all requisite corporate or partnership action; and
(c) this Agreement is legally binding upon it,

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enforceable in accordance with its terms, and does not conflict with any
agreement, instrument or understanding, oral or written, to which it is a Party
or by which it may be bound, nor violate any material law or regulation of any
court, governmental body or administrative or other agency having jurisdiction
over it.

10.2Lytix Representations and Warranties. Lytix hereby represents and warrants
to Verrica as follows, as of the Effective Date:

(a)Existing Patents. Exhibit 0 attached hereto contains a true and complete list
of the existing Licensed Patents as of the Effective Date (the “Existing
Patents”);

(b)Title; Encumbrances. Lytix is the sole owner of the entire right, title and
interest in and to all Patents and other intellectual property rights within the
Licensed Technology, free and clear from any mortgages, pledges, liens, security
interests, conditional and installment sale agreements, encumbrances, charges or
claims of any kind. Lytix has the full and legal rights and authority to grant
all rights and licenses it purports to grant to Verrica under this Agreement;

(c)Control. Lytix Controls (i) all Patents owned, invented or licensed by Lytix
that are necessary or useful for the research, Development, Manufacture, use,
offer for sale, sale or import of the Product, and (ii) all Know-How owned,
generated or licensed by Lytix that is related to the Product;

(d)Licensed Patents. All maintenance fees, annuity payments, and similar
payments relating to the Licensed Patents have been made by Lytix in a timely
manner. Lytix has not taken action or failed to undertake any action in
connection with the filing, prosecuting and maintaining the Licensed Patents in
violation of any Applicable Law. Lytix does not have knowledge of any
Information which leads it to believe that any issued Patents in the Licensed
Patents are invalid or unenforceable;

(e)No Infringement. No claim or action has been brought or threatened by any
Third Party alleging that the use of the Licensed Technology, or the
Development, Manufacture, or Commercialization of the Product (whether by Lytix
prior to the Effective Date or as anticipated hereunder), infringes or
misappropriates, or would infringe or misappropriate, any published or issued
Patent or other intellectual property right of any Third Party, and no facts or
circumstances exist, to Lytix’s knowledge, that would reasonably be expected to
give rise to any such claims. To Lytix’s knowledge, the Development,
Manufacture, and Commercialization of the Product can be carried out in a manner
anticipated hereunder without infringing any Third Party’s published or issued
Patent or other intellectual property rights;

(f)No Conflicts. Lytix has not entered into any agreement with any Third Party
that is in conflict or inconsistent with the rights granted to Verrica under
this Agreement or would impede the performance of its obligations hereunder, and
has not taken any action that would in any way prevent it from granting the
rights granted to Verrica under this Agreement, or that would otherwise conflict
with or adversely affect Verrica’s rights under this Agreement, or that would
impede its performance of its obligations hereunder;

(g)Intellectual Property Rights. The Licensed Technology includes all
intellectual property rights Controlled by Lytix that are reasonably necessary
or useful for the

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Development and Commercialization of the Product by Verrica in accordance with
the terms of this Agreement.

(h)Third Party Technology. To Lytix’s knowledge, there are no pending Third
Party patent applications that, if issued with the published or currently
pending claims, would be infringed by the Development, Manufacture, or
Commercialization of Products;

(i)Third Party Infringement. To Lytix’s knowledge, no Third Party is infringing
or has infringed any Licensed Patents or has misappropriated any Licensed
Know-How;

(j)No Proceeding. There are no pending and no threatened, adverse actions, suits
or proceedings (including Patent interferences, reissues, reexaminations,
cancellations, oppositions, nullity actions, invalidation actions or post-grant
reviews) against Lytix involving the Licensed Technology or Products or
challenging Lytix’s ownership rights in, or the validity or scope of any
Licensed Patent;

(k)Regulatory Actions.

(i)Lytix has not received any written communications from any Regulatory
Authority describing any matters specific to a Product, or to any class of drugs
to which a Product belongs, that may be necessary to be overcome in order to
obtain Regulatory Approval of any Product, nor does Lytix have any knowledge of
any basis for such matters;

(ii)All Regulatory Filings by Lytix with respect to the Product, to Lytix’s
knowledge, were, at the time of filing, true, complete, and accurate;

(iii)Lytix and its Affiliates are not, and have not been, debarred or
disqualified by any Regulatory Authority;

(iv)Lytix has filed with the applicable Regulatory Authority all required
notices, reports, and other Regulatory Filings with respect to each IND held by
Lytix for the Product; and

(v)Lytix has not received any notice from any Regulatory Authority or other
governmental authority commencing or threatening withdrawal of any active IND
held by Lytix.

(l)Clinical Data. Lytix is the sole owner of all rights to the clinical data
generated in the performance of the Lytix’s Development of the Product prior to
the Effective Date.

(m)Compliance with Laws. All Development of the Product conducted by or on
behalf of Lytix prior to the Effective Date has been conducted in compliance
with all Applicable Laws and all Product used in all clinical studies conducted
by or on behalf of Lytix has been Manufactured in compliance with GMP;

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(n)No Litigation. Lytix is not a party to any legal action, suit or proceeding
relating to the Product in the Licensed Field or in the Retained Field in the
Territory;

(o)No Debarment. Neither Verrica nor any of its Affiliates is or has been
debarred or suspended under 21 U.S.C. §335(a) or §335(b) or any foreign
equivalent thereof, or is the subject of a conviction described in such section
or any foreign equivalent thereof;

(p)Compliance. There are no legal claims, judgments or settlements against or
owed by Lytix or any of its Affiliates, or pending or, to Lytix’s knowledge,
threatened, legal claims or litigation, in each case, relating to antitrust,
anti-competition, anti-bribery or corruption violations; and

(q)Disclosure. Lytix has disclosed to Verrica all material written information
in Lytix’s possession or Control as of the Effective Date relating to Products,
and all such information disclosed by Lytix is true, complete, and correct.
There are no issues or information related to the Licensed Technology or
otherwise which are reasonably likely to have a material or adverse impact on
the Development, Manufacture, or Commercialization of the Product that have not
been fully disclosed to Verrica.

10.3Representations and Warranties of Verrica. Verrica represents and warrants
to Lytix that as of the Effective Date:

(a)Verrica and its Affiliates are not, and have not been, debarred or
disqualified by any Regulatory Authority;

(b)Verrica has sufficient financial wherewithal to (i) perform all of its
obligations pursuant to this Agreement, and (ii) meet all of its obligations
that come due in the ordinary course of business;

(c)Verrica has, or can readily obtain, sufficient technical, clinical, and
regulatory expertise to perform all of its obligations pursuant to this
Agreement, including its obligations relating to the Products in the Licensed
Field in the Territory; and

(d)Verrica has obtained from its employees, agents and Affiliates enforceable
assignments that assign the Verrica Inventions, without limitation, to Verrica
and Verrica has recorded such assignments where necessary in accordance with
Applicable Laws.

10.4Lytix Covenants. Lytix hereby covenants to Verrica as follows:

(a)Control. Lytix shall Control throughout the Term (i) all Patents owned,
invented or licensed by Lytix that are necessary or useful for the research,
Development, Manufacture, use, offer for sale, sale or import of the Product,
and (ii) all Know-How owned, generated or licensed by Lytix that is related to
the Product; and

(b)No Conflicts. Lytix shall not enter into any agreement with any Third Party
that is in conflict with the rights granted to Verrica under this Agreement or
would impede the performance of its obligations hereunder, and shall not take
any action that would in any way

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prevent it from granting the rights granted to Verrica under this Agreement, or
that would otherwise conflict with or adversely affect Verrica’s rights under
this Agreement, or would impede its performance of its obligations hereunder.

10.5Mutual Covenants.

(a)No Debarment. In the course of Development by of the Product, neither Party
shall use any employee or consultant who has been debarred by any Regulatory
Authority or, to such Party’s knowledge, is the subject of debarment proceedings
by a Regulatory Authority. Each Party shall notify the other Party promptly upon
becoming aware that any of its employees or consultants has been debarred or is
the subject of debarment proceedings by any Regulatory Authority.

(b)Compliance.

(i)Each Party and its Affiliates shall comply in all material respects with all
Applicable Laws in the Development, Manufacture, and Commercialization of
Products and performance of its obligations under this Agreement, including, to
the extent applicable to such Party and its activities hereunder, the statutes,
regulations and written directives of the FDA, the EMA and any Regulatory
Authority having jurisdiction in the Territory, the FD&C Act, the Prescription
Drug Marketing Act, the Federal Health Care Programs Anti-Kickback Law, 42
U.S.C. 1320a-7b(b), the statutes, regulations and written directives of
Medicare, Medicaid and all other health care programs, as defined in 42 U.S.C. §
1320a-7b(f), as each as may be amended from time to time.

(ii)Without limiting the foregoing, each Party shall comply with Anti-Corruption
Laws, and shall not cause the other Party or its Affiliates, directors,
officers, shareholders, employees or agents to be in violation of any
Anti-Corruption Laws. Without limiting the foregoing, neither Party shall,
directly or indirectly, pay any money to, or offer or give anything of value to,
any “foreign official” as that term is used in the FCPA or any “foreign public
official” as that term is used in the FCPA, in order to obtain or retain
business or to secure any commercial or financial advantage for the other Party
or for itself or any of their respective Affiliates or Sublicensees. Each Party
understands that if it fails to comply with the provisions of Anti-Corruption
Laws, then such failure shall automatically be deemed a breach that allows the
other Party to terminate this Agreement in accordance with Section 0, provided
that, the other Party will in such case not have to allow the infringing Party
any notice period or cure period.

10.6Disclaimer. EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, NO REPRESENTATIONS
OR WARRANTIES WHATSOEVER, WHETHER EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, OR
NON-MISAPPROPRIATION OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS, ARE MADE OR
GIVEN BY OR ON BEHALF OF A PARTY, AND ALL REPRESENTATIONS AND WARRANTIES,
WHETHER ARISING BY OPERATION OF LAW OR OTHERWISE, ARE HEREBY EXPRESSLY EXCLUDED.
Each party acknowledges and agrees that the other party has not made any
representations, express or implied with respect to the subject matter of this
Agreement, other than those contained in this agreement.

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Article 11
INDEMNIFICATION

11.1By Verrica. Verrica shall and hereby does save, defend and hold Lytix and
its Affiliates and their respective directors, officers, employees and agents
(each, a “Lytix Indemnitee”) harmless from and against any and all claims,
suits, actions, demands, liabilities, expenses and loss, including reasonable
legal expense and attorneys’ fees (collectively, “Losses”) to which any Lytix
Indemnitee may become subject as a result of any claim, demand, action or other
proceeding by any Third Party to the extent such Losses arise directly or
indirectly out of: (a) the research, Development, Manufacture, use, marketing,
promotion, distribution, handling, storage, sale or other disposition of Product
by or on behalf of Verrica or any of its Affiliates or Sublicensees; (b) the
breach by Verrica of any provision of this Agreement; or (c) the gross
negligence or willful misconduct of any Verrica Indemnitee; except, in each
case, to the extent such Losses result from the gross negligence or willful
misconduct of any Lytix Indemnitee or the breach by Lytix of any provision of
this Agreement.

11.2By Lytix. Lytix shall and hereby does save, defend and hold Verrica and its
Affiliates and their respective directors, officers, employees and agents (each,
an “Verrica Indemnitee”) harmless from and against any and all Losses to which
any Verrica Indemnitee may become subject as a result of any claim, demand,
action or other proceeding by any Third Party to the extent such Losses arise
directly or indirectly out of: (a) the research, Development, Manufacture, use,
marketing, promotion, distribution, handling, storage, sale or other disposition
of Product by or on behalf of Lytix or any of its Affiliates or licensees (other
than Verrica), (b) the breach by Lytix of any provision of this Agreement,
including Lytix’s obligations with respect to taxes pursuant to Section 8.11 and
for purposes of this Section 0(b), “Losses” includes taxes; or (c) the gross
negligence or willful misconduct of any Lytix Indemnitee; except, in each case,
to the extent such Losses result from the gross negligence or willful misconduct
of any Verrica Indemnitee or the breach by Verrica of any provision of this
Agreement.

11.3Procedure. If a Party (the “Indemnified Party”) seeks indemnification under
Section 0 or 0, the Indemnified Party shall: (a) inform the other Party (the
“Indemnifying Party”) of a claim as soon as reasonably practicable after it
receives notice of the claim (it being understood and agreed, however, that the
failure by an Indemnified Party to give notice of a claim as provided in this
Section 0 shall not relieve the Indemnifying Party of its indemnification
obligation under this Agreement except and only to the extent that such
Indemnifying Party is actually and materially damaged as a result of such
failure to give notice); (b) permit the Indemnifying Party to assume direction
and control of the defense of the claim (including the right to settle the claim
solely for monetary consideration) using counsel reasonably satisfactory to the
Indemnified Party; and (c) cooperate as requested (at the expense of the
Indemnifying Party) in the defense of the claim. If the Indemnifying Party does
not assume control of such defense within [***] days after receiving notice of
the claim from the Indemnified Party, the Indemnified Party shall control such
defense and, without limiting the Indemnifying Party’s indemnification
obligations, the Indemnifying Party shall reimburse the Indemnified Party for
all costs, including reasonable attorney fees, incurred by the Indemnified Party
in defending itself within [***] days after receipt of any invoice therefor from
the Indemnified Party. The Party not controlling such defense may participate
therein at its own expense. The Party controlling such defense shall keep the
other Party

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advised of the status of such action, suit, proceeding or claim and the defense
thereof and shall consider recommendations made by the other Party with respect
thereto. The Indemnified Party shall not agree to any settlement of such action,
suit, proceeding or claim without the prior written consent of the Indemnifying
Party, which shall not be unreasonably withheld, delayed or conditioned. The
Indemnifying Party shall not agree to any settlement of such action, suit,
proceeding or claim or consent to any judgment in respect thereof that does not
include a complete and unconditional release of the Indemnified Party from all
liability with respect thereto, that imposes any liability or obligation on the
Indemnified Party or that acknowledges fault by the Indemnified Party without
the prior written consent of the Indemnified Party.

11.4Insurance. Each Party, at its own expense, shall maintain product liability
and other appropriate insurance (or self-insure) in an amount consistent with
industry standards during the Term. Each Party shall provide a certificate of
insurance (or evidence of self-insurance) evidencing such coverage to the other
Party upon request.

11.5Limitation of Liability. NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY
SPECIAL, CONSEQUENTIAL, INCIDENTAL, PUNITIVE, OR INDIRECT DAMAGES ARISING FROM
OR RELATING TO ANY BREACH OF THIS AGREEMENT, REGARDLESS OF ANY NOTICE OF THE
POSSIBILITY OF SUCH DAMAGES. NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS
SECTION 0 IS INTENDED TO OR SHALL LIMIT OR RESTRICT (A) THE INDEMNIFICATION
RIGHTS OR OBLIGATIONS OF ANY PARTY UNDER SECTION 0 OR 0, OR (B) DAMAGES
AVAILABLE FOR A PARTY’S BREACH OF ITS CONFIDENTIALITY AND NON-USE OBLIGATIONS
UNDER ARTICLE 12.

Article 12
CONFIDENTIALITY

12.1Confidential Information. Except to the extent expressly authorized by this
Agreement or otherwise agreed in writing by the Parties, each Party agrees that,
during the Term and for [***] years thereafter, such Party (the “Receiving
Party”) shall keep confidential and shall not publish or otherwise disclose and
shall not use for any purpose, other than as expressly provided for in this
Agreement, any Confidential Information furnished to it by or on behalf of the
other Party (the “Disclosing Party”). The Receiving Party may use Confidential
Information only to the extent required to accomplish the purposes of this
Agreement. The Receiving Party shall use at least the same standard of care as
it uses to protect proprietary or confidential information of its own, but no
less than reasonable care, to ensure that its, and its Affiliates’ and
Sublicensees’, employees, agents, consultants and other representatives
(“Representatives”) do not disclose or make any unauthorized use of the
Confidential Information. The Receiving Party will promptly notify the
Disclosing Party upon discovery of any unauthorized use or disclosure of the
Confidential Information. For the avoidance of doubt, Verrica shall not disclose
or make any unauthorized use of any process information contained in the Drug
Master File for any purpose relating to the Manufacture of API.

12.2Exceptions. Confidential Information shall not include any information that
the Receiving Party can prove by competent evidence: (a) is now, or hereafter
becomes, through no act or failure to act on the part of the Receiving Party in
breach of this Agreement, generally known

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or available to the public; (b) is known by the Receiving Party at the time of
receiving such information, as evidenced by its records; (c) is hereafter
furnished to the Receiving Party on a non-confidential basis by a Third Party,
as a matter of right (i.e., without breaching any obligation such Third Party
may have to the Disclosing Party); or (d) is independently discovered or
developed by the Receiving Party, independently of the activities undertaken by
the Receiving Party pursuant to this Agreement and without the use of
Confidential Information of the Disclosing Party, as evidenced by the Receiving
Party’s contemporaneously-maintained written records.

12.3Authorized Disclosure. Each Party may disclose Confidential Information of
the other Party as expressly permitted by this Agreement, or if and to the
extent such disclosure is necessary in the following instances:

(a)filing or prosecuting Patents as permitted by this Agreement;

(b)enforcing such Party’s rights under this Agreement and performing its
obligations under this Agreement;

(c)prosecuting or defending litigation as permitted by this Agreement;

(d)complying with applicable court orders or applicable laws, rules and
regulations, or the listing rules of any exchange on which such Party’s
securities are traded;

(e)in Regulatory Filings that the Receiving Party has the right to file, or
holds, as expressly set forth in this Agreement;

(f)disclosure to the Receiving Party’s Affiliates, licensees and
sublicensees/Sublicensees, potential licensees and sublicensees/Sublicensees,
and to the Receiving Party’s and its Affiliates’ Representatives who, in each
case, need to know such information in order for the Receiving Party to exercise
its rights or fulfill its obligations under this Agreement, provided, in each
case, that any such Affiliate, actual or potential licensee or
sublicensee/Sublicensee, or Representative agrees to be bound by terms of
confidentiality and non-use at least as restrictive as those set forth in this
0; and

(g)disclosure to Third Parties in connection with due diligence or similar
investigations by such Third Parties, and disclosure to potential Third-Party
investors in confidential financing documents, provided, in each case, that any
such Third Party agrees to be bound by reasonable obligations of confidentiality
and non-use.

Notwithstanding the foregoing, if the Receiving Party is required to make a
disclosure of the Disclosing Party’s Confidential Information pursuant to
Section 0 or 0, it will, except where impracticable, (i) give reasonable advance
notice to the Disclosing Party of such disclosure, (ii) use efforts to secure
confidential treatment of such information at least as diligent as the Receiving
Party would use to protect its own confidential information, but in no event
less than reasonable efforts, and (iii) cooperate with any efforts by the
Disclosing Party, at the Disclosing Party’s request and expense, to secure
confidential treatment of such Confidential Information. Disclosure by the
Receiving Party of Confidential Information in accordance with any of the
foregoing provisions of this Section 0 shall not, in and of itself, cause the
information so disclosed to cease

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to be treated as Confidential Information under this Agreement, except to the
extent that, by virtue of disclosure by the Receiving Party in full compliance
with this Section 0, such information becomes generally known or available.

12.4Confidentiality of this Agreement. Except as otherwise provided in this 0
each Party agrees not to disclose to any Third Party the terms of this Agreement
without the prior written consent of the other Party hereto, except that each
Party may disclose the terms of this Agreement that are otherwise made public as
contemplated by Section 0 or to the extent such disclosure is permitted under
Section 0.

12.5Public Announcements.

(a)The Parties shall agree on the content and form of the expected press release
from each Party and shall coordinate to the extent reasonably practicable, the
timing of the initial press releases in order to accomplish the same promptly
upon execution and delivery of this Agreement. The initial press releases of the
Parties are attached hereto as Exhibit 0. Except to the extent already disclosed
in a press release or other public communication issued in accordance with this
Agreement, no public announcement concerning this Agreement, its subject matter
or the transactions described herein shall be made, either directly or
indirectly, by either Party or its Affiliates, except as may be required, in the
good faith discretion of such Party’s counsel, by Applicable Law (including
disclosure requirements of the U.S. Securities and Exchange Commission (“SEC”)),
judicial order, or stock exchange or quotation system rule without first
obtaining the approval of the other Party and agreement upon the nature, text
and timing of such announcement, which approval and agreement shall not be
unreasonably withheld or delayed. The Party desiring to make any such voluntary
public announcement shall provide the other Party with a written copy of the
proposed announcement in reasonably sufficient time prior to public release to
allow the other Party to comment upon such announcement, prior to public
release. In the case of press releases or other public communications required
to be made by law, judicial order or stock exchange or quotation system rule,
the Party making such press release or public announcement shall provide to the
other Party a copy of the proposed press release or public announcement in
written or electronic form upon such advance notice as is practicable under the
circumstances for the purpose of allowing the notified Party to review and
comment upon such press release or public announcement. Under such
circumstances, the releasing Party shall not be obligated to delay making any
such press release or public communication beyond the time when the same is
required to be made. Neither Party shall be required to seek the permission of
the other Party to repeat any information regarding the terms of this Agreement
or any amendment hereto that has already been publicly disclosed by such Party
or by the other Party in accordance with this Section 0; provided that such
information remains accurate as of such time and provided the frequency and form
of such disclosure are reasonable.

(b)Each Party may make public statements regarding this Agreement in response to
questions by the press, analysts, investors or those attending industry
conferences or financial analyst calls, provided that any such public statement
or press release: (i) is not inconsistent with prior public disclosures or
public statements made in accordance with Section 0 or as permitted by
Section 0; and (ii) does not reveal (A) information regarding the terms of this
Agreement that have not previously been disclosed in accordance with Section 0
or as permitted by Section 0 or (B) non‑public information about the other
Party.

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(c)The Parties shall reasonably coordinate in advance with each other in
connection with the filing of this Agreement (including redaction of certain
provisions of this Agreement) with the SEC or other governmental agency or any
stock exchange on which securities issued by a Party or its Affiliate are
traded. Each Party shall use reasonable efforts to seek and obtain confidential
treatment for the provisions of this Agreement that the Parties mutually agree
to redact from such filing; provided that each Party shall ultimately retain
ultimate discretion to disclose such information to the SEC or any stock
exchange or other governmental agency (as the case may be) as such Party
determines, based on advice of legal counsel, is required to be so disclosed.
Except as expressly set forth in this 0, neither Party (or its Affiliates) shall
be obligated to consult with or obtain approval from the other Party with
respect to any filings with the SEC or any stock exchange or other governmental
agency where such filings do not disclose Confidential Information of the other
Party.

12.6Publications. Each Party recognizes that the publication of scientific and
medical papers regarding results of and other information regarding Products,
including oral presentations and abstracts, may be beneficial to both Parties
provided such publications are subject to reasonable controls to protect
Confidential Information. Accordingly, a Party may review and comment on any
material proposed for disclosure or publication by the other Party, such as by
oral presentation, manuscript or abstract, relating to the Development,
Manufacture or Commercialization Products or that includes Confidential
Information of the other Party. Before any such material is submitted for
publication or disclosure (other than oral presentation materials and abstracts,
which are addressed below), the Party proposing publication shall deliver a
complete copy to the other Party at least [***] days prior to submitting the
material to a publisher or initiating such other disclosure, and such other
Party shall review any such material and give its comments to the Party
proposing publication within [***] days of the delivery of such material to such
other Party. With respect to oral presentation materials and abstracts, the
Party proposing publication shall deliver a complete copy to the other Party at
least [***] days prior to the anticipated date of the presentation, and such
other Party shall make reasonable efforts to expedite review of such materials
and abstracts, and shall return such items as soon as practicable to the Party
proposing publication with appropriate comments, if any, but in no event later
than [***] days from the date of delivery to the non-publishing Party. The
publishing Party shall comply with the other Party’s request to delete
references to the other Party’s Confidential Information in any such material
and shall delay any submission for publication or other public disclosure for a
period of up to an additional [***] days for the purpose of preparing and filing
appropriate patent applications. For clarity, this Section 0 is intended to set
forth the procedures for scientific and medical presentations and publications,
and other public disclosures (e.g., press releases, investor presentations and
the like) are addressed in Section 0 and Section 0.

Article 13
TERM AND TERMINATION

13.1Term. This Agreement shall become effective on the Effective Date and,
unless earlier terminated pursuant to this 0, shall remain in effect on
Product-by-Product and a country-by-country basis, until the expiration of the
Royalty Term of such Product in such country (the “Term”). Upon the expiration
of the Royalty Term for a Product in a particular country, the licenses granted
by Lytix to Verrica under Section 0 with respect to such Product and such
country shall become fully-paid, royalty free and non-exclusive.

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13.2Unilateral Termination by Verrica. At any time after the first (1st)
anniversary of the Effective Date, Verrica may terminate this Agreement, on a
Region-by-Region basis or in its entirety, for any or no reason upon [***].

13.3Termination by Lytix for Competing Product.

(a)Competing Product. Subject to Section 0, Lytix may terminate this Agreement
in its entirety or on a Region-by-Region basis, as determined by Lytix in its
sole discretion, upon [***].

(b)Cure. Lytix may not terminate this Agreement pursuant to Section 0 if (x)
Verrica’s activities with respect to a Competing Product are either by an
Acquirer of Verrica or an Affiliate that became and an Affiliate of Verrica
after the Effective Date and (y) Verrica (i) ceases Development or
Commercialization activities with respect to such Competing Product within such
[***]-day period such that Lytix would not otherwise have had the right to
terminate this Agreement pursuant to Section 0 or (ii) notifies Lytix in writing
that Verrica intends to complete the Divestiture of such Competing Product and
so completes such Divestiture within [***] months from the receipt of notice
under Section 13.3(a).

13.4Termination by Either Party for Breach.

(a)Breach. Subject to Section 0, each Party may terminate this Agreement upon
written notice to the other Party if such other Party materially breaches its
obligations under this Agreement and, after receiving written notice from the
non-breaching Party identifying such material breach in reasonable detail, fails
to cure such material breach within [***] days from the date of such notice;
provided that if such breach is not reasonably capable of cure within such
[***]-day period, the breaching Party may submit a reasonable cure plan prior to
the end of such [***]-day period, in which case the other Party shall not have
the right to terminate this Agreement for so long as the breaching Party is
using Commercially Reasonable Efforts to implement such cure plan.

(b)Disputed Breach. If the alleged breaching Party disputes in good faith the
existence or materiality of a breach specified in a notice provided by the other
Party in accordance with Section 0, and such alleged breaching Party provides
the other Party notice of such dispute within such [***]-day period, then the
non-breaching Party shall not have the right to terminate this Agreement under
Section 0 unless and until the arbitrators, in accordance with 0, has determined
that the alleged breaching Party has materially breached this Agreement and that
such Party fails to cure such breach within [***] days following such
arbitrators’ decision. During the pendency of such dispute, all of the terms and
conditions of this Agreement shall remain in effect and the Parties shall
continue to perform all of their respective obligations hereunder.

13.5Termination for Patent Challenge. Lytix may terminate this Agreement in its
entirety upon [***] days’ written notice if Verrica or its Affiliates or
Sublicensees, individually or in association with any other Person, commences a
legal action anywhere in the world challenging the validity, enforceability or
scope of any Licensed Patent that is included in the License at such time
(“Patent Challenge”); provided that a Patent Challenge does not include any
counterclaim or defensive challenge made in any legal action or other proceeding
commenced or maintained by

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Verrica, its Affiliates or its Sublicensees in response to any claim or action
brought in the first instance by, or on behalf of Lytix or its Affiliates. The
commencement of a Patent Challenge by Verrica shall not be grounds for
termination of this Agreement if (i) such Patent Challenge is withdrawn or (ii)
Verrica demands in writing that such Sublicensee withdraw such Patent Challenge
and terminates its sublicense of the License to such Sublicensee, in each case
((i) and (ii)) within [***] days of Verrica becoming aware of such Patent
Challenge.

13.6Termination by Either Party for Bankruptcy. Either Party may terminate this
Agreement if, at any time, the other Party (a) files in any court or agency
pursuant to any statute or regulation of any state, country or jurisdiction, a
petition in bankruptcy or insolvency or for reorganization or for an arrangement
or for the appointment of a receiver or trustee of such other Party or of its
assets, (b) proposes a written agreement of composition or extension of its
debts, (c) is served with an involuntary petition against it, filed in any
insolvency proceeding that is not dismissed within [***] days after the filing
thereof, (d) proposes or is a party to any dissolution or liquidation, or (e)
makes an assignment for the benefit of its creditors.

13.7Full Force and Effect During Notice Period. This Agreement shall remain in
full force and effect until the expiration of the applicable termination notice
period. For clarity, if any Development Milestone Event or Sales Milestone Event
is achieved during the termination notice period, then the corresponding
milestone payment in respect of such Development Milestone Event or Sales
Milestone Payment (as applicable) is accrued and Verrica shall remain
responsible for the payment of such milestone payment even if the due date of
such milestone payment may come after the effective date of the termination.  

13.8Effect of Termination.

(a)Upon termination of this Agreement in its entirety or with respect to one or
more countries or Regions or one or more Products by Verrica pursuant to Section
0, or by Lytix pursuant to Sections 0, 0, 0 or 0, the following shall apply:

(i)Reversion of Rights. All rights and licenses granted to Verrica under this
Agreement shall terminate and revert to Lytix, provided that if this Agreement
is only terminated with respect to one or more countries or Regions, only the
rights and licenses with respect to such country or countries or Regions shall
terminate and revert to Lytix;

(ii)Regulatory Approval. In the event that this Agreement is terminated by
Verrica pursuant to Section 13.2 or by Lytix pursuant to Section 13.3 or 13.4,
then, if at the time of termination of this Agreement, Verrica holds or has
rights in or to any Regulatory Approvals for the Product in the terminated
countr(ies) or Region, Verrica shall assign to Lytix or a Third Party designated
by Lytix all such Regulatory Approvals for the Product, at Verrica’s cost and
expense. In addition, upon Lytix’s written request, Licensee shall, at Verrica’s
sole cost and expense, provide to Lytix copies of all tangible Development Data
and Regulatory Filings Controlled by Verrica in the Territory necessary or
useful for obtaining Regulatory Approval in the terminated countr(ies) or
Region. Upon any such termination in such countr(ies) or Region, Verrica shall
grant and does hereby grant to Lytix a transferrable Right of Reference to all
Regulatory Filings pertaining to the Product submitted by or on behalf of
Verrica anywhere in the Territory solely for the purpose of seeking, obtaining,
and maintaining Regulatory Approval of

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Product in such terminated countr(ies) or Region, including in interactions with
any Regulatory Authority in connection with Development or Regulatory Approval
of Product in such terminated countr(ies) or Region. The Parties shall discuss
and establish appropriate arrangements with respect to safety data exchange.

(iii)Inventory. In the event that this Agreement is terminated in its entirety,
Lytix shall have the right, but not the obligation, to purchase any and all of
the inventory of Product held by Verrica or its Affiliates as of the date of
termination, at a price equal to the Cost of Goods of such inventory, together
with any applicable external costs of transportation, storage and insurance, and
import and export taxes and fees. If Lytix does not elect to purchase such
inventory from Verrica, Verrica shall have the right to continue to sell such
inventory of Product in the Licensed Field in the Territory for [***] months
after the date of termination of this Agreement, subject to Verrica’s continued
payment of royalties on Net Sales of Product during such period in accordance
with Section 0.

(iv)Intellectual Property.

(A)Verrica IP. Verrica shall, and shall cause its Affiliates and Sublicensees
to, disclose to Lytix (1) any and all Information Controlled by Verrica, its
Affiliates, or Sublicensees as of the effective date of termination of this
Agreement that has been generated by or on behalf of Verrica, its Affiliates or
Sublicensees with respect to Product, (2) any Verrica Inventions, and (3) any
Patents Controlled by Verrica or its Affiliates that Cover the Product in the
Licensed Field in the Territory, in each case that are necessary or reasonably
useful to enable Lytix to Develop and Commercialize Product in the Licensed
Field in the terminated country or countries or Region, as applicable
(collectively, the “Verrica IP”). After receipt of the Verrica IP, Lytix may
notify Verrica that it wishes to obtain a license to the Verrica IP to Develop
and Commercialize Product in the Licensed Field in the terminated country or
countries or Region, as applicable. The Parties shall negotiate the terms of
such license in good faith for a period not to exceed [***] days. The terms of
such license will include a mutually agreed upon payment on signing of the
license, and will include milestone payments to become due upon the achievement
of the then-remaining development milestone events set forth in Section 0 and
the sale-based milestone events set forth in Section 0, together with royalty
payments. Any such Verrica IP shall be subject to the confidentiality
obligations and exemptions from confidentiality obligations set forth in 0. If
the Parties are unable to agree on the terms and execute a definitive agreement
with respect to the Verrica IP during such [***]-day negotiation period, then
they may have such terms determined by baseball arbitration pursuant to
Section 0.

(B)Regulatory Filings. With respect to Product to which Lytix obtains a license
pursuant to Section 0, Verrica shall and does hereby assign, and shall cause its
Affiliates and Sublicensees to assign, to Lytix all of their right, title and
interest in and to all Regulatory Filings with respect to such Product in the
Licensed Field in the terminated country or countries or Region, as applicable,
including any Regulatory Approvals and applications therefor.

(C)Trademarks. If, as of the date of termination, Verrica has Commercialized the
Product to which Lytix obtains a license pursuant to Section 0, Verrica shall
and hereby does grant Lytix a non-exclusive, royalty-bearing license under the
Product Marks to Commercialize such Product in the terminated country or
countries or Region, as applicable, on commercially reasonable terms to be
negotiated by the parties as part of the negotiation set forth

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in Section 0 (and, for the avoidance of doubt, in case of inability to agree on
such terms such matter shall be included in the baseball arbitration pursuant to
Section 0).

(b)Subject to Section 13.8(a), Lytix will not have any rights with respect to
any Information generated by Verrica with respect to such terminated Product and
such country or countries or Region, to any Verrica Inventions, or to any
Patents Controlled by Verrica or its Affiliates, and Verrica will have no
further obligations to Lytix with respect to any such terminated Product and
such country or countries or Region.

(c)Subject to Section 13.8(a), upon expiration or termination of this Agreement
for any reason, each Party, at the request of the other Party, shall return, or
at the election of the other Party, destroy, and thereafter provide the other
Party written certification evidencing such destruction, all data, files,
records and other materials in its or its Affiliates’ or, with respect to
Verrica, Sublicensees, possession or control containing or comprising such other
Party’s Confidential Information.

13.9Survival. Termination or expiration of this Agreement shall not affect any
rights or obligations of the Parties under this Agreement that have accrued
prior to the date of termination or expiration. Notwithstanding anything to the
contrary, the following provisions shall survive any expiration or termination
of this Agreement: Sections 2.4, 8.8 through 8.11 (inclusive), 9.1, 10.6, 13.8,
and 13.9, and Articles 1, 11, 12, 14, and 15.

Article 14
Dispute Resolution

14.1Disputes. Except as provided in Section 0 and Section 0, upon the written
request of either Party to the other Party, either Party may refer any claim,
dispute, or controversy or claim arising out of or related to this Agreement (a
“Dispute”) to the Senior Executive of Verrica and the Senior Executive of Lytix
for resolution. If the Senior Executives are unable to resolve such matter
within [***] days after the initial written request, then, upon the written
demand of either Party, the Parties shall resolve such matter by binding
arbitration, as provided in Section 0. Any disputes about the propriety of
commencing arbitration or the scope or applicability of the agreement to
arbitrate shall be finally settled by the arbitral tribunal.

14.2Arbitration.

(a)Any Dispute shall be resolved by final and binding arbitration under the
rules of the International Chamber of Commerce as then in effect (the “Rules”),
except as they be modified herein or by mutual agreement of the Parties.

(b)The arbitration shall be conducted by one or more arbitrator(s) appointed in
accordance with the Rules; provided that: (i) such arbitrator(s) is not a
current or former employees or directors, or current stockholders, of either
Party, any of their respective Affiliates or any Sublicensee; and (ii) each
arbitrator(s) has experience and familiarity with commercial licensing practices
in the pharmaceutical and biotechnology industries. The seat, or legal place, of
arbitration shall be New York, New York, USA, and all proceedings and
communications shall be in the English language.

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(c)The arbitral tribunal shall permit discovery (including both the production
of documents and deposition testimony) as reasonably necessary for an
understanding of any legitimate issue raised in the arbitration, while also
taking into account the desirability of making discovery efficient and
cost-effective, and, in addition to the authority conferred upon the arbitral
tribunal by such Rules, the arbitral tribunal shall have the authority to order
production of documents in accordance with the IBA Rules on the Taking of
Evidence in International Arbitration as current on the commencement of the
arbitration.

(d)The arbitral tribunal shall have the power to grant any remedy or relief that
it deems appropriate, whether provisional or final, including but not limited to
conservatory relief and injunctive relief, provided that the arbitral tribunal’s
authority to award special, incidental, consequential or punitive damages is
subject to the limitation set forth in Section 0, except to the extent the
substantive laws of the State of New York, USA, do not permit such limitation.
The award shall be rendered within [***] of the appointment of the arbitral
tribunal unless the Parties jointly request an extension, or the arbitral
tribunal determines, in a reasoned decision that the interest of justice or the
complexity of the case requires that such limit be extended.

(e)The arbitration award shall be final and binding on the Parties, and the
Parties undertake to carry out the award without delay. Judgment upon the award
may be entered in any court of competent jurisdiction.

(f)During the pendency of the arbitration, each Party shall bear its own
attorneys’ fees, costs, and disbursements arising out of the arbitration, and
shall pay an equal share of the fees and costs of the arbitration and the
arbitral tribunal shall fix costs in the arbitral award in accordance with the
Rules.

14.3Confidentiality of Arbitration. The existence and content of the arbitral
proceedings and any rulings or awards shall be kept confidential by the Parties
and the arbitral tribunal except (a) to the extent that disclosure may be
required of a Party to fulfill a legal duty, protect or pursue a legal right, or
enforce or challenge an award in bona fide legal proceedings before a state
court or other judicial authority, (b) with the consent of all Parties, (c)
where needed for the preparation or presentation of a claim or defense in this
arbitration, (d) where such information is already in the public domain other
than as a result of a breach of this clause, or (e) by order of the arbitral
tribunal upon application of a Party.

14.4Injunctive Relief; Court Actions. Either Party may apply to the arbitrators
for interim injunctive relief until the arbitration award is rendered or the
controversy is otherwise resolved. Either Party also may, without waiving any
remedy under this Agreement, seek from any court having jurisdiction any interim
injunctive or other interim relief in the context of a bona fide emergency or
prospective irreparable harm, and such an action may be filed and maintained
notwithstanding any ongoing discussions between the Parties or any ongoing
arbitration proceeding. In addition, either Party may bring an action in any
court of competent jurisdiction to resolve disputes pertaining to the validity,
construction, scope, enforceability, infringement or other violations of Patents
or other intellectual property rights, and no such claim shall be subject to
arbitration pursuant to Section 0.

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14.5Baseball Arbitration. If the Parties fail to agree on any matter described
in Section 0 and a Party submits such failure to baseball arbitration for final
resolution, then relevant failure to agree shall be resolved in accordance with
this Section 0. Within [***] Business Days following a Party’s receipt of any
baseball arbitration notice from the other Party, the Parties shall meet and
attempt to agree on an independent Third Party expert with at least ten (10)
years of experience in the licensing of biopharmaceutical compounds or products.
If the Parties cannot agree on such expert within such time period, then each
Party may nominate one independent expert within [***] Business Days after such
[***]-Business Day period and the two experts so selected shall nominate the
final independent expert within [***] Business Days of their nomination. Within
[***] Business Days of her or their appointment, the expert(s) shall set a date
for the arbitration, which date shall be scheduled as soon as possible and is
intended to be scheduled no more than [***] days after the date the arbitration
is demanded. At least [***] Business Days prior to the arbitration, each Party
shall provide the expert with a complete, written proposal of such Party’s
solution to the applicable Dispute, along with any documentary or other evidence
it wishes to provide in support for such proposal. After receiving both Parties’
proposals, the expert(s) will have the right to meet with the Parties as
necessary to inform the expert’s determination and to perform independent
research and analysis. The expert(s) will be instructed to select one of the
Party’s proposals without modification within [***] days following the receipt
of both proposals. The expert(s) will deliver her/their decision regarding the
disputed matter in writing, which decision will be made in accordance with the
standard for resolution of such matter set forth in this Agreement and will be
binding and conclusive upon both Parties. The Party whose proposal is not
selected by the experts is responsible for the fees of the experts and the costs
and expenses of the baseball arbitration. The provisions of Section 0 and
Section 0 apply to any baseball arbitration proceedings commenced under this
Section 0 mutatis mutandis.

14.6Patent and Trademark Disputes. Any dispute, controversy or claim relating to
the scope, validity, enforceability or infringement of any patents or trademarks
covering the Manufacture, use, importation, offer for sale or sale of a Product
shall be submitted to a court of competent jurisdiction in the country in which
such patent or trademark rights were granted or arose.

Article 15
MISCELLANEOUS

15.1Rights Upon Bankruptcy. All rights and licenses granted under or pursuant to
this Agreement to Verrica or Lytix are, and shall otherwise be deemed to be, for
purposes of Section 365(n) of the United States Bankruptcy Code and other
similar foreign laws, licenses of rights to “intellectual property” as defined
under Section 101 of the United States Bankruptcy Code or other similar foreign
laws. The Parties shall retain and may fully exercise all of their rights and
elections under the United States Bankruptcy Code (or any comparable provision
of the laws applicable to bankruptcies or insolvencies), and other similar
foreign laws. The Parties further agree that, in the event of the commencement
of a bankruptcy proceeding by or against a Party under the United States
Bankruptcy Code, or other similar foreign laws, the non‑debtor Party shall be
entitled to a complete duplicate of (or complete access to, as appropriate) any
such intellectual property and all embodiments of such intellectual property and
the same, which, if not already in

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the non‑debtor Party’s possession, shall be promptly delivered to it (a) upon
any such commencement of a bankruptcy proceeding upon the non‑debtor Party’s
written request therefor, unless the debtor Party continues to perform all of
its obligations under this Agreement or (b) if not delivered under clause (a)
above, following the rejection of this Agreement by or on behalf of the debtor
Party upon written request therefor by the non‑debtor Party.

15.2Governing Law. This Agreement and any disputes, claims, or actions related
thereto shall be governed by and construed in accordance with the laws of the
State of New York, USA, without regard to any conflicts of law provisions
thereof that might otherwise refer construction or interpretation of this
Agreement to the substantive law of another jurisdiction. The Parties agree to
exclude the application to this Agreement of the United Nations Convention on
Contracts for the International Sale of Goods.

15.3Entire Agreement; Amendment. This Agreement, including the Exhibits hereto,
is both a final expression of the Parties’ agreement and a complete and
exclusive statement with respect to all of its terms. This Agreement supersedes
all prior and contemporaneous agreements and communications, whether oral,
written or otherwise, concerning any and all matters contained herein. This
Agreement may only be modified or supplemented in a writing expressly stated for
such purpose and signed by an authorized representative of each Party.

15.4Relationship Between the Parties. The Parties’ relationship, as established
by this Agreement, is solely that of independent contractors. This Agreement
does not create any partnership, joint venture or similar business relationship
between the Parties. Neither Party is a legal representative of the other Party,
and neither Party can assume or create any obligation, representation, warranty
or guarantee, express or implied, on behalf of the other Party for any purpose
whatsoever. The Parties (and any successor, assignee, transferee, or Affiliate
of a Party) shall not treat or report the relationship between the Parties
arising under this Agreement as a partnership for United States tax purposes,
without the prior written consent of the other Party unless required by
Applicable Law.

15.5Non-Waiver. The failure of a Party to insist upon strict performance of any
provision of this Agreement or to exercise any right arising out of this
Agreement shall neither impair that provision or right nor constitute a waiver
of that provision or right, in whole or in part, in that instance or in any
other instance. Any waiver by a Party of a particular provision or right shall
be in writing, shall be as to a particular matter and, if applicable, for a
particular period of time and shall be signed by an authorized representative of
such Party.

15.6Assignment. Except as expressly provided hereunder, neither this Agreement
nor any rights or obligations hereunder may be assigned or otherwise transferred
by either Party without the prior written consent of the other Party (which
consent shall not be unreasonably withheld); provided, however, that either
Party may assign this Agreement and its rights and obligations hereunder without
the other Party’s consent (a) to an Affiliate of such Party, provided that the
assigning Party shall remain liable and responsible to the non‑assigning Party
hereto for the performance and observance of all such duties and obligations by
such Affiliate, and (b) in connection with the transfer or sale of all or
substantially all of the assets of such Party to a Third Party, whether by
merger, sale of stock, sale of assets or otherwise, provided that in the event
of a

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transaction (whether this Agreement is actually assigned or is assumed by the
acquiring Party by operation of law (e.g., in the context of a reverse
triangular merger)). Any attempted assignment not in accordance with this
Section 15.6 shall be null and void and of no legal effect. The rights and
obligations of the Parties under this Agreement are binding upon and inure to
the benefit of the successors and permitted assigns of the Parties, and the name
of a Party appearing herein shall be deemed to include the name of such Party’s
successors and permitted assigns to the extent necessary to carry out the intent
of this section. Any assignment not in accordance with this Agreement is void.

15.7No Third-Party Beneficiaries. This Agreement is neither expressly nor
impliedly made for the benefit of any Party other than those executing it.

15.8Severability. If, for any reason, any part of this Agreement is adjudicated
invalid, unenforceable or illegal by a court of competent jurisdiction, such
adjudication shall not affect or impair, in whole or in part, the validity,
enforceability or legality of any remaining portions of this Agreement. All
remaining portions shall remain in full force and effect as if the original
Agreement had been executed without the invalidated, unenforceable or illegal
part.

15.9Notices. Any notice to be given under this Agreement must be in writing and
delivered either in person, by any method of mail (postage prepaid) requiring
return receipt, or by overnight courier or electronic mail confirmed thereafter
by any of the foregoing, to the Party to be notified at its address(es) given
below, or at any address such Party has previously designated by prior written
notice to the other. Notice shall be deemed sufficiently given for all purposes
upon the earliest of: (a) the date of actual receipt; (b) if delivered by
overnight courier, the next Business Day the overnight courier regularly makes
deliveries; or (c) if sent by electronic mail, upon electronic confirmation of
receipt.

If to Lytix:

Lytix Biopharma AS

Hoffsveien 4

0275 Oslo

Norway

Attention: [***]

Email: [***]

 

With a copy (which shall not constitute notice) to:

[***]

 

If to Verrica:

Verrica Pharmaceuticals, Inc.

10 North High Street

Suite 200,

West Chester, Pennsylvania 19380

United States of America

Attention: [***]

Email: [***]

 

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With a copy to:

Cooley LLP

11951 Freedom Drive

Suite 1500

Reston, Virginia 20190

United States of America

Attention: Kenneth J. Krisko

Email: kkrisko@cooley.com

 

15.10Force Majeure. Each Party shall be excused from the performance of their
obligations under this Agreement to the extent that such performance is
prevented by force majeure and the nonperforming Party promptly provides notice
of the prevention to the other Party. Such excuse shall be continued only for so
long as (a) the condition constituting force majeure continues and (b) the
nonperforming Party takes all reasonable efforts to remove the condition. For
purposes of this Agreement, force majeure includes conditions beyond the
reasonable control of the applicable Party, which may include an act of God,
war, civil commotion, terrorist act, labor strike or lock-out, epidemic,
pandemic, failure or default of public utilities or common carriers, destruction
of production facilities or materials by fire, earthquake, storm or like
catastrophe, action or inaction of any Governmental Authority, and failure of
plant or machinery. Notwithstanding the foregoing, a Party shall not be excused
from making payments owed hereunder because of a force majeure affecting such
Party. If a force majeure persists for more than [***] days, then the Parties
shall discuss in good faith the modification of the Parties’ obligations under
this Agreement in order to mitigate the delays caused by such force majeure.

15.11Interpretation. The headings of clauses contained in this Agreement
preceding the text of the sections, subsections and paragraphs hereof are
inserted solely for convenience and ease of reference only and shall not
constitute any part of this Agreement, or have any effect on its interpretation
or construction. All references in this Agreement to the singular shall include
the plural where applicable. Unless otherwise specified, references in this
Agreement to any Article shall include all Sections, subsections and paragraphs
in such Article, references to any Section shall include all subsections and
paragraphs in such Section, and references in this Agreement to any subsection
shall include all paragraphs in such subsection. All references to days in this
Agreement means calendar days, unless otherwise specified. Ambiguities and
uncertainties in this Agreement, if any, shall not be interpreted against either
Party, irrespective of which Party may be deemed to have caused the ambiguity or
uncertainty to exist. This Agreement has been prepared in the English language
and the English language shall control its interpretation. In addition, all
notices required or permitted to be given hereunder, and all written,
electronic, oral or other communications between the Parties regarding this
Agreement shall be in the English language.

15.12Construction. Except where the context expressly requires otherwise,
(a) the use of any gender herein encompasses references to either or both
genders, and the use of the singular shall be deemed to include the plural (and
vice versa), (b) the words “include”, “includes” and “including” are deemed
followed by the phrase “without limitation”, (c) any definition of or reference
to any agreement, instrument or other document herein refers to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein), (d) any reference herein to any person
includes the person’s successors and assigns, (e) the words

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“herein”, “hereof” and “hereunder”, and words of similar import, refer to this
Agreement in its entirety and not to any particular provision hereof, (f) all
references herein to Sections or Exhibits refer to Sections or Exhibits of this
Agreement, and references to this Agreement include all Exhibits hereto, and
(g) the word “or” is disjunctive but not necessarily exclusive.

15.13Performance by Affiliates. Each Party may discharge any obligations and
exercise any right hereunder through any of its Affiliates. Each Party hereby
guarantees the performance by its Affiliates of such Party’s obligations under
this Agreement, and shall cause its Affiliates to comply with the provisions of
this Agreement in connection with such performance. Any breach by a Party’s
Affiliate of any of such Party’s obligations under this Agreement shall be
deemed a breach by such Party, and the other Party may proceed directly against
such Party without any obligation to first proceed against such Party’s
Affiliate.

15.14Counterparts. This Agreement may be executed in counterparts, including by
transmission of facsimile or PDF copies of signature pages to the Parties or
their representative legal counsel, each of which shall be deemed an original
document, and all of which, together with this writing, shall be deemed one
instrument.

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In Witness Whereof, the Parties have executed this Exclusive License Agreement
by their duly authorized officers as of the Effective Date.

 

Verrica Pharmaceuticals Inc.

 

Lytix Biopharma AS

 

 

 

 

 

By:

/s/ Ted White

 

By:

/s/ Øystein Rekdal

 

 

 

 

 

Name:

Ted White

 

Name:

Øystein Rekdal

 

 

 

 

 

Title:

President and CEO

 

Title:

CEO