Document:

Exhibit
10.18 

 

ROYALTY
AGREEMENT

 

THIS
ROYALTY AGREEMENT (this “Agreement”) dated as of the last date provided on the signature page (the “Effective
Date”), is entered into between MELT PHARMACEUTICALS, INC., a Delaware corporation (“Melt”), with a place
of business at 12264 El Camino Real, Suite 350, San Diego, California 92130, and OHSO, LLC (“OHSO”), a South Dakota
limited liability company, with a place of business at 3101 W. 57th Street, Sioux Falls, South Dakota 57108.

 

WHEREAS,
OHSO and Harrow Health, Inc. (“Harrow”), formerly known as Imprimis Pharmaceuticals, Inc., entered into the Amended
and Restated Asset Purchase Agreement (the “OHSO APA”) on or around the Effective Date;

 

WHEREAS,
Melt and Harrow entered into the Asset Purchase Agreement (the “Melt APA”) on or around December 11, 2018; and

 

WHEREAS,
the parties are entering into this Agreement in connection with the OHSO APA and the Melt APA.

 

NOW,
THEREFORE, in consideration of the mutual promises and covenants set forth below and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:

 

1.
Definitions. For the purposes of this Agreement, the below terms shall have the respective meanings set forth below and grammatical
variations of such terms shall have corresponding meanings. Capitalized terms used but not defined herein shall have their respective
meanings set forth in the OHSO APA.

 

1.1
“First Commercial Sale” means, with respect to any Product, the first sale of such Product by Melt, its Licensees,
or its and their respective Affiliates after all applicable marketing and pricing approvals (if any) have been granted by the applicable
governing health authority.

 

1.2
“Licensee” means a Third Party (other than Harrow) to whom Melt or its Affiliate has granted a license, immunity or
other right under the Assigned Patent Rights to offer to sell, sell or otherwise commercialize one or more Products, provided such license
has not expired or been terminated.

 

1.3
“Net Licensing Revenues” means, with respect to any Product, the aggregate cash consideration or the cash value of
any in kind remuneration received by Melt or its Affiliates in consideration for the grant by Melt or its Affiliates to a Licensee of
a license, immunity or other right to offer to sell, sell or otherwise commercialize such Product (excluding amounts (a) received to
reimburse Melt or its Affiliates for research, development or similar services conducted for such Product, in reimbursement of patent
or other out of pocket expenses relating to such Product, (b) calculated on the sales price of such Product, or (c) in consideration
for the purchase of any debt or securities of Melt or its Affiliates).

 

    	1

     

    

 

1.4
“Net Receipts” means, with respect to any Product, the aggregate of the Net Sales thereof and Net Licensing Revenues
therefrom.

 

1.5
“Net Sales” means, with respect to any Product, the gross sales price for such Product invoiced by Melt, its Licensees,
or its or their respective Affiliates to customers who are not Affiliates (or are Affiliates but are the end users of such Product) less:
(a) commercially reasonable credits, allowances, discounts and rebates to, and chargebacks from the account of, such customers; (b) freight
and insurance costs in transporting such Product paid by Melt, its Licensees, or its or their respective Affiliates and not reimbursed
by such customers; (c) commercially reasonable cash, quantity and trade discounts, rebates and other price reductions for such Product;
(d) sales, use, value-added and other direct taxes assessed or imposed on the sale or license of such Product and paid by Melt, its Licensees,
or its or their respective Affiliates and not reimbursed by such customers; (e) customs duties, tariffs, surcharges and other governmental
charges incurred in exporting or importing such Product paid by Melt, its Licensees, or its or their respective Affiliates and not reimbursed
by customers; and (f) an allowance for uncollectible or bad debts determined in accordance with GAAP. If Melt, its Licensees, or its
or their respective Affiliates sell or license any Product to an Affiliate end user at a price that reflects a credit, allowance, discount
or rebate that is greater than the same offered to otherwise similarly situated customers, the amount of the credit, allowance, discount
or rebate shall not be subtracted from the gross sales price. Net Sales shall not include the gross sales price of such Product invoiced
as the result of prescriptions written for the Product or purchases made of the Product by the investors in OHSO or by Affiliates of
investors in OHSO.

 

1.6
“Payment Period” means, on a Product-by-Product and country-by-country basis, the period of time beginning on the
Payment Period Start Date and continuing for the longer of (a) the term for which a Valid Claim in such country remains in effect and
would be infringed by the use of such Product in such country, and (b) twenty (20) years following the date of the First Commercial Sale
of such Product in such country.

 

1.7
“Payment Period Start Date” means, on a Product-by-Product and country-by-country basis, (a) if the First Commercial
Sale of such Product in such country has occurred on or before April 1, 2019, then April 1, 2019, or (b) if the First Commercial Sale
of such Product in such country occurs after April 1, 2019, then the date of the First Commercial Sale of such Product in such country.

 

1.8
“Third Party” means any Person other than OHSO, Melt or their respective Affiliates.

 

1.9
“Valid Claim” means either (a) a claim of an issued and unexpired patent included within the Assigned Patent Rights,
which has not been held permanently revoked, unenforceable or invalid by a decision of a court or other governmental agency of competent
jurisdiction, unappealable or unappealed within the time allowed for appeal, and which has not been admitted to be invalid or unenforceable
through reissue or disclaimer or otherwise, or (b) a claim of a pending patent application included within the Assigned Patent Rights,
which claim was filed in good faith and has not been abandoned or finally disallowed without the possibility of appeal or refiling of
such application.

 

    	2

     

    

 

2.
Financial Terms.

 

2.1
Net Receipts Payments.

 

2.1.1
Net Receipts Payment Consideration. Subject to the provisions in this Section 2.1, on a Product-by-Product and country-by-country
basis, Melt shall pay to OHSO, on a quarterly basis, three percent (3%) of Net Receipts during the applicable Payment Period (the “Net
Receipts Payment Consideration”); provided, however, if, the manufacture, use, offer for sale, sale, or import of such Product
in a particular country would not infringe a Valid Claim, then the applicable Net Receipts Payment Consideration with respect to such
Product in such country shall be reduced by one-half (1⁄2).

 

2.1.2
Third Party Royalties. If Melt, its Licensees, or its or their respective Affiliates is required to pay royalties to any Third
Party (except Harrow) in order to make, have made, use, sell, offer to sale or import any Product, then Melt shall have the right to
credit fifty percent (50%) of such Third Party royalty payments against the Net Receipts Payment Consideration owing to OHSO under Section
2.1.1 with respect to sales of such Product; provided, however, that Melt shall not reduce the amount of the Net Receipts Payment
Consideration with respect to sales of such Product for any period to less than (i) one and nine-tenths of one percent (1.9%) of Net
Receipts of such Product for such period if the manufacture, use, offer for sale, sale, or import of such Product in a particular country
would infringe a Valid Claim, or (ii) ninety-five hundredths of one percent (.95%) of Net Receipts of such Product for such period if
the manufacture, use, offer for sale, sale, or import of such Product in a particular country would not infringe a Valid Claim.

 

2.1.3
Combination/Bundled Products. In the event that a Product is sold by Melt, its Licensees, or its or their respective Affiliates
in combination with one or more products which is itself not a Product, then Net Sales shall be calculated by multiplying the sales price
of such combination sale by the fraction A/(A+B) where A is the fair market value of the Product(s) and B is the fair market value of
the other product(s) in the combination sale, each as reasonably determined by Melt.

 

2.2
Reports and Net Receipts Payments. Within sixty (60) days after the end of each calendar quarter during the applicable Payment
Period, Melt shall deliver to OHSO a report setting forth for such calendar quarter (a) the calculation of the applicable Net Receipts
Payment Consideration, including without limitation the Net Licensing Revenues and Net Sales of each Product; (b) the payments due under
this Agreement for the sale of each Product; and (c) the applicable exchange rate as determined below. Melt shall remit the total payments
due for the sale or license of Products during such calendar quarter at the time such report is made. No such reports or payments will
be due for any Product before the First Commercial Sale of such Product. With respect to Net Receipts received in United States dollars,
all amounts shall be expressed in United States dollars. With respect to Net Receipts received in a currency other than United States
dollars, all amounts shall be expressed both in the currency in which the amount is invoiced (or received as applicable) and in the United
States dollar equivalent. The United States dollar equivalent shall be calculated using the average of the exchange rate (local currency
per US$1) published in The Wall Street Journal, Western Edition, under the heading “Currency Trading” on the last
business day of each month during the applicable calendar quarter.

 

    	3

     

    

 

2.3
Payment Provisions.

 

2.3.1
Payment Terms. The Net Receipts Payment Consideration shown to have accrued by each report provided for under Section 2.2
shall be due on the date such report is due. Payment of Net Receipts Payment Consideration in whole or in part may be made in advance
of such due date. Late payments shall incur interest at the rate of one percent (1%) per month from the date such payments were originally
due.

 

2.3.2
Withholding Taxes. Melt shall be entitled to deduct the amount of any withholding taxes, value-added taxes or other taxes, levies
or charges with respect to such amounts, other than United States taxes, payable by OHSO, or any taxes required to be withheld by Melt,
its Licensees, or its or their respective Affiliates, on behalf of OHSO, to the extent Melt, its Licensees, or its or their respective
Affiliates pay to the appropriate governmental authority on behalf of OHSO such taxes, levies or charges. Melt shall use reasonable efforts
to minimize any such taxes, levies or charges required to be withheld on behalf of OHSO by Melt, its Licensees, or its or their respective
Affiliates. Melt promptly shall deliver to OHSO proof of payment of all such taxes, levies and other charges, together with copies of
all communications from or with such governmental authority with respect thereto.

 

2.4
Audits. Upon the written request of OHSO and not more than once in each calendar year, Melt shall permit an independent certified
public accounting firm of nationally recognized standing selected by OHSO and reasonably acceptable to Melt, at OHSO’s expense,
to have access during normal business hours to such of the financial records of Melt as may be reasonably necessary to verify the accuracy
of the Net Receipts Payment Consideration reports hereunder for the eight (8) calendar quarters immediately prior to the date of such
request (other than records for which OHSO has already conducted an audit under this Section). If such accounting firm concludes that
additional amounts were owed during the audited period, Melt shall pay such additional amounts within thirty (30) days after the date
OHSO delivers to Melt such accounting firm’s written report so concluding. The fees charged by such accounting firm shall be paid
by OHSO; provided, however, if the audit discloses that the Net Receipts Payment Consideration payable by Melt for such period are more
than one hundred ten percent (110%) of the Net Receipts Payment Consideration actually paid for such period, then Melt shall pay the
reasonable fees and expenses charged by such accounting firm. OHSO shall cause its accounting firm to retain all financial information
subject to review under this Section 2.4 in strict confidence; provided, however, that Melt shall have the right to require that
such accounting firm, prior to conducting such audit, enter into an appropriate non-disclosure agreement with Melt regarding such financial
information. The accounting firm shall disclose to OHSO only whether the reports are correct or not and the amount of any discrepancy.
No other information shall be shared. OHSO shall treat all such financial information as Melt’s confidential information, and shall
not disclose such financial information to any Third Party or use it for any purpose other than as specified in this Section 2.4.

 

    	4

     

    

 

3.
Confidentiality and Publication.

 

3.1
Confidential Information. During the term of this Agreement, and for a period of five (5) years following the expiration or earlier
termination hereof, except as otherwise provided in this Section 3, OHSO shall maintain in confidence all data and information
comprising the Assets and each party shall maintain in confidence all non-public information and data of the of other party (the “Confidential
Information”), and shall not use, disclose or grant the use of the Confidential Information except on a need-to-know basis
to those directors, officers, employees, (sub)licensees and contractors, to the extent such disclosure is reasonably necessary in connection
with performing its obligations or exercising its rights under this Agreement. To the extent that disclosure is authorized by this Agreement,
prior to disclosure, the party making the disclosure shall obtain agreement of any such Person to hold in confidence and not make use
of the Confidential Information for any purpose other than those permitted by this Agreement. Each party shall notify the other promptly
upon discovery of any unauthorized use or disclosure of the Confidential Information. Notwithstanding anything to the contrary herein,
under no circumstance shall either party disclose the protected health information or personally identifiable information of the other
party at any time either during or after the termination of this Agreement.

 

3.2
Terms of this Agreement. Except as otherwise provided in this Section 3, neither party shall disclose any terms or conditions
of this Agreement to any Third Party without the prior consent of the other party. Notwithstanding the foregoing, prior to execution
of this Agreement, the parties have agreed upon the substance of information that can be used to describe the terms of this transaction,
and each party may disclose such information, as modified by mutual agreement from time to time, without the other party’s consent.

 

3.3
Permitted Disclosures. The confidentiality obligations contained in this Section 3 shall not apply to the extent that (a)
a party is required (i) in the reasonable opinion of such party’s legal counsel, to disclose information by applicable law, regulation,
rule (including rule of a stock exchange or automated quotation system), order of a governmental agency or a court of competent jurisdiction
or legal process, including tax authorities, or (ii) to disclose information to any governmental agency for purposes of obtaining approval
to test or market a product, provided in either case that, to the extent practicable, such party shall provide written notice thereof
to the other party and sufficient opportunity to object to any such disclosure or to request confidential treatment thereof; or (b) a
party can demonstrate that (i) the information was or became public knowledge, other than as a result of actions of such party in violation
hereof; or (ii) the information was disclosed to the recipient on an unrestricted basis from a source unrelated to any party to this
Agreement and not under a duty of confidentiality to the other party. Notwithstanding anything to the contrary herein, Melt may disclose
the terms and conditions of this Agreement to any Person with whom Melt has, or is proposing to enter into, a business relationship related
to the Product, as long as such Person has entered into a confidentiality agreement with Melt.

 

    	5

     

    

 

3.4
Publication. Melt shall determine the strategy for, and coordinate, the publication and presentation of any disclosures related
to the Technology, and OHSO shall not publish or otherwise disclose the Technology, or any data or information relating thereto, without
the prior written consent of Melt. If OHSO or any Person on OHSO’s behalf desires to make any such publication or presentation,
OHSO shall provide Melt with a copy of any manuscript intended for publication or any presentation intended for public disclosure (including
any oral disclosure made with or without obligation of confidentiality) by or on behalf of OHSO that incorporates any information related
to the Technology, or any data or information relating thereto, at least sixty (60) days before the submission of any manuscript for
publication or the public presentation, for Melt’s review and consideration. Melt shall have the right to approve or reject such
publication at its sole discretion. If after review Melt determines that the publishing party may publish or present such publication,
Melt shall return to the publishing party the manuscript or presentation with any proposed changes. The publishing party shall incorporate
all of Melt’s reasonable proposed changes to the manuscript or presentation prior to publication. Melt may further request that
the publishing party postpone the publication or presentation in order to consider appropriate patent applications or other protection
to be filed on information contained in the publication or presentation. If Melt requests such postponement, the publishing party shall
postpone such publication or presentation as requested by Melt.

 

3.5
Injunctive Relief. Each party acknowledges that it will be impossible to measure in money the damage to the other party if such
party fails to comply with the obligations imposed by this Section 3, and that, in the event of any such failure, the other party
may not have an adequate remedy at law or in damages. Accordingly, each party agrees that injunctive relief or other equitable remedy,
in addition to remedies at law or damages, is an appropriate remedy for any such failure and will not oppose the granting of such relief
on the basis that the disclosing party has an adequate remedy at law. Each party agrees that it will not seek, and agrees to waive any
requirement for, the securing or posting of a bond in connection with the other party seeking or obtaining such equitable relief.

 

4.
Miscellaneous.

 

4.1
LIMITATION OF LIABILITY. IN NO EVENT SHALL A PARTY BE LIABLE FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS
AGREEMENT OR THE EXERCISE OF ITS RIGHTS HEREUNDER, INCLUDING LOST PROFITS ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT, REGARDLESS
OF ANY NOTICE OF SUCH DAMAGES. NOTHING IN THIS SECTION 4.1 IS INTENDED TO LIMIT OR RESTRICT THE RIGHTS OR LIABILITIES OF EITHER PARTY
UNDER SECTION 3.

 

4.2
Public Announcements. Neither party shall make any public announcements concerning matters concerning this Agreement or the negotiation
thereof without the prior written consent of the other party unless such disclosure is required by law, in which case the announcing
party shall provide the other party with reasonable notice of such disclosure.

 

    	6

     

    

 

4.3
Assignment. Neither party shall assign its rights or obligations under this Agreement without the prior written consent of the
other party; provided, however, that a party may, without such consent, assign this Agreement and its rights and obligations hereunder
(a) to any Affiliate, or (b) in connection with the transfer or sale of all or substantially all of its business to which this Agreement
relates, or in the event of its merger, consolidation, change in control or similar transaction. Any permitted assignee shall assume
all obligations of its assignor under this Agreement. Any purported assignment in violation of this Section 4.3 shall be void.

 

4.4
Severability. Any provision of this Agreement which is illegal, invalid or unenforceable shall be ineffective to the extent of
such illegality, invalidity or unenforceability, without affecting in any way the remaining provisions hereof.

 

4.5
Entire Agreement; Amendment. This Agreement, together with each additional document, instrument or other agreement to be executed
and delivered pursuant hereto constitute all of the agreements between the parties with respect to, and supersede all prior agreements
and understandings relating to the subject matter of, this Agreement or the transactions contemplated by this Agreement. This Agreement
may not be modified or amended except by a written instrument specifically referring to this Agreement signed by the parties hereto.

 

4.6
Waiver. No waiver by one party of the other party’s obligations, or of any breach or default hereunder by any other party,
shall be valid or effective, unless such waiver is set forth in writing and is signed by the party giving such waiver; and no such waiver
shall be deemed a waiver of any subsequent breach or default of the same or similar nature or any other breach or default by such other
party.

 

4.7
Notices. Any consent, notice or report required or permitted to be given or made under this Agreement by a party to the other
party shall be in writing, delivered by any lawful means to such other party at its address indicated below, or to such other address
as the addressee shall have last furnished in writing to the addressor and (except as otherwise provided in this Agreement) shall be
effective upon receipt by the addressee.

 

	 	If
    to OHSO:	OHSO,
    LLC
	 	 	3101
    W. 57th Street
	 	 	Sioux
    Falls, South Dakota 57108
	 	 	Attn:
    John Berdahl

 

	 	If
    to Melt:	Melt
    Pharmaceuticals, Inc.
	 	 	12264
    El Camino Real, Suite 350
	 	 	San
    Diego, California 92130
	 	 	Attention:
    Greg Madison, Chief Executive Officer

 

4.8
Counterparts. This Agreement may be executed in separate counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

    	7

     

    

 

5.
Representations and Warranties. Each party represents and warrants to the other party as follows:

 

5.1
Such party is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized.

 

5.2
Such party (a) has the requisite power and authority and the legal right to enter into this Agreement and to perform its obligations
hereunder, and (b) has taken all necessary action on its part to authorize the execution and delivery of this Agreement and the performance
of its obligations hereunder. This Agreement has been duly executed and delivered on behalf of such party and constitutes a legal, valid,
binding obligation, enforceable against such party in accordance with its terms.

 

5.3
All necessary consents, approvals and authorizations of all governmental authorities and other Persons required to be obtained by such
party in connection with this Agreement have been obtained.

 

5.4
The execution and delivery of this Agreement and the performance of such party’s obligations hereunder (a) do not conflict with
or violate any requirement of applicable laws or regulations, and (b) do not conflict with, or constitute a default under, any contractual
obligation of it.

 

5.5
Such party is in compliance with all applicable laws, ordinances, orders, decrees, rules or regulations of any governmental agency or
authority, the violation of or noncompliance with which could have a material adverse effect on such party. No unresolved (a) charges
of violations of laws or regulations relating to such party’s business have been made or threatened; (b) proceedings or investigations
relating to such party’s business are pending or have been threatened; and (c) citations or notices of deficiency have been issued
or have been threatened, against such party relating to or arising out of its business by any governmental authorities, which have had
or could reasonably be expected to have, individually or in the aggregate, a material adverse effect on such party.

 

6.
Term. The term of this Agreement shall continue until expiration of all payment obligations hereunder.

 

***SIGNATURE
PAGE FOLLOWS***

 

    	8

     

    

 

SIGNATURE
PAGE

 

IN
WITNESS WHEREOF, each party has caused a duly authorized representative to execute and deliver this Agreement as of the date below.

 

	OSHO	 	MELT
	 	 	 
	OSHO,
    LLC	 	Melt
    Pharmaceuticals, Inc.
	 	 	 
	/s/
    John Berdahl, M.D	 	/s/
    Greg Madison
	By:	John
    Berdahl, M.D.	 	By:	Greg
    Madison
	Its:	Secretary
    and Managing Member	 	Its:	Chief
    Executive Officer
	 	 	 
	Date:	9/20/2019	 	Date:	10/3/2019

 

[Signature
Page to Royalty Agreement]

 

    	9Exhibit
10.19 

 

		102
    Woodmont Blvd., Suite 610

    Nashville,
    TN 37205

    www.meltpharma.com

 

June
17, 2021

 

VIA
EMAIL: [***] 

 

Larry
Dillaha

 

Dear
Mr. Dillaha,

 

Welcome
to Melt Pharmaceuticals! We are pleased to extend an offer of employment to you as the Chief Executive Officer. Your start date
is effective June 21, 2021. Your compensation will be $460,000 annually, less applicable withholdings, paid bi-weekly.
This is a full-time, exempt level position. You will also be eligible to participate in our performance incentive plan with your initial
target bonus at 50% of your annual salary amount, paid annually. Any such performance incentive plan and related bonus, which
shall be voluntary and not guaranteed, shall be based on a review and multi-factorial assessment of the Company’s condition, which
may also include Executive’s performance, and shall be conducted by the Company’s Board of Directors.

 

Melt
Pharmaceuticals, Inc. has an excellent benefits program including comprehensive medical, dental and vision plans. You will be eligible
to participate in our medical, dental and vision plans effective July 1, 2021. In addition, you will have a 20 day/160 hour personal
time off (PTO) account, which accrues bi-weekly. You will become eligible to participate in our 401(k) plan following six months of employment.

 

You
will be granted an option to purchase an additional 250,000 shares of Melt Pharmaceuticals, Inc. common stock. The stock option will
be granted to you on the 1st business day of the month following your effective date of this position. The price per share
of any approved option will be determined on this day. All other details of our stock option plan will be explained to you shortly after
any stock option is approved. Your entitlement to any stock options that may be approved is, of course, conditioned upon your signing
of the Stock Option Agreement and is subject to its terms and the terms of the Melt Incentive Stock and Awards Plan under which the options
are granted.

 

If
at any time (1) the Company terminates Executive’s employment without Cause (as defined below and other than as a result of
Executive’s death or disability), or (2) Executive resigns employment with the Company for Good Reason (as defined below), and
provided in any case such termination or resignation constitutes a “separation from service”, as defined under Treasury
Regulation Section 1.409A-1(h) (a “Separation from Service”) (such termination described in (1) or (2), an
“Involuntary Termination”), Executive shall be entitled to receive the following severance benefits,
subject in all events to Executive’s compliance with Section 10.4 below:

 

(i)
Executive shall receive a severance payment equal to the sum of (1) six (6) months of Executive’s Base Salary in effect on
the effective date of Executive’s Involuntary Termination (ignoring any decrease that forms the basis for Executive’s resignation
for Good Reason, if applicable) plus (2) the greater of Executive’s (x) Annual Bonus for the calendar year preceding the calendar
year in which the Involuntary Termination occurs or (y) target Annual Bonus for the year of Involuntary Termination, which shall be paid
in a lump sum on the thirtieth (30th) day following Executive’s Involuntary Termination.

 

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(ii)
Executive may receive an Annual Bonus, consistent with the first paragraph of this Offer of Employment letter, for the year in which
the Involuntary Termination occurs, determined based on actual results for such year and pro-rated for the period of time during such
year in which Executive provided services to the Company prior to his Involuntary Termination, which shall be paid in a lump sum in accordance
with Company practice for payment of the Annual Bonus, which shall in any event be on or before March 15 of the year following the year
in which the Involuntary Termination occurs.

 

(iii)
If Executive is eligible for and timely elects to continue Executive’s health insurance coverage under the Company’s
group health plans under the Consolidated Omnibus Budget Reconciliation Act of 1985 or the state equivalent (“COBRA”)
following Executive’s Involuntary Termination, the Company will pay the COBRA group health insurance premiums for Executive and
Executive’s eligible dependents until the earliest of (A) the end of the six (6)-month period following Executive’s Involuntary
Termination, (B) the expiration of Executive’s eligibility for the continuation coverage under COBRA, or (C) the date when Executive
becomes eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment. For purposes
of this Section, references to COBRA premiums shall not include any amounts payable by Executive under a Section 125 health care reimbursement
plan under the U.S. Internal Revenue Code. Notwithstanding the foregoing, if at any time the Company determines, in its sole discretion,
that it cannot pay the COBRA premiums without potentially incurring financial costs or penalties under applicable law (including, without
limitation, Section 2716 of the Public Health Service Act), then regardless of whether Executive elects continued health coverage under
COBRA, and in lieu of providing the COBRA premiums, the Company will instead pay Executive on the last day of each remaining month in
the six (6)-month period following Executive’s Involuntary Termination, a fully taxable cash payment equal to the COBRA premiums
for that month, subject to applicable tax withholdings (such amount, the “Health Care Benefit Payment”). The
Health Care Benefit Payment shall be paid in monthly installments on the same schedule that the COBRA premiums would otherwise have been
paid and shall be equal to the amount that the Company would have otherwise paid for COBRA premiums, and shall be paid until the earlier
of (i) expiration of the six (6)-month period following Executive’s Involuntary Termination or (ii) the date when Executive becomes
eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment.

 

Please
let us know of your decision to join Melt Pharmaceuticals, Inc.by signing this offer letter and returning it to us no later than June
18, 2021 at 5:00 pm EST. This letter sets forth our entire agreement and understanding regarding the terms of your employment with Melt
Pharmaceuticals, Inc. and supersedes all prior or contemporaneous agreements, understandings, negotiations or representations, whether
oral or written, expressed or implied, on this subject. This letter may not be modified or amended except by a specific, written agreement
signed by you and an authorized representative Melt Pharmaceuticals, Inc.

 

Your
offer and employment is contingent upon:

 

	 	●	Signing
    and abiding by the Company’s Confidentiality Agreement, Arbitration Agreement and the Proprietary Information and Inventions
    Assignment Agreement;
	 	●	Successful
    completion of a routine background check by an outside agency engaged by Melt Pharmaceuticals, Inc. and its subsidiaries to conduct
    background and reference checking;
	 	●	Successful
    passage of a drug and alcohol screening test;
	 	●	Licensing
    or certification requirements;
	 	●	Acceptance
    of other company policies and procedures, including, but not limited to, our Employee Manual, Code of Business Conduct and Ethics,
    and Insider Trading Policy.

 

Your
employment with Melt Pharmaceuticals, Inc. will be “at-will.” This means you may resign at any time and for any reason. Likewise,
the company may terminate the employment relationship at any time, with or without cause or advance notice. In addition, Melt Pharmaceuticals,
Inc. reserves the right to modify your position, duties and/or reporting relationship to meet business needs and to use its discretion
in deciding on appropriate discipline. Any change to the at-will employment relationship must be by a specific, written agreement, signed
by you and Melt Pharmaceuticals, Inc.

 

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You
also must establish your identity and authorization to work as required by the Immigration Reform and Control Act of 1986 (IRCA). Enclosed
is a copy of the Employment Verification Form (I-9), with instructions required by IRCA. Please review this document and bring the appropriate
original documentation on your first day of work.

 

To
indicate your acceptance of Melt Pharmaceuticals, Inc. offer of employment, on the terms and conditions set forth in this letter, please
sign and date this letter in the space provided below and return it to Laura Sherry, Director of Operations and Finance at 102 Woodmont
Blvd., Suite 610, Nashville, TN 37205 or via email to [***].

 

We
hope your employment with Melt Pharmaceuticals, Inc. will prove mutually rewarding.

 

	Sincerely,	 
	 	 
	/s/
    Mark L. Baum	 
	Mark
    L. Baum	 
	Chairman
    of the Board of Directors	 

 

*          *          *

 

I
have read this agreement in its entirety and agree to the terms and conditions of employment described in these documents. I understand
and agree that my employment with Melt Pharmaceuticals, Inc. is at-will. Your employment relationship with Melt Pharmaceuticals, Inc.
will be subject to the terms and conditions of this letter.

 

	6/18/2021	 	/s/
    Larry Dillaha
	Date	 	Candidate
    Name

 

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