Document:

Adamis Pharmaceuticals Corporation 10-Q

 

Exhibit 10.6

 

Execution
copy

 

[*Designates
portions of this document have been omitted pursuant to a request for confidential treatment filed separately with the Commission]

 

DEVELOPMENT,
LICENSE AND COMMERCIALIZATION AGREEMENT

 

THIS
DEVELOPMENT, LICENSE AND COMMERCIALIZATION AGREEMENT (this “Agreement”) is made and entered into on May 9,
2016 (the “Effective Date”), by and between Watson Laboratories, Inc., a Nevada corporation (“Watson”),
on the one hand, and Adamis Pharmaceuticals Corporation, a company incorporated under the laws of Delaware (“Adamis”),
on the other hand. Watson and Adamis shall each sometimes be referred to herein as a “Party” and collectively
as the “Parties.”

 

RECITALS

 

1.          Watson
is engaged in the development, manufacture, promotion, sale and distribution of pharmaceutical products throughout the world.

 

2.          Adamis
is engaged in research and development of pharmaceutical products and had developed a pre-filled single dose syringe for the delivery
of epinephrine solution.

 

3.          Watson
desires to obtain, and Adamis is willing to provide Watson, with the exclusive right to use and sell the Product (as defined below)
in the Territory on the terms and conditions set forth in this Agreement.

 

NOW,
THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, the receipt and sufficiency of which
is hereby acknowledged by the Parties, the Parties hereby agree as follows:

 

ARTICLE
1

DEFINITIONS

 

As
used herein, the following terms shall have the following meanings.

 

“[*]
Product” means a PFS designed to deliver [*] Epinephrine Injection USP for subcutaneous or intramuscular injection.

 

“0.3mg
Product” means a PFS designed to deliver 0.3mg Epinephrine Injection USP, which contains approximately [*] epinephrine
solution for subcutaneous or intramuscular injection.

 

“AAA”
has the meaning set forth in Section 12.2(a).

 

“Adamis”
has the meaning set forth in the Caption.

 

“Adamis
Indemnitee” has the meaning set forth in Section 10.1.

 

     

    	 

    

 

“Affiliate”
means, with respect to a Person, any Person that directly or indirectly controls, is controlled by or is under common control
with such Person. For the purposes of this definition, the word “control” (including, with correlative meaning, the
terms “controlled by” or “under the common control with”) means (a) ownership of fifty percent (50%) or
more of the voting and equity rights of such Person, or (b) the power to direct the management of such Person. Notwithstanding
the foregoing, for purposes of this Agreement, a Wholesaler Affiliate shall not constitute an Affiliate of Watson.

 

“Agreement”
has the meaning set forth in the Caption.

 

“Applicable
Law” means any and all laws, statutes, ordinances, rules, regulations, permits, orders, decrees, judgments,
directives or guidelines of any kind whatsoever that may apply to the development, manufacturing, marketing or sale of a Product
or the performance of either Party’s obligations under this Agreement, including laws, regulations and guidelines governing
the import, export, development, manufacturing, marketing, distribution and sale of a Product, to the extent applicable and relevant,
and including all current Good Manufacturing Practices or guidelines promulgated by the FDA or other Governmental Authorities
and including trade association guidelines, where applicable, as well as U.S. import and export control laws and the U.S. Foreign
Corrupt Practices Act.

 

“Approval
Deadline” has the meaning set forth in Exhibit A.

 

“Back-up
Facility” has the meaning set forth in Section 4.3(a).

 

“Bankruptcy
Code” has the meaning set forth in Section 11.3.

 

“Bankruptcy
Laws” has the meaning set forth in Section 11.3.

 

“Calendar
Quarter” means each consecutive three-month period beginning on January 1, April 1, July 1 or October 1 of
any given year.

 

“Calendar
Year” means each consecutive beginning on January 1 and ending on December 31 of any given year.

 

“Catalent”
means Catalent Belgium, S.A. and any successor thereto.

 

“Commercial
Supply” has the meaning set forth in Section 4.1(a).

 

“Commercial
Supply Price” means, unless otherwise agreed by the Parties in writing:

 

(i)
 to the extent that manufacturing (which for all purposes of this Agreement includes packaging and/or labelling activities)
of the Product for the Territory is performed by a Contract Manufacturer, the amount owing or made to any Contract Manufacturer
for the acquisition of the Product, including, without limitation, [*]; 

 

(ii)
 to the extent that a Party or its Affiliate performs all or any part of the manufacturing or supply of the Product, the
Cost of Manufacture of the Product, plus a margin of [*] percent ([*]%), provided however, this amount shall not exceed the [*]
(i.e., [*]) [*]; and

 

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(iii)
notwithstanding (i) and (ii) above, if a Party determines to qualify a Back-up Facility pursuant to Section 4.2(a) and the Parties
do not agree in writing on their relative payment responsibility for such qualification, such Party shall bear [*].

 

For
the avoidance of doubt, if a Party or its Affiliate performs only a part of the manufacturing required for the Product, the [*]
payable pursuant to (ii) or (iii) above shall only apply to [*].

 

“Commercially
Reasonable Efforts” means, with respect to a Party, such efforts and resources which are consistent with those efforts
and resources that would be used by a similarly situated company to perform any activity for any product at a comparable stage
of development or commercialization, taking into consideration such product’s commercial potential, stage of development
and life cycle, medical/scientific viability, technical and regulatory profile, intellectual property protection and risks, competitiveness
in the marketplace, profitability (but without consideration of the sharing of Net Profits pursuant to this Agreement) and other
relevant factors.

 

“Competing
Product” means any other PFS epinephrine solution product.

 

“Confidential
Information” means, with respect to a Party, all information of any kind whatsoever (including, without limitation,
data, compilations, formulae, models, patent disclosures, procedures, processes, projections, protocols, results of experimentation
and testing, specifications, strategies, techniques and all non-public intellectual property rights, as hereinafter defined),
and all tangible and intangible embodiments thereof of any kind whatsoever (including, without limitation, apparatus, compositions,
documents, drawings, machinery, patent applications, records and reports), which is disclosed or made available to the other Party
regardless of whether such information is marked, identified as or otherwise acknowledged to be confidential at the time of disclosure
to the other Party. All information shall be deemed confidential unless agreed otherwise. Notwithstanding the foregoing, Confidential
Information of a Party shall not include information which the other Party can establish by written documentation or similar evidence
(a) to have been publicly known prior to disclosure of such information by the disclosing Party to the other Party, (b) to have
become publicly known, without breach of this Agreement or violation of Applicable Laws on the part of the other Party or its
Affiliates or any employee, contractor or agent acting on their behalf, subsequent to disclosure of such information by the disclosing
Party to the other Party, (c) to have been received by the other Party at any time without obligation of confidentiality from
a source, other than the disclosing Party, rightfully having possession of and the right to disclose such information, (d) to
have been otherwise known by the other Party prior to disclosure of such information by the disclosing Party to the other Party,
or (e) to have been independently developed by employees or agents of the other Party without the use of or reliance upon any
information disclosed by the disclosing Party to the other Party.

 

“Contract
Manufacturer” means Catalent, [*], or any other Third Party that is engaged by either Party to manufacture and/or
package the Product.

 

“Cost
of Manufacture” means the [*].

 

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“Development
Plan” means the development plan and responsibility matrix attached hereto as Exhibit B, relating
to the development of and regulatory submission for the [*] Product, as well as the marketing materials for the Product, as modified
by the Parties from time to time upon written agreement.

 

“Development
Services” means those services set forth in the Development Plan to be performed by the Party identified in the
Development Plan.

 

“Direct
Cost” means the cost of [*].

 

“Dispute”
has the meaning set forth in Section 12.1.

 

“Effective
Date” has the meaning set forth in the Caption.

 

“[*]”
means either or both (i) [*], and (ii) [*].

 

“FDA”
means the United States Food and Drug Administration or its successor agency.

 

“FDCA”
means the United States Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301 et seq., as amended.

 

“Governmental
Authority” means any transnational, domestic or foreign federal, provincial, state or local governmental, regulatory
or administrative authority (including, without limitation, any Regulatory Authority), department, bureau, court, agency or official,
including, without limitation, any political subdivision thereof.

 

“Indemnified
Party” has the meaning set forth in Section 10.3.

 

“Indemnifying
Party” has the meaning set forth in Section 10.3.

 

“Initial
Marketing and Regulatory Activities” means all activities customarily undertaken by a pharmaceutical company to
create and implement its marketing plans and strategies to encourage the FDA approved use of a prescription pharmaceutical product,
including the preparation of training and promotional materials (materials intended for training purposes and/or for distribution
or dissemination to sales representatives, medical professionals and other Third Parties, briefing documents, information about
Watson, strategy and tactical plans to promote the Product, as well as advertising), and any regulatory or legal activities related
thereto, including review and approval by a promotional review committee comprised of medical, legal and/or regulatory personnel
required.

 

“Initial
Term” has the meaning set forth in Section 11.1.

 

“Know-How”
means any confidential and proprietary ideas, concepts, discoveries, inventions, developments, improvements, know-how, trade secrets,
designs, devices, process conditions, algorithms, notation systems, works of authorship, technology, formulas, techniques, methods,
procedures, protocols, data, specifications, conclusions, skill, experience, test data and results (including, without limitation,
pharmacological, toxicological, manufacturing, and clinical test data and results), analytical and quality control data, results
or descriptions, in each case whether patentable or otherwise. Know-How does not include patents and patent applications.

 

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“Launch
Deadline” has the meaning set forth in Exhibit A.

 

“Licensed
Technology” means all tangible or intangible Know-How including improvements, patents and patent applications that
(a) are owned or controlled (with the right to license or sublicense) by Adamis
and (b) are either (i) necessary for use by Watson in performance of the Development Services to be performed by Watson
or (ii) are necessary for the manufacture, use or sale of the Product in the Territory.

 

“Losses”
has the meaning set forth in Section 10.1.

 

“Manufacturing
Facility” means the manufacturing facility (or facilities) at which the Product to be supplied to Watson is manufactured.

 

“Marketing
Allowance” means, for any period, [*] percent ([*]%) of the [*] of such Product in such period, for the selling,
marketing and other expenses related to the Product incurred by Watson and its Affiliates.

 

“Milestone
Payments” has the meaning set forth in Section 5.2.

 

“Minimum
Obligation” means [*].

 

“NDA(s)”
means a New Drug Application (as defined in the FDCA) filed with the FDA, including, without limitation, all amendments and supplements
thereto.

 

“Net
Profit” means (a) the sum of the following, without duplication: (i) Net Sales, (ii) [*], less (b) the sum
of the following, without duplication: [*]. 

 

“Net
Sales” means the gross amount invoiced by Watson or its Affiliates or any sub-licensees on all sales or other dispositions
for value of Product in the Territory (excluding any sales among Watson and its Affiliates for resale), less the following items
(to the extent not previously deducted and included in the gross amount invoiced or otherwise directly paid or incurred by the
selling party):

 

(i)           any
and all promotional allowances, rebates, government mandated rebates (i.e. Medicaid, etc.), charge backs, quantity and cash discounts,
and other usual and customary discounts to customers actually allowed or taken,

 

(ii)          amounts
repaid or credited by reason of rejections, returns or recalls of goods,

 

(iii)         retroactive
price reductions and shelf stock adjustments,

 

(iv)         any
sales, excise, turnover, inventory, value-added, and similar taxes and duties assessed on applicable sales of Products, but excluding
national, state or local taxes assessed on income,

 

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(v)          allowances
for doubtful accounts accrued in the ordinary course of business in accordance with Watson’s standard practices for doubtful
accounts consistently applied, and

 

(vi)         transportation
charges (including insurance costs) and handling charges for transportation of Products to Third Parties.

 

Components
of Net Sales shall be determined using the accrual method of accounting in accordance with U.S. generally accepted accounting
principles. There shall be no double-counting in determining the foregoing deductions.

 

In
the event Watson or any of its Affiliates or sub-licensees transfers Product for consideration, in whole or in part, other than
cash, the gross sales price for such Product shall be deemed the standard invoice price then being invoiced by Watson in arm’s
length transactions with similar Third Party customers. In no event shall a sale be deemed to occur in the case of transfers of
professional samples, product donations, or other samples or clinical research supplies at no charge.

 

Notwithstanding
the foregoing, for any sales by Watson, its Affiliates or its sub-licensees to a Wholesaler Affiliate, Net Sales shall be deemed
to be the [*] by Watson in [*] to Third Parties of Product during the fiscal quarter in which the sale to the Wholesaler Affiliate
took place.

 

“Other
Costs” means other [*] for which Watson or its Affiliates are responsible to pay in connection with the commercialization
of the Product, including without limitation, (i) [*], (ii) [*], (iii) [*], and (iv) [*]. For the avoidance of doubt, Other Costs
do not include [*].

 

“Out-of-Pocket
Expenses” means any fees, costs or other expenses paid by a Party, as applicable, to Third Parties, excluding
in all cases any Overhead Expenses. Under no circumstances shall Out-of-Pocket Expenses include [*].

 

“Overhead
Expenses” means overhead, compensation paid by such Party to its employees, employee benefits, depreciation,
taxes, insurance, rent, repairs and maintenance, supplies, utilities, administrative expenses and other fixed costs.

 

“Party”
and “Parties” have the meanings set forth in the Caption.

 

“Person”
means an individual, corporation, partnership, limited liability company, firm, association, joint venture, estate, trust, governmental
or administrative body or agency, or other entity.

 

“PFS”
means a pre-filled single dose syringe, which delivers epinephrine solution by injection, and is designed to be self-administered
by the patient or by a caregiver.

 

“Pharmacovigilance
Agreement” means an agreement between the Parties or their Affiliates, setting forth their respective responsibilities
for adverse event reporting with respect to the Product.

 

“[*]”
means [*].

 

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“Product”
means each or both of the [*] Product and the 0.3mg Product.

 

“Quality
Agreement” means an agreement between Adamis or Contract Manufacturer and Watson, setting forth the quality
responsibilities with respect to the manufacture and supply of Product to Watson, which agreement shall be entered into prior
to the delivery of any Product to Watson.

 

“Recall”
has the meaning set forth in Section 6.2.

 

“Regulatory
Approvals” shall mean any and all approvals, product and/or establishment licenses, registrations or authorizations,
including, without limitation approvals under NDAs, of any Regulatory Authority or other Governmental Authority, which are necessary
for the commercial manufacture, use, storage, importation, transport, marketing, promotion, pricing or sale of the Product in
the Territory.

 

“Regulatory
Authority” means the FDA and any other applicable Governmental Authority responsible for or involved in granting
or issuing approvals, product and/or establishment licenses, registrations or authorizations for the commercial manufacture, use,
storage, importation, transport, marketing, promotion, pricing or sale of the Product in the Territory.

 

“Regulatory
Dossier” means all files regarding the Regulatory Approvals, including but not limited to correspondence,
records, applications (including, without limitation NDAs), supplements, annual reports, adverse event reports, clinical studies
and pre-clinical studies to the extent related to the Product owned or controlled by Adamis or its Affiliate.

 

“Reimbursable
Expense” has the meaning set forth in Section 5.4.

 

“Renewal
Term” has the meaning set forth in Section 11.1.

 

“SEC”
has the meaning set forth in Section 8.3.

 

“Supplement
Approval Deadline” has the meaning set forth in Exhibit A.

 

“Term”
has the meaning set forth in Section 11.1.

 

“Territory”
means the entirety of the United States of America and its territories and possessions (including, but not limited to, the Commonwealth
of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the United States Virgin Islands, the Territory of Guam and
United States’ military bases) and any other countries that the Parties agree, in writing, to add to the Territory.

 

“Territory
Supply Agreement” means any agreement between Watson or its Affiliate and Catalent (or any other Contract Manufacturer)
for commercial supply of the Product for the Territory and/or any agreement between Watson or its Affiliate and [*] (or any other
Contract Manufacturer) for packaging of the Product for the Territory.

 

“Third
Party” means any Person that is not a Party, or an Affiliate of a Party.

 

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“Third
Party Claim” has the meaning set forth in Section 10.3.

 

“Trademark”
means all of Adamis’ rights to the name “[*]”.

 

“Warranties”
has the meaning set forth in Section 4.7.

 

“Watson” has the
meaning set forth in the Caption.

 

“Watson
Indemnitee” has the meaning set forth in Section 10.2.

 

“Wholesaler
Affiliate” shall mean a Person that would be an Affiliate of Watson, but for the exclusion in the last sentence of
the definition of Affiliate, whose primary business is wholesale distribution of pharmaceutical products (including, without limitation,
ANDA, Inc.).

 

ARTICLE 2

DEVELOPMENT AND PROJECT MANAGEMENT

 

2.1          Development.
Each Party agrees that it shall be responsible for performing
all Development Services allocated to such Party in accordance with the Development Plan.
Without limiting the generality of the foregoing, and as set forth in the Development Plan, (i) Adamis shall be responsible for
all activities required for or associated with the development of the [*] Product, and the preparation, submission and approval
of the NDAs for the Products, including all stability studies and process validations, including all costs related thereto, and
(ii) Watson shall be responsible for [*] as well as the commercialization of the [*] Product in the Territory, including all costs
related thereto. Each Party shall keep the other Party fully informed of the status and progress being made towards completion
of their respective activities under the Development Plan and shall exchange all relevant information relating thereto (as of the
Effective Date and from time to time thereafter). Watson shall be entitled to inspect Adamis’ work in progress related to
its Development Services and any documents relating thereto (including at Adamis’ facilities, during normal business hours
and upon reasonable notice). The Parties shall maintain records of Development Services in sufficient detail and in good scientific
manner appropriate for patent and regulatory purposes and shall properly reflect all work done and results achieved in the performance
of its obligations under the Development Plan.

 

2.2          Materials
and Facilities. Each Party shall conduct the Development Services to be performed by such
Party in accordance with the requirements of Applicable Law. 

 

2.3          Facility
Qualification. Unless and until Watson enters into Territory Supply Agreements with Catalent
and [*], Adamis shall, at its expense, use Commercially Reasonable Efforts to cause each of the Catalent and [*] Manufacturing
Facility to be qualified and capable of manufacturing the Product as required under Applicable Law (including FDA requirements),
in order to maintain Regulatory Approvals for the Product. 

 

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ARTICLE 3

REGULATORY APPROVAL

 

3.1          NDA
and Other Regulatory Dossiers. Adamis shall prepare
and file, at its own expense, the NDA and any other Regulatory Dossier required to be made in connection with obtaining and maintaining
the Regulatory Approval of the 0.3mg Product from the FDA and any other applicable Regulatory Authority in the Territory. Subject
to completion of development of the [*] Product in accordance with Article 3, Adamis shall
prepare and file, at its own expense, the NDA and any other Regulatory Dossier required to be made in connection with obtaining
and maintaining the Regulatory Approval of the [*] Product from the FDA and any other applicable Regulatory Authority in the Territory.
Adamis shall use Commercially Reasonable Efforts to (i) file the NDA and any other applicable Regulatory Dossier for the 0.30 mg
Product and, subject to completion of development of the [*] Product in accordance with Article 3, the [*] Product with the FDA
and any other applicable Regulatory Authority in the Territory as soon as reasonably practicable, and (ii) maintain each such NDA
and other applicable Regulatory Dossiers after the FDA’s and/or other applicable Regulatory Authority’s approval thereof.
The NDA and all other Regulatory Approvals for the Product in the Territory shall be filed in the name of, and will be owned exclusively
by, Adamis. Watson shall, at its own expense, promptly provide Adamis with such assistance as may be reasonably requested by Adamis
in connection with preparing the NDA or any other Regulatory Dossier and responding to any questions posed by the FDA or any other
Regulatory Authority. Adamis shall provide Watson with a copy of any regulatory submissions (including the NDA and any other Regulatory
Dossier) regarding the Product filed with, and correspondence received from, the FDA and any other Regulatory Authority, and Adamis
shall keep Watson informed of all material regulatory developments related thereto, including the status of any such submissions
filed by Adamis. Adamis shall not make any material modification of the NDA or any other Regulatory Dossier without the prior written
consent of Watson, not to be unreasonably withheld or delayed, unless required by Applicable Law. Adamis and its Affiliates and
licensees shall have the right to use all data and information contained or referenced in the NDA and any other Regulatory Dossier,
and to cross-reference the NDA and any other Regulatory Dossier, in connection with developing, filing for, obtaining and maintaining
regulatory approval of, and/or commercializing the Product outside the Territory.

 

3.2          Compliance.
Each Party shall provide the other Party with all information necessary for the other Party to comply with Applicable Law with
respect to activities contemplated by Section 3.1. Each Party shall promptly notify the other Party of any comments, responses
or notices received from, or inspections by, the FDA or any other Regulatory Authority, which relate to the Product, and shall
promptly inform the other Party of any responses to such comments, responses, notices or inspections and the resolution of any
issue raised by the FDA or such other Regulatory Authority.

 

ARTICLE 4

SUPPLY

 

4.1          Supply.
Adamis shall cooperate with Watson and use Commercially Reasonable Efforts to enable Watson or its Affiliate to enter into Territory
Supply Agreements with Catalent and [*] (or other Contract Manufacturer) so that, if and when Regulatory Approval is obtained,
the Contract Manufacturer shall supply the Product directly to Watson and its Affiliates and sub-licensees for the Territory and,
until Watson or its Affiliate enters into Territory Supply Agreements with Catalent and [*] (or other Contract Manufacturer), Adamis
shall supply or cause to be supplied by a Contract Manufacturer the Product to Watson and its Affiliates and sub-licensees for
the Territory (any such commercial supply of the Product for the Territory, “Commercial Supply”). Watson shall
pay the [*] for Commercial Supply supplied by or on behalf of Adamis. Adamis shall not supply Product to itself or any Third Party
for use in the Territory during the Term, and until the Minimum Obligation has been met (to the extent that the Minimum Obligation
remains an obligation of Adamis), Watson and its Affiliates and sub-licensees shall purchase sufficient Product from Adamis or
its Contract Manufacturer to satisfy the Minimum Obligation. For so long as Watson or its Affiliates purchase Commercial Supply
from Adamis that is manufactured by Catalent or packaged by [*], (i) the Parties shall use Commercially Reasonable Efforts to coordinate
and plan their respective activities to timely make forecasts, place purchase orders, take deliveries and effect payments in accordance
with the terms of the [*], and (ii) Adamis shall not amend any [*] to the extent it applies to the Territory without prior written
consent of Watson, not to be unreasonably withheld; provided, however, that no consent of Watson shall be required for any amendment
the sole purpose of which is to allow Catalent or [*] to enter into a Territory Supply Agreement with Watson or its Affiliate.
After the Minimum Obligation has been met, Watson shall be able to obtain the Product that Watson and its Affiliates and sub-licensees
require for the Territory from a supplier of its choosing, including any Contract Manufacturer. 

 

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4.2          Back-Up
Facility.

 

(a)          If
either Party determines that a Contract Manufacturer for the Territory is or will be unable to meet the supply needs of the Parties
for Product or that a better manufacturing alternative is available, the Parties shall in good faith discuss the situation and
make a determination as to (i) whether an additional manufacturing facility (whether on its own or through any of its Affiliates
or a Third Party manufacturer other than Catalent and [*]) should be qualified as a backup source of manufacturing for the Commercial
Supply (a “Back-up Facility”) for the Territory or for Product needs of Adamis or its Affiliates or licensees
outside of the Territory, and (ii) the Parties’ relative payment responsibility for such qualification.

 

(b)          Subject
to the Parties’ obligations under Sections 4.1 and 4.2(a), either Party shall have the right (but not the obligation) to
secure and qualify (and thereafter to maintain the qualification of) a Back-up Facility at any time during the Term.

 

(c)          If
Watson chooses to qualify a Back-up Facility, Adamis shall use Commercially Reasonable Efforts to (i) provide Watson, its Affiliate
or Contract Manufacturer with copies of any requested documentation in Adamis’ possession or control (including Licensed
Technology) that is necessary or useful for the manufacture and release of the Product in the Territory, subject to execution of
any such third party of confidentiality, nondisclosure and nonuse agreements or covenants in form and substance reasonably satisfactory
to Adamis, (ii) assist Watson, its Affiliate or Contract Manufacturer with the transfer of all analytical methods, manufacturing
procedures and Know-How in Adamis’ possession or control that is used in the manufacture and release of Product in the Territory,
and (iii) make all required regulatory filings needed to qualify and maintain the Back-up Facility as a manufacturer of the Product
under the Regulatory Approval, provided however, Watson shall be responsible for all Out-of-Pocket Expenses incurred by Adamis
in connection with making any such filings. 

 

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(d)          In
the event that Watson or any of its Affiliates or sub-licensees qualifies a Back-up Facility for the Territory at its own initial
expense (i.e., the Parties were unable to agree upon their respective payment responsibility for such qualification), Watson shall
in good faith discuss with Adamis or any of its Affiliates or licensees the terms upon which Watson, its Affiliate or its Contract
Manufacturer shall supply the Product to Adamis or its Affiliate for use outside the Territory.

 

(e)          In the event
that Adamis or any of its Affiliates or sub-licensees qualifies a Back-up Facility for outside the Territory at its own initial
expense, Adamis shall in good faith discuss with Watson or its Affiliates the terms upon which Adamis, its Affiliate or Contract
Manufacturer will supply the Product to Watson for use in the Territory.

 

ARTICLE 5

COMMERCIALIZATION; MILESTONE & PROFIT SHARE PAYMENTS

 

5.1        Commercialization.
Watson shall have the exclusive right, to the exclusion of Adamis and its Affiliates, to commercialize the Product in the Territory,
at its sole cost and expense, subject to the terms and conditions of this Agreement. Watson shall have sole discretion and control
as to the manner and extent of such commercialization of the Product in the Territory (including issues concerning labeling, market
launch (including the timing thereof), terms of sale and pricing and customer contracts), subject to the terms and conditions of
this Agreement.

 

5.2        Commercially
Reasonable Efforts.

 

(a)          Watson
shall use Commercially Reasonable Efforts to (x) commence the marketing and sale of the Product in the Territory within [*] ([*])
days from receipt of (i) the applicable Regulatory Approval, (ii) availability of sufficient Commercial Supply for initial launch
of the Product in the Territory as ordered by Watson and (iii) the Initial Marketing and Regulatory Activities required to launch,
and (y) following such commencement, continue the marketing and sale of the Product in the Territory during the Term. If Watson
believes that, in the exercise of Commercially Reasonable Efforts, it is necessary to postpone or delay the launch of the Product
as a result of then-prevailing market or economic conditions or pending, threatened or anticipated litigation with respect to the
Product in the Territory, Watson shall provide Adamis with a detailed explanation of the reasons for such suggested postponement
or delay and the Parties shall then discuss such reasons in good faith. 

 

(b)          In
the event that Adamis reasonably determines that Watson has failed to use Commercially Reasonable Efforts as required by Section
5.2(a), Adamis shall provide written notice thereof to Watson, and the Parties shall promptly discuss the matter in good faith
for a period not to exceed [*] ([*]) days (or such longer period as may be agreed by the Parties) following the date of such notice.
Such notice shall specify in reasonable detail the facts and circumstances constituting Adamis’ reasons for reaching such
a determination. Following such [*] ([*]) day period (or such longer period as may be agreed by the Parties), unless otherwise
agreed by the Parties, if Watson (i) has not cured such failure, or (ii) in the event that such failure is not capable of being
cured in [*] ([*]) days or Watson is not using best efforts to cure such failure, Adamis shall have the right, exercisable in its
sole discretion and effective [*] ([*]) days after written notice thereof by Adamis to Watson, to terminate this Agreement; provided
that, any such determination shall be stayed if Watson challenges Adamis’ determination that Watson has failed to use Commercially
Reasonable Efforts as required by Section 5.2(a) in accordance with the dispute resolution procedure in Article 12.

 

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5.3          Milestone
Payments. Watson shall make each of the one-time milestone payments set forth in Exhibit
A (the “Milestone Payments”) to Adamis after the achievement of the corresponding milestone event set forth
in Exhibit A.

 

5.4          Reimbursement.
Adamis shall invoice Watson for [*] (the “Reimbursable Expense”) as follows: 

 

(a)          Following
the first commercial sale by Watson of the Product, Adamis shall invoice Watson for its [*]; 

 

(b)          Following
the Effective Date, Watson shall (i) [*], and (ii) [*]; and 

 

(c)          Watson
shall pay Adamis the invoiced Reimbursable Expense within [*] ([*]) days after the date of invoice.

 

5.5          Profit
Share Payments. In each
Calendar Year during the Term, Watson shall pay Adamis [*] percent ([*]%) of the first [*] ($[*]) of Net Profit, and [*] percent
([*]%) of any Net Profit in excess of [*] ($[*]). [*]. Each payment due hereunder shall be made within [*] ([*]) days of the end
of each Calendar Quarter and shall be accompanied by a written report setting forth in reasonable detail the quantity of Product
sold in the Territory (as measured in saleable units of Product) and Watson’s calculations of Net Sales and Net Profit for
such period. In addition, the Parties shall in good faith discuss what additional reports, if any, that Watson may be able to provide
with respect to the Net Sales and Net Profit earned during the preceding Calendar Quarter. Any adjustments to be made in respect
of payments previously made to Adamis due to rebates, returns and the like, shall be factored into the calculation of subsequent
payments.

 

5.6          Records
and Audits. For a period of [*] ([*]) years after each payment made to Adamis, Watson shall
keep complete and accurate records in sufficient detail to permit Adamis to confirm the accuracy of the calculation of such payment.
Adamis shall have the right to audit or have its independent, certified public accountant (reasonably acceptable to Watson) audit
Watson’s records solely to confirm the accuracy of the calculation of the payment of consideration for the preceding [*]
([*]) years. Such audits may be exercised during normal business hours no more than once in any [*] ([*]) month period upon at
least [*] ([*]) days prior written notice. If an audit finds an underpayment to Adamis, Watson shall promptly pay Adamis the full
amount of such underpayment. If an audit finds an underpayment by Watson of greater than [*] percent ([*]%) of what was due under
this Agreement, Watson shall promptly pay the full amount of such underpayment and shall pay or reimburse Adamis for the cost of
the audit.

 

5.7          Currency
of Payments. All payments under this Agreement shall be made in U.S. Dollars by wire transfer
to such bank account as Adamis may designate from time to time. 

 

5.8          Taxes.
Each Party is responsible for its own taxes, duties, levies, imposts, assessments, deductions, fees, withholdings or similar charges
imposed on or measured by net income or overall gross income (including branch profits), gross receipts, capital, ability or right
to do business and franchise or similar taxes imposed on it under Applicable Law. 

 

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5.9          Late
Payments. In the event that any payment due under this Agreement is not made within [*] ([*])
days of the date it was due, the payment shall accrue interest from the date due at a rate per annum equal to [*] percent ([*]%)
above the U.S. Prime Rate (as set forth in the Wall Street Journal, Eastern U.S. Edition) for the date on which payment
was due, calculated daily on the basis of a 365-day year, or similar reputable data source; provided that, in no event shall such
rate exceed the maximum legal annual interest rate. The payment of such interest shall not limit the Party entitled to receive
such payment from exercising any other rights it may have as a consequence of the lateness of any payment.

 

ARTICLE
6

PHARMACOVIGILANCE; RECALLS

 

6.1          Pharmacovigilance.
Prior to the commercialization of the Product, the Parties shall enter into a Pharmacovigilance Agreement setting forth their
respective pharmacovigilance responsibilities.

 

6.2          Product
Recalls. In the event either Party is ordered by a Regulatory Authority or believes it is necessary to conduct a recall,
field correction, market withdrawal, stock recovery or other similar action with respect to the Product in the Territory (each,
a “Recall”), Watson shall determine the best manner in which to proceed in its sole discretion and shall be
solely responsible for conducting such Recall. If a Recall is due to a Party’s willful or negligent act or omission or a
breach of its obligations under this Agreement or Applicable Law, including, without limitation, the warranties or covenants made
by Adamis or Watson, then that Party shall bear the cost of that Recall and shall reimburse the other Party for all Out-of-Pocket
Expenses incurred by such other Party in connection with such Recall, in each case including the cost of any Product returned
to Watson as a result of the Recall or destroyed as a result of the Recall.

 

ARTICLE 7

INTELLECTUAL PROPERTY

 

7.1          License.

 

  (a)          Subject
to the terms and conditions of this Agreement, Adamis, on behalf of itself and its Affiliates, hereby grants to Watson and its
Affiliates an exclusive (even as to Adamis and its Affiliates), sub-licensable license under the Licensed Technology to make or
have made (subject to the obligations in Article 4), sell, offer for sale, distribute, promote, market, or otherwise commercially
exploit the Product in the Territory during the Term. For the avoidance of doubt, Adamis retains the right under the Licensed Technology
to have Contract Manufacturers manufacture and/or package the Product for Watson pursuant to this Agreement and to make and have
made and/or package the Product for Adamis and its Affiliates and licensees for use outside the Territory. 

 

  (b)          Subject
to the license granted to Watson in Section 7.1(a), Adamis shall maintain all rights in and to the Licensed Technology. As part
of the license granted under Section 7.1(a), during the Term, Watson and its Affiliates shall have the exclusive right, limited
to the Territory, to reference any and all data owned by Adamis or its Affiliates that is submitted in the Regulatory Dossiers.
Adamis shall not, and shall cause its Affiliates not to, sell, offer for sale, distribute or otherwise make available (nor contract
with a Third Party to do any of the foregoing) the Product or any Competing Product to any Person other than Watson and its Affiliates
in the Territory during the Term. 

 

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  (c)          Subject
to the terms and conditions of this Agreement, Adamis, on behalf of itself and its Affiliates, hereby grants to Watson and its
Affiliates an exclusive (even as to Adamis and its Affiliates), sub-licensable license under the Trademark, to use and display
the Trademark solely in connection with the sale, offer for sale, distribution, promotion, marketing, or other commercial exploitation
of the Product in the Territory. All uses by Watson and its Affiliates and sub-licensees of the Trademark shall be in compliance
with all Applicable Laws and shall be in accordance with such commercially reasonable quality standards as used by Watson for comparable
products. In all packaging, labeling, advertising, promotional and other material of Watson and its Affiliates and sub-licensees
referencing the Trademark, Watson and its Affiliates and sub-licensees shall not, without Adamis’s written consent: (i) vary
the spelling, add or delete hyphens, abbreviate, make one word two, or use a possessive or plural form of the Trademark; (ii) modify
the design, add or delete any elements or words, change any colors or proportion of the Trademark; (iii) use the Trademark in a
manner that disparages Adamis or any of its products or services; or (iv) use the Trademark in a manner that interferes with or
adversely affects Adamis’ use of the Trademark; in each case except to the extent required by Applicable Laws, provided that
Watson will review and discuss with Adamis any such exceptions required by Applicable Laws before using the Trademark pursuant
to such exception. At the request of Adamis, Watson will provide from time to time copies of packaging, labeling, advertising,
promotional and other material of Watson or its Affiliates or sub-licensees referencing the Trademark to allow Adamis to confirm
compliance with the foregoing.

 

  (d)          Any
and all sublicenses to non-Affiliates granted under any license set forth in this Section 7.1 shall require the prior written consent
of Adamis, which consent shall not be unreasonably withheld, conditioned or delayed. Any and all sublicenses granted under any
license set forth in this Section 7.1 and distribution agreements or subcontracts for commercialization of the Product in the Territory
shall be in writing and shall be subject to, and consistent with, the terms and conditions of this Agreement. Watson shall be responsible
for the compliance of its Affiliates, sub-licensees, distributors and subcontractors with the terms and conditions of this Agreement.
Within thirty (30) days after execution, Watson shall provide Adamis with a full and complete copy of each agreement granting a
sub-license under any license set forth in this Section 7.1 to any Third Party or appointing any Third Party as a distributor or
subcontractor for commercialization of the Product in the Territory (provided that Watson may redact any confidential information
contained therein that is not necessary to confirm compliance with this Agreement). For
the avoidance of doubt, the foregoing obligations do not apply to direct and indirect purchase and sale agreements between Watson
and its customers.

 

7.2          Patent
Filings. Upon agreement by the Parties, Adamis shall prepare and file any and all patent
applications relating to, underlying or arising out of the Licensed Technology and shall take any other similar actions to secure,
maintain, enhance, protect or perfect the intellectual property rights related to the Licensed Technology. Each Party shall cooperate,
as reasonably requested by the other Party, in connection with such preparation, filing, prosecution and maintenance. Any such
patent application and any patent that issues from such application(s) will be solely owned by Adamis.

 

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7.3          Infringement
of Intellectual Property. Upon a Party learning of any infringement or threatened infringement
of any Licensed Technology in the Territory, such Party shall promptly inform the other Party in writing of any such infringement
and shall supply such other Party with all evidence pertaining to such infringement in such Party’s possession. In the event
of any infringement or threatened infringement of the Licensed Technology by a Third Party in the Territory, Watson shall have
the first right to file an action against any such infringing Third Party or seek abatement of the infringement by such Third Party
at Watson’ sole cost and expense and by counsel of its own choice, and Adamis shall have the right, at its own expense, to
be represented in any such action by counsel of its own choice. Adamis shall fully cooperate with Watson in any action brought
by Watson, including by being joined as a party. In the event Watson does not file an action or seek abatement within (a) seventy-five
(75) days following the notice of alleged infringement or (b) ten (10) days before the time limit, if any, set forth in the Applicable
Laws, whichever comes first, then Adamis shall have the right, but not the obligation, to file an action against any such infringing
Third Party or seek abatement of the infringement by such Third Party at Adamis’ sole cost and expense and by counsel of
its own choice, and Watson shall have the right, at its own expense, to be represented in any such action by counsel of its own
choice. Watson shall make reasonable efforts to promptly notify Adamis in writing if Watson decides not to file an action or seek
abatement. Watson shall fully cooperate with Adamis in such action, including by being joined as a party. Except as otherwise agreed
to by the Parties as part of a cost-sharing arrangement, any recovery or damages realized as a result of such action or proceeding
with respect to Licensed Technology shall be used first to reimburse the documented Out-of-Pocket Expenses relating to the action
or proceeding that were incurred by the Party that brought and controlled the action or proceeding, any remaining compensatory
damages relating to the Product (including lost sales or lost profits with respect to the Product) shall be retained by the Party
that brought and controlled such action or proceeding, , and any punitive damages shall be equally shared by the Parties. Notwithstanding
the foregoing, (i) the Party bringing such action shall indemnify and reimburse the other Party for all reasonable Out-of-Pocket
Expenses incurred by the other Party in connection with the action initiated pursuant to this Section 7.3, and (ii) if Watson brought
and controlled the proceeding, the remaining compensatory damages (i.e., after reimbursement of its documented Out-of-Pocket Expenses)
shall be included in Net Profits and subject to the provisions of Section 5.5.

 

7.4Infringement
of Third Parties’ Rights; Certain Generic Drug Filings.

 

(a)          In
the event of any claim by a Third Party, or if either Party determines, that the manufacture, sale, offer
for sale, distribution, promotion, marketing, other commercial exploitation or use of the Product by Watson or its Affiliate
or sub-licensee infringes the intellectual property rights of a Third Party, Watson shall have the sole right and obligation, so
long as rights to such Product are licensed to Watson hereunder, to defend and indemnify Adamis Indemnitees from and against such
claim at Watson’s expense, including any judicial or administrative proceedings relating to such claim. If Adamis is put
on notice of any such claim or makes any such determination of infringement, Adamis shall provide prompt notice to Watson of any
such claim or determination. Adamis agrees to assist and cooperate with Watson in resolving any such claim. The procedures for
indemnification under this Section 7.4 shall be the same as those set forth in Section 10.3. Watson shall reimburse Adamis for
all reasonable Out-of-Pocket Expenses incurred by Adamis in the course of providing requested assistance and cooperation in accordance
with this Section 7.4(a).

 

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(b)          Without
limiting the foregoing, Watson and its attorneys, in consultation with Adamis and its attorneys, shall prepare any certifications
or notices required to be filed or delivered to the FDA, other applicable Regulatory Authority or Third Party in connection with
obtaining Regulatory Approval for the Product that requires an assessment as to whether the manufacture, use and sale of the Product
would infringe any valid Third Party patent listed with the FDA or such other applicable Regulatory Authority, including, without
limitation, such certifications and notices required pursuant to Sections 505(j)(2)(A) and (B) of the U.S. Food Drug and Cosmetic
Act, as amended. Adamis agrees to assist and cooperate with Watson in preparation of such certifications and notices. As requested
by Watson, Adamis shall incorporate, as applicable, such certifications and notices as prepared by Watson in the NDA and other
Regulatory Dossiers to be filed by Adamis or in notices to be filed with Third Parties as required by Applicable Law. Watson shall
have the sole right and authority to determine whether any patent held by a Third Party in the Territory shall be challenged in
connection with the pursuit of any Regulatory Approval and shall have the sole right with prior notice to and consultation with
Adamis to control all decisions that relate to or could impact such patent challenge (including, without limitation, appointment
of counsel, strategies related to the prosecution of the Regulatory Approval or any related litigation and defense of any litigation
or claim of infringement). Watson shall reimburse Adamis for all reasonable Out-of-Pocket Expenses incurred by Adamis in the course
of providing its assistance and cooperation in accordance with this Section 7.4(b).

 

7.5           Improvements
to the Licensed Technology. The Parties hereby agree that any improvements to the Licensed
Technology made by either Party or jointly by the Parties shall be owned solely by Adamis, with such improvements becoming part
of the Licensed Technology, so that Watson and its Affiliates shall have the sole and exclusive right to use such improvements
in the Territory with respect to the Product during the Term. Watson shall and hereby does assign to Adamis any and all right title
and interest of Watson or its Affiliates in any such improvements to the Licensed Technology, and Watson and its Affiliates shall,
at Adamis’ request and expense, execute such documents and perform such acts as Adamis may deem reasonably necessary to confirm
Adamis’ right, title and interest in and to any improvements to the Licensed Technology, and to enable and assist Adamis
in procuring, maintaining, enforcing and defending patents, copyrights and other statutory protections with respect to such improvements
to the Licensed Technology. 

 

7.6           Trademark.

 

(a)          Adamis
shall own and shall retain the ownership of the entire right, title and interest in and to the Trademark and goodwill related thereto.
Watson acknowledges, as between the parties, the exclusive right, title and interest of Adamis in and to the Trademark and goodwill
related thereto and will not do or cause to be done any act or thing contesting or, in any way, impairing any part of said right,
title and interest for the Term and after its expiration. Watson will not, and will require that its Affiliates and sub-licensees
not, make any representations or take any actions, which may be taken to indicate that it has any right title or interest in or
to the ownership or use of the Trademark except under the terms of this Agreement, and acknowledges that nothing contained in this
Agreement shall give Watson or any of its Affiliates or sub-licensees any right, title or interest in or to the Trademark and goodwill
related thereto except the license rights granted under Section 7.1(c). 

 

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(b)          Upon
request by Adamis, Watson shall, and shall require its Affiliates and sub-licensees to, provide information to Adamis or its authorized
representative as to its use of the Trademark and to render any assistance reasonably
required by Adamis or its authorized representative to secure and/or maintain the registration(s) of the Trademark in the Territory.

 

(c)          Watson shall notify Adamis of any adverse use by a Third Party of the Trademark or of a mark or name confusingly similar to the
Trademark. Watson agrees, and will require its Affiliates and sub-licensees to agree, to take no action with respect thereto except
with the prior written authorization of Adamis. Adamis may thereupon take such action as it in its sole discretion deems advisable
for the protection of its rights in and to the Trademark, including, without limitation, allowing Watson to bring and prosecute
a claim against such Third Party at Watson’s expense, if Watson chooses to do so. Watson further agrees to provide full cooperation
with any legal or equitable action by Adamis to protect Adamis’ right, title and interest in the Trademark. The Party responsible
for bringing and prosecuting any infringement proceedings with respect to the Trademark and for the expenses associated with such
proceedings shall have the sole right to retain any damages recovered in such proceedings. Notwithstanding the foregoing, (i) the
Party bringing such action shall indemnify and reimburse the other Party for all reasonable Out-of-Pocket Expenses incurred by
the other Party in connection with the action initiated pursuant to this Section 7.6, and (ii) if Watson brought and controlled
the proceeding, the remaining damages received (i.e., after reimbursement of its documented Out-of-Pocket Expenses) shall be included
in Net Profits and subject to the provisions of Section 5.5.

 

ARTICLE 8

CONFIDENTIALITY AND PUBLIC DISCLOSURE

 

8.1           Confidentiality.
Each Party shall treat as confidential the Confidential Information of the other Party, and shall take all necessary precautions
to assure the confidentiality of such Confidential Information. Each Party agrees to return to the other Party upon the expiration
or termination of this Agreement all Confidential Information of such other Party, except as to such information it may be required
to retain under Applicable Law, except for (a) one (1) copy of such Confidential Information to be retained by such Party’s
legal department and (b) copies of laboratory books which Adamis shall require to keep for audits and inspections (in each case,
which information which shall remain subject to ongoing obligations of confidentiality). During the Term and for a period of [*]
([*]) years following the expiration or termination of this Agreement, neither Party shall, without the other Party’s express
prior written consent, use or disclose any such Confidential Information of the other Party for any purpose other than to carry
out its obligations hereunder and under any other written agreement between the Parties. Each Party may disclose Confidential Information
of the other Party to any Affiliates, actual and potential sub-licensees, employees, consultants, contractors or agents of such
Party who have a need to know such information in order for such Party to exercise its rights or fulfill its obligations under
this Agreement, provided that prior to disclosure of such Confidential Information of the other Party to any Affiliate, actual
or potential sub-licensee, employee, consultant, contractor or agent, the Party making such disclosure shall ensure that such Person
is bound in writing to observe obligations of confidentiality and non-use consistent with the provisions of this Article 8. Notwithstanding
the obligations of confidentiality set forth in this Section 8.1, the receiving Party may disclose Confidential Information of
the disclosing Party to the extent that such disclosure is required by Applicable Law or a court of competent jurisdiction; provided,
however, that the receiving Party shall so notify the disclosing Party of its intent (so as to provide the disclosing Party a reasonable
opportunity to seek relief from such required disclosure) and cooperate with the disclosing Party on reasonable measures to protect
the confidentiality of the Confidential Information. Any such information disclosed as permitted by this Section 8.1 shall still
be deemed Confidential Information and subject to the restrictions set forth in this Agreement.

 

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8.2           Public
Disclosure. Except for such disclosure that is deemed necessary in the reasonable judgment
of either Party to comply with Applicable Law, no public announcement, news release, statement, publication or presentation relating
to the existence of this Agreement, the subject matter hereof or either Party’s performance hereunder shall be made without
the other Party’s prior written approval, which approval shall not be unreasonably withheld, conditioned or delayed. In the
event that the Parties mutually agree in writing to issue a public announcement, news release, statement, publication or presentation,
the Parties agree that they shall use reasonable efforts to coordinate the initial public announcement, news release, statement,
publication or presentation relating to the existence of this Agreement so that such public announcement, news release, statement,
publication or presentation by each is made contemporaneously. Notwithstanding the foregoing, neither Party shall be obligated
to issue any public announcement, news release, statement, publication or presentation in connection herewith. Each Party may make
any public statement in response to questions by the press, analysts, investors or those attending industry conferences or financial
analyst calls, or issue press releases, so long as any such public statement or press release is not inconsistent with prior public
disclosures or public statements made in accordance with this Section 8.2 and which do not reveal non-public information about
the other Party.

 

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

 

8.4           Prior
Nondisclosure Agreement. As of the Effective Date, the terms of this Article 8 shall supersede
any prior non-disclosure, secrecy or confidentiality agreement between the Parties (or their Affiliates) dealing with the subject
of this Agreement. Any information disclosed pursuant to any such prior agreement shall be deemed Confidential Information for
purposes of this Agreement.

 

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8.5           Equitable
Relief. Given the nature of the Confidential Information and the competitive damage that
a Party would suffer upon unauthorized disclosure, use or transfer of its Confidential Information to any Third Party, the parties
agree that monetary damages would not be a sufficient remedy for any breach of this Article 8. In addition to all other remedies,
a Party shall be entitled to specific performance and injunctive and other equitable relief as a remedy for any breach or threatened
breach of this Article 8.

 

ARTICLE 9

REPRESENTATIONS, WARRANTIES AND COVENANTS; DISCLAIMER

 

9.1           Representations
and Warranties by Each Party. Each Party hereby represents and warrants to the other Party
as follows as of the Effective Date:

 

(a)          Existence.
Such Party is a corporation or limited liability company duly organized, validly existing and in good standing under the laws of
the jurisdiction in which it is incorporated or formed (as applicable).

 

(b)          Authorization
and Enforcement of Obligations. Such Party (i) has the power and authority and the legal right to enter into this Agreement
and to perform its obligations hereunder, and (ii) 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,
subject to enforcement of remedies to applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting generally
the enforcement of creditors’ rights and subject to a court’s discretionary authority with respect to the granting
of a decree ordering specific performance or other equitable remedies.

 

(c)          Consents.
All necessary consents, approvals and authorizations of all Governmental Authorities and other Persons required to be obtained
by such Party in connection with its execution and delivery of this Agreement have been obtained.

 

(d)          No
Conflict. The execution and delivery of this Agreement and the performance of such Party’s obligations hereunder (i)
do not conflict with or violate any Applicable Laws and (b) do not conflict with, or constitute a default under, any material contractual
obligation of such Party.

 

(e)          No Debarment.
Neither such Party nor any of its employees has ever been: (a) debarred, (b) convicted of a crime for which a person can be disbarred
under Section 306 (a) or (b) of the Generic Drug Enforcement Act of 1992 (Article 306(a) or (b)), (c) threatened to be debarred
or (d) indicted for a crime or otherwise engaged in conduct for which a person can be debarred under Section 306 (a) or (b).

 

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9.2           Covenants
by Each Party. Each Party hereby covenants to the other Party as follows:

 

(a)          Debarment.
In the event that either Party, or any of its officers, directors, or employees or other Person
engaged by such Party performing services under this Agreement, (a) become debarred or receives notice of action or threat of action
with respect to its debarment or (b) becomes the object of any investigation or subject of any report regarding such Party, or
any of its officers, directors, or employees or other Person engaged by such Party performing services under this Agreement, in
connection with any activity that could result in debarment or suspension or refusal of approval, including without limitation
any inspection report, warning letter, notice of opportunity for hearing in a case of debarment, or any other Justice Department,
FDA or other federal or state government inquiry or action bearing on potentially illegal activities, such Party shall notify the
other Party immediately and such Party shall cease employing, contracting with, or retaining
any such Person to perform any such services.

 

(b)          Compliance
with Applicable Laws. In the performance of its obligations under this Agreement, such Party shall comply and shall cause its
and its Affiliates’ employees and contractors to comply with all Applicable Laws.

 

9.3           Additional
Representations, Warranties and Covenants by Adamis. Adamis also hereby represents, warrants
and covenants to Watson that (a) as of the Effective Date it has sufficient legal or beneficial title, ownership or license rights
in or to the Licensed Technology and the Trademark to grant the license as purported to be granted in Section 7.1 pursuant to this
Agreement; (b) as of the Effective Date, it has not received any notice from a Third Party alleging that (i) the practice of the
Licensed Technology infringes or may infringe such Third Party’s intellectual property right, or (ii) any research, development
or manufacture of the Product by Adamis prior to the Effective Date infringed or misappropriated the intellectual property rights
of such Third Party; (c) it has not as of the Effective Date, and will not during the Term, grant any right to any Third Party
under the Licensed Technology or the Trademark that would conflict with the licenses granted to Watson in this Agreement; and (d)
to Adamis’ knowledge as of the Effective Date, there are no threatened or pending actions, claims or governmental investigations
by or against Adamis that challenge the ownership of the Licensed Technology or the Product. If Watson or its Affiliates purchase
Commercial Supply from Adamis, Adamis also provides the same representations and warranties regarding all such Product supplied
to Watson that the Contract Manufacturer that manufactures such Product provides to Adamis under the [*].

 

9.4           Disclaimer.
Except as expressly set forth in this Agreement, THE LICENSED TECHNOLOGY AND THE DEVELOPMENT SERVICES TO BE PROVIDED
HEREUNDER ARE PROVIDED “AS IS,” AND EACH PARTY EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED,
INCLUDING THE WARRANTIES OF DESIGN, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OBTAINING SUCCESSFUL RESULTS, OR NON-INFRINGEMENT
OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES, OR ARISING FROM A COURSE OF DEALING, USAGE OR TRADE PRACTICES.

 

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ARTICLE 10

INDEMNIFICATION; INSURANCE; LIMITATION OF LIABILITY

 

10.1         By
Watson. Watson agrees to defend, indemnify and hold Adamis and its Affiliates and their respective
directors, officers, employees, consultants, agents and successors and assigns of any of the foregoing (the “Adamis Indemnitees”)
harmless from and against any and all costs, losses, liability and expenses (including reasonable attorney’s fees) (“Losses”)
incurred by any Adamis Indemnitee resulting from claims made by any Third Party to the extent relating to or arising out of (a)
the manufacture, marketing, distribution, sale, offer for sale, promotion or other commercial exploitation of the Product by Watson,
including, without limitation, the infringement of any Third Party’s intellectual property matters, as set forth under Section
7.4, (b) a breach of any obligation, covenant, representation or warranty by Watson contained in this Agreement or (c) any
negligent, grossly negligent or intentionally wrongful act or omission of Watson or its directors, officers or employees, in each
case, except to the extent to, or for matters for, which Adamis would be required to indemnify Watson Indemnitees under Section
10.2.

 

10.2         By
Adamis. Adamis agrees to defend, indemnify and hold Watson and its Affiliates and their respective
directors, officers, employees, consultants, agents and successors and assigns of any of the foregoing (the “Watson Indemnitees”)
harmless from and against any and all Losses incurred by any Watson Indemnitee resulting from claims made by any Third Party to
the extent relating to or arising out of (a) performance of Development Services by Adamis, (b) a breach of any obligation, covenant,
representation or warranty by Adamis contained in this Agreement or (c) any negligent, grossly negligent or intentionally wrongful
act or omission of Adamis or its directors, officers, employees or agents, in each case, except to the extent to, or for matters
for, which Watson would be required to indemnify Adamis Indemnitees under Section 10.1.

 

10.3         Procedures
for Control of Third Party Claims. The Adamis Indemnitee or Watson Indemnitee, as applicable,
entitled to make a claim for indemnification under this Article 10 shall be referred to as the “Indemnified Party”
and the Party required to indemnify such claim shall be referred to as the “Indemnifying Party.” In order for
an Indemnified Party to be entitled to any indemnification provided for under this Agreement in respect of, arising out of or involving
a claim or demand, made by any Third Party against the Indemnified Party (a “Third Party Claim”), such Indemnified
Party must notify the Indemnifying Party in writing of the Third Party Claim within thirty (30) business days after receipt by
such Indemnified Party of written notice of the Third Party Claim; provided, however, that failure to give such notification
shall not affect the indemnification provided hereunder except to the extent the Indemnifying Party shall have been actually materially
prejudiced as a result of such failure. If a Third Party Claim is made against an Indemnified Party, the Indemnifying Party shall
be entitled to participate in the defense thereof and, upon notice to the Indemnified Party, to assume the defense thereof; provided,
that (i) the Indemnifying Party’s counsel is reasonably satisfactory to the Indemnified Party and (ii) the Indemnifying Party
shall thereafter consult with the Indemnified Party upon the Indemnified Party’s reasonable request for such consultation
from time to time with respect to such suit, action or proceeding. If the Indemnifying Party assumes such defense, the Indemnified
Party shall have the right (but not the duty) to participate in the defense thereof and to employ counsel, at its own expense,
separate from the counsel employed by the Indemnifying Party. The Indemnifying Party shall be liable for the fees and expenses
of counsel employed by the Indemnified Party for any period during which the Indemnifying Party has not assumed the defense thereof,
but the Indemnifying Party shall not be liable to the Indemnified Party for any legal expenses subsequently incurred by the Indemnified
Party in connection with the defense thereof. Whether or not the Indemnifying Party defends or prosecutes any Third Party Claim,
the Parties shall cooperate in the defense or prosecution thereof. Such cooperation shall include the retention and (upon the Indemnifying
Party’s request) the provision to the Indemnifying Party of records and information which are reasonably relevant to such
Third Party Claim, and making employees or any other Indemnified Party available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder. Whether or not the Indemnifying Party shall have assumed the defense
of a Third Party Claim, the Indemnified Party shall not admit any liability with respect to, or settle, compromise or discharge,
such Third Party Claim without the Indemnifying Party’s prior written consent, which shall not be unreasonably withheld,
conditioned or delayed. The Indemnifying Party shall be entitled to settle a Third Party Claim so long as such settlement does
not impose any obligation or burden (including loss of goodwill) on the Indemnified Party. In no event shall the Indemnifying Party
settle any Third Party Claim if such settlement would impose any obligation or burden on the Indemnified Party without the prior
written consent of the Indemnified Party.

 

    	21

     

    

 

10.4         Insurance.
For the Term and for a period of two (2) years after the expiration or termination of this Agreement, Watson agrees to obtain and
maintain (including through a self-insurance program) comprehensive general liability insurance, including Products Liability,
Bodily Injury and Property Damage Insurance with a combined single limit of not less than $[*] per occurrence and $[*] in the aggregate
annually.

 

10.5         LIMITATION
OF LIABILITY. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, EXCEPT WITH RESPECT
TO (i) A BREACH OF ARTICLE 8, (ii) A PARTY’S INFRINGEMENT OF THE OTHER PARTY’S INTELLECTUAL PROPERTY AND/OR PROPRIETARY
RIGHTS, AND (iii) THIRD PARTY CLAIMS PURSUANT TO THE INDEMNIFICATION OBLIGATIONS SET FORTH IN THIS ARTICLE 10, NEITHER PARTY SHALL
BE LIABLE TO THE OTHER PARTY FOR ANY CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGES, INCLUDING FOR LOST PROFITS OR LOSS OF OPPORTUNITY
OR USE OF ANY KIND SUFFERED BY THE OTHER PARTY, WHETHER IN CONTRACT, TORT OR OTHERWISE.

 

ARTICLE 11

TERM AND TERMINATION

 

11.1         Term.
This Agreement shall become effective on the Effective Date. Unless earlier terminated in accordance
with this Agreement, this Agreement shall expire [*] ([*]) years from the first sale of the 0.3mg Product by Watson or its Affiliate
or sub-licensee in the Territory (the “Initial Term”). The term of this Agreement shall be automatically extended
for additional [*] ([*]) year terms (each a “Renewal Term” and together with the Initial Term, collectively
referred to herein as the “Term”), unless either Party notifies the other, in writing, that it will not extend
the applicable Term and such notice is delivered no later than one (1) year prior to the expiration of the Initial Term or the
then-current Renewal Term (as applicable).

 

    	22

     

    

 

11.2        Termination
for Breach. A Party may terminate this Agreement with
written notice to the other Party at any time during the Term if the other Party is in breach of any material term of this Agreement,
and has not cured such breach within [*] ([*]) days ([*] ([*]) days with respect to any payment breach) after written notice from
the terminating Party requesting cure of such breach. In the event of a good faith dispute between the Parties as to whether a
material breach (other than a payment breach) has occurred, the [*] ([*]) day cure period referenced in the preceding sentence
shall be tolled during any action or proceeding concerning such good faith dispute.

 

11.3        Termination
for Insolvency or Bankruptcy. This Agreement may
be terminated prior to the expiration of its Term upon written notice by a Party: (a) in the event that the other Party shall (i)
apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself
or of all or a substantial part of its property, (ii) make a general assignment for the benefit of its creditors, (iii) commence
a voluntary case under the United States Bankruptcy Code (or foreign equivalent), as now or hereafter in effect (the “Bankruptcy
Code”), (iv) file a petition seeking to take advantage of any law (the “Bankruptcy Laws”) relating
to bankruptcy, insolvency, reorganization, winding-up, or composition or readjustment of debts, (v) fail to controvert in a timely
and appropriate manner, or acquiesce in writing to, any petition filed against it in any involuntary case under the Bankruptcy
Code or (vi) take any corporate action for the purpose of effecting any of the foregoing; or (b) if a proceeding or case shall
be commenced against the other Party in any court of competent jurisdiction, seeking (i) its liquidation, reorganization, dissolution
or winding-up, or the composition or readjustment of its debts, (ii) the appointment of a trustee, receiver, custodian, liquidator
or the like of the party or of all or any substantial part of its assets or (iii) similar relief under any Bankruptcy Laws, or
an order, judgment or decree approving any of the foregoing shall be entered and continue unstayed for a period of sixty (60) days;
or (c) in the event that an order for relief against the other Party shall be entered in an involuntary case under the Bankruptcy
Code.

 

11.4        Termination
for Convenience. 

 

(a)        [*]

 

(b)        [*]

 

(c)        [*]

 

11.5        Effect
of Expiration or Termination. 

 

(a)          If
Watson or its Affiliate has entered into a Territory Supply Agreement with any Third Party Contract Manufacturer, then, effective
on the date of any termination of this Agreement, at Adamis’ written election (to be made prior to such termination), Watson
or its Affiliate shall either (i) assign that Territory Supply Agreement to Adamis (but only to the extent applicable to the terminated
Product), and Adamis shall accept such assignment or (ii) terminate that Territory Supply Agreement so that Adamis may enter into
an agreement directly with such Contract Manufacturer for supply of the Product for the Territory, provided however, under either
scenario, as between the Parties, Adamis shall be solely responsible for any Minimum Obligations thereafter owing to the Contract
Manufacturer with respect to the supply of the Product.

 

    23 

     

    

 

(b)          Unless
otherwise expressly set forth herein, the expiration or termination of this Agreement shall not relieve either Party of any obligation
(including, without limitation, any payment obligation with respect to Net Sales of Product manufactured before the date of termination,
but sold after the date of termination) or liability accruing prior to such expiration or termination, nor shall the expiration
or termination of this Agreement preclude either Party from pursuing all rights and remedies it may have under this Agreement,
at law or in equity, with respect to breach of this Agreement. 

 

(c)          Articles
1, 8, 10, 12 and 13, Sections 5.6 (for the period specified therein), 6.1 (only with respect to a Recall with respect to Product
commercialized in the Territory prior to expiration or termination), 9.4 and this Section 11.5 shall survive expiration or termination
of this Agreement. 

 

ARTICLE 12

DISPUTE RESOLUTION

 

12.1        Disputes.
Subject to Section 12.3, upon the written request
of either Party to the other Party, any claim, dispute, or controversy as to the breach, enforcement, interpretation or validity
of this Agreement (a “Dispute”) shall be referred to a senior executive of Adamis and a senior executive of
Watson. In the event that such senior executives are unable to resolve such Dispute within sixty (60) days after referral to them,
the Dispute shall be referred to the Chief Executive Officer of Adamis and the Chief Executive Officer of Watson (or such executive’s
designee with decision-making authority) for attempted resolution. In the event such Chief Executive Officers (or designees) are
unable to resolve such Dispute within sixty (60) days after referral to them, then, upon the written demand of either Party, the
Dispute shall be subject to arbitration, as provided in Section 11.2, except as expressly set forth in Section 11.3. 

 

12.2        Arbitration.

 

(a)          Subject
to Section 12.3 below, any Dispute that is not resolved under Section 12.1 within thirty (30) days after a Party’s initial
written request for resolution, shall be resolved by final and binding arbitration before a panel of three neutral experts with
relevant industry experience. The arbitration proceeding shall be administered in accordance with the Commercial Arbitration Rules
and Supplementary Procedures for Large Complex Disputes of the American Arbitration Association (“AAA”), and
the panel of arbitrators shall be selected in accordance with such rules. The arbitration and all associated discovery proceedings
and communications shall be conducted in English, and the arbitration shall be held in San Diego, California. Except to the extent
necessary to confirm an award or as may be required by law, neither a Party nor an arbitrator may disclose the existence, content,
or results of arbitration without the prior written consent of both Parties. 

 

(b)          The
arbitrators shall, within fifteen (15) days after the conclusion of the arbitration hearing, issue a written award and statement
of decision describing the essential findings and conclusions on which the award is based, including the calculation of any damages
awarded. The decision or award rendered by the arbitrators shall be final and non-appealable, and judgment may be entered upon
it in any court of competent jurisdiction. Either Party may apply for interim injunctive relief with the arbitrators until the
arbitration award is rendered or the controversy is otherwise resolved. The arbitrators shall be authorized to award compensatory
damages, but shall not be authorized (i) to award non-economic damages, (ii) to award punitive damages or any other damages expressly
excluded under this Agreement, or (iii) to reform, modify or materially change this Agreement or any other agreements contemplated
hereunder; provided, however, that the damage limitations described in subsections (i) and (ii) of this sentence will not apply
if such damages are statutorily imposed.

 

    24 

     

    

 

(c)          Each
Party shall bear its own attorneys’ fees, costs, and disbursements arising out of the arbitration, and shall pay an equal
share of the fees and costs of the arbitrators; provided, however, the arbitrators shall be authorized to determine whether a Party
is the prevailing Party, and at their discretion, to award to that prevailing Party reimbursement for its reasonable attorneys’
fees, costs and disbursements (including, for example, expert witness fees and expenses, photocopy charges, travel expenses, etc.),
and/or the fees and costs of the AAA and the arbitrators.

 

12.3        Court
Actions. Nothing contained in this Agreement
shall deny either Party the right to seek, upon good cause, injunctive or other equitable relief from a court of competent jurisdiction
in the context of an emergency or prospective irreparable harm, and such an action may be filed and maintained notwithstanding
any ongoing dispute resolution discussions or arbitration proceedings. In addition, either Party may bring an action in any court
of competent jurisdiction to resolve disputes pertaining to the validity, construction, scope, enforceability, infringement or
other violations of intellectual property rights, and no such claim shall be subject to arbitration pursuant to Section 12.2.

 

ARTICLE
13

MISCELLANEOUS

 

13.1        Independent
Contractor Status. The Parties’ relationship as established by this Agreement is solely
that of independent contractors. This Agreement does not create any partnership, joint venture or similar business relationship
between the Parties. Neither Party is a legal representative of the other Party, and neither Party can assume or create any obligation,
representation, warranty or guarantee, express or implied, on behalf of the other Party for any purpose whatsoever. It is expressly
agreed and understood that neither Adamis nor any of its employees or subcontractors is an employee or agent of Watson. 

 

13.2        Expenses.
Except as otherwise expressly provided herein, each Party shall pay its own expenses in connection with the negotiation of this
Agreement, the performance of its obligations hereunder and the consummation of the transactions contemplated hereby.

 

13.3        Amendment;
Modification. No amendment, modification or supplement of any provision of this Agreement
shall be valid or effective unless made in writing and signed by a duly authorized officer of each Party.

 

    25 

     

    

 

13.4        Waiver.
No provision of this Agreement shall be waived by any act, omission, course of dealing or knowledge of a Party or its agents except
by an instrument in writing expressly waiving such provision and signed by a duly authorized officer of the waiving Party.

 

13.5        Notices.
All notices to be given hereunder shall be in writing, shall be effective when received, and shall be delivered personally, by
facsimile or other electronic transmission (receipt verified), mailed by registered or certified mail (return receipt requested),
postage prepaid, or sent by express courier service, to the Parties at the following addresses (or at such other address for a
Party as shall be specified by like notice, also effective only upon receipt thereof):

 

	Notices to Watson:	with a copy to:
	 	 
	Watson Laboratories, Inc.	Watson, Inc.
	Morris Corporate Center III	Morris Corporate Center III
	400 Interpace Parkway, Bldg. A	400 Interpace Parkway, Bldg. A
	Parsippany, New Jersey 07054	Parsippany, New Jersey 07054
	Attention:  Sr. VP, Business Development	Attention:  Legal Department
	Facsimile:	Facsimile: 862-261-7911
	E-mail: Daniel.Motto@Watson.com	E-mail: USLegal@actavis.com
	 	 
	Notices to Adamis:	with a copy to:
	 	 
	Adamis Pharmaceuticals, Inc.	 
	11682 El Camino Real, Suite 300	 
	San Diego, California 92130	 
	Attention: Sr. VP, Corporate Development	 
	Facsimile: 858-461-0842	 
	E-mail: dmarguglio@adamispharma.com	 

 

13.6        Assignment.
This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit
of the Parties and their respective successors and permitted assigns. Neither Party may assign any of its rights, liabilities or
obligations hereunder without the prior written consent of the other Party and any assignment without such consent shall be void.
Notwithstanding anything to the contrary in this Section 13.6, either Party may assign this Agreement and its rights, liabilities
and obligations hereunder without the other Party’s consent:

 

(a)          in
the case of either Party, in connection with the transfer or sale of all or substantially all of the business of such Party to
which this Agreement relates to a Third Party, whether by merger, sale of stock, sale of assets or otherwise; provided, however,
that in the event of such a transaction (whether this Agreement is actually assigned or is assumed by the acquiring party by operation
of law (e.g., in the context of a reverse triangular merger)), intellectual property rights of the acquiring party to such
transaction (if other than one of the Parties to this Agreement) shall not be included in the technology licensed hereunder or
otherwise subject to this Agreement; or

 

    26 

     

    

 

(b)          to
an Affiliate, provided that the assigning Party shall remain liable and responsible to the non-assigning Party hereto for the performance
and observance of all such duties and obligations by such Affiliate.

 

13.7        No
Strict Construction. The language used in this Agreement shall be deemed to be the language
chosen by the Parties to express their mutual intent, and no rule of strict construction shall be applied against either Party.

 

13.8        Complete
Agreement. This Agreement, together with all exhibits and schedules attached hereto, contains
the complete agreement between the Parties with respect to the subject matter hereof and supersedes any prior understandings, agreements
or representations by or between the Parties, written or oral, which may have related to the subject matter hereof in any way.

 

13.9        Governing
Law. This Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware, without regard to the application of principles of conflicts of law.

 

13.10      Force
Majeure. Each of the Parties hereto shall be excused from the performance of its obligations
hereunder (except for payment obligations) in the event such performance is prevented by force majeure, provided that each of the
Parties shall use reasonable commercial efforts to complete such performance by other means. Causes beyond the control of Adamis
or Watson include but are not limited to acts of God, acts or laws of any government, war, civil commotion, destruction of production
facilities or materials by fire, earthquake or storm, labor disturbances, epidemic and failure of public utilities or common carriers.

 

13.11      Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, and all of which shall
be considered one and the same instrument. 

 

13.12      Severability.
If any provision of this Agreement shall be held invalid, illegal or unenforceable, the validity, legality or unenforceability
of the other provisions of this Agreement shall not be affected thereby, and there shall be deemed substituted for the provision
at issue a valid, legal and enforceable provision as similar as possible to the provision at issue.

 

[Signature page follows]

 

    27 

     

    

 

IN WITNESS WHEREOF,
this Agreement is effective as of the Effective Date. 

	 	 	 	 	 
	Watson Laboratories, Inc.	 	Adamis Pharmaceuticals Corporation
	 	 	 
	By: 	  /s/ Daniel N. Motto	 	By:	  /s/ Dennis J. Carlo
	Name: Daniel N. Motto	 	Name: Dennis J. Carlo
	Title: SVP, Global Business Development	 	Title: Chief Executive Officer

 

    28 

     

    

 

EXHIBIT
A

 

MILESTONE PAYMENTS

 

Watson will make the following Milestone
Payments to Adamis within 30 days of each of the following events:

 

		a)	$[*] upon execution of this Agreement (“Execution Milestone Payment”);

 

		b)	$[*] upon the [*] of the 0.3mg Product in the Territory (“[*]”);

 

		c)	$[*];

 

		d)	$[*] upon the [*] of the [*] Product in the Territory (“[*]”);

 

		e)	$[*];

 

		f)	$[*]; and

 

		g)	$[*].

 

Notwithstanding the foregoing,

 

		(A)	If the NDA for the 0.3mg Product has not received final marketing approval by [*](the “Approval
Deadline”), Watson shall have the right to terminate this Agreement by providing written notice to Adamis no later than
[*] ([*]) days after the Approval Deadline and receive a full refund from Adamis of the Execution Milestone Payment.
If the NDA has not received FDA approval by the Approval Deadline and Watson has not provided notice of termination pursuant to
the immediately preceding sentence, then Adamis will not be required to refund the Execution Milestone Payment.

 

		(B)	If the first commercial sale of the 0.3mg Product in the Territory has not occurred by [*] (the
“Launch Deadline”), and the Launch Deadline is not missed as a result of matters within the reasonable control
of Watson, then the [*] shall not become payable by Watson upon the achievement of the specified event. For the avoidance of doubt,
a decision to delay the launch of the Product as a result of threatened or pending intellectual property litigation or other legal
concerns that could be reasonably expected to impede marketing efforts, shall not be a matter within the reasonable control of
Watson.

 

		(C)	If the NDA for the [*] Product has not received final marketing approval by [*], or such later
date as agreed in writing by the Parties (the “Supplement Approval Deadline”) then the [*] shall not become
payable by Watson upon the achievement of the specified event.

 

     

     

    

 

EXHIBIT B

 

DEVELOPMENT PLAN AND RESPONSIBILITY MATRIX

 

[*]cmft-ex106_298.htm

 

Exhibit 10.6

COMMUNITY FIRST, INC.

RESTRICTED SHARE AWARD AGREEMENT

(Directors)

 

THIS RESTRICTED SHARE AWARD AGREEMENT (this “Agreement”) is made and entered into as of the ____ day of ______, 20__ (the “Grant Date”), between Community First, Inc., a Tennessee corporation (together with its Subsidiaries, the “Company”), and the individual identified on the signature page hereto (the “Grantee”).  Capitalized terms not otherwise defined herein shall have the meaning ascribed to such terms in the Community First, Inc. 2016 Equity Incentive Plan (the “Plan”).

 

WHEREAS, the Company has adopted the Plan, which permits the issuance of restricted shares of the Company’s common stock, no par value per share (the “Common Stock”); and

 

WHEREAS, pursuant to the Plan, the Board or Committee responsible for administering the Plan has granted an award of restricted shares to the Grantee as provided herein.

 

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:

 

1.Grant of Restricted Shares.

 

(a)The Company hereby grants to the Grantee an award (the “Award”) of ______ shares of Common Stock (the “Shares” or the “Restricted Shares”) on the terms and conditions set forth in this Agreement and as otherwise provided in the Plan.

 

(b)The Grantee’s rights with respect to the Award shall remain forfeitable at all times prior to the dates on which the restrictions shall lapse in accordance with Sections 2 and 3 hereof.

 

2.Terms and Rights as a Shareholder.

 

(a)Except as provided herein and subject to such other exceptions as may be determined by the Board in its discretion, the “Restricted Period” for Restricted Shares granted herein shall expire with respect to the following percentages of Restricted Shares granted herein as set forth below:

 

Percentage of Restricted Shares      Date

    __________________

    __________________

    __________________

    __________________

 

 

 

 

(b)The Grantee shall have all rights of a shareholder with respect to the Restricted Shares, including the right to receive dividends and the right to vote such Shares, subject to the following restrictions: 

 

(i)the Grantee shall not be entitled to the removal of the restricted legends or restricted account notices or to delivery of the stock certificate (if any) for any Shares until the expiration of the Restricted Period as to such Shares and the fulfillment of any other restrictive conditions set forth herein; 

 

(ii)none of the Restricted Shares may be sold, assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed of during the Restricted Period as to such Shares and until the fulfillment of any other restrictive conditions set forth herein; and 

 

(iii)except as otherwise determined by the Committee at or after the grant of the Award hereunder, all of the Restricted Shares shall be forfeited, and all rights of the Grantee to such Shares shall terminate, without further obligation on the part of the Company, unless the Grantee continues his/her service as a director of the Company for the entire Restricted Period.

 

(c)Notwithstanding the foregoing, the Restricted Period shall automatically terminate as to all Restricted Shares awarded hereunder (as to which such Restricted Period has not previously terminated) upon (i) the termination of the Grantee’s service as a director of the Company which results from the Grantee’s death or Disability, or (ii) a Change in Control.

 

Any Shares, any other securities of the Company and any other property (except for cash dividends) distributed with respect to the Restricted Shares shall be subject to the same restrictions, terms and conditions as such Restricted Shares.

 

3.Termination of Restrictions.  Following the termination of the Restricted Period, and provided that all other restrictive conditions set forth herein have been met, all restrictions set forth in this Agreement or in the Plan relating to the Restricted Shares shall lapse and a stock certificate for the appropriate number of Shares, free of the restrictions and restrictive stock legend, shall be delivered to the Grantee or the Grantee’s beneficiary or estate, as the case may be, pursuant to the terms of this Agreement (or, in the case of book-entry Shares, such restrictions and restricted stock legend shall be removed from the confirmation and account statements delivered to the Grantee in book-entry form).

 

4.Delivery of Shares.

 

(a)As of the date hereof, certificates representing the Restricted Shares may be registered in the name of the Grantee and held by the Company or transferred to a custodian appointed by the Company for the account of the Grantee subject to the terms and conditions of the Plan and shall remain in the custody of the Company or such custodian until their delivery to the Grantee or Grantee’s beneficiary or estate as set forth in Sections 4(b) and (c) hereof or their forfeiture or reversion to the Company as set forth in Section 2(b) hereof.  The Board may, in its 

2

 

discretion, provide that Grantee’s ownership of Restricted Shares prior to the lapse of any transfer restrictions or any other applicable restrictions shall, in lieu of such certificates, be evidenced by a “book entry” (i.e., a computerized or manual entry) in the records of the Company or its designated agent in accordance with and subject to the applicable provisions of the Plan. 

 

(b)If certificates shall have been issued as permitted in Section 4(a) above, the certificates representing Restricted Shares in respect of which the Restricted Period has lapsed pursuant to this Agreement shall be delivered to the Grantee as soon as practicable following the date on which the restrictions on such Restricted Shares lapse.

 

(c)If certificates shall have been issued as permitted in Section 4(a) above, the certificates representing Restricted Shares in respect of which the Restricted Period lapsed upon the Grantee’s death shall be delivered to the executors or administrators of the Grantee’s estate as soon as practicable following the receipt of proof of the Grantee’s death satisfactory to the Company.

 

(d)Any certificate representing Restricted Shares shall bear (and confirmation and account statements sent to a Grantee with respect to book-entry Shares may bear) a legend in substantially the following form or substance:

 

THIS CERTIFICATE AND THE SHARES OF STOCK REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS (INCLUDING FORFEITURE AND RESTRICTIONS AGAINST TRANSFER) CONTAINED IN THE COMMUNITY FIRST, INC. 2016 EQUITY INCENTIVE PLAN (THE “PLAN”) AND THE RESTRICTED SHARE AWARD AGREEMENT (THE “AGREEMENT”) BETWEEN THE OWNER OF THE RESTRICTED SHARES REPRESENTED HEREBY AND COMMUNITY FIRST, INC. (THE “COMPANY”).  THE RELEASE OF SUCH SHARES FROM SUCH TERMS AND CONDITIONS SHALL BE MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF THE PLAN AND THE AGREEMENT AND ALL OTHER APPLICABLE POLICIES AND PROCEDURES OF THE COMPANY, COPIES OF WHICH ARE ON FILE AT THE COMPANY.

 

5.Effect of Lapse of Restrictions.  To the extent that the Restricted Period applicable to any Restricted Shares shall have lapsed, the Grantee may receive, hold, sell or otherwise dispose of such Shares free and clear of the restrictions imposed under the Plan and this Agreement upon compliance with applicable legal requirements.

 

6.No Right to Continued Service.  This Agreement shall not be construed as giving Grantee the right to continue to serve as a director of the Company, and, subject to applicable law, the Company may at any time dismiss Grantee from service as a director, free from any liability or any claim under the Plan.

 

7.Adjustments.  The Board may make equitable and proportionate adjustments in the terms and conditions of, and the criteria included in, this Award in recognition of unusual or nonrecurring events (and shall make adjustments for the events described in Section 4.2 of the 

3

 

Plan) affecting the Company or the financial statements of the Company or of changes in applicable laws, regulations, or accounting principles in accordance with the Plan whenever the Board determines that such events affect the Shares.  Any such adjustments shall be effected in a manner that precludes the material enlargement of rights and benefits under this Award. 

 

8.Amendment to Award.  Subject to the restrictions contained in the Plan, the Board may waive any conditions or rights under, amend any terms of, or alter, suspend, discontinue, cancel or terminate, the Award, prospectively or retroactively; provided that any such waiver, amendment, alteration, suspension, discontinuance, cancellation or termination that would materially and adversely affect the rights of the Grantee or any holder or beneficiary of the Award shall not to that extent be effective without the consent of the Grantee, holder or beneficiary affected.

 

9.Plan Governs.  The Grantee hereby acknowledges receipt of (or electronic link to) a copy of the Plan and agrees to be bound by all the terms and provisions thereof.  The terms of this Agreement are governed by the terms of the Plan, and in the case of any inconsistency between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall govern.

 

10.Severability.  If any provision of this Agreement is, or becomes, or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any Person or the Award, or would disqualify the Plan or Award under any laws deemed applicable by the Board, such provision shall be construed or deemed amended to conform to the applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Board, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person or Award, and the remainder of the Plan and Award shall remain in full force and effect.

 

11.Notices.  All notices required to be given under this Award shall be deemed to be received if delivered or mailed as provided for herein, to the parties at the following addresses, or to such other address as either party may provide in writing from time to time.

 

To the Company:Community First, Inc.

501 S. James Campbell Blvd.

Columbia, Tennessee 38401

Attn:  Chief Financial Officer

 

	
 
	
To the Grantee:
	
The address then maintained with respect to the Grantee in the Company’s records.

 

12.Governing Law.  The validity, construction and effect of this Agreement shall be determined in accordance with the laws of the State of Tennessee without giving effect to conflicts of laws principles.

 

13.Successors in Interest.  This Agreement shall inure to the benefit of and be binding upon any successor to the Company.  This Agreement shall inure to the benefit of the Grantee’s legal representatives.  All obligations imposed upon the Grantee and all rights granted to the 

4

 

Company under this Agreement shall be binding upon the Grantee’s heirs, executors, administrators and successors. 

 

14.Resolution of Disputes.  Any dispute or disagreement which may arise under, or as a result of, or in any way related to, the interpretation, construction or application of this Agreement shall be determined by the Board.  Any determination made hereunder shall be final, binding and conclusive on the Grantee and the Company for all purposes.

 

 

(remainder of page left blank intentionally)

5

 

IN WITNESS WHEREOF, the parties have caused this Restricted Share Award Agreement to be duly executed effective as of the day and year first above written. 

 

COMMUNITY FIRST, INC.

 

 

 

By: ______________________________________

 

 

 

 

GRANTEE:

 

__________________________________________

 

 

17140364.1

6

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