Adamis Pharmaceuticals Corporation 10-Q [admp-10q_063020.htm]

 

Exhibit 10.6

 

*** Certain identified information has been omitted from this exhibit because it
is both (i) not material and (ii) would likely cause competitive harm to the
Registrant if publicly disclosed. Such omitted information is indicated by
brackets (“[…***…]” in this exhibit. ***

 

DISTRIBUTION AND COMMERCIALIZATION AGREEMENT

 

This Distribution and Commercialization Agreement (the “Agreement”) is made
effective as of the Effective Date (as defined herein) by and between Adamis
Pharmaceuticals Corporation, a corporation organized under the laws of Delaware,
with an office located at 11682 El Camino Real, Suite #300, San Diego,
California 92130 (“Company”) and USWM, LLC, a limited liability company
organized under the laws of Delaware, with an office at [***] (“USWM”). Company
and USWM may hereafter be referred to collectively as the “Parties” and
individually as a “Party”.

 

WHEREAS, Company, pursuant to the terms of this Agreement, would like to
manufacture and supply Products (as defined below) to USWM for distribution and
commercialization in the Territory (as defined below); and

 

WHEREAS, USWM, pursuant to the terms of this Agreement, would like to purchase
the Products from Company for distribution and commercialization in the
Territory.

 

NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements hereinafter set forth, the Parties hereto, intending to be legally
bound, hereby agree as follows:

 

1.            DEFINITIONS. In this Agreement, the following words shall have the
following meanings:

 

1.1.          “Act” means the Federal Food, Drug and Cosmetic Act of 1938,
including any amendments thereto and all regulations promulgated thereunder or
under any similar act or set of laws in the Territory.

 

1.2.          “Accrued Losses” means, for any particular Calendar Quarter(s)
occurring after the quarter in which Profitability has been reached, the amount
by which the calculation of “Net Profit” for the Calendar Quarter (or Calendar
Quarters, if and to the extent there are Accrued Losses in more than one (1)
Calendar Quarter) is less than zero dollars ($0.00).

 

1.3.          “Additional Costs” means, for any applicable Calendar Quarter, the
total costs, inclusive of (i) [***], (ii) [***], (iii) [***], and (iv) [***]; in
each case, only to the extent not overlapping with any amount deducted in the
calculation of Net Sales.

 

1.4.          “Affiliate” means, with respect to any Person, any Person which,
directly or indirectly, controls, is controlled by, or is under common control
with, the specified Person, but only for the period of time the Person first
identified in this Section 1.3 controls, is controlled by, or is under common
control, with the respective specified Person. For the purposes of this
definition, the term “control,” as applied to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management of that Person, whether through ownership of more than fifty percent
(50%) voting securities or otherwise.

 

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1.5.          “API” means the compound epinephrine and/or naloxone, as
applicable, and as further described in the Specifications.

 

1.6.          “Applicable Laws” means all laws, ordinances, rules and
regulations applicable to the Parties’ activities under this Agreement,
including, without limitation, the Manufacture, Development, or Processing of
API or Product, and the obligations of each Party as the context requires,
including, without limitation: (i) all applicable federal, state and local laws
and regulations of the Territory; (ii) the Act; and (iii) cGMP.

 

1.7.          “Bankruptcy Code” means the United States Bankruptcy Code (Title
11 of the United States Code).

 

1.8.          “Batch” means a specific quantity of the Product that is intended
to have uniform character and quality within specified limits, and is produced
according to a single Manufacturing order during the same cycle of Manufacture.

 

1.9.          “Batch Record” means Batch production and control records as set
forth in 21 C.F.R. § 211.188, as may be amended from time-to-time.

 

1.10.        “Books and Records” means the books and records maintained by the
Parties relating to the Products in the Territory and/or the obligations
hereunder in sufficient detail, in accordance with GAAP (to the extent
applicable) and in accordance with the terms of this Agreement.

 

1.11.        “Business” means, whether by Company or a Third Party, the
development, sale, marketing, manufacturing, distribution and commercialization
of the Products.

 

1.12.        “Business Day” means any day that is not a Saturday, Sunday or
other day on which commercial banks located in New York, New York are authorized
or required to be closed, as the case may be.

 

1.13.        “Calendar Quarter” means any of the three-month periods beginning
January 1, April 1, July 1 or October 1 of any calendar year.

 

1.14.        “Certificate of Analysis” “Certificate of Compliance” and
“Certificate of Release” (collectively the “Certificates”) means a document or
documents signed and dated by a duly authorized representative of Company
certifying that the Product Conforms to the Specifications as set forth in the
Quality Agreement and/or was prepared in compliance with cGMP, and in accordance
with Section 3.11.1.

 

1.15.        “cGMP” or “Good Manufacturing Practices” means current good
manufacturing practices as set forth in 21 C.F.R. Parts 210 and 211, as
established by the FDA or any similar set of laws, regulations, rules, or
practices in the Territory or otherwise applicable to Development, Manufacture,
Processing or supply of Product pursuant to this Agreement, as may be amended
from time-to-time.

 

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1.16.        “Claim” means any claim, action, suit, demand or other legal
assertion or proceeding brought by a Third Party against any of the USWM
Indemnified Parties and/or Company Indemnified Parties, as the case may be,
related to any Liability.

 

1.17.        “Commercialize” or “Commercialization” means the activities for
general management, legal, compliance, finance, regulatory, quality, medical
affairs, marketing, sales, sales management, pricing, promotion, and
distribution of the Products.

 

1.18.        “Commercially Reasonable Efforts” means, with respect to the
efforts to be expended by a Party with respect to any objective under this
Agreement, reasonable, diligent, good-faith efforts to accomplish such objective
as such Party would normally use to accomplish a similar objective under similar
circumstances exercising reasonable business judgment. It is anticipated that
the level of effort may change over time, reflecting changes in the status of
such Party and its circumstances, including, without limitation, the market for
the Products. “Commercially Reasonable” shall have the correlative meaning.

 

1.19.        “Company Indemnified Parties” means Company, Company’s Affiliates,
any of their successors or assigns, and any of their respective then-current or
then-former directors, officers, employees, contractors or agents.

 

1.20.        “Competitive Entry” means an event in which prior to the Company
receiving Regulatory Approval, another drug-device combination product obtains
regulatory clearance to begin marketing that [***], that could also be
reasonably expected to compete favorably against the Product in the Territory.

 

1.21.        “Components” means, collectively, and without limitation, all
container closure components (syringes, stoppers, etc.), raw materials,
excipients, device parts, and all Labels, necessary to Manufacture the Products
in accordance with the NDAs, the Drug Master Files, and the Specifications for
the Products.

 

1.22.        “Confidential Information” means all confidential, trade secret,
proprietary or nonpublic information of a Party, including, without limitation,
all Know-How, scientific information, clinical data, efficacy and safety data,
formulas, methods and processes, specifications, pricing information (including
discounts, rebates and other price adjustments), and other terms and conditions
of sales, customer information, business plans, and all other intellectual
property, which is disclosed or made available to the other Party regardless of
whether such information is marked, identified as or otherwise acknowledged to
be confidential at the time of disclosure to the other Party.

 

1.23.        “Conforming” or “Conform” means that the Product (a) conforms, in
all respects, to the applicable Specifications, (b) was Manufactured in
accordance with cGMP and Applicable Law, and (c) is not adulterated or
misbranded within the meaning of the Act or within the meaning of any applicable
state or municipal law in which the definitions of adulteration and misbranding
are substantially the same as those contained in the Act.

 

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1.24.        “Control” or “Controlled” means, with respect to any Know-How,
materials, Patents or other intellectual property rights, the legal authority or
right (whether by ownership, license or otherwise but without taking into
account any rights granted by one Party to the other Party pursuant to this
Agreement) of a Party to grant access, a license or a sublicense of or under
such Know-How, materials, Patents or other intellectual property rights to
another Party, or to otherwise disclose proprietary or trade secret information
to such other Party, without breaching the terms of any agreement with a Third
Party, or misappropriating the proprietary or trade secret information of a
Third Party.

 

1.25.        “Develop” or “Development” means any activities related to the
development of the Products, including but not limited to, all formulation,
process and method development, manufacturing, testing and release of all
clinical/registration and scale-up, Product validation, and packaging related to
the Products for use in the Territory, on-going Product stability testing in
accordance with the Specifications and Applicable Laws, maintaining
documentation of any stability testing conducted on the Products in accordance
with the Specifications and Applicable Laws, and any post-Launch stability
testing.

 

1.26.        “Domain Names” means any internet electronic addresses, uniform
resource locators and alphanumeric designations associated therewith, registered
with or assigned by any domain name registrar, domain name registry or other
domain name registration authority as part of an electronic address on the
internet, rights in social media accounts and social media pages, and all
applications for any of the foregoing.

 

1.27.        “Drug Master File” or “DMF” means, with respect to the Product API,
the drug master file or any supplement thereto, filed by Company or its
Affiliates or a Third Party with the FDA or other Regulatory Authority pursuant
to the Act or other Applicable Law.

 

1.28.        “Effective Date” means the date this Agreement is signed by the
last Party (as indicated by the date associated with such Party’s signature on
the signature page to this Agreement). Notwithstanding the foregoing, the
effective date with respect to USWM’s rights to the SYMJEPI product shall be the
effective date of the termination of the Sandoz Commercial and Distribution
Agreement to which Company is a party.

 

1.29.        “Executive Officer” means (a) the Chief Executive Officer of USWM
or another officer of USWM designated by USWM, or an Affiliate of USWM (the
“USWM Executive Officer”), and (b) the President of Company or another officer
of Company designated by Company (the “Company Executive Officer”).

 

1.30.        “Force Majeure Event” means an event impacting a Party due to
causes beyond such Party’s reasonable control, including without limitation,
acts of God, pandemics or epidemics, national or regional emergency, any actions
of governmental authorities or agencies, government order or law, embargoes or
blockades in effect on or after the Effective Date, war, hostilities between
nations (whether war is declared or not), terrorist threats or acts, civil
commotions, riots or other civil unrest, national industry strikes, lockouts,
sabotage, labor stoppages or slowdowns or other industrial disturbances,
shortage of adequate power or transportation facilities, fire, floods and acts
of nature such as typhoons, hurricanes, earthquakes, or tsunamis, or by any
other event or circumstance of like or different character to the foregoing
beyond the reasonable control of such impacted Party.

 

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

 

1.32.        “GAAP” means Generally Accepted Accounting Principles, as generally
and consistently applied by USWM, and as may be updated or revised from time to
time by a decision of the Financial Accounting Standards Board or related
accredited accounting entity.

 

1.33.        “Know-How” means any information or material that is confidential
and proprietary, including, without limitation, ideas, concepts, discoveries,
inventions, developments, improvements, know-how, trade secrets, designs,
devices, equipment, process conditions, algorithms, notation systems, works of
authorship, computer programs, technologies, formulas, techniques, methods,
procedures, assay systems, applications, data, documentation, reports, chemical
compounds, products and formulations, whether patentable or otherwise. Know-How
shall also include non-Confidential Information and material to the extent such
information and material first lost its confidentiality by virtue of its
disclosure in an issued patent or published patent application, a filing with a
Regulatory Authority or as part of a legal proceeding.

 

1.34.        “Labels” means any package, packaging material, labels, package
inserts, instructions for use documents, patient prescribing information and
medication guides, as may be applicable, designed for use with the Products,
pursuant to the terms of this Agreement, in accordance with Applicable Laws,
that is approved by the FDA.

 

1.35.        “Labeling” means the act of preparing the Product with approved
Labels (packaging in approved and serialized, as applicable, shipping
containers, boxes, cartons, applying approved prescribing inserts, etc.),
pursuant to the terms of this Agreement, in accordance with Applicable Laws.

 

1.36.        “Latent Defect” means any adulteration, contamination of or other
latent defect in any Product that is not readily detectible upon visible
inspection.

 

1.37.        “Launch” means the first commercial sale of Product in the
Territory by USWM or its Affiliates to a Third Party (including without
limitation, a wholesale, chain or retail pharmacy level) after receipt of the
Launch Quantity. For purposes of this definition, “first commercial sale” shall
exclude sales for test marketing, clinical-trial purposes or compassionate use.

 

1.38.        “Launch Quantity” means a mutually agreed quantity of Product
Delivered by Company to USWM in advance of a Launch.

 

1.39.        “Liabilities” or “Liability” 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, related to or arising from this Agreement or any of the
Products developed, made, sold, marketed or otherwise distributed by the
Parties.

 

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1.40.        “Licensed IP” means the Licensed Know-How and the Licensed Patents
any intellectual property rights Controlled by Company or its Affiliates that
Company reasonably determines are necessary or useful for the Manufacture or
Commercialization of the Products in the Territory.

 

1.41.        “Licensed Know-How” means Know-How Controlled by Company that is
necessary or useful for the Manufacture and Commercialization of the Products in
the Territory.

 

1.42.        “Licensed Patents” means any patents and patent applications
Controlled by Company now or in the future that are necessary or useful for
Commercialization and Manufacture of the Products in the Territory. An initial
list of Licensed Patents is set forth on Schedule A. Schedule A will be updated
by Company during the Term, as specified in Section 2.3.2 below.

 

1.43.        “Licensed Trademarks” means the trademarks and Domain Names listed
on Schedule A and any Domain Names Controlled by Company during the Term related
to such trademark.

 

1.44.        “Manufacture” or “Manufacturing” means the commercial synthesis,
manufacture, storage, handling, production, Processing, and Labeling of the
Products pursuant to this Agreement.

 

1.45.        “Manufacturing Facility” means the manufacturing facilities of the
Product Manufacturer, or such other facility under the control of the respective
Product Manufacturer that is approved by the FDA or other Regulatory Authority
for manufacturing the Products.

 

1.46.        “Marketing Year” means any calendar year during which the Products
are Commercialized in the Territory. The first Marketing Year for a Product
shall be the calendar year in which its Launch occurs.

 

1.47.        “NDA” means either new drug application 207534 (SYMJEPI) or 212854
(ZIMHI) filed by Company with the FDA, as may be amended or supplemented.

 

1.48.        “Net Profit” means the amount (which shall not be less than zero
dollars ($0.00)) calculated for a given Calendar Quarter equal to Net Sales of
the Products less the sum of (i) the Supply Price of Products sold by USWM in
such Calendar Quarter, and (ii) Additional Costs for the Products sold in such
Calendar Quarter. Prior to [***]. Upon [***]. Notwithstanding the foregoing, if
and to the extent [***], then [***]. The costs of (i) and (ii) in this
definition shall be calculated in accordance with GAAP, to the extent applicable
to such cost or calculation.

 

1.49.        “Net Profit Share” means an amount equal to the percentage of Net
Profits allocated to each Party as set forth on Schedule B.

 

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1.50.       “Net Sales” means the net sales recorded by USWM or any of its
Affiliates for sales of Product in the Territory to Third Parties as determined
in accordance with GAAP as consistently applied. The deductions booked on an
accrual basis by USWM and its Affiliates under GAAP to calculate the recorded
net sales from gross sales consist of, without limitation, the following applied
consistently:

 

(i)normal trade and cash discounts;

 

(ii)amounts repaid or credited by reasons of defects, rejections, recalls or
returns, inclusive of expiry and damage;

 

(iii)price protection and shelf stock adjustments, slotting fees and coupons;

 

(iv)rebates and chargebacks to customers and Third Parties (including, without
limitation, group purchasing organizations, Medicare, Medicaid, Managed
Healthcare and similar types of rebates);

 

(v)any amounts recorded in gross revenue associated with goods provided to
customers for free;

 

(vi)amounts provided or credited to customers through coupons and other discount
programs;

 

(vii)delayed ship order credits, discounts or payments related to the impact of
price increases between purchase and shipping dates or retroactive price
reductions;

 

(viii)fee for service payments to customers for any non-separable services
(including compensation for maintaining agreed inventory levels and providing
information); and

 

(ix)other reductions or specifically identifiable amounts deducted for reasons
similar to those listed above in accordance with GAAP.

 

There shall be no double-counting in determining the foregoing deductions. With
respect to the calculation of Net Sales: (i) Net Sales only include the value
charged or invoiced on the first arm’s length sale to a Third Party and sales
between or among USWM and its Affiliates shall be disregarded for purposes of
calculating Net Sales; and (ii) if a Product is delivered to the Third Party
before being invoiced (or is not invoiced), Net Sales will be calculated at the
time all the revenue recognition criteria under GAAP are met. In the case of any
sale or other disposal for value, [***], of any Product, or part thereof, other
than [***], Net Sales shall be calculated [***].

 

1.51.       “Person” means any natural person, corporation, firm, business
trust, joint venture, association, organization, company, partnership or other
business entity, or any government, or any agency or political subdivisions
thereof.

 

1.52.       “Process” or “Processing” means the compounding, filling, producing
and/or packaging of the API and raw materials to produce a Product in accordance
with the applicable Specifications and the terms and conditions set forth in
this Agreement.

 

1.53.       “Product” or “Products” means the applicable definition set forth on
Schedule D attached hereto.

 

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1.54.       “Product Liability Claim” means any product liability claims or
action asserted or filed by a Third Party, seeking damages or equitable relief
of any kind, relating to personal injury, wrongful death, medical expenses, an
alleged need for medical monitoring, consumer fraud or other alleged economic
losses, allegedly caused by the Products, and including claims by or on behalf
of users of the Products (including spouses, family members and personal
representatives of such users) relating to the use, sale, distribution or
purchase of the Products sold by or on behalf of USWM in the Territory.

 

1.55.       “Product Manufacturer” means the Third Party manufacturers of the
Product set forth in Schedule G attached hereto, or as otherwise agreed in
writing by the Parties.

 

1.56.       “Profitability” means the first Calendar Quarter in which a Net
Profit is greater than zero (0).

 

1.57.       “Quality Agreement” means the Quality Agreement that will govern the
production of the Products and that will be executed by and between USWM and
Company in connection with this Agreement.

 

1.58.       “Regulatory Approval” means the technical, medical and scientific
licenses, registrations, authorizations and approvals required for the
manufacture, use, storage, import, transport, marketing, promotion, selling, and
placing on the market of the Products (including post-approval changes, pricing
and Third Party reimbursement approvals, and Label approvals) by any Regulatory
Authority in the Territory. This includes any authorization necessary for the
Manufacture, distribution, marketing, promotion, offer for sale, use, import,
export or sale of the Products as the context may require within the Territory.

 

1.59.       “Regulatory Authority” means any applicable local, national or
supranational government agency involved in assessing the Products or granting
approvals for the marketing and sale of the Products in the Territory.

 

1.60.       “Regulatory Filing” means any filing made with a Regulatory
Authority.

 

1.61.       “USWM Indemnified Parties” means USWM, its Affiliates, any of their
successors or assigns, and any of their respective then-current or then-former
directors, officers, employees, contractors, agents, successors or assigns.

 

1.62.       “Specifications” means (i) with respect to the SYMJEPI 0.3mg
Product, [***], and (ii) with respect to the SYMJEPI 0.15mg Product, [***]. In
either case of (i) or (ii) in this Section 1.62, “Specifications” shall also
include the criteria set forth in the applicable Regulatory Approval required
for USWM’s acceptance of the respective Product from Company.

 

1.63.       “Supply Price” means the amount Company shall invoice USWM as
described in Schedule E attached hereto.

 

1.64.       “Territory” means 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, United States military bases and any other territories the Parties
mutually agree in writing to add to this Agreement, but excluding in all cases
[***]. For the avoidance of doubt, [***] does not include [***].

 

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1.65.       “Third Party” and the correlative term “Third Parties” means any
Person or Persons other than a Party or any of its Affiliates.

 

1.66.       Other Defined Terms. Each of the following definitions is set forth
in the Section of this Agreement indicated below:

 

Definition Section AAA 12.4 Accelerated Net Profit Share Payments 6.2.3 At Fault
Recall 5.3.2 Audited Party 6.5.2 Auditing Party 6.5.2 Branded Pharma Fee 6.3
Commercial Efforts Schedule F Commercial Plan 4.1 Commercial Milestone Payments
Schedule C Commercialization Plan 4.1 Company Elected Increase 4.2.4 Delivery
3.6.1 Dispute 12.3 [***] [***] Encumbrance 7.5.4 Failure to Supply 11.2.2(a)
Firm Commitment 3.2 Firm Order 3.4 Indemnitee 8.3 Indemnitor 8.3 Infringement
Action 11.2.2(b) Initial Term 11.1 JPT 4.2.1 Milestone Payments 6.1 Near-Term
Milestone Payments 6.1 Net Profit Share Payments 6.2.2 OPDP 4.5.2 Order
Confirmation 3.4 Other Agreements 3.5.1 Other Products 3.5.1 Pharmacovigilance
Agreement 5.4 Product Changes 3.12.3 Promotional Materials 4.5.1 Purchase Order
3.3 Quarterly Payment Date 6.2.2

 

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Definition Section Quarterly Report 6.2.2 Renewal Term 11.1 Rolling Forecast 3.2
Sales and Distribution Allocation Schedule F Sales Taxes 6.4 Sandoz 3.5.1 Term
11.1 USWM Legal Expenses 2.6.3

 

2.Exclusive distributorship; exclusivity.

 

2.1.         Appointment of USWM as Exclusive Distributor in the Territory.
Subject to the terms and conditions of this Agreement, (a) Company hereby
appoints USWM, and USWM hereby accepts, during the Term, to serve as the
exclusive distributor (even as to Company) of the Products in the Territory, and
(b) Company grants to USWM the exclusive right (even as to Company) to market,
sell, offer for sale, and otherwise Commercialize the Products in the Territory
under Company’s NDAs during the Term. Except as USWM may otherwise agree in
Other Agreements, USWM shall have the exclusive right to invoice and book all
Product sales in the Territory during the Term. Subject to the terms of this
Agreement, USWM shall not have the right to grant any rights as subdistributor
to any Third Party except to the extent USWM’s agreements with specialty
pharmacies, specialty distributors, group purchasing organizations, wholesalers
or similar entities that apply to Commercialization of the Products in the
Territory contemplate such entities acting as subdistributors.

 

2.2.         Supply of Product for Distributorship. As provided in Section 3,
Company shall supply (or have supplied) to USWM, and USWM shall purchase from
Company, its requirements of the Products for sale by USWM and its Affiliates in
the Territory pursuant to Section 2.1.

 

2.3.         Licensed IP.

 

2.3.1.       Subject to the terms and conditions of this Agreement (including,
without limitation, Section 12.9), Company hereby grants to USWM a fully paid
and exclusive (even as to Company), non-transferable and non-sublicenseable
(except with the prior written consent of Company to any such transfer or
sublicense, such consent not to be unreasonably withheld, denied, conditioned,
or delayed; provided however, that such consent shall not be required to the
extent the license is transferred or sublicensed to an Affiliate of USWM)
license under the Licensed IP for USWM to market, sell, offer for sale, and
otherwise Commercialize the Products in the Territory under this Agreement.

 

2.3.2.       Company shall update the listing of Licensed Patents set forth in
Schedule A on or before [***], so as to include information with respect to
[***]. If Company plans to [***], Company shall notify USWM in writing at least
[***] in advance of [***]. Following such notice, USWM will have the right, in
its sole discretion, to [***]. Effective as of [***], such [***] shall [***].

 

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2.4.         Licensed Trademarks. Subject to the terms and conditions of this
Agreement (including, without limitation, Section 12.9), Company hereby grants
to USWM a fully-paid, non-transferable and non-sublicenseable (except with the
prior written consent of Company to any such transfer or sublicense, such
consent not to be unreasonably withheld, denied, conditioned, or delayed;
provided however, that such consent shall not be required to the extent the
license is transferred or sublicensed to an Affiliate of USWM) license to use
the Licensed Trademarks only to market, sell, offer for sale and otherwise
Commercialize the Products in the Territory under this Agreement, which shall be
exclusive (even as to Company). USWM and its Affiliates shall display the
Licensed Trademarks on all Products and on or in all packaging, promotion, and
advertising materials to the extent practicable in a form and manner
substantially in accordance with the Trademark Usage Guidelines attached hereto
in Schedule H and otherwise in compliance with all Applicable Laws. At the
reasonable request of Company from time to time, USWM will provide copies of
packaging, Labels, advertising, promotional and other material of USWM or its
Affiliates referencing the Licensed Trademark to allow Company to confirm
compliance with the foregoing. In the event that Company has a reasonable
objection, made in good faith, to the Licensed Trademark practices of USWM or
reasonably believes in good faith that USWM is not complying with the Schedule H
guidelines, following an inspection in accordance with the preceding sentence,
as its sole remedy therefor, Company shall provide written notice to USWM of
such objection in reasonable detail to facilitate cure by USWM, and USWM shall
use all Commercially Reasonable Efforts to cure and remedy the objection.
Approval of any particular practices, or use of any Licensed Trademark, once
given by Company, shall continue in effect with respect to such practices, or
use, and any practices or use substantially consistent therewith, without need
for further approval.

 

2.5.         Licensed Trademark and Licensed Patent Filing, Prosecution,
Maintenance and Costs.

 

2.5.1.      Company shall be responsible for the preparation, registration,
filing, prosecution and maintenance of the Licensed Trademarks, at its sole cost
and expense using reasonable care and skill and using counsel reasonably
acceptable to USWM.

 

2.5.2.      Company shall prepare, file and prosecute any and all patent
applications and maintain any and all patents within the Licensed Patents.
Company shall pay for all prosecution, filing and maintenance fees and all other
costs for prosecution, filing and maintenance of any Licensed Patents associated
with the Product in the Territory. Company shall use all reasonable care and
skill and shall use counsel reasonably acceptable to USWM in performing its
obligations pursuant to this Section 2.5.2.

 

2.5.3.      In performing its obligations under Sections 2.5.1 and 2.5.2,
Company shall:

 

a)keep USWM reasonably informed of the filing and progress of all material
aspects of the prosecution of such trademark or patent application and the
issuance of patents from any such patent application or the registration of any
such trademark;

 

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b)provide USWM with a copy of such material patent application or trademark
application, amendments thereto, and other related correspondence to and from
patent and trademark offices, and, to the extent reasonably practicable, permit
USWM an opportunity to offer its comments thereon before making a material
submission to a patent and trademark office and Company shall consider in good
faith USWM’s comments;

 

c)consult with USWM concerning any decisions that could reasonably be expected
to materially affect the scope or enforcement of any issued claims or the
potential abandonment of such patent application, patent, trademark application
or trademark; and

 

d)notify USWM in writing of any material changes in the scope or status of such
patent, patent application, trademark, or trademark application.

 

2.6.         Enforcement of Licensed IP and Licensed Trademarks.

 

2.6.1.      If either Party believes or becomes aware of (a) any suspected
infringement of any Licensed IP or Licensed Trademark by a Third Party in the
Territory or (b) a Third Party allegation that any Licensed IP or Licensed
Trademark is invalid or unenforceable, including the receipt of a notice of
certification filed pursuant to the Hatch-Waxman Act claiming that any of the
Licensed IP is invalid, unenforceable or that no infringement will arise from
the manufacture, use or sale of the Product or a Competing Product by a Third
Party, or (c) Third Party allegation that the Product, or its use, development,
manufacture, or sale infringes a Third Party’s intellectual property rights in
the Territory, such Party shall notify the other Party within [***] of forming
such belief or awareness and provide the other Party with all details of such
infringement, claim, or notice, as applicable, that are known or possessed by
such Party.

 

2.6.2.      [***] shall have the first right, but not the obligation, to bring
an Infringement Action to enforce any Licensed IP or Licensed Trademark, defend
any declaratory judgment action concerning any Licensed IP or Licensed
Trademark, and take any other lawful action reasonably necessary to protect,
enforce, or defend any Licensed IP or Licensed Trademark, and control the
conduct thereof, and attempt to resolve any claims relating to any Licensed IP
or Licensed Trademark, including by (a) prosecuting or defending any inter
partes review, post-grant review, covered business method patent review,
opposition, derivation, interference, declaratory judgment, federal district
court, state court, US Patent and Trademark Office, US International Trade
Commission, or other proceeding of any kind, and (b) taking any other lawful
action that [***] believes is reasonably necessary to protect, enforce, or
defend any Licensed IP or Licensed Trademark. [***] has the right to prosecute
or defend any such proceeding in [***] own name or, if required by applicable
law or otherwise necessary or desirable for such purposes, in the name of [***],
and may join [***] as a party. [***] shall have the right to control the conduct
thereof and be represented by counsel of its own choice therein. Notwithstanding
the foregoing, if [***] does not bring an action with respect to any
commercially significant Third Party infringement within [***] of [***] or
earlier notifies [***] in writing of [***], then [***] shall have the right, but
not the obligation, to bring such an action and to control the conduct thereof.

 

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2.6.3.       Subject to the subsequent sentence, in the event a Party undertakes
the enforcement or defense of any Licensed IP or Licensed Trademark in
accordance with Section 2.6.2: (a) such Party will [***]; (b) the other Party
shall provide all reasonable cooperation and assistance, at the enforcing
Party’s expense, including [***]; (c) in the event [***] undertakes the
enforcement or defense, any recovery, damages, or settlement derived from such
suit, action, or other proceeding will be [***]; (d) in the event [***]
undertakes the enforcement or defense, any recovery, damages, or settlement
derived from such suit, action, or other proceeding will be [***]; and (e) such
Party may settle any such suit, action, or other proceeding, whether by consent
order, settlement, or other voluntary final disposition, without the prior
written approval of the other Party, provided that [***] shall not settle any
such suit, action, or other proceeding in a manner that [***] without [***]
prior written consent [***]. Notwithstanding the foregoing, in the event (i)
[***] undertakes the enforcement or defense of any Licensed IP or Licensed
Trademark in accordance with Section 2.6.2, and (ii) such enforcement or defense
results in a final judgment or settlement [***] exceeds [***], then [***] shall
be deducted from [***].

 

2.6.4.       If any suit, action, or other proceeding alleging invalidity or
non-infringement of any Licensed IP or Licensed Trademark is brought against
[***] or any Affiliate, [***], at its option, will have the right, within [***]
after commencement of such suit, action, or other proceeding, to [***].

 

2.7.         License of Third Parties’ Rights. In addition to the Company’s
obligations pursuant to Section 8.1, in the event it is necessary to obtain a
license in the intellectual property rights of the Third Party in order for a
Party to utilize any Licensed IP or Licensed Trademarks to conduct activities
for which it is responsible as contemplated by this Agreement, [***].

 

2.8.         Reserved Rights. Company hereby expressly reserves all rights under
the Licensed IP and Licensed Trademarks that are not expressly granted to USWM
under this Agreement, including, without limitation, rights under (a) the
Licensed IP and Licensed Trademarks to research, develop, make, have made,
import, use, sell, offer for sale, distribute, promote, market, and otherwise
Commercialize the Products outside of the Territory, and (b) the Licensed IP to
research, develop, make, have made, import, use, sell, offer for sale,
distribute, promote, market, and otherwise commercialize any and all products
other than the Products (including any product other than the Products that use
any syringe to administer products) worldwide, provided, however, that the
Company’s reservation of rights in this Section 2.8(b) does not apply with
respect to any products sold in the Territory containing epinephrine or naloxone
(but does apply to [***]), and (c) the Licensed IP and Licensed Trademarks to
Manufacture, have Manufactured and supply the Products for USWM and its
Affiliates pursuant to this Agreement and to make, have made, package and have
packaged the Products in the Territory for Company and its Affiliates and
licensees for use outside the Territory. If (i) the Company uses the Licensed IP
to develop and Commercialize, or permit the Licensed IP to be used to develop
and Commercialize any products containing epinephrine or naloxone in [***], or
(ii) the Company or any of its Affiliates, directly or indirectly (e.g., by
partnering with any Third Party), develops or Commercializes any products
containing epinephrine or naloxone in [***], then the Company agrees to [***].
Further, the Company retains the right to reference and use, and grant to
Company’s Affiliates and licensees (and their sublicensees) the right to
reference and use, all Regulatory Approvals for the Products in the Territory,
including the NDA and the documentation comprising the NDA, including all
submissions, reports and correspondence relating to the NDA, and all data and
information contained or referenced therein (including all data and information
from human factors, reliability and biocompatibility studies) as may be
necessary or useful (A) to perform Company’s obligations contemplated by this
Agreement, and (B) in connection with any of the activities described in Section
2.8(a), (b) and/or (c).

 

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2.9.         No Implied Licenses. Except as set forth in this Agreement, neither
Party shall acquire any license or other intellectual property interest, by
implication or otherwise, under or to any patents, patent applications, Know-How
or other intellectual property owned or Controlled by the other Party.

 

2.10.       Mutual Agreements.

 

2.10.1.       USWM hereby covenants and agrees that during the Term it shall not
(and cause its Affiliates not to), either itself or through a Third Party,
market, promote, sell or actively offer for sale the Products outside of the
Territory. Without limiting the generality of the foregoing, with respect to
countries outside of the Territory, USWM shall not (i) engage in any advertising
activities relating to the Products directed primarily to customers located
outside of the Territory (which excludes any participation in conferences,
congresses or scientific or medical meetings held throughout the world) or in
the Territory for distribution outside the Territory, or (ii) actively or
intentionally solicit orders from any prospective purchaser of the Products for
distribution outside of the Territory. To the extent permitted by Applicable
Law, if USWM receives any order from a prospective purchaser of the Products in
or for a country outside of the Territory, USWM shall immediately refer that
order to Company and shall not accept any such order or deliver or tender (or
cause to be delivered or tendered) the Products under such order. If USWM is
actually aware that a customer or distributor has actively engaged itself or
through a Third Party in the sale or distribution of the Products outside of the
Territory, then USWM shall, [***], unless otherwise agreed in writing by the
Parties.

 

2.10.2.       Company hereby covenants and agrees that during the Term it shall
not (and shall cause its Affiliates, licensees and subcontractors not to),
either itself or through a Third Party, market, promote, sell or actively offer
for sale the Products in the Territory. Without limiting the generality of the
foregoing, Company shall not (i) engage in any advertising activities relating
to the Products directed primarily to customers located in the Territory (which
excludes any participation in conferences, congresses or scientific or medical
meetings held throughout the world) or outside of the Territory for distribution
in the Territory, or (ii) actively or intentionally solicit orders from any
prospective purchaser of the Products for distribution in the Territory. To the
extent permitted by Applicable Law, if Company (or its Affiliates, licensees and
subcontractors) receives any order from a prospective purchaser of the Products
in or for the Territory, Company shall immediately refer that order to USWM. If
Company is actually aware that a customer or distributor has actively engaged
itself or through a Third Party in the sale or distribution of the Products in
or for the Territory, then Company shall [***].

 

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3.            MANUFACTURING AND supply services.

 

3.1.         Overview.

 

3.1.1.       Subject to the terms and conditions of this Agreement, Company
shall supply or have supplied to USWM, or its designee, the Products for
distribution and sale by USWM, or its Affiliates, in the Territory and Company
shall not supply such Products to any Third Party for sale in the Territory.
USWM agrees that in no event shall USWM or its Affiliates Manufacture Product,
have the Products Manufactured by a Third Party, or purchase the Products from
any party other than Company unless otherwise agreed in writing by the Parties.
Subject to the terms and conditions of this Agreement, Company shall be
responsible for all costs related to Manufacturing and supplying the Products to
USWM.

 

3.1.2.       Except as expressly provided in Sections 3.2, 3.3 and 3.5, USWM
makes no guarantee or commitment, directly or indirectly, that USWM will
purchase any minimum quantity of the Products under this Agreement, and Company
acknowledges that it will not conduct its business in reliance on any such
guarantee or commitment.

 

3.1.3.       The Parties acknowledge and agree that Company will use the Product
Manufacturers to Manufacture and supply (including making available to USWM for
shipping) the Products to USWM and its Affiliates under this Agreement. As of
the Effective Date, the Third Parties listed in Schedule G are the Product
Manufacturers. If Company desires to delegate such Manufacturing and supply
obligations to a Product Manufacturer other than a Third Party that is listed in
Schedule G [***] at any time during the Term, then Company shall [***]. For
purposes of clarity, except in the case of [***], it shall be deemed reasonable
for [***], if such delegation could [***]. Company shall be responsible for
performance of Company’s obligations hereunder to the extent performed on
Company’s behalf by such subcontractor as if Company were itself performing such
activities. The Parties acknowledge and agree that the terms “Company shall” or
“Company will” or the like, shall be deemed to be followed by the words “or the
Product Manufacturer, as a subcontractor of Company, will” or “or the Product
Manufacturer, as a subcontractor of Company, shall” or “Company shall require
that the Product Manufacturer shall” or the like, with respect to Company’s
Manufacturing and supply obligations herein.

 

3.1.4.       Company shall be responsible for all sourcing of all Components
used in the Manufacture and Processing of the Products (including API,
excipients and primary packaging Components). The Company shall cause the
Components to be manufactured under cGMP conditions, as required by Applicable
Law, and cause the Drug Master File to be maintained in good standing with the
FDA during the Term.

 

3.2.         Rolling Forecast. By the later to occur of (i) [***] after [***],
or (ii) [***] prior to [***], USWM shall submit to Company a rolling [***]
forecast of Product that USWM intends to order from Company (the “Rolling
Forecast”) for such period commencing on the Launch. The first [***] of each
Rolling Forecast shall be binding on the Parties (the “Firm Commitment”). The
remaining [***] of each Rolling Forecast shall be non-binding good faith
estimates for planning purposes. On or about the [***], USWM shall provide
Company with an updated Rolling Forecast of both the revised Firm Commitment and
the non-binding good faith estimate.

 

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3.3.         Purchase Order. USWM shall provide purchase orders to Company
concurrently with the submission of each Rolling Forecast which collectively
represent the quantity of the Products USWM would like Company to deliver to
USWM during the Firm Commitment (“Purchase Order”). Each Purchase Order shall
specify: (a) USWM’s internal purchase order number, (b) the desired Batch
quantity, and (c) the desired date for Delivery.

 

3.4.         Firm Order. Company shall supply to USWM those quantities of
Products ordered by USWM pursuant to any accepted Firm Order within the Firm
Commitment. Company shall confirm to USWM each Purchase Order, including
quantity, pricing and date for Delivery, in writing (“Order Confirmation”)
within [***] after receipt (or within [***] after receipt for a Purchase Order
in excess of the Firm Commitment). Each Order Confirmation shall either confirm
the delivery date requested in the Purchase Order or provide reasonable
alternative date for Delivery. Company may reject any Purchase Order in excess
of the Firm Commitment or otherwise not given in accordance with this Agreement;
provided, however, that Company shall [***] to supply USWM with quantities of
the Products which are in excess of the quantities specified in the Firm
Commitment, subject to [***]. For clarity, Company will not be considered in
breach or default of this Agreement if it does not supply quantities of the
Products which are in excess of [***]. USWM shall have [***] following the
receipt of an Order Confirmation, or such longer period as mutually agreed by
the Parties, to cancel a Purchase Order; thereafter the Purchase Order, under
the terms of the Order Confirmation, shall constitute a binding contact (“Firm
Order”). Each Firm Order shall be considered a binding, non-cancellable
commitment upon Company to produce and deliver such quantities of the Products
on the date for Delivery described there and upon USWM to purchase and pay for
such Products; however, the supply, purchase and sale of the Products shall be
governed solely by this Agreement and any additional or contrary terms or
provisions contained in any Purchase Order, Order Confirmation, Firm Order or
similar form or invoice or acknowledgment shall be void and have no force or
effect. Product shall be delivered to USWM no more than [***] from [***].

 

3.5.         Packaging; NDC. Except (i) as may otherwise be agreed by the
Parties in writing, and/or (ii) as set forth in Section 3.5.1, Company shall
supply USWM with the Products packaged in USWM’s trade dress under USWM’s NDC
labeler code. Company shall cooperate with USWM as required to support USWM
obtaining its own NDC labeler codes for the Products. USWM shall supply to
Company information and materials regarding USWM’s trade dress and NDC labeler
codes and any standards and instructions for Product packaging that USWM
requests in sufficient time to permit Manufacturing and supply of the Products
in accordance with this Agreement. USWM acknowledges that a failure by USWM to
provide the requirements for Labels including, but not limited to, USWM
trademarks, trade names, packaging graphics, serialization codes and NDC
numbers, within the timeframe specified by Company could delay the Delivery of
the Launch Quantity. USWM shall be responsible at its sole cost for ensuring
that all such information, materials, standards and instructions comply with
Applicable Laws. Company shall provide USWM with all documentation regarding the
Products reasonably requested by USWM to allow USWM to complete a country of
origin evaluation pursuant to Applicable Laws.

 

3.5.1.       Other Agreements. To the extent that the Parties enter in one or
more agreements (“Other Agreements”) with Sandoz Inc. (“Sandoz”) concerning
activities relating to the past, present or future commercialization,
distribution, marketing or sale of [***] (“Other Products”), as between USWM and
Company, (i) [***], and (ii) [***].

 

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3.6.         Delivery Terms.

 

3.6.1.       Company or the Product Manufacturer shall deliver the Product
ExWorks (Incoterms2010) in accordance with the delivery date determined
according to Section 3.4 (“Delivery”). For the avoidance of doubt, Company shall
not be responsible for the Products in transit, including any cost of insurance
or other transport fees for the Products, or any risks associated with transit,
storage and handling. Company shall provide delivery information [***]; however,
USWM shall be [***], in accordance with the terms of the Quality Agreement.

 

3.6.2.       If the requested quantity of the Products cannot be delivered on
the delivery date determined according to Section 3.4, Company shall notify USWM
within [***] of becoming aware of such delivery issue.

 

3.7.         Documentation. With each shipment of the Products, Company shall,
or shall cause its Product Manufacturer to, provide all documentation in the
possession or control of Company or the Product Manufacturer as is reasonably
required by any Regulatory Authority from time to time in connection with the
Manufacture of the Products.

 

3.8.         Storage. Company shall maintain and store all Product in accordance
with the Specifications and Good Manufacturing Practices at all times, pending
Delivery to USWM. Company’s actual out of pocket costs incurred to comply with
this Section 3.8 shall be [***].

 

3.9.         Serialization and Coding. Company shall implement Product
serialization and coding in accordance with Applicable Laws. USWM and Company
will work together to align on implementation. USWM acknowledges that a failure
by USWM to provide the requirements for serialization including, but not limited
to, GTIN, bar codes, bulk serialization numbers and links between Product
Manufacturer and USWM’s third-party logistics (3PL) provider, within the
timeframe specified by Company could delay the Delivery of the Products. The
cost of setting up the relevant equipment and the capability for online coding,
creating unique serial numbers and its aggregations including necessary IT
systems required for data storage and data exchange in order to pack the
Products to meet the regulations in the Territory shall be borne by Company or
its Product Manufacturer.

 

3.10.       Inspection and Acceptance.

 

3.10.1.       Company shall test and inspect each Batch of Product for
compliance with the Specifications prior to the release and shipment thereof to
USWM. Company shall provide a Certificate of Analysis, Certificate of
Conformance, Certificate of Release or other Certificate with each shipment of
each Batch of Product. The Certificate(s) must evidence that the Product
conforms to [***].

 

3.10.2.       USWM, or a qualified Third Party designated by USWM, may, but is
not obligated to, test and inspect the Products after receipt of each Batch of
Product. USWM may reject any shipment (or portion thereof) of Product if it does
not Conform based on such inspection by written notification to Company within
[***] of [***]. USWM shall be deemed to have accepted the Product if USWM fails
to give written notice of rejection within [***] of [***], except in the case of
[***] in which case such written notice of rejection must be provided within
[***]. The written notice of rejection shall be given to Company and shall
include identification of the lot number and description of the basis for
rejection.

 

Page 17 

 

 

 

3.10.3.       Following receipt of written notice of rejection of a particular
Batch of Product, Company shall notify USWM in writing within [***] of receipt
of such notice from USWM whether Company disagrees with the rejection and, if
Company does not provide such written notice within such [***] period, Company
will be deemed to agree with such rejection. If Company provides written notice
of disagreement with the rejection in accordance with the preceding sentence,
the following procedures shall apply: the Parties shall review the test results
and attempt to reach agreement as to whether or not the Product fails to Conform
and if they fail to reach agreement within [***] after delivery of the written
notice of disagreement provided by Company to USWM, the Parties shall designate
a mutually acceptable Third Party laboratory to make a determination on such
matter from a sample obtained from the rejected Batch of Product. The decision
of the Third Party laboratory shall be binding on all Parties hereto and all
expenses related to such Third Party investigation shall be borne by the Party
found to have been mistaken. Should such Third Party laboratory confirm USWM’s
claim, Company shall, at USWM’s request, promptly provide USWM with [***].

 

3.10.4.       If the Parties agree to the rejection of any Batch (or portion
thereof) of Product or the Third Party laboratory confirms rejection of any
Batch (or portion thereof) of Product, USWM shall return, destroy, or cause to
be destroyed any rejected Product to Company at Company’s expense to an address
that Company shall designate within [***] of the agreement or Third Party
laboratory determination regarding rejection, as applicable, and Company, at
USWM’s request, will promptly provide USWM with a credit or refund of the Supply
Price for the rejected Product if USWM has already paid Company for such
rejected Product or will promptly provide replacement Product to USWM subject to
USWM’s payment of the Supply Price for replacement Product unless USWM has
already paid Company for such rejected Product, together with [***]. If Company,
however, does not agree with USWM’s claim of non-compliance with the
Specifications or other defect, USWM shall not be obligated to return the
rejected Product to Company until after a final determination is made by a Third
Party laboratory that such Product does not comply with the applicable
Specifications or is otherwise defective. Absent such designation of address,
USWM shall ship rejected Product to the location of the Manufacturing Facility.
If the Third Party laboratory determines that the Batch was not correctly
rejected, then USWM shall pay Company the Supply Price for such Batch and for
any replacement Product (for purposes of clarity, USWM’s payment of the Supply
Price for such Batch shall not be a duplicative payment).

 

3.11.       Supply Price and Payment.

 

3.11.1.       Solely to the extent otherwise included in the Supply Price (as
the term is defined in Section 1.63 hereto), Company shall send an invoice to
USWM covering such Firm Order. The Supply Price shall be invoiced in U.S.
dollars.

 

3.11.2.       USWM shall pay each undisputed invoice no later than [***] after
receipt of such invoice by USWM. Payments by USWM to Company, including, but not
limited to, any final payment by USWM to Company, shall not be deemed as an
acknowledgement by USWM that Company has performed properly or that Company has
fulfilled its contractual obligations, regardless of whether the respective
payments were made with any reservation.

 

Page 18 

 

 

 

3.11.3.       The Supply Price may be adjusted based on (i) [***], (ii) [***],
and (iii) [***] upon [***] prior written notice to USWM; provided, however, that
Company shall provide USWM reasonable documentation [***], and USWM may audit
such [***] pursuant to Section 3.13.

 

3.11.4.       During the Term, Company shall [***] to [***].

 

3.12.       Specifications & Quality.

 

3.12.1.       Company shall cause the Product Manufacturer to Manufacture the
Products in strict conformity with the Specifications. Further, Company
represents that, as of the Effective Date and during the Term, the Product
Manufacturer holds the required manufacturing authorization pursuant to
Applicable Laws for the Manufacture of the Products.

 

3.12.2.       Within [***], USWM and Company (and/or the Product Manufacturer,
as applicable) shall enter into a mutually agreeable Quality Agreement relating
to the Products. Company shall maintain a current Quality Agreement and quality
control system compliant with the Regulatory Authority for the Products to be
delivered hereunder. Such a system shall include [***]. Each Batch of Product to
be supplied to USWM hereunder shall be subject to a quality control inspection
by Company in accordance with Company’s then current quality assurance standards
and the approved Regulatory Filings. In the event a conflict arises between the
Quality Agreement and this Agreement, the term contained in the Quality
Agreement shall control with respect to quality-related matters relating to the
Products.

 

3.12.3.       [***] modifications, changes, additions or deletions to the (1)
[***]; (2) [***]; (3) [***]; (4) [***]; (5) [***]; (6) [***]; (7) [***]; or (8)
[***], which Company intends to carry out (hereinafter, “Product Changes”), must
be evaluated and documented by [***]. Prior to implementation of any material
Product Change, and in any event, within [***] from [***], Company agrees to
provide reasonable notice to USWM in writing of such change and Company shall
consider in good faith any input timely provided by USWM regarding any Product
Changes. Reasonable notice applies in (1) circumstances in which [***], and (2)
circumstances where [***]. In such circumstances, following reasonable notice,
USWM shall be informed of [***]. If appropriate and upon considering in good
faith timely input provided by USWM, Company shall [***].

 

3.12.4.       Company is responsible for storing and maintaining retention
samples of each Batch of Product produced for USWM for [***] in accordance with
Good Manufacturing Practices and the terms of the Quality Agreement. Company
will take measures to ensure that the quantity of retention samples shall be of
sufficient quantity [***].

 

3.12.5.       Company shall be responsible for the testing and generation of
stability data for the Products in accordance with the cGMP and ICH guidelines.

 

Page 19 

 

 

 

3.12.6.       Company shall be responsible for confirming that all facilities
(including the Manufacturing Facility), utilities, equipment and the processes
utilized to Manufacture the Products are satisfactorily validated according to
the guidelines of all applicable Regulatory Authorities, Applicable Laws, and
cGMP.

 

3.12.7.       Records which include the information relating to the
Manufacturing, packaging and quality operations for each Batch of Product shall
be prepared by Company for each lot at the time such operations occur. Such
records shall be prepared in accordance with Applicable Laws and Company’s
standard operating procedures. Company shall keep Batch Records, and all
associated batch documentation (i.e., deviations, testing data, testing results,
Batch release documentation, etc.), for each Batch of Product until the later of
(i) the period of time required by Applicable Law, or (ii) [***].

 

3.13.       Manufacture and Supply Records; Audit Rights.

 

3.13.1.       Company shall maintain (a) complete, accurate and systematic
written records of the Manufacture and supply of the Products in the Territory
to USWM, and (b) records relating to quality and Manufacturing processes and
control steps. Such records shall be maintained for a period of at least [***]
or longer if required under Applicable Laws or the Quality Agreement.

 

3.13.2.       On reasonable prior notice, Company shall allow employees or
authorized representatives of USWM and/or its Affiliates to perform an audit of
any documents, records or any facility, including the Manufacturing Facility,
involved in the Processing or Manufacturing of the Products, including, but not
limited to, any such documents and records and facility related to the API and
Product intermediates, subject to the following sentence with respect to
subcontractors. In case that any subcontractor is involved (including, without
limitation, any Product Manufacturer), Company shall (i) upon request, provide
USWM and/or its Affiliates with the report of the audits carried out by or on
behalf of Company of any such subcontractor or any other documents and
information necessary for USWM to verify compliance of such subcontractors with
Applicable Laws and this Agreement; and (ii) use [***] to cause [***].

 

3.13.3.       USWM shall also have the right to conduct “for-cause” audits to
address significant Product or safety concerns as discovered through Product
failures related to the Manufacture of the Products. Product failures shall
include [***]. USWM shall notify Company in writing in advance of the audit and
thereafter, with Company’s reasonable assistance, the Product Manufacturer and
USWM shall mutually determine the timing of the audit.

 

3.13.4.       In the event Company’s (or its Product Manufacturer’s)
Manufacturing, packaging, testing or storage facility(ies), including the
Manufacturing Facility, producing the Products is/are inspected by
representatives of any Regulatory Authority in connection with Company’s (or its
Third Party contractor’s) Manufacture of the Products, Company will notify USWM
promptly upon learning of such inspection, and will, to the extent permitted by
Applicable Laws and Company’s agreements with its Third Party contractors,
supply USWM with copies of any correspondence or communications or portions
thereof which relate to the Products.

 

Page 20 

 

 

 

3.14.       Manufacturing Facility. As of the Effective Date, the Manufacturing
Facility is deemed to be Catalent [***]. As of the Effective Date, the
Manufacturing Facility has any and all Regulatory Approvals required for the
Manufacture, Labeling, packaging, and exportation of the Products in accordance
with the Specifications, cGMP and Applicable Laws, and thereafter Company will
use [***] to ensure that the Manufacturing Facility shall maintains any and all
such Regulatory Approvals.

 

4.            COMMERCIALIZATION.

 

4.1.         Commercialization. USWM shall Commercialize the Products in the
Territory in accordance with Applicable Law and shall use [***], including
[***], to Commercialize the Products in the Territory in accordance with [***].

 

4.2.         Joint Project Team.

 

4.2.1.       Formation. Promptly after the Effective Date, the Parties will form
a Joint Project Team (“JPT”) comprised of [***] representatives from Company and
[***] representatives from USWM. [***].

 

4.2.2.       Purposes. The purpose of JPT meetings will be to discuss the Launch
and Commercialization of the Products according to the applicable provisions of
this Agreement, including planned Commercial Efforts, improvements to [***], as
well as [***]. Additionally, the JPT shall discuss and approve the Sales and
Distribution Allocation for the future Marketing Year.

 

4.2.3.       Disputes. The JPT will operate [***]. The decisions made and the
actions taken by the JPT will be made with the interests of both Parties duly
considered in good faith. Subject to the terms of this Agreement and Applicable
Law, the decisions of the JPT will be made in accordance with the discretion and
business judgement of the members thereof. [***].

 

4.2.4.       Limited Authority. For purposes of clarity, the failure of the JPT
in [***] will not be deemed to constitute a breach of this Agreement by either
Party. In no case shall the JPT have any authority to (i) [***], (ii) [***],
(iii) [***], and/or (iv) [***].

 

4.2.5.       Company Elected Increase. If the JPT is unable to [***], the
Company may elect, at its sole discretion, to [***].

 

4.2.6.       Meetings. The JPT will meet in person or by teleconference on a
quarterly basis, or at such other frequency as the JPT agrees. The Parties will
agree upon the time and place of such meetings. Within [***] days after each
meeting, [***].

 

4.3.         Sales and Distribution; Returns. USWM shall be responsible for
handling all returns, recalls, order processing, invoicing and collection,
distribution, and/or receivables for the Products Commercialized by USWM in the
Territory pursuant to this Agreement. The cost of any recall shall be allocated
pursuant to Section 5.3. USWM shall book all sales of the Products in the
Territory.

 

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4.4.         Pricing. The JPT will discuss pricing strategy in general, however,
USWM will have final discretion in determining the pricing, terms of sale,
marketing, and selling decisions for the Products in the Territory.

 

4.5.         Advertising and Promotional Materials.

 

4.5.1.       Excepting for such advertising and Promotional Materials, if any,
which are provided to USWM by the Company, USWM shall prepare and produce all
Promotional Materials for Commercialization of the Products in the Territory. In
relation to the Products, USWM shall determine the manner in which information
will be presented and described to the medical community in any Promotional
Materials or other materials related to the Products for sale in the Territory.
USWM shall own all right, title and interest in and to any and all such
Promotional Materials it develops, including all applicable copyrights,
trademarks (other than the Licensed Trademarks, which are licensed to USWM under
Section 2.4), program names and domain names for Products to be sold by USWM in
the Territory. For purposes of this Agreement, “Promotional Materials” means all
sales, marketing, and advertising materials as defined in the Act for the
Products to be sold by USWM in the Territory.

 

4.5.2.       USWM shall be solely responsible for developing, filing and making
decisions with respect to all Promotional Materials and associated regulatory
materials, including all filings and interactions with the FDA’s Office of
Prescription Drug Promotion (“OPDP”). The Parties shall jointly notify the FDA
of Company’s delegation of such responsibility for the Products to be sold by
USWM in the Territory to USWM. USWM shall provide Company with a copy of each
such filing promptly after submission thereof. For the avoidance of doubt, USWM
will retain exclusive authority and responsibility for the filing of Promotional
Materials with the FDA on Form 2253 (or such other form as required by the FDA)
or as otherwise required by, or permitted under, Applicable Laws. USWM shall
promptly, but in any case, within three (3) Business Days of receipt, provide
Company with complete copies of all material correspondence relating to
Promotional Materials for the Products with Regulatory Authorities, including
OPDP.

 

4.5.3.       USWM Trademarks. All trademarks, trade names and packaging graphics
owned or licensed by USWM and intended to be used in connection with the
Products will be chosen by USWM in its sole discretion. Additionally, in the
event the Licensed Trademark(s) cannot be used in connection with the
Commercialization of the Products in the Territory because of legal, safety
and/or regulatory reasons, USWM shall select and work with Company to obtain
regulatory acceptance for an alternative trademark or trade name for such use
and shall file and register appropriate registrations for such trademark with
the USPTO. USWM shall own such alternative trademark and all goodwill associated
therewith.

 

4.6.         Medical Information. USWM shall determine procedures for responding
in a consistent manner to medical information requests on the Products in the
Territory. USWM shall be solely responsible for responding to all medical
information requests and for providing support and responding to product and
medical complaints relating to the Products in the Territory; provided, that,
Company shall cooperate with and assist USWM upon USWM’s reasonable request with
regards to such activities.

 

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5.            regulatory matters.

 

5.1.         Regulatory Approval; Regulatory Authority Communications.

 

5.1.1.       Except as otherwise mutually agreed by the Parties, Company will be
responsible for all regulatory and registration activities for the Products in
the Territory at Company’s sole cost and expense (except as set forth in Section
4.5.2), including, but not limited to, being solely responsible for interacting
with FDA for the purpose of obtaining and maintaining the Regulatory Approval
for the Products. Except as otherwise mutually agreed by the Parties, Company
shall be responsible for conducting all nonclinical and clinical studies; device
design and testing; chemistry, manufacturing and controls related activities,
and manufacturing process validations necessary for Regulatory Approval or
required by a Regulatory Authority as a condition to, or in connection with the
grant or maintenance of a Regulatory Approval, encompassing both registration
and post-marketing commitment/ requirement activities. At each meeting of the
JPT, Company will present and discuss the status of all of the registration
and/or post-marketing commitment/requirement activities that Company has
performed or caused to be performed pursuant to this Section 5.1.1 since the
last meeting of the JPT. Company shall perform any work necessary in response to
FDA deficiencies connected with initial registration, application supplement, or
post-marketing commitment/requirement and Company shall keep USWM informed of
the status of all such activities on a regular basis.

 

5.1.2.       In addition to the requirements set forth in 5.1.1, Company shall
provide USWM with written notice of meetings with the FDA regarding the
Products. Company shall consider in good faith any input timely provided by USWM
regarding regulatory activities relating to the Products in the Territory and
will promptly update USWM on the results of such regulatory activities. Upon
request, Company shall promptly provide to USWM complete copies of all material
correspondence with Regulatory Authorities regarding the Products.

 

5.1.3.       Company acknowledges that it is not authorized to and agrees that
it shall not interact directly with government agencies, entities or authorities
on behalf of USWM without the prior written authorization of USWM. In the event
that such interaction with government agencies, entities or authorities is
authorized in writing, it is agreed that certain due diligence, additional
inquiries, and potentially other agreed upon measures will be required prior to
or coincident with such authorization being granted and that this Agreement may
also need to be amended to include certain standard provisions including regular
satisfactory reviews and updated due diligence by USWM and its agents relating
to Company.

 

5.2.         Regulatory Costs. Company shall be responsible for paying all
regulatory fees that are payable to a Regulatory Authority relating to the
Products, including, without limitation, the PDUFA program user fee for the
Products (and any other similar or related fees required by similar laws, rules
or regulations, including any annual fees owed to any Regulatory Authority with
respect to the Products).

 

5.3.         Product Withdrawals and Recalls.

 

5.3.1.       The Parties agree that each Party shall consult with the other
Party and the Parties shall jointly cooperate in all recalls, but that Company
shall be responsible for providing proper notification of a Product recall or
Product withdrawal to the applicable Regulatory Authority(ies). With respect to
the Products Commercialized by USWM in the Territory, in the event that: (a) any
Regulatory Authority in the Territory issues a request, directive or order that
Product be recalled or retrieved; (b) a court of competent jurisdiction orders
that Product be recalled or retrieved; or (c) USWM reasonably determines, after
reasonable, good faith discussion with Company, that Product should be recalled
or retrieved, USWM shall promptly notify Company of such event and both Parties
shall cooperate in relation to the recall. USWM shall be responsible for the
final recall decision, communication to the public, and the logistic process
regarding returned goods.

 

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5.3.2.       [***] shall be responsible for administering any recall and [***]
shall bear the cost of a recall and shall reimburse [***] for [***], in each
case including [***], unless the recall is determined to be caused by [***], in
which event [***] shall bear the cost of that recall and shall reimburse [***]
for [***].

 

5.4.         Safety Reporting. Within [***], the Parties shall enter into a
mutually agreeable, commercially reasonable pharmacovigilance agreement for the
purpose of providing detailed procedures regarding the exchange of safety data
and information regarding the Products and for ensuring compliance with
reporting requirements of Regulatory Authorities (the “Pharmacovigilance
Agreement”). The Pharmacovigilance Agreement shall provide, among other things,
that Company shall (at its sole cost) be, or shall cause a Third Party to be,
responsible for maintaining the safety database for the Products and reporting
safety-related information to the FDA; provided, that, Company shall be
responsible for performance of Company’s obligations under the Pharmacovigilance
Agreement to the extent performed on Company’s behalf by such Third Party as if
Company were itself performing such activities. [***] will be [***] responsible
for [***] incurred by [***] related to [***]. In the event a conflict arises
between any pharmacovigilance term in this Agreement and a term in the
Pharmacovigilance Agreement, the term contained in the Pharmacovigilance
Agreement shall prevail.

 

5.5.         Compliance with Government Pricing, Government Programs and
State/Federal Pricing Transparency Regulations. USWM shall be solely responsible
for all federal, state and local government purchasing, pricing or reimbursement
programs and private purchasing, pricing or reimbursement programs with respect
to the Products sold by USWM pursuant to this Agreement, including taking all
necessary and proper steps to execute agreements and file other appropriate
reports and other documents with Regulatory Authorities and private entities
necessary for coverage of the Products under state, federal or other health care
programs and to list the Products under such agreements as appropriate. USWM
shall be responsible for categorizing the Products under federal, state and
local government pricing or reimbursement programs in the Territory. USWM shall
respond to all state and federal regulations on pricing transparency. In
connection with the foregoing, Company will promptly provide USWM with any
information and supporting documentation with respect to the Products, which is
within Company’s possession or control, that is required to support all
government pricing calculations including product classifications, baseline AMP
value and period or state/federal regulations/legislation related to government
pricing, Medicaid liabilities or pricing transparency regulations (current and
future).

 

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6.            FINANCIALS.

 

6.1.         Milestone Payments. During the Term, USWM will make: (a) the
one-time, non-refundable, non-creditable Near-Term Milestone Payments, and (b)
the one-time, non-refundable, non-creditable Commercial Milestone Payments, both
set forth on Schedule B and Schedule C, respectively (collectively the
“Milestone Payments”) to the Company upon successful completion of the
corresponding milestone events. Each Party shall promptly notify the other Party
upon the occurrence of a milestone (as applicable) which may occur prior to the
completion of a Quarterly Report referenced in Section 6.2.2 below, and the
Company shall thereafter issue an invoice to USWM for the applicable Milestone
Payment. Milestone Payments shall be due as described in Schedule B and Schedule
C.

 

6.2.         Net Profit Sharing.

 

6.2.1.       Net Profit Allocation Percentages. Except as otherwise provided
herein, during the Term of this Agreement, Company will be entitled to a payment
from USWM equal to its allocated percentage of Net Profit Share, as more fully
set forth on Schedule B attached hereto. USWM shall retain the remaining
percentage of Net Profit Share.

 

6.2.2.       Net Profit Share Payments. All Net Profit Share allocation payments
made by USWM to Company will be made on a quarterly basis. Within [***] after
the end of an applicable Calendar Quarter, USWM shall provide Company with a
report showing units sold, Net Sales, deductions from Net Sales, the Net Profit
Share allocations and [***] (“Quarterly Report”). Within [***] after the end of
the applicable Calendar Quarter (such date, the “Quarterly Payment Date”), USWM
shall provide Company with a cash payment equal to the Net Profit Share stated
in the latest Quarterly Report.

 

6.2.3.       Accelerated Net Profit Share Payments. In the absence of [***],
beginning with [***], USWM shall pay [***] to the Company as defined in Schedule
B until [***]. After such [***], the [***] will revert to [***]. If [***]
precedes [***], then no Accelerated Net Profit Share Payments shall be due,
however, [***].

 

6.2.4.       [***] Reports. In addition to the quarterly reports described in
Section 6.2.2, within [***] after [***], USWM shall provide Company with a
report (in Microsoft excel format or any other format reasonably agreed to by
the Parties) that includes (i) [***], and (ii) [***].

 

6.3.         Branded Prescription Drug Fees. By means of [***], the Parties
shall [***] any applicable Annual Branded Prescription Drug Fees owed with
regard to the Products, including 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
(the “Branded Pharma Fee”). Each [***], USWM shall [***]. Such amount is
subjected to [***].

 

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6.4.         Taxes. All amounts payable by USWM to Company under this Agreement
are exclusive of any tax, levy or similar governmental charge that may be
assessed by any jurisdiction, whether based on gross revenue, the Manufacturing,
sale, storage, Delivery, possession or use of the Products, the execution or
performance of this Agreement or otherwise. If any payment under this Agreement
by USWM to Company is subject to withholding tax under Applicable Law, USWM
shall have the right to withhold any and all such taxes, which shall be paid to
the appropriate taxing authority for the account of Company and such payments to
Company shall be net of the applicable withholding taxes. USWM shall provide to
Company appropriate proof of payment of any and all taxes so withheld. The
Parties agree to cooperate to minimize any withholding taxes (including
providing each other with any exemption certificates or other documentation
establishing that no taxes are due, or such taxes are due at a reduced rate).
Additionally, all charges made by Company to USWM hereunder for the supply of
the Products is exclusive of any sales, use, value added, or similar tax
customarily borne by a purchaser (“Sales Taxes”). If Company has a legal
obligation to collect or charge Sales Taxes, [***] and [***]. Other than as
provided in this Section 6.4, each Party shall be responsible for its own taxes,
including but not limited to any tax, fee, assessment or other charge based on
or measured by the capital or net income, or any other tax imposed by any
jurisdiction.

 

6.5.         Financial Records; Audits.

 

6.5.1.       During the Term, the Parties shall maintain complete and accurate
Books and Records for the purpose of determining the amounts paid or payable
pursuant to this Agreement. Such Books and Records shall be kept for such period
of time required by Applicable Laws, but no less than at least [***]. Such
records shall be subject to inspection in accordance with Section 6.5.2.

 

6.5.2.       Upon [***] prior written notice and no more than [***] for each
category of costs or revenues, a Party (“Audited Party”) will permit its Books
and Records for the prior calendar year to be examined for any cost, expense,
Supply Price, Net Sales or Net Profit for which it may owe a payment to the
other Party [***], during normal business hours, by an independent auditor
appointed by the other Party (“Auditing Party”) and reasonably acceptable to the
Audited Party, and at the Auditing Party’s expense (and the Auditing Party shall
not compensate such auditor on a contingent fee basis), to the extent necessary
to verify the accuracy of the amounts paid by the Audited Party to the Auditing
Party pursuant to this Agreement. Any information received as a result of such
inspection will be maintained as the Audited Party’s Confidential Information.
In the event that an examining auditor concludes any underpayment or
overcharging by any Party, the auditor will specify such underpayment or
overcharging in a written report, along with the information on which such
conclusion is based. This report will be shared promptly with the Audited Party.
The underpaying or overcharging Party shall remit such underpayment or reimburse
such overpayment to the underpaid or overcharged Party within [***] of the date
of such report, provided, that if a Party disputes the conclusion of the
auditor, the Parties will attempt to resolve the dispute according to Section
12.3. Further, if the audit for an audited period shows an underpayment or an
overcharge by any Party for that period in excess of [***] of the amounts
properly determined, the underpaying or overcharging Party, as the case may be,
shall reimburse the applicable underpaid or overcharged Party conducting the
audit, for its respective audit fees and reasonable out-of-pocket costs in
connection with such audit, which reimbursement shall be made within [***] after
receiving appropriate invoices and other support for such audit-related costs.

 

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6.6.         Disclaimer. Notwithstanding USWM’s obligations to meet the
Commercial Efforts set by the JPT, Company acknowledges that USWM makes no
further representation, warranty or covenant, either express or implied, that
(a) USWM will succeed in Commercializing the Products in the Territory, (b) the
Products will achieve any particular sales level, or (c) achievement of any
Commercialization Plan guarantees the achievement of any particular future sales
level within any given period of time, if at all.

 

7.            REPRESENTATIONS AND WARRANTIES.

 

7.1.         Corporate Power. Each Party hereby represents and warrants that
such Party is duly organized, validly existing, and in good standing under the
laws of its jurisdiction of formation and organization and has full corporate
power and authority to enter into this Agreement and to carry out the provisions
hereof.

 

7.2.         Due Authorization. Each Party hereby represents and warrants that
such Party is duly authorized to execute and deliver this Agreement and to
perform its obligations hereunder throughout the term of this Agreement. Each
Party hereby represents and warrants that the execution of this Agreement by its
representative whose signature is set forth at the end hereof has been duly
authorized by all necessary organizational action of the Party.

 

7.3.         Binding Obligation. Each Party hereby represents and warrants that
this Agreement, when executed, is a legal and valid obligation binding upon it
and is enforceable against that Party in accordance with its terms. The
execution, delivery and performance of this Agreement by such Party does not
conflict with any agreement, instrument or understanding, oral or written, to
which it is a party or by which it may be bound, nor violate any law or
regulation of any court, governmental body or administrative or other agency
having authority over it.

 

7.4.         Compliance with Applicable Laws. Company represents, warrants and
covenants to USWM that (i) it has complied, and is now complying, with all
Applicable Laws applicable to the conduct of the Business as currently conducted
or the ownership and use of the Products, and (ii) it shall, at all times,
comply with all Applicable Laws in its performance of its obligations pursuant
to this Agreement. USWM represents, warrants and covenants to Company that it
shall, at all times during the term of this Agreement, comply with all
Applicable Laws in its performance of its obligations pursuant to this
Agreement.

 

7.5.         Additional Company Representations and Warranties. Company hereby
represents and warrants that:

 

7.5.1.       The Licensed Patents listed on Schedule A represent all Patents
that Company or its Affiliates Control that are necessary or useful for the
Manufacture or Commercialization of the Products in the Territory for the
duration of the term of this Agreement. As of the Effective Date, to Company’s
knowledge, all of the Licensed IP and the Licensed Trademarks are valid and
enforceable.

 

7.5.2.       Company is, and shall remain for the Term of this Agreement, the
sole and exclusive owner of the entire right, title and interest in and to the
Licensed IP and the Licensed Trademarks.

 

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7.5.3.       Company has, and shall continue to have for the Term of this
Agreement, the right to the Licensed IP and the Licensed Trademarks to grant the
licenses to USWM that are granted hereunder.

 

7.5.4.       Company has not granted, and will not grant during the Term, to any
Third Party any license, lien, option, encumbrance, or other contingent or
non-contingent right, title or interest in or to the Licensed IP or Licensed
Trademark(s) (each, an “Encumbrance”) that conflicts with the licenses granted
to USWM hereunder or would materially impair USWM’s rights hereunder regarding
the Licensed IP or Licensed Trademark(s). For avoidance of doubt, Company may
grant an Encumbrance in or to the Licensed IP or Licensed Trademark(s) to a
lender or other similar Third Party (in either case, solely to the extent such
Third Party is not in the business of developing or commercializing
pharmaceutical products) provided that such Encumbrance does not materially
impair USWM’s rights hereunder regarding the Licensed IP or Licensed
Trademark(s).

 

7.5.5.       As of the Effective Date, Company has not received any notice that
has not been resolved from a Third Party alleging that (i) the practice of the
Licensed IP or the Licensed Trademark(s) infringes or may infringe such Third
Party’s intellectual property right, or (ii) Development or Manufacturing of the
Products by Company infringes or misappropriates the intellectual property
rights of any Third Party.

 

7.5.6.       As of the Effective Date, to Company’s knowledge there is no actual
or threatened infringement by a Third Party of any of the Licensed IP or the
Licensed Trademark(s) licensed to USWM hereunder.

 

7.5.7.       As of the Effective Date, there is no settled, pending, or
unresolved action, claim, demand, suit, proceeding, arbitration, grievance,
citation, summons, subpoena, inquiry or investigation of any nature, civil,
criminal, regulatory or otherwise, in law or in equity, pending or, to the best
of Company’s knowledge, threatened against Company in connection with the
Products or any of the Licensed IP or Licensed Trademark(s) licensed to USWM
hereunder, in each of the above cases which would reasonably be expected to
impair, restrict or prohibit the ability of USWM or Company to perform its
obligations and enjoy the benefits of this Agreement.

 

7.5.8.       Company has complied in all material respects with all Applicable
Laws in connection with the prosecution of the Licensed IP, including any
disclosure requirements of the United States Patent and Trademark Office, and
has timely paid all filing and renewal fees payable with respect thereto.

 

7.5.9.       Company is in material compliance with all agreements (i) with the
Product Manufacturers, and (ii) with all other Third Parties applicable to this
Agreement. To the best of its knowledge, Company is not aware of any threatened
material breach or termination to any of the foregoing contracts.

 

7.5.10.     Each Product delivered to USWM will be conveyed with good title,
free and clear of all encumbrances.

 

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7.5.11.     As of the Effective Date, the estimated Supply Prices for each
Product set forth in Schedule E are accurate and otherwise consistent with the
terms and conditions of Company’s agreements (i) with the Product Manufacturers,
and (ii) with all other applicable Third Parties.

 

7.6.         Additional USWM Representations and Warranties.

 

7.6.1.       In the performance of its obligations and activities under or
contemplated by this Agreement, USWM shall comply and shall use [***] to cause
its employees and contractors and those of its Affiliates that are engaged in
Commercialization of the Product in the Territory (but not any other Affiliates
of USWM) to comply with all Applicable Laws, including without limitation
Applicable Laws regarding corruption, bribery, kickbacks, ethical business
conduct, fraud and money laundering.

 

7.7.         Disclaimer. Except as expressly set forth in this Agreement,
neither Party makes any warranties, express or implied, including, without
limitation, as to DESIGN, merchantability, fitness for a particular purpose, OR
NON-INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES, ARISING FROM
A COURSE OF DEALING, USAGE OR TRADE PRACTICES, or any other matter concerning
the commercial utility of the Products.

 

8.            INDEMNIFICATION; LIABILITY.

 

8.1.         Company Indemnification. Company shall indemnify, defend and hold
USWM Indemnified Parties harmless from and against any Liability paid or payable
by USWM Indemnified Parties to a Third Party as a result of any Claim that
results from, arises out of or is based upon: (a) the inaccuracy or breach of
any of the representations, warranties, covenants, obligations or agreements
made by Company in this Agreement, the Pharmacovigilance Agreement, or the
Quality Agreement; (b) the negligence or willful misconduct of Company, its
Affiliates, officers, directors, agents, and employees relating to this
Agreement; (c) the Development, Processing or Manufacturing of the Products by
or on behalf of Company pursuant to this Agreement; (d) any Product Liability
Claim involving a failure to warn claim, a Product manufacturing defect (i.e.,
non-Conforming Product) or a Product design defect; (e) any failure to supply
penalties incurred by USWM from any of USWM’s customers as a result of Company’s
failure to provide the Products in accordance with this Agreement unless caused
by any negligent action or omission of USWM, (f) any infringement of the
Intellectual Property Rights of a Third Party; in each case, except to the
extent to, or for matters for, which USWM would be required to indemnify Company
Indemnified Parties under Section 8.2, or (g) the conduct or operation of the
Business or other ownership, use or license of the Products before, or in
respect of periods preceding, the Effective Date.

 

8.2.         USWM Indemnification. USWM shall indemnify, defend and hold Company
Indemnified Parties harmless from and against any Liability paid or payable by
Company Indemnified Parties to a Third Party as a result of any Claim that
results from, arises out of or is based upon: (a) the inaccuracy or breach of
any of the representations, warranties, covenants, obligations or agreements
made by USWM in this Agreement; (b) the negligence or willful misconduct of
USWM, its Affiliates, officers, directors, agents and employees relating to this
Agreement; or (c) the Commercialization of the Products by or on behalf of USWM
or its Affiliates; in each case, except to the extent to, or for matters for,
which Company would be required to indemnify USWM Indemnified Parties under
Section 8.1.

 

Page 29 

 

 

 

8.3.         Prompt Notice Required. A Company Indemnified Party or USWM
Indemnified Party, as applicable (the “Indemnitee”) seeking indemnification
pursuant to this Section 8 shall give prompt notice (but in any event no later
than as reasonably practicable after such Indemnitee becomes aware of such Third
Party claim in order to allow the Indemnitor to attempt to resolve the claim
with the respective Third Party) of the matter which may give rise to such claim
to the Party against whom indemnification may be sought (the “Indemnitor”);
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 Liability and Claim giving rise
to the request for indemnification, and provide relevant details thereof. The
Indemnitor shall notify the Indemnitee no later than thirty (30) days from such
notice of its intention to assume the defense of any such Claim. If the
Indemnitor fails to give the Indemnitee notice of its intention to defend any
such Claim as provided in this Section 8.3, 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 denied, withheld,
conditioned or delayed.

 

8.4.         Indemnitor May Settle. The Indemnitor shall at its expense, have
the right to control, through counsel satisfactory to the Indemnitee (such
satisfaction of Indemnitee shall not be unreasonably denied, withheld,
conditioned or delayed), any Claim or Liability which is or may be brought in
connection with all matters for which indemnification is provided hereunder,
including without limitation the right to settle or defend. In such event the
Indemnitee of the Claim or Liability in question and any successor thereto shall
permit Indemnitor’s counsel and independent auditors, to the extent relevant,
full and free access to its Books and Records and otherwise fully cooperate with
the Indemnitor in connection with such Claim or Liability; 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, except as permitted pursuant to
Section 10.2; and (iii) access shall only be given to the Books and Records that
are relevant to the Claim or Liability at issue. Any defense arguments and
proceedings 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 Liability in
question. The Indemnitor shall have the right to settle or compromise any Claim
against the Indemnitee without the consent of the Indemnitee provided that the
terms thereof: (a) provide for the unconditional release of Claims and/or
Liabilities against the Indemnitee; (b) require the payment of compensatory
monetary damages by Indemnitor only; and (c) expressly state that neither the
fact of settlement nor the settlement agreement shall constitute, or be
construed or interpreted as, an admission by the Indemnitee of any issue, fact,
allegation or any other aspect of the Claim being settled. In all other cases,
the Indemnitee and Indemnitor must agree to enter into any proposed settlement,
which shall not be unreasonably denied, withheld, conditioned or delayed. No
Indemnitee shall pay or voluntarily permit the determination of any Liability
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 denied,
withheld, conditioned or delayed.

 

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8.5.         Assistance. Each Party shall use Commercially Reasonable Efforts to
provide all relevant information in its possession and reasonable assistance to
the other Party as necessary to enable the other Party to defend any Claim.
Nothing herein shall prevent the Indemnitee from retaining counsel of its
choice, at such Indemnitee’s expense, to monitor the defense, trial, or
settlement of a Claim, and the Indemnitor and its counsel shall reasonably
cooperate with such Indemnitee counsel.

 

8.6.         Limitation of Liability. To the FULLEST extent permitted by
Applicable Law, neither Party shall be LIABLE TO the other Party OR ANY OTHER
PERSON FOR any special, incidental, consequential or punitive damages in
connection with this Agreement except to the extent that a Party is solely
seeking reimbursement for such damages paid to a Third Party and such
reimbursement is covered by the indemnification provisions of this Agreement;
and provided that this Section 8.6 shall not be construed to limit a Party’s
right to special, incidental or consequential damages for the other Party’s
breach of Section 10.

 

9.            INSURANCE.

 

9.1.         Parties’ Insurance. Each Party, at its sole cost, at all times
during [***], maintain the insurance coverages with the minimum limits as set
forth below. Notwithstanding the foregoing, to the extent USWM [***] USWM shall
use [***]. Insurance shall be purchased from insurance companies licensed to do
business within the state or country where any Manufacturing work is being
performed and rated A.M. Best A-VIII or better. It is also understood and agreed
that any deductibles associated with the insurance coverage set forth below
shall be assumed by the Party at its sole cost. Within [***], each Party shall
provide the other Party with proof of insurance demonstrating its compliance
with the obligations of this Section 9.

 

a.Statutory Workers’ Compensation insurance, including occupational disease, as
required by the State(s) in which workers are located;

 

b.Employer’s Liability insurance in the amount of [***];

 

c.Commercial General Liability insurance, including Contractual Liability, with
a combined single limit of not less than [***], and [***]; and

 

d.Product Liability Insurance, including Products/Completed Operations
insurance, of not less than [***], and [***] in the aggregate.

 

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9.1.1.       All insurance coverage required of Parties will be primary and not
concurrent or excess over any insurance or self-insurance program carried by a
Party, and will have no recourse to any self-insured program or insurance
program carried by a Party.

 

9.1.2.       By requiring Parties to maintain insurance, neither Party
represents that coverage and limits required will be adequate to fund all
Liabilities for which Parties may be liable. The limits of insurance coverage
shall not affect or limit the liability or indemnity obligations of the Parties
stated elsewhere in this Agreement or as required by Applicable Law.

 

9.1.3.       All required insurance coverage of Parties will be maintained
without interruption during the Term of this Agreement.

 

9.2.        Maintenance Covenant. Each Party represents, warrants and covenants
that nothing has or will be done or be omitted to be done that may result in any
of the said insurance policies being or becoming void, voidable or unenforceable
during the Term or any Renewal Term of this Agreement.

 

10.          CONFIDENTIALITY.

 

10.1.       Obligations. Each Party acknowledges that it may receive
Confidential Information of the other Party in the performance of this
Agreement. Each Party shall safeguard and hold such information received by it
from the other Party in confidence by using such reasonable precautions as it
normally takes with its own confidential and proprietary information, but in no
event less than a reasonable degree of care, and each Party shall limit
disclosure of the furnishing Party’s information to those employees and
consultants of the receiving Party and its Affiliates who are informed of and
understand the confidential nature thereof and are bound by non-disclosure and
non-use obligations no less restrictive than those set forth in this Agreement.
To the extent that such employees or consultants take an action, or fail to take
an action, that would constitute a breach of such confidentiality or non-use
obligations by such employee or contractor (as if such employee or contractor
were a party to this Agreement), it will constitute a breach of such obligations
as if a Party had taken, or failed to take, such action itself. Each receiving
Party shall not, directly or indirectly, disclose, publish or use for the
benefit of any Third Party or itself, except in exercising its rights and
carrying out its duties hereunder or as otherwise provided in this Section 10,
any Confidential Information of the other Party, without first having obtained
the furnishing Party’s prior written consent to such disclosure or use. This
restriction shall not apply to any information within the following categories:
(i) information that is known to the receiving Party or its Affiliates prior to
the time of disclosure to it, to the extent evidenced by written records or
other competent proof; (ii) information that is independently developed by
employees, agents, or independent contractors of the receiving Party or its
Affiliates without reference to or reliance upon the information furnished by
the disclosing Party, as evidenced by written records or other competent proof;
(iii) information disclosed at any time to the receiving Party or its Affiliates
by a Third Party that has a right to make such disclosure; or (iv) any other
information that is or becomes part of the public domain through no fault or
negligence of the receiving Party.

 

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10.2.       Required Disclosures. The receiving Party shall also be entitled to
disclose the other Party’s Confidential Information (i) that is required to be
disclosed in compliance with Applicable Law or regulations (including, without
limitation, to comply with SEC, NASDAQ, NYSE or similar stock exchange
disclosure requirements) or by order of any governmental body or a court of
competent jurisdiction, or (ii) as may be necessary or appropriate in connection
with the enforcement of this Agreement; provided, however, that, in both cases,
the Party disclosing such information shall, if practicable, promptly notify the
other Party in advance of any required or necessary disclosure and shall use
Commercially Reasonable Efforts to obtain confidential treatment of such
information by the agency or court or other disclosee, and that, in the case of
disclosures under (i), shall (a) provide the other Party with prompt prior
notice of the proposed disclosure such that the other Party may seek a
protective order or other appropriate remedy, (b) provide the other Party with a
copy of the proposed disclosure in sufficient time to allow reasonable
opportunity to comment thereon, and (c) disclose only that portion of the
Confidential Information that, in the opinion of its legal counsel, must be
disclosed pursuant to Applicable Law.

 

10.3.       Use of Information. Each Party shall only use, and direct each of
its Affiliates to only use, any Confidential Information obtained by it from the
other Party or their respective Affiliates, pursuant to this Agreement or
otherwise, solely in connection with the transactions contemplated hereby.

 

10.4.       Return of Information. Upon the earlier of expiration or termination
of this Agreement, the receiving Party shall, if requested by the disclosing
Party, return or destroy all Confidential Information of the disclosing Party
including copies and extracts thereof; provided, that the receiving Party shall
not be required to return or destroy any electronic copy of Confidential
Information created pursuant to its standard electronic backup and archival
procedures. Notwithstanding the foregoing, the receiving Party may retain one
copy of any Confidential Information of the disclosing Party to the extent
required to defend or maintain any litigation relating to this Agreement, comply
with legal or regulatory requirements or established document retention
policies, or to demonstrate compliance with this Agreement. Notwithstanding the
return or destruction of the Confidential Information (or the retention of any
Confidential Information pursuant to the preceding sentence) the Parties shall
continue to be bound by its obligations of confidentiality and non-use
hereunder. Each Party’s obligations of confidentiality and non-use shall extend
during the Term and for a period of [***] from the expiration or termination of
this Agreement.

 

10.5.       Publicity. The Parties may mutually agree to issue a joint press
release substantially, in a form agreed by the Parties, as of the Effective Date
or as promptly as practicable following the Effective Date. Each agrees to
consult with the other Party reasonably and in good faith with respect to the
text and timing of any publicity, news release or public announcement, written
or oral, whether to the public, the press, stockholders or otherwise, referring
to the terms or existence of this Agreement, the subject matter to which it
relates, the performance under it or any of its specific terms and conditions,
prior to any such disclosure. Either Party may make, such reasonable
announcements or disclosures to securities exchanges or other applicable
agencies as it determines (based on advice of the legal counsel for the Party
making such announcement) are required by Applicable Law, including United
States securities laws, rules or regulations, or market disclosure. Each Party
shall provide the other Party with advance notice of legally required
disclosures and shall reasonably consider input from the other Party concerning
such required disclosures. Each Party may make any public statement in response
to questions by the press, analysts, investors or those attending industry
conferences or financial analyst calls, or issue press releases, so long as any
such public statement or press release is not inconsistent with prior public
disclosures or public statements made in accordance with this Section 10.5 and
which do not reveal non-public information about the other Party.

 

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10.6.       Filing of this Agreement. The Parties will coordinate in advance
with each other in connection with the filing of this Agreement (including
redaction of certain provisions of this Agreement) with the U.S. Securities and
Exchange Commission or any stock exchange or governmental authority on which
securities issued by a Party or its Affiliate are traded, and each Party will
use reasonable efforts to seek confidential treatment for the terms proposed to
be redacted; provided that, each Party will ultimately retain control over what
information to disclose to the U.S. Securities and Exchange Commission or any
stock exchange or other governmental authority, as the case may be, and provided
further that the Parties will use their reasonable efforts to file redacted
versions with any governing bodies which are consistent with redacted versions
previously filed with any other governing bodies. Other than such obligation,
neither Party (nor its Affiliates) will be obligated to consult with or obtain
approval from the other Party with respect to any filings to the U.S. Securities
and Exchange Commission or any stock exchange or other governmental authority on
which securities issued by a Party or its Affiliate are traded.

 

10.7.       Prior Non-Disclosure Agreement. As of the Effective Date, the terms
of this Section 10 shall supersede any prior non-disclosure, secrecy or
confidentiality agreement between the Parties (or their Affiliates) dealing with
the subject of this Agreement. Any information disclosed pursuant to any such
prior agreement shall be deemed Confidential Information for purposes of this
Agreement.

 

10.8.       Equitable Relief. Given the nature of the Confidential Information
and the irreparable harm that a Party may suffer upon unauthorized disclosure,
use or transfer of its Confidential Information to any Third Party, the Parties
agree that monetary damages may not be a sufficient remedy for any breach of
this Section 10. In addition to all other remedies, a Party shall be entitled to
seek specific performance and injunctive and other equitable relief as a remedy
for any breach or threatened breach of this Section 10.

 

11.         TERM AND TERMINATIOn.

 

11.1.       Term. The term of this Agreement shall begin on the Effective Date
and, unless otherwise terminated as permitted under this Agreement, shall
continue for a period of ten (10) years from the Launch of the first Product in
the Territory pursuant to this Agreement (the “Initial Term”). This Agreement
shall thereafter be automatically renewed for consecutive five (5) year renewal
terms (each a “Renewal Term”) unless this Agreement is otherwise (i) terminated
by mutual prior written agreement by Parties (either with respect to the ZIMHI
Product or the SYMJEPI Product individually, or both Products collectively), or
(ii) terminated by a Party as permitted under this Agreement. The “Term” means
the Initial Term and, if applicable, the Renewal Term.

 

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11.2.       Termination.

 

11.2.1.    Termination for Cause. Subject to the terms of this Section 11.2.1, a
Party may terminate this Agreement for any breach of a material provision of
this Agreement by the other Party [***] in the case of payment breach) after
written notice to the other Party containing details of such breach if the
breach remains uncured at the end of such notice period. Notwithstanding the
foregoing, the Parties agree that the [***] notice and cure period herein may be
extended if the breaching Party is [***] to cure the specified breach. With
respect to a default or breach of this Agreement, failure of a Party to provide
notice to the defaulting or breaching Party as required by this Section 11.2.1
shall not constitute a waiver of the right to give such notice with respect to
any subsequent default or breach. A Party may terminate this Agreement pursuant
to this Section 11.2.1 (i) with respect to the ZIMHI Product or the SYMJEPI
Product individually to the extent the uncured breach arises pursuant to an
obligation concerning a Product individually, or (ii) with respect to both
Products collectively to the extent the uncured breach arises pursuant to
obligations concerning both Products collectively.

 

11.2.2.    USWM Termination.

 

a.       Failure to Supply. If at any time during the Term, (a) Company is
unable to deliver Product pursuant to a Firm Order for a period longer than
[***] after the applicable delivery date set forth in the respective Firm Order
for causes within Company’s control, or (b) if the Company is unable to supply,
or arrange to make available for shipment the Launch Quantity within [***] of
the Regulatory Approval for causes within Company’s control; then, in either
case (each such occurrence a “Failure to Supply”), USWM may, upon [***] prior
written notice to Company that a Failure to Supply has occurred, request in such
notice that Company exercise, and Company shall, at Company’s sole cost and
expense, [***] to (i) evaluate, contract, and qualify a mutually agreeable
alternate manufacturing facility to manufacture and supply all of USWM’s
requirements of Product(s) in the Territory, (ii) transfer sufficient know-how
to the alternate manufacturing facility in order to enable the facility to
manufacture the Product(s) in accordance with the terms of this Agreement, and
(iii) ensure that the alternate manufacturing facility is contractually
obligated to use commercially reasonable efforts to be approved by the
applicable Regulatory Authority to manufacture commercial quantities of the
Product(s) and is brought up to production readiness as soon as reasonably
possible following USWM’s written notice specified above. In the event an
alternate manufacturing facility is utilized to supply Products under this
Agreement, such facility shall be deemed a “Manufacturing Facility” for purposes
of this Agreement. Subject to Company [***], the Parties may mutually agree to
terminate this Agreement (either with respect to the ZIMHI Product or the
SYMJEPI Product individually, or both Products collectively). Notwithstanding
anything in this Section 11.2.2(a), in the event that a Failure to Supply arises
by the willful act or omission of Company (and not for other reasons including
without limitation acts or omissions of third parties beyond the reasonable
control of Company or acts or omissions relating to [***] taken in good faith by
Company), USWM may, in its sole discretion, elect to terminate this Agreement
(either with respect to the ZIMHI Product or the SYMJEPI Product individually,
or both Products collectively, as the case may be) at the end of such [***]
notice period, and Company shall pay to USWM within [***] of the [***] an amount
equal to [***]. In the event that either (i) Company fails to [***], or (ii)
supply of the affected Product(s) fails to resume within [***] from [***], USWM
may, in its sole discretion, elect to terminate this Agreement (either with
respect to the ZIMHI Product or the SYMJEPI Product individually, or both
Products collectively) unless supply of the affected Product(s) resumes during
such [***] notice period and, in the event that USWM elects to terminate this
Agreement (either with respect to the ZIMHI Product or the SYMJEPI Product
individually, or both Products collectively, as the case may be) Company shall
pay to USWM within [***] of the effective date of termination an amount equal to
[***] of (a) [***], or (b) [***]. For purposes of clarity, the remedies
available to USWM pursuant to this Section 11.2.2(a) are in addition to any
other remedies available to USWM under this Agreement, including without
limitation, USWM’s indemnification rights pursuant to Section 8.1.
Notwithstanding the foregoing, USWM shall not be entitled to exercise the
remedies in this Section 11.2.2(a) upon a Failure to Supply as a result of a
Force Majeure event in accordance with Section 12.10.

 

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b.       Infringement Action. From the Effective Date through a period of [***]
following [***], USWM may, upon [***] prior written notice to Company, terminate
this Agreement (either with respect to the ZIMHI Product or the SYMJEPI Product
individually, or both Products collectively, as the case may be) if [***] that
prevents either (i) [***], or (ii) [***]. In the event that USWM terminates this
Agreement (either with respect to the ZIMHI Product or the SYMJEPI Product
individually, or both Products collectively, as the case may be) pursuant to
this Section 11.2.2(b), Company shall pay to USWM within [***] of [***] an
amount equal to [***] plus the greater of (i) [***], or (ii) [***]. For purposes
of this Agreement, “Infringement Action” any claim of infringement or potential
infringement of Third Party intellectual property rights in connection with the
marketing, development, manufacture, production, use, importation, offer for
sale, or sale of the Products in the Territory.

 

c.       Regulatory Approval. If, as it relates to the ZIMHI Product, Regulatory
Approval has not been achieved within [***], USWM, in its sole discretion, may
elect to either (i) upon [***] prior written notice to Company, terminate this
Agreement only with respect to the ZIMHI Product individually, or (ii) [***].

 

11.2.3.    Termination by the Company.

 

a.       Failure to Launch. Subject to the terms of this Section 11.2.3(a), upon
[***] prior written notice to USWM, Company shall have, at its sole discretion,
the right to terminate this Agreement if within [***] (or such longer period as
agreed in writing by the Parties) after both (i) [***], and (ii) [***], USWM
fails to Launch the Product in the Territory, provided such failure is for
causes within USWM’s control. Company may terminate this Agreement pursuant to
this Section 11.2.3(a) only with respect to the ZIMHI Product or the SYMJEPI
Product individually to the extent USWM fails to Launch each of the Products
individually on the terms and subject to the conditions otherwise set forth in
this Section 11.2.3(a).

 

b.       Commercial Efforts. Subject to the terms of this Section 11.2.3(b),
upon [***] prior written notice to USWM, Company may terminate this Agreement in
part or in its entirety if (i) USWM fails to [***] for [***], and (ii) such
failure by USWM remains uncured at the end of such notice period; provided such
failure is for causes within USWM’s reasonable control. Notwithstanding the
foregoing, the Parties agree that the [***] notice and cure period herein may be
extended if USWM is [***] to cure the specified failure. Company may terminate
this Agreement pursuant to this Section 11.2.3(b) only with respect to the ZIMHI
Product or the SYMJEPI Product individually to the extent USWM fails to meet
[***] for [***] as such [***] are determined with respect to each of the
Products individually, and on the terms and subject to the conditions otherwise
set forth in this Section 11.2.3(b).

 

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11.2.4.    Bankruptcy. To the extent permitted under Applicable Law, a Party may
terminate this Agreement (either with respect to the ZIMHI Product or the
SYMJEPI Product individually, or both Products collectively) effective
immediately with written notice if the other Party shall be adjudicated
bankrupt, shall be dissolved or shall have a receiver appointed for
substantially all of its property. All rights and licenses granted by Company
under or pursuant to this Agreement are, and shall otherwise be deemed to be,
for purposes of Section 365(n) of the Bankruptcy Code, rights and licenses to
“intellectual property” as such term is used in, and interpreted under Section
101(35A) of the Bankruptcy Code. The Parties shall retain and may fully exercise
all of their respective rights, elections, and protections under the Bankruptcy
Code, and all other bankruptcy, insolvency, and similar laws with respect to
this Agreement and the subject matter hereof. Without limiting the generality of
the foregoing, Company acknowledges and agrees that, if Company or its estate
shall become subject to any bankruptcy or similar proceeding, (i) subject to
USWM’s rights of election under Section 365(n) of the Bankruptcy Code, all
rights, licenses, and privileges granted to USWM under this Agreement will
continue subject to the respective terms and conditions hereof, and will not be
affected, even by Company’s rejection of this Agreement, (ii) USWM shall further
be entitled to a complete duplicate of (or complete access to, as appropriate)
any and all such intellectual property and embodiments of intellectual property,
which if not already in USWM’s possession, shall be promptly delivered to USWM
or its designee, and (iii) Company shall undertake [***] to ensure USWM’s access
to Company’s contracts with the Product Manufacturers, in both instances of (ii)
and (iii) to the extent needed to allow USWM to make or have made and continue
to Commercialize any Product under this Agreement, and such, if not already in
its possession, shall be promptly delivered to USWM by Company, unless the
Company elects to continue, and does in fact continue to perform all of its
obligations under this Agreement. All [***] incurred by USWM to [***] may be
deducted by USWM from [***]. Notwithstanding the foregoing, if USWM (or any
administrator, receiver, liquidator, trustee appointed over all or any parts of
its assets, or similar entity) selects to continue, and does in fact continue to
perform all of its obligations under this Agreement, then Company shall not be
entitled to terminate this Agreement pursuant to this Section 11.2.4.

 

11.2.5.    Effects of Termination.

 

a.       Except (i) to the extent this Agreement is terminated solely with
respect to a Product individually (in which case the Parties’ rights and
obligations pursuant to this Agreement with regard to such non-terminated
Product shall be unaffected by this Section 11.2.5(c)), and (ii) as expressly
set forth in this Agreement, upon expiration or termination of this Agreement
for any reason, neither Party shall have any obligation to make any payments to
the other, except for amounts accrued prior to expiration or termination,
including any owed and payable outstanding liabilities.

 

b.       Except to the extent this Agreement is terminated solely with respect
to a Product individually (in which case the Parties’ rights and obligations
pursuant to this Agreement with regard to such non-terminated Product shall be
unaffected by this Section 11.2.5(b)), in the event of expiration or termination
of this Agreement by (i) Company pursuant to Section 11.2.1 (Termination for
Cause), Section 11.2.3(a) (Failure to Launch), Section 11.2.3(b) (Commercial
Efforts), or Section 11.2.4 (Bankruptcy), or (ii) USWM pursuant to Section
11.2.1 (Termination for Cause), Section 11.2.2(a) (Failure to Supply), Section
11.2.2(b) (Infringement Action), or Section 11.2.4 (Bankruptcy), all licenses
and rights granted by Company to USWM will terminate, and each Party will
promptly return to the other Party all materials and records in its possession
or control containing Confidential Information of the other Party.

 

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c.       Except to the extent this Agreement is terminated solely with respect
to a Product individually (in which case the Parties’ rights and obligations
pursuant to this Agreement with regard to such non-terminated Product shall be
unaffected by this Section 11.2.5(c)), in the event of early termination of this
Agreement for any reason other than termination by Company pursuant to Section
11.2.1 (Termination for Cause), Section 11.2.3(a) (Failure to Launch) or Section
11.2.4 (Bankruptcy), USWM and its Affiliates shall have the right, in USWM’s
sole discretion, to continue, to the extent that USWM and its Affiliates
continue to have Product inventory, to fulfill orders received from customers
for the Products in the Territory until up to [***] after the effective date of
termination of this Agreement. For Product sold by USWM or its Affiliates after
the effective date of termination, USWM shall continue to make payments to
Company in accordance with Section 6, as applicable.

 

11.2.6.     Non-Exclusive Remedy. Subject to Section 8.6, the termination of
this Agreement shall be in addition to, and shall not prejudice, the Parties’
remedies at law or in equity, including, without limitation, the Parties’
ability to receive legal damages and/or equitable relief with respect to any
breach of this Agreement, regardless of whether or not such breach was the
reason for the termination.

 

12.         GENERAL.

 

12.1.       Interpretation. The headings of each Article and Section in this
Agreement have been inserted for convenience of reference only and are not
intended to limit or expand on the meaning of the language contained in the
particular Article or Section. The definitions of the terms herein apply equally
to the singular and plural forms of the terms defined. Whenever the context may
require, any pronoun will include the corresponding masculine, feminine and
neuter forms. The words “include”, “includes” and “including” shall be deemed to
always be followed by the phrase “without limitation.” Unless the context
requires otherwise, (a) any definition of or reference to any agreement,
instrument or other document herein will be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein or therein), (b) any
reference to any laws herein will be construed as referring to such laws and any
rules or regulations promulgated thereunder as from time to time enacted,
repealed or amended, (c) any reference herein to any person will be construed to
include the person’s successors and assigns, (d) the words “herein”, “hereof”
and “hereunder”, and words of similar import, will be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (e) any
reference herein to the words “mutually agree” or “mutual written agreement”
will not impose any obligation on either Party to agree to any terms relating
thereto or to engage in discussions relating to such terms except as such Party
may determine in such Party’s sole discretion, except as expressly provided in
this Agreement, (f) as applied to a Party, the word “will” shall be construed to
have the same meaning and effect as the word “shall,” and (g) all references
herein without a reference to any other agreement to Articles, Sections, or
Exhibits will be construed to refer to Articles, Sections, and Exhibits of or to
this Agreement.

 

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12.2.       Exclusivity. During the Term of this Agreement, except (i) as
contemplated by this Agreement, including but not limited to (X) [***] and (Y)
[***], (ii) as contemplated under Other Agreements, or (ii) upon the prior
written consent of the other Party, the Company agrees not to, directly or
indirectly, and [***].

 

12.3.       Informal Dispute Resolution. Unless otherwise expressly provided for
herein, any disputes arising out of or in connection with this Agreement
(“Dispute”) shall be identified in writing and presented to the other Party.
Within [***] after delivery of such notice of dispute, the USWM Executive
Officer and the Company Executive Officer shall meet at a mutually acceptable
time and place, and thereafter as often as they reasonably deem necessary, to
attempt to resolve the dispute in good faith. All reasonable requests for
information made by one Party to another shall be honored. All negotiations
pursuant to this clause are confidential and shall be treated as compromise and
settlement negotiations for purposes of applicable rules of evidence. If such
Executive Officers cannot resolve such dispute within [***] after such meeting,
then, subject to Section 12.4, each Party reserves its right to any and all
remedies available under law or equity with respect to any other dispute.

 

12.4.       Jurisdiction. Any Dispute that is not resolved under Section 12.3
within the time periods described in such section shall be resolved by final and
binding arbitration before a panel of one arbitrator with relevant industry
experience. The arbitration proceeding shall be administered in accordance with
the Commercial Arbitration Rules of the American Arbitration Association
(“AAA”), and the panel of arbitrators shall be selected in accordance with such
rules. The arbitration and all associated discovery proceedings and
communications shall be conducted in English, and the arbitration shall be held
in a reasonable location to be selected by the Party against whom arbitration is
compelled. The location selected by such Party shall not be located in a state
in which the respective selecting Party is domiciled. The arbitrator shall,
reasonably promptly after the conclusion of the arbitration hearing, issue a
written award and statement of decision describing the essential findings and
conclusions on which the award is based, including the calculation of any
damages awarded. The decision or award rendered by the arbitrator shall be final
and non-appealable, and judgment may be entered upon it in any court of
competent jurisdiction. Either Party may apply for interim injunctive relief
with the arbitrator until the arbitration award is rendered or the controversy
is otherwise resolved. The arbitrator shall be authorized to award compensatory
damages, but shall not be authorized (i) to award noneconomic damages, (ii) to
award punitive damages or any other damages expressly excluded under this
Agreement, or (iii) to reform, modify or materially change this Agreement or any
other agreements contemplated hereunder; provided, however, that the damage
limitations described in subsections (i) and (ii) of this sentence will not
apply if such damages are statutorily imposed. Each Party shall bear its own
attorneys’ fees, costs, and disbursements arising out of the arbitration, and
shall pay an equal share of the fees and costs of AAA and the arbitrator;
provided, however, the arbitrator shall be authorized to determine whether a
Party is the prevailing Party, and at the arbitrator’s discretion, to award to
that prevailing Party reimbursement for its reasonable attorneys’ fees, costs
and disbursements (including, for example, expert witness fees and expenses,
photocopy charges, travel expenses, etc.), and/or the fees and costs of the AAA
and the arbitrator. Subject to the foregoing provisions, the Company and USWM
agree to irrevocably submit to the jurisdiction of the federal and state courts
for the judicial district in which the underlying arbitration occurred, for the
purposes of any suit, action or other proceeding arising out of this Agreement
or any transaction contemplated hereby, and agrees that services of any process
may be made in the manner provided in this Agreement for delivery of notices.
Each Party irrevocably and unconditionally waives any objection to the laying of
venue of any action, suit or proceeding arising out of this Agreement or the
transactions contemplated hereby in such courts. Each Party hereto agrees that
any such proceeding shall be conducted solely in the English language.

 

Page 39 

 

 

 

12.5.       Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
EITHER OF SUCH WAIVERS; (II) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS
OF SUCH WAIVERS; (III) IT MAKES SUCH WAIVERS VOLUNTARILY; AND (IV) IT HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS CLAUSE 12.5.

 

12.6.       Governing Law. This Agreement and any and all matters arising
directly or indirectly herefrom shall be governed by and construed and enforced
in accordance with the internal laws of the State of Delaware, U.S.A. applicable
to agreements made and to be performed entirely in such state, without giving
effect to the conflict of law principles thereof. The Parties expressly agree
that the United Nations Convention on Contracts for the International Sale of
Goods shall not apply to this Agreement or any Party’s performance hereunder.

 

12.7.       Remedies. Except as otherwise provided herein, any and all other
remedies herein expressly conferred upon a Party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby, or by law or equity upon
such Party, and the exercise by a Party of any one (1) remedy will not preclude
the exercise of any other remedy, provided, that a party shall not be entitled
to more than one recovery, without duplication, for the same liability, loss or
damage.

 

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12.8.       Convictions, Exclusion, Debarment, Etc. Neither Party nor any person
employed by or under contract to such Party now or in the future in connection
with any activities contemplated by this Agreement (i) has been convicted of an
offense related to any Federal or State healthcare program, including (but not
limited to) those within the scope of 42 U.S.C. § 1320a-7(a); (ii) has been
excluded, suspended or is otherwise ineligible for Federal or State healthcare
program participation, including (but not limited to) persons identified on the
General Services Administration’s List of Parties Excluded from Federal Programs
or the HHS/OIG List of Excluded Individuals/Entities; (iii) has been debarred
from or under any Federal or State healthcare program (including, but not
limited to debarment under Section 306 of the Federal Food, Drug and Cosmetic
Act (21 USC 335a); or (iv) is on any of the FDA Clinical Investigator
enforcement lists, including, but not limited to, the (a) Disqualified/Totally
Restricted List, (b) Restricted List, and (c) Adequate Assurances List. Each
Party further agrees that if, at any time after execution of this Agreement, it
becomes aware that it has or any Person who participated, or is participating,
in the performance of any activities contemplated by this Agreement has become
or is in the process of being charged, convicted, debarred, excluded, proposed
to be excluded, suspended or otherwise rendered ineligible, or is on an
enforcement list, such Party will immediately notify the other Party in writing.

 

12.9.       Assignment or Transfer of Interest. This Agreement shall be binding
upon and inure to the benefit of the successors or permitted assigns of each of
the Parties and may not be assigned or transferred by a Party without the prior
written consent of the other, except that such consent shall not be required on
the part of either Party in connection with (i) an assignment or transfer to an
Affiliate of the assigning Party, (ii) a transfer or sale of all or
substantially all of the business of that Party to which this Agreement relates
to a Third Party, whether by merger, sale of stock, sale of assets or otherwise,
or (iii) a transfer or sale of all or substantially all of the assets directly
related to one (1) or more business units of such Party to a Third Party,
whether by merger, sale of stock, sale of assets or otherwise; provided,
however, that in the event of such a transaction (whether this Agreement is
actually assigned or is assumed by the acquiring party by operation of law
(e.g., in the context of a reverse triangular merger)), intellectual property
rights of the acquiring party to such transaction (if other than one of the
Parties to this Agreement) shall not be included in the technology licensed
hereunder or otherwise subject to this Agreement. Any attempted assignment that
does not comply with the terms of this Section 12.9 shall be void.

 

12.10.     Force Majeure. No Party shall be liable or responsible to the other
Party, nor be deemed to have defaulted under or breached this Agreement, for any
failure or delay in fulfilling or performing any term of this Agreement (except
for any obligations to make payments of amounts invoiced hereunder), when and to
the extent such failure is caused by or results from a Force Majeure Event. The
Party claiming a Force Majeure Event shall notify the other Party with notice of
the Force Majeure Event as soon as practicable, which notice shall reasonably
identify such obligations under this Agreement and the extent to which
performance thereof will be affected, including the period of time the
occurrence is expected to continue. In such event, the Parties shall meet
promptly (either in person or telephonically, as the situation may dictate) to
determine an equitable solution to the effects of any such Force Majeure Event,
and the Party affected by the Force Majeure Event shall use all Commercial
Reasonable Efforts to minimize the loss or inconvenience suffered by the
Parties.

 

12.11.     Entire Agreement. This Agreement, including any schedules or exhibits
hereto, and the subsequent pharmacovigilance agreement and Quality Agreement to
be executed by the Parties pursuant to this Agreement, contains the entire
agreement and understanding between the Parties relating to the subject matter
hereof, and shall supersede all prior or contemporaneous agreements and
understandings, oral or written, relating to the subject matter hereof and any
inconsistent terms of any subsequent invoice, purchase order or similar
document. Neither Party shall be liable or bound to the other Party in any
manner by any representations, warranties or covenants relating to such subject
matter except as specifically set forth herein.

 

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12.12.     Amendments and Waiver. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the Parties. By an instrument
in writing a Party may waive compliance by another Party with any term or
provision of this Agreement that such other Party was or is obligated to comply
with or perform. Any failure of a Party to enforce at any time, or for any time
period, any of the provisions of this Agreement shall not be deemed or construed
to be a waiver of such provisions or a waiver of any right of such Party
thereafter to enforce each and every such provision on any succeeding occasion
or breach thereof.

 

12.13.     Nature of Relationship. In making and performing this Agreement, the
Parties are acting, and intend to be treated, as independent entities and
nothing contained herein shall be deemed or implied to create an independent
contractor, agency, distributorship, joint venture or partnership relationship
among the Parties hereto. Except as otherwise expressly provided herein, no
Party may make any representation, warranty or commitment, whether express or
implied, on behalf of or incur any charges or expenses for the other Party.

 

12.14.     Further Actions and Documents. Each Party agrees to execute,
acknowledge and deliver all such further instruments, and to do all such further
acts, as may be reasonably necessary or appropriate to carry out the intent and
purposes of this Agreement.

 

12.15.     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 (i) on the date delivered, if personally
delivered, (ii) on the date sent by telecopier or email with automatic
confirmation by the transmitting machine showing the proper number of pages were
transmitted without error, (iii) on the Business Day after being sent by FedEx
or another recognized overnight mail service which utilizes a written form of
receipt for next day or next Business Day delivery, or (iv) five (5) Business
Days after mailing, if mailed by United States 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 USWM: If to Company:        

USWM, LLC

[***]

Attn: [***]

Adamis Pharmaceuticals Corporation

11682 El Camino Real, Suite 300

San Diego, CA 92130

Attn: President & CEO

  Tel: [***] Tel: (858) 997-2400   Email:  [***] Email:  [***]       With a copy
to:       USWM, LLC   [***]   [***]   Attn: [***]   Tel: [***]   Email:  [***]  

 

Page 42 

 

 

 

12.16.     Counterparts; Facsimile/PDF Signature. This Agreement may be executed
by the exchange of faxed executed copies, certified electronic signatures or
executed copies delivered by electronic mail in Adobe Portable Document Format
or similar format, and any signature transmitted by such means for the purpose
of executing this Agreement shall be deemed an original signature for purposes
of this Agreement. 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. This Agreement may
be executed in two or more counterparts, each of which shall be deemed an
original as against any Party whose signature appears thereon, but all of which
together shall constitute one and the same instrument.

 

12.17.     Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the Parties
shall negotiate in good faith with a view to the substitution therefore of a
suitable and equitable solution in order to carry out, so far as may be valid
and enforceable, the intent and purpose of such invalid provision; provided,
however, that the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions contained herein shall not
be in any way impaired thereby, it being intended that all of the rights and
privileges of the Parties hereto shall be enforceable to the fullest extent
permitted by law.

 

12.18.     Headings. The captions or headings of the Sections or other
subdivisions hereof are inserted only as a matter of convenience or for
reference and are not part of the agreement of the Parties and shall have no
effect on the meaning of the provisions hereof. All references in this Agreement
to Sections are to Sections of this Agreement, unless otherwise indicated.

 

12.19.     Expenses. Each Party will pay all of its own fees and expenses
(including all legal, accounting and other advisory fees) incurred in connection
with the negotiation and execution of this Agreement and the arrangements
contemplated hereby.

 

12.20.     Third Party Rights. Nothing in this Agreement will be deemed to
create any Third Party beneficiary rights in or on behalf of any other Person.

 

12.21.     Performance through Affiliates. Notwithstanding anything to the
contrary contained herein, each Party may discharge any obligations and exercise
any right hereunder, or performance hereunder, through any of its Affiliates.
Each Party hereby guarantees the performance by its Affiliates of such Party’s
obligations under this Agreement and will cause its Affiliates to comply with
the provisions of this Agreement in connection with such performance.

 

Page 43 

 

 

 

12.22.     Survival. Expiration or termination of this Agreement shall not
relieve the Parties of any rights or obligation accruing prior to such
expiration or termination. In addition, the Parties’ respective rights and
obligations set forth in this Section 12.22, Section 5.3, Sections 6.5 (for
[***] following the calendar year in which termination or expiration occurs),
6.6, 7, 9.1.3 (for [***] following termination or expiration occurs), 11.2.5 and
11.2.6 and Section 1, Sections 8, 10 and 12 (other than 12.1) and any right,
obligation, or required performance of the Parties in this Agreement which, by
its express terms or nature and context is intended to survive termination or
expiration of this Agreement, will survive any such termination or expiration.

 

[signature page follows]

 

Page 44 

 

 

IN WITNESS WHEREOF, each Party is signing this Distribution and
Commercialization Agreement on the date stated opposite that Party’s signature.

 

USWM, LLC             By:      /s/ P. Breckinridge Jones, Sr.   Date:
________________ NAME:      P. Breckinridge Jones, Sr.     Title:          CEO  
          ADAMIS PHARMACEUTICALS CORPORATION             By:     /s/ Dennis J.
Carlo   Date: ________________ NAME:      Dennis J. Carlo, Ph.D.    
Title:          President and CEO    

 

[SIGNATURE PAGE TO DISTRIBUTION AND COMMERCIALIZATION AGREEMENT]

 

 

 

 

SCHEDULE A

 

Licensed Patents and Licensed Trademarks

 

Licensed Patents:

 

[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
[***] [***] [***] [***]   [***] [***] [***]

 

Licensed Trademarks:

 

“SYMJEPI” (registered trademark no. 5853281)

 

“ZIMHI” (pending US TM application no. 88281598)

 

Domain Names:

 

SYMJEPI.com

 

ZIMHI.com

 

 

 

 

SCHEDULE B

 

Near-Term Milestone Payments and Net Profit Share

 

Near-Term Milestone Payments

 

Milestone Amount Payable (i) Within [***] US$ [***] (ii) Within [***] US$ [***]
(iii) [***] US$ [***]

 

Net Profit Share

 

Subject to the terms of the Agreement, including without limitation, Section
6.2.2 (Net Profit Share Payments) and Section 6.3 (Branded Prescription Drug
Fees), USWM shall pay Company [***] of the Net Profits. USWM shall retain the
remaining [***] of the Net Profits.

 

Accelerated Net Profit Share

 

Subject to the terms of the Agreement, including without limitation, Section
6.2.2 (Net Profit Share Payments), Section 6.2.3 (Accelerated Net Profit Share
Payments) and Section 6.3 (Branded Prescription Drug Fees), in addition to the
Net Profit Share Payment USWM shall pay Company an Accelerated Net Profit Share
equal to [***]. After such limit is reached, Net Profit Allocation would revert
to the Net Profit Share defined above. For purposes of clarity, the payment of
Accelerated Net Profit Share will end upon the date on which [***].

 

For the avoidance of doubt, the cumulative total of Near-Term Milestone Payments
and Accelerated Net Profit Share Payments shall not exceed a total of US$ [***].

 

 

 

 

SCHEDULE C

 

Commercial Milestone Payments and Net Profit Share

 

Commercial Milestone Payments

 

Milestones Amount Payable (i)       On [***], upon the initial achievement of
[***] (1) US$ [***] (ii)      On [***], upon the initial achievement of [***]
(1) US$ [***] (iii)     On [***], upon the initial achievement of [***] (1) US$
[***] (iv)     On [***], upon the initial achievement of [***] (1) US$ [***]
(v)      On [***], upon the initial achievement of [***] (1) US$ [***]

 

(1)If there is [***] and therefore no [***], the combined Net Sales of the
Products (SYMJEPI and ZIMHI) will then be counted toward the achievement of the
above Commercial Milestones. For the avoidance of doubt, the cumulative
Commercial Milestone Payments shall not exceed a total of US$ [***].

 

 

 

 

SCHEDULE D

 

Products

 

“Product” or “Products” means the Company’s injection product containing
epinephrine in 0.3mg/0.3mL, 0.15mg/0.3mL, and any other strength, as approved by
the FDA under NDA number 207534, as amended, and/or any the Company’s injection
product containing naloxone in 5mg/0.5 mL, and any other strength, pending FDA
approval under NDA number 212854, as amended, in finished, packaged form that is
distributed by USWM under the Licensed Trademarks SYMJEPI and ZIMHI pursuant to
their respective NDAs, in each case, in the Territory, under USWM NDC numbers,
pursuant to this Agreement.

 

 

 

 

SCHEDULE E

 

Supply Price

 

The Supply Price shall be [***] Company’s actual cost for Product without any
Company markup or allocation of Company overhead. The Supply Price shall include
[***]. The following is an estimate of Third Party costs under the current
Product Manufacturer agreements.

 

SYMJEPI

 

Primary Assembly – the primary assembly, which includes [***], will be conducted
at [***]. Pursuant to the supply agreement, [***] sources all material and
components required to complete the primary assembly and [***] cost is
determined by [***]. The approximate current cost of primary assembly at [***]
is [***] and [***] and [***] for batches of [***] and [***], respectively. The
approximate direct cost of shipping the filled syringes from [***] to [***] for
[***] and [***] batches of [***] and [***], respectively.

 

Final Assembly – the final assembly, which includes [***], will be performed at
[***]. The cost of final assembly varies based on [***]

 

The estimated annual capacity for [***] is [***]) doses and [***] is at least
[***]) doses. Presently, the [***] dose is assembled on [***] and the [***] dose
is assembled on [***]; however, the Company, at its sole expense and cost (e.g.,
not to be included in the Supply Price), plans to [***].

 

By way of example, if a [***] unit batch of SYMJEPI was assembled on the [***]
when the forecasted combined annual volume was [***], the estimated total cost
would be [***].

 

ZIMHI

 

Primary Assembly – the primary assembly, which includes [***], will be conducted
at [***]. The cost of primary assembly includes [***]. Pursuant to the supply
agreement, [***] will source all material (except API) and components required
to complete the primary assembly and [***] cost will be determined by [***]. The
total cost of primary assembly, including [***] is estimated to be [***] and
[***] per [***] for batches of [***] and [***], respectively. The approximate
direct cost of shipping [***] from [***] to [***] for final assembly is [***]
and [***] per syringe for batches of [***] and [***], respectively.

 

Final Assembly – the final assembly, which includes [***], will also be
performed at [***] and the cost of final assembly is [***]. [***] has been
[***]; however, the Company, at [***], plans to [***].

 

By way of example, [***] unit batch of SYMJEPI was assembled on the [***] when
the forecasted combined annual volume was [***], the estimated total cost would
be [***].

 

Company shall maintain complete and accurate written records of all costs
relating to Product and will make these records available to USWM as requested
in accordance with this Agreement. During the Term, Company shall [***].

 

 

 

 

SCHEDULE F

 

Commercial Efforts and Sales and Distribution Allocation

 

“Commercial Efforts” as described in this Agreement shall mean the specific
activities involved in USWM’s Commercial Efforts for each Product and could
[***]. More generally, such activities would include [***]: [***]. Commercial
Efforts for a given Marketing Year would include, but not be limited to, [***]:

 

1)[***];

 

2)[***];

 

3)[***]; and

 

4)[***].

 

The allocation of cost for these functions via [***] would be determined [***]
and would be [***].

 

Notwithstanding anything in this Agreement to the contrary, USWM shall not be
deemed to be in breach of its Commercial Efforts obligations under this
Agreement so long as USWM actually [***].

 

“Sales and Distribution Allocation” as described in this Agreement shall mean
[***] including, without limitation, (i) [***], (ii) [***], and (iii) [***].

 

The Parties acknowledge and agree that, with respect to [***], commencing as of
[***], the allocation of shared sales expenses will be allocated [***].

 

The Company shall have the right to reasonably audit USWM’s Books and Records
for purposes of verifying the Commercial Efforts and the calculation of the
Sales and Distribution Allocation under this Agreement (for purposes of clarity,
any such audit described herein shall be limited to only include those records
of USWM that are applicable to/for verifying USWM’s Commercial Efforts
performance and the calculation of the Sales and Distribution Allocation
pursuant to this Agreement). Such audits may be requested no more than [***] per
[***] period during the Term and once during the [***] period following [***].
Such audits shall be limited to USWM’s Books and Records which are relevant for
verifying the Commercial Efforts and/or the calculation of the Sales and
Marketing Allocation, and for no earlier than [***] immediately preceding such
audit. Any such right to audit shall be exercised only on at least [***] advance
written notice.

 

 

 

 

SCHEDULE G

 

Approved Product Manufacturer

 

Catalent [***] located at [***]

 

[***]

 

[***]

 

[***]

 

 

 

 

SCHEDULE H

 

Licensed Trademarks Usage Guidelines

 

Pursuant to the Distribution and Commercialization Agreement dated May 11, 2020,
by and between Adamis Pharmaceuticals Corporation, a corporation organized under
the laws of Delaware, with an office located at 11682 El Camino Real, Suite
#300, San Diego, CA 92130 (“Licensor”) and USWM, LLC a limited liability company
organized under the laws of Delaware, with an office at [***] (“Licensee”) (the
“Agreement”) and to create and maintain strong trademark protection, Licensee
should follow these guidelines when using any Licensed Trademarks in print and
electronic materials. In the event a conflict arises between these Usage
Guidelines and the Agreement, the terms contained in these Usage Guidelines
shall control with respect to matters relating to the usage of the Licensed
Trademarks. Any capitalized terms used but not defined herein shall have the
meaning ascribed to them in the Agreement.

 

[***]