Exhibit 10.4

 

Certain information identified by bracketed asterisks ([* * *]) has been omitted
from this exhibit because it is both not material and would be competitively
harmful if publicly disclosed.

 

EXCLUSIVE LICENSE AND SUPPLY AGREEMENT

 

THIS EXCLUSIVE LICENSE AND SUPPLY AGREEMENT (this “Agreement”) is entered into
as of February 8, 2019 (the “Effective Date”) by and between ETON
PHARMACEUTICALS, INC., a Delaware corporation with offices at 21925 W. Field
Pkwy, Suite 235, Deer Park, Illinois, USA (“ETON”), and SINTETICA SA, a company
number CHE-105.272.121 with offices at Penate 5, CH-6850 Mendrisio, Switzerland
(“Sintetica”).

 

RECITALS

 

WHEREAS, ETON is engaged in the business of licensing, developing, marketing,
distributing and selling pharmaceutical drug products;

 

WHEREAS, Sintetica is engaged in the business of developing and manufacturing
pharmaceutical drug products, including the Products (later defined);

 

WHEREAS, Sintetica desires to manufacture and supply the Products exclusively to
ETON for Marketing (later defined) in the Territory (later defined), and ETON is
willing to purchase exclusively from Sintetica the Products under the terms and
conditions set forth herein;

 

WHEREAS, ETON desires to obtain an exclusive license to the Products, the MAs
(later defined), and Sintetica Background Intellectual Property (later defined)
for Marketing the Products in the Territory, and Sintetica is willing to grant
such an exclusive license to ETON under the terms and conditions set forth
herein; and

 

WHEREAS, ETON and Sintetica will share in the Net Profits (later defined)
obtained by the sale of Products in the Territory under the terms and conditions
set forth herein;

 

NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties, covenants and agreements herein contained and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, ETON and Sintetica, intending to be legally bound, hereby agree as
follows:

 

1. DEFINITIONS.

 

For the purposes of this Agreement, the following terms whether used in singular
or plural form shall have the meanings as defined below:

 

1.1 “Accepted” shall have the meaning ascribed to the term in Section 4.8 of
this Agreement.

 

1

 

 

1.2 “Affiliates” means, with respect to a Party or any Third Party, any
corporation, firm, partnership or other entity that controls, is controlled by
or is under common control with such entity. For the purposes of this
definition, “control” means the ownership of at least 50% of the voting share
capital of an entity or any other comparable equity or ownership interest.

 

1.3 “Applicable Law” means the applicable laws, rules, regulations, guidelines
and requirements of any Governmental Entity related to the development,
registration, manufacture, importation, commercialization of the Products in the
Territory, the manufacture in and export from the Territory of Manufacture, or
any obligation under, or related to, this Agreement, including those obligations
applicable to the MAs.

 

1.4 “Breaching Party” shall have the meaning ascribed to the term in Section
11.2 of this Agreement.

 

1.5 “Business Day” means any day, other than Saturday, Sunday or other day on
which commercial banks are authorized or required to close in New York, New York
or Rome, Italy.

 

1.6 “Calendar Quarter” means a three (3) consecutive month period ending on
March 31, June 30, September 30 or December 31.

 

1.7 “Claim” includes a claim, notice, demand, action, proceeding, litigation,
prosecution, arbitration, investigation, judgment, award, damage, loss, cost,
expense or liability however arising, whether present, unascertained, immediate,
future or contingent, whether based in contract, tort or statute and whether
involving a Third Party or a Party or otherwise.

 

1.8 “COGS” means for each applicable Product the total of all actual, direct
manufacturing costs (including cost of raw materials and packaging materials)
directly incurred by Sintetica and directly allocable to the manufacture and
supply of the applicable Product as of the Effective Date or as adjusted
pursuant to Section 6.2.1 of this Agreement. For clarity, such costs shall not
include (a) any allocation or absorption of unused, excess or idle capacity, (b)
any costs attributable to shipment of the Product to the relevant facility, (c)
any Taxes or Transfer Taxes, or (d) any depreciation expense (including but not
limited to any depreciation of any machinery or equipment).

 

1.9 “Confidential Information” shall have the meaning ascribed to the term in
Section 10.2 of this Agreement.

 

1.10 “Confirmed Purchase Order” shall have the meaning ascribed to the term in
Section 5.5.1 of this Agreement.

 

1.11 “Customer Penalties” shall have the meaning ascribed to the term in Section
4.11.3 of this Agreement.

 

1.12 “Deducted Customer Penalties” shall have the meaning ascribed to the term
in Section 5.11.4 of this Agreement.

 

2

 

 

1.13 “Delivery Date” shall have the meaning ascribed to the term in Section
4.5.1 of this Agreement.

 

1.14 “ETON Indemnified Parties” shall have the meaning ascribed to the term in
Section 14.1 of this Agreement.

 

1.15 “Excessive Amount” shall have the meaning ascribed to the term in Section
4.5.2 of this Agreement.

 

1.16 “FDA” means the United States Food and Drug Administration and all
divisions under its direct control or any successor organizations.

 

1.17 “Firm Period” shall have the meaning ascribed to such term in Section 4.4
of this Agreement.

 

1.18 “Force Majeure Events” shall have the meaning ascribed to such term in
Section 16.2 of this Agreement.

 

1.19 “GMP” means current good manufacturing practices as defined by the FDA.

 

1.20 “Governmental Entity” means any arbitrator, court, judicial, legislative,
administrative, or regulatory agency, commission, department, board, or bureau
or body or other government authority or instrumentality or any Person or entity
exercising executive, legislative, judicial, regulatory, or administrative
functions of or pertaining to government, whether foreign or domestic, whether
federal, state, provincial, municipal, or other.

 

1.21 “Gross Sales” shall have the meaning ascribed to the term in Section 1.36.

 

1.22 “Indemnitee” shall have the meaning ascribed to the term in Section 13.3.1
of this Agreement.

 

1.23 “Indemnitor” shall have the meaning ascribed to the term in Section 13.3.1
of this Agreement.

 

1.24 “Infringement Notification Date” shall have the meaning ascribed to the
term in Section 7.4 of this Agreement.

 

1.25 “Intellectual Rights Legal Expenses” shall have the meaning ascribed to the
term in Section 7.6.1 of this Agreement.

 

1.26 “Intellectual Rights Suit” shall have the meaning ascribed to the term in
Section 7.4 of this Agreement.

 

1.27 “Latent Defect” shall have the meaning ascribed to the term in Section 4.10
of this Agreement.

 

3

 

 

1.28 “Losses” means all losses, costs, damages, judgments, settlements,
interest, fees or expenses including, without limitation, all reasonable
attorneys’ fees, experts’ or consultants’ fees, expenses and costs.

 

1.29 “MAs” means the New Drug Applications pursuant to 21 U.S.C. §355(b)(1)-(2),
and all amendments and supplements thereof, for the Products as set forth in
Exhibit A.

 

1.30 “Market” or “Marketing” shall have the meaning ascribed to the term in
Section 2.1 of this Agreement.

 

1.31 “Material Delivery Delay” shall have the meaning ascribed to the term in
Section 4.11.3 of this Agreement.

 

1.32 “MAQ” shall have the meaning ascribed to the term in Section 4.5.5 of this
Agreement.

 

1.33 “MOQ” shall have the meaning ascribed to the term in Section 4.5.4 of this
Agreement.

 

1.34 “NDC” means a national drug code as issued by the FDA.

 

1.35 “Net Profits” means with respect to a given Product sold by ETON in the
Territory, (a) the Net Sales of the Product less (b) the sum of (i) the Transfer
Price or transfer price paid by ETON if manufactured by a Third Party, if
applicable, (ii) Sintetica’s share of the Regulatory Fees, and (iii) the SG&A
Fee.

 

1.36 “Net Sales” means, with respect to each Product sold in the Territory, the
aggregate gross sales amount invoiced by wholesalers, distributors or ETON on an
arms-length basis to Third Parties in the Territory (“Gross Sales”), less the
following deductions per NDC number: (a) all trade discounts including a
percentage off Gross Sales to cover cash discounts given by ETON; (b) ETON’s
adjustments on account of price adjustments, billing adjustments, bid defaults,
shelf stock adjustments, promotional payments or similar allowances; (c) ETON’s
chargebacks, rebates, administrative fee arrangements, reimbursements, and
similar payments to wholesalers and other distributors, buying groups, health
insurance carriers, managed care groups, pharmacy benefit management companies,
health maintenance organizations, other institutions or health care
organizations or customers; (d) ETON’s amounts due to third parties on account
of rebate payments, including Medicaid rebates, or other price reductions
provided, based on sales by ETON to any Governmental Entity or regulatory
authority in respect of state or federal Medicare, Medicaid, government pricing
or similar programs;(f) any government-mandated manufacturing Tax including
without limitation the brand manufacturer’s Tax imposed pursuant to the Patient
Protection and Affordable Care Act (Pub. L. No. 111-148) as amended or replaced;
(g) any costs incurred in connection with or arising out of compliance with any
Risk Evaluation and Mitigation Strategies, the Prescription Drug User Fee Act
and (h) other specifically identifiable amounts that have been credited against
or deducted from ETON’s Gross Sales and are substantially similar to those
credits and deductions listed above.

 

4

 

 

1.37 “Operating Expenses” shall mean with respect to a given Product in the
Territory, the shipping, handling, freight, import Tax, insurance cost for
transportation of the Products (or any Third Party logistics’ warehouses)
incurred by ETON.

 

1.38 “Party” or “Parties” means ETON or Sintetica, as applicable.

 

1.39 “Payment Period” shall have the meaning ascribed to the term in Section
6.3.3 of this Agreement.

 

1.40 “Person” means any individual, partnership (general or limited),
association, corporation, limited liability company, joint venture, trust,
estate, limited liability partnership, unincorporated organization, government
(or any agency or political subdivision thereof) or other legal person or
organization.

 

1.41 “Pharmacovigilance Agreement” shall have the meaning ascribed to the term
in Section 4.4 of this Agreement.

 

1.42 “Product” or “Products” means a product or products set forth in Exhibit A
for Marketing by or for ETON in the Territory (and covered or intended to be
covered by an MA) and manufactured and supplied by Sintetica (or a Third Party
as permitted by this Agreement) to ETON in fully packaged and labeled form and
ready for commercialization by ETON.

 

1.43 “Product Labelling and Packaging” shall have the meaning ascribed to the
term in Section 5.1.1 of this Agreement.

 

1.44 “Quality Agreement” shall have the meaning ascribed to that term in Section
4.2.10 of this Agreement.

 

1.45 “Quality Assurance Liaison” shall have the meaning ascribed to that term in
Section 5.3.4 of this Agreement.

 

1.46 “Recall Event” shall have the meaning ascribed to that term in Section 3.4
of this Agreement.

 

1.47 “Recovery Plan” shall have the meaning ascribed to that term in Section
4.11.3 of this Agreement.

 

1.48 “Regulatory Fees” shall have the meaning ascribed to that term in Section
3.2 of this Agreement.

 

1.49 “Rolling Forecast” shall have the meaning ascribed to that term in Section
4.4 of this Agreement.

 

1.50 “Selling, General, and Administrative Fee” or “SG&A Fee” shall have the
meaning ascribed to that term in Section 6.3.2 of this Agreement.

 

5

 

 

1.51 “Sintectica Background Intellectual Property” means any and all patents and
trademarks, patent and trademark applications or other patent and trademark
rights, copyrights, inventions, know-how, trade secrets, proprietary knowledge,
data, and other information owned, licensed to or controlled by Sinetica
relating to the Products, including but not limited to use, manufacture, and
packaging thereof.

 

1.52 “Sintetica Indemnified Parties” shall have the meaning ascribed to the term
in Section 13.2 of this Agreement.

 

1.53 “Sintetica Net Profit Share” shall have the meaning ascribed to the term in
Section 6.3.1 of this Agreement.

 

1.54 “Specification” shall mean, for a particular Product, the specifications,
methods and processes of the product, as set forth in the applicable MAs for
that Product.

 

1.55 “Supply Failure” has the meaning ascribed to that term in Section 4.11.2 of
this Agreement.

 

1.56 “Supply Term” shall mean, on a Product by Product basis, an initial period
of ten (10) years from the date of first commercial sale of the applicable
Product by ETON in the Territory, and any renewals or extensions thereof.

 

1.57 “Taxes” means taxes, duties, fees, premiums, assessments, imposts, levies
and other charges of any kind whatsoever imposed by any Governmental Entity,
including all interest, penalties, fines, additions to tax or other additional
amounts imposed by any Governmental Entity in respect thereof, and including
those levied on, or measured by, or referred to as, income, gross receipts,
profits, capital, transfer, land transfer, sales, goods and services, harmonized
sales, use, value-added, excise, stamp, withholding, business, franchising,
property, development, occupancy, employer health, payroll, employment, health,
social services, education and social security taxes, all surtaxes, all customs
duties and import and export taxes, countervail and anti-dumping, all license,
franchise and registration fees and all employment insurance, health insurance
and government pension plan premiums or contributions.

 

1.58 “Term” shall have the meaning ascribed to this term in Section 11.1 of this
Agreement.

 

1.59 “Territory” shall mean the fifty states of the United States of America,
the District of Columbia, the Commonwealth of Puerto Rico, Guam, American Samoa,
the U.S. Virgin Islands and all territories and possessions of the United States
of America and United States military bases.

 

1.60 “Territory of Manufacture” means the country of Switzerland.

 

1.61 “Third Party” means any Person other than ETON, Sintetica or their
respective Affiliates.

 

6

 

 

1.62 “Transfer Price” has the meaning ascribed to that term in Section 6.2.1 of
this Agreement.

 

1.63 “Transfer Taxes” shall have the meaning ascribed to this term in Section 10
of this Agreement.

 

2. GRANT OF RIGHTS

 

2.1 Sintetica, for itself and its Affiliates, hereby grants to ETON in
accordance with the terms and conditions of this Agreement, an exclusive (even
as to and against Sintetica) right and license, including the right to
sublicense, to the Products, MAs, and all current and future Sinetica Background
Intellectual Property that are owned or controlled by Sintetica or its
Affiliates for ETON to develop, manufacture, import, use, promote, distribute,
market, advertise, offer for sale or sell (collectively, “Market”) the Products
in the Territory. For avoidance of doubt, Sinetica and its Affiliates shall
remain the owner of the Product dossiers and Sinetica Background Intellectual
Property.

 

2.2 ETON, for itself and its Affiliates, hereby grants to Sintetica in
accordance with the terms and conditions of this Agreement, a right and license,
to its trademark, including to its name and logo, that is owned or controlled by
ETON or its Affiliates for Sintetica to make the packs, labels, and leaflets for
the Products for sale in the Territory. For avoidance of doubt, ETON and its
Affiliates shall remain the owner of its trademarks.

 

2.3 Except as otherwise expressly provided in this Agreement, Sintetica and its
Affiliates, during the Term, shall manufacture and supply exclusively to ETON
and its Affiliates all of their requirements for the Products for Marketing in
the Territory. For avoidance of doubt, Sintetica and its Affiliates shall not
manufacture and supply, during the Term, the Products or any pharmaceutically
equivalent products for themselves or any Third Party (not consented by ETON)
for Marketing in and for the Territory.

 

2.4 Except as otherwise expressly provided in this Agreement, ETON and its
Affiliates shall exclusively purchase all of their requirements for the Products
from Sintetica for Marketing in the Territory.

 

3. PRODUCT DEVELOPMENT AND REGISTRATION

 

3.1 Development and Registration Responsibilities.

 

3.1.1 At its sole cost and expense, Sinetica shall be responsible and liable for
developing the Products and filing and obtaining approval of the MAs with the
FDA. Within seven (7) days after receiving notice of approval of the MA(s) for
the Product(s), Sintetica shall file the necessary documentation to transfer the
approved MA(s) to ETON’s name.

 

3.1.2 If ETON’s customer research shows demand that there is commercial demand
for the Product in a container system that Sintetica is unable to produce, then
ETON shall have the right to secure additional suppliers to develop, file for
registration, and obtain approval with the FDA for the Product in that container
system, and Sinetica shall grant ETON all the rights and licenses necessary to
develop, register, obtain approval, and Market the Product with that container
system in the Territory. Any additional Products would be subject to this
agreement

 

7

 

 

3.2 Registration Maintenance and Regulatory Responsibilities. After the approved
MAs are transferred to ETON’s name, ETON shall be responsible for the
maintenance of the approved MAs. In such an event, ETON will take all actions
with the FDA, including paying all fees accrued after time of transfer and
conducting all communications with FDA or other Governmental Entities as
required by Applicable Law in respect of the MAs, including without limitation
initial payment of fees owed under the Prescription Drug User Fee Act, Annual
Branded Prescription Drug Fees assessed under Section 9008 of the Patient
Protection and Affordable Care Act (ACA), Public Law 111-148 (124 Stat. 119
(2010)), as amended by section 1404 of the Health Care and Education
Reconciliation Act of 2010 (HCERA), Public Law 111-152 (124 Stat. 1029 (2010)),
or any successor laws, and preparing and filing all required reports (including
adverse drug experience reports) with the appropriate Governmental Entity. The
Parties shall share equally in all maintenance and regulatory fees under this
Section 4.2 (“Regulatory Fees”). Sintetica shall use its best efforts to provide
support, including providing any required information and documents, to ETON in
the maintenance of the approved MAs. Sintetica’s share of Regulatory Fees shall
be deducted prior to Sintetica receiving its profit share.

 

3.3 ETON’s NDC Numbers. Sintetica and its Affiliates shall not sell any products
under ETON’s or its Affiliates’ names or NDC numbers.

 

3.4 Medical Inquires, Product Complaints and Recalls. After the approved MAs are
transferred to ETON’s name, ETON shall assume all responsibility for responding
to any medical inquiries or complaints about any Products as set forth in the
Pharmacovigilance Agreement attached hereto as Exhibit C (the “Pharmacovigilance
Agreement”) and to be entered into by the Parties as soon as practicable.
Sintetica will notify ETON immediately of any circumstances that may result in a
potential recall, market withdrawal, inventory retrieval, or similar action
(“Recall Event”) that may affect the products or services under this proposal.
ETON will administer the Recall Event, but Sintetica shall reimburse ETON for
any costs associated with the Recall Event, including but not limited to
shipping charges, legal fees, and any action necessary to effectuate a recall,
to the extent the Recall Event is attributable to Sintetica’s performance of its
obligations under this Agreement, including but not limited to sanitation of
Sintetica’s equipment, negligence in manufacturing, or poor quality standards.
If the Recall Event is related to ETON’s commercialization activities, then ETON
will administer the Recall Event and be solely responsible for costs and
expenses associated with that Recall Event.

 

3.5 Competitive Products. During the Term of this Agreement, and for a period of
five (5) years thereafter, Sintetica nor ETON shall not research, develop,
manufacture, file, sell, market, or distribute any competitive product,
including a product containing [* * *] as the active ingredient that is marketed
and sold in the Territory in the injectable route of administration; nor will
Sintetica nor ETON directly or indirectly assist any other Person or entity in
carrying or any such activities for eventual marketing or sale in the Territory.

 

8

 

 

4. MANUFACTURE AND SUPPLY

 

4.1 Product Labeling and Packaging.

 

4.1.1 The packaging artworks will be prepared by Sintetica, at its sole cost and
expense, with the proprietary trademark and design artwork. Sintetica shall
design the packaging, the containers, the labels, the user instructions, warning
notices, master shipper, pattlet layout, including the artwork necessary or
beneficial for the distribution in the Territory (“Product Labelling and
Packaging”). Sintetica shall also be solely responsible for, at its cost and
expense, the requirements to serialize the Products under Applicable Law. Prior
to commencing into production, Sintetica shall submit the Product Labelling and
Packaging to ETON for its review for accuracy. Only upon ETON’s approval shall
Sintetica proceed to print the Product Labelling and Packaging. Sintetica shall
be responsible and liable for the final content of the Product Labelling and
Packaging and their compliance with Applicable Law in the Territory and
Territory of Manufacture.

 

4.1.2 After ETON approves the Product Labelling and Packaging in Section 5.1.1,
Sintetica shall supply ETON the Products in finished dosage form and fully
packaged and ready for Marketing by ETON in the Territory.

 

4.1.3 ETON shall distribute the Products exclusively with the Product Labelling
and Packaging in which they are supplied to it by Sintetica. For avoidance of
doubt, ETON shall not modify the Product Labelling and Packaging in any way when
distributing the Products in the Territory.

 

4.1.4 Any modification of the Product Labelling and Packaging shall require
prior written approval by both Parties and must comply with all Applicable Laws
in the Territory.

 

4.2 Manufacture and Supply of Products.

 

4.2.1 Sintetica shall exclusively manufacture and supply the Products to ETON,
and ETON shall exclusively purchase from Sintetica the Products and Market the
Products in the Territory, except as otherwise expressly provided in this
Agreement.

 

4.2.2 Sintetica shall use commercially reasonable efforts to supply on a timely
basis one hundred percent (100%) of ETON’s requirement for each Product for
commercialization in the Territory.

 

4.2.3 Sintetica shall use commercially reasonable efforts to provide ETON with
Product with expiration date that is at least seventy five percent (75%) of the
shelf-life for the applicable Product, but in no event less than eighteen (18)
months from the date such Product is delivered to ETON.

 

4.2.4 Sintetica shall ensure that it has an adequate supply of active and other
ingredients required to manufacture the Products in order to meet at least one
hundred twenty-five percent (125%) of ETON’s forecasted requirements for the
Products in the Territory. In the event that for any reason Sintetica may have
insufficient supply of active or other ingredients required to meet its
obligations under this Section 4.2.2, Sintetica, upon ETON’s approval, shall
obtain a Third-Party source for such active and other ingredients agreed to by
ETON.

 

9

 

 

4.2.5 Sintetica shall manufacture each Product at its own manufacturing site. In
the event Sintetica desires to transfer the manufacture of any Product to
another site other than those designated in the relevant MA, Sintetica shall
require ETON’s written approval.

 

4.2.6 Sintetica shall, during the Term, maintain its relevant manufacturing
site, all property, equipment, machinery and systems therein in the ordinary
course of business and in compliance with GMP and Applicable Law (including Drug
Security and Supply Chain Act) and free of material defects except for those
attributable to wear and tear consistent with age and usage of such assets and
except for such defects as do not and will not in the aggregate impair the
ability to use such assets in connection with this Agreement.

 

4.2.7 Sintetica will properly maintain a sample from each batch of Product as
required by applicable regulatory standards in the Territory, Territory of
Manufacture, Applicable Law or as otherwise agreed in writing by the Parties.

 

4.2.8 Sintetica will validate all processes, methods, equipment, facilities and
utilities used in the manufacture, storage, testing and release of each Product
in conformity with all Applicable Laws. ETON shall have the right to review the
validation reports upon written request.

 

4.2.9 Sintetica shall provide ETON with timely notification of all deviations
that could materially impact the quality of any Product as well as all reports
or audits of any applicable regulatory authority or other applicable
governmental agency regarding testing, manufacture, storage, labeling, handling
or packaging of any Product.

 

4.2.10 Notwithstanding anything to the contrary in this Agreement, all Product
manufactured by Sintetica and sold to ETON under this Agreement, when delivered
by Sintetica to ETON, shall meet the specifications and the requirements as set
forth in a Quality Agreement, attached hereto as Exhibit B, to be entered into
by the Parties as soon as practicable (the “Quality Agreement”).

 

4.3 Manufacturing and Quality Records and Audits.

 

4.3.1 Sintetica shall supply the Products to ETON in accordance with the terms
and conditions of this Agreement, the Quality Agreement, the relevant MAs and
Applicable Law. Sintetica shall deliver to ETON, together with each delivery of
each batch of Product, the corresponding certificate of analysis relating to
such batch and certification that all Product in such batch were manufactured in
accordance with GMP, the Quality Agreement and any Applicable Law. The
certificate of analysis shall include the actual result of the testing performed
by Sintetica on such batch. Sintetica agrees that it shall not make any changes
in the formulation, manufacture, production, packaging, labeling or storage of
any Product or any component thereof without consent of ETON unless Sintetica is
expressly required to do so by Applicable Law or a relevant regulatory
authority, in which case Sintetica shall notify ETON in writing promptly of such
change and the reason therefor.

 

10

 

 

4.3.2 Sintetica shall prepare and maintain complete and accurate records
relating to each Product and the manufacture, quality operation, packaging,
labeling, storage, handling and testing of each batch therefor as required by
Applicable Law and GMP and Sintetica shall make copies thereof available for
review by ETON upon request. These records shall be subject to audit and
inspection under this Agreement. Records that include information relating to
the manufacturing, finished product packaging, and quality operation for each
batch of each Product will be prepared by Sintetica at the time such operations
occur. Sintetica will prepare such records in accordance with GMP, this
Agreement, the Specifications and Applicable Law.

 

4.3.3 On an annual basis, upon ETON’s prior written notice of at least thirty
(30) days and at its expense, Sintetica shall permit representatives of or
selected on behalf of ETON to inspect Sintetica’s facilities relevant to the
manufacture, testing, packaging, labeling, quality control, storage and
transport of any Product. Notwithstanding the foregoing, ETON may inspect at any
time without cost to ETON if the inspection is for cause, provided that the
scope of such inspection is limited to the cause for such inspection.

 

4.3.4 ETON and Sintetica shall each designate one (1) individual to whom all of
the other Party’s communications may be addressed with respect to the
manufacturing of Product (the “Quality Assurance Liaison”). Each Party shall
give prompt notice to the other Party of any material adverse change or event
that relates to a quality issue or related matter with respect to the
manufacturing site for a Product or the Product itself.

 

4.4 Forecasts. No later than sixty (60) days prior to ETON’s projected desired
initial delivery of commercial batches of each Product, ETON shall provide to
Sintetica a forecast which shall indicate ETON’s reasonable estimate of its
expected requirements for each Product from Sintetica for the twelve (12) month
period commencing on the desired initial Delivery Date for such Product.
Commencing on the fifth (5th) Business Day after the initial Delivery Date for a
given Product and not later than the third (3rd) Business Day of each third
(3rd) calendar month thereafter, ETON shall submit a forecast of its
requirements from Sintetica for each Product which shall indicate ETON’s
reasonable estimate of its expected requirements of Product from Sintetica for
the twelve (12) month period commencing on the first (1st) day of the fourth
(4th) full calendar month after the date of each such update (each a “Rolling
Forecast”). The first three (3) calendar months of each Rolling Forecast shall
be considered binding forecasts for Product (the “Firm Period”). Except as
expressly provided in the foregoing sentence, such Rolling Forecasts constitute
non-binding, good-faith estimates provided solely to assist Sintetica in
production planning and subject to the terms and conditions hereof the Rolling
Forecast for any period may be revised by ETON by written notice to Sintetica.

 

4.5 Purchase Orders and Minimum Order Requirements.

 

4.5.1 The purchase of each Product under this Agreement shall be implemented by
ETON’s issuance of individual purchase orders to Sintetica for specific
quantities of each Product which purchase orders shall reflect the Firm Period,
if applicable, and shall specify the delivery date for each Product (the
“Delivery Date”). The first order shall be placed no earlier than fifteen (15)
days from ETON receiving written confirmation from Sintetica of the approval of
the MA for the Product by FDA in the Territory. Subsequent orders shall be
placed one hundred twenty (120) days prior to ETON’s requested Delivery Date.
Within seven (7) Business Days of its receipt of a purchase order, Sintetica
shall accept in writing such purchase order submitted in accordance with this
Section 4.5.1 by delivering a confirmation of the Delivery Date set forth in
each purchase order (a “Confirmed Purchase Order”).

 

11

 

 

4.5.2 If a purchase order requests quantities of such Product in excess of one
hundred twenty five percent (125%) of ETON’s most recent forecast for such
month, then Sintetica shall within seven (7) Business Days of its receipt of
such a purchase order, notify ETON whether and to what amount Sintetica can
supply such excess. No purchase order shall be rejected provided that the
purchase order complies with the terms of this Agreement. For any given calendar
month, Sintetica may be required to accept purchase orders for quantities of
Product up to one hundred twenty-five percent (125%) of ETON’s most recent
forecast for such month and shall use commercially reasonable efforts to supply
quantities of Product in excess of one hundred twenty-five percent (125%) of the
forecasted amounts (the “Excessive Amount”). In the event Sintetica cannot
supply the Excessive Amount, then ETON shall be free to source and procure such
Excessive Amount from a Third-Party alternative source at its own cost. In such
an event, Sintetica shall not receive its profit share for the Excessive Amount.

 

4.5.3 ETON shall assign a purchase order number to each order placed with
Sintetica and notify such order numbers to Sintetica. Each Party shall use the
relevant purchase order number in all subsequent correspondence relating to the
order.

 

4.5.4 [* * *].

 

4.5.5 [* * *].

 

4.5.6 [* * *].

 

4.6 Delayed Delivery. In the event of any changes in the Territory that could
adversely affect sales of a given Product, ETON shall have the right to delay
delivery of Product ordered by ETON from Sintetica pursuant to a purchase order
for a period of up to six (6) months after the Delivery Date of the applicable
shipment of the applicable Product. In the event ETON wishes to delay any such
shipments it will notify Sintetica in writing at least sixty (60) days in
advance of the applicable Delivery Date. ETON shall also have the right to
cancel any purchase order, however, in the event of such cancellation ETON shall
pay for (a) all such applicable Product already manufactured by Sintetica that
cannot be sold to ETON hereunder in a future shipment of such Product without
violating the terms of this Agreement; (b) all of the materials and components
ordered by Sintetica specifically for the manufacture of the affected Product
that cannot be otherwise used or returned to the applicable supplier; (c) any
reasonable, documented costs and expenses for work-in-progress of the affected
Product completed under the purchase order prior to cancellation; and (d) the
cost of destruction of the applicable Product, if any.

 

4.7 Shipment.

 

4.7.1 Products shall be invoiced and delivered Ex-Works Sintetica, Mendrisio,
CH, in Sintetica’s standard packaging and delivery units applicable from time to
time.

 

4.7.2 Sintetica will not ship any Product that it reasonably believes will not
conform to the relevant Specifications, MAs, this Agreement or with Applicable
Law. If Sintetica reasonably believes any such Product would not conform as
such, then Sintetica shall, at no cost to ETON, manufacture and supply
replacement Product to replace the non-conforming Product as promptly as
possible. Sintetica shall be responsible for all costs and expenses, including
expedited shipping and Customer Penalties related to such replacement.

 

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4.7.3 Risk of loss shall pass in accordance with the applicable Incoterms, and
at such time Sintetica shall pass to ETON good and marketable title to each
Product, free and clear of all liens, claims, security interests, pledges,
charges, mortgages, deeds of trusts, options, or other encumbrances of any kind.

 

4.8 Acceptance. Within thirty (30) days of receipt of each shipment of Product
by Sintetica at ETON or its designated facility, ETON shall perform or cause to
be performed any inspections ETON deems necessary for each shipment of the
Product and notify Sintetica in writing within such thirty (30) day period if
ETON believes that the Product fails to conform to the Specifications, MAs, this
Agreement, or Applicable Law, or if any defect, shortage, or other
nonconformance exists. If ETON does not provide such notice within the thirty
(30) day period, the shipment shall be deemed to be accepted (“Accepted”),
except as otherwise provided by Section 5.10.

 

4.9 Non-Conformity; Shortage; Defectiveness. If ETON believes that (a) any
Product has not been manufactured in accordance with the requirements of the
Specifications, MAs, this Agreement or Applicable Law; (b) any defect exists in
any Product delivered, or (c) there is a shortage of Product delivered; then in
each case ETON will, within thirty (30) days of the receipt of such Product by
ETON, notify Sintetica in writing setting forth in reasonable detail the alleged
nonconformity, defect or shortage. Upon any such notification, Sintetica shall
have the right to inspect the applicable Product itself or appoint, at its
expense, a mutually acceptable Third Party to perform such inspection. Sintetica
or such Third Party will have fourteen (14) days to inspect the affected Product
to make an assessment of the alleged nonconformity, defect or shortage. If the
Parties agree there is a nonconformity, defect or shortage or if Sintetica fails
to inspect or have inspected the applicable shipment of Product within such
fourteen (14) day period, then Sintetica at its sole cost and expense shall
promptly replace any nonconforming or defective Product or make up the shortage,
to be shipped at Sintetica’s cost. Nonconforming or defective Product will be
returned to Sintetica at Sintetica’s cost. Sintetica shall, during any such
inspection periods outlined in this Section 5.9, continue to supply Product to
ETON pursuant to the terms and conditions of this Agreement. Any dispute between
the Parties concerning rejection of all or any part of a shipment of Product
which the Parties are unable to resolve within thirty (30) days of the
aforementioned fourteen (14) day period will be submitted to an agreed-upon,
qualified, independent laboratory for testing using the test methods set forth
in the applicable MA or other mutually agreed upon methods. Sintetica shall
replace promptly any shipment or portion of a shipment of Product under dispute
until the dispute is resolved. Such replacement Product and the cost of the
laboratory will be at Sintetica’s expense if the laboratory finds that the lot
in question is non-conforming or otherwise defective. The costs of the
laboratory shall be ETON’s expense if the lot in question is found to be
conforming or otherwise non-defective. The findings of the laboratory shall be
final and binding upon the Parties and not subject to appeal or review by any
Third Party. In the event the laboratory finds that the lot in question is
nonconforming, then Sintetica shall pay for the destruction of such
nonconforming lot.

 

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4.10 Latent Defects. The Parties acknowledge it is possible for Product to have
manufacturing defects that are not discoverable upon reasonable physical
inspection or testing (such a “Latent Defect or “Latent Defects”). Latent
Defects may include, by way of example and not definition or limitation, loss of
stability, separation, discoloration, defects not present in pre-shipment
samples or other manufacturing defects. Sintetica is responsible for all Latent
Defects that are attributable to the manufacture, labeling, packaging, shipping,
handling or storage of Product by Sintetica or failure of such Product to
otherwise comply with the provisions of this Agreement. As soon as ETON becomes
aware of any Latent Defect, it will immediately notify Sintetica of the lot(s)
involved and Sintetica shall replace such Product in the manner described in
Section 4.9.

 

4.11 Failure to Supply.

 

4.11.1 In the event that Sintetica is unable to supply any quantity of Product
ordered through a Confirmed Purchase Order for any reason, then Sintetica shall
promptly notify ETON of such inability to supply and if possible, will notify
ETON of the date on which such inability is expected to end. In such event,
Sintetica and ETON will for a period up to thirty (30) days discuss in good
faith a resolution to such inability to supply. Sintetica shall also immediately
prioritize its available production capacity, materials and components to the
manufacture of the affected Product to minimize the impact of the failure to
supply.

 

4.11.2 Notwithstanding the foregoing, in the event Sintetica is unable to (i)
supply Product to ETON as ordered by ETON per purchase order, and in the amount
of product equal to at least that specified in Section 5.2.2 of this Agreement
for a period within thirty (30) days of the Delivery Date or (ii) deliver
Product in the amount of product equal to at least that specified in Section
4.2.2 of this Agreement to ETON by the Delivery Date on two (2) or more
occasions over a period of three (3) months (a “Supply Failure”), then ETON
shall, in addition to its other rights and remedies available hereunder, have
the right to cancel the purchase order(s) for Product(s) without penalty or
liability and to purchase such Product from an alternate source, including a
Third Party. For purposes of this Agreement, delivery within thirty (30) days
before or after the Delivery Date shall be deemed as meeting the Delivery Date.

 

4.11.3 In the event that Sintetica shall have reason to believe it will be
unable to supply Product to ETON for a period of at least three (3) months
beyond the Delivery Date (a “Material Delivery Delay”), Sintetica shall promptly
notify ETON thereof. Following ETON’s receipt of such notice the Parties shall
promptly meet to discuss in good faith and establish a plan that shall contain
all necessary activities to be implemented to avoid or eliminate interruption in
supply, including but not limited to permitting ETON to purchase the Products
from a Third Party if necessary (the “Recovery Plan”). Sintetica shall be
obligated to perform the activities in accordance with the Recovery Plan. If,
despite undertaking the measures set forth in the preceding sentence, ETON
purchases substitute product or incurs Customer Penalties as a result of any
Supply Failure or Material Delivery Delay, ETON will provide to Sintetica proof
thereof which shall only include identity of the customer, amount of the
customer penalty and a reference to either a credit number or invoice number
associated with the customer penalty and Sintetica shall reimburse ETON for (A)
the difference, if any, between (x) the purchase price ETON pays for product
from an alternate source and (y) the Transfer Price and (B) Customer Penalties,
including the difference between (i) the purchase price paid by ETON’s customer
to source product from an alternative source and (ii) ETON’s price to the
customer for the Product if such difference is charged by the customer to ETON
(each of (A) and (B) “Customer Penalties”).

 

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4.11.4 In the event ETON incurs and pays for any Customer Penalties, except due
to a Force Majeure Event (which Customer Penalties shall be deducted from Net
Profits), ETON will, as a first remedy, deduct for a period up to two (2)
consecutive Calendar Quarters, from its future payment of the Sintetica Net
Profit Share an amount not to exceed the Customer Penalties (the “Deducted
Customer Penalties”) until the first to occur of: (a) the Deducted Customer
Penalties equals the Customer Penalties or (b) ETON does not owe to Sintetica
any such Sintetica Net Profit Share. If, after such deductions or upon reaching
the end of the two (2) calendar quarter period, the Customer Penalties exceed
the Deducted Customer Penalties, ETON will invoice Sintetica for such difference
and Sintetica will pay such invoice in full within sixty (60) days of receipt
thereof. ETON will have the right to withhold any future payments owed to
Sintetica until all such invoices are paid in full.

 

4.11.5 Notwithstanding anything to the contrary in this Agreement, in the event
of Supply Failure by Sintetica, ETON shall have the right to use a Third-Party
manufacturer to supply the Product for the Territory. In such an event,
Sintetica (a) shall use commercially reasonable efforts to effectuate such
technology transfer to the Third-Party manufacturer, and (b) pay for the
technology transfer to the Third-Party manufacturer. Under this Section 4.11.5,
ETON shall be fully released from its purchase orders and any Firm Period
section of a Rolling Forecast and shall be permitted to purchase such Products
from a Third Party.

 

4.12 The rights and remedies provided in this Section 5 shall be cumulative and
in addition to any other rights and remedies that may be available to ETON.

 

4.13 Inventory: ETON shall keep an amount of inventory at all times greater than
six (6) months of forecasted sales of product.

 

5. SALES AND MARKETING

 

5.1 ETON shall be solely responsible for the Marketing of the Products and shall
have sole and exclusive right to make all Marketing decisions for the Product in
the Territory.

 

5.2 ETON shall use commercially reasonable efforts to Market the Products in the
Territory during the Term of this Agreement.

 

5.3 ETON shall have the sole and exclusive right to determine all terms and
conditions of sale of the Products to its or its prospective consumers.

 

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6. MILESTONES AND PROFIT SHARE; PAYMENTS

 

6.1 Milestones. ETON will pay to Sintetica a total sum of two million seven
hundred fifty thousant dollars ($2,750,000) after the achievement of the
following milestones:

 

(a) An amount of two million dollars ($2,000,000) within thirty (30) days after
the execution of this Agreement. If the MAs for the Products are not accepted to
file or review by the FDA, then the two million dollars ($2,000,000) payment
shall be returned to ETON within five (5) Business Days after Sintetica’s
receipt of the FDA’s notice of non-acceptance to file or review of the MAs.

 

(b) An amount of seven hundred fifty thousand ($750,000) within thirty (30) of
the first commercial sale of [* * *]. If Sintetica is able to supply Product to
Eton and Eton has not achieved first commercial sale within ninety (90) days,
the payment shall become due.

 

6.2 Transfer Price.

 

6.2.1 [* * *].

 

6.2.2 Sintetica shall use commercially reasonable efforts in accordance with its
standard manufacturing practices to reduce its COGS for Products. The Parties
will meet on annual basis to discuss plans to reduce the Transfer Price.
Sintetica shall use commercially reasonable efforts to implement such plans and
reduce the Transfer Price.

 

6.2.3 Sintetica will invoice ETON when Product has been released by Sintetica,
at a price per unit that is equal to the Transfer Price for such Product. Except
as otherwise provided for in this Agreement, ETON shall pay to Sintetica the
Transfer Price for such Product within thirty (30) days after the date of
receipt of an invoice from Sintetica.

 

6.2.4 If ETON fails to cure any non-payment of an invoice within sixty (60) days
after receipt of the invoice other than for reasons outside of its control, then
Sintetica may call for immediate payment of all outstanding invoices. Sintetica
may also make further deliveries subject to prepayment.

 

6.3 Net Profit Share.

 

6.3.1 ETON shall pay to Sintetica the first five hundred thousand ($500,000) of
Net Profits from sales by ETON of the Products in the Territory. After five
hundred thousand ($500,000) is paid to Sintetica, ETON and Sintetica will share
the Net Profits from sales by ETON of the Products in the Territory, if any, as
follows: (a) ETON’s share is fifty percent (50%) of Net Profits, and (b)
Sintetica’s share is fifty percent (50%) of Net Profits (the “Sintetica Net
Profit Share”).

 

6.3.2 ETON will have the right to withhold the following amounts on a
Product-by-Product basis from the commercialization of such Products by ETON in
the Territory: five (5%) percent of Net Sales (the “Selling, General and
Administrative Fee” or “SG&A Fee”).

 

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6.3.3 Within sixty (60) days following the end of each Calendar Quarter
following first commercial sale in the Territory, including the first and last
Payment Period which may be of a shorter duration (each, a “Payment Period”),
ETON shall: (a) compute and report to Sintetica in a mutually acceptable format
the Net Sales, Net Profits and Sintetica Net Profit Share for each Product sold
in the Territory during the Payment Period, and (b) pay to Sintetica within
thirty (30) days of the delivery of the report, the aggregate Sintetica Net
Profit Share for all Products for that Payment Period as reflected in the
report. For the first year of commercial sale if aggregate Net Profit for all
Products for any Payment Period equals a negative amount, then Sintetica shall
not be entitled to receive any Sintetica Net Profit Share for such Payment
Period and ETON shall be permitted to carry over such negative amount to apply
against aggregate positive Net Profit amounts in subsequent Calendar Quarters
until such negative amount is reduced to zero.

 

6.4 Interim and Final True-Ups. During the Supply Term, on an annual basis,
following the first (1st) calendar year from launch of Product and on a
Product-by-Product basis, ETON shall perform an interim “true-up” reconciliation
and shall provide Sintetica with a written report of such outlining the
deductions specified in the definition of Net Sales. The reconciliation shall be
based on actual cash paid or credits issued plus an estimate for any remaining
liabilities incurred related to the specified Product, but not yet paid at the
end of the preceding calendar year. If the foregoing reconciliation report shows
either an underpayment or an overpayment between the Parties, the Party owing
payment to the other Party shall pay the amount of the difference to the other
Party within thirty (30) days after the date of delivery of such report. In
addition, within twenty-five (25) months after the termination or expiration of
the Term or Supply Term and on a Product-by-Product basis, ETON shall perform a
final “true-up” reconciliation and shall provide Sintetica with a written report
of such outlining the deductions specified in the definition of Net Sales. If
the foregoing reconciliation report shows either an underpayment or an
overpayment between the Parties, the Party owing payment to the other Party
shall pay the amount of the difference to the other Party within thirty (30)
days after the date of delivery of such report.

 

6.5 Taxes. Each Party shall be responsible for and shall pay all Taxes payable
on any income earned or received by it during the Term. Where required by law,
ETON shall have the right to withhold applicable Taxes from any payments to be
made hereunder by ETON to Sintetica. Any Tax, duty or other levy paid or
required to be withheld by ETON on account of any payments payable to Sintetica
under this Agreement shall be deducted from the amount of payments due to
Sintetica. ETON shall secure and promptly send to Sintetica proof of such Taxes,
duties or other levies withheld and paid by ETON for the benefit of Sintetica.
Each Party agrees to cooperate with the other Party in claiming exemptions from
such deductions or withholdings under any agreement or treaty from time to time
in effect.

 

6.6 Audits. Each Party shall permit an independent certified public accounting
firm selected by the auditing Party and reasonably acceptable to the
non-auditing Party, that has agreed to be bound by a confidentiality agreement
reasonably acceptable to the Parties, to have access, during normal business
hours and upon reasonable prior notice (not more often than once in any calendar
year), to those books and records maintained by the non-auditing Party necessary
for the auditing Party to verify the accuracy of the non-auditing Party’s
calculations under this Section 6 (including the Transfer Price and Net Profit
Share) for any period ending not more than two (2) years prior to the date of
such request, subject to any limitations in scope necessary to comply with
Applicable Law, Third Party confidentiality restrictions, or maintain legal
privilege, including but not limited to Third Party pricing information. All
such information shall be retained on a confidential basis by the accounting
firm, and such accounting firm’s use of such information shall be limited to the
aforementioned verification. Unless otherwise agreed to by the Parties in
writing, the accounting firm shall not be paid on a contingency or similar
basis.

 

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6.7 Accounting. ETON and Sintetica shall calculate and record calculations under
this Section 7 in accordance with U.S. GAAP, and shall maintain all books and
records related thereto in accordance with standard cost accounting policies and
practices, in accordance with U.S. GAAP for the Supply Term plus an additional
three (3) years thereafter.

 

7. INTELLECTUAL PROPERTY AND OTHER RIGHTS

 

7.1 At its sole cost and expense, Sintetica shall be solely responsible and
liable for any litigation in connection with the Product’s development,
manufacturing, and the Sintetica Background Intellectual Property.

 

7.2 At its sole cost and expense, ETON shall be solely responsible and liable
for any non-patent litigation in connection with its marketing activities.

 

7.3 Patents and Other Intellectual Property. Each Party shall be responsible, at
its own expense, for filing and prosecuting such patent applications, as it
deems appropriate, and for paying maintenance fees on any patents issuing
therefrom, for the Term, with respect to intellectual property owned by it that
relate to or are used in connection with the manufacture, sale or use of the
Product. Notwithstanding anything herein to the contrary, and provided that the
Sintetica Background Intellectual Property is covered by a patent or patent
application, Sintetica, at its sole cost and expense, shall maintain and protect
the Sintetica Background Intellectual Property and continue to prosecute and
maintain its patents covering the Sintetica Background Intellectual Property and
shall keep ETON advised of material actions relative to the same. Should
Sintetica contemplate to abandon or otherwise forfeit any patent/patent
applications or patent rights in the Sintetica Background Intellectual Property,
Sintetica shall notify ETON in advance of such contemplation. In such an event,
ETON may pursue filing and prosecuting such patent applications relating to the
Products, at its own cost and expense, and shall obtain from Sintetica rights
and licenses to those patents and patent applications with the same scope as
that in Section 2.1. Sintetica shall maintain the confidentiality of any trade
secrets covering the Sintetica Background Intellectual Property. Each Party
shall promptly render all necessary assistance reasonably requested by the other
Party, at the requesting Party’s expense, in applying for and prosecuting patent
applications based on intellectual property owned by such other Party pursuant
to this Agreement.

 

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7.4 Notice of Infringement. If either Party shall learn of (a) any claim or
assertion that the manufacture, use or marketing of the Product under this
Agreement, or any other action taken by either Party in performance of its
obligations hereunder infringes, misappropriates or otherwise violates the
intellectual property rights of any Third Party, or (b) the actual or threatened
infringement, misappropriation or other violation by any Third Party of the
intellectual property rights of any Party hereto that are the subject of this
Agreement (“Intellectual Rights Suits”), then the Party becoming so informed
shall as soon as reasonably practicable, but in all events within fourteen (14)
days thereafter (the “Infringement Notification Date”), notify the other Party
of such claim or assertion, or actual or threatened infringement,
misappropriation or other violation.

 

7.5 Provision of Information. Sintetica shall promptly provide ETON with
reasonable access to information and data about, and personnel knowledgeable of,
the Product, its formulation, use and process of manufacture, to enable ETON to:
(a) ascertain whether the manufacture or marketing of the Product would infringe
any Third Party intellectual property rights; and (b) determine its conduct in
relation to any proceedings alleging infringement of the Third Party
intellectual property rights.

 

7.6 Intellectual Rights Suit.

 

7.6.1 At its sole cost and expense, Sintetica shall be solely responsible and
liable for and assume the direction and control of any Intellectual Rights Suit
and the defense of claims arising therefrom, including, without limitation, the
selection of legal counsel; provided, however, that Sintetica shall keep ETON
apprised of material developments. ETON shall fully cooperate with Sintetica in
the defense of any such Intellectual Rights Suit (regardless of which Party is a
named party to such suit), including joining as a party to the suit, and shall
be consulted by Sintetica in connection with the settlement of any such
Intellectual Rights Suit. Except as otherwise set forth in this Agreement,
Sintetica shall be responsible for all reasonable attorneys’ fees and costs,
settlement amounts and/or awarded damages incurred by either Party or their
respective Affiliates in connection with the defense of any Intellectual Rights
Suit provided such is directly related to this Agreement (“Intellectual Rights
Legal Expenses”).

 

7.6.2 Sintetica agrees that it will not, whether in the context of litigation or
otherwise related thereto, without the prior written consent of ETON enter into
any agreement or arrangement with any Third Party which in any way compromises,
relinquishes, waives, or otherwise affects, in whole or in part, the rights of
ETON under this Agreement in respect of the Product.

 

7.7 Third Party Infringement. In the event either Party believes that a Third
Party is infringing or otherwise violating a Party’s intellectual property
rights in the Territory or Manufacturing Territory, which infringement involves
the Product, Sintetica and ETON shall consult with each other and their
respective counsel in order to develop a strategy for addressing the Third-Party
infringement. Unless the Parties agree differently, the owner of the infringed
intellectual property (the owning Party) shall have the right at its sole
discretion to bring action against the Third Party infringer, select counsel
for, control, and bear the costs of such action, shall indemnify and hold the
non-owning Party harmless, and shall be entitled to any award or settlement in
respect thereof. In the event that the owning Party does not bring any action
against the Third-Party infringer within the earlier of ninety (90) days from
the Infringement Notification Date or the relevant statute of limitations, the
non-owning Party shall be free to bring the action in its own name, at its own
expense, and retain any award or settlement in its entirety. If necessary, the
non-participating Party shall join, or be joined as a Party to the suit, but
shall be under no obligation to participate, except to the extent that such
participation is required as the result of being a named Party to the suit. The
non-participating Party shall offer reasonable assistance in connection
therewith, at no charge to the participating Party, except for reimbursement of
reasonable out-of-pocket expenses.

 

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7.8 Sections 7.1, 7.2 and 7.6 shall survive termination or expiration of this
Agreement.

 

8. INSURANCE

 

At all times from the first commercial sale of any Product(s) or after the
Effective Date through the date which is five (5) years after the final sale of
such Product(s), the Parties will maintain general liability insurance in
amounts that are reasonable and customary in the pharmaceutical industry,
provided in no event shall the general liability insurance amounts be less than
five million dollars ($5,000,000) per occurrence and ten million dollars
($10,000,000) in the aggregate limit of liability per year. The Parties shall
provide written proof of such insurance to each other upon request.

 

9. CONFIDENTIAL INFORMATION; PUBLICITY

 

9.1 Confidential Information. Each Party agrees that it shall not, without the
prior written consent of the other Party, (i) disclose to any Person such other
Party’s Confidential Information (as defined below), except to those of its and
its Affiliates’ employees or representatives who need to know such information
for the purpose of exploiting its rights or fulfilling its obligations under
this Agreement (and then only to the extent that such persons are under an
obligation to maintain the confidentiality of the Confidential Information), or
(ii) use any of such other Party’s Confidential Information for any reason other
than as contemplated by this Agreement. If a Party has been advised by legal
counsel that disclosure of Confidential Information of the other Party is
required to be made under Applicable Law (including to the FDA or pursuant to
the requirements of a national securities exchange or another similar regulatory
body on which it’s or any of its Affiliates stock trades) or pursuant to
documents subpoena, civil investigative demand, interrogatories, requests for
information, or other similar process, the Party required to disclose the
Confidential Information shall (to the extent legally permitted) provide the
other Party with prompt written notice of such request or demands or other
similar process so that such other Party may seek an appropriate protective
order or waive the disclosing Party’s compliance with the provisions of this
Section. In the absence of a protective order or waiver or other remedy, the
Party required to disclose the other Party’s Confidential Information may
disclose only that portion of the Confidential Information that its legal
counsel advises it is legally required to disclose, provided that it exercises
its commercially reasonable efforts to preserve the confidentiality of such
other Party’s Confidential Information, at such other Party’s expense, including
by cooperating with such other Party to obtain an appropriate protective order
or other reliable assurance that confidential treatment will be accorded the
Confidential Information. Confidential Information shall remain the sole
property of the disclosing Party and all Confidential Information furnished in
written form (and all copies thereof) shall be promptly returned to the
disclosing Party or destroyed by the receiving Party at the disclosing Party’s
request; provided, however, that the receiving Party may retain copies of such
Confidential Information as necessary for its compliance obligations under
Applicable Laws and any archival purposes, subject to the ongoing obligation to
maintain the confidentiality of such information. This Section 9.1 shall survive
termination or expiration of this Agreement and continue in effect thereafter
for a period of five (5) years.

 

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9.2 Definition of Confidential Information. The term “Confidential Information”
as used in this Agreement means all confidential information relating to the
Parties’ business and operation, this Agreement and its terms, or other
technical, business or financial information provided by the Parties as
contemplated by this Agreement. The term “Confidential Information” does not
include information that (A) becomes generally available to the public other
than as a result of disclosure by the receiving Party, (B) becomes available to
the receiving Party on a non-confidential basis from a source other than the
disclosing Party, provided that such source is not known by the receiving Party
to be bound by a confidentiality agreement with the disclosing Party, (C) was
previously known by the receiving Party as evidenced by the receiving Party’s
written records, or (D) was independently developed by the receiving Party
without use of or reliance on the Confidential Information.

 

10. TRANSFER TAXES

 

All transfer, sales, value added, stamp duty and similar Taxes (“Transfer
Taxes”) payable to the U.S. government in connection with the transaction
contemplated hereby will be borne by ETON and all Transfer Taxes payable to the
Swiss government in connection with the transaction contemplated hereby will be
borne by Sintetica.

 

11. TERM & TERMINATION

 

11.1 Term. The term of this Agreement shall begin on the Effective Date and
shall end upon the termination or expiration of every Supply Term, unless
earlier terminated as set forth in Sections 11.2, 11.3 and 11.4 of this
Agreement (the “Term”). The Supply Term shall begin on the Effective Date and
shall end ten (10) years after the first commercial sale of each Product, and
automatically be extended for successive three (3) year increments unless ETON
or Sintetica provides each other with written notice of its intention not to
extend the particular Supply Term for a given Product at least six (6) months
before the expiration of the applicable initial Supply Term or any extension
thereof.

 

11.2 Termination for Breach. The Agreement may be terminated by either Party by
written notice to the other at any time if the other Party (the “Breaching
Party”) is in material breach or default of any of its obligations hereunder or
any of its representations or warranties as follows: (i) the terminating Party
shall send a written notice of the material breach or material default to the
Breaching Party and (ii) the termination shall become effective sixty (60) days
after the sending of such written notice unless the Breaching Party has cured
any such material breach or material default prior to the expiration of the
sixty (60) day period or if such material default or material breach is not
capable of being cured within such sixty (60) day period and the Breaching Party
has commenced activities reasonably expected to cure such material breach or
material default within such sixty (60) day period and thereafter uses diligent
efforts to complete the cure as soon as practicable, but in no event shall such
period exceed one hundred eighty (180) days.

 

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11.3 Termination for Bankruptcy. Either Party may immediately terminate the
Agreement in whole or in part if the other Party: (a) makes an assignment for
the benefit of creditors, admits in writing its inability to pay debts as they
mature, or ceases operating in the normal course of business; (b) has a receiver
or trustee appointed by a court over the Party or any substantial part of the
Party’s assets; (c) becomes insolvent or is unable to pay its debts as they
become due; (d) authorizes, applies for or consents to the appointment of a
trustee or liquidator of all or a substantial part of its assets or has
proceedings seeking such an appointment commenced against it which are not
terminated within ninety (90) days of such commencement; (e) has any substantial
part of its property subjected to any levy, seizure, assignment or sale for, or
by any creditor or governmental agency without said levy, seizure, assignment or
sale being lifted, released, reversed or satisfied within ten (10) days; (f)
files a voluntary petition under any chapters of the United States Bankruptcy
Code or any other insolvency law or an involuntary proceeding has been commenced
by any Party against the Party under any one of the chapters of the United
States Bankruptcy Code or any other insolvency law and (A) the proceeding has
been pending for at least sixty (60) days; or (B) the Party has consented,
either expressly or by operation of law, to the entry of an order for relief; or
(C) the Party has been decreed or adjudged a debtor or equivalent.

 

11.4 Termination By ETON. ETON shall have the right to terminate the Agreement
or any Supply Term in whole or in part upon thirty (30) days prior written
notice to Sintetica (a) in the event ETON determines in its sole discretion that
a given Product is no longer commercially viable in the Territory; (b) if
Sintetica sells an MA for a Product or otherwise does not support maintaining
approval of the MA; (c) if Sintetica stops producing the Product; (d) if a
Sintetica facility (i) fails to obtain or maintain any necessary license, ; (e)
if Eton determines in its sole discretion that the Product filings are unlikely
to be approved by the FDA and (f) any Product infringes upon any Third Party
patents, trademarks, or other intellectual property rights in the Territory or
Territory of Manufacture.

 

11.5 Termination By Sintetica. Sintetica shall have the right to terminate the
Agreement or any Supply Term in whole or in part upon thirty (30) days prior
written notice to ETON (a) if ETON develops competing product; and (b) if
Government action forces the cessation of ETON’s selling and marketing
activities of all pharmaceutical products.

 

11.6 Effect of Termination.

 

11.6.1 If this Agreement is terminated by ETON under Sections 11.2, 11.3, and
11.4(b,c,d,f) in addition to any remedies that ETON is entitled to (a) Sintetica
shall, at its cost, provide reasonable assistance in technology transfer to an
alternative supplier of ETON’s choice and make best efforts in reducing or
avoiding any adverse impact to ETON, (b) ETON shall have the right to purchase
such Products from a Third Party and shall have a perpetual, fully-paid up,
royalty-free, sublicensable, and exclusive right and license (including as to
and against Sintetica) to make and have made the Product inside and outside the
Territory and Market the Products in the Territory, at its option, and (c)
Sintetica shall execute any documents or agreements reasonably necessary to
effectuate the foregoing (including but not limited to any amendment to this
Agreement), as determined by ETON.

 

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11.6.2 If this Agreement is terminated by Sintetica under Sections 11.2 and
11.3, then (a) ETON shall have the right to, and Sintetica shall hereby grant
ETON a license to, Market or otherwise dispose of any existing inventory of any
Products then in ETON’s possession, (b) Sinetica may keep all the licensing
payments paid by ETON up to the point of termination and is free to
commercialize or relicense the Product with no further obligations owed to ETON,
(c) ETON shall refrain from holding itself out as Sintetica’s distributor, in
particular, eliminate any reference to the Product and Sintetica from its
business, trade style and promotional material, (d) ETON will promptly transfer
the MAs to Sintetica’s name, and (e) ETON shall transfer all rights, licenses,
and approvals to the Product to Sintetica or another company indicated by
Sintetica within thirty (30) days of termination. This Section 11.5 shall
survive termination or expiration of this Agreement.

 

11.6.3 If this Agreement is terminated by ETON under Section 11.4(a) all
milestones will become immediately due to Sintetica. All rights to Products will
immediately return to Sintetica.

 

11.6.4 If this Agreement is terminated by ETON under Section 11.4(e) prior to
two years having elapsed since filing for the MA with the FDA; all milestones
will become immediately due to Sintetica, and a one time payment for lost Gross
Profit of one million dollars ($1,000,000) will also become due. All rights to
Products will immediately return to Sintetica.

 

12. REPRESENTATIONS AND WARRANTIES

 

12.1 ETON Representations and Warranties. ETON represents and warrants to
Sintetica that:

 

12.1.1 it has the corporate power and authority to enter into this Agreement and
to consummate the transactions contemplated hereby;

 

12.1.2 neither the execution and delivery of this Agreement by it, nor its
performance hereunder, conflicts with or will result in any violation or breach
of, or constitutes (with or without due notice or lapse of time or both) a
default under any of the terms or conditions of any note, indenture, license,
agreement or other instrument or obligation to which it is a party or by which
it or any of its properties or assets may be bound; or to its best knowledge,
violates any Applicable Law;

 

12.1.3 this Agreement is a legal, valid and binding agreement of ETON,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer and other similar
laws affecting creditors’ rights generally from time to time in effect and to
general principles of equity (including concepts of materiality, reasonableness,
good faith and fair dealing), regardless of whether considered in a proceeding
in equity or at law; and

 

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12.1.4 it has not been debarred, is not subject to debarment, and will not use,
in any capacity in connection with the obligations to be performed under this
Agreement, any person who has been debarred pursuant to Section 306 of the
United States Food, Drug and Cosmetic Act;

 

12.1.5 there is no Claim, suit, investigation, action or proceeding pending or
threatened against ETON before any court, governmental agency, or arbitration
panel which may in any way materially adversely affect the performance of its
obligations hereunder or transaction contemplated by this Agreement;

 

12.1.6 it has not and will not enter into any contract or any other transaction
with any Third Party or Affiliate that conflicts with or derogates from its
undertakings hereunder;

 

12.1.7 it has and will at all times during Term have requisite expertise,
experience, personnel, equipment and skill to perform its obligations hereunder;
and

 

12.1.8 it will not make nor will it promise to make any payment in violation of
the U. S. Foreign Corrupt Practices Act or similar applicable local, federal or
national law.

 

12.2 Sintetica Representation and Warranties. Sintetica represents and warrants
to ETON that:

 

12.2.1 it has the corporate power and authority to enter into this Agreement and
to consummate the transactions contemplated hereby;

 

12.2.2 neither the execution and delivery of this Agreement by it, nor its
performance hereunder, conflicts with or will result in any violation or breach
of, or constitutes (with or without due notice or lapse of time or both) a
default under any of the terms or conditions of any note, indenture, license,
agreement or other instrument or obligation to which it is a Party or by which
it or any of its properties or assets may be bound; or to its best knowledge,
violates any Applicable Law;

 

12.2.3 this Agreement is a legal, valid and binding agreement of Sintetica,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer and other similar
laws affecting creditors’ rights generally from time to time in effect and to
general principles of equity (including concepts of materiality, reasonableness,
good faith and fair dealing), regardless of whether considered in a proceeding
in equity or at law;

 

12.2.4 it has not been debarred, is not subject to debarment, and will not use,
in any capacity in connection with the obligations to be performed under this
Agreement, any person who has been debarred pursuant to Section 306 of the
United States Food, Drug and Cosmetic Act;

 

12.2.5 there is no Claim, suit, investigation, action or proceeding pending or
threatened against Sintetica before any court, governmental agency, or
arbitration panel which may in any way materially adversely affect the
performance of its obligations hereunder or transaction contemplated by this
Agreement;

 

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12.2.6 it will not divest, sell, fail to maintain or otherwise dispose of any MA
related to Products during the Term of this Agreement;

 

12.2.7 it has not and will not enter into any contract or any other transaction
with any Third Party or Affiliate that conflicts with or derogates from its
undertakings hereunder;

 

12.2.8 it has and will at all times during Term have requisite expertise,
experience, personnel, equipment and skill to perform its obligations hereunder;

 

12.2.9 it has the unencumbered right to the MAs and Products and the right,
power and authority to grant a license to ETON hereunder;

 

12.2.10 it has and will maintain until the end of the Term the capacity to
manufacture the Products in quantities ordered by ETON;

 

12.2.11 it will not make nor will it promise to make any payment in violation of
the U. S. Foreign Corrupt Practices Act or similar applicable local, federal or
national law;

 

12.2.12 it has obtained and will maintain all required licenses, authorizations,
and approvals required by federal, state, or local governmental authorities,
including the FDA and any other applicable regulatory agency to manufacture,
export and supply each Product for the Territory and in accordance with this
Agreement;

 

12.2.13 its manufacturing facilities applicable to Products conform, and shall
conform throughout the Term, in all respects to all Applicable Laws governing
such facilities and it shall maintain all records as are necessary and
appropriate to demonstrate compliance in the manufacture of each Product with
GMP, the Specifications, the applicable MA, the Quality Agreement and all
Applicable Laws;

 

12.2.14 all Product supplied to ETON shall: (i) meet the applicable
Specifications at the time of shipment; (ii) meet regulatory requirements of any
relevant regulatory authority in the Territory and Territory of Manufacture;
(iii) be manufactured, packaged, tested, stored and shipped in accordance with
applicable GMP, the MA, Applicable Law and this Agreement; (iv) not be
adulterated or misbranded under the U. S. Food, Drug and Cosmetic Act or any
other relevant laws and regulations as amended from time to time; and (v) be
produced, packaged, tested and stored in facilities that have been approved by
applicable regulatory authorities to the extent required by Applicable Laws;

 

12.2.15 Sintetica has not been informed of any proceeding or similar action
pending or threatened in writing seeking the revocation, suspension or amendment
of any MAs for reasons related to safety or efficacy;

 

12.2.16 The FDA has not requested or demanded in writing that Sintetica
discontinue any MAs for reasons related to safety or efficacy;

 

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12.2.17 Sintetica has not been informed of any pending or threatened in writing
product liability claims relating to any Product; and

 

12.2.18 Sintetica has not been informed of any pending or threatened in writing
Claims alleging infringement of a Third Party’s intellectual property rights
relating to any MAs or the use, manufacture, import, distribution, sale or offer
for sale of any Product.

 

12.3 Survival of Representations and Warranties. All representations and
warranties of ETON and Sintetica contained herein or made pursuant hereto shall
be ongoing during the Term and for a period of twelve (12) months thereafter. In
the event of any breach of the representations and warranties set forth herein,
the applicable Party shall immediately notify the other Party of such breach.

 

13. INDEMNIFICATION

 

13.1 Sintetica’s Indemnification Obligations. Sintetica shall indemnify, defend
and hold ETON and its owners, officers, directors, Affiliates, and employees
(collectively, “ETON Indemnified Parties”) harmless from and against any and all
Losses arising out of or resulting from any Third Party Claims made or suits
brought against ETON Indemnified Parties which arise or result from (i)
Sintetica’s material breach of any of its representations, warranties or
covenants set forth in this Agreement, or any of its obligations hereunder; (ii)
Sintetica’s manufacture, registration, handling, storage, use, transportation of
any Product on or after the Effective Date, including, without limitation, any
Claim for personal injury or death, to the extent such Third Party Claims arise
from the period of time commencing on or after the Effective Date and to the
extent such is not attributable to ETON’s breach of this Agreement or any
Applicable Laws; or (iii) Sintetica’s negligence or willful misconduct with
regard to the Products to the extent such is not attributable to ETON’s breach
of this Agreement or any Applicable Laws.

 

13.2 ETON’s Indemnification Obligations. ETON shall indemnify, defend and hold
Sintetica and its officers, directors, agents, Affiliates and employees
(collectively, “Sintetica Indemnified Parties”) harmless from and against any
and all Losses arising out of or resulting from any Third Party Claims made or
suits brought against Sintetica Indemnified Parties which arise or result from
(i) ETON’s material breach of any of its representations, warranties or
covenants set forth in this Agreement, or any of its obligations hereunder; (ii)
ETON’s marketing, distribution, or sale of any Product on or after the Effective
Date, including, without limitation, any Claim for personal injury or death, to
the extent such Third Party Claims arise from the period time commencing on or
after the Effective Date and to the extent such is not attributable to
Sintetica’s breach of this Agreement or any Applicable Law; or (iii) ETON’s
negligence or willful misconduct with regard to the Products to the extent such
is not attributable to Sintetica’s breach of this Agreement or any Applicable
Laws.

 

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13.3 Indemnification Procedure.

 

13.3.1 Notice of the matter which may give rise to such Claim shall be given in
writing by the indemnitee (the “Indemnitee”) to the Party against whom
indemnification may be sought (the “Indemnitor”) as soon as reasonably
practicable after such Indemnitee becomes aware of such Claim; provided,
however, that the failure to notify the Indemnitor shall not relieve it from any
liability that it may have to the Indemnitee otherwise unless the Indemnitor
demonstrates that the defense of the underlying Claim has been materially
prejudiced by such failure to provide timely notice. Such notice shall request
indemnification and describe the potential Losses and Claim giving rise to the
request for indemnification, and provide, to the extent known and in reasonable
detail, relevant details thereof. If the Indemnitor fails to give Indemnitee
notice of its intention to defend any such Claim as provided in this Section
13.3.1. the Indemnitee involved shall have the right to assume the defense
thereof with counsel of its choice, at the Indemnitor’s expense, and defend,
settle or otherwise dispose of such Claim with the consent of the Indemnitor,
not to be unreasonably withheld or delayed.

 

13.3.2 In the event the Indemnitor elects to assume the defense of a Claim, the
Indemnitee of the Claim in question and any successor thereto shall permit
Indemnitor’s counsel and independent auditors, to the extent relevant,
reasonable access to its books and records and otherwise fully cooperate with
the Indemnitor in connection with such Claim; provided, however, that (i) the
Indemnitee shall have the right fully to participate in such defense at its own
expense; (ii) the Indemnitor’s counsel and independent auditors shall not
disclose any Confidential Information of the Indemnitee to the Indemnitor
without the Indemnitee’s consent; (iii) access shall only be given to the books
and records that are relevant to the Claim or Losses at issue. The defense by
the Indemnitor of any such actions shall not be deemed a waiver by the
Indemnitee of its right to assert a Claim with respect to the responsibility of
the Indemnitor with respect to the Claim or Losses in question. The Indemnitor
shall not have the right to settle or compromise any Claim against the
Indemnitee (that the Indemnitor has defended pursuant to this Section 13.3.2)
without the consent of the Indemnitee which shall not be unreasonably withheld
or delayed. No Indemnitee shall pay or voluntarily permit the determination of
any Losses which is subject to any such Claim while the Indemnitor is
negotiating the settlement thereof or contesting the matter, except with the
prior written consent of the Indemnitor, which consent shall not be unreasonably
withheld or delayed.

 

13.3.3 This Section 13 shall survive termination or expiration of this
Agreement.

 

14. LIMITATION OF LIABILITY

 

14.1 NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, NEITHER PARTY SHALL BE
LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL OR EXEMPLARY
DAMAGES, WHETHER FORESEEABLE OR NOT, THAT ARE IN ANY WAY RELATED TO THIS
AGREEMENT.

 

15. MISCELLANEOUS

 

15.1 Governing Law; English Language. This Agreement shall be governed,
interpreted and construed in accordance with the substantive laws of
Switzerland. To the extent that it may otherwise by applicable, the Parties
hereby expressly agree to unconditionally waive and exclude from the operation
of this Agreement the United Nations Convention on Contracts for the
International Sale of Goods, concluded at Vienna, on 11 April 1980, as amended
and as may be amended further from time to time. This Agreement has been
negotiated and drafted by the Parties in the English language. Any translation
into any other language shall not be an official version thereof. In the event
any translation of this Agreement is prepared for convenience or for any other
purpose, the provisions of the English version shall prevail.

 

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15.2 Force Majeure. Neither Party shall be liable for non-performance or delay
in the fulfillment of its obligations when any such non-performance or delay
shall be occasioned by any unforeseeable cause beyond the reasonable control of
Sintetica or ETON, as the case may be, including without limitation, acts of
God, fire, flood, earthquakes, explosions, sabotage, strikes or labor
disturbances, civil commotion, riots, military invasions, war, terrorism,
failure of utilities, failure of carriers, or any acts, restraints,
requisitions, regulations, or directives issues by a Governmental Entity (“Force
Majeure Events”). In the event either Party is prevented from discharging its
obligations hereunder on account of a Force Majeure Event, such Party shall
notify the other forthwith and shall nevertheless make every endeavor in good
faith to discharge its said obligations even if in a partial or compromised
manner. If either Party is unable to perform its obligations hereunder as a
result of a Force Majeure Event for a period of thirty (30) days or greater,
then the other Party shall have the right, following sixty (60) days’ notice to
the other Party to terminate the Supply Term if the Force Majeure Event still
exists following such sixty (60) day notice period. Notwithstanding anything to
the contrary in this Agreement, any Customer Penalties attributable to such
Force Majeure Event shall be deducted from Net Profits.

 

15.3 Notices. All notices and other communications required or permitted to be
given or made pursuant to this Agreement shall be in writing signed by the
sender and shall be deemed duly given (a) on the date delivered, if personally
delivered, (b) on the date sent by telecopier with automatic confirmation by the
transmitting machine showing the proper number of pages were transmitted without
error, (c) on the Business Day after being sent by Federal Express or another
recognized overnight mail service which utilizes a written form of receipt for
next day or next Business Day delivery or (d) three (3) Business Days after
mailing, if mailed by U.S. postage-prepaid certified or registered mail, return
receipt requested, in each case addressed to the applicable Party at the address
set forth below; provided that a Party may change its address for receiving
notice by the proper giving of notice hereunder:

 

If to ETON, to:   ETON Pharmaceuticals, Inc. 21925 W. Field Pkwy, Suite 235 Deer
Park, Illinois, USA Attention: CEO   With a copy (which shall not constitute
notice) to:   ETON Pharmaceuticals, Inc. 21925 W. Field Pkwy, Suite 235 Deer
Park, Illinois, USA Attention: Legal   if to Sintetica, to:   Sintetica S.A. Via
Penate 5, 6850 Mendrisio, Switzerland Attention: CEO

 

15.4 Relationship of Parties. The status of the Parties under this Agreement
shall be that of independent contractors, without the authority to act on behalf
of or bind each other. Nothing in this Agreement shall be construed as
establishing a partnership or joint venture relationship between the Parties
hereto. No Party shall have the right to enter into any agreements on behalf of
the other Party, nor shall it represent to any person that it has such right or
authority. All persons employed by a Party shall be employees of such Party and
not of the other Party and all costs and obligations incurred by reason of any
such employment shall be for the account and expense of such Party.

 

15.5 Entire Agreement; Amendment. This Agreement (and all Exhibits attached
hereto) supersedes all prior discussions and agreements among the Parties with
respect to the subject matter hereof and contains the sole and entire agreement
among the Parties hereto with respect to the subject matter hereof. This
Agreement may not be amended or modified except in writing executed by the duly
authorized representatives of the Parties.

 

15.6 No Third-Party Beneficiaries. This Agreement is not intended to confer upon
any Person other than the Parties hereto any rights or remedies hereunder.

 

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15.7 Severability. Should any part or provision of this Agreement be held
unenforceable or in conflict with Applicable Law, the invalid or unenforceable
part or provision shall, provided that it does not affect the essence of this
Agreement, be replaced with a revision which accomplishes, to the greatest
extent possible, the original commercial purpose of such part or provision in a
valid and enforceable manner, and the balance of this Agreement shall remain in
full force and effect and binding upon the Parties hereto.

 

15.8 Assignment. The terms and provisions hereof shall inure to the benefit of,
and be binding upon the Parties and their respective successors and permitted
assigns. The Parties shall not assign, encumber or otherwise transfer this
Agreement or any part of it to any Third Party, without the prior written
consent of the other Party. Notwithstanding the foregoing, each Party may assign
the rights and obligations under this Agreement in whole, without consent of the
other Party, to a Third Party or Affiliate in connection with the transfer or
sale of all or substantially all of its business or in the event of a merger,
consolidation or change in control provided that the assignee assumes in writing
and becomes directly obligated to the other Party to perform all of the
obligations of assignor under this Agreement.

 

15.9 Waiver. No waiver of a breach or default hereunder shall be considered
valid unless in writing and 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.

 

15.10 Survival. Any provision which by its terms is intended to survive the
termination or expiration of this Agreement will survive the termination or
expiration of this Agreement and remain in full force and effect thereafter.

 

15.11 Counterparts; PDF. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original but all of which, taken
together, shall constitute one and the same instrument. PDF and facsimile
signatures shall constitute original signatures. The Parties agree that the
electronic signatures appearing on this Agreement are the same as handwritten
signatures for the purposes of validity, enforceability and admissibility
pursuant to the Electronic Signatures in Global and National Commerce (ESIGN)
Act of 2000, and Uniform Electronic Transactions Act (UETA) model law, or
similar applicable laws.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
date first above written.

 

ETON PHARMACEUTICALS, INC.       By:                                 Name:    
Title:           SINTETICA S.A.       By:     Name:     Title:    

 

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EXHIBIT A: PRODUCTS AND TRANSFER PRICES

 

Products:

[* * *]

 

Transfer Price:

[* * *]

 

31