Document:

Exhibit 10.2

 

SECURITY AGREEMENT

 

THIS SECURITY AGREEMENT (this “Agreement”), dated as of May 8, 2018, is executed by ContraVir Pharmaceuticals, Inc., a Delaware corporation (“Debtor”), in favor of Iliad Research and Trading, L.P., a Utah limited partnership (“Secured Party”).

 

A.                                    Debtor has issued to Secured Party a certain Secured Convertible Promissory Note #1 of even date herewith, as may be amended from time to time, in the original face amount of $3,325,000.00 (the “First Note”).

 

B.                                    Debtor may issue to Secured Party a certain Secured Convertible Promissory Note #2 in the original face amount of $2,200,000.00 (the “Second Note” and together with the First Note, the “Notes”).

 

C.                                    In order to induce Secured Party to extend the credit evidenced by the Notes, Debtor has agreed to enter into this Agreement and to grant Secured Party the security interest in the Collateral (as defined below).

 

NOW, THEREFORE, in consideration of the above recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Debtor hereby agrees with Secured Party as follows:

 

1.                                      Definitions and Interpretation. When used in this Agreement, the following terms have the following respective meanings:

 

“Collateral” has the meaning given to that term in Section 2 hereof.

 

“Intellectual Property” means all patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses (software or otherwise), information,  know-how,  inventions, discoveries, published and unpublished works of authorship, processes, any and all other proprietary rights, and all rights corresponding to all of the foregoing throughout the world, now owned and existing or hereafter arising, created or acquired.

 

“Lien” shall mean, with respect to any property, any security interest, mortgage, pledge, lien, claim, charge or other encumbrance in, of, or on such property or the income therefrom, including, without limitation, the interest of a vendor or lessor under a conditional sale agreement, capital lease or other title retention agreement, or any agreement to provide any of the foregoing, and the filing of any financing statement or similar instrument under the UCC or comparable law of any jurisdiction.

 

“Obligations” means (a) all loans, advances, future advances, debts, liabilities and obligations, howsoever arising, owed by Debtor to Secured Party or any affiliate of Secured Party of every kind and description, now existing or hereafter arising, whether created by the Notes, this Agreement, that certain Securities Purchase Agreement of even date herewith, entered into by and between Debtor and Secured Party (the “Purchase Agreement”), any other Transaction Documents (as defined in the Purchase Agreement), any other promissory note issued by Debtor in favor of Secured Party (or any affiliate of Secured Party),  any modification or amendment to any of the foregoing, guaranty of payment or other contract or by a quasi-contract, tort, statute or other operation of law, whether incurred or owed directly to Secured Party or as an affiliate of Secured Party or acquired by Secured Party or an affiliate of Secured Party by purchase, pledge or otherwise, (b) all costs and expenses, including attorneys’ fees, incurred by Secured Party or any affiliate of Secured Party in connection with the Notes or in connection with the collection or enforcement of any portion of the indebtedness,

 

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liabilities or obligations described in the foregoing clause (a), (c) the payment of all other sums, with interest thereon, advanced in accordance herewith to protect the security of this Agreement, and (d) the performance of the covenants and agreements of Debtor contained in this Agreement and all other Transaction Documents.

 

“Permitted Liens” means (a) Liens for taxes not yet delinquent or Liens for taxes being contested in good faith and by appropriate proceedings for which adequate reserves have been established, and (b) Liens in favor of Secured Party under this Agreement or arising under the other Transaction Documents.

 

“UCC” means the Uniform Commercial Code as in effect in the state whose laws would govern the security interest in, including without limitation the perfection thereof, and foreclosure of the applicable Collateral.

 

Unless otherwise defined herein, all terms defined in the UCC have the respective meanings given to those terms in the UCC.

 

2.                                      Grant of Security Interest. As security for the Obligations, Debtor hereby pledges to Secured Party and grants to Secured Party a security interest in all right, title, interest, claims and demands of Debtor in and to the property described in Schedule A hereto, and all replacements, proceeds, products, and accessions thereof (collectively, the “Collateral”).

 

3.                                      Authorization to File Financing Statements. Debtor hereby irrevocably authorizes Secured Party at any time and from time to time to file in any filing office in any Uniform Commercial Code jurisdiction or other jurisdiction of Debtor or its subsidiaries (including without limitation Delaware and New Jersey) any financing statements or documents having a similar effect and amendments thereto that provide any other information required by the Uniform Commercial Code (or similar law of any non-United States jurisdiction, if applicable) of such state or jurisdiction for the sufficiency or filing office acceptance of any financing statement or amendment, including whether Debtor is an organization, the type of organization and any organization identification number issued to Debtor. Debtor agrees to furnish any such information to Secured Party promptly upon Secured Party’s request.

 

4.                                      General Representations and Warranties. Debtor represents and warrants to Secured Party that (a) Debtor is the owner of the Collateral and that no other person has any right, title, claim or interest (by way of Lien or otherwise) in, against or to the Collateral, other than Permitted Liens, (b) upon the filing of UCC-1 financing statements with the Delaware Secretary of State and/or the New Jersey Secretary of State, Secured Party shall have a perfected first-position security interest in the Collateral to the extent that a security interest in the Collateral can be perfected by such filing, except for Permitted Liens, (c) Debtor has received at least a reasonably equivalent value in exchange for entering into this Agreement, (d) Debtor is not insolvent, as defined in any applicable state or federal statute, nor will Debtor be rendered insolvent by the execution and delivery of this Agreement to Secured Party; and (e) as such, this Agreement is a valid and binding obligation of Debtor.

 

5.                                      Additional Covenants. Debtor hereby agrees:

 

5.1.                            to perform all acts that may be necessary to maintain, preserve, protect and perfect in the Collateral, the Lien granted to Secured Party therein, and the perfection and priority of such Lien;

 

5.2.                            to procure, execute (including endorse, as applicable), and deliver from time to time any endorsements, assignments, financing statements, certificates of title, and all other instruments,

 

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documents and/or writings reasonably deemed necessary or appropriate by Secured Party to perfect, maintain and protect Secured Party’s Lien hereunder and the priority thereof;

 

5.3.                            to provide at least fifteen (15) days prior written notice to Secured Party of any of the following events: (a) any changes or alterations of Debtor’s name, (b) any changes with respect to Debtor’s address or principal place of business, (c) the formation of any subsidiaries of Debtor, or (d) any changes in the location of any Collateral;

 

5.4.                            upon the occurrence of an Event of Default (as defined in the Notes) under the Notes and, thereafter, at Secured Party’s request, to endorse (up to the outstanding amount under such promissory notes at the time of Secured Party’s request), assign and deliver any promissory notes and all other instruments, documents, or writings included in the Collateral to Secured Party, accompanied by such instruments of transfer or assignment duly executed in blank as Secured Party may from time to time specify;

 

5.5.                            to the extent the Collateral is not delivered to Secured Party pursuant to this Agreement, to keep the Collateral at the principal office of Debtor (unless otherwise agreed to by Secured Party in writing), and not to relocate the Collateral to any other locations without the prior written consent of Secured Party;

 

5.6.                            not to sell or otherwise dispose, or offer to sell or otherwise dispose, of the Collateral or any interest therein (other than inventory in the ordinary course of business);

 

5.7.                            not to, directly or indirectly, allow, grant or suffer to exist any Lien upon any of the Collateral, other than Permitted Liens;

 

5.8.                            not to incur any indebtedness (other than pursuant to the Notes) without Secured Party’s prior written consent;

 

5.9.                            not to grant any license or sublicense under any of its Intellectual Property, or enter into any other agreement with respect to any of its Intellectual Property, except in the ordinary course of Debtor’s business;

 

5.10.                     not to encumber or grant any security interest in or Lien upon any of its Intellectual Property (or substitutions for or proceeds or products thereof) without Secured Party’s prior written consent;

 

5.11.                     to the extent commercially reasonable and in Debtor’s good faith business judgment: (a) to file and prosecute diligently any patent, trademark or service mark applications pending as of the date hereof or hereafter until all Obligations shall have been paid in full, (b) to make application on unpatented but patentable inventions and on trademarks and service marks, (c) to preserve and maintain all rights in all of its Intellectual Property, and (d) to ensure that all of its Intellectual Property is and remains enforceable. Any and all costs and expenses incurred in connection with each of Debtor’s obligations under this Section 5.11 shall be borne by Debtor. Debtor shall not knowingly and unreasonably abandon any right to file a patent, trademark or service mark application, or abandon any pending patent application, or any other of its Intellectual Property, without the prior written consent of Secured Party except for Intellectual Property that Debtor determines, in the exercise of its good faith business judgment, is not or is no longer material to its business;

 

5.12.                     upon the request of Secured Party at any time or from time to time, and at the sole cost and expense (including, without limitation, reasonable attorneys’ fees) of Debtor, Debtor shall

 

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take all actions and execute and deliver any and all instruments, agreements, assignments, certificates and/or documents reasonably required by Secured Party to collaterally assign any and all of Debtor’s foreign patent, copyright and trademark registrations and applications now owned or hereafter acquired to and in favor of Secured Party; and

 

5.13.                     at any time amounts paid by Secured Party under the Transaction Documents are used to purchase Collateral, Debtor shall perform all acts that may be necessary, and otherwise fully cooperate with Secured Party, to cause (a) any such amounts paid by Secured Party to be disbursed directly to the sellers of any such Collateral, (b) all certificates of title pertaining to such Collateral (as applicable) to be properly filed and reissued to reflect Secured Party’s Lien on such Collateral, and (c) all such reissued certificates of title to be delivered to and held by Secured Party.

 

6.                                      Authorized Action by Secured Party. Debtor hereby irrevocably appoints Secured Party as its attorney-in-fact (which appointment is coupled with an interest) and agrees that Secured Party may perform (but Secured Party shall not be obligated to and shall incur no liability to Debtor or any third party for failure so to do) any act which Debtor is obligated by this Agreement to perform, and to exercise such rights and powers as Debtor might exercise with respect to the Collateral, including the right to (a) collect by legal proceedings or otherwise and endorse, receive and receipt for all dividends, interest, payments, proceeds and other sums and property now or hereafter payable on or on account of the Collateral; (b) enter into any extension, reorganization, deposit, merger, consolidation or other agreement pertaining to, or deposit, surrender, accept, hold or apply other property in exchange for the Collateral; (c) make any compromise or settlement, and take any action Secured Party deems advisable, with respect to the Collateral; (d) file a copy of this Agreement with any governmental agency, body or authority, at the sole cost and expense of Debtor; (e) insure, process and preserve the Collateral; (f) pay any indebtedness of Debtor relating to the Collateral; (g) execute and file UCC financing statements and other documents, certificates, instruments and agreements with respect to the Collateral or as otherwise required or permitted hereunder; and (h) take any and all appropriate action and execute any and all documents and instruments that may be necessary or useful to accomplish the purposes of this Agreement; provided, however, that Secured Party shall not exercise any such powers granted pursuant to clauses (a) through (c) above prior to the occurrence of an Event of Default and shall only exercise such powers during the continuance of an Event of Default. The powers conferred on Secured Party under this Section 6 are solely to protect its interests in the Collateral and shall not impose any duty upon it to exercise any such powers. Secured Party shall be accountable only for the amounts that it actually receives as a result of the exercise of such powers, and neither Secured Party nor any of its stockholders, directors, officers, managers, employees or agents shall be responsible to Debtor for any act or failure to act, except with respect to Secured Party’s own gross negligence or willful misconduct. Nothing in this Section 6 shall be deemed an authorization for Debtor to take any action that it is otherwise expressly prohibited from undertaking by way of other provision of this Agreement.

 

7.                                      Default and Remedies.

 

7.1.                            Default. Debtor shall be deemed in default under this Agreement upon the occurrence of an Event of Default.

 

7.2.                            Remedies. Upon the occurrence of any such Event of Default, Secured Party shall have the rights of a secured creditor under the UCC, all rights granted by this Agreement and by law, including, without limiting the foregoing, (a) the right to require Debtor to assemble the Collateral and make it available to Secured Party at a place to be designated by Secured Party, and (b) the right to take possession of the Collateral, and for that purpose Secured Party may enter upon premises on which the Collateral may be situated and remove the Collateral therefrom. Debtor hereby agrees that fifteen (15) days’ notice of a public sale of any Collateral or notice of the date after which a private sale of any

 

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Collateral may take place is reasonable. In addition, Debtor waives any and all rights that it may have to a judicial hearing in advance of the enforcement of any of Secured Party’s rights and remedies hereunder, including, without limitation, Secured Party’s right following an Event of Default to take immediate possession of Collateral and to exercise Secured Party’s rights and remedies with respect thereto. Secured Party may also have a receiver appointed to take charge of all or any portion of the Collateral and to exercise all rights of Secured Party under this Agreement. Secured Party may exercise any of its rights under this Section 7.2 without demand or notice of any kind. The remedies in this Agreement, including without limitation this Section 7.2, are in addition to, not in limitation of, any other right, power, privilege, or remedy, either in law, in equity, or otherwise, to which Secured Party may be entitled. No failure or delay on the part of Secured party in exercising any right, power, or remedy will operate as a waiver thereof, nor will any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right hereunder. All of Secured Party’s rights and remedies, whether evidenced by this Agreement or by any other agreement, instrument or document shall be cumulative and may be exercised singularly or concurrently.

 

7.3.                            Standards for Exercising Rights and Remedies. To the extent that applicable law imposes duties on Secured Party to exercise remedies in a commercially reasonable manner, Debtor acknowledges and agrees that it is not commercially unreasonable for Secured Party (a) to fail to incur expenses reasonably deemed significant by Secured Party to prepare Collateral for disposition, (b) to fail to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to obtain governmental or third party consents for the collection or disposition of Collateral to be collected or disposed of, (c) to fail to exercise collection remedies against account debtors or other persons obligated on Collateral or to fail to remove liens or encumbrances on or any adverse claims against Collateral, (d) to exercise collection remedies against account debtors and other persons obligated on Collateral directly or through the use of collection agencies and other collection specialists, (e) to advertise dispositions of Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized nature, (f) to contact other persons, whether or not in the same business as Debtor, for expressions of interest in acquiring all or any portion of the Collateral, (g) to hire one or more professional auctioneers to assist in the disposition of Collateral, whether or not the Collateral is of a specialized nature, (h) to dispose of Collateral by utilizing Internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capability of doing so, or that match buyers and sellers of assets, (i) to dispose of assets in wholesale rather than retail markets, (j) to disclaim disposition warranties, (k) to purchase insurance or credit enhancements to insure Secured Party against risks of loss, collection or disposition of Collateral or to provide to Secured Party a guaranteed return from the collection or disposition of Collateral, or (l) to the extent deemed appropriate by Secured Party, to obtain the services of other brokers, investment bankers, consultants and other professionals to assist Secured Party in the collection or disposition of any of the Collateral. Debtor acknowledges that the purpose of this Section is to provide non-exhaustive indications of what actions or omissions by Secured Party would fulfill Secured Party’s duties under the UCC in Secured Party’s exercise of remedies against the Collateral and that other actions or omissions by Secured Party shall not be deemed to fail to fulfill such duties solely on account of not being indicated in this Section. Without limitation upon the foregoing, nothing contained in this Section shall be construed to grant any rights to Debtor or to impose any duties on Secured Party that would not have been granted or imposed by this Agreement or by applicable law in the absence of this Section.

 

7.4.                            Marshalling. Secured Party shall not be required to marshal any present or future Collateral for, or other assurances of payment of, the Obligations or to resort to such Collateral or other assurances of payment in any particular order, and all of its rights and remedies hereunder and in respect of such Collateral and other assurances of payment shall be cumulative and in addition to all other rights and remedies, however existing or arising. To the extent that it lawfully may, Debtor hereby agrees that it will not invoke any law relating to the marshalling of Collateral which might cause delay in or impede the

 

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enforcement of Secured Party’s rights and remedies under this Agreement or under any other instrument creating or evidencing any of the Obligations or under which any of the Obligations is outstanding or by which any of the Obligations is secured or payment thereof is otherwise assured, and, to the extent that it lawfully may, Debtor hereby irrevocably waives the benefits of all such laws.

 

7.5.                            Application of Collateral Proceeds. The proceeds and/or avails of the Collateral, or any part thereof, and the proceeds and the avails of any remedy hereunder (as well as any other amounts of any kind held by Secured Party at the time of, or received by Secured Party after, the occurrence of an Event of Default) shall be paid to and applied as follows:

 

(a)                                 First, to the payment of reasonable costs and expenses, including all amounts expended to preserve the value of the Collateral, of foreclosure or suit, if any, and of such sale and the exercise of any other rights or remedies, and of all proper fees, expenses, liability and advances, including reasonable legal expenses and attorneys’ fees, incurred or made hereunder by Secured Party;

 

(b)                                 Second, to the payment to Secured Party of the amount then owing or unpaid on the Notes (to be applied first to accrued interest and fees and second to outstanding principal) and all amounts owed under any of the other Transaction Documents or other documents included within the Obligations; and

 

(c)                                  Third, to the payment of the surplus, if any, to Debtor, its successors and assigns, or to whosoever may be lawfully entitled to receive the same.

 

In the absence of final payment and satisfaction in full of all of the Obligations, Debtor shall remain liable for any deficiency.

 

8.                                      Miscellaneous.

 

8.1.                            Notices. Any notice required or permitted hereunder shall be given in the manner provided in the subsection titled “Notices” in the Purchase Agreement, the terms of which are incorporated herein by this reference.

 

8.2.                            Non-waiver. No failure or delay on Secured Party’s part in exercising any right hereunder shall operate as a waiver thereof or of any other right nor shall any single or partial exercise of any such right preclude any other further exercise thereof or of any other right.

 

8.3.                            Amendments and Waivers. This Agreement may not be amended or modified, nor may any of its terms be waived, except by written instruments signed by Debtor and Secured Party. Each waiver or consent under any provision hereof shall be effective only in the specific instances for the purpose for which given.

 

8.4.                            Assignment. This Agreement shall be binding upon and inure to the benefit of Secured Party and Debtor and their respective successors and assigns; provided, however, that Debtor may not sell, assign or delegate rights and obligations hereunder without the prior written consent of Secured Party.

 

8.5.                            Cumulative Rights, etc. The rights, powers and remedies of Secured Party under this Agreement shall be in addition to all rights, powers and remedies given to Secured Party by virtue of any applicable law, rule or regulation of any governmental authority, or the Notes, all of which rights, powers, and remedies shall be cumulative and may be exercised successively or concurrently without impairing Secured Party’s rights hereunder. Debtor waives any right to require Secured Party to proceed

 

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against any person or entity or to exhaust any Collateral or to pursue any remedy in Secured Party’s power.

 

8.6.                            Partial Invalidity. If any part of this Agreement is construed to be in violation of any law, such part shall be modified to achieve the objective of the parties to the fullest extent permitted and the balance of this Agreement shall remain in full force and effect.

 

8.7.                            Expenses. Debtor shall pay on demand all reasonable fees and expenses, including reasonable attorneys’ fees and expenses, incurred by Secured Party in connection with the custody, preservation or sale of, or other realization on, any of the Collateral or the enforcement or attempt to enforce any of the Obligations which are not performed as and when required by this Agreement.

 

8.8.                            Entire Agreement. This Agreement, the Notes, and the other Transaction Documents, taken together, constitute and contain the entire agreement of Debtor and Secured Party with respect to this particular matter and supersede any and all prior agreements, negotiations, correspondence, understandings and communications between the parties, whether written or oral, respecting the subject matter hereof.

 

8.9.                            Governing Law; Venue. Except as otherwise specifically set forth herein, the parties expressly agree that this Agreement shall be governed solely by the laws of the State of Utah, without giving effect to the principles thereof regarding the conflict of laws; provided, however, that enforcement of Secured Party’s rights and remedies against the Collateral as provided herein will be subject to the UCC. The provisions set forth in the Purchase Agreement to determine the proper venue for any disputes are incorporated herein by this reference.

 

8.10.                     Waiver of Jury Trial. EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO DEMAND THAT ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE RELATIONSHIPS OF THE PARTIES HERETO BE TRIED BY JURY. THIS WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND A TRIAL BY JURY ARISING UNDER COMMON LAW OR ANY APPLICABLE STATUTE, LAW, RULE OR REGULATION. FURTHER, EACH PARTY HERETO ACKNOWLEDGES THAT IT IS KNOWINGLY AND VOLUNTARILY WAIVING ITS RIGHT TO DEMAND TRIAL BY JURY.

 

8.11.                     Purchase Agreement; Arbitration of Disputes. By executing this Agreement, each party agrees to be bound by the terms, conditions and general provisions of the Purchase Agreement and the other Transaction Documents, including without limitation the Arbitration Provisions (as defined in the Purchase Agreement) set forth as an exhibit to the Purchase Agreement.

 

8.12.                     Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original and all of which together shall constitute one instrument. Any electronic copy of a party’s executed counterpart will be deemed to be an executed original.

 

8.13.                     Further Assurances. Debtor shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as Secured Party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

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8.14.                     Time of the Essence. Time is expressly made of the essence with respect to each and every provision of this Agreement.

 

[Remainder of page intentionally left blank; signature page follows]

 

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IN WITNESS WHEREOF, Secured Party and Debtor have caused this Agreement to be executed as of the day and year first above written.

 

	
 
    	
SECURED   PARTY:
    
	
 
    	
 
    
	
 
    	
ILIAD   RESEARCH AND TRADING, L.P.
    
	
 
    	
 
    
	
 
    	
By:
    	
Iliad   Management, LLC, its General Partner
    
	
 
    	
 
    
	
 
    	
 
    	
By:
    	
Fife   Trading, Inc., its Manager
    
	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
John   M. Fife, President
    
	
 
    	
 
    
	
 
    	
DEBTOR:
    
	
 
    	
 
    
	
 
    	
CONTRAVIR PHARMACEUTICALS, INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
									

 

[Signature Page to Security Agreement]

 

 

SCHEDULE A

 

TO SECURITY AGREEMENT

 

All right, title, interest, claims and demands of Debtor in and to all of Debtor’s assets owned as of the date hereof and/or acquired by Debtor at any time while the Obligations are still outstanding, including without limitation, the following property:

 

1.                                      All equity interests in all wholly- or partially-owned subsidiaries of Debtor.

 

2.                                      All customer accounts, insurance contracts, and clients underlying such insurance contracts.

 

3.                                      All goods and equipment now owned or hereafter acquired, including, without limitation, all laboratory equipment, computer equipment, office equipment, machinery, fixtures, vehicles, and any interest in any of the foregoing, and all attachments, accessories, accessions, replacements, substitutions, additions, and improvements to any of the foregoing, wherever located.

 

4.                                      All inventory now owned or hereafter acquired, including, without limitation, all merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and finished products including such inventory as is temporarily out of Debtor’s custody or possession or in transit and including any returns upon any accounts or other proceeds, including insurance proceeds, resulting from the sale or disposition of any of the foregoing and any documents of title representing any of the above, and Debtor’s books relating to any of the foregoing.

 

5.                                      All contract rights (including those certain Investor Notes (comprised of Investor Note #1, Investor Note #2, Investor Note #3, and Investor Note #4) issued by Secured Party in favor of Debtor on the date hereof, each in the initial principal amount of $250,000.00), general intangibles, healthcare insurance receivables, legal claims, payment intangibles and commercial tort claims, now owned or hereafter acquired, including, without limitation, all software and computer programs including source code, methods, goodwill, license agreements, information, any and all other proprietary rights, franchise agreements, blueprints, drawings, purchase orders, customer lists, route lists, infringements, claims, computer programs, computer disks, computer tapes, literature, reports, catalogs, design rights, income tax refunds, payments of insurance and rights to payment of any kind and whether in tangible or intangible form or contained on magnetic media readable by machine together with all such magnetic media, and all rights corresponding to all of the foregoing throughout the world, now owned and existing or hereafter arising, created or acquired.

 

6.                                      All now existing and hereafter arising accounts, contract rights, royalties, license rights and all other forms of obligations owing to Debtor arising out of the sale or lease of goods, the licensing of technology or the rendering of services by Debtor (subject, in each case, to the contractual rights of third parties to require funds received by Debtor to be expended in a particular manner), whether or not earned by performance, and any and all credit insurance, guaranties, and other security therefor, as well as all merchandise returned to or reclaimed by Debtor and Debtor’s books relating to any of the foregoing.

 

7.                                      All documents, cash, deposit accounts, letters of credit, letter of credit rights, supporting obligations, certificates of deposit, instruments, chattel paper, electronic chattel paper, tangible chattel paper and investment property, including, without limitation, all securities, whether certificated or uncertificated, security entitlements, securities accounts, commodity contracts and commodity accounts, and all financial assets held in any securities account or otherwise, wherever

 

 

located, now owned or hereafter acquired and Debtor’s books relating to the foregoing.

 

8.                                      All other assets, goods and personal property of Debtor, wherever located, whether tangible or intangible, and whether now owned or hereafter acquired.

 

9.                                      Any and all claims, rights and interests in any of the above and all substitutions for, additions and accessions to and proceeds and products thereof, including, without limitation, insurance, condemnation, requisition or similar payments and the proceeds thereof.

 

Notwithstanding the foregoing, and for the avoidance of doubt, the foregoing shall expressly exclude all Intellectual Property of Debtor.EXHIBIT
10.1

 

ASSET
PURCHASE AND LICENSE AGREEMENT

 

THIS
ASSET PURCHASE AND LICENSE AGREEMENT (this “Agreement”) dated as of the last date provided on the signature page (the
“Effective Date”), is entered into between IMPRIMIS PHARMACEUTICALS, INC., a Delaware corporation (“Imprimis”),
with a place of business at 12264 El Camino Real, Suite 350, San Diego, California 92130, and SURFACE
Pharmaceuticals, Inc., a Delaware corporation (“Surface”), with a place of business at 12264 El Camino Real,
Suite 350, San Diego, California 92130. 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 and grammatical variations of such terms shall
have corresponding meanings:

 

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
“Assets” shall mean, collectively, (a) all Technology as of the Effective Date, (b) the Assigned Patent Rights,
(c) the Assigned Know-How Rights, and (d) all compositions, formulations, samples, data and information as of the Effective Date
regarding the Technology.

 

1.3
“Assigned Know-How Rights” shall mean Imprimis’ rights in all trade secret and other know-how rights
as of the Effective Date specific to the Technology.

 

1.4
“Assigned Patent Rights” shall mean, collectively, (a) all patent applications (including provisional patent
applications) listed on Schedule A, together with all divisionals, continuations and continuations-in-part that claim priority
to, or common priority with, the foregoing; (b) all patents issuing therefrom (including utility models and design patents and
certificates of invention), together with all reissues, renewals, extensions or additions thereof and thereto; and (c) all foreign
counterparts with or to any of the foregoing.

 

1.5
“Confidential Information” shall mean all information and data that (a) is provided by one party to the other
party under this Agreement, and (b) 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. Imprimis’ Confidential Information includes, without limitation, embodiments of the Licensed
Know-How Rights. Surface’s Confidential information includes, without limitation, the Assets. 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 recipient without access to or
use of the information disclosed by the disclosing party.

 

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1.6
“First Commercial Sale” shall mean, with respect to any Product, the first sale of such Product after all applicable
marketing and pricing approvals (if any) have been granted by the applicable governing health authority of such country.

 

1.7
“Licensed Know-How Rights” shall mean Imprimis’ rights in all trade secret or other know-how rights as
of the Effective Date regarding the Technology, excluding the Assigned Know-How Rights and Assigned Patent Rights.

 

1.8
“Licensee” shall mean a Third Party to whom Surface or its Affiliate has granted a license, immunity or other
right under the Assigned Patent Rights to offer to sell, sell or otherwise commercialize one or more Products, provided such license
has not expired or been terminated.

 

1.9
“Net Licensing Revenues” shall mean, with respect to any Product, the aggregate consideration received by Surface
or its Affiliates in connection with the grant by Surface or its Affiliates to a Licensee of a license, immunity or other right
under the Assigned Patent Rights to offer to sell, sell or otherwise commercialize such Product, excluding amounts calculated
on the sales price of such Product.

 

1.10
“Net Receipts” shall mean, with respect to any Product, the aggregate of the Net Sales thereof and Net Licensing
Revenues therefrom.

 

1.11
“Net Sales” shall mean, with respect to any Product, the gross sales price for such Product invoiced by Surface,
its Licensees or their respective Affiliates to customers who are not Affiliates (or are Affiliates but are the end users of such
Product), less (a) credits, allowances, discounts and rebates to, and chargebacks from the account of, such customers; (b) freight
and insurance costs in transporting such Product to the extent separately invoiced and included in the gross sales price; (c)
cash, quantity and trade discounts, rebates and other price reductions for such Product; (d) sales, use, value-added and other
direct taxes for such Product to the extent separately invoiced and included in the gross sales price; (e) customs duties, tariffs,
surcharges and other governmental charges incurred in exporting or importing such Product to the extent separately invoiced and
included in the gross sales price; and (f) an allowance for uncollectible or bad debts for such Product determined in accordance
with generally accepted accounting principles not to exceed 3% of Net Sales of such Product for the applicable quarterly reporting
period before giving effect to this subsection (f).

 

1.12
“Patent Issuance” shall mean issuance of a patent from, claiming priority to, or claiming common priority with,
a patent application listed on Schedule A, or any foreign counterpart of the foregoing.

 

    	 	2	 

    	 

    

 

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
“Product” shall mean any product, in a capsule or oral dose composition, compromising a combination of (a)
an anti-bacterial agent of the tetracycline class (such as doxycycline) and (b) essential fatty acids (such as omega-3s).

 

1.15
“Product Supported Patent Rights” shall mean, collectively, (a) all patent applications hereafter filed anywhere
in the world; (b) all patents that have issued or in the future issue from any of the foregoing patent applications, including
without limitation utility models, design patents and certificates of invention; and (c) all divisionals, continuations, continuations-in-part,
reissues, renewals, extensions or additions to any such patents and patent applications; in each case that use or are supported
by data and information derived from the development, manufacture or use of the Product or otherwise from the exploitation of
the Technology; provided, however, that Product Supported Patent Rights shall exclude the Assigned Patent Rights.

 

1.16
“Technology” shall mean, collectively, the Product together with all methods of manufacture or use thereof.

 

1.17
“Third Party” shall mean any Person other than Imprimis, Surface or their respective Affiliates.

 

1.18
“Valid Claim” shall mean either (a) a claim of an issued and unexpired patent included within the Assigned
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 Assigned 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.

 

2.
Purchase and Sale of the Assets.

 

2.1
Assets. Subject to the terms and conditions of this Agreement, Surface hereby purchases from Imprimis, and Imprimis hereby
sells, conveys, transfers and assigns to Surface, on the Effective Date, all of Imprimis’ right, title and interest in and
to the Assets. To the extent necessary to comply with applicable privacy laws, Imprimis shall have the right to redact patient
identifying information from any data or information transferred to Surface.

 

2.2
No Assumption of Liabilities. Surface shall not be obligated to assume or perform and is not assuming or performing any
liabilities or obligations of Imprimis which relate to Imprimis’ ownership of the Assets prior to the Effective Date or
otherwise, whether known or unknown, fixed or contingent, certain or uncertain, and regardless of when they are or were asserted,
and Imprimis shall remain responsible for such liabilities.

 

    	 	3	 

    	 

    

 

2.3
Transfer Documents. The sale, conveyance, transfer and assignment of the Assets may be further evidenced by the due execution
and delivery by the parties of any additional bills of sale, assignment or other title transfer documents and instruments as reasonably
requested by Surface evidencing the sale, conveyance, transfer and assignment of the Assets in accordance with this Agreement.

 

3.
License Grants.

 

3.1
License to Surface.

 

3.1.1
Subject to the terms and conditions of this Agreement, Imprimis hereby grants to Surface a non-exclusive, irrevocable, perpetual,
non-transferable (except in connection with a permitted assignment of this Agreement), worldwide license under the Licensed Know-How
Rights to develop, make, have made, use, offer for sale, sell, and import one or more Products.

 

3.1.2
Surface shall have the right to grant sublicenses, through multiple tiers, to Third Parties and Affiliates for the purpose of
developing, manufacturing, seeking regulatory approval for, or commercializing any Product. Any such sublicense shall be subject
and subordinate to the terms and conditions of this Agreement.

 

3.2
Grantback License.

 

3.2.1
Subject to the terms and conditions of this Agreement, Surface hereby grants to Imprimis a non-exclusive, irrevocable, perpetual,
non-transferable (except in connection with a permitted assignment of this Agreement), worldwide license under the Product Supported
Patent Rights for all uses, other than to develop, make, have made, use, offer for sale, sell, and import one or more Products.

 

3.2.2
Imprimis shall have the right to grant sublicenses, through multiple tiers, to Third Parties and Affiliates.

 

3.3
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.
Representations and Warranties.

 

4.1
Mutual Representations and Warranties. Each party represents and warrants to the other party as follows:

4.1.1
Organization. Such party is duly organized, validly existing and in good standing under the laws of the jurisdiction in
which it is organized.

 

4.1.2
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.

 

    	 	4	 

    	 

    

 

4.1.3
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.

 

4.1.4
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.

 

4.2
Disclaimer of Warranties. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN SECTION
4.1, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, REGARDING THE ASSETS, LICENSED KNOW-HOW RIGHTS,
OR ANY OTHER MATTER, INCLUDING WITHOUT LIMITATION, ANY REPRESENTATION OR WARRANTY REGARDING VALIDITY, ENFORCEABILITY, MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE OR NONINFRINGEMENT. THE ASSETS AND LICENSED KNOW-HOW RIGHTS ARE PROVIDED “AS IS.”

 

5.
Financial Terms.

 

5.1
Milestone Payment. Within thirty (30) days following the first Patent Issuance, Surface shall give written notice to Imprimis
and shall pay to Imprimis a non-refundable and noncreditable payment of fifty thousand dollars ($50,000).

 

5.2
Net Receipts Payments.

 

5.2.1
Net Receipts Payment Amounts.

 

(a)
Payment Amount. Subject to the provisions in this Section 5.2.1, on a Product-by-Product and country-by-country basis,
Surface shall pay to Imprimis, on a quarterly basis, six percent (6%) of Net Receipts (the “Payment Amount”);
provided, however, if, the manufacture, use, offer for sale, sale, or import of such Product in a particular country would not
infringe a Valid Claim (if such Valid Claim were in an issued patent owned solely by a Third Party), then the applicable Payment
Amount with respect to such Product in such country shall be reduced by one-half (1⁄2).

 

(b)
Discounts. If Surface, its Licensees or their respective Affiliates sells the Product to a Third Party who also purchases
other products or services from Surface, its Licensees or their respective Affiliates, and Surface, its Licensees or their respective
Affiliates discounts the purchase price of the 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 Net Sales for the sale of the Product to such Third Party shall equal
the arm’s length price that Third Parties would generally pay for the Product alone when not purchasing any other product
or service from Surface, its Licensee or their respective Affiliates. For purposes of this provision, “discounting”
includes establishing the list price at a lower-than-normal level.

 

    	 	5	 

    	 

    

 

(c)
Incentives. If Surface, its Licensees or their respective Affiliates sells the Product to a Third Party who also purchases
other products or services from Surface, its Licensees or their respective Affiliates during the same period pursuant to a pharmacy,
performance or other incentive program, a disease management or similar program, or any other discount, chargeback or credit program
for products or services purchased, then for purposes of calculating Net Sales of the Product hereunder for such period, all discounts,
chargebacks, credits and the like for such Third Party shall be allocated in proportion to the respective list prices of all products
or services sold to such Third Party during such period.

 

5.2.2
Reports and Net Receipts Payments. Within sixty (60) days after the end of each calendar quarter, Surface shall deliver
to Imprimis a report setting forth for such calendar quarter (a) the calculation of the applicable Payment Amount; (b) the payments
due under this Agreement for the sale of each Product; and (c) the applicable exchange rate as determined below. Surface shall
remit the total payments due for the sale of Products during such calendar quarter at the time such report is made. No such reports
or payments shall be due for any Product before the First Commercial Sale of such Product. With respect to Net Receipts received
in United States dollars, all amounts shall be expressed in United States dollars. With respect to Net Receipts received in a
currency other than United States dollars, all amounts shall be expressed both in the currency in which the amount is invoiced
(or received as applicable) and in the United States dollar equivalent. The United States dollar equivalent shall be calculated
using the average of 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 each month during the applicable calendar quarter.

 

5.3
Payment Provisions.

 

5.3.1
Payment Method. All payments by Surface to Imprimis hereunder shall be in United States dollars in immediately available
funds and shall be made by wire transfer from a United States bank located in the United States to such bank account as designated
from time to time by Imprimis to Surface.

 

5.3.2
Payment Terms. The Payment Amount shown to have accrued by each report provided for under Section 5.2.2 shall be due on
the date such report is due. Payment of Payment Amount in whole or in part may be made in advance of such due date.

 

5.3.3
Withholding Taxes. Surface shall be entitled to deduct the amount of any withholding taxes, value-added taxes or other
taxes, levies or charges with respect to such amounts, other than United States taxes, payable by Surface, its Licensees or their
respective Affiliates, or any taxes required to be withheld by Surface, its Licensees or their respective Affiliates, to the extent
Surface, its Licensees or their respective Affiliates pay to the appropriate governmental authority on behalf of Imprimis such
taxes, levies or charges. Surface shall use reasonable efforts to minimize any such taxes, levies or charges required to be withheld
on behalf of Imprimis by Surface, its Licensees or their respective Affiliates. Surface promptly shall deliver to Imprimis proof
of payment of all such taxes, levies and other charges, together with copies of all communications from or with such governmental
authority with respect thereto.

 

    	 	6	 

    	 

    

 

5.4
Audits. Upon the written request of Imprimis and not more than once in each calendar year, Surface shall permit an independent
certified public accounting firm selected by Imprimis and reasonably acceptable to Surface, at Imprimis’ expense, to have
access during normal business hours to such of the financial records of Imprimis as may be reasonably necessary to verify the
accuracy of the Payment Amount reports hereunder for the eight (8) calendar quarters immediately prior to the date of such request.
If such accounting firm concludes that additional amounts were owed during the audited period, Surface shall pay such additional
amounts within thirty (30) days after the date Imprimis delivers to Surface 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 Payment
Amount payable by Surface for such period are more than one hundred five percent (105%) of the Payment Amount actually paid for
such period, then Surface shall pay the fees and expenses charged by such accounting firm. Imprimis shall cause its accounting
firm to retain all financial information subject to review under this Section 5.4 in strict confidence. Imprimis shall treat all
such financial information as Surface’s confidential information, and shall not disclose such financial information to any
Third Party or use it for any purpose other than as specified in this Section 5.4.

 

6.
Post-Effective Date Covenants.

 

6.1
Surface Diligence.

 

6.1.1
Surface shall use commercially reasonable efforts (whether alone or with or through its Licensees and its or their respective
Affiliates) to research, develop and commercialize Products.

 

6.1.2
Surface shall control, at its sole expense, the preparation, filing, prosecution, maintenance and enforcement of the Assigned
Patent Rights consistent with prudent business practices, and shall consider in good faith the interests of Imprimis.

 

6.2
Imprimis Covenants.

 

6.2.1
Within thirty (30) days after the Effective Date, Imprimis shall transfer to Surface all tangible embodiments of the Technology
in the possession and control of Imprimis.

 

6.2.2
Imprimis shall provide cooperation reasonably requested by Surface in connection with Surface’s efforts to establish, perfect,
defend, or enforce its rights in or to the Assets (including without limitation the Assigned Patent Rights). Such cooperation
shall include, without limitation, (a) executing such further assignments, transfers, licenses, releases and consents, and (b)
providing such data and information, consulting with Surface and executing and delivering all such further documents and instruments,
in each case as reasonably requested by Surface regarding the Assets (including without limitation the Assigned Patent Rights).

 

    	 	7	 

    	 

    

 

7.
Indemnification.

 

7.1
Indemnification of Surface. Subject to the provisions of this Section 7, Imprimis shall indemnify, defend and hold harmless
Surface, its officers, directors, affiliates, agents, stockholders and representatives (collectively, the “Surface Indemnitees”),
from and against any and all losses, liabilities, damages and expenses (including without limitation reasonable attorneys’
fees and costs) incurred as a result of any claim, demand, action or proceeding by any Third Party (collectively, “Losses”)
incurred or suffered by an Surface Indemnitee to the extent arising out of:

 

7.1.1
any breach of the representations and warranties of Imprimis set forth in this Agreement;

 

7.1.2
any breach of any covenant or agreement of Imprimis set forth in this Agreement or in any certificate, instrument, or other document
delivered pursuant to this Agreement; and

 

7.1.3
the ownership or exploitation of the Assets prior to the Effective Date or any liability or obligation whatsoever of Imprimis.

 

7.2
Indemnification of Imprimis. Subject to the provisions of this Section 7, Surface shall indemnify and hold harmless Imprimis,
its officers, directors, affiliates, agents, stockholders and representatives (collectively, the “Imprimis Indemnitees”),
from and against any and all Losses incurred or suffered by an Imprimis Indemnitee to the extent arising out of:

 

7.2.1
any breach of the representations and warranties of Surface set forth in this Agreement;

 

7.2.2
any breach of any covenant or agreement of Surface set forth in this Agreement or in any certificate, instrument, or other document
delivered pursuant to this Agreement;

 

7.2.3
the ownership or exploitation of the Assets after the Effective Date or the manufacture, use, or sale of any Product solely by
Surface, its Licensees or their respective Affiliates or the use of any Product by their customers.

 

7.3
Procedure. A party seeking indemnification (the “Indemnitee”) shall promptly notify the other party
(the “Indemnifying Party”) in writing of a claim or suit; provided that an Indemnitee’s failure to give
such notice or delay in giving such notice shall not affect such Indemnitee’s right to indemnification under this Section
7 except to the extent that the Indemnifying Party has been prejudiced by such failure or delay. The Indemnifying Party shall
have the right to control the defense of all indemnification claims hereunder. The Indemnitee shall have the right to participate
at its own expense in the claim or suit with counsel of its own choosing. The Indemnifying Party shall consult with the Indemnitee
in good faith with respect to all non-privileged aspects of the defense strategy. The Indemnitee shall cooperate with the Indemnifying
Party as reasonably requested, at the Indemnifying Party’s sole cost and expense. The Indemnifying Party shall not settle
any claim or suit without the Indemnitee’s prior written consent, which consent shall not be unreasonably withheld.

 

    	 	8	 

    	 

    

 

8.
Confidentiality.

 

8.1
Confidential Information. Following the Effective Date and for a period of five (5) years after the expiration of the last
Valid Claim, except as otherwise provided in this Section 8, each party shall maintain in confidence the Confidential Information
of the other party except as expressly permitted herein, and shall not use, disclose or grant the use of the Confidential Information
except on a need-to-know basis to those directors, officers, employees and contractors, to the extent such disclosure is reasonably
necessary in connection with performing its obligations or exercising its rights under this Agreement. To the extent that disclosure
by a party is authorized by this Agreement, prior to disclosure, such party shall obtain agreement of any such Person to hold
in confidence and not make use of the Confidential Information for any purpose other than those permitted by this Agreement.

 

8.2
Terms of this 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, (iii) a permitted sublicense under this Agreement, or (iv) 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 of this transaction, and each party may disclose such information, as modified
by mutual agreement from time to time, without the other party’s consent.

 

8.3
Permitted Disclosures. The confidentiality obligations contained in this Section 8 shall not apply to the extent that a
party is required (i) in the reasonable opinion of such party’s legal counsel, to disclose information by applicable law,
regulation, rule (including rule of a stock exchange or automated quotation system), order of a governmental agency or a court
of competent jurisdiction or legal process, including tax authorities, or (ii) to disclose information to any governmental agency
for purposes of obtaining approval to test or market a product, provided in either case that, to the extent practicable, such
party shall provide written notice thereof to the other party and sufficient opportunity to object to any such disclosure or to
request confidential treatment.

 

8.4
Injunctive Relief. Each party acknowledges that it will be impossible to measure in money the damage to the other party
if such party fails to comply with the obligations imposed by this Section 8, and that, in the event of any such failure, the
other party may not have an adequate remedy at law or in damages. Accordingly, each party agrees that injunctive relief or other
equitable remedy, in addition to remedies at law or damages, is an appropriate remedy for any such failure and shall not oppose
the granting of such relief on the basis that the disclosing party has an adequate remedy at law. Each party agrees that it shall
not seek, and agrees to waive any requirement for, the securing or posting of a bond in connection with the other party seeking
or obtaining such equitable relief

 

9.
Condition Precedent. Notwithstanding anything
to the contrary herein, the effectiveness of this Agreement is conditioned upon Surface having received net proceeds of the sale
of its equity securities to Third Parties of not less than ten million dollars ($10,000,000.00) in cash, whether individually
or in the aggregate, within ninety (90) days after the Effective Date. If Surface fails to satisfy such condition precedent, then
unless such condition precedent is expressly waived or modified in writing by Imprimis, this Agreement shall be null and void
ab initio.

 

    	 	9	 

    	 

    

 

10.
Miscellaneous.

 

10.1
Assignment. Neither party shall assign its rights or obligations under this Agreement without the prior written consent
of the other party; provided, however, that a party may, without such consent, assign this Agreement and its rights and obligations
hereunder (a) to any Affiliate, or (b) in connection with the transfer or sale of all or substantially all of its business to
which this Agreement relates, 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
10.1 shall be void.

 

10.2
Severability. Any provision of this Agreement which is illegal, invalid or unenforceable shall be ineffective to the extent
of such illegality, invalidity or unenforceability, without affecting in any way the remaining provisions hereof.

 

10.3
Governing Law; Exclusive Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of
the State of California, without regard to the conflicts of law principles thereof. Each of the parties hereto irrevocably consents
to the exclusive jurisdiction and venue of any federal court located in the Southern District of the State of California or state
court in San Diego, California having jurisdiction, in connection with any matter based upon or arising out of this Agreement
or the matters contemplated herein, agrees that process may be served upon them in any manner authorized by laws of the State
of California for such persons and waives and covenants not to assert or plead any objection which they might otherwise have to
such jurisdiction, venue and such process.

 

10.4
Entire Agreement; Amendment. This Agreement, together with the Schedule A hereto, and each additional document, instrument
or other agreement to be executed and delivered pursuant hereto constitute all of the agreements of the parties with respect to,
and supersede all prior agreements and understandings relating to the subject matter of, this Agreement or the transactions contemplated
by this Agreement. This Agreement may not be modified or amended except by a written instrument specifically referring to this
Agreement signed by the parties hereto.

 

10.5
Waiver. No waiver by one party of the other party’s obligations, or of any breach or default hereunder by any other
party, shall be valid or effective, unless such waiver is set forth in writing and is signed by the party giving such waiver;
and no such waiver shall be deemed a waiver of any subsequent breach or default of the same or similar nature or any other breach
or default by such other party.

 

10.6
Notices. Any consent, notice or report required or permitted to be given or made under this Agreement by a party to the
other party shall be in writing, delivered by any lawful means to such other party at its address indicated below, or to such
other address as the addressee shall have last furnished in writing to the addressor and (except as otherwise provided in this
Agreement) shall be effective upon receipt by the addressee.

 

    	 	10	 

    	 

    

 

	 	If
    to Imprimis:	Imprimis
    Pharmaceuticals, Inc.
	 	 	12264
    El Camino Real, Suite 350
	 	 	San
    Diego, California 92130
	 	 	Attention:
    Chief Executive Officer
	 	 	 
	 	If
    to Surface:	Surface
    Pharmaceuticals, Inc.
	 	 	12264
    El Camino Real, Suite 350
	 	 	San
    Diego, California 92130
	 	 	Attention:
    Executive Director

 

 

10.7
Counterparts. This Agreement may be executed in separate counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.

 

***SIGNATURE
PAGE FOLLOWS***

 

    	 	11	 

    	 

    

 

SIGNATURE
PAGE

 

IN
WITNESS WHEREOF, each party has caused a duly authorized representative to execute this Agreement as of the date first written
above.

 

	IMPRIMIS
    	 	SURFACE
    
	 	 	 
	Imprimis
    Pharmaceuticals, Inc. 	 	Surface
    Pharmaceuticals, Inc.
	 	 	 
		/s/
    Mark L Baum	 		/s/
    Andrew Boll
	By:
    	Mark
    L. Baum	 	By:
    	Andrew
    R. Boll
	Its:
    	Chief
    Executive Officer	 	Its:
    	Executive
    Director
	 	 	 	 	 
	Date:9/28/2017	 	Date:9/28/2017

 

[Signature Page to Asset Purchase and License Agreement]

 

    	 	 	 

    	 

    

 

SCHEDULE
A

 

Assigned
Patent Rights

 

 

	SUMMARY	 	TITLE	 	INVENTOR	 	MATTER
    TYPE	 	COUNTRY	 	STATUS	 	APPLICATION
    #	 	DATE
    FILED
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Dermatology
    — Rosacea, Acne	 	Pharmaceutical
    formulations for treating skin...	 	Saadeh	 	Provisional	 	U.S.	 	Converted	 	USSN
    62/265,643	 	December
    10, 2015
	Dermatology
    — Rosacea, Acne	 	Pharmaceutical
    formulations for treating skin...	 	Saadeh	 	Provisional	 	U.S.	 	Converted	 	USSN
    62/287,714	 	January
    27, 2016
	Dermatology
    — Rosacea, Acne	 	Pharmaceutical
    formulations for treating skin...	 	Saadeh	 	Utility	 	U.S.	 	Pending	 	USSN
    15/371,508	 	December
    7, 2016
	Dermatology
    — Rosacea, Acne	 	Pharmaceutical
    formulations for treating skin...	 	Saadeh	 	N/A	 	PCT	 	Pending	 	PCT/US16/65263	 	December
    7, 2016

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