Exhibit 10.2




 


CERTAIN INFORMATION CONTAINED IN THIS EXHIBIT,
MARKED BY [***], HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE THE REGISTRANT HAS DETERMINED THAT IT IS BOTH NOT MATERIAL AND IS THE
TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.


 


Security Purchase Option Agreement




 


This Security Purchase Option Agreement (the “Agreement”)
is entered into as of August 8, 2022 (the “Effective Date”), by and among (i) Enalare Therapeutics
Inc., a Delaware corporation (the “Company”), (ii) the holders of the outstanding capital stock of the
Company set forth on Schedule A hereto (the “Stockholders”), (iii) the holders of certain convertible
promissory notes of the Company (collectively, the “Notes” and each, a “Note”) set
forth on Schedule B hereto (the “Noteholders”), (iv) the holders of options to acquire capital
stock in the Company set forth on Schedule C hereto (the “Optionholders”), (v) the holders of warrants
to acquire capital stock in the Company set forth on Schedule D hereto (the “Warrantholders” and together
with the Stockholders, Noteholders and Optionholders, the “Securityholders”) and (vi) Eagle Pharmaceuticals, Inc.,
a Delaware corporation (the “Purchaser”, and together with the Company, Stockholders and Optionholders, each
a, “Party” and together, the “Parties”).


 


R E C I T A L S


 


WHEREAS, the Company and the Purchaser are parties
to the Stock Purchase Agreement, dated as of the date hereof (the “Purchase Agreement”), and it is a condition
to the closing of the sale of the Common Stock of the Company, par value $0.0001 per share (the “Common Stock”),
that the Company, Stockholders and Optionholders execute and deliver this Agreement to the Purchaser;


 


WHEREAS, the Stockholders collectively hold 90,000
shares of Common Stock, and each individual Stockholder holds the number of shares of Common Stock set forth opposite his or her name
on Schedule A hereto and, following the Conversion, the Noteholders collectively hold 30,735 shares of Common Stock, and each
individual Noteholder holds the number of shares of Common Stock set forth opposite his or her name on Schedule B hereto following
the Conversion (the “Outstanding Common Stock”);


 


WHEREAS, the Optionholders collectively hold the
option to acquire 2,480 shares of Common Stock, and each individual Optionholder holds an option to acquire the number of shares of Common
Stock set forth opposite his or her name on Schedule C hereto (the “Outstanding Options”) and the Warrantholders
collectively hold the warrants exercisable for 4,591 shares of Common Stock, and each individual Warrantholder holds warrants to acquire
the number of shares of Common Stock set forth opposite his or her name on Schedule D hereto (the “Outstanding Warrants”
and together with the Outstanding Common Stock and Outstanding Options, the “Outstanding Securities”); and


 


WHEREAS, the Parties desire to set forth the terms
and conditions under which the Company shall have the right, but not the obligation, to purchase all of the Outstanding Securities on
the terms set forth herein.


 


NOW, THEREFORE, in consideration of the promises,
covenants and agreements set forth above and herein contained, the receipt and sufficiency of which the Parties acknowledge, the Parties
agree as follows:


 






     


     


    

 


A G R E E M E N T


 


1.            Conversion
of Indebtedness.


 


(a)            As
of the Effective Date, each Noteholder and the Company hereby agrees and acknowledge that the balance under such Noteholder’s convertible
notes (the “Balance”) has been converted (the “Conversion”) into the number of shares
of Common Stock set forth on Schedule B (the “Conversion Shares”). Notwithstanding the terms of the
Notes, each Noteholder acknowledges and agrees that as of the Effective Date, the aggregate outstanding principal amount of each Note,
together with all accrued and unpaid interest thereon, is as set forth across from such Noteholder’s name on Schedule B.
Each Noteholder further agrees that the principal and accrued interest for each such Noteholder’s Note(s) shall be calculated
as of August 5, 2022. To the extent that additional interest accrues so that the total amount otherwise due to a Noteholder under
a Note is in excess of the amount set forth on Schedule B, each such Noteholder hereby irrevocably waives any such additional
interest. For the avoidance of doubt, no fractional shares of Common Stock will be issued as Conversion Shares and in lieu of any fractional
Conversion Shares to which such Noteholder would otherwise be entitled, the Company shall pay such Noteholder cash equal to such fraction
multiplied by the price at which such Noteholder’s Note converts. Following the Conversion, the undersigned Noteholder agrees and
acknowledges that such Noteholder will be a party to this Agreement as a Stockholder and will be subject to the covenants and obligations
applicable to the Stockholders under this Agreement.


 


(b)            Each
undersigned Noteholder agrees and acknowledges that the issuance of the Conversion Shares pursuant the Notes constitutes full satisfaction
of the Company’s obligations with respect to the Balance, and as of the Effective Date any and all obligations, liabilities, claims,
expenses, liens, actions, rights and interests the Noteholder has or may have in the future arising in respect of the Balance are hereby
extinguished and terminated, or otherwise are hereby forgiven and waived to the full extent of the law, and the Company is hereby released
from the same to the full extent of the law. The Noteholder hereby agrees to promptly take any further action and to execute any and
all additional documents or instruments requested by the Company to release the Company from its obligations under the Balance.


 


(c)            Upon
issuance of the Conversion Shares in accordance with Section 1(a) above, all obligations of the Company (including outstanding
principal, interest or any other amounts) under the Notes will be fully satisfied and discharged, and the Notes will automatically be
terminated and of no further force or effect. Each Noteholder acknowledges and agrees that the Notes and any and all side letters and
similar agreements entered into between such Noteholder and the Company in connection with the Notes and all obligations set forth therein
shall be terminated and of no further force or effect (whether or not actually delivered to the Company). Other than Noteholder’s
right to receive the Conversion Shares, each Noteholder hereby waives, on behalf of itself, any and all demands, claims, suits, actions,
causes of actions, proceedings, assessments and rights with respect to the Notes and any related agreements underlying the Notes, including,
without limitation: (i) any principal or interest payments due as of the date hereof in excess of the amounts to be converted into
Conversion Shares pursuant hereto; (ii) any right to notice of the conversion of the Conversion Shares; and (iii) any rights
arising from any past or present default or event of default under the Notes.


 






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(d)            The
Noteholder agrees and covenants that it will promptly execute and deliver to the Company such further instruments and documents and take
such further action as the Company may reasonably require in order to carry out the full intent and purpose of this Agreement, including,
for the avoidance of doubt, all financing documents executed by the investors in connection with the Qualified Financing (as defined
in the Notes) in accordance with Section 3(d) of the Notes, and to comply with state or federal securities laws or other regulatory
approvals, including causing any Affiliates of the Noteholder to take any actions that are necessary or appropriate to fulfill the terms
and provisions of this Conversion Agreement. For purposes of this Agreement, “Affiliate” of a Party, means
any corporation or other business entity controlled by, controlling or under common control with such Party. For this purpose, “control”
shall mean direct or indirect beneficial ownership of fifty percent (50%) or more of the voting or income interest in such corporation
or other business entity.


 


2.            Right
to Purchase. The Securityholders hereby irrevocably grant to the Purchaser the right to purchase (the “Purchase Option”),
and the Securityholders hereby irrevocably agree to promptly sell to the Purchaser, all of the Outstanding Securities at any time following
the date hereof until the expiration of the Option Term as set forth in Section 7. The Purchaser may exercise the Purchase Option
in its sole and absolute discretion. As more fully set forth in the Definitive Agreement (as defined below), the Outstanding Securities
shall be sold free and clear of any liens.


 


3.            Procedures.


 


(a)            The
Purchase Option may be exercised by the Purchaser by service of a written notice substantially in the form attached hereto as Exhibit B
(the “Call Exercise Notice”) on the Securityholders and Company at any time following date hereof
(and prior to termination of the Purchase Option pursuant to Section 7). The Purchaser’s delivery of the Call Exercise
Notice shall be revokable, in the Purchaser’s reasonable discretion, within [***] Business
Days of the Company delivering to the Purchaser a substantially complete disclosure schedule under the Definitive Agreement. For the
purposes of this Section 3(a), the date of exercise of the Purchase Option is the date on which the Purchaser serves the
Call Exercise Notice on the Securityholders and Company (such date, the “Call Notice Date”).


 


(b)            The
sale of the Outstanding Securities to the Purchaser shall be documented in a definitive agreement (the “Definitive Agreement”)
containing the terms, covenants and conditions set forth in the Term Sheet attached hereto as Exhibit A
(the “Term Sheet”). The Parties shall use commercially reasonable efforts to enter into the Definitive
Agreement within [***] days of the Purchaser delivering the Call Exercise Notice, and the Securityholders
hereby irrevocably agree to vote all shares of capital stock that they hold in the Company in favor of the transactions contemplated
by the Definitive Agreement as long as the Definitive Agreement does not materially deviate from the terms and conditions set forth in
the Term Sheet attached hereto as Exhibit A.


 


(c)            Notwithstanding
the foregoing, the Purchaser, in its sole and absolute discretion, may elect to exercise the Purchase Option and acquire the
Outstanding Securities pursuant to this Agreement rather than pursuant to the terms of the Term Sheet and the Definitive Agreement
(the “Direct Acquisition Option”). Following the determination of the Valuation Amount (as defined below),
the Direct Acquisition Option may be exercised by the Purchaser by service of a written notice substantially in the form attached
hereto as Exhibit C (the “Direct Acquisition
Notice”) on the Securityholders and Company at any time following date hereof (and prior to termination of the
Purchase Option pursuant to Section 7). The Purchaser’s delivery of the Direct Acquisition Notice shall be
revokable in the Purchaser’s reasonable discretion if the Company, the Company’s business or the Company’s
products suffer a material adverse event in between the Direct Notice Date and the Acquisition Closing. For the purposes of this Section 3(c),
the date of exercise of the Direct Acquisition Option is the date on which the Purchaser serves the Direct Acquisition Notice on the
Securityholders and Company (the “Direct Notice Date”). Upon the written request of the Purchaser, the
Company and the Purchaser shall promptly cooperate to determine the Valuation Amount (as defined below), which written
request may be delivered by Purchaser prior to or after the Purchaser delivers the Call Exercise Notice or Direct Acquisition
Notice.


 






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(d)            The
consummation of the transactions contemplated by the Direct Acquisition Option shall take place remotely through the exchange of documents
on a date to be designated by the Purchaser and consented to by the Company, such consent to not be unreasonably withheld, delayed or
conditioned; provided, that if the Parties are unable to agree on a date for the Acquisition Closing, the consummation of the transaction
contemplated by the Direct Acquisition Option shall take place [***] days after the Direct Notice
Date (the “Direct Acquisition Closing Date”). On the Direct Acquisition Closing Date:


 


(i)            Each
Stockholder shall deliver to Purchaser a customary release of claims relating to the transaction contemplated by this Agreement and their
equity ownership in the Company and any other documentation as may be reasonably requested by the Purchaser;


 


(ii)            Each
Stockholder shall deliver to the Purchaser an executed stock power in the form attached hereto as Exhibit D
(the “Stock Power”), representing the assignment of all Outstanding Securities held by such Stockholder
to the Purchaser in exchange for such Stockholder’s portion of the Direct Acquisition Consideration;


 


(iii)            Each
Optionholder shall deliver to the Purchaser an executed option termination agreement in the form attached hereto as Exhibit E
(the “Option Termination Agreement”), terminating the Outstanding Options held by such Optionholder
in exchange for the Optionholder’s portion of the Direct Acquisition Consideration as specified in the Option Termination Agreement;


 


(iv)            Each
Warrantholder shall deliver to the Purchaser an executed warrant termination agreement in the form attached hereto as Exhibit F
(the “Warrant Termination Agreement”), terminating the Outstanding Warrants held by such Warrantholder
in exchange for the Warrantholder’s portion of the Direct Acquisition Consideration as specified in the Warrant Termination Agreement;


 


(v)            The
Purchaser shall pay to each Stockholder, by wire transfer of immediately available funds, each Stockholder’s portion of the Direct
Acquisition Consideration (as defined below);


 






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(vi)            The
Purchaser shall deposit with the Company the aggregate amount of the Direct Acquisition Consideration that is due to the Optionholders
that are employees of the Company for payment through the Company’s standard payroll practices; and


 


(vii)            The
Purchaser shall pay to each Optionholder that is not an employee of the Company (a “Non-Employee Optionholder”),
by wire transfer of immediately available funds, each Non-Employee Optionholder’s portion of the Direct Acquisition Consideration.


 


(e)            As
used in this Agreement, the “Direct Acquisition Consideration” shall mean (i) the greater of (a) $100,000,000.00
or (b) the Valuation Amount calculated as of the Call Notice Date or the Direct Notice Date, as applicable,
which shall not be greater than $175,000,000.00 (ii) plus the product equal to (A) [***],
as applicable (the “Acquisition Closing”), multiplied by a percentage equal to (B) [***].
[***]. For purposes of this Subsection 3(e), the following terms shall have the following meanings:


 


(i)            “Valuation
Amount” shall mean an amount equal to [***].


 


(ii)            “Indebtedness”
shall mean the outstanding principal amount of, and all interest and other amounts accrued in respect of and all amounts payable at retirement
of, (a) any indebtedness for borrowed money of the Company, (b) any obligation of the Company evidenced by bonds, debentures,
notes or other similar instruments, (c) any reimbursement obligation of the Company with respect to letters of credit (including
standby letters of credit to the extent drawn upon), bankers’ acceptances or similar facilities issued for the account of the Company,
(d) any obligation of the type referred to in clauses (a) through (c) of another person or entity the payment of which
the Company has guaranteed or for which the Company is responsible or liable, directly or indirectly, jointly or severally, as obligor
or guarantor, (e) any known tax liabilities and (f) any deferred revenue.


 


(f)            The
Company shall use reasonable best efforts to promptly (and in any event within [***] days following
notice from the Purchaser) prepare and deliver true and complete copies of all audited, unaudited and proforma financial statements that
Purchaser will be required to file with the Securities and Exchange Commission (the “SEC”) in connection with
the consummation of the Purchase Option (including the Direct Acquisition Option) and such financial statements shall be prepared in
accordance with generally accepted accounting principles and Regulation S-X in a manner suitable for filing with the SEC. Notwithstanding
anything to the contrary herein, all time periods with respect to the exercise of the Purchase Option and Direct Acquisition Option,
the execution of a Definitive Agreement and the closing of such acquisition shall be tolled pending the preparation and delivery of such
financial statements. The Company shall cause its independent auditors to deliver an audit report in connection with any audited financial
statements and a consent allowing Purchaser to file such auditor report with the SEC.


 


(g)            Notwithstanding
the foregoing, the deadline for the closing on the Purchase Option (including the Direct Acquisition Option) may be extended to the extent
necessary for the Purchaser to receive any necessary approvals from regulatory authorities under applicable anti-trust laws or to allow
for the lapse of any waiting period under applicable anti-trust laws; provided, that Purchaser shall use best efforts to obtain such
anti-trust clearances.


 






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4.            Power
of Attorney. As security for the performance by the Securityholders of his, her or its obligations under this Agreement, in the event
the Purchaser exercises its Purchase Option, each Securityholder hereby grants an irrevocable proxy and power of attorney to the Purchaser,
with power to take all necessary actions and execute and deliver all documents and/or written consent of the stockholders to consummate
the sale and purchase of the Outstanding Securities pursuant to the Direct Acquisition Option or the Definitive Agreement, as applicable
(“Power of Attorney”); provided that, the Purchaser shall not exercise the foregoing Power of Attorney
unless the Securityholder has failed to comply with his, her or its obligations pursuant to this Agreement and in any case within [***]
Business Days following the request by Purchaser. This Power of Attorney is coupled with an interest and
shall survive, and shall not be affected by, the subsequent death, disability, incompetency or bankruptcy of the Securityholder. This
Power of Attorney shall not, without the prior written consent of the Purchaser, be superseded or revoked by any proxy or power of attorney
granted by the Securityholder simultaneously herewith or subsequent hereto.


 


5.            Phase
3 Milestone.


 


(a)            Within
[***] Business Days of the Company achieving the Phase 3 Milestone, the Company shall deliver a
notice (the “Phase 3 Notice”) to the Purchaser pursuant to Section 15 of this Agreement confirming the
achievement of the Phase 3 Milestone. As used in this Agreement, the “Phase 3 Milestone” means the Company’s
receipt of a communication from the U.S. Food and Drug Administration (“FDA”) after the completion of the Phase
2 Clinical Trial (as defined in the Purchase Agreement) that can be reasonably interpreted as not precluding the Company to proceed to
a phase 3 clinical trial involving the Company’s Product (as defined in the Purchase Agreement) (the “Company Product”).
The term “Business Day” shall have the meaning ascribed to it in the Purchase Agreement.


 


(b)            Prior
to and following the Phase 3 Milestone, the Company shall, to the extent practicable, provide the Purchaser with at least [***]
days’ advance notice of any meetings, consultations or appointments with FDA representatives relating
to the Company Product (an “FDA Meeting”); provided that, if the FDA or the Company requests a meeting
with the other and [***] days’ advance notice is not practicable, the Company shall provide
the Purchaser with notice of the requested meeting by the FDA or the Company within twenty-four hours (24) of such request. The Company
shall use commercially reasonable efforts to allow representatives of the Purchaser to attend any such FDA Meetings, and the Company
shall provide Purchaser copies of any data, documentation and information prepared in connection with any such FDA Meeting and all communications
with the FDA for the Purchaser to review, discuss and comment or, if not practicable or legally permitted, shall provide Purchaser with
a copy or summary thereof as soon as reasonably practicable thereafter.


 


(c)            Following
the Phase 3 Milestone, the Company hereby agrees and covenants not to initiate phase 3 pivotal studies involving the Company Product
until the termination of the Purchase Option as set forth in Section 7. The Company further agrees and covenants to provide the
Purchaser with reasonable access to the Company’s personnel, data, documentation, systems and information relating to the Company
Product following the Phase 3 Milestone, including any communications received from the FDA.


 






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6.            Royalties.


 


(a)            Royalty
Term. Purchaser’s obligation to pay royalties under this Section 6 shall commence [***] and
shall continue with respect to sales of all Products on a country-by-country basis until [***] years
after the First Commercial Sale of the first Product in such country (“Royalty Term”).


 


(b)            Royalty
Rates. Following the closing of the Acquisition and during the Royalty Term, Purchaser shall pay to the Royalty Recipients a [***]%
royalty on the Net Sales of all Products for the first [***] months
after the First Commercial Sale in such country (the “Initial Royalty Period”); provided that, with respect
to any Net Sales of Products to a United States Governmental Body, the Post-Initial Period Royalty Rates shall apply and such sales shall
be included in the calculation of Annual Net Sales of Product. Following the Initial Royalty Period, Purchaser shall pay to the Royalty
Recipients the following royalties on the Annual Net Sales of Products, equal to the following percentages of such Net Sales (the “Post-Initial
Period Royalty Rates”):


 


	Annual Net Sales of Products	Royalty
    Rate
	Annual
    Net Sales of Products (as defined below) equal to or less than	9%
	Annual
    Net Sales of Products greater than	12%


 


For purposes of this Agreement, “Annual Net Sales of Products”
means [***].


 


For clarity, the Initial Royalty Period is determined on a country-by-country
basis. By way of example, if the First Commercial Sale of a Product occurs in the United States, then the Initial Royalty Period will
end [***] months after such First Commercial Sale in the United States for any and all Products, and thereafter Purchaser will pay royalties
at the applicable Post-Initial Period Royalty Rate on Net Sales of all Products in the United States. Then, if there is a First Commercial
Sale of a Product in Germany, the Initial Royalty Period will end [***] months after such First Commercial Sale in Germany, and thereafter
Purchaser will pay royalties at the applicable Post-Initial Period Royalty Rate on Net Sales for any and all Products in Germany in addition
to the United States.


 


(c)            Royalty
Adjustment.


 


(i)            If
Purchaser, its Affiliate or sublicensee becomes obligated to make payment to a Third Party with respect to intellectual property rights
owned or controlled by such Third Party reasonably necessary for the Development, manufacture, use or sale of the Products (including
with respect to any pharmaceutically active ingredient that is not a Product (excluding Other Product) but is sold in combination with
a Product (whether or not in fixed dosage form)) (such amount, a “Third Party Payment Amount”), the Royalty
Recipients’ portion of such Third Party Payment Amount shall be equal to the then applicable Post-Initial Period Royalty Rate multiplied
by the Third Party Payment Amount (the “Deduction Amount”) and Purchaser may deduct the Deduction Amount from
the amounts payable to the Royalty Recipients under this Section 6; provided that, such deduction shall not reduce the amounts
so payable to the Royalty Recipients to less than [***] percent ([***]%)
of the amount that would otherwise be due hereunder. Purchaser may carry forward to subsequent calendar quarters any deductions that
it was not able to deduct as a result of the foregoing proviso. Notwithstanding the foregoing, in no event shall any royalty adjustment
under this Section 6(c) apply to the TP Royalty (as defined in Section 6(e) below).


 






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(ii)            If
the Product is neither (i) Covered by a Valid Claim of a Patent controlled by Purchaser or any of its Affiliates in the country
for which such Product is sold nor (ii) subject to any Regulatory Exclusivity in such country, the royalty payable by Purchaser
with respect to such Product in such country shall be reduced by [***] percent ([***]%)
of the amount otherwise payable pursuant to Section 6(b). Notwithstanding the foregoing, the reduction in this Section 6(c)(ii) shall
not apply with respect to a Product in a calendar quarter in a particular country if a reduction is made under Section 6(c)(iii) below
for such Product in such quarter in such country.


 


(iii)            If
in any country during the Royalty Term for a Product, Generic Products to such Product are sold by any Third Party that is not a
sublicensee, and the aggregated (all package sizes) sales turnover of the Product in such country (measured in unit sales) is less
than [***]% of the aggregated sales volume of such Product for the calendar quarter immediately
prior to the launch of the Generic Product in such country, then the then-applicable royalty rates (i.e., as set forth in
Section 6(b)) and as such royalties may have been further reduced pursuant to Section 6(c)(i), subject to
Section 6(c)(v) for such calendar quarter for Product sold in such country will be reduced by [***] percent
([***]%) of the royalty rates then applicable. If, in any country during the Royalty Term for a
Product, Generic Products to such Product are sold by any Third Party that is not a sublicensee, and the aggregated (all package
sizes) sales turnover of the Product in such country (measured in unit sales) is less than [***]%
of the aggregated sales volume of such Product for the calendar quarter immediately prior to the launch of the Generic Product in
such country, then the then-applicable royalty rates (i.e., as set forth in Section 6(b) and as such royalties may have
been further reduced pursuant to Section 6(c)(i), subject to Section 6(c)(v)) for such calendar quarter for Product sold
in such country will be reduced by [***] percent ([***]%)
of the royalty rates set forth in Section 6(b). All such determinations of unit sales shall be based upon a mutually
acceptable calculation method using market share data provided by a reputable and mutually agreed upon provider, such as IQVIA.


 


(iv)            No
more than one royalty payment shall be due under this Agreement with respect to a sale of a particular Product (e.g., even if such Product
is Covered by multiple Valid Claims or multiple patents).


 


(v)            Notwithstanding
anything to the contrary, with respect to any Product in any calendar quarter, the operation of Section 6(c)(i), Section 6(c)(ii) and
Section 6(c)(iii) above, individually or in combination, shall not reduce by more than [***] percent
([***]%) the royalties that would otherwise have been due under Section 6(b) with respect
to Net Sales of such Product in the applicable country(ies) during such calendar quarter.


 






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(d)            Payment.
Commencing with the calendar quarter in which the First Commercial Sale of the first Product occurs, Purchaser shall pay the Royalty
Recipients equitably based on a pro rata ratio of the total number of capital stock held by the Royalty Recipients (or, their respective
predecessors-in-interest, as applicable) at the time of the closing of the Acquisition (“Pro Rata Basis”) within
[***] days following the end of each such calendar quarter during the Royalty Term.


 


(e)            TP
Royalty. If Purchaser or its Affiliates Divests one or more Products to a Third Party for commercialization in a territory other
than the United States (i.e., divestiture shall not be based on the location of the Third Party), Purchaser shall pay to the Royalty
Recipients on a Pro Rata Basis a [***] percent ([***]%) royalty
on any sales or non-sales related revenue either Purchaser or its Affiliates receives from such Third Party (“TP Royalty”)
within [***] days following receipt of such revenue; provided that, (a) such TP Royalty
shall not be greater than [***] ($[***]), and (b) such
TP Royalty shall not be subject to any royalty adjustment. For clarity, Purchaser’s obligation to pay the TP Royalty shall survive
any Change of Control of Purchaser or the Company.


 


(f)            PRV.
If Purchaser or any of its Affiliates determines to sell the first Priority Review Voucher granted with respect to the Product (“PRV”),
Purchaser shall pay to the Royalty Recipients on a Pro Rata Basis [***] percent ([***]%)
of all proceeds received from the sale of such PRV within [***] days of the consummation of the
sale of the PRV. If Purchaser or any of its Affiliates determines to use the PRV for an application of Purchaser or any of its Affiliates,
Purchaser shall pay to the Royalty Recipients on a Pro Rata Basis [***] Dollars ($[***])
within [***] days of the submission of such application.


 


(g)            Late
Payments. In the event any royalty payments or other payments due to the Royalty Recipients under this Section 6 are not paid
when due hereunder, Purchaser shall pay to the Royalty Recipients interest charges at the rate of [***] percent
([***]%) per annum on the total royalty payments or other payments due hereunder under paid in full.


 


(h)            Reporting.
At such times as Purchaser shall deliver a royalty payment to the Royalty Recipients under Section 6(b), Section 6(d) or
Section 6(e) hereof, Purchaser shall also deliver to each of Herman Cukier, Daniel Motto, and Dr. Joseph V. Pergolizzi,
Jr (the “Designated Persons”) a written report detailing all sales, if any, made of Products during the calendar
quarter giving rise to the royalty payment (or such other applicable period), and detailing the amount of Net Sales made during such
calendar quarter and showing its calculations the royalty payments due to the Royalty Recipients pursuant to Section 6(c) or
Section 6(d) hereof, as applicable. The Designated Persons shall be responsible for distributing each report to the Royalty
Recipients. Each report shall include at least the following:


 


(i)            The
dollar amount of Net Sales, on a country-by-country basis, of Products sold by and/or for Purchaser or its Affiliates or any Licensees;


 






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(ii)            an
accounting for Net Sales, showing the details of all deductions from the gross amounts invoiced by Purchaser and its Affiliates and any
Licensees; and


 


(iii)            the
royalty amounts due to the Royalty Recipients;


 


Each such report shall be signed by an officer of Purchaser and shall
be certified as true, correct, and complete. Purchaser’s failure to submit a royalty report as provided in this Section 6(h) shall
constitute a breach of this Agreement.


 


(i)            Records.
Purchaser and its Affiliates shall keep (and shall cause each Licensee to keep) complete, true and accurate records and books in
reasonably sufficient detail for the purpose of showing its calculation of Net Sales as well as any amounts payable to the Royalty
Recipients hereunder. Records and books shall be kept at Purchaser’s (or Licensee’s, as applicable) principal
place of business, for at least thirty-six (36) months following the end of the calendar year to which such books and records
pertain.


 


(j)            Audit.
The books and records referred to in Section 6(j) shall be open to inspection by the Designated Persons as well as their respective
accountants, attorneys, agents or advisors (each, a “Designated Persons’ Representative”) reasonably
acceptable to Purchaser, upon at least twenty (20) days’ prior written notice to Purchaser, during normal business hours during
the Royalty Term and for a period of three (3) years thereafter, for the purpose of verifying the Purchaser’s calculations
of Net Sales and Purchaser’s royalty statement. Such audits may not (a) be conducted for any calendar year ending more than
thirty-six (36) months prior to the date of the request, (b) be conducted more than once each calendar year per Designated Person,
or (c) be repeated for any calendar quarter. Purchaser shall ensure that any Licensee will provide the Designated Persons with such
access to any books and records maintained by the Licensee. In the event such audit is conducted by a Designated Persons’ Representative,
such Designated Persons’ Representative shall provide to Purchaser (y) a preliminary copy of its audit report at the same
time it provides such audit report to the Designated Persons and (z) the final audit report containing its conclusions regarding
any audit. Any Designated Person or Designated Persons’ Representative conducting an audit shall enter into a confidentiality agreement
with Purchaser and shall not disclose or use the confidential information except to the extent necessary to conduct the audit.


 


(k)            Assumption
by Acquirer. During the Royalty Term, Purchaser shall not (and shall ensure that none of its Affiliates do not) Divest any rights
with respect to any Product to any Person (an “Acquirer”), unless the Acquirer agrees in writing (a) to
assume and be bound by all of the provisions of this Section 6 (including, but not limited to this Section 6(k)), to the same
extent that such provisions apply to Purchaser, and (b) that each Royalty Recipient is an intended third party beneficiary of the
foregoing. Purchaser shall deliver a copy such agreement signed by an Acquirer to each Royalty Recipient prior to or at the time of the
closing of the transaction pursuant to which rights with respect to a Product are Divested to the Acquirer.


 


(l)            Definitions.
As used in this Section 6, the following terms shall have the following respective meanings:


 


(i)            “Acquisition” means
Purchaser’s acquisition of all the outstanding securities of the Company pursuant to the terms of this Agreement.


 






    10


     


    

 


(ii)            “Change
of Control” means, with respect to a Party: (i) a merger, reorganization or consolidation involving such Party in
which the holders of the voting securities of such Party outstanding immediately prior thereto cease to beneficially own at least fifty
percent (50%) of the combined voting power of the surviving entity, directly or indirectly, immediately after such merger, reorganization
or consolidation; or (ii) a transaction in which an entity or individual, or group of entities and/or individuals acting in concert,
acquires more than fifty percent (50%) of the voting equity securities of such Party.


 


(iii)            “Combination
Product” means: [***]. [***] are each referred
to as the “Other Product(s)”.


 


(iv)            “Cover”
shall mean, with respect to a claim of a Patent and a Product, that such claim would be infringed, absent a license, by the manufacture,
use, offer for sale, sale or importation of such Product (considering claims of patent applications to be issued as then pending).


 


(v)            “Development”
or “Develop” means all activities that relate to the development of Products, including, but not limited to,
all interactions with Regulatory Authorities, management of the clinical development program, and oversight of the manufacturing of clinical
supplies and registration batches.


 


(vi)            “Divest”
means the sale, license, sublicense, assignment, or transfer (in any manner) of all or any of the right, title, or interest in and to
a Product to a Third Party.


 


(vii)            “First
Commercial Sale” means, on a country-by-country basis, the first commercial sale, transfer or disposition for monetary
value of any Product for use or consumption by a Third Party end user, in each case, after all approvals, licenses, registrations or
authorizations of any Governmental Body that are necessary for the manufacturing, use, storage, import, transport and sale of such first
Product in a regulatory jurisdiction, including in each case, pricing and reimbursement approval, have been obtained for such country
and where such sale, disposition or transfer results in a recordable Net Sale in accordance with Purchaser’s or its Affiliate’s,
applicable accounting practices (consistently applied).


 


(viii)            “Generic
Product” means, with respect to a particular pharmaceutically active ingredient (including the Product) (“Original
Product”) and a particular country, any pharmaceutical product that: (a) contains the same active pharmaceutical ingredient(s) as
such Original Product, (b) is approved by the regulatory authority in such country as a substitutable generic for such Original
Product or otherwise is approved as a therapeutic equivalent to such Product in a manner that relied on or incorporated data submitted
by a Person (the “Filing Entity”), in connection with the regulatory filings for such Product, including through
an ANDA or an application under §505(b)(2) of the U.S. Federal Food, Drug and Cosmetic Act, or any enabling legislation thereof,
or any similar procedure outside the United States, in each case now or in the future, and (c) is sold in such country by a Person
other than by or on behalf of such Filing Entity.


 






    11


     


    

 


(ix)            “Governmental
Body” shall mean any national, federal, regional, state, provincial, local, or foreign or other governmental authority
or instrumentality, legislative body, court, administrative agency, regulatory body, commission or instrumentality, including any multinational
authority having governmental or quasi-governmental powers, or any other industry self-regulatory authority or arbitral body.


 


(x)            “Licensee”
means a Third Party to whom Purchaser or any of its Affiliates grants a license to offer for sale, sell, have sold, or otherwise commercialize
any Product, and any sublicensees (through multiple tiers) of any of the foregoing. “Licensee” shall not be deemed to include
any distributor, wholesaler or reseller of a Product who is not responsible for marketing or promotion of such Product.


 


(xi)            “Phase
2 Clinical Trial” means a human clinical trial of any Product, the principal purpose of which is to evaluate the effectiveness
and/or safety of such Product in the target patient population, as described in 21 C.F.R. § 312.21(b), as amended from time to time,
or the corresponding foreign regulations, and which trial is intended to be the final clinical trial before the initiation of a pivotal
clinical trial and to establish the dosing for such pivotal clinical trial.


 


(xii)            “Regulatory
Authorities” means the FDA and comparable regulatory agencies outside of the United States.


 


(xiii)            “Regulatory
Exclusivity” means, with respect to a Product, any exclusive marketing rights or data exclusivity rights conferred by the
applicable Regulatory Authority with respect to the Product, other than a Patent, including, but not limited to, orphan drug exclusivity,
new chemical entity exclusivity, data exclusivity, or pediatric exclusivity.


 


(xiv)            “Patent(s)”
means all patents and patent applications (including provisional applications), including all divisionals, continuations, substitutions,
continuations-in-part, re-examinations, re-issues, additions, renewals, extensions, confirmations, registrations, any other pre- or post-grant
forms of any of the foregoing, any confirmation patent or registration patent or patent of addition, utility models, patent term extensions,
and supplemental protection certificates or requests for continued examinations, foreign counterparts, foreign equivalents and the like
of any of the foregoing.


 


(xv)            “Product”
means [***]; “Products” means, collectively, [***].


 


(xvi)            “Royalty
Recipient” means the Persons that were Company stockholders at the time of the closing of the Acquisition (other than Purchaser
or its Affiliates), and any of their respective successors, assigns and estates, as applicable.


 






    12


     


    

 


(xvii)            “Net
Sales” means, [***]:


 


(A)            [***];


 


(B)            [***];


 


(C)            [***];


 


(D)            [***];


 


(E)            [***];


 


(F)            [***];
and


 


(G)            [***].


 


Notwithstanding the foregoing, amounts received
or invoiced by Purchaser or its Affiliates for the sale of Products among Purchaser and its Affiliates shall not be included in the computation
of Net Sales hereunder. Net Sales shall be accounted for in accordance with U.S. GAAP in all instances.


 


Transfers, use or sales of Products for research,
Development (including for clinical studies), promotional or advertising purposes or as donations or the like or as “treatment
IND sales,” “named patient sales,” “compassionate use sales” or pursuant to any expanded access programs,
in each case, shall not be included in Net Sales.


 


For purposes of calculating Net Sales on sales of
Combination Products, the gross amount received for any Product included in a Combination Product shall be calculated by multiplying
the gross amount received for such Combination Product by the fraction A/(A+B), where “A” is the gross amount received for
such Product sold separately without the Other Product and “B” is the gross amount received for the Other Product sold separately,
in each case in the same country and calendar quarter. In the event that such Product and any Other Product are not sold separately in
material amounts in the same country and calendar quarter, the gross amount received for such Product shall be reasonably determined
by Purchaser based upon the relative value of the Product and the Other Product included in the Combination Product. In the event of
a dispute with respect to such allocation, either Party may submit the matter to dispute resolution pursuant to Section 11.14 of
the Purchase Agreement.


 


(xviii)            “Third
Party” means any Person other than other than a Party or an Affiliate of a Party.


 


(xix)            “Valid
Claim” means (a) a claim of an issued, unexpired patent controlled by Purchaser that has not been revoked, disclaimed,
abandoned or held invalid or unenforceable by court or other body of competent jurisdiction in an unappealed or unappealable decision,
or (b) a claim of a pending patent application that has not been cancelled, withdrawn, abandoned, or finally rejected by an administrative
agency action from which no appeal can be taken and that has not been pending for more than seven (7) years from the date of filing
of the earliest priority patent application to which such pending patent application is entitled to claim benefit.


 


7.            Term
of the Option. The Purchase Option shall be effective as of the execution of this Agreement and shall terminate if the Purchaser
does not exercise the Purchase Option upon the earlier of (a) within ninety (90) days of receiving the Phase 3 Notice from the Company,
or (b) by June 30, 2027 (the “Option Term”).


 






    13


     


    

 


8.            Representations
and Warranties of the Securityholders. Each Securityholder hereby represents and warrants to the Purchaser that the following representations
and warranties are true and complete as of the date of this Agreement:


 


(a)            Ownership
of Securities. Securityholder is the sole record, legal and beneficial owner of that number and class of shares of Common Stock set
forth opposite the Securityholder’s name on Schedule A or is the sole and beneficial owner of an option to acquire that
number and class of shares of Common Stock set forth opposite the Securityholder’s name on Schedule B. The Outstanding Securities
constitute Securityholder’s only equity or security interest in the Company and Securityholder has no rights to directly or indirectly
acquire additional shares of Common Stock. The Outstanding Securities (a) are not, and as of the closing of the Definitive Agreement
will not be, subject to any liens, claims, options, charges, rights of first refusal or other encumbrances (any of the foregoing, a “Lien”)
(other than Liens created pursuant to this Agreement), and (b) have not been transferred, assigned or otherwise disposed of by Securityholder
and Securityholder has not entered into any agreement to transfer, assign or otherwise dispose of the Outstanding Securities (other than
pursuant to this Agreement).


 


(b)            Power,
Authorization and Validity. Securityholder has all requisite power and legal capacity to enter into this Agreement and to perform
his, her or its obligations under this Agreement. The execution and delivery of this Agreement by Securityholder and the consummation
by Securityholder of the transactions contemplated hereby have been duly authorized by all necessary action, if any, on the part of Securityholder.
This Agreement has been duly executed and delivered by Securityholder and constitutes, or when executed by Securityholder shall constitute,
a valid and binding obligation of Securityholder, enforceable against Securityholder in accordance with its terms, subject only to the
effect, if any, of (i) applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting the enforcement
of the rights of creditors generally and (ii) rules of law governing specific performance, injunctive relief and other equitable
remedies.


 


(c)            No
Consents. No consent, approval, order, authorization, release or waiver of, or registration, declaration or filing with, any governmental
authority is necessary or required to be made or obtained by Securityholder to enable Securityholder to lawfully execute and deliver,
enter into, and perform its, his or her obligations under this Agreement.


 


(d)            No
Conflict. Neither the execution and delivery by Securityholder of this Agreement or any other transaction contemplated by this Agreement:
(a) conflicts with, or, with or without notice or lapse of time (or both), results in a termination, breach, impairment or violation
of, or constitutes a default under, or requires the consent, release, waiver or approval of, or notice to, any third party under, (i) if
Securityholder is an entity, any provision of the organizational or governing documents of Securityholder, each as currently in effect,
(ii) any applicable law, or (iii) any contract to which Securityholder is a party or by which Securityholder or its, his or
her assets are bound or otherwise affected; or (b) results in the creation of any Lien on any of the Outstanding Securities.


 






    14


     


    

 


(e)            Legal
Proceedings. There is no private or governmental action, inquiry, claim, mediation, arbitration, counterclaim, proceeding, suit,
hearing, litigation, audit or investigation, in each case whether civil, criminal, administrative, judicial or investigative, or any
appeal therefrom (each of the foregoing, a “Legal Proceeding”) to which Securityholder is a party (either directly
or indirectly) and that relates in any way to the Outstanding Securities or any of the transactions contemplated hereby or thereby. To
the knowledge of Securityholder, no such Legal Proceeding has been threatened.


 


(f)            Review.
Securityholder has carefully read this Agreement and Securityholder has had reasonable time and opportunity to discuss this Agreement
with Securityholder’s financial, legal and other advisors, to the extent Securityholder has determined necessary, prior to executing
this Agreement. Securityholder has such knowledge and experience in business and financial matters to enable Securityholder to understand
and form an investment decision with respect thereto. Securityholder understands and acknowledges that the Purchaser is entering into
this Agreement in reliance upon Securityholder’s execution and delivery of this Agreement and agreement to be bound hereby and
by the terms of the Definitive Agreement (including with respect to Securityholder’s indemnification obligations hereunder and
thereunder).


 


9.            Covenants
of the Company. The Company hereby acknowledges and agrees that, during the Option Term, the Company:


 


(a)            Shall
use commercially reasonable best efforts to maintain and preserve intact the business of the Company as currently conducted and to maintain
reasonably satisfactory relationships with suppliers, customers, distributors, Company employees and other persons or entities having
material business relationships with the Company.


 


(b)            Shall
not take any of the following actions without the prior written consent of the Purchaser, such consent to not be unreasonably withheld,
delayed or conditioned:


 


(i)            authorize
the creation or reclassification of, or issue or obligate itself to issue shares of, any shares of any additional class or series of
capital stock or debt securities that rank senior to the Common Stock with respect to the distribution of assets on the liquidation,
sale, change of control, dissolution or winding up of the Company or other similar events, the payment of dividends, rights of redemption,
and any other rights, preferences or privileges; provided that, for the avoidance of doubt, nothing herein shall be construed
as restricting an optionholder or recipient of an award under the Stock Plan (as defined in the Purchase Agreement) from exercising its
option or award pursuant to the terms thereof and the terms of the Stock Plan (as defined in the Purchase Agreement);


 


(ii)            enter
into a Corporate Transaction (as such term is defined in the Purchase Agreement);


 


(iii)            purchase
or redeem (or permit any subsidiary to purchase or redeem) or pay or declare any dividend or make any distribution on, any shares of
capital stock of the Company other than (A) repurchases of stock from former employees, officers, directors, consultants or other
persons who performed services for the Company or any subsidiary in connection with the cessation of such employment or service at the
lower of the original purchase price or the then-current fair market value thereof, and (B) the Company’s exercise of its
right of first refusal under Section 3.1 of the Amended and Restated Stockholders’ Agreement of the Company, dated as of the
Effective Date, as may be amended from time to time in accordance with its terms;


 






    15


     


    

 


(iv)            sell
or dispose of any assets having an aggregate value exceeding $500,000, other than the sale of inventory in the ordinary course of business
consistent with past practice;


 


(v)            acquire
any assets outside of the ordinary course of business having an aggregate value exceeding $500,000;


 


(vi)            make
any capital expenditures or expenditures in respect of capital additions having an aggregate value exceeding $500,000;


 


(vii)            settle
or agree to settle any Legal Proceeding in an amount greater than $1,000,000 in the aggregate;


 


(viii)            make
any material change in any method of financial accounting or accounting practice;


 


(ix)            to
the extent it may affect the Company, (i) make, revoke or modify any material tax election, (ii) except as required by changes
in applicable law, change any annual accounting period for taxes, (iii) adopt or change any tax accounting method, except as required
by changes in applicable law, (iv) enter into any closing or other agreement with a taxing authority with respect to taxes, (v) settle
or compromise any tax claim or assessment, consent to the extension or waiver of the limitation period applicable to any tax claim or
assessment, (vi) surrender any right to claim a refund of taxes, or (vii) file any tax return other than on a basis consistent
with past practice;


 


(x)            enter
into any commercialization license, option, joint development or other contract relating or pertaining to the Company Product outside
the ordinary course of business;


 


(xi)            waive
any claims or rights with a value in excess of $500,000;


 


(xii)            (A) incur
any indebtedness for borrowed money in an aggregate amount exceeding $500,000 except for unsecured indebtedness, obligations and/or liabilities
or (B) impose any Lien upon any of the assets of the Company, other than in the ordinary course of business and consistent with
past practice;


 


(xii)            hire
a new President or Chief Executive Officer or other officer having similar duties and responsibilities customarily delegated to the President
or Chief Executive Officer; or


 


(xiii)            agree
or commit to do any of the foregoing.


 






    16


     


    

 


(c)            Shall
cause any new recipient of securities of the Company, including any securities convertible into capital stock of the Company, to become
a party to this Agreement as a Securityholder as a condition to the issuance of such capital and become subject to the Purchase Option
obligations set forth herein. For the avoidance of doubt, the Company shall be permitted to continue to grant awards under the Stock
Plan (as defined in the Purchase Agreement) subject to such grantees becoming a party to this Agreement in accordance with this Section 9(c).


 


10.            Restrictions
on Transfer.


 


(a)            Other
than as a function of law (e.g., death or divorce), no Securityholder, at any time, shall be permitted to, directly or indirectly, Transfer
any of its Common Stock without the prior written consent of the Purchaser, such consent to not be unreasonably withheld, delayed or
conditioned; provided, however, that the undersigned Securityholder agrees that it will be a condition to the transfer of any Common
Stock by function of law that such transferred Common Stock continue to be subject to the Purchase Option obligations set forth herein
and the undersigned Securityholder shall further undertake to take any actions necessary to ensure such obligations will continue, be
recognized and enforced.


 


(b)            As
used in this Section 10, “Transfer” shall mean any sale, assignment, disposition, exchange, pledge, encumbrance,
hypothecation, foreclosure or other transfer of such Common Stock or capital stock of the Company or any participation or interest therein,
in each case whether directly or indirectly (including pursuant to a derivative transaction) in any direct or indirect company holding
any Common Stock or capital stock of the Company (including, for the avoidance of doubt, if the Securityholder is an entity, the transfer
of any equity interests or other securities in any direct or indirect parent entity holding equity interests or other securities in the
Securityholder).


 


11.            Representations
and Warranties of the Company. The Company hereby represents and warrants to the Purchaser that the following representations and
warranties are true and complete as of the date of this Agreement:


 


(a)            Authorization;
Binding Obligations. The Company has the requisite power and authority to execute, deliver and perform this Agreement and all
other agreements contemplated hereby, and the Company’s execution, delivery and performance of this Agreement and all other
agreements contemplated hereby has been duly authorized by all required action. This Agreement constitutes a valid and legally
binding obligation of the Company, enforceable in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of creditors’ rights generally and by laws relating to
the availability of specific performance, injunctive relief or other equitable remedies.


 


(b)            No
Conflict. The execution, delivery and performance of and compliance with this Agreement by the Company will not result in any violation
or breach by the Company of any of its formation or governance documents, or any term of any indenture, mortgage, deed of trust or other
agreement, instrument, court order, judgment, decree, statute, rule or regulation to which the Company is a party or by which the
Company is bound and will not be in conflict with or constitute a default under any such term or result in the creation of any mortgage,
pledge, lien, encumbrance or charge upon any of the properties or assets of the Company. There is no action, suit or proceeding pending
or, to the knowledge of the Company, currently threatened against the Company that questions the legality, validity or enforceability
of this Agreement or the right of the Company to enter into this Agreement.


 






    17


     


    

 


12.            Severability.
If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.


 


13.            Amendments
and Waivers.


 


(a)            Prior
to the Purchaser’s purchase of all the Outstanding Securities, whether consummated by a closing under the Definitive Agreement
or by the Purchaser electing to exercise the Direct Acquisition Option (the closing of such purchase and sale, an “M&A
Closing”), this Agreement may only be amended and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively) only with the written consent of the Company (on its behalf and
on behalf of the Securityholders pursuant to the Company PoA) and the Purchaser. For purposes of amending or waiving any right under
this Agreement as provided in the foregoing sentence, each Securityholder hereby grants an irrevocable proxy and power of attorney to
the Company, with power to take all necessary actions and execute and deliver all documents necessary to amend this agreement or waive
any rights on behalf of such Securityholder (the “Company PoA”); provided that, the consent of the Securityholder
shall be required for any amendment that is targeted as such individual Securityholder. This Company PoA is coupled with an interest
and shall survive, and shall not be affected by, the subsequent death, disability, incompetency or bankruptcy of the Securityholder.
This Company PoA shall not, without the prior written consent of the Purchaser and the Company, be superseded or revoked by any proxy
or power of attorney granted by the Securityholder simultaneously herewith or subsequent hereto. Notwithstanding the foregoing, the Company
PoA shall be automatically terminated without the further action of any Person at the time of an M&A Closing, in which case the provisions
of Section 13(b) shall apply.


 


(b)            Notwithstanding
the provisions of Section 13(a) above, following an M&A Closing, if any, this Agreement may only be amended and the observance
of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively)
only with the written consent of a Majority of the Royalty Recipients (as defined below) and the Purchaser; provided that, the
consent of a Royalty Recipient shall be required for any amendment that is targeted as such individual Royalty Recipient. For purposes
hereof, a “Majority of the Royalty Recipients” means, measured immediately prior to the M&A Closing, Royalty
Recipients collectively holding at least [***]% of the shares of Common Stock measured solely amongst
the Royalty Recipients (for the avoidance of doubt, excluding any shares of Common Stock owned by Purchaser or its Affiliates immediately
prior to such M&A Closing).


 


14.            Interpretation
and Construction; Termination. This Agreement and the Transaction Documents (as defined in the Purchase Agreement) constitute
the entire Agreement and understanding among the Parties pertaining to the subject matter contained herein and supersedes all prior
and contemporaneous agreements, representations, and understandings of the Parties. No covenant, representation, or condition not
expressed in this Agreement shall affect or be deemed to interpret, change, or restrict the express provisions hereof. The headings
in this Agreement are for the convenience of reference only and shall not affect the interpretation of this Agreement. This
Agreement may be terminated as set forth in Section 11.20 of the Purchase Agreement; provided that, (a) this
Agreement may not be terminated by the Purchaser following an M&A Closing, (b) Sections 1, 14, 16, 17, 18, 19, 20, and 22
shall survive any such termination, and (c) if this Agreement is terminated as set forth in Section 11.20 of the Purchase
Agreement, the Purchase Agreement shall also be deemed terminated as of such date without further action on the part of any Person
(as defined in the Purchase Agreement).


 






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15.            Notices.
All notices and other communications required or permitted hereunder shall be in writing in English and given by delivery in person,
by electronic mail with confirmation of delivery, by overnight delivery by a nationally recognized private courier, or by U.S. mail
postage prepaid, certified mail. Any such notice or communication shall be deemed to have been received for
the purposes of this Agreement (a) in the case of personal delivery, on the date of such delivery if a Business Day or, if not
a Business Day, the next succeeding Business Day, (b) in the case of nationally-recognized private courier (including overnight
delivery by such courier), on the next Business Day after the date when sent, (c) in the case of email, on the date of such
delivery when receipt is confirmed, and (d) in the case of mailing by U.S. mail, on the fifth Business Day following that on
which the piece of mail containing such communication is deposited with the U.S. Postal Service. All notices shall be addressed as
set out below or to such other address as the Party to whom notice is to be given may have furnished to the other Parties in writing
in accordance with this Section 15:


 


(i)           if
to the Purchaser:


 


Eagle Pharmaceuticals, Inc. 


50 Tice Boulevard, Suite 315 


Woodcliff Lake, NJ 07677 


Attention: [***]


 


With a copy to (which copy shall not constitute notice):


 


Cooley LLP 


500 Boylston Street 


Boston, MA 02116 


Attention: Marc Recht and Miguel J. Vega 


Email: mrecht@cooley.com; mvega@cooley.com 


Fax No.: 617.937.2400


 


(ii)           if
to the Company:


 


Enalare Therapeutics Inc. 


161 Hodge Road 


Princeton, New Jersey 08540 


Attention: [***] 


Email: [***]


 


With a copy to (which copy shall not constitute notice):


 


Coviello Weber & Dahill LLP 


707 Westchester Avenue, Suite 300 


White Plains, NY 10604 


Attention: Paul R. Weber, Esq. 


Email: pweber@cwdlaw.com


 


(iii)            if
to the Securityholders, to the address, facsimile or email address set forth opposite his, her or its name on Schedule A and Schedule
B, as applicable.


 






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16.            Successors
and Assigns. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be transferred or assigned,
in whole or in part, by operation of law or otherwise by any Party without the prior written consent of the other Parties.
Notwithstanding the foregoing, the Purchaser may assign this Agreement and its rights and obligations hereunder (a) to any
Affiliate of Purchaser (provided the Company receives reasonably satisfactory evidence that such Affiliate is able to meet its
obligations hereunder), or (B) to a successor to all or substantially all of the assets of the Purchaser (irrespective of the
nature of the transaction, whether by way of stock sale, asset sale or otherwise). In the event of any assignment in accordance with
the terms of this Agreement, the assignee shall specifically assume and be bound by the provisions of the Agreement by executing and
agreeing to an assumption agreement reasonably acceptable to the Purchaser and the Company. Any purported transfer or assignment
without such consent shall be void. Subject to the preceding sentence, this Agreement shall be binding upon, inure to the
benefit of and be enforceable by, the Parties and their respective successors, transferees and
assigns.


 


17.            Further
Assurances. Each Party agrees to execute such further documents and instruments and to take such further actions as may be reasonably
necessary to carry out the purposes and intents of this Agreement.


 


18.            Expenses.
Except as expressly provided in this Agreement, each of the Purchaser and the Company will bear their own costs and expenses, including,
without limitation, fees and disbursements of counsel, financial advisors and accountants, in connection with this Agreement and the transactions
contemplated hereby. Each Securityholder may engage its own counsel, financial advisors and accountants, in connection with this Agreement
and the transactions contemplated hereby and if it does, it shall bear all such costs and expenses individually.


 


19.            No
Third-Party Beneficiaries. Except as otherwise provided in this Agreement, nothing in this Agreement is intended to, or will, create
any rights to any party other than the Parties.


 


20.            Governing
Law. This Agreement shall be governed in all respects by the internal laws of the State of Delaware, without regard to conflict of
law principles that would result in the application of any law other than the law of the State of Delaware.


 


21.          Jurisdiction;
Venue. With respect to any disputes arising out of or related to this Agreement, each Party irrevocably consents to the exclusive
jurisdiction of, and venue in, the Court of Chancery in the State of Delaware, agrees that process may be served upon them in any manner
authorized by the laws of the State of Delaware for such persons and waives, and covenants not to assert or plead, any objection which
such party might otherwise have to such jurisdiction, venue and process.


 






    20 


     


    

 


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


 


23.            Remedies;
Prevailing Party. Any Party having any rights under any provision of this Agreement will be entitled to enforce its rights under this
Agreement to recover damages and costs (including attorneys’ fees) caused by any breach of any provision of this Agreement and to
exercise all other rights existing in its favor. Each Party hereby acknowledges and agrees that money damages may not be an adequate remedy
for any breach of the provisions of this Agreement and that any Party may in its sole discretion apply to any court of law or equity of
competent jurisdiction (without posting any bond or deposit) to seek specific performance and/or other injunctive relief in order to enforce
or prevent any violations of the provisions of this Agreement.


 


[Signature page follows]


 






    21 


     


    

 


In Witness
Whereof, each of the parties has executed this Security Purchase Option Agreement as of the day and year first above written.


 


	 	SECURITYHOLDERS:




 


	 	[***]




 


[Signature
Page to Security Purchase Option Agreement]


 






     


     


    

 


In Witness
Whereof, each of the parties has executed this Security Purchase Option Agreement as of the day and year first above written.


 


	 	PURCHASER:




 


	 	Eagle Pharmaceuticals, Inc.




 


		By:	/s/ Scott Tarriff






	 	Name: Scott Tarriff
	 	Title: President & Chief Executive Officer




 


[Signature
Page to Security Purchase Option Agreement]


 






     


     


    

 


In Witness
Whereof, each of the parties has executed this Security Purchase Option Agreement as of the day and year first above written.


 


	 	COMPANY:




 


	 	Enalare Therapeutics Inc.




 


		By:	/s/ Herman Cukier



		Name:	Herman Cukier
		Title:	President & CEO



 


[Signature
Page to Security Purchase Option Agreement]


 






     


     


    

 


CERTAIN
INFORMATION CONTAINED IN THIS EXHIBIT, MARKED BY [***], HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE THE REGISTRANT HAS DETERMINED
THAT IT IS BOTH NOT MATERIAL AND IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.


 


Schedule A


 


Stockholders


 


	Name	Number of Shares of Common Stock Held	Contact Information
	[***]	[***]	[***]


 






     


     


    

 


Schedule B


 


Noteholders


 


	Name	Note Agreement	Balance	Number of Shares of Common Stock Held Following Conversion	Contact Information
	[***]	[***]	[***]	[***]	[***]


 






    2 


     


    

 


Schedule C


 


Optionholders


 


	Name	Number of Shares of Common Stock Underlying Options	Contact Information
	[***]	[***]	[***]


 






    3 


     


    

 


Schedule D


 


Warrantholders


 


	Name	Number of Shares of Common Stock Underlying Warrants	Contact Information
	[***]	[***]	[***]


 






    4 


     


    

 


Exhibit A


 


TERM SHEET


 


SUMMARY OF PRINCIPAL TERMS OF PROPOSED DEFINITIVE
TRANSACTION


 


The following is a summary
of the principal terms for the proposed acquisition of Enalare Therapeutics, Inc. (the “Transaction”). This
summary is not intended to, and does not, bind any party or create any legal rights or obligations among any parties. No party will be
obligated to consummate the Transaction unless and until all definitive agreements with respect thereto are negotiated, executed and delivered.


 


	Topic	Terms
	Parties	
    (1)     Eagle
    Pharmaceuticals, Inc., a Delaware corporation (“Parent”)

     

    (2)     A
    newly formed Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub”) (in the event of a merger
    structure)

     

    (3)     At
    Parent’ option, Enalare Therapeutics Inc., a Delaware corporation (the “Company”)

     

    (4)   A
    representative, agent and attorney-in-fact (the “Securityholder Representative”) of the Company’s stockholders,
    optionholders and warrantholders (the “Company Securityholders”)

     

    (5)    In
    the event of a stock purchase, the holders of capital stock, options, warrants and other securities of the Company (the “Company
    Securityholders”)

     

	Transaction Structure	
    Parent would acquire the Company by
    means of either (at Parent’s election) (1) a statutory merger (the “Merger”), pursuant to which Merger
    Sub would merge with and into the Company and the Company would be the surviving corporation of such merger (the “Surviving
    Corporation”) or (2) a stock purchase transaction. To the extent possible, the Transaction will be structured as a
    simultaneous sign and close.

     

	Principal Definitive Agreement	The principal definitive agreement providing for the Transaction would be an Agreement and Plan of Merger (the “Definitive Agreement”) to be prepared by Parent. For the avoidance of doubt, this summary does not purport, and is not intended, to include an exhaustive list of all the terms that Parent may ultimately propose in the Definitive Agreement.

                                                                                 

	Other Transaction Agreements	
    Concurrently with the execution of the
    Definitive Agreement, certain other definitive agreements would be executed and delivered in connection with the Transaction, including:

     

    (1)    a
    restrictive covenant agreement, in form and substance reasonably acceptable to Parent, pursuant to which certain C-level executives or
    members of senior management that are also Company Securityholders to be identified by Parent would agree not to compete with the Company
    (Enalare Therapeutics Inc.) as the business is conducted at the time of the execution of the Definitive Agreement and not solicit or hire
    employees for the longer of (a) three years following the Closing (as defined below) and (b) one year after the termination
    of his/her employment, or disclose confidential information regarding, the Company (the “Restrictive Covenant Agreement”),
    with such agreement to be effective as of the Closing;

     

    (2)     Agreements
    terminating the outstanding options of the Company in the form agreed to by the Company, Parent and the Company Securityholders in the
    Security Purchase Option Agreement, dated August [●], 2022 (the “Call Option Agreement”);

     

    (3)     Agreements
    terminating the outstanding warrants of the Company in the form agreed to in the Call Option Agreement; and

     

    (4)     A
    customary joinder agreement to the Merger Agreement, executed by Company’s securityholders.

     




 






    5 


     


    

 


	Execution of Definitive Agreement	The parties shall use commercially reasonable efforts to enter into the Definitive Agreement to effect the Transaction within [***] days of Parent delivering the Call Exercise Notice (as defined in the Call Option Agreement) or such other date as Parent and the Company mutually agree. The closing of the Definitive Agreement (the “Closing”) shall be as set forth in the Definitive Agreement and the Definitive Agreement shall contain customary closing conditions, including the receipt of any clearances necessary with applicable anti-trust laws or other regulatory bodies.

                                                                                 

	Consideration Payable at Closing	
    At the Closing, Parent shall acquire
    all of the outstanding shares and terminate all other securities of the Company other than those owned by Parent for an amount equal to
    the greater of (the “Purchase Price”):

     

    (i) $100 million; or

     

    (ii) an amount equal to [***] (such
    final valuation amount, the “Valuation Amount”); provided further that, in no event shall the purchase price
    be greater than $175 million (the “Cap”).

     

    For avoidance of doubt, the Purchase
    Price would be paid for the Company shares owned by persons other than Parent and not prorated based on Parent’s existing ownership.

     

    At Closing, the Purchase Price shall
    (i) be increased the product of (A) [***] to (B) [***], (ii) be reduced by [***], (iii) be reduced by [***],
    and (iv) be subject to [***] (the “Closing Payment”). [***].

     

    The calculation of the Closing Payment
    shall be subject to a customary post-closing adjustment whereby Parent shall deliver to the Securityholder Representative Parent’s
    calculation of the Closing Payment and be allowed to recover from the Securityholders if it is determined that the Purchase Price at Closing
    was higher than the final Purchase Price (the “Purchase Price Offset”).

     

    Additionally, a portion of the Closing
    Payment in an amount equal to [***] shall be placed into a separate escrow account to serve as Parent’s remedy for certain indemnification
    obligations of the Company set forth in the Definitive Agreement (the “Indemnity Escrow”). A portion of the
    Closing Payment in an amount to be determined by Parent shall also be placed into a separate escrow account to serve as the first line
    of recovery for Parent in the event of a Purchase Price Offset (the “Purchase Price Escrow”) which amount shall
    be released from the Purchase Price Escrow within [***] days of the parties agreement (or as determined by the independent accounting
    firm) as to the final working capital.

     

    Finally, the Company Securityholders
    may place a portion of the Purchase Price in a separate account to be administered by the Company Securityholder Representative to cover
    the Company Securitholder Representative’s costs and expenses incurred in connection with its representation of the Company Securityholders
    (the “Expenses Fund”).

     




 






    6 


     


    

 


	Effects of the Transaction	
    If structured as a Merger, at the time
    the Merger becomes effective (the “Effective Time”), as a result of the Merger and without any action on the
    part of any of Parent, Merger Sub, the Company or any Company Securityholder:

     

    (1)    Outstanding
Shares of Merger Sub Common Stock. Each share of common stock of Merger Sub issued and outstanding immediately prior to the Effective
Time would be converted into and become one share of common stock of the Surviving Corporation;

     

    (2)    Treasury
Shares of the Company. Any shares of capital stock of the Company that are treasury shares as of immediately prior to the Effective
Time would be cancelled and cease to exist (“Cancelled Shares”);

     

    (3)    Outstanding
Shares of Company Common Stock. Each share of common stock of the Company issued and outstanding immediately prior to the Effective
Time (other than Cancelled Shares or dissenting shares) would be cancelled and converted into the right to receive, in cash, without
interest, the per share portion (determined on a fully diluted basis) of:

     

    (a)       the
    Closing Payment;

     

    (b)       any
    amount released from the Indemnity Escrow for payment to Company Securityholders;

     

    (c)      any
    amount released from the Purchase Price Escrow for payment to Company Securityholders; and

     

    (d)       any
    amount released from the Expense Fund for payment to Company Securityholders;

     

    in each case, subject to any required
    withholding taxes; and

     

    (4)    Company
Options and Warrants. Each vested option and warrant to purchase shares of common stock of the Company that is unexpired and unexercised
as of immediately prior to the Effective Time would automatically be converted into the right to receive for each share that is subject
to such option or warrant, in cash, without interest, the per share portion (determined on a fully diluted basis) of:

     

    (a)       the
    Closing Payment, less the per share exercise price of such option or warrant;

     

    (b)       any
    amount released from the Indemnity Escrow for payment to Company Securityholders;

     

    (c)       any
    amount released from the Purchase Price Escrow for payment to Company Securityholders; and

     

    (d)       any
    amount released from the Expense Fund for payment to Company Securityholders;

     

    in each case, subject to any required
    withholding taxes and subject to such holder delivering an executed option cancellation agreement or warrant cancellation agreement, as
    applicable. Any unvested options shall be cancelled for no consideration.

     

    In structured as a stock purchase, the
    payments in clauses (3) and (4) above will apply.

     

    Parent would have no obligation
to make any payment pursuant to the Definitive Agreement unless and until it first received from the Company or the Securityholder Representative
a schedule setting forth the portion thereof payable to each Company Securityholder and instructions for disbursement thereto (each,
a “Payment Schedule”). Parent would be entitled to rely on each Payment Schedule in making such payment without
investigation and would have no liability for any errors that may be contained in any Payment Schedule. 

     




 






    7 


     


    

 


	Release of Indemnity Escrow, Purchase Price Escrow and Expense Fund	
    Promptly following the date that is
    [***] months after the date of the Closing, any remaining balance of the Indemnity Escrow would be released for disbursement to the Company
    Securityholders; provided, however, that, if there are any indemnifications claims pending, the applicable portion of the
    Indemnity Escrow would not be so released until such claims are finally resolved and satisfied.

     

    If, pursuant to the post-Closing adjustment
    procedures with respect to the Closing Payment, it is determined that (1) the final Closing Payment equals or exceeds the estimated
    Closing Payment or (2) the estimated Closing Payment exceeds the final Closing Payment by an amount that is less than the Purchase
    Price Escrow, then either the full amount of the Purchase Price Escrow or the portion of the Purchase Price Escrow in excess of the amount
    by which the estimated Closing Payment exceeds the final Closing Payment, as applicable, would be released for disbursement to the Company
    Securityholders. If, pursuant to the post-Closing adjustment procedures with respect to the Closing Payment, it is determined that the
    estimated Closing Payment exceeds the final Closing Payment by an amount that is greater than the Purchase Price Escrow, Parent may recover
    from the Company Securityholders an amount equal to such shortfall.

     

    As soon as reasonably determined by
    the Securityholder Representative that the Expense Fund is no longer required to be held by the Securityholder Representative, the remaining
    portion of the Expense Fund would be released for disbursement to the Company Securityholders.

     

	Representations and Warranties of the Company	
    The Definitive Agreement will contain
    customary representations and warranties. The following representations and warranties will be considered “Fundamental Representations”
    for puposes of the Definitive Agreement: [***].[***]. The representations and warranties in the Definitive Agreement that are not [***]
    or [***] are referred to herein as the “Standard R&Ws.”

     

    [***]

     




 






    8 


     


    

 


	Indemnification	
    Survival: The representations,
    warranties, covenants and agreements contained in the Definitive Agreement would survive the Closing as follows:

     

    (1)     [***];

     

    (2)     [***];

     

    (3)     [***];
    and

     

    (4)     [***].

     

    Indemnification Provisions:

     

    (1) Each Company
    Securityholder would, severally but not jointly, indemnify Parent, Merger Sub, the Surviving Corporation (if applicable) and each of
    their respective affiliates and representatives (the “Parent Indemnitees”) from and against such Company
    Securityholder’s pro rata share of any losses that such Parent Indemnitee directly or indirectly incurs related to:

     

    (a)       [***];

     

    (b)       [***];

     

    (c)       [***];

     

    (d)       [***];

     

    (e)       [***];
    or

     

    (f)       [***].

     

    For the avoidance of doubt, each party
    subject to a Restrictive Covenant Agreement shall be liable for its own breaches thereof and in no event shall any Company Securityholder
    (other than the Company Securityholder that is party ot the Restictive Covenant Agreement) be liable for such party’s breaches.

     

    (2) Parent would indemnify Parent
    the Company Securityholders and their respective affiliates and representatives (each, a “CS Indemnitee” the
    “CS Indemnitees”) from and against any losses that a CS Indemnitee directly or indirectly incurs related to:

     

    (a)       [***];
    or

     

    (b)       [***].

     

    Order of Recovery:

     

    (1)       Parent
    Indemnities would seek recovery for indemnification claims as follows:

     

    (a)       [***];

     

    (b)       [***];
    and

     

    (c)       [***].

     

    (2)     [***].

     

    (3)     [***].

     

    (4)     [***].

     




 






    9 


     


    

 


	 	Other Indemnification Matters:

                                                                                 

                                                                                For purposes of indemnification, all materiality qualifiers contained in the Company’s representations and warranties would be disregarded, both for purposes of determining whether true and correct and for purposes of calculating losses.

                                                                                 

                                                                                [***];

                                                                                 

                                                                                [***].

                                                                                 

                                                                                An indemnified party shall take all
    reasonable steps to mitigate any loss upon becoming aware of any event or circumstance that would be reasonably expected to, or does,
    give rise thereto; provided that no indemnified party shall be obligated to make a claim, commence litigation or initiate a dispute against
    a third party that is a customer or vendor of such indemnified party.

                                                                                 

                                                                                NO PARTY WILL BE LIABLE TO ANY OTHER
    PARTY FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, OR SPECIAL DAMAGES SUFFERED BY THE OTHER PARTY (INCLUDING WITHOUT LIMITATION DAMAGES
    FOR HARM TO BUSINESS, LOST REVENUES, LOST SAVINGS, OR LOST PROFITS SUFFERED BY THE OTHER PARTY), REGARDLESS OF THE FORM OF ACTION,
    WHETHER IN CONTRACT, WARRANTY, STRICT LIABILITY, OR TORT, INCLUDING WITHOUT LIMITATION NEGLIGENCE OF ANY KIND WHETHER ACTIVE OR PASSIVE,
    AND REGARDLESS OF WHETHER A PARTY KNEW OF THE POSSIBILITY THAT SUCH DAMAGES COULD RESULT. THE PARTIES SHALL RELEASE THE OTHER PARTIES
    (AND EACH INDEMNIFIED PARTY) FROM ANY SUCH CLAIM.

                                                                                 

                                                                                All indemnification payments made under
    this Agreement shall be treated by the parties as an adjustment to the Purchase Price for tax purposes, unless otherwise required by law.

                                                                                 

                                                                                The parties agree that their sole and
    exclusive remedy with respect to any and all claims for any breach of any representation, warranty, covenant, agreement or obligation
    set in the Definitive Agreement or otherwise relating to the subject matter of the Definitive Agreement, shall be pursuant to the indemnification
    provisions set forth in the Definitive Agreement.

                                                                                 

                                                                                For the avoidance of doubt, the foregoing
    does not purport, and is not intended, to be an exhaustive list of all the changes that Parent may ultimately propose to the indemnification
    provisions in the Definitive Agreement.

                                                                                 




 






    10 


     


    

 


	Expenses	
    All costs and expenses incurred in connection
    with the Definitive Agreement and the transactions contemplated thereby (including fees and disbursements of counsel, financial advisors
    and accountants) that are not otherwise paid prior to the closing date shall be borne by the party which incurs such cost or expense;
    provided that, all fees incurred in connection with any (a) filings under the HSR Act, (b) any other regualtory filing
    and (c) the premium for the R&W Policy shall be borne equally by Parent, on the one hand, and by the Company, on the other hand.
    Any tail insurance premiums shall be borne by the Company.

     

	Specific Performance	
    Each party would be entitled to specific
    performance of the terms of the Definitive Agreement and immediate injunctive relief, without the necessity of proving the inadequacy
    of money damages as a remedy, in addition to any other remedy at law or in equity.

     

	Governing Law; Exclusive Forum	
    The Definitive Agreement would be interpreted,
    construed and governed in accordance with the laws of the State of Delaware without regard to the conflicts of law principles thereof,
    and the parties would irrevocably submit to the jurisdiction of state and federal courts in the State of Delaware in respect of the interpretation
    and enforcement of the Definitive Agreement.

     



 






    11 


     


    

 


Exhibit B


 


CALL EXERCISE NOTICE


 






    12 


     


    

 


Exhibit C


 


Direct Acquisition Notice


 






    13 


     


    

 


Exhibit D


 


Stock Power


 






    14 


     


    

 


Exhibit E


 


Option Termination Agreement


 






    15 


     


    

 


Exhibit F


 


Warrant Termination Agreement


 






    16