LICENSE AGREEMENT

 

THIS LICENSE AGREEMENT (this “Agreement”) dated as of August 11, 2015 (the
“Effective Date”), is entered into between IMPRIMIS PHARMACEUTICALS, INC., a
Delaware corporation (“Imprimis”), having a place of business at 12264 El Camino
Real, Suite 350, San Diego, California 92130, U.S.A., on the one hand, and
ADVANCED DOSAGE FORMS, INC., a Canadian corporation (“ADF”), having a place of
business at 3700 St-Patrick, suite 240, Montreal, Quebec, H4E 1A2, Canada, and
JOHN DIGENOVA, an individual (“DiGenova”, and together with ADF, collectively,
the “ADF Parties”), on the other hand. The parties hereby agree as follows:

 

  1. DEFINITIONS.

 

For the purposes of this Agreement, the following terms shall have the
respective meanings set forth below:

 

1.1 “Affiliate” shall mean, with respect to any Person, any other Person which
directly or indirectly controls, is controlled by, or is under common control
with, such Person. A Person shall be regarded as in control of another Person if
it owns, or directly or indirectly controls, more than fifty percent (50%) of
the voting stock or other ownership interest of the other Person, or if it
directly or indirectly possesses the power to direct or cause the direction of
the management and policies of the other Person by any means whatsoever.

 

1.2 “Challenge” shall mean, with respect to any patent rights, directly or
indirectly, (a) to assert in any court, patent office or other competent
governmental authority that such patent rights are invalid or unenforceable in
whole or in part, (b) to oppose the issuance of, or to challenge or seek to
narrow the issued or applied for claims, scope or duration of, any claim of such
patent rights, (c) to seek a declaratory judgment or similar relief that any
product or service does not infringe any such patent rights or is licensed or
otherwise authorized under this Agreement or otherwise, (d) to seek, request or
otherwise take any action that results in the declaration, initiation or
continuation of an interference or derivative proceeding, opposition,
reexamination, post-grant review or inter partes review (or their equivalents)
of such patent rights, or (e) to assist or cooperate with any other Person to do
any of the foregoing.

 

1.3 “Confidential Information” shall mean, with respect to a party, all
information and data that (a) is provided by or on behalf of such party to the
other party under this Agreement, and if disclosed in writing or other tangible
medium is marked or identified as confidential at the time of disclosure to the
recipient, is acknowledged at the time of disclosure to be confidential, or
otherwise should reasonably be deemed to be confidential, or (b) is derived by
the recipient from the observation or use of the foregoing. Notwithstanding the
foregoing, Confidential Information of a party shall not include that portion of
such information and data which, and only to the extent, the recipient can
establish by written documentation: (i) is known to the recipient as evidenced
by its written records before receipt thereof from the disclosing party, (ii) is
disclosed to the recipient free of confidentiality obligations by a third person
who has the right to make such disclosure, (iii) is or becomes part of the
public domain through no fault of the recipient, or (iv) the recipient can
reasonably establish is independently developed by persons on behalf of the
recipient without access to or use of the information disclosed by the
disclosing party.

 

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1.4 “Field” shall mean the prevention or treatment of any ophthalmic disease,
state or condition in humans.

 

1.5 “First Commercial Sale” shall mean, with respect to a Product, the first
sale of such Product by ADF, its sublicensees or their respective Affiliates to
customers who are not Affiliates in the Territory.

 

1.6 “Imprimis In-License” shall mean a license, sublicense or other agreement
under which Imprimis has acquired, or hereafter acquires, rights to the Licensed
IP Rights.

 

1.7 “Licensed Copyrights” shall mean, collectively, Imprimis’ rights in those
certain copyrights in the Territory and copyrightable works (including without
limitation all rights of authorship, use, publication, reproduction,
distribution, performance, transformation, moral rights and rights of ownership
of copyrightable works and all rights to register and obtain renewals and
extensions of registrations, together with all other interests accruing by
reason of international copyright), together with all registrations and
applications therefor in the Territory, in and to the marketing, promotional and
other materials relating to the Products or their use in the Field that are
designated from time to time in writing by Imprimis for use by ADF under this
Agreement.

 

1.8 “Licensed IP Rights” shall mean, collectively, the Licensed Copyrights,
Licensed Know-How Rights, Licensed Marks and Licensed Patent Rights.

 

1.9 “Licensed Know-How Rights” shall mean, collectively, Imprimis’ rights in all
trade secret and other know-how rights reasonably necessary for the formulation,
making or use of the Products in the Territory in the Field.

 

1.10 “Licensed Marks” shall mean Imprimis’ rights in those certain trademarks,
trade names, designs and markings, together with all registrations and
applications therefor in the Territory, that are designated from time to time in
writing by Imprimis for use by ADF under this Agreement.

 

1.11 “Licensed Patent Rights” shall mean, collectively, Imprimis’ rights in (a)
all patent applications (including provisional patent applications) in the
Territory, together with all divisional, continuation, continuation-in-part and
substitute applications that claim priority to, or common priority with, the
foregoing; and (b) all patents in the Territory issuing therefrom (including
utility models, design patents and certificates of invention), together with all
extensions, supplementary protection certificates, registrations, confirmations,
reissues, reexaminations, inter partes reviews, post-grant reviews, restorations
and renewals of or to any of the foregoing, in each case that claim, and only to
the extent they claim the Products or the formulation, making or use thereof.

 

1.12 “Marketing Committee” shall mean the committee comprising representatives
of Imprimis and ADF, described in Section 6.1 below.

 

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1.13 “Person” shall mean any individual, partnership, firm, corporation,
association, trust, unincorporated organization or other entity, as well as any
syndicate or group of any of the foregoing.

 

1.14 “Products” shall mean the final dosage and packaged formulations of the
products (a) which are specifically described on Exhibit A, as amended or
restated from time to time by mutual written agreement of the parties, and (b)
the formulation, making, use, offer for sale or sale of which in the Territory
is claimed or covered by a Valid Claim.

 

1.15 “Qualified Pharmacy” shall mean a compounding pharmacy facility that (a) is
owned and operated by ADF or its sublicensed Affiliates, (b) has been expressly
approved in writing in advance by Imprimis, and (c) is in strict compliance at
all times with all applicable laws and regulations.

 

1.16 “Royalty Term” shall mean, with respect to a Product, the term for which
the formulation, making, use, offer for sale or sale thereof in the Territory is
claimed or covered by a Valid Claim.

 

1.17 “Sales” shall mean, with respect to a Product, the gross sales price of
such Product invoiced by ADF, its sublicensees or their respective Affiliates to
end user customers; provided, however, that Sales shall exclude (a) sales, use,
value-added and other direct taxes incurred on the sale of such Product to such
customers that are separately itemized, and (b) discounts, rebates and other
price reductions for such Product given to such customers under price reduction
programs that are consistent with price reductions given for similar products by
ADF, its sublicensees or their respective Affiliates (as applicable) and are
expressly approved in writing by Imprimis.

 

1.18 “Specifications” shall mean, with respect to each Product, the
specifications for the formulation and making thereof provided by Imprimis from
time to time.

 

1.19 “Supported Patent Rights” shall mean, collectively, (a) all patent
applications (including provisional patent applications), together with all
divisional, continuation, continuation-in-part and substitute applications that
claim priority to, or common priority with, the foregoing; and (b) all patents
issuing therefrom (including utility models, design patents and certificates of
invention), together with all extensions, supplementary protection certificates,
registrations, confirmations, reissues, reexaminations, inter partes reviews,
post-grant reviews, restorations and renewals of or to any of the foregoing, in
each case that use or are supported by data or information derived from the
activities under this Agreement.

 

1.20 “Territory” shall mean Canada.

 

1.21 “Valid Claim” shall mean either (a) a claim of an issued and unexpired
patent included within the Licensed Patent Rights which has not been held
permanently revoked, unenforceable or invalid by a decision of a court or other
governmental agency of competent jurisdiction, unappealable or unappealed within
the time allowed for appeal, and which has not been admitted to be invalid or
unenforceable through reissue or disclaimer or otherwise, or (b) a claim of a
pending patent application included within the Licensed Patent Rights, which
claim was filed in good faith and has not been abandoned or finally disallowed
without the possibility of appeal or refiling of such application.

 

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  2. REPRESENTATIONS AND WARRANTIES.

 

2.1 By Imprimis. Imprimis represents and warrants to the ADF Parties as follows:

 

2.1.1 Organization. Such party is duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is organized.

 

2.1.2 Authorization and Enforcement of Obligations. Such party (a has the
requisite power and authority and the legal right to enter into this Agreement
and to perform its obligations hereunder; and (b) has taken all requisite action
on its part to authorize the execution and delivery of this Agreement and the
performance of its obligations hereunder. This Agreement has been duly executed
and delivered on behalf of such party, and constitutes a legal, valid, binding
obligation, enforceable against such party in accordance with its terms.

 

2.1.3 Consents. All necessary consents, approvals and authorizations of all
governmental authorities and other persons or entities required to be obtained
by such party in connection with this Agreement have been obtained.

 

2.1.4 No Conflict. The execution and delivery of this Agreement and the
performance of such party’s obligations hereunder (a) do not conflict with or
violate any requirement of applicable laws, regulations or orders of
governmental bodies; and (b) do not conflict with, or constitute a default
under, any contractual obligation of such party.

 

2.2 By the ADF Parties. The ADF Parties represent and warrant to Imprimis as
follows:

 

2.2.1 Organization. ADF is duly organized, validly existing and in good standing
under the laws of the jurisdiction in which it is organized.

 

2.2.2 Competence and Capacity. DiGenova is an individual, resident of the
Province of Québec, Canada, and competent to conduct his affairs and to enter
into and perform his obligations under this Agreement. Curry has the capacity
and the legal right to enter into this Agreement and to perform his obligations
hereunder.

 

2.2.3 Authorization and Enforcement of Obligations. Such party (a) has the
requisite power and authority and the legal right to enter into this Agreement
and to perform its obligations hereunder; and (b) has taken all requisite action
on its part to authorize the execution and delivery of this Agreement and the
performance of its obligations hereunder. This Agreement has been duly executed
and delivered on behalf of such party, and constitutes a legal, valid, binding
obligation, enforceable against such party in accordance with its terms.

 

2.2.4 Consents. All necessary consents, approvals and authorizations of all
governmental authorities and other persons or entities required to be obtained
by such party in connection with this Agreement have been obtained.

 

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2.2.5 No Conflict. The execution and delivery of this Agreement and the
performance of such party’s obligations hereunder (a) do not conflict with or
violate any requirement of applicable laws, regulations or orders of
governmental bodies; and (b) do not conflict with, or constitute a default
under, any contractual obligation of such party.

 

2.3 DISCLAIMER OF WARRANTIES. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN SECTION
2.1, IMPRIMIS MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED,
REGARDING THE LICENSED IP RIGHTS, OR ANY OTHER MATTER, INCLUDING WITHOUT
LIMITATION, ANY REPRESENTATION OR WARRANTY REGARDING VALIDITY, ENFORCEABILITY,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR NONINFRINGEMENT.

 

  3. license.

 

3.1 Non-Exclusive License Grants to ADF.

 

3.1.1 On the terms and conditions of this Agreement, Imprimis hereby grants to
ADF a non-exclusive license under the Licensed Know-How Rights and Licensed
Patent Rights to formulate, make, use, offer for sale and sell the Products
solely branded with the Licensed Marks and formulated and dispensed by Qualified
Pharmacies to end user customers in the Territory for use in the Field.

 

3.1.2 On the terms and conditions of this Agreement, Imprimis hereby grants to
ADF a non-exclusive license to use the Licensed Marks solely in the promotion,
marketing and commercialization of the Products in the Territory for use in the
Field as permitted hereunder.

 

3.1.3 On the terms and conditions of this Agreement, Imprimis hereby grants to
ADF a non-exclusive license under the Licensed Copyrights to reproduce, prepare
derivative works, distribute copies, display and perform the subject matter
thereof solely in the promotion, marketing and commercialization of the Products
in the Territory for use in the Field as permitted hereunder.

 

3.1.4 ADF shall have the right to grant sublicenses to Affiliates (without the
right to grant further sublicenses with the prior express written consent of
Imprimis. Any such sublicense shall be subject and subordinate to the terms and
conditions of this Agreement. ADF shall cause each such Affiliate to fully
comply with all terms and conditions of this Agreement applicable to ADF, and
ADF shall be liable for any and all breaches thereof by any such Affiliate.

 

3.1.5 Except as expressly set forth in this Agreement, ADF and its Affiliates
shall not, directly or indirectly, (a) formulate, make, use, offer for sale,
sell or dispense the products specifically described on Exhibit A (as amended or
restated from time to time by mutual written agreement of the parties), or (b)
use or exploit the Licensed IP Rights other than as expressly licensed
hereunder.

 

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3.2 Conversion to Exclusive License. Prior to December 31, 2015, the parties
shall negotiate in good faith and attempt to reach mutual agreement on the terms
and conditions upon which ADF would have the option to convert the licenses
hereunder to exclusive. Such terms and conditions would include, without
limitation, (a) diligence and market penetration conditions to convert, (b)
annual diligence and market growth conditions to maintain exclusivity, and (c)
an annual license fee of $50,000 payable to Imprimis (one-half (½) of which
would be creditable against the royalties owing during such year).

 

3.3 Cross License to Imprimis. ADF hereby grants to Imprimis a royalty-free,
perpetual, irrevocable, nonexclusive, worldwide license (with the right to grant
sublicenses) under the Supported Patent Rights for all uses. Imprimis shall use
commercially reasonable efforts to obtain a similar grantback license from any
third party that enters into a license agreement with Imprimis for rights to
formulate, make, use, offer for sale and sell any Product, and if Imprimis is
unable to obtain such a grantback license from any such third party, then
Imprimis shall not grant a sublicense to such third party under the license
grant from ADF under this Section 3.3, and any such sublicense granted by
Imprimis to such third party shall be void.

 

3.4 No Implied Licenses. Only licenses and rights expressly granted herein shall
be of legal force and effect. No license or other right shall be created
hereunder by implication, estoppel or otherwise.

 

  4. financial terms.

 

4.1 License Fee. On the Effective Date, the ADF Parties, joint and severally,
shall pay to Imprimis the nonrefundable and noncreditable license fee of
$10,000.

 

4.2 Royalties.

 

4.2.1 During the applicable Royalty Term, the ADF Parties, jointly and
severally, shall pay to Imprimis royalties on each unit of Product sold by ADF,
its sublicensees and their respective Affiliates equal to the greater of (a
twenty percent (20%) of Sales for each such unit, and (b)(i) fifty dollars ($50)
for each such unit of an injectable Product, or (ii) a mutually agreed amount
(to be determined not less than ninety (90) days after the Effective Date by
mutual written agreement of the parties after good faith negotiation) for each
such unit of a topical Product.

 

4.2.2 If ADF, its sublicensees or their respective Affiliates sells a Product to
a third party who also purchases other products or services from ADF, its
sublicensees or their respective Affiliates, and ADF, its sublicensees or their
respective Affiliates discounts the purchase price of such Product to a greater
degree than it generally discounts the price of its other products or services
to such customer, then in such case the Sales for the sale of such Product to
such third party shall equal the arm’s length price that third parties would
generally pay for such Product alone when not purchasing any other product or
service from ADF, its sublicensee or their respective Affiliates. For purposes
of this provision, “discounting” includes without limitation establishing the
list price at a lower-than-normal level, or providing credits, allowances,
discounts, rebates, chargebacks or other price reductions at a
higher-than-normal level.

 

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4.3 Royalty Reports.

 

4.3.1 Within thirty (30) days after the end of each calendar quarter, ADF shall
furnish to Imprimis a written report showing in reasonably specific detail (a)
the gross invoiced sales price for each Product sold by ADF, its sublicensees
and their respective Affiliates during such calendar quarter and the calculation
of Sales therefrom; (b) the calculation of the royalties, if any, which shall
have accrued based upon such Sales; (c) the exchange rates, if any, used in
determining the amount of United States dollars; and (d) the name of the
prescribing physician or ordering party for each such Product.

 

4.3.2 With respect to sales of a Product invoiced in United States dollars, all
such amounts shall be expressed in United States dollars. With respect to sales
of a Product invoiced in a currency other than United States dollars, all such
amounts shall be expressed both in the currency in which the sale is invoiced
and in the United States dollar equivalent. The United States dollar equivalent
shall be calculated using the exchange rate (local currency per US$1) published
in The Wall Street Journal, Western Edition, under the heading “Currency
Trading” on the last business day of the applicable calendar quarter. All
royalties payable hereunder shall be calculated based on Sales expressed in
United States dollars.

 

4.3.3 ADF shall keep complete and accurate records in sufficient detail to
properly reflect all gross sales and Sales and to enable the royalties payable
to be determined.

 

4.3.4 All royalties shown to have accrued by each royalty report provided under
this Section 4.3 shall be payable on the date such royalty report is due.
Payment of royalties in whole or in part may be made in advance of such due
date.

 

4.4 Audits. Upon the written request of Imprimis and not more than once in each
calendar year, ADF shall permit an independent certified public accounting firm
of nationally recognized standing, selected by Imprimis and reasonably
acceptable to ADF, at Imprimis’ expense, to have access during normal business
hours to such records of ADF as may be reasonably necessary to verify the
accuracy of the royalty reports hereunder for any year ending not more than
thirty-six (36) months prior to the date of such request. If such accounting
firm concludes that additional royalties were owed during the audited period,
ADF shall pay such additional royalties within thirty (30) days of the date
Imprimis delivers to ADF such accounting firm’s written report so concluding.
The fees charged by such accounting firm shall be paid by Imprimis; provided,
however, if the audit discloses that the aggregate royalties payable by ADF for
such period are more than one hundred five percent (105%) of the royalties
actually paid for such period, then ADF shall pay the reasonable fees and
expenses charged by such accounting firm. Imprimis shall treat all financial
information subject to review under this Section 4.4 as confidential, and shall
cause its accounting firm to retain all such financial information in
confidence.

 

4.5 No Offsets, Credits or Deductions. Except as the parties otherwise mutually
agree in writing, ADF shall make all payments hereunder without offset, credit
or deduction of any type whatsoever or for any reason.

 

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4.6 Payment Method. All payments by ADF to Imprimis hereunder shall be in United
States dollars in immediately available funds and shall be made by wire transfer
to such bank account as designated from time to time by Imprimis to ADF.

 

  5. SPECIFIC OBLIGATIONS OF ADF.

 

5.1 Responsibility. On the terms and conditions of this Agreement, ADF shall be
solely responsible, at its sole expense, for the formulation, making, use,
offering for sale and sale of the Product in the Territory.

 

5.2 Specifications. ADF, its sublicensees and their respective Affiliates shall
formulate, make and use, offer for sale, sell and the Products solely in
accordance with the applicable Specifications.

 

5.3 Compliance with Laws and Quality Standards. ADF, its sublicensees and their
respective Affiliates shall conduct all activities under this Agreement or
relating to Products in accordance with (a) all applicable laws and regulations,
(b) all quality standards, protocols and systems established by Imprimis from
time to time therefor, and (c) the highest quality standards, protocols and
systems for sterile ophthalmic compounding formulations in the Territory.

 

5.4 Diligence. ADF shall use commercially reasonable efforts to formulate, make,
use, offer for sale and sell the Products in the Territory, and to meet the
reasonably foreseeable market demand therefor. Without limiting the generality
of the foregoing:

 

5.4.1 ADF shall employ and maintain a national commercial team (which shall
include not less than the following full-time employees: three (3) dedicated
sales directors, one (1) reimbursement/billing manager, and one (1) customer
service representative) primarily dedicated to the promotion, marketing and
sales of the Products in the Territory hereunder.

 

5.4.2 ADF shall promote, market and commercialize the Products throughout the
Territory in each of the following four key market segments: cataract surgeons,
LASIK/refractive surgeons, general ophthalmologists, and optometrists.

 

5.4.3 ADF shall cause members of such national commercial team annually to
attend relevant national and regional ophthalmology conferences, such as
conferences of the Canadian Ophthalmology Society.

 

5.4.4 ADF shall actively generate grass roots efforts (including by engaging the
societies/advocacy groups and using social media) to facilitate Dropless and
LessDrops discussion.

 

5.4.5 ADF shall achieve and maintain a market share of not less than 10% to 15%
of the relevant market in the Territory for such products in the Territory on
and after the first anniversary of the Effective Date.

 

A breach of this Section 5.4 shall be a material breach of this Agreement.

 

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5.5 Marketing, Promotion and Sales. ADF shall use only such marketing and other
materials for the Products in the Territory as are expressly approved in writing
in advance by Imprimis, are consistent in all respects with positioning of such
Products by Imprimis, include all warnings and instructions applicable for the
proper use of the Products, comply with all applicable laws and regulations in
the Territory, and do not contain any claims regarding a Product or its
performance that ADF does not reasonably demonstrate are supported by such
Product or its performance. ADF shall not make any warranty or claim, express or
implied, relating to any Product other than those contained in any marketing
materials provided by Imprimis to ADF or otherwise expressly authorized in
writing by Imprimis. ADF shall have the right to use, translate and make copies
of marketing materials provided by Imprimis to ADF hereunder to the extent
reasonably necessary to perform its obligations under this Agreement and subject
to the terms and conditions of this Agreement. If Imprimis reasonably believes
that any marketing or other materials for the Products for use in the Territory
fail to fully comply with the terms and conditions of this Agreement, Imprimis
shall give written notice thereof and ADF immediately shall cease to use such
non-compliant materials.

 

5.6 Claims, Complaints and Incidents. ADF promptly shall notify Imprimis in
writing of any claim, complaint or incident of which it becomes aware relating
to patient injury, death, or serious public health threat relating to a Product.

 

5.7 Cost of Approval of Sublicensees and Qualified Pharmacies. Imprimis shall
invoice ADF for the reasonable costs and expenses incurred or accrued by
Imprimis in connection with any request to approve an Affiliate as a sublicensee
or a compounding pharmacy facility as a Qualified Pharmacy hereunder, and the
ADF Parties jointly and severally shall pay Imprimis such costs and expenses
within thirty (30) days after the date of the applicable invoice.

 

  6. MARKETING Committee.

 

6.1 Membership. The Marketing Committee shall comprise an equal number of
representatives of Imprimis and of ADF, as determined by mutual agreement of the
parties. Each party shall appoint its representatives to the Marketing Committee
from time to time, and may substitute one or more of its representatives, in its
sole discretion, effective upon written notice to the other party of such
change.

 

6.2 Purpose. The purpose of the Marketing Committee shall be (a) to facilitate
the exchange of information between the parties regarding the promotion,
marketing and sales of the Products hereunder, (b) to review and discuss the
proposed marketing and other materials for the Products in the Territory, (c) to
discuss any issues relating to the promotion, marketing and sales of the
Products hereunder. The Marketing Committee shall have no authority to make
decisions affecting this Agreement or the rights or obligations of the parties
hereunder, but may make proposed recommendations only.

 

6.3 Meetings. The Marketing Committee shall meet at least once quarterly and
otherwise on an as needed basis (as mutually determined by the parties). Such
meetings shall be held on such dates and at such times and places as mutually
agreed by the parties.

 

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  7. intellectual property rights.

 

7.1 Patent Rights.

 

7.1.1 Imprimis shall have the sole right, at its sole expense, to control the
preparation, filing, prosecution, maintenance, enforcement and defense of the
Licensed Patent Rights. Imprimis shall consider in good faith the interests of
ADF in so doing. ADF shall assist Imprimis, upon request and at Imprimis’ sole
expense, and to the extent commercially reasonable, in connection therewith.

 

7.1.2 ADF shall have the sole right, at its sole expense, to control the
preparation, filing, prosecution, maintenance, enforcement and defense of the
Supported Patent Rights. ADF shall consider in good faith the interests of
Imprimis in so doing.

 

7.2 Copyrights. ADF hereby acknowledges that Imprimis or a Third Party has
claimed, or may claim, copyright protection with respect to certain parts of the
Products and the labels, inserts, studies, publications, promotional materials,
and other materials related to the Products. ADF shall not knowingly take any
action which is in any way inconsistent with Imprimis’ or such Third Party’s
claim of copyright protection with respect to such items.

 

7.3 Marks. ADF shall use the Licensed Marks in accordance with such use
restrictions provided from time to time by Imprimis. ADF shall not use any
Licensed Marks, or any word, title, expression, trademark, design or marking
that is confusingly similar thereto, other than in connection with the
promotion, marketing and sale of the Products in the Territory on the terms and
subject to the conditions of this Agreement. Without limiting the generality of
the foregoing, ADF shall not use any Licensed Marks, or any word, title,
expression, trademark, design or marking that is confusingly similar thereto, as
part of its corporate or business name or in any other manner whatsoever and
shall not register any trade mark or trade name (including any company name)
which is identical to or confusingly similar to or incorporates the Imprimis
Marks. Any goodwill associated with the Licensed Marks shall accrue to the sole
benefit of Imprimis.

 

  8. CONFIDENTIALITY.

 

8.1 Confidentiality. During the term of this Agreement and for a period of five
(5) years following the expiration or earlier termination hereof, each party
shall maintain in confidence the Confidential Information of the other party,
shall not use or grant the use of the Confidential Information of the other
party except as expressly permitted hereby, and shall not disclose the
Confidential Information of the other party except on a need-to-know basis to
such party’s directors, officers, employees and consultants, to the extent such
disclosure is reasonably necessary in connection with such party’s activities as
expressly authorized by this Agreement. To the extent that disclosure to any
person is authorized by this Agreement, prior to disclosure, a party shall
obtain agreement of such person to hold in confidence and not disclose, use or
grant the use of the Confidential Information of the other party except as
expressly permitted under this Agreement. Each party shall notify the other
party promptly upon discovery of any unauthorized use or disclosure of the other
party’s Confidential Information.

 

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8.2 Terms of Agreement. Neither party shall disclose any terms or conditions of
this Agreement to any third party without the prior consent of the other party;
provided, however, that a party may disclose the terms or conditions of this
Agreement, (a) on a need-to-know basis to its legal and financial advisors to
the extent such disclosure is reasonably necessary, and (b) to a third party in
connection with (i) an equity investment in such party, (ii) a merger,
consolidation or similar transaction by such party, or (iii) the sale of all or
substantially all of the assets of such party. Notwithstanding the foregoing,
prior to execution of this Agreement, the parties have agreed upon the substance
of information that can be used to describe the terms and conditions of this
transaction, and each party may disclose such information, as modified by mutual
written agreement of the parties, without the consent of the other party.

 

8.3 Permitted Disclosures. The confidentiality obligations under this Section 8
shall not apply to the extent that a party is required to disclose information
by applicable law, regulation, court order or rules of a stock exchange or
automated quotation system; provided, however, that such party shall provide
advanced written notice thereof to the other party, consult with the other party
with respect to such disclosure and provide the other party sufficient
opportunity to object to any such disclosure or to request confidential
treatment thereof (if applicable).

 

  9. indemnification AND INSURANCE.

 

9.1 By ADF. The ADF Parties, jointly and severally, shall indemnify and hold
harmless Imprimis, and its directors, officers, employees and agents, from and
against all losses, liabilities, damages and expenses, including reasonable
attorneys’ fees and costs (collectively, “Liabilities”), resulting from any
claims, demands, actions or other proceedings by any third party to the extent
resulting from (a) the breach of any representation, warranty or covenant by ADF
under this Agreement; (b) the use of the Licensed IP Rights by ADF, its
sublicensees or their respective Affiliates; (c) the formulation, making, use,
offer for sale or sale of a Product by or on behalf of ADF, its sublicensees or
their respective Affiliates, customers or end-users; or (d) the use of the
Confidential Information of Imprimis by ADF, its sublicensees or their
respective Affiliates.

 

9.2 Procedure. If Imprimis intends to claim indemnification under this Section
9, it shall promptly notify ADF in writing of any claim, demand, action or other
proceeding for which Imprimis intends to claim such indemnification, and ADF
shall have the right to participate in, and, to the extent ADF so desires, to
assume the defense thereof with counsel mutually satisfactory to the parties;
provided, however, that the indemnitee shall have the right to retain its own
counsel, with the fees and expenses to be paid by the ADF Parties, if
representation of such indemnitee by the counsel retained by ADF would be
inappropriate due to actual or potential differing interests between such
indemnitee and any other party represented by such counsel in such proceeding.
The obligations of this Section 9 shall not apply to amounts paid in settlement
of any claim, demand, action or other proceeding if such settlement is effected
without the consent of ADF, which consent shall not be withheld or delayed
unreasonably. Imprimis, its employees and agents, shall reasonably cooperate
with ADF and its legal representatives in the investigation of any claim,
demand, action or other proceeding covered by this Section 9.

 

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9.3 Insurance. ADF shall maintain insurance, including comprehensive or
commercial general liability and products liability insurance (contractual
liability included), with respect to its activities under this Agreement in such
amounts and with such limits as reasonable and customary in the industry, but
with limits not less than the following: (a) each occurrence, one million
dollars ($1,000,000); (b) products/completed operations aggregate, five million
dollars ($5,000,000); (c) personal and advertising injury, one million dollars
($1,000,000); and (d) general aggregate (commercial form only), five million
dollars ($5,000,000). ADF shall maintain such insurance for so long as it
continues its activities under this Agreement, and thereafter for so long as it
customarily maintains insurance for itself covering similar activities;
provided, however, if such insurance is written on a claims-made form, it shall
continue for not less than three (3) years following termination or expiration
of this Agreement.

 

  10. TERM AND TERMINATION.

 

10.1 Term. This Agreement shall commence on the Effective Date and, unless
earlier terminated pursuant to this Section 10, shall continue in effect until
the expiration of ADF’s obligation to pay royalties hereunder.

 

10.2 Termination.

 

10.2.1 If a party has materially breached this Agreement, and such material
breach shall continue for thirty (30) days after written notice of such breach
was provided to the breaching party by the nonbreaching party, the nonbreaching
party shall have the right at its option to terminate this Agreement effective
at the end of such thirty (30) day period.

 

10.2.2 If ADF or any of its Affiliates Challenges any of the patent rights owned
by or licensed to Imprimis or its Affiliates relating to the Products, then
unless, within thirty (30) days after written notice thereof by Imprimis, ADF
withdraws or causes to be withdrawn all such Challenges, this Agreement
automatically shall terminate upon the expiration of such thirty (30) day
period.

 

10.2.3 ADF may terminate this Agreement at any time upon ninety (90) days prior
written notice to Imprimis.

 

10.3 Effect of Expiration or Termination.

 

10.3.1 Expiration or termination of this Agreement shall be without prejudice to
any rights which shall have accrued to the benefit of a party prior to such
expiration or termination. Without limiting the foregoing, Sections 2.3, 3.1.5,
3.3, 3.4, 4.3, 4.4, 5.6, 6, 8, 9, 10.3 and 11 shall survive any expiration or
termination of this Agreement.

 

10.3.2 Except as otherwise expressly set forth in this Agreement, promptly upon
the expiration or earlier termination of this Agreement, each party shall return
to the other party all tangible items regarding the Confidential Information of
the other party and all copies thereof; provided, however, that each party shall
have the right to retain one (1) copy for its legal files for the sole purpose
of determining its obligations hereunder.

 

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10.3.3 Following the expiration or termination of this Agreement, ADF and its
Affiliates shall not, directly or indirectly, (a) formulate, make, use, offer
for sale, sell or dispense the products specifically described on Exhibit A (as
amended or restated from time to time by mutual written agreement of the
parties), or (b) use or exploit the Licensed IP Rights.

 

  11. miscellaneous.

 

11.1 Governing Law. This Agreement shall be governed by, interpreted and
construed in accordance with the laws of the State of California, without regard
to the conflicts of law principles thereof. Any legal action or other proceeding
to resolve any dispute arising from or relating to this Agreement shall be
brought only in the courts of the State of California, located in San Diego
County, or the federal court of the United States of America, located in San
Diego, California. Each party expressly consents to the exclusive personal
jurisdiction and venue of such courts for the purpose of any such legal action
or other proceeding.

 

11.2 Waiver. No waiver by a party hereto of any breach or default of any of the
covenants or agreements herein set forth shall be deemed a waiver as to any
subsequent and/or similar breach or default.

 

11.3 Assignment. Neither this Agreement nor any right or obligation hereunder
may be assigned or delegated, in whole or part, by either party without the
prior express written consent of the other; provided, however, that either party
may, without the written consent of the other, assign this Agreement and its
rights and delegate its obligations hereunder in connection with the transfer or
sale of all or substantially all of its business, or in the event of its merger,
consolidation, change in control or similar transaction. Any permitted assignee
shall assume all obligations of its assignor under this Agreement. Any purported
assignment in violation of this Section 11.3 shall be void.

 

11.4 Independent Contractors. The relationship of the parties hereto is that of
independent contractors. The parties hereto are not deemed to be agents,
partners or Marketing venturers of the others for any purpose as a result of
this Agreement or the transactions contemplated thereby.

 

11.5 Further Actions. Each party shall execute, acknowledge and deliver such
further documents and instruments and to perform all such other acts as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement.

 

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11.6 Notices. All requests and notices required or permitted to be given to the
parties hereto shall be given in writing, shall expressly reference the
section(s) of this Agreement to which they pertain, and shall be delivered to
the other party, effective on receipt, at the appropriate address as set forth
below or to such other addresses as may be designated in writing by the parties
from time to time during the term of this Agreement.

 

  If to Imprimis: Imprimis Pharmaceuticals, Inc.       12264 El Camino Real,
Suite 350       San Diego, California 92130, U.S.A.       Attn: Gary W.
Seelhorst             With a copy to: Morrison & Foerster LLP       12531 High
Bluff Drive, Suite 100       San Diego, California 92121, U.S.A.      
Attention: Mark R. Wicker             If to the ADF Parties: Advance Dosage
Forms, Inc.       3700 St-Patrick, suite 240       Montreal, Quebec, H4E 1A,
Canada       Attn: John Di Genova             With a copy to: John Di Genova    
  5858 Côte des Neiges , suite 400,       Montreal, Quebec H3S 1Z1, Canada  

 

11.7 No Consequential Damages. IN NO EVENT SHALL A PARTY BE LIABLE FOR SPECIAL,
INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS AGREEMENT OR THE
EXERCISE OF ITS RIGHTS HEREUNDER, INCLUDING WITHOUT LIMITATION LOST PROFITS
ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT, REGARDLESS OF ANY
NOTICE OF SUCH DAMAGES. NOTHING IN THIS SECTION 11.7 IS INTENDED TO LIMIT OR
RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF EITHER PARTY UNDER SECTION
9 ABOVE.

 

11.8 Imprimis In-Licenses. Notwithstanding anything to the contrary in this
Agreement, the grant of rights by Imprimis under this Agreement shall be subject
to and limited in all respects by the terms of the applicable Imprimis
In-License(s) pursuant to which Imprimis acquired Licensed IP Rights, and all
rights or sublicenses granted under this Agreement shall be limited to the
extent that Imprimis may grant such rights and sublicenses under such Imprimis
In-Licenses.

 

11.9 Complete Agreement. This Agreement constitutes the entire agreement between
the parties regarding the subject matter hereof, and all prior representations,
understandings and agreements regarding the subject matter hereof, either
written or oral, expressed or implied, are superseded and shall be and of no
effect.

 

11.10 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original and together shall be deemed to be one
and the same agreement.

 

11.11 United States Dollars. Except as otherwise expressly specified herein, all
amounts specified herein are expressed in United States dollars.

 

11.12 Headings. The captions to the several sections hereof are not a part of
this Agreement, but are included merely for convenience of reference only and
shall not affect its meaning or interpretation.

 

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IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be
executed by their duly-authorized representatives as of the Effective Date.

 

  IMPRIMIS PHARMACEUTICALS, INC.         By: /s/ Mark L. Baum          Name:
Mark L. Baum          Title: CEO          ADVANCED DOSAGE FORMS, INC.        
By: /s/ John Di Genova       `  Name: John Di Genova         Title: President  
      /s/ John DiGenova   JOHN DIGENOVA

 

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EXHIBIT A

PRODUCTS

 

Short Name   Long Name   Notes           Injectable                   Tri-Moxi  
triamcinolone acetonide 15 mg/mL, moxifloxacin hydrochloride 1 mg/mL   single
use 1 mL vial           Tri-Moxi-Vanc   triamcinolone acetonide 15 mg/mL,
moxifloxacin hydrochloride 1 mg/mL, vancomycin 10 mg/mL   single use 1 mL vial  
        Dex-Moxi   dexamethasone sodium phosphate 1 mg/mL, moxifloxacin
hydrochloride 5 mg/mL   single use 1 mL vial           Topical                  
Pred-Moxi Drops   prednisolone acetate 1%, moxifloxacin hydrochloride 0.5%   3
mL sterile preservative free ophthalmic drops           Tri-Moxi Drops  
triamcinolone acetonide 1.5%, moxifloxacin hydrochloride 0.5%   3 mL sterile
preservative free ophthalmic drops           Pred-Ketor Drops   prednisolone
acetate 1%, ketorolac tromethamine 0.4%   3 mL sterile preservative free
ophthalmic drops           Pred-Moxi-Ketor Drops   prednisolone acetate 1%,
moxifloxacin hydrochloride 0.5%, ketorolac tromethamine 0.4%   3 mL sterile
preservative free ophthalmic drops           Pred-Moxi Drops   prednisolone
acetate 1%, moxifloxacin hydrochloride 0.5%   6 mL sterile ophthalmic drops
w/preservatives           Pred-Ketor Drops   prednisolone acetate 1%, ketorolac
tromethamine 0.4%   6 mL sterile ophthalmic drops w/preservatives          
Pred-Moxi-Ketor Drops   prednisolone acetate 1%, moxifloxacin hydrochloride
0.5%, ketorolac tromethamine 0.4%   6 mL sterile ophthalmic drops
w/preservatives

 

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