Consulting
Agreement


 


THIS
CONSULTING AGREEMENT (the “Agreement”) is effective as the last date provided for on the signature page and is entered
into by and between Mark L. Baum, an individual (“Consultant”) and Eton Pharmaceuticals, Inc., a Delaware corporation
with its principal address located at 12264 El Camino Real, Suite 350, San Diego, CA 92130 (the “Company”).


 


WHEREAS,
the Company wishes to retain Consultant as an advisor to the Company; and


 


WHEREAS,
Consultant wishes to provide advisory services to the Company as set forth below.


 


NOW
THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Consultant and the Company agree, intending to be legally bound, as follows:


 


		1.	Consulting
                                         Services.



 


		1.1.	Consultant
                                         will provide consulting services to the Company during the Term (as further defined below)
                                         of this Agreement. The consulting services (“Services”) are set forth in
                                         the Statement of Work (“SOW”) that is attached hereto as Appendix A
                                         and made a part hereof, as it may be amended from time to time by the parties
                                         hereto. Consultant shall perform all Services in compliance with all applicable laws.



 


		2.	Effective
                                         Date; Term and Termination.



 


		2.1.	This
                                         Agreement shall be effective on the later of the dates that it is executed by the Company
                                         and Consultant (the “Effective Date”) and shall terminate as of the date
                                         Services are completed (the “Term” as further defined and outlined in Appendix
                                         A) unless: (i) this Agreement is sooner terminated as provided in Section 2.2
                                         below; or (ii) the parties agree in writing to extend the Term for a mutually agreed
                                         upon period.



 


		2.2.	The
                                         Agreement and the Services provided by Consultant may be terminated by either Consultant
                                         or the Company, at any time and for any reason, upon five (5) days prior written notice
                                         of termination.



 


		3.	Consulting
                                         Fees.



 


		3.1.	In
                                         consideration of the Services provided hereunder, the Company shall provide Consultant
                                         the compensation as set forth in the applicable SOW (“Consulting Fee”).



 


		3.2.	Consultant
                                         shall be responsible for all expenses incurred in association with performance of the
                                         Services, unless pre-approved by the Company in writing in advance.



 






    	 



    	 



    

 











		4.	Confidentiality.
                                         Consultant acknowledges that Consultant will receive confidential and proprietary information
                                         from, on behalf of, or at the direction of, the Company in connection with, and during
                                         the course of providing, the Services, including but not limited to technical, clinical,
                                         marketing, commercial and/or legal information, data, reports, drawings, models, designs,
                                         prototypes, biological material, specimens, chemical compounds, formulas, manufacturing
                                         or other processes, software, specifications, patent applications, marketing strategies,
                                         customer information and customer lists (“Confidential Information”). All
                                         Confidential Information is and shall at all times remain the exclusive property of the
                                         Company. Consultant agrees:



 


		4.1.	to
                                         hold the Confidential Information in strict confidence and not to disclose or make available
                                         any Confidential Information to any third party whatsoever, without the prior written
                                         consent of the Company;



 


		4.2.	to
                                         use the Confidential Information only for the benefit of the Company and only for the
                                         purpose of providing the Services;



 


		4.3.	to
                                         take at least the same degree of care to prevent disclosure of Confidential Information
                                         as Consultant takes to preserve and safeguard Consultant’s own confidential and
                                         proprietary information, but in any event, no less than a reasonable degree of care;



 


		4.4.	not
                                         to make copies of the Confidential Information except to the extent that the copies are
                                         reasonably necessary for providing the Services;



 


		4.5.	to
                                         return or destroy (as the Company may direct) any Confidential Information held by Consultant
                                         immediately upon termination of the Term of this Agreement pursuant to Section 2 above
                                         and provide the Company with a letter certifying that all such Confidential Information
                                         has been returned or destroyed as directed;



 


		4.6.	that
                                         Confidential Information excludes information that:



 


		(a)	as
                                         evidenced by Consultant’s written records, was lawfully known to Consultant prior
                                         to its communication by, on behalf of, or at the direction of the Company and was not
                                         communicated to Consultant subject to any restrictions on disclosure or use; or



 


		(b)	as
                                         evidenced by Consultant’s written records, is independently developed by Consultant
                                         without use or knowledge of the Confidential Information; or



 


		(c)	is
                                         or becomes a part of the public domain other than by a breach of this Agreement by Consultant;



 


		(d)	becomes
                                         known to Consultant by the action of a third party not in breach of any obligation of
                                         confidence; or



 


		(e)	is
                                         required to be disclosed or made available by Consultant to a third party pursuant to
                                         any applicable law, governmental regulation, or decision of any court or tribunal of
                                         competent jurisdiction, so long as Consultant takes reasonable steps, in light of the
                                         circumstances, to give the Company sufficient prior notice in order to contest such law,
                                         governmental regulation, or decision;



 




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		4.7.	that
                                         no representation or warranty, express or implied, is made by the Company as to the accuracy,
                                         completeness or reasonableness of any Confidential Information and that neither the Company
                                         will have any liability to Consultant as a result of Consultant’s possession or
                                         use of the Confidential information; and



 


		4.8.	that
                                         money damages may not be sufficient remedy for any breach of this Section and that the
                                         Company will be entitled to seek specific performance and injunctive or equitable relief
                                         as a remedy for any such breach.



 


		4.9.	Nothing
                                         in this Section is intended to limit any remedy of the Company under the California Uniform
                                         Trade Secrets Act (California Civil Code Section 3426), or otherwise available under
                                         law.



 


		4.10.	Notwithstanding
                                         the other provisions of this Agreement, pursuant to 18 U.S.C. Section 1833(b), Consultant
                                         shall not be held criminally or civilly liable under any federal or state trade secret
                                         law for the disclosure of a trade secret that is made in confidence to a federal, state,
                                         or local government official, either directly or indirectly, or to an attorney, and solely
                                         for the purpose of reporting or investigating a suspected violation of law; or is made
                                         in a complaint or other document filed in a lawsuit or other proceeding, if such filing
                                         is made under seal.



 


		5.	Independent
                                         Contractor. The relationship of Consultant to the Company shall be that of an independent
                                         contractor rendering professional services. Consultant is not an employee of the Company.
                                         Nothing contained in this Agreement shall be deemed to create a relationship of employer
                                         and employee or principal and agent between the Company and Consultant. In no circumstance
                                         shall Consultant look to the Company as Consultant’s employer, partner, agent or
                                         principal. Consultant is not entitled to and will be excluded from participating in any
                                         of Company’s fringe benefit plans or programs as a result of the performance of
                                         the Services under this Agreement, including, but not limited to, health, sickness, accident
                                         or dental coverage, life insurance, disability benefits, accidental death and dismemberment
                                         coverage, unemployment insurance coverage, workers’ compensation coverage, and
                                         pension or 401(k) benefit(s) provided by Company to its employees (and Consultant waives
                                         the right to receive any such benefits). Consultant agrees, as an independent contractor,
                                         that Consultant is not entitled to unemployment benefits in the event this Agreement
                                         terminates, or workers’ compensation benefits in the event that Consultant is injured
                                         in any manner or becomes ill while performing the work under this Agreement. Consultant
                                         is solely responsible for all tax returns, payments, or reports required to be filed
                                         with or made to any federal, state or local tax authority with respect to Consultant’s
                                         performance of Services and receipt of consideration (including Consulting Fees) under
                                         this Agreement. Consultant is not authorized to make any representation, contract or
                                         commitment on behalf of the Company unless specifically requested or authorized in writing
                                         to do so by an executive officer or Board member of the Company.



 


		6.	Waiver.
                                         No waiver of this Agreement or any of its provisions shall be binding upon a party unless
                                         in writing and signed by each party. The waiver by either party of a breach or violation
                                         of any provision of this Agreement shall not constitute or be construed as a waiver of
                                         any subsequent breach or violation of that provision or as a waiver of any breach or
                                         violation of any other provision.



 




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		7.	Severability.
                                         If any provision of this Agreement is held by a court of competent jurisdiction to be
                                         invalid, illegal or unenforceable, the remaining provisions of this Agreement shall be
                                         unimpaired, and the invalid, illegal or unenforceable provision shall be replaced by
                                         a mutually acceptable provision, which, being valid, legal and enforceable, comes closest
                                         to the intention of the parties underlying the invalid, illegal or unenforceable provision.



 


		8.	Survival.
                                         The provisions of Sections 2.2, 3, 4, 6-11 and any other obligation under this Agreement
                                         which is to survive or be performed after termination of this Agreement, regardless of
                                         the cause therefor, shall survive any termination or expiration of this Agreement.



 


		9.	Notices.
                                         Any notice or other communication required or permitted to be made or given under this
                                         Agreement to either party shall be in writing and shall be sufficiently given if (i)
                                         hand delivered, (ii) sent by overnight guaranteed delivery service, such as Federal Express
                                         or UPS; or (iii) sent by facsimile transmission or electronic mail during addressee’s
                                         normal business hours, with a duplicate copy sent by overnight delivery or certified
                                         or registered mail, addressed as either party may from time to time designate to the
                                         other by written notice. Any such notice or other communication shall be deemed to be
                                         given as of the date it is received by the addressee.



 


		10.	Governing
                                         Law. This Agreement shall be governed by and construed in accordance with the laws
                                         of the State of California, excluding the choice of law rules, and the parties hereby
                                         agree to submit to the jurisdiction and venue of the State and Federal courts of the
                                         State of California, and agree that the State and Federal courts of the State of California
                                         shall be the exclusive forum for the resolution of all disputes related to or arising
                                         out of this Agreement.



 


		11.	Entire
                                         Agreement; Amendments. This Agreement, including any applicable SOW, represents the
                                         entire agreement between the parties in relation to the subject matter contained herein
                                         and supersedes all previous other agreements and representations, whether oral or written.
                                         This Agreement may be modified only if such modification is in writing and signed by
                                         a duly authorized representative of each party.






 


***SIGNATURE
PAGE FOLLOWS***


 




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SIGNATURE
PAGE


 


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


 


	 	CONSULTANT:
	 	 	 
	 	MARK
    L. BAUM
	 	 	 
	 	By:	/s/
    Mark L. Baum
	 	Name:	Mark
    L. Baum
	 	 	An
    individual
	 	 	 
	 	Date:
    May 1, 2017









 





	 	COMPANY:
	 	 
	 	ETON
    PHARMACEUTICALS, INC.
	 	 
	 	By:	/s/
    Andrew R. Boll
	 	Name:	Andrew
    R. Boll
	 	Title:	Executive
    Director
	 	 
	 	Date:
    May 1, 2017















 







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Appendix
A


 


Statement
of Work 


under
Consulting Agreement 


by
and between 


Mark
L. Baum and Eton Pharmaceuticals, Inc.


 


Services:


 


Consultant
shall provide senior management advisory services to the Company relating to its establishment, financing activities, patent applications
and other related services as may be requested from time to time by the Company.


 


Compensation:


 


Upon
or shortly following commencement of Consultant’s Services to the Company, the Company shall grant to Consultant 730,000
shares (the “Shares”) of the Company’s restricted common stock, par value $0.001 (“Common Stock”)
under the terms of the Company’s 2017 Equity Incentive Plan (the “Plan”) and a Restricted Stock Award Grant
Notice and Agreement thereunder to be provided to Consultant by the Company (collectively with the Plan, the “Restricted
Stock Documents”).


 


The
Shares shall vest upon the earlier of:


 


	 	(1)	a
    Change in Control (as defined in the Plan); 
	 	 	 
	 	(2)	the
    date of any underwriting agreement between the Company and the underwriter(s) managing an initial public offering of the Company’s
    common stock, pursuant to which the common stock is priced for initial public offering (the “IPO”);
	 	 	 
	 	(3)	the
    date of closing of any Company financing in excess of $10,000,000 (“Subsequent Financing”); or
	 	 	 
	 	(4)	immediately
    prior to the one year anniversary of the date of grant of the Shares (as indicated in the Restricted Stock Documents) (the
    “Grant Date”).


 


and
in any case of (1), (2), (3) and (4), which occurs following the Bridge Financing (as defined below), subject to Consultant’s
Continuous Service (as defined in the Plan) through such vesting date; provided, however, in the event the Consultant’s
Continuous Service is terminated by the Company (other than for Cause (as defined in the Plan)) prior to the completion of the
Term (as outlined below), the Shares shall vest immediately upon such termination. The “Bridge Financing” shall mean
closing of a bona-fide equity financing with third party investors resulting in cash gross proceeds to the Company of at least
$10,000,000 which occurs within one year of the Grant Date.


 


Consultant
understands that that the receipt of the Shares hereunder will trigger tax consequences to Consultant for which Consultant will
be solely responsible and that the Shares have not been registered under the Securities Act of 1933, as amended, or any applicable
state securities law. Consultant must execute the Restricted Stock Documents as a condition to receipt of the Shares hereunder.


 


Term:


 


Consultant
commenced providing Services to the Company on April 26, 2017 and shall provide the Services through the earlier of (i) one year
from the Grant Date, (ii) a Change in Control, (iii) the IPO, (iv) a Subsequent Financing or (v) such earlier date as the Services
are terminated by the Company or Consultant in accordance with this Agreement (the “Term”).


 




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