DEVELOPMENT AND LICENSE AGREEMENT

1.1.

“ AB-Rated Generic Substitution Date ” means, with respect to any Licensed Product, the first day of the first month in which an AB-rated generic product for such Licensed Product in the United States as set forth in the “Orange Book” ( i.e ., the A PPROVED D RUG P RODUCTS WITH T HERAPEUTIC E QUIVALENCE E VALUATIONS

published by the U.S. Department of Health and Human Services) is substituted by pharmacies or other dispensers for 17.5% or more of the prescriptions written in the United States during such calendar month for such Licensed Product as evidenced by data from IMS Health or another prescription data service acceptable to both Parties.

1.2.

“ Affiliate ” means, with reference to any Person, any other Person directly or indirectly controlling, controlled by/or under common control with such Person, and “control” means the power to direct the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

1.3.

“ Applicable Laws ” means all laws, treaties, ordinances, judgments, directives, injunctions, orders of any court, arbitrator or governmental agency or authority, rules, regulations, interpretations and authorizations of any international, national, regional, local or other governmental body, agency, authority, court or Person having jurisdiction over or related to the development, registration, manufacture and sale of the Licensed Products, as may be in effect from time to time.

1.4.

“ Development Plan ” means the work plan for continued development and testing of the Licensed Products attached hereto as Appendix A , which may be amended from time to time upon mutual written agreement of the Parties.

1.5.

“ DOW Trademark(s) ” means the trademark or trademarks registered by DOW for its patented aqueous gel technology, and for use by Dow licensees in association with topical aqueous gel products covered by the Licensed Patent.

1.6.

“ FDA ” means the United States Food and Drug Administration or any successor entity.

1.7.

“ Field ” means the topical treatment of all human dermatological conditions.

1.8.

“ Force Majeure Event ” means any action or inaction which is not reasonably within the control of the Party claiming the benefit of force majeure, including, without limitation, acts of God, terrorism, unanticipated government regulations, labor disputes, floods, fires, civil commotion, embargoes, quotas, any manufacturing or supply delays by a third party beyond a Party’s reasonable control or any delays or detention by customs, health or other government authorities.

1.9.

“ GAAP ” means United States generally accepted accounting principles applied on a consistent basis.

1.10.

“ Government Filings ” means, as to each Licensed Product, the INDA, the NDA, foreign equivalents of the foregoing and any other applications for government and/or regulatory approval with respect to such Licensed Product, and any

information directly related thereto including without limitation communications with the relevant Regulatory Authority(ies) together with the information and data contained therein.

1.11.

“ INDA ” means an Investigational New Drug Application submitted to the FDA.

1.12.

“ Launch Date ” means, with respect to any particular Licensed Product, the date of the first commercial sale of such Licensed Product in the United States by SKINMEDICA.

1.13.

“ Licensed Know-How ” means, except to the extent published or otherwise known, all proprietary know-how, trade secrets, unpatented inventions, technical data, manufacturing processes and knowledge concerning appropriate manufacturing equipment, formulations, technology and technical information which are as of the Effective Date or thereafter during the Term owned or controlled by DOW (and which DOW has the right to license to SKINMEDICA pursuant to the terms hereof without breach of any third party license agreement) necessary or reasonably useful for the manufacture, use or sale of the Licensed Products in the Field, but excluding Work Product.

1.14.

“ Licensed Patent ” means United States Patent No. 6,387,383 titled, “Topical low-viscosity gel composition” issued May 14, 2002 and any extensions or reissues thereof and any patent in the Territory claiming priority to the originally filed application from which the ‘383 patent issued or to the progeny of such application (solely with respect to those claims entitled to claim priority to the originally filed application), and any foreign counterparts to any of the foregoing, including, but not limited to, those patent applications listed on Schedule 1.13 hereto, with the exception of United States Patent No. 6,517,847, which shall not constitute a Licensed Patent.

1.15.

“ Licensed Product ” or “ Licensed Products ” means, individually, any of the following, and collectively, all of the following: (i) the Mometasone Product (or any substitute pursuant to Section 2.9); (ii) following exercise of the Option set forth in Section 2.6 of this Agreement, the Third Steroid Product, and (iii) following exercise of the option set forth in Section 2.7 of this Agreement, any Other Steroid Product.

1.16.

“ Mometasone Product ” means all forms of a topical aqueous gel product covered by a Valid Claim of a Licensed Patent containing mometasone as the sole active pharmaceutical ingredient.

1.17.

“ NDA ” means a New Drug Application or application for approval to market submitted to the FDA.

1.18.

“ Net Sales ” means the gross amount invoiced by SKINMEDICA for the sale or other disposition of the Licensed Products in the Territory (other than with respect to sales or dispositions to end users outside the United States by SKINMEDICA’s sublicensees and/or distributors for which payment is to be made pursuant to Section 4.5), less the following: (a) customary quantity, trade, and/or cash discounts, allowances, chargebacks, rebates and price adjustments or reductions allowed or given as consistently applied by SKINMEDICA; (b) actual credits, rebates, or refunds for Licensed Products that are rejected, returned or destroyed by customers; (c) freight, postage and shipping expenses to the extent included in the gross invoiced amount and separately itemized on the invoice; and (d) sales and other excise taxes and duties directly related to the sale, to the extent included in the gross invoiced amount and separately itemized on the invoice, all applied in accordance with GAAP. For purposes of clarity, any Licensed Product delivered to a third party without charge ( e.g. , “free goods”) or any Licensed Product used in any new clinical or marketing-initiated trial supported by SKINMEDICA without charge to the user shall not be included in Net Sales.

1.19.

“ Other Steroid Product ” means any form of topical aqueous gel product covered by a Valid Claim of a Licensed Patent, which product contains as the sole active pharmaceutical ingredient a steroid selected by SKINMEDICA pursuant to Section 2.7.

1.20.

“ Party” or “Parties ” means, individually, SKINMEDICA or DOW, as the context so requires, and collectively, SKINMEDICA and DOW.

1.21.

“ Person ” means any individual, partnership, limited liability company, association, joint venture or corporation.

1.22.

“ Regulatory Authority ” means any governmental agency, administrative agency or commission or other governmental authority or other instrumentality of the United States or any other country, or any state, county, city or other political subdivision thereof, including, without limitation, the FDA and the European Agency for the Evaluation of Medicinal Drug Products.

1.23.

“ SKINMEDICA Trademark(s) ” means any of the trademarks, service marks or trade names used by SKINMEDICA.

1.24.

“ Territory ” means the entire world.

1.25.

“ Third Steroid ” means a single active pharmaceutical ingredient steroid selected by SKINMEDICA in accordance with Section 2.6 (if any).

1.26.

“ Third Steroid Product ” means any form of a topical aqueous gel product covered by a Valid Claim of a Licensed Patent, which product contains the Third Steroid as the single active pharmaceutical ingredient.

1.27.

“ United States ” means the United States, its territories and its possessions, including, without limitation, the Commonwealth of Puerto Rico.

1.28.

“ Valid Claim ” means, on a country-by-country basis, a claim of an issued and unexpired Licensed Patent or a pending patent application for a Licensed Patent which has not: (a) expired or been canceled, (b) been declared invalid by an unreversed and unappealable or unreversed and unappealed decision (and as to which the time to appeal has lapsed) of a court of competent jurisdiction; or (c) been admitted to be invalid or unenforceable through reissue, disclaimer or otherwise.

1.29.

“ Work Product ” means any and all work product created, gathered or generated by or on behalf of DOW in its performance under the Development Plan including, without limitation, clinical data, toxicology data, analytical data, professional opinions, statistical analysis, clinical results, and analysis of any and all of the foregoing.

2. RIGHTS AND RESTRICTIONS

2.1.

Grant of License. Subject to the terms and conditions of this Agreement, DOW hereby grants to SKINMEDICA an exclusive (even as to DOW), sublicensable (as set forth in Section 2.2 below), royalty-bearing right and license: (i) under the Licensed Patent, to make, have made, use, sell, have sold, offer for sale, import and export the Licensed Products in the Field in the Territory; and (ii) to utilize the Licensed Know-How to make, have made, use, sell, have sold, offer for sale, import and export the Licensed Products in the Field in the Territory (such exclusive licenses collectively, the “ SKINMEDICA Licenses ”). The foregoing shall not be construed to limit DOW’s rights to use or practice under the Licensed Know-How or the Licensed Patent (a) outside the scope of the SKINMEDICA Licenses or (b) for the purposes of performing its responsibilities under this Agreement, including the Development Plan.

2.2.

Sublicense Rights . SKINMEDICA shall not have the right to grant sublicenses under this Agreement, nor to enter into any agreement with a third party for distribution or promotion of any Licensed Product in the absence of prior written approval from DOW, which approval shall not be unreasonably withheld, conditioned or delayed. For the avoidance of doubt, this Section 2.2 shall not prevent SKINMEDICA’s use of a contract manufacturer and related sublicense of rights to have made the Licensed Products. Any sublicense will be subject to the terms of this Agreement. SKINMEDICA shall at all times remain fully liable for the performance of its sublicensees, distributors, wholesalers, dealers and affiliates under any sublicense and will indemnify, defend and hold harmless DOW from all liabilities, damages, losses, judgments, costs or expenses (including reasonable attorneys’ fees) arising in any manner from any failure by any such sublicensee, distributor, wholesaler, dealer or affiliate to comply with the terms of this Agreement.

2.3.

Clinical and Product Development .

(a)

During the term of the applicable SKINMEDICA License covering a Licensed Product, (i) DOW shall not undertake clinical or product development or seek regulatory approval from any Regulatory Authority with regard to such Licensed Product in the Field in the Territory except pursuant to the Development Plan or by mutual agreement of the Parties; and (ii) prior to the approval of the NDA for each such Licensed Product, SKINMEDICA shall not undertake clinical or product development or seek regulatory approval from any Regulatory Authority with regard to such Licensed Product in the Field in the United States except pursuant to the Development Plan or by mutual agreement of the Parties.

(b)

During the term of the applicable SKINMEDICA License covering a Licensed Product, SKINMEDICA may undertake clinical or product development or seek regulatory approval from FDA in the United States with regard to any Licensed Product in its sole discretion after approval of the NDA for such Licensed Product, and may undertake clinical or product development or seek regulatory approval from any Regulatory Authority outside the United States for any Licensed Product in its sole discretion at any time. In the event SKINMEDICA pursues any such activities with regard to a particular Licensed Product SKINMEDICA shall keep DOW reasonably informed of such activities related to each such Licensed Product.

2.4.

Covenant Not to Assert . During the Term, DOW agrees not to assert United States Patent No. 6,517,847 or any other patent rights which may be owned or controlled by DOW as of the Effective Date against SKINMEDICA based upon SKINMEDICA’s exercise of the SKINMEDICA Licenses as expressly permitted under this Agreement. This provision shall not be construed in such a way as to imply any expansion of the SKINMEDICA Licenses.

2.5.

Non-Compete.

(a)

Mometasone . During the term of the SKINMEDICA License for the Mometasone Product hereunder, neither Party shall develop, manufacture, have manufactured, test, market, sell, or otherwise commercialize a topical aqueous gel product containing mometasone as an active pharmaceutical ingredient in the Field in any country in the Territory, except as provided herein with regard to Licensed Products.

(b)

Third Steroid . From and after SKINMEDICA’s exercise of the Option (as defined in Section 2.6 below) until the expiration of the term of the SKINMEDICA License for the Third Steroid Product hereunder, neither Party shall develop, manufacture, have manufactured, test, market, sell, or otherwise commercialize a topical aqueous gel product containing the Third Steroid as an active pharmaceutical ingredient in the Field in any country in the Territory, except (i) as provided herein with regard to Licensed Products; or (ii) to the extent that DOW can document it has commenced or contracted to provide prior to the exercise of the Option by SKINMEDICA, in which case DOW shall provide prompt notice to SKINMEDICA of such services and the steroid(s) involved, clinical testing, clinical development or any non-formulation services for a third party, or the development (including formulation) of a combination product containing the Third Steroid and another active pharmaceutical ingredient (whether a steroid or a non-steroid). This Section 2.5(b) and the SKINMEDICA License with respect to such Third Steroid shall terminate if SKINMEDICA does not elect to exercise the Option under Section 2.6 below on or before the Option Deadline, or thereafter ceases development, or directs DOW to cease development, of a Third Steroid Product.

(c)

Other Steroids .

(i)

Prior to Exercise of Option to Develop Third Steroid . Until the date that is *** after the Effective Date (the “ Option Deadline ”), DOW shall not, directly or indirectly, for itself or any third party, in the Field in any country in the Territory:

(A)

develop, manufacture, have manufactured, test, market, sell, or otherwise commercialize any topical aqueous gel product covered by a Valid Claim of the Licensed Patent containing a steroid as the single active pharmaceutical ingredient; or

(B)

engage in any formulation activities with respect to any topical aqueous gel product containing a steroid as the single active pharmaceutical ingredient (provided, however, that nothing in this Section 2.5(c)(i) shall restrict DOW’s ability to contract for and provide clinical testing, clinical development or any non-formulation services to third parties in connection with formulations provided by third parties);

except (1) as provided herein with regard to Licensed Products; or (2) pursuant to that certain Development and License Agreement between the Parties dated as of June 16, 2003 (the “ Desonide Agreement ”).

(ii)

After Exercise of Option to Develop Third Steroid .

(A)

Exercise of Option; Payment of Steroid Exclusivity Royalty . If SKINMEDICA elects to develop a Third Steroid Product under Section 2.6 below on or before the Option Deadline, then for so long as SKINMEDICA pays to DOW the Steroid Exclusivity Royalty (defined below), until the expiration of the Term of the license for all Licensed Products hereunder, DOW shall not, directly or indirectly, for itself or any third party, in the Field in any country in the Territory:

(1)

develop, manufacture, have manufactured, test, market, sell, or otherwise commercialize any topical aqueous gel product covered by a Valid Claim of the Licensed Patent containing a steroid as the single active pharmaceutical ingredient; or

(2)

engage in any formulation activities with respect to any topical aqueous gel product containing a steroid as the single active pharmaceutical ingredient (provided, however, that nothing in this Section 2.5(c)(ii) shall restrict DOW’s ability to contract for and provide clinical testing, clinical development or any non-formulation services to third parties in connection with formulations provided by third parties);

except (x) as provided herein with regard to Licensed Products; or (y) pursuant to the Desonide Agreement.

The term “ Steroid Exclusivity Royalty ” shall mean with respect to each complete calendar year commencing after the first commercial sale of the earlier of the Mometasone Product or the Third Steroid Product the amount set forth opposite such year below:

YEAR

STEROID

EXCLUSIVITY

ROYALTY            

Year 1

***

Year 2

***

Year 3

***

Year 4

***

Year 5

***

Year 6

***

Year 7

***

Year 8

***

For the avoidance of doubt, no Steroid Exclusivity Royalty shall be due prior to the first complete calendar year commencing after the first commercial sale of the earlier of the Mometasone Product or the Third Steroid Product.

The Steroid Exclusivity Royalty shall be measured as of SKINMEDICA’s royalty report due under Section 4.6 for the final quarter of the applicable year, and DOW’s obligations under this subsection (A) shall apply until it is demonstrated in the royalty report under Section 4.6 that SKINMEDICA has not paid the Steroid Exclusivity Royalty for any complete year. In the event the royalties paid by SKINMEDICA to DOW under Section 4.4 exceed the Steroid Exclusivity Royalty for any given year, the excess amount shall be credited to the following years; and in the event SKINMEDICA’s actual royalty payments under Section 4.4 are less than the Steroid Exclusivity Royalty for any given year, SKINMEDICA shall have the option, but not the obligation, to preserve DOW’s obligations under this subsection (A) by providing notice of SKINMEDICA’s intention to pay to DOW the difference between such amounts with the applicable royalty report and making payment within 30 days thereafter.

(B)

Exercise of Option; Failure to Pay Steroid Exclusivity Royalty . Notwithstanding subsection (A) above, if SKINMEDICA elects to develop a Third Steroid Product

under Section 2.6 below on or before the Option Deadline, but fails to pay to DOW the Steroid Exclusivity Royalty, then after the lapse of DOW’s obligations under subsection (A) above and until the expiration of the Term of the license for all Licensed Products hereunder, DOW shall not, directly or indirectly, for itself or any third party, develop, manufacture, have manufactured, test, market, sell, or otherwise commercialize any topical aqueous gel product covered by a Valid Claim of the Licensed Patent containing a steroid as the single active pharmaceutical ingredient, except (1) as provided herein with regard to Licensed Products; or (2) pursuant to the Desonide Agreement. For the avoidance of doubt, after the lapse of DOW’s obligations under subsection (A) above, except for a product containing desonide, mometasone or the Third Steroid, DOW shall not be restricted by this Agreement from developing any other topical aqueous gel products that are not covered by a Valid Claim of the Licensed Patent.

(d)

Other Steroid Products . During the term of a SKINMEDICA License for any Other Steroid Product for which SKINMEDICA has exercised its rights under Section 2.7 below, DOW shall not develop, manufacture, have manufactured, test, market, sell or otherwise commercialize any topical aqueous gel product which contains that Other Steroid in the territory licensed to SKINMEDICA, except (A) as provided herein with regard to Licensed Products; (B) pursuant to the Desonide Agreement; or (C) to the extent that DOW can document it has commenced or contracted to provide prior to SKINMEDICA’s exercise of its rights under Section 2.7 below, in which case DOW shall provide prompt notice to SKINMEDICA of such services and the steroid(s) involved, clinical testing, clinical development or any non-formulation services for a third party.

(e)

Non-Steroid Products or Steroid Combination Products . During the period that SKINMEDICA has an exclusive license to use, make, have made or sell a Non-Steroid Product or Steroid Combination Product under any definitive agreement executed by the parties pursuant to Section 2.8, DOW shall not develop, manufacture, test, market, sell or otherwise commercialize any topical aqueous gel product which contains the same active pharmaceutical ingredient as such Non-Steroid Product or the same combination of active pharmaceutical ingredients as such Steroid Combination Product, limited to the territory licensed to SKINMEDICA, except (A) as provided herein with regard to Licensed Products; (B)

pursuant to the Desonide Agreement; or (C) clinical testing, clinical development or any non-formulation services for a third party. DOW’s obligations under this Section 2.5(e) shall automatically terminate with respect to each Non-Steroid Product or Steroid Combination Product at the end of the term of the exclusive license for each such product.

(f)

***

2.6.

Option for Third Steroid Product . At any time on or before the Option Deadline, SKINMEDICA shall have the option, but not the obligation, to select in its sole discretion the Third Steroid for development of the Third Steroid Product by DOW pursuant to this Agreement. DOW shall cooperate with SKINMEDICA in its due diligence review and evaluation of potential candidates for development as the Third Steroid Product, including, but not limited to, providing SKINMEDICA with all available projections for development cost of such potential candidates. SKINMEDICA may exercise its option for the Third Steroid Product hereunder (the “ Option ”) only by giving written notice to DOW prior to the Option Deadline and specifying the Third Steroid in reasonable detail. If SKINMEDICA does not deliver to DOW such written notice by the Option Deadline, then as of the Option Deadline (i) the SKINMEDICA Licenses shall be deemed void ab initio with respect to the Third Steroid Product (but not with respect to the Mometasone Product), (ii) the Parties’ obligations under Sections 2.5 and 2.6 with regard to the Third Steroid and the Third Steroid Product shall terminate, and (iii) the right of first refusal set forth in Section 2.8 below shall terminate. Dow shall have up to *** after SKINMEDICA’s notice of its intent to exercise the Option to commence development services for the Third Steroid Product. For the avoidance of doubt, following the exercise of the Option, and provided further that if and only if SKINMEDICA has in good faith initiated development of a Third Steroid Product, Sections 2.7 and 2.8 shall remain in full force and effect. If at any time following exercise of the Option, SKINMEDICA directs DOW to cease, or SKINMEDICA ceases, development of the Third Steroid Product and SKINMEDICA does not select an alternate steroid product pursuant to Section 2.9 for development hereunder as a replacement for such Third Steroid Product and commence development thereof within *** after such cessation, then SKINMEDICA’s rights under Sections 2.7 and 2.8 shall immediately terminate. Upon such selection, the alternate steroid product shall be deemed the Third Steroid Product for purposes of this Agreement, including this Section 2.6.

2.7.

License of Other Steroid Products . At any time after the exercise of the Option, SKINMEDICA shall have the right, but not the obligation, to request that DOW develop one or more Other Steroid Products pursuant to this Agreement. Upon SKINMEDICA’s request, DOW shall cooperate with SKINMEDICA in its due diligence review and evaluation of potential candidates for development as the

Other Steroid Products, including, but not limited to, providing SKINMEDICA with all available projections for development cost of such potential candidates. Following exercise of the Option, DOW shall not offer any steroid product covered by a Valid Claim of the Licensed Patent for development to any third party without first offering such steroid to SKINMEDICA subject to the procedures and time periods set forth in Section 2.8 below, if and only if SKINMEDICA has not ceased development of the Third Steroid Product.

2.8.

Right of First Refusal for Non-Steroid Products and Steroid Combination Products.

(a)

If at any time during the term of this Agreement, DOW or any of its Affiliates develops or acquires any rights to, or plans to offer a license with respect to, any topical aqueous gel compound or other product (other than a product containing ***) with application in the Field and covered by a Valid Claim of a Licensed Patent (a “ Non-Steroid Product or Steroid Combination Product ”), DOW shall offer, or cause its applicable Affiliate to offer, to SKINMEDICA such rights upon terms and conditions developed in good faith by DOW. Such offer shall be made in the form of a written term sheet, describing the rights and all economic terms in reasonable detail (the “Offer”). DOW shall cooperate with SKINMEDICA in its due diligence review of such Non-Steroid Product or Steroid Combination Products, including, but not limited to, providing SKINMEDICA with all available projections for development costs of such potential candidates. SKINMEDICA shall have *** to negotiate the material terms of the licensing of the applicable candidate for development by giving DOW written notice of such election and *** to enter into the definitive agreement related to such licensing. During such combined *** period, both SKINMEDICA and DOW shall conduct any such negotiations in good faith.

(b)

Subject to the non-compete provisions in Section 2.5 above, in the event SKINMEDICA does not exercise its right to negotiate with DOW, or the Parties otherwise fail to enter into a definitive agreement within the combined *** period set forth in Section 2.8(a) above, DOW or its Affiliate, as applicable, shall then have the right to offer the same rights to any other third party on terms that are consistent with (or more expensive or onerous than, from the third party’s perspective) those offered to SKINMEDICA by DOW in the Offer or, if applicable, the last draft of a definitive agreement proposed by DOW to SKINMEDICA in the Parties’ good faith negotiations.

(c)

In the event that DOW enters into any definitive agreement with a third party with respect to a development candidate that was the subject of an Offer to SKINMEDICA in accordance with the foregoing, DOW shall provide SKINMEDICA with written confirmation signed by an officer of DOW certifying that DOW has complied with the provisions of this Section 2.8.

(d)

DOW’s obligations under this Section 2.8 shall terminate as set forth in Section 2.6 above.

2.9.

Right of Substitution regarding Mometasone and Third Steroid Products . In the event SKINMEDICA determines that the continued development of the Mometasone Product and/or the Third Steroid Product hereunder is not commercially viable, taking into account market potential, stage of development, product life, the alternative products in the marketplace and the likelihood of regulatory approval, among other things, SKINMEDICA may, within thirty (30) business days of its determination, select another steroid as a substitute for development hereunder, without payment of license and exclusivity fees (other than those not already paid pursuant to Section 4.1) by giving written notice to DOW, provided , however , if DOW in compliance with the terms of this Agreement has entered into a development or other agreement with any third party with respect to SKINMEDICA’s proposed substitute steroid (“ Prior Agreement ”) prior to receipt of SKINMEDICA’s written notice of its selection of a substitute steroid under this Section 2.9, DOW shall not be deemed in breach of this Agreement by virtue of the performance of its obligations or the exercise of its rights under the Prior Agreement, and provided further , that DOW’s performance of its obligations under this Agreement with respect to a substitute steroid shall be subject to any restrictions or other terms of that Prior Agreement. In such event, DOW shall cooperate with SKINMEDICA in its due diligence review and evaluation of potential candidates for development as the substitute Licensed Product, including, but not limited to, providing SKINMEDICA with all available projections for development cost of such potential candidates. The Parties shall agree on a development plan and budget promptly thereafter for such substitute Licensed Product. Notwithstanding anything in this Agreement to the contrary, (i) from and after the selection of a substitute development product for the Mometasone Product all references herein to the “Mometasone Product” shall be deemed to refer to such substitute product, and the noncompete provisions set forth in Section 2.5(a) above applicable to mometasone shall terminate and shall apply instead to such substitute steroid, and (ii) from and after the selection of a substitute development product for the Third Steroid and the Third Steroid Product all references herein to the “Third Steroid” and the “Third Steroid Product” shall be deemed to refer to such substitute steroid and substitute product, respectively, and the noncompete provisions set forth in Section 2.5(b) above applicable to the original Third Steroid shall terminate and shall apply instead to

such substitute steroid. Notwithstanding anything else in this Agreement, SKINMEDICA shall only be entitled to one (1) substitution for each of the Mometasone Product or the Third Steroid Product, and further substitutions shall not be permitted hereunder.

3.

DEVELOPMENT AND COMMERCIALIZATION

3.1.

Project Coordination . SKINMEDICA and DOW each shall appoint a project coordinator (each a “ Project Coordinator ”) to coordinate such Party’s efforts under this Agreement. Each Party shall have the right to replace its Project Coordinator at any time upon written notice to the other Party. The DOW Project Coordinator will administer the Development Plan (and any amendments to the Development Plan as jointly agreed to by the Parties) and will keep the SKINMEDICA Project Coordinator informed of material developments. DOW will promptly respond to any reasonable requests by the SKINMEDICA Project Coordinator for information concerning any matters related to the development of the Licensed Products.

3.2.

Meetings . The Project Coordinators (and other management and scientific personnel of the Parties as desired) will meet ***. Such meetings will be held at DOW’s principal place of business or telephonically or at such other locations as the Parties may agree from time to time.

3.3.

Resolution of Issues . Either of the Parties may at any time submit by written notice to the chief executive officers of the Parties any issue pertaining to the Development Plan, including, without limitation, any proposed modification to the Development Plan involving an increase or decrease in the Development Fee (defined below) pursuant to Section 4.2(d) below. Within *** after receipt of such notice, the chief executive officers of both Parties shall meet and enter into good faith negotiations to resolve the issue(s) that were the subject of such notice. During such negotiations, the Parties shall, to the extent reasonably possible consistent with prudent business practices, continue to perform their respective obligations under this Agreement, subject to the provisions of Section 3.4. In the event the Parties are unable to resolve such issue(s) within *** following written submission to the chief executive officers, either Party may submit the issue to the dispute resolution process set forth in Section 12 below.

3.4.

Responsibilities of DOW . In addition to DOW’s other responsibilities under this Agreement, DOW shall use reasonable commercial efforts to diligently (i) undertake clinical development, product development, and other responsibilities set forth in the Development Plan and this Agreement; (ii) seek regulatory

approval of the Licensed Products from the FDA as set forth in the Development Plan, it being the intent of the Parties that a key objective of the Development Plan is the expeditious clinical development, product development and regulatory approval of the Licensed Products in the Field in the United States; (iii) evaluate in good faith SKINMEDICA’s suggested changes to the Development Plan and use reasonable commercial efforts to minimize costs, if any, associated with any changes to the Development Plan implemented in accordance with the provisions of this Agreement; (iv) following the exercise of the Option, agree to develop the Third Steroid Product on terms to be negotiated between the Parties in good faith and implement a separate written Development Plan for such Third Steroid Product; and (v) upon SKINMEDICA’s request, agree to (1) develop one or more Other Steroid Products consistent with Section 2.7 on terms and conditions to be negotiated between the Parties in good faith (including, without limitation, development fees, milestone payments, royalty payments and other fees, and supplements or changes to the Development Plan, but excluding additional exclusivity fees) and (2) implement a separate written Development Plan for such Other Steroid Product. For any responsibilities set forth in the current Development Plan for which DOW has in-house capability as of the Effective Date, such responsibilities shall be performed directly by DOW except as otherwise agreed in writing by the Parties. Notwithstanding any other provision of this Agreement, DOW shall be entitled in its discretion to suspend performance under the Development Plan at any time when any payment due to DOW hereunder is more than *** past due.

3.5.

Responsibilities of SKINMEDICA . SKINMEDICA shall not be required to conduct, have conducted or to pay the costs of any material additional expanded studies, data or data analysis required by the FDA, whether pre-or post-marketing approval, beyond those included in the Development Plan (“ Additional FDA Studies ”) that it reasonably determines are commercially over burdensome or impracticable. In the event SKINMEDICA elects not to conduct, have conducted, or pay the costs of any Additional FDA Studies with respect to any particular Licensed Product, SKINMEDICA shall so notify DOW in writing (a “ No-Go Notice ”) within *** after notice from the FDA that such Additional FDA Studies are required, and the SKINMEDICA License with respect to such Licensed Product shall thereupon terminate automatically. In the event that SKINMEDICA does not give a No-Go Notice within ***: (i) the Additional FDA Studies to be performed prior to NDA approval will be added to the Development Plan and the Development Fee owed to DOW by SKINMEDICA will be increased appropriately in accordance with the procedures set out in Section 3.3; and (ii) SKINMEDICA shall be required to conduct or have conducted and to pay all costs relative to all Additional FDA Studies to be performed after NDA approval, and (iii) DOW will provide such assistance to SKINMEDICA with regard to such post-NDA-approval Additional FDA Studies as the Parties may mutually agree in writing.

3.6.

Commercialization .

(a)

SKINMEDICA shall use reasonable commercial efforts to diligently undertake market development, launch, and sales and marketing activities for the Licensed Products in the United States and shall promptly notify DOW in writing of each Launch Date. In the event SKINMEDICA does not launch a particular Licensed Product in the United States within *** after FDA approval of such Licensed Product: (i) SKINMEDICA shall provide DOW notice of delay and the reasons for the delay; and (ii) SKINMEDICA shall, upon notice to DOW, have the option of extending the Launch Date by a period of not more than *** beyond such *** post-FDA-approval period (the “ Extended Period ”).

(b)

If, at the end of the Extended Period, the Launch Date for the applicable Licensed Product has still not occurred, subject to any rights which may have previously been granted to one or more third parties by SKINMEDICA, DOW shall have the right to terminate the SKINMEDICA Licenses with regard to such Licensed Product in the Territory, provided , however , that if such delay is due to a Force Majeure Event the provisions of Section 13.4 shall apply.

3.7.

Use of Subcontractors by DOW . The Parties understand and agree that DOW shall have the right to use the services of subcontractors to perform any of its obligations under the Development Plan. Except as set forth below, such subcontractor shall be subject to SKINMEDICA’s prior written approval, not to be unreasonably withheld (and if no written approval or rejection has been received by DOW within *** after DOW’s written request therefore, SKINMEDICA shall be deemed to have approved the same). Notwithstanding the foregoing, no approval shall be required (as long as the service provided is part of an activity that was identified in the Development Plan) for DOW subcontracting out any (1) services to any subcontractor totaling less than ***, or (2) purity testing, preservative testing, raw material release testing, and other analytical testing that DOW routinely subcontracts to outside vendors. Any permitted subcontractor shall be bound by confidentiality obligations at least as restrictive as those set forth in Section 8 below.

3.8.

Manufacture . SKINMEDICA shall be responsible for the selection of the entity(ies) that will manufacture each Licensed Product, after consultation with DOW. SKINMEDICA shall use its commercially reasonable efforts to make such selection, by notice in writing to DOW, as soon as reasonably possible after the Effective Date with respect to the Mometasone Product, and as soon as reasonably possible after the selection of the Third Steroid Product and as soon as

reasonably possible after the selection of each Other Steroid Product. SKINMEDICA understands that any delay in the selection of the manufacturer may delay the filing of the NDA for the applicable Licensed Product. DOW shall, at no additional expense to SKINMEDICA, provide each such third party manufacturer and SKINMEDICA all reasonable assistance in enabling the manufacturer to manufacture and supply each Licensed Product during the development, scale up, validation stages and product launch stages.

3.9.

Inspection Rights . During the Term, SKINMEDICA and its authorized representatives shall have the right, during normal business hours and no more often than twice each calendar year, to inspect DOW’s facilities and review the testing process and quality control procedures used with regard to activities under the Development Plan, upon reasonable notice which, in any event, shall be not less than ***. All such inspections shall be limited to the portions of such facilities which are being utilized in the perf