Document:

Exhibit 10.8

 

DEVELOPMENT, SUPPLY AND COMMERCIALIZATION
AGREEMENT

 

THIS DEVELOPMENT, SUPPLY AND COMMERCIALIZATION
AGREEMENT (this “Agreement”) dated as of November 7, 2017 (the “Effective Date”), is entered into between
***, with a place of business at ***, and ETON PHARMACEUTICALS, INC., a Delaware corporation (“Eton”), with a place
of business at 21925 Field Pkwy, Suite 235, Deer Park, Illinois 60010. The parties hereby agree as follows:

 

1.           Definitions.
For the purposes of this Agreement, the following terms shall have the respective meanings set forth below, and grammatical variations
of such terms shall have corresponding meanings:

 

1.1           “Affiliate”
shall mean, with respect to any Person, any other Person which directly or indirectly controls, is controlled by, or is under common
control with, such Person. A Person shall be regarded as in control of another Person if it owns, or directly or indirectly controls,
more than fifty percent (50%) of the voting stock or other ownership interest of the other Person, or if it directly or indirectly
possesses the power to direct or cause the direction of the management and policies of the other Person by any means whatsoever.

 

1.2           “***
Development Activities” shall mean all activities reasonably necessary to generate all data and information reasonably
required for the chemistry, manufacturing, and controls (CMC) portion(s) of Regulatory Filings for Product in the Territory (as
set forth in 21 C.F.R. § 314.50(d)(1)), including the drug product (as detailed in 21 C.F.R. § 314.50(d)(1)(ii),
including the drug formulation, drug batch manufacturing, a list of all components used in the manufacture of the drug product
and a statement of the composition of the drug product, the specifications for each component, and the proposed or actual master
product record); (c) the environmental impact (as detailed in 21 C.F.R. § 314.50(d)(1)(iii)); and (d) developing and validating
(i) the final and scaled-up manufacturing process, (ii) all appropriate analytical methods related to Product, and (iii) the finished
dosage formulation for Product.

 

1.3           “***
Development Costs” shall mean the lesser of (a) all of *** out of pocket costs directly incurred (and actually paid to
Third Parties) for the *** Development Activities and (b) one million dollars ($1,000,000).

 

 

***Text has been omitted pursuant to Registrant’s confidential
treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934.  The omitted text has been filed separately with the Commission.

 

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1.4           “***
Technology” shall mean all technology and intellectual property rights that were conceived, created, generated, made,
derived, developed or reduced to practice by or on behalf of*** (solely or jointly) either unrelated to *** performance of the
*** Development Activities or prior to the Effective Date to the extent (a) incorporated into the Work Product or (b) the use or
exploitation of which is reasonably necessary for the use or exploitation of the Work Product or the research, development, commercialization
or other exploitation of Product.

 

1.5           “API”
shall mean the active pharmaceutical ingredient ***.

 

1.6           “Certificate
of Analysis” shall mean the certificate to be issued by *** for each batch or lot of Product stating the Specifications,
the testing results, and the analytical methods used.

 

1.7           “Certificate
of Compliance” shall mean the certificate to be issued by *** stating that the Product was manufactured and tested in
compliance with the terms and conditions of this Agreement, cGMP, all applicable laws and regulations and the Quality Agreement.

 

1.8           “cGMP”
shall mean the principles detailed in the United States Current Good Manufacturing Practices (21 C.F.R. §§ 200, 211 and
600).

 

1.9           “Clinical
Costs” shall mean all costs and expenses incurred by Eton or its Affiliates in connection with any preclinical, clinical
or bioequivalence studies for Product less the *** Development Costs.

 

1.10         “FDA”
shall mean the Food and Drug Administration of the United States or any successor thereto.

 

1.11         “First
Commercial Sale” shall mean, with respect to any Product, the first sale of such Product to a Third Party after Registration
of such Product.

 

1.12         “Eton
Development Activities” shall mean all activities reasonably necessary to generate all data and information reasonably
required for Regulatory Filings for Product in the Territory, including all preclinical, clinical, and bioequivalence studies,
but excluding the *** Development Activities.

 

 

***Text has been omitted pursuant to Registrant’s confidential
treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934. The omitted text has been filed separately with the Commission.

 

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1.13         “Gross
Profits” shall mean, with respect to a Product, Net Sales of such Product less the fully-burdened cost of goods sold
determined in accordance with generally accepted accounting principles, including any applicable Third Party royalty payments or
similar payments and the applicable Transfer Price.

 

1.14         “Litigation
Expenses” shall mean all costs and expenses (including attorneys’ fees and costs), but excluding any royalty payments
or similar payments covered by Section 1.13, incurred by Eton or its Affiliates in connection with any claim, demand, action or
proceeding regarding Product, not to exceed two million dollars ($2,000,000) in the aggregate except upon mutual written agreement.

 

1.15         “Net
Sales” shall mean the gross sales price of Product invoiced by Eton or its Affiliates to customers who are not Affiliates
(or are Affiliates but are the end users of such Product), less (a) credits, allowances, discounts and rebates to, and chargebacks
from the account of, such customers; (b) freight and insurance costs in transporting Products; (c) cash, quantity and trade discounts,
rebates and other price reductions for Product; (d) sales, use, value-added and other direct taxes; (e) customs duties, tariffs,
surcharges and other governmental charges incurred in exporting or importing Product; and (f) an allowance for uncollectible or
bad debts determined in accordance with generally accepted accounting principles, which shall not exceed one percent (1%) of Net
Sales of the Product, and will be updated annually based on actual losses.

 

1.16         “Person”
shall mean any individual, partnership, firm, corporation, association, trust, unincorporated organization or other entity, as
well as any syndicate or group of any of the foregoing.

 

1.17         “Product”
shall mean the product, in such form and formulation for injectable administration, containing *** as an active pharmaceutical
ingredient with a concentration of 80 USP units/mL, USP, to be developed by *** for the benefit of Eton in accordance with this
Agreement.

 

1.18         “Product
Profits” shall mean, with respect to a Product and will be calculated every calendar quarter, Gross Profits of such Product,
less (a) the Recovery Amount not previously deducted; (b) the Clinical Costs not previously deducted up to twenty-five percent
(25%) of Gross Profits for such calendar quarter; and (c) selling, general and administrative expenses related to the Product,
which shall not exceed twenty percent (20%) of Net Sales in any calendar quarter as determined in accordance with generally accepted
accounting principles, including sales commissions incurred on the sale of such Product.

 

 

***Text has been omitted pursuant to Registrant’s confidential
treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934. The omitted text has been filed separately with the Commission.

 

    	 	3	 

     

    

 

1.19         “Purchase
Order” shall mean a written purchase order provided by Eton or its Affiliate to *** for the supply and purchase of Product
under this Agreement.

 

1.20         “Recovery
Amount” shall mean all Litigation Expenses and all costs and expenses incurred by Eton or its Affiliates in connection
with the development, commercialization, obtaining and maintaining Registrations and other exploitation or use of Product (including
any costs or expenses related to safety monitoring or recall of Product), but excluding Clinical Costs.

 

1.21         “Registration”
shall mean any registration, license, permit or governmental approval or clearance from the FDA or other regulatory authority necessary
for the purchase, distribution, promotion, marketing or sale of a human pharmaceutical product.

 

1.22         “Regulatory
Filing” shall mean any New Drug Application or Abbreviated New Drug Application, or any other application, notification
or submission made to or with the FDA or other regulatory authority for Registration of a human pharmaceutical product, together
with all amendments and supplements to any of the foregoing.

 

1.23         “Specifications”
shall mean the specifications for Product provided by Eton to *** hereunder, as modified from time to time by mutual written agreement
between the parties.

 

1.24         “Territory”
shall mean collectively all the territories and possessions of the United States of America and worldwide as mutually agreed by
both Parties.

 

1.25         “Third
Party” shall mean any Person other than Eton, *** or their respective Affiliates.

 

1.26         “Transfer
Price” shall mean, with respect to a Product purchased by Eton or its Affiliates from *** hereunder, one hundred twenty
percent (120%) of *** demonstrated costs to manufacture such Product but excluding any costs to procure API.

 

1.27         “Work
Product” shall mean all methods of manufacture or use of Product and all discoveries, inventions (whether or not protectable
under patent laws), designs, developments, works of authorship, data, information, compositions, formulae, procedures, protocols,
techniques, results of experimentation and testing and other technology and all intellectual property rights therein and thereto
conceived, created, generated, made, derived, developed, reduced to practice, or otherwise resulting from performance of the ***
Development Activities, whether directly or indirectly or solely or jointly with others.

 

 

***Text has been omitted pursuant to Registrant’s confidential
treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934. The omitted text has been filed separately with the Commission.

 

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2.            Representations
and Warranties.

 

2.1         By
Each Party. Each party represents and warrants to the other party as follows:

 

2.1.1       Such
party is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized.

 

2.1.2       Such
party (a) has the requisite power and authority and the legal right to enter into this Agreement and to perform its obligations
hereunder, and (b) has taken all necessary action on its part to authorize the execution and delivery of this Agreement and the
performance of its obligations hereunder. This Agreement has been duly executed and delivered on behalf of such party and constitutes
a legal, valid, binding obligation, enforceable against such party in accordance with its terms.

 

2.1.3       All
necessary consents, approvals and authorizations of all governmental authorities and other Persons required to be obtained by such
party in connection with this Agreement have been obtained.

 

2.1.4           The
execution and delivery of this Agreement and the performance of such party’s obligations hereunder (a) do not conflict with
or violate any requirement of applicable laws or regulations, and (b) do not conflict with, or constitute a default under, any
contractual obligation of it. Neither party, its Affiliates, its (sub)contractors, nor any of its or their officers, directors,
employees or consultants, have been debarred by the FDA or other applicable governing health authority (or authorities), under
any existing or prior law or regulation.

 

2.2         By
***. *** represents and warrants to Eton as follows:

 

2.2.1       All
data, information, results of experimentation and testing provided by *** to Eton regarding Product shall be accurate and complete
in all respects.

 

 

***Text has been omitted pursuant to Registrant’s confidential
treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934. The omitted text has been filed separately with the Commission.

 

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2.2.2       The
*** Development Activities shall be performed in a professional and workmanlike manner in accordance with the highest applicable
industry standards.

 

2.2.3       All
Product supplied by *** shall be manufactured, stored and supplied in accordance with, and otherwise perform its obligations hereunder
in accordance with, all applicable laws (including cGMP and all applicable FDA or other regulatory authority requirements), the
Quality Agreement, this Agreement and generally accepted professional standards.

 

2.2.4       All
Product supplied by *** shall be free from defect in workmanship and material and shall meet all Specifications. Upon delivery
of a Product, the Product shall be in conformity with applicable law and the Quality Agreement, and shall not be adulterated, misbranded,
misused, contaminated, tampered with or otherwise altered, mishandled, or subjected to negligence. Title to all Products delivered
hereunder shall pass to Eton concurrently with risk of loss, free and clear of all liens, encumbrances and other adverse claims.

 

2.3         DISCLAIMER
OF WARRANTIES. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN SECTION 2, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES,
EXPRESS OR IMPLIED, REGARDING THE TECHNOLOGY, THE PRODUCT OR ANY OTHER MATTER, INCLUDING ANY REPRESENTATION OR WARRANTY REGARDING
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NONINFRINGEMENT.

 

3.           Development
and Registration.

 

3.1         Initial
Technology Transfer. As soon as reasonably practical following the Effective Date, Eton shall provide *** with a copy of the
Specifications, the anticipated formulation for Product, and the initial manufacturing process for Product.

 

 

***Text has been omitted pursuant to Registrant’s
confidential treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2
under the Securities Exchange Act of 1934. The omitted text has been filed separately with the Commission.

 

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3.2         ***
Development.

 

3.2.1       ***
shall be responsible for and shall perform the *** Development Activities in accordance with this Agreement, cGMP and all applicable
laws and regulations. Eton, at its sole expense, shall supply *** with such quantities of API, at such times as reasonably requested
by *** as necessary for use in the *** Development Activities.

 

3.2.2       ***
shall perform the *** Development Activities at its sole expense, provided, however, that *** out of pocket costs directly incurred
(and actually paid to Third Parties) for the *** Development Activities in excess of one million dollars ($1,000,000) shall be
shared by the parties as follows: seventy percent (70%) by Eton and thirty percent (30%) by ***.

 

3.2.3       ***
shall keep Eton reasonably informed of its progress in performing the *** Development Activities. Without limiting the generality
of the foregoing, following the end of each calendar quarter, *** shall prepare and provide Eton with (a) an invoice for reimbursement
of Eton’s share of any Third Party expenses set forth in Section 3.2.2 and (b) a reasonably detailed written report describing
in detail (i) its progress in performing the *** Development Activities sufficient to enable Eton to understand and monitor ***
diligence and the results thereof, through such date of such report, and (ii) the calculation of Eton’s share, if any,
of the Third Party expenses set forth in Section 3.2.2. Eton shall remit payment for Eton’s share, if any, of the Third Party
expenses set forth in Section 3.2.2 as properly set forth in such invoice and report within forty-five (45) days after receiving
such invoice and report.

 

3.3         Eton
Development. Eton shall be responsible for and shall perform, at its sole expense, all Eton Development Activities in accordance
with this Agreement, cGMP and all applicable laws and regulations. ***, at its sole expense, shall supply Eton with such quantities
of Product, at such times as reasonably requested by Eton, for use in connection with the Eton Development Activities.

 

 

***Text has been omitted pursuant to Registrant’s confidential
treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934. The omitted text has been filed separately with the Commission.

 

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3.4         Work
Product.

 

3.4.1       ***
promptly shall disclose all Work Product to Eton and provide copies thereof in a form reasonably requested by Eton. Eton shall
own all Work Product, and *** hereby assigns to Eton all right, title and interest therein and thereto. Notwithstanding anything
to the contrary herein, all Work Product shall be Confidential Information of Eton.

 

3.4.2       If
*** incorporates or permits to be incorporated any *** Technology into the Work Product, or the use or exploitation of any ***
Technology is reasonably necessary for the use or exploitation of the Work Product or the research, development, commercialization
or other exploitation of Product, then *** hereby grants to Eton and its Affiliates a non-exclusive, royalty-free, irrevocable,
worldwide, fully paid-up license (with the right to grant sublicenses through multiple tiers) to use, practice and exploit such
*** Technology for such purpose.

 

3.4.3       ***
shall perform, during and after the Term, all acts that Eton deems necessary or desirable to permit and assist Eton in obtaining,
perfecting and enforcing the full benefits, rights and title in the Work Product. If Eton is unable for any reason to secure ***
signature to any document required to file, prosecute, register or memorialize the assignment of any rights under any Work Product,
*** hereby irrevocably designates and appoints Eton as *** agent and attorney-in-fact to act for and on *** behalf and instead
of *** to take all lawfully permitted acts to further the filing, prosecution, registration, memorialization of assignment, issuance
and enforcement of rights under such Work Product, all with the same legal force and effect as if executed by ***. The foregoing
is deemed a power coupled with an interest and is irrevocable.

 

3.5         Registration.

 

3.5.1       Eton
shall own any and all Regulatory Filings and Registrations for Product.

 

 

***Text has been omitted pursuant to Registrant’s confidential
treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934. The omitted text has been filed separately with the Commission.

 

    	 	8	 

     

    

 

3.5.2       Eton
shall have the exclusive right (a) to prepare, file, prosecute, submit and control all Regulatory Filings for Product; (b) to interact
and communicate with the FDA and other regulatory authorities regarding Regulatory Filings and Registration of Product; (c) to
collect information on the adverse effects of Product and report the same to the FDA and other regulatory authorities; and (d)
to coordinate and control any Recall (as defined below) of Product in accordance with this Agreement and applicable laws and regulations
and reporting relevant information to the FDA and other regulatory authorities.

 

3.5.3       Eton
shall pay filing fees associated with Regulatory Filings, but all filing fee expenses can be recouped through product sales as
a Recovery Amount.

 

3.5.4       ***
shall reasonably assist, execute such certificates and other instruments and documents, perform all such other acts as may be necessary
or appropriate and otherwise cooperate with and provide reasonable assistance to Eton as Eton may request from time to time regarding
any Regulatory Filings or amendments to Registrations for Product, including qualifying a Third Party second source of Product
in accordance with this Agreement and all applicable laws and regulations.

 

3.5.5       ***
shall be responsible for obtaining, at its own expense, all permissions, licenses and approvals necessary to perform its obligations
under this Agreement.

 

4.           Manufacture
and Supply.

 

4.1         Supply
to Eton.

 

4.1.1       Subject
to the terms and conditions of this Agreement, *** shall manufacture and supply Product exclusively to Eton and Eton’s Affiliates
during the Term.

 

4.1.2       During
the Term and for a period of two (2) years thereafter, *** shall not (a) market, solicit orders for, offer for sale, sell, import,
distribute, commercialize or otherwise provide Product to any other party; (b) directly or indirectly engage in or assist any Third
Party in the research, development, obtaining Registration, manufacture, offering for sale, sale, distribution, commercialization
or other provision or disposition of any product that comprises or contains ***; or (c) enter into any agreement to do any of the
foregoing.

 

 

***Text has been omitted pursuant to Registrant’s confidential
treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934. The omitted text has been filed separately with the Commission.

 

    	 	9	 

     

    

 

4.1.3       Eton
shall have the right (a) to engage a Third Party second source for Product and to purchase such amounts of Product from such second
source supplier as reasonably necessary to qualify and maintain such second source supplier for commercial production of Product
in accordance with prudent industry practices, and (b) to procure Product if, at any time, *** is unable to demonstrate to Eton’s
satisfaction that it will be able to timely supply Eton’s requirements for Product hereunder or upon *** prior written consent
to Eton.

 

4.2         Forecasts.

 

4.2.1       Not
less than ninety (90) days prior to the anticipated First Commercial Sale of Product and before the first (1st) business day of
each month thereafter, Eton shall provide *** with a written rolling twelve (12) month forecast of its good faith estimated requirements
for Product under this Section 4 (“Forecast”). The first six (6) months of each Forecast shall be binding (the “Firm
Order Period”) and simultaneously with submission of the Forecast, Eton shall submit Purchase Order(s) for the Product to
be delivered during the Firm Order Period. The remaining Forecast quantities estimated shall be non-binding and for planning purposes
only.

 

4.2.2       ***
shall supply the quantity of Product ordered by Eton under this Section 4 in any calendar month up to one hundred twenty percent
(120%) of the quantity forecasted for such calendar month in the most recent Forecast. If Eton’s Purchase Orders in any calendar
month exceed one hundred twenty percent (120%) of the quantity forecasted in the most recent Forecast, then *** shall use good
faith efforts to supply such excess.

 

4.3         Purchase
Orders.

 

4.3.1       Eton
or its Affiliate shall submit a Purchase Order to *** for each order of Product under this Agreement. Each Purchase Order shall
(a) indicate the quantity of Product required and the delivery date and (b) be submitted at least ninety (90) days prior to the
required delivery date. If no delivery date is specified in the Purchase Order, the Product shall be delivered hereunder ninety
(90) days after the Purchase Order date.

 

4.3.2       ***
shall accept all Purchase Orders that comply with the terms of this Agreement in writing to Eton. Any Purchase Order that is not
rejected by *** in writing within three (3) business days after its receipt due to non-compliance with the terms of this Agreement
shall be deemed accepted by ***.

 

 

***Text has been omitted pursuant to Registrant’s confidential
treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934. The omitted text has been filed separately with the Commission.

 

    	 	10	 

     

    

 

4.3.3       Unless
otherwise agreed to by the parties, the minimum shelf life of Product provided to Eton by *** shall not be less than seventy-five
percent (75%) of the approved shelf life after receipt of Product by Eton.

 

4.4         Transfer
of API.

 

4.4.1       Except
as set forth herein, Eton shall provide *** with quantities of API necessary to fulfill orders for Product and otherwise fulfill
its obligations hereunder at no cost to ***. Title and risk of loss shall transfer to *** upon delivery. *** shall handle, store
and use all such API in accordance with industry standards and all applicable laws and regulations to maintain such API at all
times for its intended purpose. *** shall use the API to fulfill its obligations hereunder and shall not use the API for any other
purpose.

 

4.4.2       If,
due to *** negligence, recklessness, willful misconduct or breach of this Agreement, API delivered under Section 4.4.1 is wasted,
spoiled or otherwise rendered unfit for its intended use (including by reason of Product rejection in accordance with Section 4.10),
then (a) *** shall notify Eton in writing of the amount of wasted, spoiled or otherwise unfit API, (b) Eton shall use commercially
reasonable efforts to procure replacement API for ***, and (c) *** shall pay Eton an amount equal to Eton’s fully-burdened
costs to procure and supply such replacement API. Eton shall invoice *** for the replacement API, and *** shall pay all such invoiced
amounts within forty-five (45) days after receipt of such invoice.

 

4.5         Quality
Agreement. Within ninety (90) days after the Effective Date or such other date as the parties mutually agree, the parties shall
enter into a quality agreement (the “Quality Agreement”) regarding the manufacture and supply of Product by *** to
Eton hereunder. The Quality Agreement shall contain provisions consistent with the provisions of this Agreement and such other
provisions as customary in the industry or otherwise required for compliance with cGMP and all other applicable FDA or other regulatory
authority requirements.

 

 

***Text has been omitted pursuant to Registrant’s confidential
treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934. The omitted text has been filed separately with the Commission.

 

    	 	11	 

     

    

 

4.6         Quality
Control.

 

4.6.1       ***
(a) shall manufacture all Product in accordance with the Specifications, the terms and conditions of this Agreement, cGMP, the
Quality Agreement and all applicable laws and regulations; and (b) shall cause all Product to be free from adulteration or defects.

 

4.6.2       In
accordance with the Quality Agreement, *** shall test and release, or cause to be tested and released by Third Party testing facilities
specified in the Quality Agreement and audited by ***, Product manufactured and supplied hereunder.

 

4.6.3       For
each shipment of Product to Eton hereunder, *** shall provide a Certificate of Analysis and a Certificate of Compliance along with
the shipment.

 

4.6.4       ***
shall prepare methods and all necessary documentation to enable testing of Product by Eton or its designee and shall deliver such
methods and necessary documentation to Eton before the first shipment of Product hereunder.

 

4.6.5       ***
shall properly store and retain appropriate samples (identified by batch number) of Product that it supplies to Eton in conditions
and for times consistent with all Specifications (which shall not be less than (a) five (5) years from the date of manufacture,
or (b) one (1) year following the retest date, whichever is longer) and to permit appropriate or required internal or external
regulatory checks and references (collectively, the “Retention Samples”). *** shall provide Eton with access to and
portions of the Retention Samples for testing and other purposes upon request.

 

4.6.6       ***
shall maintain all records relating to the manufacture, stability and quality control of all Product and all records reasonably
necessary to support and verify *** compliance with this Agreement and the Quality Agreement. *** shall maintain all such records
for a period of not less than five (5) years from the manufacturing date of Product to which such records pertain, or such longer
period as may be required by any applicable law.

 

 

***Text has been omitted pursuant to Registrant’s confidential
treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934. The omitted text has been filed separately with the Commission.

 

    	 	12	 

     

    

 

4.7         Trademarks.

 

4.7.1       Eton
shall have the right to determine the names and trademarks, trade names, designs, logos and markings (“Trademarks”)
used in connection with the promotion, marketing and sale of Product and shall own all such Trademarks. *** shall label and package
all Products hereunder in accordance with the respective labeling approved by Eton and in accordance with applicable laws.

 

4.7.2       Subject
to the terms and conditions of this Agreement, Eton grants to *** a non-exclusive, non-transferable, revocable and terminable license
to affix Eton’s Trademarks to Products and Product packaging as contemplated herein.

 

4.7.3       Except
as set forth herein, *** shall not (a) use any of Eton’s Trademarks, or any mark or name confusingly similar thereto, as
part of a corporate or business name or in any other manner, or (b) register any Trademark (including any company name) which is
identical to or confusingly similar to or incorporates any Trademark which Eton or any of its Affiliates owns or claims to own.
Any goodwill associated with Eton’s Trademarks affixed, applied or used in connection with the Product shall accrue to Eton’s
sole benefit. Eton shall have the right, at reasonable times, to conduct such inspections as reasonably necessary or appropriate
to police and monitor the use of the Trademarks hereunder.

 

4.7.4       Only
the limited license and rights to Eton’s Trademarks expressly granted in this Section 4.7 shall be of legal force and effect.
No rights or licenses are granted under any intellectual property rights of Eton’s except as expressly provided herein, whether
by implication, estoppel or otherwise.

 

4.8         Packing
and Shipping. All amounts of Product ordered by Eton shall be packed for shipment and storage in full accordance with applicable
law, the Specifications, Eton’s instructions and in full compliance with the Quality Agreement. Delivery shall be Ex Works
(Incoterms 2010) *** U.S. warehousing facility. Upon learning of any potential delivery delays, *** shall notify Eton as to the
cause of such delays and the actions taken by *** to resolve such delays. If *** fails to make deliveries at the specified time
and such failure is not caused by Eton, *** shall, at no additional cost to Eton, employ accelerated measures such as material
expediting fees, premium transportation costs, or labor overtime required to meet the specified delivery schedule or minimize the
lateness of deliveries.

 

 

***Text has been omitted pursuant to Registrant’s confidential
treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934. The omitted text has been filed separately with the Commission.

 

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4.9         Transfer
Price. Subject to the terms and conditions of this Agreement, for any Product purchased from *** hereunder, Eton shall pay
to *** the applicable Transfer Price. *** shall invoice Eton for the applicable Transfer Price for Product purchased hereunder
after delivery of such Product. Payment shall be due within forty-five (45) days after receipt of such invoice.

 

4.10       Acceptance.
If a shipment of Product or any portion thereof is not in conformance with the Specifications, then Eton shall have the right to
reject such shipment, or the portion thereof that fails to so conform. Eton shall give written notice to *** of its rejection hereunder,
within forty-five (45) days after Eton’s receipt of such shipment, specifying the grounds for such rejection. *** shall replace
such rejected Product within ninety (90) days after receipt of notice of rejection thereof.

 

4.11       Pharmacovigilance.

 

4.11.1     Each
party shall maintain an effective system for the review, evaluation and reporting of Product complaints and adverse drug experiences,
as defined in 21 C.F.R. § 314.80(a) and as required under applicable law and in accordance with the Quality Agreement.

 

4.11.2     Each
party shall promptly (but in any event within three (3) business days) advise the other of any safety or toxicity problem of which
either party becomes aware regarding the Product. *** shall, within five (5) business days following notification to ***, inform
Eton in the event of any FDA or other regulatory inspection relating to the Product and shall immediately (but in any event within
one (1) business day) notify Eton in writing of any adverse event relating to the Product.

 

 

***Text has been omitted pursuant to Registrant’s confidential
treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934. The omitted text has been filed separately with the Commission.

 

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4.12       Recall.

 

4.12.1     Each
party promptly shall notify the other party if a Product is determined to be the subject of a recall, market withdrawal, or correction
(collectively, “Recall”). In the event of a Recall, Eton shall be responsible for coordinating and managing such Recall.
*** shall reasonably cooperate with Eton and take all necessary actions that may be necessary for Eton to manage the Recall, including
providing Eton with any and all data, information and documents requested by Eton within three (3) days of such request. The parties
agree to cooperate in case of a Recall and provide such information as may be necessary to effectuate the Recall and to satisfy
any regulatory requests about the Recall.

 

4.12.2     If
a Recall is due solely to Eton’s breach of its obligations herein, gross negligence or willful misconduct, then Eton shall
bear all reasonable out-of-pocket costs and expenses (including attorneys’ fees) in connection with the Recall incurred by
either party or its Affiliates, including all notification letters, postage, phone calls, faxes, courier charges and all shipping
expenses (collectively, “Recall Expenses”). In all other cases, *** shall bear all Recall Expenses.

 

4.13       Access
and Inspections.

 

4.13.1     ***
shall (a) permit, and shall cause its Affiliates to permit, the FDA and other regulatory agencies to perform inspections of its
factory which contains the manufacturing operations for Product; (b) as soon as reasonably practicable, but in no event later than
forty-eight (48) hours after being notified of any proposed visit to, or inspection of, the factory, notify Eton of such inspections;
and (c) permit Eton or its representatives to be present and participate in such visit or inspection. *** promptly shall notify
Eton of all results of an inspection that affect the manufacturing processes of Product or that may affect *** ability to supply
Products to Eton hereunder.

 

4.13.2     During
the Term and for a period of two (2) years thereafter, *** shall make available to Eton or its representatives upon request all
documentation, records, raw data, specimens, labeling, certificates, specifications, formulae, data, procedures, and other work
product relating to the manufacture or testing of the Product, equipment, and facilities relating to this Agreement within thirty
(30) days advance notice for inspection by Eton, its representatives, including authorized Third Party consultants, or representatives
of the FDA or any other regulatory authority.

 

 

***Text has been omitted pursuant to Registrant’s confidential
treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934. The omitted text has been filed separately with the Commission.

 

    	 	15	 

     

    

 

4.13.3     Notwithstanding
the foregoing, Eton shall have the right to conduct audits under this Section 4.13 for cause, including pursuant to a notice from
the FDA or any other regulatory authority or an audit by the FDA or any other regulatory authority, as soon as practicable, but
not more than once per year. Eton shall have the right to access any facility manufacturing the Product on behalf of *** pursuant
to this Agreement, and all applicable records related thereto, to oversee production of the Product, to discuss and inspect its
manufacturing processes, and to test the Product and review *** records or the records of the applicable facility.

 

4.13.4     If
Eton observes, discovers or is notified of any variances from established standards and methods of production of the Product (or
any component thereof) at a manufacturing facility, Eton shall give written notice thereof to *** (“Variance Notice”),
and upon receipt of any such notice, *** promptly shall take all appropriate remedial or corrective action and give written notice
to Eton describing in reasonable detail such actions taken. Upon any failure to cure such variance or noncompliance set forth in
the Variance Notice within a reasonable amount of time, not to exceed ninety (90) days, in addition to any rights and remedies
available to Eton pursuant to this Agreement or under applicable law, Eton shall have the option to (a) implement such necessary
remedial actions necessary to cure such variance, or (b) terminate this Agreement. No inspections, audits or testing performed
by Eton as set forth in this Section shall relieve *** of any liability for the Product later found to be defective or for ***
failure to meet its obligations under this Agreement.

 

5.           Financial
Terms.

 

5.1         Remittance
to ***.

 

5.1.1       Subject
to the terms and conditions of this Agreement, Eton shall pay to *** thirty percent (30%) of the Product Profits.

 

5.1.2       In
the event that a Product is sold by Eton or its Affiliates in combination with one or more products which is itself not a Product,
then Net Sales of such combination shall be adjusted by multiplying the Net Sales of such combination by the fraction A/(A+B) where
A is the fair market value of the Product(s) and B is the fair market value of the other product(s) in the combination sale, each
as reasonably determined by Eton.

 

 

***Text has been omitted pursuant to Registrant’s confidential
treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934. The omitted text has been filed separately with the Commission.

 

    	 	16	 

     

    

 

5.2         Reports
and Payments. Within forty-five (45) days after the end of each calendar quarter, Eton shall deliver to *** a report showing
for such calendar quarter in reasonably specific detail the calculation of Net Sales, Gross Profits and Product Profits. Eton shall
remit the total payments due during such calendar quarter at the time such report is made. Payment in whole or in part may be made
in advance of such due date. Reports before the First Commercial Sale of such Product will only detail amounts Eton has spent on
Clinical Costs and Recovery Amounts. No payments shall be due for any Product before the First Commercial Sale. With respect to
amounts received in United States dollars, all amounts shall be expressed in United States dollars. With respect to amounts received
in a currency other than United States dollars, all amounts shall be expressed both in the currency in which the amount is invoiced
(or received as applicable) and in the United States dollar equivalent. The United States dollar equivalent shall be calculated
using the average of the exchange rate (local currency per US $1) published in The Wall Street Journal, Eastern Edition, under
the heading “Currency Trading” on the last business day of each month during the applicable calendar quarter.

 

5.3         Withholding
Taxes. Eton shall be entitled to deduct the amount of any withholding taxes, value-added taxes or other taxes, levies or charges
with respect to such amounts payable by Eton or its Affiliates, or any taxes required to be withheld by Eton or its Affiliates,
to the extent Eton or its Affiliates pay to the appropriate governmental authority on behalf of *** such taxes, levies or charges.
Eton shall use reasonable efforts to minimize any such taxes, levies or charges required to be withheld on behalf of *** by Eton
or its Affiliates. Eton promptly shall deliver to *** proof of payment of all such taxes, levies and other charges, together with
copies of all communications from or with such governmental authority with respect thereto.

 

5.4         Audits.

 

5.4.1       Upon
the written request of a party (the “Auditing Party”) and not more than once in each calendar year, the other party
shall permit an independent certified public accounting firm of nationally recognized standing selected by the Auditing Party and
reasonably acceptable to the other party, at the Auditing Party’s expense, to have access during normal business hours to
such of the financial records of the other party as may be reasonably necessary to verify the accuracy of any invoices, reports,
or other records of any amounts owed hereunder for the eight (8) calendar quarters immediately prior to the date of such request
(other than records for which the Auditing Party has already conducted an audit under this Section).

 

 

***Text has been omitted pursuant to Registrant’s confidential
treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934. The omitted text has been filed separately with the Commission.

 

    	 	17	 

     

    

 

5.4.2       If
such accounting firm concludes that additional amounts were owed during the audited period, the other party shall pay such additional
amounts within thirty (30) days after the date the Auditing Party delivers to the other party such accounting firm’s
written report so concluding. The fees charged by such accounting firm shall be paid by the Auditing Party; provided, however,
to the extent the auditor determines an underpayment discrepancy greater than ten percent (10%), then the other party shall pay
the reasonable fees and expenses charged by such accounting firm.

 

5.4.3       The
Auditing Party shall cause its accounting firm to retain all financial information subject to review under this Section 5.4 in
strict confidence; provided, however, that the other party shall have the right to require that such accounting firm, prior to
conducting such audit, enter into an appropriate and reasonable non-disclosure agreement with the other party regarding such financial
information. The accounting firm shall disclose to the Auditing Party only whether the amounts are correct or not and the amount
of any discrepancy. No other information shall be shared. The Auditing Party shall treat all such financial information as the
other party’s Confidential Information (as defined below), and shall not disclose such financial information to any Third
Party or use it for any purpose other than as specified in this Section 5.4.

 

6.           Indemnification
and Insurance.

 

6.1         Indemnification
by ***. *** shall indemnify, defend and hold harmless Eton, its Affiliates, and its and their respective officers, directors,
shareholders, employees, agents and representatives (collectively “Eton Indemnitees”) from any and all losses, liabilities,
damages and expenses, including reasonable attorneys’ fees and costs (collectively, “Losses”) arising from any
claim, demand, action or other proceeding by a Third Party, to the extent arising out of or caused by (a) gross negligence or willful
misconduct of ***, its agents or Affiliates; (b) any breach of any representation, warranty or covenant of this Agreement by ***;
(c) *** failure to fully comply with all applicable laws regarding Product, its use, or any part thereof; or (d) infringement of
any intellectual property rights of a Third Party or misappropriation by *** or its Affiliates of any know-how of a Third Party
by use or exploitation of the *** Technology; provided, however, that the foregoing indemnity obligations shall not apply to the
extent that any Loss arises from, is based on, or results from any matter set forth in Section 6.2 for which Eton is obligated
to indemnify *** Indemnitees.

 

 

***Text has been omitted pursuant to Registrant’s confidential
treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934. The omitted text has been filed separately with the Commission.

 

    	 	18	 

     

    

 

6.2         Indemnification
by Eton. Eton shall indemnify, defend and hold harmless ***, its Affiliates, and its and their respective officers, directors,
shareholders, employees, agents and representatives (collectively “*** Indemnitees”) from any and all Losses arising
from any claim, demand, action or other proceeding by a Third Party, to the extent arising out of or caused by (a) gross negligence
or willful misconduct of Eton, its agents or Affiliates; (b) any breach of any representation, warranty or covenant of this Agreement
by Eton; (c) Eton’s failure to fully comply with all applicable laws regarding Product, its use, or any part thereof; (d) the
use of Product in accordance with the applicable label by any customer; (e) infringement of any intellectual property rights of
a Third Party or misappropriation by Eton or its Affiliates of any know-how of a Third Party by the use, exploitation or commercialization
of the Product; or (f) use of Eton’s Trademarks; provided, however, that the foregoing indemnity obligations shall not apply
to the extent that any Loss arises from, is based on, or results from any matter set forth in Section 6.1 for which *** is obligated
to indemnify Eton Indemnitees.

 

6.3         Procedure.
A party seeking indemnification (the “Indemnitee”) shall promptly notify the other party (the “Indemnifying Party”)
in writing of a claim, demand, action or proceeding; provided that an Indemnitee’s failure to give such notice or delay in
giving such notice shall not affect such Indemnitee’s right to indemnification under this Section 6 except to the extent
that the Indemnifying Party has been prejudiced by such failure or delay. The Indemnifying Party shall have the right to control
the defense of all indemnification claims hereunder. The Indemnitee shall have the right to participate at its own expense in the
claim, demand, action or proceeding with counsel of its own choosing. The Indemnifying Party shall consult with the Indemnitee
in good faith with respect to all non-privileged aspects of the defense strategy. The Indemnitee shall cooperate with the Indemnifying
Party as reasonably requested at the Indemnifying Party’s sole cost and expense. The Indemnifying Party shall not settle
or otherwise consent to an adverse judgment in any such claim, demand, action or other proceeding that diminishes the rights or
interests of the Indemnitee without the prior express written consent of the Indemnitee, which consent shall not be unreasonably
withheld or delayed.

 

6.4         Limitation
of IP Indemnification. If the Indemnifying Party reasonably determines that the aggregate of the Litigation Expenses and the
Losses arising out of or caused by infringement or misappropriation described in this Section 6 is likely to exceed two million
dollars ($2,000,000), then, without prejudice to any other rights or remedies the parties may have, the parties shall discuss in
good faith the merits of continuing to incur such Litigation Expenses or Losses.

 

 

***Text has been omitted pursuant to Registrant’s confidential
treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934. The omitted text has been filed separately with the Commission.

 

    	 	19	 

     

    

 

6.5         Insurance.
Each Party shall obtain, at its expense, the following minimum insurance coverages during the Term and for five (5) years thereafter.
Each party shall provide a certificate of insurance evidencing such coverage to the other party upon request.

 

6.5.1       ***
shall obtain the following insurance coverages:

 

(a)          worker’s
compensation insurance as required by applicable law;

 

(b)          product
liability insurance with respect to the Product with a minimum of five million dollars ($5,000,000) per occurrence and five million
dollars ($5,000,000) annual aggregate for bodily injury and property damage;

 

(c)          commercial
general liability insurance with a minimum of five million dollars ($5,000,000) per occurrence and five million dollars ($5,000,000)
annual aggregate; and

 

(d)          property
insurance (sufficient to fully cover the cost of replacement), through the designated freight carrier or otherwise, on all of the
Products at all times until receipt by Eton.

 

6.5.2       Eton
shall obtain the following insurance coverages:

 

(a)          worker’s
compensation insurance as required by applicable law;

 

(b)          product
liability insurance with respect to the Product with a minimum of five million dollars ($5,000,000) per occurrence and five million
dollars ($5,000,000) annual aggregate for bodily injury and property damage; and

 

(c)          commercial
general liability insurance with a minimum of five million dollars ($5,000,000) per occurrence and five million dollars ($5,000,000)
annual aggregate.

 

 

***Text has been omitted pursuant to Registrant’s confidential
treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934. The omitted text has been filed separately with the Commission.

 

    	 	20	 

     

    

 

6.6         LIMITATION
OF LIABILITY. WITHOUT LIMITING THE RIGHTS OR REMEDIES OF THE PARTIES REGARDING THE OBLIGATIONS TO INDEMNIFY, DEFEND AND HOLD
HARMLESS FOR INTELLECTUAL PROPERTY INFRINGEMENT PURSUANT TO SECTION 6.1(d) AND SECTION 6.2(e) THE MAXIMUM LIABILITY OF EACH PARTY
SHALL BE CAPPED AT $1 MILLION AND NEITHER PARTY SHALL BE LIABLE FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES,
WHETHER FORESEEABLE OR NOT, ARISING OUT OF THIS AGREEMENT OR THE EXERCISE OF ITS RIGHTS HEREUNDER, REGARDLESS OF ANY NOTICE OF
SUCH DAMAGES.

 

7.           Confidentiality.

 

7.1         Confidential
Information. Each party shall maintain in confidence any and all information of the other party that is disclosed by the other
party, whether disclosed orally or in written, graphic, schematic, or electronic form, and identified as, or acknowledged to be,
confidential at the time of disclosure (the “Confidential Information”), and shall not use, disclose or grant the use
of the Confidential Information except on a strictly need-to-know basis to those directors, officers, affiliates, employees, permitted
licensees, permitted assignees and agents, consultants, clinical investigators or contractors, to the extent such disclosure is
reasonably necessary in connection with performing its obligations or exercising its rights under this Agreement. To the extent
that disclosure is authorized by this Agreement, prior to disclosure, each party hereto shall obtain agreement of any such Person
to hold in confidence and not make use of the Confidential Information for any purpose other than those permitted by this Agreement.
Each party shall notify the other promptly upon discovery of any unauthorized use or disclosure of the other party’s Confidential
Information.

 

7.2         Permitted
Disclosures. The confidentiality obligations contained in Section 7.1 above shall not apply to the extent that (a) any receiving
party (the “Recipient”) is required (i) to disclose information by law, regulation or order of a governmental agency
or a court of competent jurisdiction, or (ii) to disclose information to any governmental agency for purposes of obtaining approval
to test or market a product, provided in either case that the Recipient shall provide written notice thereof to the other party
and sufficient opportunity to object to any such disclosure or to request the highest level of confidential treatment thereof;
or (b) the Recipient can demonstrate that (i) the disclosed information was public knowledge at the time of such disclosure to
the Recipient, or thereafter became public knowledge, other than as a result of actions of the Recipient in violation hereof; (ii)
the disclosed information was rightfully known by the Recipient (as shown by its written records) prior to the date of disclosure
to the Recipient by the other party hereunder; (iii) the disclosed information was disclosed to the Recipient on an unrestricted
basis from a source unrelated to any party to this Agreement and not under a duty of confidentiality to the other party; or (iv)
the disclosed information was independently developed by the Recipient without use of the Confidential Information disclosed by
the other party.

 

7.3         Terms
of this Agreement. Except as otherwise provided in Section 7.2 above, neither party shall disclose any terms or conditions
of this Agreement to any Third Party without the prior consent of the other party. Upon a party’s request, the parties shall
discuss in good faith information that can be used to describe the terms of this transaction, and each party may disclose such
information, as modified by mutual agreement from time to time, without the other party’s consent.

 

    	 	21	 

     

    

 

7.4         Injunctive
Relief. Each party acknowledges that it will be impossible to measure in money the damage to the other party if such party
fails to comply with the obligations imposed by this Section 7, and that, in the event of any such failure, the other party may
not have an adequate remedy at law or in damages. Accordingly, each party agrees that injunctive relief or other equitable remedy,
in addition to remedies at law or damages, is an appropriate remedy for any such failure and shall not oppose the granting of such
relief on the basis that the disclosing party has an adequate remedy at law. Each party agrees that it shall not seek, and agrees
to waive any requirement for, the securing or posting of a bond in connection with the other party seeking or obtaining such equitable
relief.

 

8.           Term
and Termination.

 

8.1         Term.
The Agreement shall commence on the Effective Date and shall continue for a period of ten (10) years from the commercial launch
date of Product by Eton unless earlier terminated under Section 8.2 (the “Term”).

 

8.2         Termination.

 

8.2.1       In
the event of a material breach of this Agreement by either party, including for violation of any applicable trade control or anti-corruption
law, the non-breaching party may provide written notice of such breach to the breaching party, including a description of the breach,
and indicating the non-breaching party’s intent to terminate this Agreement. The breaching party shall have thirty (30) days
from its receipt of such notice to cure the breach, provided the breach is capable of being cured within the thirty (30) day period.
If the breaching party fails to cure the breach within such period, then unless otherwise agreed by the non-breaching party, this
Agreement shall terminate on the date that is thirty (30) days following the breaching party’s receipt of the notice of breach
from the non-breaching party. If the breach is not capable of being remedied within thirty (30) days, the Agreement terminates
upon the written notice.

 

8.2.2       Each
party shall have the right to terminate this Agreement immediately upon written notice if the manufacture, distribution or sale
of Product in the Territory materially contravenes any new or existing applicable law and cannot be brought into compliance with
such law within a reasonable period of time after notice thereof.

 

8.2.3       Eton
shall have the right to terminate this Agreement (a) immediately upon written notice to *** for *** failure to cure such variance
or noncompliance set forth in a Variance Notice pursuant to Section 4.13.3; (b) upon six (6) months prior written notice to ***
if any of *** Certificates of Analysis or Certificates of Conformance reveal that the Product is not in compliance with the Specifications
and such non-compliance is not cured before the expiration of such six (6) month period; or (c) upon thirty (30) days prior
written notice to *** if *** fails to complete the *** Development Activities and otherwise fulfill its obligations under Section
3.2.1 within two (2) years after the Effective Date.

 

    	 	22	 

     

    

 

8.2.4       Eton
shall have the right to terminate this Agreement upon thirty (30) days prior written notice to *** if (a) Eton determines that
the aggregate of Losses arising out of or caused by infringement or misappropriation described in clause (e) of Section 6.2
and Litigation Expenses is reasonably likely to exceed two million dollars ($2,000,000); (b) the FDA issues a Refusal to File
letter in response to the initial Regulatory Filing for Product; (c) Product is not first commercially sold within three (3) years
after the Effective Date; (d) Eton determines, after consulting with ***, that a Product presents patient safety or tolerability
issues; (e) Product Profits are less than thirty percent (30%) of the gross sales price invoiced by Eton for two (2) consecutive
calendar quarters; or (f) Eton otherwise reasonably determines to terminate this Agreement for regulatory, safety or commercial
reasons.

 

8.3         Effect
of Termination or Expiration.

 

8.3.1       Termination
or expiration of this Agreement shall be without prejudice to any rights which shall have accrued to the benefit of any party prior
to such termination or expiration. Without limiting the foregoing, Sections 2.3, 3.4, 3.5, 4.1.2, 4.6, 4.11, 4.12, 4.13, 6, 7,
8.3 and 9 shall survive any termination or expiration of this Agreement.

 

 

***Text has been omitted pursuant to Registrant’s confidential
treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934. The omitted text has been filed separately with the Commission.

 

    	 	23	 

     

    

 

8.3.1       If
Eton terminates this Agreement in accordance with Sections 8.2.2 or 8.2.4, then Eton shall, within thirty (30) days after
the date of termination, reimburse *** the positive remainder, if any, of the *** Development Costs minus the aggregate amount
of Product Profits paid by Eton to ***.

 

9.           Miscellaneous.

 

9.1         Relationship
of Parties. The relationship between *** and Eton, with respect to this Agreement, is only that of independent contractors
notwithstanding any activities set forth in this Agreement. Neither party is the agent or legal representative of the other party,
and neither party has the right or authority to bind the other party in any way. This Agreement creates no relationship as partners
or a joint venture, and creates no pooling arrangement.

 

9.2         Governing
Law and Resolution of Disputes.

 

9.2.1       This
Agreement shall be governed by and construed in accordance with the laws of the State of New York without reference to its conflict
of laws principles.

 

9.2.2       Any
and all disputes or claims arising from or out of this Agreement shall be litigated exclusively before a court of the State of
New York in New York City or, if subject matter jurisdiction exists, the United States District Court for the Southern District
of New York. Each party hereby irrevocably and unconditionally consents to the exclusive personal jurisdiction and service of,
and venue of, any such court, and further irrevocably and unconditionally waives and agrees not to plead or claim that any action,
lawsuit or proceeding brought in any such court has been brought in an inconvenient forum. Any judgment issued by such a court
may be enforced in any court having jurisdiction.

 

 

***Text has been omitted pursuant to Registrant’s confidential
treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934. The omitted text has been filed separately with the Commission.

 

    	 	24	 

     

    

 

9.3         Assignment.
Neither party shall assign its rights or obligations under this Agreement without the prior written consent of the other party,
which shall not be unreasonably withheld or delayed; provided, however, that a party may, without such consent, assign this Agreement
and its rights and obligations hereunder (a) to any Affiliate, or (b) in connection with the transfer or sale of all or substantially
all of its business to which this Agreement relates, or in the event of its merger, consolidation, change in control or similar
transaction. Any permitted assignee shall assume all obligations of its assignor under this Agreement. Any purported assignment
in violation of this Section 9.3 shall be void.

 

9.4         Counterparts.
This Agreement may be executed in several counterparts that together shall be originals and constitute one and the same instrument.

 

9.5         Waiver.
The failure of any party to enforce any of its rights hereunder or at law shall not be deemed a waiver of any of its rights or
remedies against another party, unless such waiver is in writing and signed by the party to be charged. No such waiver shall be
deemed a waiver of any subsequent breach or default of the same or similar nature or any other breach or default by such other
party. All rights and remedies conferred herein shall be cumulative and in addition to all of the rights and remedies available
to each party at law, equity or otherwise.

 

9.6         Severability.
If any provision of this Agreement, or part thereof, is declared by a court of competent jurisdiction to be invalid, void or unenforceable,
each and every other provision, or part thereof, shall nevertheless continue in full force and effect.

 

9.7         Notices.
Any consent, notice or report required or permitted to be given or made under this Agreement by a party to the other party shall
be in writing, delivered by any lawful means to such other party at its address indicated below, or to such other address as the
addressee shall have last furnished in writing to the addressor and (except as otherwise provided in this Agreement) shall be effective
upon receipt by the addressee.

 

If to ***:***

	If to Eton:	Eton Pharmaceuticals, Inc.
	 	21925 Field Pkwy, Suite 235
	 	Deer Park, Illinois 60010
	 	Attention:  Chief Executive Officer

 

9.8           Further
Assurances. The parties agree to execute such additional documents and perform such acts as are reasonably necessary to effectuate
the intent of this Agreement.

 

9.9           Entire
Agreement. This Agreement constitutes the entire agreement between the parties regarding the subject matter hereof, and supersedes
all prior or contemporaneous understandings or agreements regarding the subject matter hereof, whether oral or written. This Agreement
shall be modified or amended only by a writing specifically referring to this Agreement signed by both Eton and ***.

 

    	 	25	 

     

    

 

9.10         Force
Majeure. Neither Party shall be liable for delays in its performance caused by events beyond its control, such as fires, floods,
epidemics, computer virus, earthquakes, riots, acts of terror, acts of God, storms, acts of civil or military authority or similar
occurrences, provided the affected party gives the other party written notice of such event within three (3) business days of its
occurrence. Such notice shall state the estimated duration of such event and the cause thereof and the affected party shall use
commercially reasonable efforts to work around such event beyond its control.

 

9.11         Use
of Other Party’s Name. Neither Party shall use the name of the other Party or any of its Affiliates for advertising,
promotional or other purposes without the prior written consent of the other Party.

 

 

***Text has been omitted pursuant to Registrant’s confidential
treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934. The omitted text has been filed separately with the Commission.

 

    	 	26	 

     

    

 

9.12         Headings
and Construction. No rule of construction shall be applied to the disadvantage of a party because that party was responsible
for the preparation of this Agreement or any part of this Agreement. The Article and Section headings in this Agreement are for
convenient reference only and shall be given no substantive or interpretive effect. With respect to all terms used in this Agreement,
words used in the singular include the plural and words used in the plural include the singular. The word ‘including’
means including without limitation, and the words ‘herein,’ ‘hereby,’ ‘hereto’ and ‘hereunder’
refer to this Agreement as a whole. Unless the context otherwise requires, references found in this Agreement: (i) to Articles
and Sections mean the Articles and Sections of this Agreement, as amended, supplemented and modified from time to time; (ii) to
an agreement, instrument or other document means such agreement; (iii) to an agreement, instrument or other document means such
agreement, instrument or other document as amended, supplemented and modified from time to time, to the extent provided by the
provisions thereof and by this Agreement; and (iv) to a statute or a regulation mean such statute or regulation as amended from
time to time.

 

[Remainder of Page Intentionally Left Blank]

 

    	 	27	 

     

    

 

IN WITNESS WHEREOF, each party has caused
a duly authorized representative to execute this Agreement as of the Effective Date.

 

	 	***
	 	 
	 	***
	 	 
	 	ETON PHARMACEUTICALS, INC.
	 	 	 
	 	By:	/s/ Sean Brynjelsen
	 	Name:	Sean Brynjelsen
	 	Title:	CEO

 

 

***Text has been omitted pursuant to Registrant’s confidential
treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934. The omitted text has been filed separately with the Commission.

 

    	 	28Exhibit 10.12

 

ETON PHARMACEUTICALS, INC.

12264 EL CAMINO REAL, SUITE 350

SAN DIEGO, CA 92130

 

May 14, 2017

 

Sean Brynjelsen

516 S. Cook St.

Barrington, IL 60010

 

Re:        Employment Terms

 

Dear Sean:

 

On behalf of Eton Pharmaceuticals,
Inc. (the “Company”), I am pleased to offer you employment in the position of Chief Executive Officer of the Company,
on the terms set forth in this offer letter agreement (the “Agreement”).

 

1.          Effectiveness.

 

(a)          Your
employment with the Company and all of the terms of this Agreement shall become effective one week following 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 within the
ninety (90) days following the date listed above (the “Employment Effective Date”). In the event that such closing
does not occur within the designed time frame, this your employment with the Company and this Agreement shall be null and void
ab initio and neither party hereto shall have any liability or obligation hereunder.

 

(b)          Prior
to the Employment Effective Date, you will provide part-time consulting services to help secure a financing transaction meeting
the criteria above, as requested by the Company from time to time and as permitted by the terms of your current employment (the
“Consulting Services”). As compensation for your Consulting Services, the Company shall, subject to your execution
below and commencement of Consulting Services, grant you a restricted stock award covering 1,000,000 shares of the Company’s
common stock (the “Stock Award”). The Stock Award shall vest 25% on the one year anniversary of its grant date and
in equal monthly installments thereafter ending on the two-year anniversary of its grant date, subject to your continued service
to the Company (which shall include your consulting and employment services) and vesting acceleration as set forth in Section 9(b)
below. The Stock Award is subject to approval by the Company’s Board of Directors (the “Board”) and the terms
of a Restricted Stock Award Grant Notice and Agreement that will be provided to you by the Company. You understand that the grant
of the Stock Award will trigger taxable income to you, and you agree to timely file a Section 83(b) election with the Internal
Revenue Service and provide documentation of such election to the Company. Either you or the Company may terminate the Consulting
Services at any time upon advance written notice to the other party. Your legitimate and documented business expenses incurred
in performing the Consulting Services will be reimbursed by the Company as provided under its business expense reimbursement policies.
You understand that you shall not be an employee of the Company prior to the Employment Effective Date, and shall not be entitled
to any compensation or benefits for performing the Consulting Services other than as set forth in this Section l(b).

    	 		 

     

    

  

2.          Employment
Position; Duties. Upon the Employment Effective Date, you will be employed in the position of Chief Executive Officer of the
Company. In this position, you will report to the Board, and you will have those duties and responsibilities as customary for this
position and as may be directed by the Board. Your commencement of employment shall begin on or around the Employment Agreement
Effective Date (such actual date, the “Employment Start Date”). Your work duties may include work for, or on behalf
of, Affiliates of the Company (as defined below). You will primarily work from your current location in Chicago, Illinois, although
you understand that reasonable travel shall be required in the performance of your position with the Company. During your employment,
you will devote your full-time best efforts to the business of the Company and its Affiliates.

 

3.          Employee
Base Salary; Employee Benefits and Business Expenses.

 

(a)          Base
Salary. Your base salary will be paid at the annual rate of $325,000, less required payroll deductions and tax withholdings,
paid on the Company’s normal payroll schedule (which shall initially be bi-weekly). As an exempt salaried employee, you will
be required to work the Company’s normal business hours, and such additional time as appropriate for your work assignments
and position. You will not be eligible for extra payment under the overtime laws. Your base salary may otherwise be adjusted from
time to time at the Company’s discretion. Within six (6) months following the closing of the Company’s first firm-commitment
underwritten public offering of its equity securities pursuant to a registration statement filed with the Securities and Exchange
Commission (“IPO”), the Board or the Compensation Committee of the Board (the “Compensation Committee”)
will review your base salary against market practices of public peer companies, with the assistance of an outside compensation
consultant, and shall increase your base salary, if necessary, according to such market practices, as determined appropriate by
the Board or the Compensation Committee in its discretion.

 

(b)          Employee
Benefits. As a regular full-time employee, you will be eligible to participate in the Company’s standard employee benefits
(pursuant to the terms and conditions of the benefit plans and applicable policies), as they may be terminated or changed from
time to time within the Company’s discretion.

 

(c)          Business
Expenses. Your legitimate and documented business expenses will be reimbursed by the Company as provided under its business
expense reimbursement policies.

 

4.          Annual
Performance Bonus. In addition to base salary, you will be eligible to earn discretionary incentive compensation at a total
annual target amount of forty-five percent (45%) of your base salary in effect during the bonus year (“Performance Bonus”),
based on the achievement of corporate and individual performance targets to be determined and approved by the Board or the Compensation
Committee thereof. The Performance Bonus, if earned, will be paid on an annual basis, less required payroll deductions and tax
withholdings, after the close of the fiscal year and after determination by the Board (or the Compensation Committee thereof) of
the level of achievement of the applicable performance targets and metrics and the level of the Performance Bonus amount (if any).
No Performance Bonus amount is guaranteed and, in addition to the other conditions for earning such Performance Bonus, you must
remain an employee in good standing of the Company on the Performance Bonus payment date in order to earn any Performance Bonus.
You will be eligible for a Performance Bonus for 2017, pro-rated based on when the Employment Start Date occurs.

    	 		 

     

    

  

5.          Equity
Awards. In addition to the Stock Award, you will be eligible to receive additional equity award grants under the Company’s
equity incentive plans from time to time in the discretion of the board or its Compensation Commitee and in accordance with the
terms and conditions of such plans.

 

6.          Compliance
With Proprietary Information Agreement and Company Policies. As a condition of employment, you shall sign and comply with the
Proprietary Information, Inventions, Non- Solicitation and Non-Competition Agreement (the “Proprietary Information Agreement”)
which is attached as Exhibit A. In addition, you are required to abide by the Company’s policies and procedures, as
may be modified from time to time within the Company’s discretion.

 

7.          Protection
of Third Party Information and Outside Activities.

 

(a)          Third
Party Information. In your work for the Company or its Affiliates (including the Consulting Services), you will be expected
not to make any unauthorized use or disclosure of any confidential information or materials, including trade secrets, of any former
employer or other third party; and not to violate any lawful agreement that you may have with any third party. By signing this
Agreement, you represent that you are able to perform your job duties within these guidelines, and you are not in unauthorized
possession or control of any confidential documents, information, or other property of any former employer or third party. In addition,
you represent that you have disclosed to the Company in writing any agreement you may have with any third party (e.g., a former
employer) which may limit your ability to perform your duties to the Company or its Affiliates, or which could present a conflict
of interest with the Company or its Affiliates, including but not limited to disclosure (and a copy) of any contractual restrictions
on solicitations or competitive activities, and are not bound by any such restrictions which would restrict or prevent you from
performing the Consulting Services or accepting employment with the Company.

 

(b)          Outside
Activities. During your employment with the Company, you may engage in civic and not-for-profit activities, act as a trustee
for estate planning purposes and engage in, and manage, personal investments, so long as such activities do not interfere with
the performance of your duties hereunder or present a conflict of interest with the Company or its Affiliates. Subject to the restrictions
set forth herein, and only with prior written disclosure to and consent of the Board, you may engage in other types of business
or public activities. Your service on any board of directors (or similar) of an outside entity or organization shall be subject
to prior written approval of the Board, except for your current service on the board of directors of Mobius Therapeutics LLC, which
the Board hereby acknowledges and approves. The Board may rescind approval of outside services, if the Board determines, in its
sole discretion, that such activities compromise or threaten to compromise the Company’s or its Affiliates’ business
interests or conflict with your duties to the Company or its Affiliates.

    	 		 

     

    

  

(c)          Non-Competition.
During your employment with the Company, you will not, without the express written consent of the Board, directly or indirectly
serve as an officer, director, stockholder, employee, partner, proprietor, investor, joint venture, associate, representative or
consultant of any person or entity engaged in, or planning or preparing to engage in, business activity competitive with any line
of business engaged in (or, to your knowledge, immediately planned to be engaged in) by the Company or its Affiliates; provided,
however, that you may purchase or otherwise acquire up to (but not more than) five percent (5%) of any class of securities of any
enterprise (without participating in the activities of such enterprise) if such securities are listed on any national or regional
securities exchange. In addition, you will be subject to certain restrictions (including restrictions continuing after your employment
ends) under the terms of your Proprietary Information Agreement.

 

8.          At
Will Employment Relationship. Your employment relationship the Company is at-will. Accordingly, you may terminate your employment
with the Company at any time and for any reason whatsoever simply by notifying the Company, and the Company may terminate your
employment at any time with or without Cause or prior notice. In addition, the Company retains the discretion to modify your other
employment terms from time to time, including but not limited to your position, duties, authority, reporting relationship, work
location, compensation, and benefits.

 

9.          Severance
Benefits.

 

(a)          Severance
Benefits for Covered Termination. If beginning on or after the six (6) month anniversary of the Employment Start Date, (A)
your employment is terminated due to (1) a termination by the Company without Cause (other than as a result of your death or Disability)
or (2) your resignation for Good Reason (collectively, a “Covered Termination”), (B) you satisfy the Release Requirement
and (C) you continue to abide by the terms of your Proprietary Information Agreement, then you will receive the “Severance
Benefits” as set forth in this Section 9(a) as your sole severance benefits, and you will not be eligible for severance benefits
under any other policy, plan or agreement except to the extent required by law. Specifically, you will receive:

 

(i)          Severance
Payments. Severance pay in the form of continuation of your base salary at the time of your Covered Termination (but ignoring
any decrease that forms the basis of your resignation for Good Reason, if applicable) for a period of twelve (12) months, subject
to required payroll deductions and tax withholdings (the “Severance Payments”). Subject to Section 10, the Severance
Payments shall be made on the Company’s regular payroll schedule in effect following your termination date, provided, however,
that any such payments that are otherwise scheduled to be made prior to the Release Effective Date (as defined below) shall instead
accrue and be made on the first regular payroll date following the Release Effective Date; and

 

(ii)         Health
Care Continuation Coverage Payments.

 

    	 		 

     

    

 

(A)         COBRA
Premiums. If you timely elect continued coverage under COBRA, the Company will pay your COBRA premiums to continue your coverage
(including coverage for your eligible dependents, if applicable) (“COBRA Premiums”) through the period starting on
the termination date and ending twelve (12) months after the termination date (the “COBRA Premium Period”); provided,
however, that the Company’s provision of such COBRA Premium benefits will immediately cease if during the COBRA Premium Period
you become eligible for group health insurance coverage through a new employer or you cease to be eligible for COBRA continuation
coverage for any reason, including plan termination. In the event you become covered under another employer’s group health
plan or otherwise cease to be eligible for COBRA during the COBRA Premium Period; you must immediately notify the Company of such
event. For purposes of this Section, references to COBRA premiums shall not include any amounts payable you under a Section 125
health care reimbursement plan under the Internal Revenue Code of 1986, as amended (the “Code”).

 

(B)         Special
Cash Payments in Lieu of COBRA Premiums. Notwithstanding the foregoing, if the Company determines, in its sole discretion,
that it cannot pay the COBRA Premiums without potentially incurring financial costs or penalties under applicable law (including,
without limitation, Section 2716 of the Public Health Service Act), regardless of whether you or your dependents elect or are eligible
for COBRA coverage, the Company instead shall pay to you, on the first day of each calendar month following the time the Company
determines it cannot pay such COBRA Premiums, a fully taxable cash payment equal to the applicable COBRA premiums for that month
(including the amount of COBRA premiums for your eligible dependents), subject to applicable tax withholdings (such amount, the
“Special Cash Payment”), for the remainder of the COBRA Premium Period. You may, but are not obligated to, use such
Special Cash Payments toward the cost of COBRA premiums.

 

(b)          Severance
Benefits for Covered Termination during Change in Control Period. Notwithstanding the foregoing, if your Covered Termination
occurs during the period commencing one (1) month prior to the Closing of a Change in Control and ending twelve (12) months following
the Closing of a Change in Control, in addition to the Severance Benefits described in Section 9(a), you shall also be eligible
to receive the following, subject to satisfaction of the Release Requirement:

 

(i)          Equity
Acceleration. The vesting and exercisability of each outstanding unvested stock option and other stock award, as applicable,
that you hold covering Company common stock (each, an “Equity Award”) shall be accelerated in full and any reacquisition
or repurchase rights held by the Company in respect of common stock issued pursuant to any Equity Award granted to you shall lapse
in full. For purposes of determining the number of shares that will vest pursuant to the foregoing provision with respect to any
Equity Award that vests based on performance goals for which the performance period has not ended and that has multiple vesting
levels depending upon the level of performance, vesting acceleration with respect to any ongoing performance period(s) shall occur
with respect to the number of shares subject to the award as if the applicable performance criteria had been attained at a 100%
level or, if greater, based on actual performance as of your Covered Termination. If necessary to give effect to this Section 9(b)(i),
if your Covered Termination occurs prior to a Change in Control, all of the Equity Awards you hold as of immediately prior to your
Covered Termination shall remain outstanding after your Covered Termination for at least until the earlier of (i) thirty (30) days
after your Covered Termination or (ii) the Closing, if sooner. Notwithstanding anything to the contrary set forth herein, your
Equity Awards shall remain subject to the terms of the applicable Company plan and award documents under which such Equity Award
was granted, including any provision for earlier termination of such Equity Awards.

    	 		 

     

    

  

(c)          Release
Requirement. To be eligible for the Severance Benefits pursuant to Sections 9(a) and 9(b) above, you must satisfy the following
release requirement (the “Release Requirement”): return to the Company a signed and dated general release of all known
and unknown claims, in such form as provided by the Company (the “Release and Waiver”) within the applicable deadline
set forth therein, and permit the Release and Waiver to become effective and irrevocable in accordance with its terms, which must
occur no later than sixty (60) days following your termination date (such effective date of the Release and Waiver, the “Release
Effective Date”). You may be asked to provide reasonable transitional services as a condition of payment of Severance Benefits.

 

(d)          Definitions.

 

(i)          “Affiliate”
means, at the time of determination, any “parent” or “majority-owned subsidiary” of the Company, as such
terms are defined in Rule 405 promulgated under the Securities Act of 1933, as amended. The Board will have the authority to determine
the time or times at which “parent” or “majority-owned subsidiary” status is determined within the foregoing
definition.

 

(ii)         “Cause”
means the occurrence of any one of more of the following: (i) your conviction of, or plea of no contest with respect to, any felony,
or of any misdemeanor involving dishonesty or moral turpitude; (ii) your participation in a fraud or act of dishonesty (or an attempted
fraud or act of dishonesty) that results in (or could result in) material harm to the Company or its Affiliates, including but
not limited to material harm to reputational interests; (iii) your violation of a fiduciary duty owed to the Company or its Affiliates;
(iv) your material breach of any fully executed agreement between you and the Company or any of its Affiliates, including but not
limited to this Agreement or your Proprietary Information Agreement, or any applicable Company policies; (v) persistent, unsatisfactory
performance or neglect of your job duties, which is not cured within ten (10) business days after you are provided written notice
by the Company specifically identifying the manner of your performance or neglect (provided, that, such written notice and
opportunity to cure are not required if your performance or neglect is not reasonably susceptible to being cured); (vi) your gross
misconduct or material failure to comply with a written instruction of the Company; or (vii) your inability to perform your job
duties for any consecutive thirty (30) day period for any reason that is not the result of death or Disability.

 

(iii)        “Change
in Control” means the occurrence, in a single transaction or in a series of related transactions, of any one or more
of the following events:

 

    	 		 

     

    

 

(A)         any
Exchange Act Person 1 (excluding Imprimis Pharmaceuticals, Inc. and any of its Affiliates (“Imprimis”)) becomes
the Owner, directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined
voting power of the Company’s then outstanding securities other than by virtue of a merger, consolidation or similar
transaction. Notwithstanding the foregoing, a Change in Control will not be deemed to occur (A) on account of the acquisition
of securities of the Company directly from the Company, (B) on account of the acquisition of securities of the Company by an
investor, any affiliate thereof or any other Exchange Act Person that acquires the Company’s securities in a
transaction or series of related transactions the primary purpose of which is to obtain financing for the Company through the
issuance of equity securities or (C) solely because the level of Ownership held by any Exchange Act Person (the
“Subject Person”) exceeds the designated percentage threshold of the outstanding voting securities as a

 

 

 

“Exchange Act Person”
means any natural person, entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act), except
that “Exchange Act Person” will not include (i) the Company or any Subsidiary of the Company,

 

(ii)          any
employee benefit plan of the Company or any Subsidiary of the Company or any trustee or other fiduciary holding

 

securities under an employee benefit plan
of the Company or any Subsidiary of the Company, (iii) an underwriter temporarily holding securities pursuant to an offering of
such securities, (iv) an entity Owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions
as their Ownership of stock of the Company; or (v) any natural person, entity or “group” (within the meaning of Section
13(d) or 14(d) of the Exchange Act) that, as of the Effective Date, is the Owner, directly or indirectly, of securities of the
Company representing more than fifty percent (50%) of the combined voting power of the Company’s then outstanding securities.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“Own,” “Owned,”
“Owner,” “Ownership” A person or entity will be deemed to “Own,” to have “Owned,”
to be the “Owner” of, or to have acquired “Ownership” of securities if such person or entity, directly
or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares voting power, which includes
the power to vote or to direct the voting, with respect to such securities.

 

result of a repurchase or other
acquisition of voting securities by the Company reducing the number of shares outstanding, provided that if a Change in
Control would occur (but for the operation of this sentence) as a result of the acquisition of voting securities by the
company, and after such share acquisition, the Subject Person becomes the Owner of any additional voting securities that,
assuming the

 

repurchase or other acquisition had not occurred, increases the percentage of the then outstanding voting
securities Owned by the Subject Person over the designated percentage threshold, then a Change in Control will be deemed to
occur;

 

    	 		 

     

    

 

(B) there is consummated a merger, consolidation
or similar transaction involving (directly or indirectly) the Company and, immediately after the consummation of such merger, consolidation
or similar transaction, the stockholders of the Company immediately prior thereto do not Own, directly or indirectly, either (A)
outstanding voting securities representing more than fifty percent (50%) of the combined outstanding voting power of the surviving
Entity in such merger, consolidation or similar transaction or (B) more than fifty percent (50%) of the combined outstanding voting
power of the parent of the surviving Entity in such merger, consolidation or similar transaction, in each case in substantially
the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such transaction;

 

(C) the stockholders of the Company approve
or the Board approves a plan of complete dissolution or liquidation of the Company, or a complete dissolution or liquidation of
the Company will otherwise occur, except for a liquidation into a parent corporation; or

 

(D) there is consummated a sale, lease,
exclusive license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries,
other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and
its Subsidiaries to Imprimis or to an Entity, more than fifty percent (50%) of the combined voting power of the voting securities
of which are Owned by stockholders of the Company in substantially the same proportions as their Ownership of the outstanding voting
securities of the Company immediately prior to such sale, lease, license or other disposition.

 

Notwithstanding the foregoing definition
or any other provision of this Agreement, the term Change in Control will not include a sale of assets, merger or other transaction
effected exclusively for the purpose of changing the domicile of the Company.

 

(iv)        “Closing”
means the initial closing of the Change in Control as defined in the definitive agreement executed in connection with the Change
in Control. In the case of a series of transactions constituting a Change in Control, “Closing” means the first closing
that satisfies the threshold of the definition for a Change in Control.

 

(v)         “Disability”
means your inability to perform the essential functions of your position, with or without reasonable accommodation, by reason of
any medically determinable physical or mental impairment, where such inability has continued for at least a period of 60 days in
any consecutive 365-day period, as determined by the Company in its sole discretion.

 

(vi)        “Good
Reason” for your resignation means the occurrence of any of the following events, conditions or actions taken by the
Company without Cause and without your written consent: (i) a material reduction of your annual base salary; provided, however,
that Good Reason shall not be deemed to have occurred in the event of a reduction in your annual base salary that is pursuant
to salary reduction program affecting substantially all of the executive employees of the Company; (ii) a material reduction in
your authority, duties or responsibilities, including a requirement that you report to a corporate officer or employee of the Company
instead of reporting directly to the Board; (iii) a relocation of your principal place of employment with the Company to a place
that increases your one way commute by more than fifty (50) miles as compared to your then-current principal place of employment
immediately prior to such relocation (excluding regular travel in the ordinary course of business); or (iv) a material breach by
the Company of any provision of this Agreement; provided, however, that in each case above, in order for your resignation
to be deemed to have been for Good Reason, you must first give the Board written notice of the action or omission giving rise to
“Good Reason” within thirty (30) days after the first occurrence thereof; the Company must fail to reasonably cure
such action or omission within thirty (30) days after receipt of such notice (the “Cure Period”), and your resignation
from all positions you hold with the Company must be effective not later than thirty (30) days after the expiration of such Cure
Period.

    	 		 

     

    

  

(vii) “Subsidiary”
means, with respect to the Company, (i) any corporation of which more than fifty percent (50%) of the outstanding capital stock
having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether, at the
time, stock of any other class or classes of such corporation will have or might have voting power by reason of the happening of
any contingency) is at the time, directly or indirectly, Owned by the Company, and (ii) any partnership, limited liability company
or other entity in which the Company has a direct or indirect interest (whether in the form of voting or participation in profits
or capital contribution) of more than fifty percent (50%).

 

(e)          Other.
You will not be eligible for any Severance Benefits under any circumstances other than those described herein, including circumstances
in which your employment is terminated by the Company for Cause, you terminate your employment for any reason at any time, or your
employment terminates due to your death or Disability. In addition, if you materially breach any continuing obligations to the
Company (including but not limited to any material breach of the Proprietary Information Agreement) during the period of time that
you are receiving any Severance Benefits, you will forfeit your entitlement to any then unpaid Severance Benefits, and the Company’s
obligation to continue to pay or provide such Severance Benefits will immediately terminate as of the date of your material breach.

 

10.         Section
409A. It is intended that all of the benefits and other payments payable under this Agreement satisfy, to the greatest extent
possible, an exemption from the application of Section 409A of the Code and the regulations and other guidance thereunder and any
state law of similar effect (collectively “Section 409A”), and this Agreement will be construed to the greatest extent
possible as consistent with those provisions, and to the extent no so exempt, this Agreement (and any definitions hereunder) will
be construed in a manner that complies with Section 409A, and any ambiguities herein shall be interpreted accordingly. Specifically,
the benefits under this Agreement are intended to satisfy the exemptions from application of Section 409A provided under Treasury
Regulations Sections 1.409A-l(b)(4), 1.409A-l (b)(5) and 1.409A-l (b)(9) and each installment of severance benefits, if any, is
a separate “payment” for purposes of Treasury Regulations Section l.409A-2(b)(2)(i). However, if such exemptions are
not available and you are, upon your “separation from service” with the Company (within the meaning of Treasury Regulation
Section 1.409A-l(h) (without regard to any permissible alternative definition thereunder) (“Separation from Service”),
a “specified employee” for purposes of Section 409A, then, solely to the extent necessary to avoid adverse personal
tax consequences under Section 409A, the timing of the severance benefits payments shall be delayed until the earlier of (i) six
(6) months and one (1) day after your Separation from Service, or (ii) your death. Severance benefits shall not commence until
you have a Separation from Service. If the severance benefits are not covered by one or more exemptions from the application of
Section 409A and the Release and Waiver could become effective in the calendar year following the calendar year in which your Separation
from Service occurs, the Release Effective Date will not be deemed effective, for purposes of payment of severance, any earlier
than the first day of the second calendar year. Except to the minimum extent that payments must be delayed because you are a “specified
employee” or until the Release Effective Date, all severance amounts will be paid as soon as practicable in accordance with
this Agreement and the Company’s normal payroll practices.

    	 		 

     

    

  

11.         Section
280G.

 

(a)          If
any payment or benefit you would receive from the Company or otherwise in connection with a change in control of the Company or
other similar transaction (“Payment”) would (1) constitute a “parachute payment” within the meaning of
Section 280G of the Code, and (2) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the
“Excise Tax”), then such Payment will be equal to the Reduced Amount. The “Reduced Amount” will be either
(x) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax, or (y) the
largest portion, up to and including the total, of the Payment, whichever amount ((x) or (y)), after taking into account all applicable
federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate),
results in your receipt, on an after- tax basis, of the greater amount of the Payment notwithstanding that all or some portion of
the Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute payments”
is necessary so that the Payment equals the Reduced Amount, reduction will occur in the manner (the “Reduction Method”)
that results in the greatest economic benefit for you. If more than one method of reduction will result in the same economic benefit,
the items so reduced will be reduced pro rata (the “Pro Rata Reduction Method”).

 

(b)          Notwithstanding
the foregoing, if the Reduction Method or the Pro Rata Reduction Method would result in any portion of the Payment being subject
to taxes pursuant to Section 409A that would not otherwise be subject to taxes pursuant to Section 409A, then the Reduction Method
and/or the Pro Rata Reduction Method; as the case may be, shall be modified so as to avoid the imposition of taxes pursuant to
Section 409A as follows: (A) as a first priority, the modification shall preserve to the greatest extent possible, the greatest
economic benefit for you as determined on an after- tax basis; (B) as a second priority, Payments that are contingent on future
events (e.g., being terminated without cause), shall be reduced (or eliminated) before Payments that are not contingent on future
events; and (C) as a third priority, Payments that are “deferred compensation” within the meaning of Section 409A shall
be reduced (or eliminated) before Payments that are not deferred compensation within the meaning of Section 409A.

 

(c)         The independent registered
public accounting firm engaged by the Company for general audit purposes as of the day prior to the effective date of the event
described in Section 280G(b)(2)(A)(i) of the Code will perform the foregoing calculations. If the independent registered public
accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group effecting the
change in control or similar transaction, the Company will appoint a nationally recognized independent registered public accounting
firm to make the determinations required hereunder. The Company will bear all expenses with respect to the determinations by such
independent registered public accounting firm required to be made hereunder. The independent registered public accounting firm
engaged to make the determinations hereunder will make its determination with input from you (or your counsel) and provide its
calculations, together with detailed supporting documentation, to the Company and you within fifteen (15) calendar days after the
date on which your right to a Payment is triggered (if requested at that time by the Company or you) or such other time as reasonably
requested by the Company or you.

    	 		 

     

    

  

12.         Dispute
Resolution. To ensure the rapid and economical resolution of disputes that may arise in connection with your employment with
and services for the Company, you and the Company agree that any and all disputes, claims, or causes of action, in law or equity,
including but not limited to statutory claims, arising from or relating to the enforcement, breach, performance, or interpretation
of this Agreement, your employment with and services for the Company, or the termination of your employment with and services for
the Company, will be resolved pursuant to the Federal Arbitration Act, 9 U.S.C. §§1-16, and to the fullest extent permitted
by law, by final, binding and confidential arbitration conducted in Chicago, Illinois (or such other location as mutually agreed
by the parties) by JAMS, Inc. (“JAMS”) or its successors by a single arbitrator. Both you and the Company acknowledge
that by agreeing to this arbitration procedure, you each waive the right to resolve any such dispute through a trial by jury or
judge or administrative proceeding. Any such arbitration proceeding will be governed by JAMS’ then applicable rules and
procedures for employment disputes, which will be provided to you upon request. In any such proceeding, the arbitrator shall (a)
have the authority to compel adequate discovery for the resolution of the dispute and to award such relief as would otherwise be
permitted by law; and (b) issue a written arbitration decision including the arbitrator’s essential findings and conclusions
and a statement of the award. You and the Company each shall be entitled to all rights and remedies that either would be entitled
to pursue in a court of law. Nothing in this Agreement is intended to prevent either the Company or you from obtaining injunctive
relief in court to prevent irreparable harm pending the conclusion of any such arbitration pursuant to applicable law. The Company
shall pay all filing fees in excess of those that would be required if the dispute were decided in a court of law, and shall pay
the arbitrator’s fees and any other fees or costs unique to arbitration. Any awards or orders in such arbitrations may be
entered and enforced as judgments in the federal and state courts of any competent jurisdiction.

 

13.         Indemnification.
Upon the Employment Effective Date, you shall be eligible for indemnification by the Company in your role as Chief Executive Officer
to the fullest extent as provided for pursuant to Section 8.1 of the Company’s By-Laws, as may be amended and restated from
time to time.

 

14.         Miscellaneous.
This Agreement, along with Exhibit A, forms the complete and exclusive statement of your agreement with the Company regarding
the subject matter hereof. It supersedes and replaces any other agreements or promises made to you by anyone concerning your employment
terms with the Company or any Affiliate thereof, whether oral or written. This Agreement may not be amended or modified except
by a written modification signed by you and a duly authorized member of the Board, with the exception of those changes expressly
reserved to the Company’s discretion in this Agreement. This Agreement is governed by the laws of the state of Illinois without
reference to conflicts of law principles, and it is intended to bind and inure to the benefit of and be enforceable by the Company
and its successors and assigns. If any provision of this Agreement shall be held invalid or unenforceable in any respect, such
invalidity or unenforceability shall not affect the other provisions of this Agreement, and such provision will be reformed, construed
and enforced so as to render it valid and enforceable consistent with the general intent of the parties insofar as possible under
applicable law. With respect to the enforcement of this Agreement, no waiver of any right hereunder shall be effective unless it
is in writing. Any ambiguity in this Agreement shall not be construed against either party as the drafter. This Agreement may be
executed in counterparts which shall be deemed to be part of one original, and facsimile and electronic signatures shall be equivalent
to original signature. To the extent required by law, your employment with the Company will be subject to satisfactory proof of
your identity and right to work in the United States.

    	 		 

     

    

  

To accept our offer
of consulting and employment under the terms set forth herein, please sign and date this Agreement and sign and date the Proprietary
Information Agreement attached as Exhibit A, and return the fully signed documents to me at your earliest convenience and
no later than within fifteen business days from the date listed above.

 

Please let me know if you have any questions.

 

Sincerely,

 

	ETON PHARMACEUTICALS, INC.	 
	 	 
	By: /s/ Mark L. Baum	 
	 	 
	Mark L. Baum	 
	 	 
	Reviewed, Understood, and Accepted:	 
	 	 
	/s/ Sean Brynjelsen	 
	 	 
	Sean Brynjelsen	 
	 	 
	Date 5/14/2017	 
	 	 
	Accepted by Company:	 
	 	 
	/s/ Mark L. Baum	 
	 	 
	Mark L. Baum, Executive Director	 
	 	 
	Date 5/14/2017	 

 

    	 		 

     

    

  

EXHIBIT A

 

PROPRIETARY INFORMATION AGREEMENT

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