Document:

Exhibit 10.7

 

EXCLUSIVE SALES
AND MARKETING AGREEMENT

 

THIS EXCLUSIVE
SALES AND MARKETING AGREEMENT (this “Agreement”) dated as of August 11, 2017 (the “Effective Date”), is
entered into between EYEMAX LLC, a Massachusetts limited liability company (“Eyemax”), with a place of business at
74 Chestnut Street, Weston, Massachusetts 02493, and ETON PHARMACEUTICALS, INC., a Delaware corporation (“Eton”),
with a place of business at 21925 Field Pkwy, Suite 235, Deer Park, Illinois 60010. The parties hereby agree as follows:

 

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

 

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

 

1.2           “Eyemax
IP Rights” shall mean, collectively, the Eyemax Patent Rights, Eyemax Know-How Rights and Eyemax Registrations.

 

1.3           “Eyemax
Know-How Rights” shall mean all trade secret and other know-how rights in which Eyemax or its Affiliates heretofore
or hereafter has an ownership or (sub)licensable interest, in and to the Technology.

 

1.4           “Eyemax
Patent Rights” shall mean (a) all patents and patent applications that claim or cover the Technology in which Eyemax
or its Affiliates heretofore or hereafter has an ownership or (sub)licensable interest, (b) all divisions, continuations, continuations-in-part,
that claim priority to, or common priority with, the patent applications described in clause (a) above or the patent applications
that resulted in the patents described in clause (a) above, and (c) all patents that have issued or in the future issue from any
of the foregoing patent applications, including utility models, design patents and certificates of invention, together with any
reissues, reexaminations, renewals, extensions or additions thereto.

 

1.5           “Eyemax
Registrations” shall mean all Regulatory Filings and Registrations regarding Product.

  

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

 

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

 

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1.8           “Minimum
Annual Royalty Payment” shall mean, with respect to any calendar year period, royalty payments from Eton to Eyemax of
an amount equal to One Hundred Thousand Dollars ($100,000USD).

 

1.9           “Minimum
Royalty Cure Payment” shall mean, with respect to any calendar year period, the positive remainder, if any, of the Minimum
Annual Royalty Payment minus the amount of royalties paid by Eton for such calendar year period.

 

1.10         “Net
Sales” shall mean the gross sales price of Products invoiced by Eton or its Affiliates to customers who are not Affiliates
(or are Affiliates but are the end users of such Product) less (a) credits, allowances, discounts and rebates to, and chargebacks
from the account of, such customers; (b) freight and insurance costs in transporting Products; (c) cash, quantity and trade discounts,
rebates and other price reductions for Products; (d) sales, use, value-added and other direct taxes; (e) customs duties, tariffs,
surcharges and other governmental charges incurred in exporting or importing Products; (f) the fully-burdened cost of goods sold
determined in accordance with generally accepted accounting principles; (g) selling, general and administrative expenses determined
in accordance with generally accepted accounting principles, including sales commissions incurred on the sale of such Product;
and (h) an allowance for uncollectible or bad debts determined in accordance with generally accepted accounting principles.

 

1.11         “Net
Sublicensing Revenues” shall mean, with respect to a Product, the aggregate cash consideration received by Eton or its
Affiliates in consideration for a sublicense under the Eyemax IP Rights by Eton or its Affiliates to a Third Party sublicensee
with respect to such Product (including royalties received by Eton or its Affiliates based on sales of such Product by such sublicensee,
but excluding amounts received (a) for the sale of such Product by Eton or its Affiliates to such sublicensee, or (b) in consideration
for the purchase of any debt or securities of Eton or its Affiliates).

 

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

 

1.13         “Product”
shall mean any product, in any form or formulation, including (without limitation) unit dose vials or multi-dose containers, for
ophthalmic administration, containing ***.

 

 

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

 

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1.14         “Recovery
Amount” shall mean all reasonable costs and expenses (including reasonable attorneys’ fees and costs) incurred
by Eton or its Affiliates in connection with the development, commercialization, obtaining and maintaining regulatory approvals,
or other exploitation or use of Product, but excluding any items covered by clauses (f) and (g) of Section 1.10 provided; however,
the dollar amount of the Recovery Amount shall not exceed Two Million Dollars ($2,000,000) without the prior written consent of
Eyemax.

 

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

 

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

 

1.17         “Technology”
shall mean, collectively, all forms and formulations comprising ***, all methods of manufacture or use thereof, and all data,
information, compositions, formulae, procedures, protocols, techniques and results of experimentation and testing and other technology
relating to or reasonably necessary or useful to make, use, sell, offer for sale, import, develop, seek regulatory approval, market,
commercialize or otherwise exploit the foregoing.

 

1.18         “Territory”
shall mean collectively all the territories and possessions of the United States of America; provided, however, that (a) Eyemax
shall first offer to Eton any rights to exploit Product outside of the then-current Territory, and (b) if accepted by Eton, then
the parties shall negotiate and enter into a mutually acceptable amendment to this Agreement to add such geographic territory
to the Territory.

 

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

 

 

***Text
has been omitted pursuant to Registrant’s confidential treatment request filed with the Securities and Exchange Commission
(“Commission”) pursuant to Rule 406 under the Securities Act of 1933.  The omitted text has been filed separately
with the Commission.

 

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		2.	Commercialization.

 

2.1          Grant
of Rights. Subject to the terms and conditions of this Agreement, Eyemax hereby grants to Eton an exclusive right and license
(with the right to grant sublicenses to Affiliates, contractors (including manufacturers), consultants and representatives; provided,
however, sublicenses to other Third Parties require the prior written consent of Eyemax) under the Eyemax IP Rights (a) to research,
develop, make, have made, use, offer for sale, sell, import, or otherwise exploit, commercialize or dispose of Products in the
Territory, and (b) to make or have made Products worldwide for use, offering for sale, sale, importation or other exploitation,
commercialization or disposition of Products in the Territory. Subject to the satisfaction of Eyemax’s obligations hereunder
and obtaining applicable Registration(s) for Product, Eton shall use commercially reasonable efforts to commercialize such Product
in the Territory.

 

2.2          Technology
Transfer. Eyemax shall provide Eton with a copy of all Technology and Eyemax IP Rights (or copies thereof if applicable) at
such time and in such manner as reasonably requested by Eton.

 

2.3          Product
Branding. Eton shall have the exclusive right to determine the names and trademarks, trade names, designs, logos and markings
used in connection with the research, development, promotion, marketing and sale of Product in the Territory.

 

		3.	Product Development and Registration

 

3.1          Regulatory
Submission

 

3.1.1           Eyemax
shall own any Registrations for Product and hereby grants to Eton exclusive rights under all such Registrations.

 

3.1.2           Eyemax
shall be responsible for submission of all initial Regulatory Filings to obtain Registration for Product at its own expense. For
purposes of clarity, the preceding sentence only covers the NDA filing fee only. Subject to the foregoing, Eton shall take all
reasonably necessary actions to support and obtain Registration thereafter by performing such development and obtaining such data
and information as reasonably necessary therefor at its own expense. Without limiting and subject to the foregoing, Eton shall
have the right to prepare, file, prosecute, submit and control all Regulatory Filings for Product. Eyemax shall provide to Eton
all reasonable assistance as Eton may request from time to time in connection therewith. Eton shall provide to Eyemax reasonably
requested updates as to the Registration and Regulatory Filings as Eyemax may request from time to time.

 

3.1.3           Eyemax
hereby appoints Eton as Eyemax’s authorized representative, agent and attorney in fact to pursue and maintain Registration
of Product. Eton hereby accepts such appointment. Without limiting the foregoing, Eton shall have the exclusive right, subject
to the first sentence of Section 3.1.2, (a) to submit relevant Regulatory Filings; (b) to interact and communicate with the FDA
and other regulatory authorities in the Territory regarding Regulatory Filings and Registration of Product; (c) to collect information
on the adverse effects of Product and report the same to the FDA; and (d) to coordinate and control any Recall (as defined below)
of Product in accordance with this Agreement and applicable laws and regulations and reporting relevant information to the FDA.

  

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3.1.4           Without
limiting anything set forth herein, Eyemax shall reasonably assist, execute such certificates and other instruments and otherwise
cooperate with Eton in connection with any Regulatory Filings as necessary to permit the promotion, marketing and sale of Product
in the Territory and comply with all Registration requirements therein.

 

3.2          Pharmacovigilance.

 

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

 

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

 

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

 

		4.	Representations and Warranties.

 

4.1          Representations
and Warranties of Eyemax. Eyemax hereby represents and warrants to Eton as follows:

 

4.1.1           Eyemax
is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Massachusetts.

 

4.1.2           Eyemax
(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 Eyemax, and constitutes a legal,
valid, binding obligation, enforceable against Eyemax in accordance with its terms.

  

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

 

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

 

4.1.5           All
material data, information, results of experimentation and testing provided by Eyemax to the FDA or Eton are accurate and complete
in all respects.

 

4.1.6           To
the best of Eyemax’s knowledge after due inquiry but without performing a freedom of operate, neither Product nor any use
thereof infringes, misappropriates or otherwise violates the intellectual property rights of any Third Party.

 

4.2          Representations
and Warranties of Eton. Eton hereby represents and warrants to Eyemax as follows:

 

4.2.1           Eton
is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.

 

4.2.2           Eton
(a) has the corporate power and authority and the legal right to enter into this Agreement and to perform its obligations hereunder,
and (b) has taken all necessary corporate 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 Eton, and constitutes
a legal, valid, binding obligation, enforceable against Eton in accordance with its terms.

 

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

 

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

 

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		5.	Financial Terms

 

5.1          Upfront
Fee. Within five (5) business days after the Effective Date, Eton shall pay to Eyemax an upfront fee of two hundred fifty
thousand dollars ($250,000).

  

5.2          Milestone
Payments. Within thirty (30) days following the first achievement of each of the following milestone events, Eton shall pay
to Eyemax the corresponding milestone payment:

 

	Milestone Event	 	Milestone Payment	 
	Eyemax obtaining Registration for Product	 	$	250,000	 
	First Commercial Sale of Product	 	$	500,000	 

 

5.3          Royalties.

 

5.3.1           Royalty
Rate. During the Term, subject to the terms and conditions of this Agreement, Eton shall pay to Eyemax royalties equal to
ten percent (10%) of Net Sales and Net Sublicensing Revenues, in each case in excess of the Recovery Amount.

 

5.3.2           Combination/Bundled
Products. In the event that a Product is sold by Eton or its Affiliates in combination with one or more products which is
itself not a Product, then Net Sales 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 Eton after consultation with Eyemax.

 

5.3.3           Third
Party Royalties. If Eton or its Affiliates is required to pay royalties to any Third Party in order to exercise its rights
hereunder to make, have made, use, offer for sale, sell or import any Product, then Eton shall have the right to credit fifty
percent (50%) of such Third Party royalty payments against the royalties that would otherwise be owing with respect to sales of
such Product prior to giving effect to this Section 5.3.3; provided, however, that Eton shall not reduce the amount of royalties
paid to Eyemax by reason of this Section 5.3.3 to less than fifty percent (50%) of the royalties that would otherwise be owing
with respect to sales of such Product.

 

5.4          Royalty
Reports and Payments. Within sixty (60) days after the end of each calendar quarter, Eton shall deliver to Eyemax a report
showing for such calendar quarter in reasonably specific detail the calculation of the royalties owing to Eyemax. Eton shall remit
the total payments due during such calendar quarter at the time such report is made. Payment in whole or in part may be made in
advance of such due date. No such reports or payments shall be due for any Product before the First Commercial Sale of such Product.

 

5.5          Withholding
Taxes. Eton shall be entitled to deduct the amount of any withholding taxes, value-added taxes or other taxes, levies or charges
with respect to such amounts payable by Eton or its Affiliates, or any taxes required to be withheld by Eton or its Affiliates,
to the extent Eton or its Affiliates pay to the appropriate governmental authority on behalf of Eyemax such taxes, levies or charges.
Eton shall use reasonable efforts to minimize any such taxes, levies or charges required to be withheld on behalf of Eyemax by
Eton or its Affiliates. Eton promptly shall deliver to Eyemax 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.

  

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		5.6	Audits.

 

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

 

5.6.2           If
such accounting firm concludes that additional amounts were owed during the audited period, Eton shall pay such additional amounts
within ten (10) days after the date Eyemax delivers to Eton such accounting firm’s written report so concluding. The fees
charged by such accounting firm shall be paid by Eyemax; provided, however, to the extent the auditor determines an underpayment
discrepancy greater than five percent (5%), Eton shall pay the reasonable fees and expenses charged by such accounting firm.

 

5.6.3           Eyemax
shall cause its accounting firm to retain all financial information subject to review under this Section 5.6 in strict confidence;
provided, however, that Eton shall have the right to require that such accounting firm, prior to conducting such audit, enter
into an appropriate and reasonable non-disclosure agreement with Eton regarding such financial information. The accounting firm
shall disclose to Eyemax only whether the reports are correct or not and the amount of any discrepancy. No other information shall
be shared. Eyemax shall treat all such financial information as Eton’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 5.6.

 

		6.	Indemnification and Insurance.

 

6.1          Indemnification
by Eyemax. Eyemax shall indemnify, defend and hold harmless Eton, its Affiliates, and its and their respective officers, directors,
shareholders, employees, agents and representatives (collectively “Eton Indemnitees”) from any and all losses, liabilities,
damages and expenses, including reasonable attorneys’ fees and costs (collectively, “Losses”) arising from any
claim, demand, action or other proceeding by a Third Party, to the extent arising out of or caused by (a) gross negligence or
willful misconduct of Eyemax, its agents or Affiliates; (b) any breach of any representation, warranty or covenant of this Agreement
by Eyemax; or (c) Eyemax’s failure to fully comply with all applicable laws regarding Product, its use, or any part thereof.

 

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6.2           Indemnification
by Eton. Eton shall indemnify, defend and hold harmless Eyemax, its Affiliates, and its and their respective officers, directors,
shareholders, employees, agents and representatives (collectively “Eyemax Indemnitees”) from any and all Losses arising
from any claim, demand, action or other proceeding by a Third Party, to the extent arising out of or caused by (a) gross negligence
or willful misconduct of Eton, its agents or Affiliates; (b) any breach of any representation, warranty or covenant of this Agreement
by Eton; or (c) Eton’s failure to fully comply with all applicable laws regarding Product, its use, or any part thereof.

 

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

 

6.4           Insurance.
Each party shall maintain insurance, including product liability insurance, with respect to its activities under this Agreement
regarding Product in such amount as such party customarily maintains with respect to similar activities for its other products,
but not less than such amount as is reasonable and customary in the industry. Each party shall maintain such insurance for so
long as it continues its activities under this Agreement, and thereafter for so long as such party customarily maintains insurance
for itself covering similar activities for its other products.

 

6.5           LIMITATION
OF LIABILITY. NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, EXCEPT FOR THE OBLIGATIONS TO INDEMNIFY, DEFEND AND HOLD HARMLESS
PURSUANT TO THIS SECTION 6 OR THE CONFIDENTIALITY OBLIGATIONS PURSUANT TO SECTION 7, NEITHER PARTY SHALL BE LIABLE FOR ANY SPECIAL,
INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHETHER FORESEEABLE OR NOT, ARISING OUT OF THIS AGREEMENT OR THE EXERCISE OF ITS
RIGHTS HEREUNDER, REGARDLESS OF ANY NOTICE OF SUCH DAMAGES.

 

		7.	Confidentiality.

 

7.1           Confidential
Information. During the Term and for a period of five (5) years thereafter, each party shall maintain in confidence all information
of the other party that is disclosed by the other party and identified as, or acknowledged to be, confidential at the time of
disclosure (the “Confidential Information”), and shall not use, disclose or grant the use of the Confidential Information
except on a need-to-know basis to those directors, officers, affiliates, employees, permitted licensees, permitted assignees and
agents, consultants, clinical investigators or contractors, to the extent such disclosure is reasonably necessary in connection
with performing its obligations or exercising its rights under this Agreement. To the extent that disclosure is authorized by
this Agreement, prior to disclosure, each party hereto shall obtain agreement of any such Person to hold in confidence and not
make use of the Confidential Information for any purpose other than those permitted by this Agreement. Each party shall notify
the other promptly upon discovery of any unauthorized use or disclosure of the other party’s Confidential Information.

  

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

 

7.3           Terms
of this Agreement. Except as otherwise provided in Section 7.2 above, neither party shall disclose any terms or conditions
of this Agreement to any Third Party without the prior consent of the other party. 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.

 

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

 

		8.	Term and Termination.

 

8.1           Term.
The Agreement shall commence on the Effective Date and shall continue for a period of ten (10) years thereafter unless (a)
renewed under Section 8.2 or (b) earlier terminated under Section 8.3 (the “Term”).

 

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8.2          Renewal
Term. This Agreement shall automatically renew for successive two (2) year terms unless Eton provides to Eyemax written notice
of non-renewal at least ninety (90) days prior to the end of the then-current term.

 

8.3          Termination.

 

8.3.1           In
the event of a material breach of this Agreement by either party, the non-breaching party may provide written notice of such breach
to the breaching party, including a description of the breach, and indicating the non-breaching party’s intent to terminate
this Agreement. The breaching party will have sixty (60) days from its receipt of such notice to cure the breach, provided the
breach is capable of being cured within the sixty (60) day period. If the breaching party fails to cure the breach within such
period, then unless otherwise agreed by the non-breaching party, this Agreement shall terminate on the date that is sixty (60)
days following the breaching party’s receipt of the notice of breach from the non-breaching party. If the breach is not
capable of being remedied within sixty (60) days, the Agreement terminates upon the written notice.

 

8.3.2           Eton
shall have the right to terminate this Agreement in its sole discretion at any time upon ninety (90) days prior written notice
to Eyemax.

 

8.3.3           If
(a) Eton fails to meet the Minimum Annual Royalty Payment for any full calendar year following the First Commercial Sale of the
Product and (b) Eton has not provided the Minimum Royalty Cure Payment within sixty (60) days after the end of such calendar year,
then Eyemax may elect (at its sole and absolute discretion) to: (1) terminate this Agreement by providing sixty (60) days written
notice, (2) not terminate this Agreement but convert the exclusivity provisions of this Agreement to non-exclusive, or (3) provide
a waiver without effecting its rights to future violations.

 

8.3.4           If
Eton fails to file an initial Regulatory Filing for Product pursuant to Section 3.1.2 by August 15, 2019, Eyemax has the right
to terminate this Agreement by providing thirty (30) days’ prior written notice and providing Eton with a thirty (30) day
cure period.

 

8.3.5           If
Eton determines that the Recovery Amount is reasonably likely to exceed two million dollars ($2,000,000), then Eton shall have
the right to terminate this Agreement upon thirty (30) days’ prior written notice to Eyemax.

 

8.4          Effect
of Termination or Expiration. Termination or expiration of this Agreement shall be without prejudice to any rights which shall
have accrued to the benefit of any party prior to such termination or expiration. Without limiting the foregoing, Sections 3.2,
3.3, 4, 6, 7, 8.4 and 9 shall survive any termination or expiration of this Agreement.

  

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		9.	Miscellaneous.

 

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

 

9.2          Governing
Law and Resolution of Disputes.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

  

    	 	12	 

     

    

 

	If to Eyemax:	Eyemax LLC
	 	74 Chestnut Street
	 	Weston, Massachusetts 02493
	 	Attention:  Dr. Elias Reichel
	 	 
	If to Eton:	Eton Pharmaceuticals, Inc.
	 	21925 Field Pkwy, Suite 235
	 	Deer Park, Illinois 60010
	 	Attention:  Chief Executive Officer

 

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

 

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

 

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

 

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

 

    	 	13	 

     

    

 

[Remainder of
Page Intentionally Left Blank]

 

    	 	14	 

     

    

 

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

 

	 	EYEMAX LLC
	 	 
	 	By: 	/s/ Elias Reichel
	 	Name: 	Elias Reichel
	 	Title: 	President
	 	 
	 	ETON PHARMACEUTICALS, INC.
	 	 
	 	By: 	/s/ Sean Brynjelsen
	 	Name: 	Sean Brynjelsen
	 	Title:	CEO

 

    	 	15Exhibit 10.8

 

DEVELOPMENT, SUPPLY AND COMMERCIALIZATION
AGREEMENT

 

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

 

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

 

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

 

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

 

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

 

 

***Text
has been omitted pursuant to Registrant’s confidential treatment request filed with the Securities and Exchange Commission
(“Commission”) pursuant to Rule 406 under the Securities Act of 1933.  The omitted text has been filed separately
with the Commission.

 

    	 	1	 

     

    

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

***Text
has been omitted pursuant to Registrant’s confidential treatment request filed with the Securities and Exchange Commission
(“Commission”) pursuant to Rule 406 under the Securities Act of 1933.  The omitted text has been filed separately
with the Commission.

 

    	 	2	 

     

    

 

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

 

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

 

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

 

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

 

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

 

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

 

 

***Text
has been omitted pursuant to Registrant’s confidential treatment request filed with the Securities and Exchange Commission
(“Commission”) pursuant to Rule 406 under the Securities Act of 1933.  The omitted text has been filed separately
with the Commission. 

 

    	 	3	 

     

    

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

***Text
has been omitted pursuant to Registrant’s confidential treatment request filed with the Securities and Exchange Commission
(“Commission”) pursuant to Rule 406 under the Securities Act of 1933.  The omitted text has been filed separately
with the Commission.

 

    	 	4	 

     

    

 

2.            Representations
and Warranties.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

***Text
has been omitted pursuant to Registrant’s confidential treatment request filed with the Securities and Exchange Commission
(“Commission”) pursuant to Rule 406 under the Securities Act of 1933.  The omitted text has been filed separately
with the Commission.

 

    	 	5	 

     

    

 

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

 

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

 

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

 

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

 

3.           Development
and Registration.

 

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

 

 

***Text
has been omitted pursuant to Registrant’s confidential treatment request filed with the Securities and Exchange Commission
(“Commission”) pursuant to Rule 406 under the Securities Act of 1933.  The omitted text has been filed separately
with the Commission.

 

    	 	6	 

     

    

 

3.2         ***
Development.

 

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

 

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

 

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

 

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

 

 

***Text
has been omitted pursuant to Registrant’s confidential treatment request filed with the Securities and Exchange Commission
(“Commission”) pursuant to Rule 406 under the Securities Act of 1933.  The omitted text has been filed separately
with the Commission.

 

    	 	7	 

     

    

 

3.4         Work
Product.

 

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

 

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

 

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

 

3.5         Registration.

 

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

 

 

***Text
has been omitted pursuant to Registrant’s confidential treatment request filed with the Securities and Exchange Commission
(“Commission”) pursuant to Rule 406 under the Securities Act of 1933.  The omitted text has been filed separately
with the Commission.

 

    	 	8	 

     

    

 

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

 

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

 

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

 

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

 

4.           Manufacture
and Supply.

 

4.1         Supply
to Eton.

 

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

 

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

 

 

***Text
has been omitted pursuant to Registrant’s confidential treatment request filed with the Securities and Exchange Commission
(“Commission”) pursuant to Rule 406 under the Securities Act of 1933.  The omitted text has been filed separately
with the Commission.

 

    	 	9	 

     

    

 

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

 

4.2         Forecasts.

 

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

 

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

 

4.3         Purchase
Orders.

 

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

 

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

 

 

***Text
has been omitted pursuant to Registrant’s confidential treatment request filed with the Securities and Exchange Commission
(“Commission”) pursuant to Rule 406 under the Securities Act of 1933.  The omitted text has been filed separately
with the Commission.

 

    	 	10	 

     

    

 

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

 

4.4         Transfer
of API.

 

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

 

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

 

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

 

 

***Text
has been omitted pursuant to Registrant’s confidential treatment request filed with the Securities and Exchange Commission
(“Commission”) pursuant to Rule 406 under the Securities Act of 1933.  The omitted text has been filed separately
with the Commission.

 

    	 	11	 

     

    

 

4.6         Quality
Control.

 

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

 

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

 

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

 

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

 

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

 

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

 

 

***Text
has been omitted pursuant to Registrant’s confidential treatment request filed with the Securities and Exchange Commission
(“Commission”) pursuant to Rule 406 under the Securities Act of 1933.  The omitted text has been filed separately
with the Commission.

 

    	 	12	 

     

    

 

4.7         Trademarks.

 

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

 

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

 

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

 

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

 

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

 

 

***Text
has been omitted pursuant to Registrant’s confidential treatment request filed with the Securities and Exchange Commission
(“Commission”) pursuant to Rule 406 under the Securities Act of 1933.  The omitted text has been filed separately
with the Commission.

 

    	 	13	 

     

    

 

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

 

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

 

4.11       Pharmacovigilance.

 

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

 

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

 

 

***Text
has been omitted pursuant to Registrant’s confidential treatment request filed with the Securities and Exchange Commission
(“Commission”) pursuant to Rule 406 under the Securities Act of 1933.  The omitted text has been filed separately
with the Commission.

 

    	 	14	 

     

    

 

4.12       Recall.

 

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

 

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

 

4.13       Access
and Inspections.

 

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

 

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

 

 

***Text
has been omitted pursuant to Registrant’s confidential treatment request filed with the Securities and Exchange Commission
(“Commission”) pursuant to Rule 406 under the Securities Act of 1933.  The omitted text has been filed separately
with the Commission.

 

    	 	15	 

     

    

 

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

 

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

 

5.           Financial
Terms.

 

5.1         Remittance
to ***.

 

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

 

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

 

 

***Text
has been omitted pursuant to Registrant’s confidential treatment request filed with the Securities and Exchange Commission
(“Commission”) pursuant to Rule 406 under the Securities Act of 1933.  The omitted text has been filed separately
with the Commission.

 

    	 	16	 

     

    

 

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

 

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

 

5.4         Audits.

 

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

 

 

***Text
has been omitted pursuant to Registrant’s confidential treatment request filed with the Securities and Exchange Commission
(“Commission”) pursuant to Rule 406 under the Securities Act of 1933.  The omitted text has been filed separately
with the Commission.

 

    	 	17	 

     

    

 

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

 

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

 

6.           Indemnification
and Insurance.

 

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

 

 

***Text
has been omitted pursuant to Registrant’s confidential treatment request filed with the Securities and Exchange Commission
(“Commission”) pursuant to Rule 406 under the Securities Act of 1933.  The omitted text has been filed separately
with the Commission.

 

    	 	18	 

     

    

 

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

 

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

 

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

 

 

***Text
has been omitted pursuant to Registrant’s confidential treatment request filed with the Securities and Exchange Commission
(“Commission”) pursuant to Rule 406 under the Securities Act of 1933.  The omitted text has been filed separately
with the Commission.

 

    	 	19	 

     

    

 

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

 

6.5.1       ***
shall obtain the following insurance coverages:

 

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

 

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

 

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

 

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

 

6.5.2       Eton
shall obtain the following insurance coverages:

 

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

 

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

 

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

 

 

***Text
has been omitted pursuant to Registrant’s confidential treatment request filed with the Securities and Exchange Commission
(“Commission”) pursuant to Rule 406 under the Securities Act of 1933.  The omitted text has been filed separately
with the Commission.

 

    	 	20	 

     

    

 

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

 

7.           Confidentiality.

 

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

 

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

 

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

 

    	 	21	 

     

    

 

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

 

8.           Term
and Termination.

 

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

 

8.2         Termination.

 

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

 

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

 

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

 

    	 	22	 

     

    

 

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

 

8.3         Effect
of Termination or Expiration.

 

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

 

 

***Text
has been omitted pursuant to Registrant’s confidential treatment request filed with the Securities and Exchange Commission
(“Commission”) pursuant to Rule 406 under the Securities Act of 1933.  The omitted text has been filed separately
with the Commission.

 

    	 	23	 

     

    

 

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

 

9.           Miscellaneous.

 

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

 

9.2         Governing
Law and Resolution of Disputes.

 

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

 

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

 

 

***Text
has been omitted pursuant to Registrant’s confidential treatment request filed with the Securities and Exchange Commission
(“Commission”) pursuant to Rule 406 under the Securities Act of 1933.  The omitted text has been filed separately
with the Commission.

 

    	 	24	 

     

    

 

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

 

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

 

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

 

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

 

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

 

If to ***:***

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

 

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

 

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

 

    	 	25	 

     

    

 

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

 

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

 

 

***Text
has been omitted pursuant to Registrant’s confidential treatment request filed with the Securities and Exchange Commission
(“Commission”) pursuant to Rule 406 under the Securities Act of 1933.  The omitted text has been filed separately
with the Commission.

 

    	 	26	 

     

    

 

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

 

[Remainder of Page Intentionally Left Blank]

 

    	 	27	 

     

    

 

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

 

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

 

 

***Text
has been omitted pursuant to Registrant’s confidential treatment request filed with the Securities and Exchange Commission
(“Commission”) pursuant to Rule 406 under the Securities Act of 1933.  The omitted text has been filed separately
with the Commission.

 

    	 	28

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