Document:

Exhibit

Exhibit 10.3

	
	
	   
DANAHER DEFERRED COMPENSATION PLAN
EFFECTIVE JANUARY 1, 2019

	 

TABLE OF CONTENTS

ARTICLE I DEFINITIONS    3
ARTICLE II PARTICIPATION    6
ARTICLE III CREDITING OF ACCOUNTS    7
ARTICLE IV VESTING OF ACCOUNTS    10
ARTICLE V DISTRIBUTION OF BENEFITS    11
ARTICLE VI CLAIMS AND ADMINISTRATION    15
ARTICLE VII STATUS OF PLAN    18
ARTICLE VIII PLAN AMENDMENT OR TERMINATION    19
ARTICLE IX MISCELLANEOUS    20

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DANAHER DEFERRED COMPENSATION PLAN
WHEREAS, Danaher Corporation sponsors the Danaher Corporation & Subsidiaries Executive Deferred Incentive Program which allowed a select group of management and highly compensated employees of Danaher Corporation and its subsidiaries an opportunity to defer compensation before January 1, 2019; and
WHEREAS, as of January 1, 2019, this Danaher Deferred Compensation Plan (the “Plan”) is established to allow a select group of management and highly compensated employees of Danaher Corporation and its subsidiaries to defer salary and annual incentive compensation.
NOW, THEREFORE, in order to accomplish such purpose, the Plan Sponsor has adopted, by appropriate resolutions, this Plan effective as of January 1, 2019.  It is intended that this Plan shall be unfunded for purposes of the Code and shall constitute an unfunded pension plan maintained for a select group of management and highly compensated employees for purposes of Title I of ERISA, and shall comply with Code section 409A and all formal regulations, rulings, and guidance issued thereunder.

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ARTICLE I 
 
DEFINITIONS
As used in this Plan, each of the following terms shall have the respective meaning set forth below unless a different meaning is plainly required by the content.
1.1    Account.  The total amount held in a bookkeeping account under the Plan for a Participant, consisting of his or her Deferral Account(s).  
1.2    Administrator.  The individual or committee appointed by the Plan Sponsor to administer the Plan.
1.3    Beneficiary.  An individual or entity entitled to receive any benefits under this Plan that are payable upon a Participant's death.
1.4    Bonus.  With respect to a Participant for a Plan Year, the amount for the Plan Year that shall be determined to have been earned by the Participant in accordance with the Employer's annual cash incentive program.
1.5    Bonus Deferral Amount.  With respect to a Participant for a Plan Year, an amount of the Participant's Bonus for the applicable Plan Year that the Participant has elected to defer pursuant to Section 3.1.
1.6    Code.  The Internal Revenue Code of 1986, as it may be amended from time to time.
1.7    Common Stock.  The common stock of the Plan Sponsor.  
1.8    Common Stock Price.  With respect to a specified date as of which the price of shares of Common Stock shall be determined, the closing sale price on that date or, if the given date is not a trading day, the closing sale price for the immediately preceding trading day. 

1.9    Deferral Account.  A bookkeeping account established under Section 5.1 to which a Participant’s Salary Deferral Amounts and Bonus Deferral Amounts are allocated.  Each Participant’s Account shall contain one (1) Deferral Account for each Plan Year with respect to which the Participant deferred Salary Deferral Amounts or Bonus Amounts.
1.10    Earnings Crediting Rate.  With respect to a Participant, the rate at which nominal earnings shall be credited to, or nominal losses shall be deducted from, all or a designated portion of the Participant's Account, as determined pursuant to Section 3.2 of the Plan.
1.11    Effective Date.  January 1, 2019.
1.12    Eligible Employee.  An Employee who, pursuant to a determination made by the Administrator, in its sole discretion, prior to the first day of an applicable Plan Year, is an Eligible Employee with respect to such Plan Year.  The Administrator may, in its sole discretion, designate any newly hired Employee as an Eligible Employee under the Plan, but only to the extent the Administrator determines such newly hired Employee belongs in a select group of management or highly compensated employees within the meaning of ERISA sections 201(2), 301(a)(3) and 401(a)(1). Notwithstanding the foregoing, an active participant in the Danaher Corporation & Subsidiaries Executive Deferred Incentive Program shall not be an Eligible Employee.

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1.13    Employee.  An Employee is an employee who performs services for an Employer. 
1.14    Employer.  (a) The Plan Sponsor or (b) an employer that is a member of the Plan Sponsor's "controlled group of corporations, trades, or businesses," as such term shall be defined in Code Sections 414(b) and 414(c), and that has adopted this Plan with the approval of the Plan Sponsor.
1.15    Employment Termination Date.  With respect to a Participant, the date that the Participant separates from service with all Employers, whether by death, retirement, or other termination of employment, in a manner consistent with the definition in Treasury Regulation section 1.409A-1(h).
1.16    ERISA.  The Employee Retirement Income Security Act of 1974, as it may be amended from time to time.
1.17    Participant. An Eligible Employee or former Eligible Employee who is participating in this Plan pursuant to Article II.
1.18    Participation Date.  With respect to an Eligible Employee, the date (if any) as of which the Eligible Employee shall initially become a Participant as determined pursuant to Section 2.1.
1.19    Payroll Period.  With respect to an Eligible Employee, a period with respect to which the Eligible Employee receives a pay check or otherwise is paid for services that he or she performs during the period for an Employer.
1.20    Plan.  The Danaher Deferred Compensation Plan, as it is set forth herein and as it may be amended from time to time.
1.21    Plan Sponsor.  Danaher Corporation.
1.22    Plan Year.  The calendar year.  
1.23    Salary.  With respect to a Participant for a Payroll Period, the total cash compensation (if any) that is payable to the Participant by any Employer during the Payroll Period and that would be reportable on the Participant's federal income tax withholding statement (Form W-2) or would be reportable but such amount is not includible in the gross income of the Participant under Code Sections 125, 132(f)(4), or 402(e)(3), including but not limited to salary and overtime pay, plus remuneration as defined in Code Section 3401(a)(8)(A) to the extent not otherwise reported on the Participant's Form W-2 (excluding housing, COLA, tax equalization, hardship and special allowances); but excluding amounts attributable to Bonuses, hiring bonuses, long-term incentive awards, equity awards, exercised stock options, severance benefits or other variable compensation. 

1.24    Salary Deferral Amount.  With respect to a Participant for a Plan Year, an amount of the Participant's Salary for a Payroll Period during the Plan Year that the Participant has elected to defer pursuant to Section 3.1.
1.25    Valuation Date.  The monthly or other periodic date selected by the Administrator to value Participants’ Accounts.  

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1.26    Year of Service.  With respect to a Participant, a Year of Service has the same meaning as defined in the Danaher Corporation & Subsidiaries Savings Plan, as it may be amended from time to time.

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ARTICLE II     
 
PARTICIPATION
2.1    Commencement of Participation.  An Eligible Employee shall become a Participant as of the date that is the first (1st) day of a month and that coincides with or follows the later of January 1, 2019, or the date that the individual became an Eligible Employee.  
2.2    Termination of Participation.  A Participant who ceases being an Employee or an Eligible Employee shall cease being a Participant as of the earlier of the Participant’s date of death or the date as of which the Participant’s vested portion of his or her Account (as determined subsequent to any crediting of his or her Account under the Plan) equals zero (0). 

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ARTICLE III     
 
CREDITING OF ACCOUNTS 
3.1    Deferral Accounts.
(a)    Election to Defer.  Subject to this Section 3.1:
(i)    Bonus Deferral Amounts.  A Participant who is an Eligible Employee may elect to have a percentage of his or her Bonus for a Plan Year deferred as a Bonus Deferral Amount for the applicable Plan Year; provided that the actual amount deferred shall not exceed eighty-five percent (85%) of such Bonus for the Plan Year. 
(ii)    Salary Deferral Amounts.  A Participant who is an Eligible Employee may elect to have an amount of his or her Salary for each Payroll Period in a Plan Year deferred as a Salary Deferral Amount. A Participant may only elect to have deferred as a Salary Deferral Amount a whole percentage not to exceed eighty-five percent (85%) of such Salary for a Payroll Period.  
(b)    Election Procedures.  Subject to any further procedures established by the Administrator pursuant to Article V, any election made by a Participant pursuant to Subsection (a) above shall be subject to the procedures described in Paragraphs (i) through (iv) below:
(i)    Initial Opportunity to Defer.  
(A)    Bonus Deferral Amounts.  A Participant may, in the Administrator’s sole discretion, elect to have a Bonus Deferral Amount deferred on his or her behalf with respect to the Participant's Bonus for the Plan Year in which the Participant's Participation Date occurs by so indicating on the enrollment form provided by the Administrator, which shall be consistent with the requirements of Treasury Regulation section 1.409A-2(a)(7).
(B)    Salary Deferral Amounts.  A Participant may, in the Administrator’s sole discretion, elect to have Salary Deferral Amounts deferred on his or her behalf with respect to the Participant's Salary for the Plan Year in which the Participant's Participation Date occurs by so indicating on the enrollment form provided by the Administrator, which shall be consistent with the requirements of Treasury Regulation section 1.409A-2(a)(7).  Such election shall be effective for Payroll Periods during such Plan Year or the remainder of such Plan Year, as applicable, beginning as soon as administratively possible on or after the latest of (I) the Participant's Participation Date, or (II) the date that the Participant files the properly completed enrollment form with the Administrator. 
(ii)    Annual Opportunities to Defer.  
(A)    Bonus Deferral Amounts.  A Participant may elect to have a Bonus Deferral Amount deferred on his or her behalf with respect to the Participant's Bonus for a Plan Year by properly completing an election form provided by the Administrator and filing the form with the Administrator in accordance with the Administrator’s procedures prior to the first (1st) day of such Plan Year.  
(B)    Salary Deferral Amounts.  A Participant may elect to have Salary Deferral Amounts deferred on his or her behalf with respect to the Participant's Salary for a Plan Year by properly completing an election form provided by the Administrator and filing the 

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form with the Administrator in accordance with the Administrator’s procedures prior to the first (1st) day of such Plan Year.    
(iii)    No Revocations.  A Participant may not, at any time, revoke a previous election with respect to a Bonus Deferral Amount or Salary Deferral Amounts.
(iv)    Termination of Election.  A Participant's election concerning a Bonus Deferral Amount or Salary Deferral Amounts shall terminate on the date as of which the last amount or the only amount, as applicable, designated to be withheld under such election shall be withheld.  Notwithstanding the foregoing, a Participant’s election concerning a Bonus Deferral Amount or Salary Deferral Amounts shall terminate (i) upon the date an in-service distribution is made to the Participant of all or a part of his Account in the event that the Participant has an unforeseeable emergency pursuant to Section 5.3, or (ii) upon the date a hardship distribution is made to the Participant within the meaning of Treasury Regulation section 1.401(k)-1(d)(3). A Participant’s election concerning a Bonus Deferral Amount or Salary Deferral Amounts shall apply only with respect to Bonus Deferral Amount or Salary Deferral Amounts earned in the Plan Year designated on the enrollment form or election form provided by the Administrator and shall not apply to amounts earned in any other Plan Year.
(c)    Crediting of Deferral Amounts.  A Participant’s Salary Deferral Amounts and Bonus Deferral Amounts with respect to a Plan Year shall be credited to the Participant’s Deferral Account established for such Plan Year. Such Salary Deferral Amounts and Bonus Deferral Amounts shall be credited as soon as administratively practicable after the time such Salary Deferral Amounts and Bonus Deferral Amounts would have otherwise been paid to the Participant.
3.2    Crediting of Earnings.
(a)    Elections.  A Participant may elect the Earnings Crediting Rate that shall apply to all or a designated portion of the Participant’s Account from the investment options that the Administrator shall from time to time designate, in accordance with rules established by the Administrator.  A Participant makes his or her initial election of the Earnings Crediting Rate(s) that shall apply to the Participant's Account by properly completing an investment option form and filing it with the Administrator.  A Participant who has filed an investment option form with the Administrator may elect to change his or her investment election with respect to either the investment of future amounts credited to the Participant's Account and/or the investment of all or a designated portion of the current balance of the Participant's Account by so designating on a new investment option form and filing the form with the Administrator or, in accordance with procedures adopted by the Administrator, by so notifying the Administrator in any manner acceptable to the Administrator; provided, however, that a Participant may not change his or her investment election with respect to any portion of his or her Account deemed invested in notional shares of Common Stock and any such election of notional shares of Common Stock as an investment option shall be irrevocable and remain in effect until the Participant's Account is distributed pursuant to the terms of the Plan.  Except as otherwise provided by the Administrator with respect to one (1) or more investment options, any initial investment election made pursuant to this Paragraph shall be effective as soon as administratively possible, and any subsequent investment election made pursuant to this Paragraph shall be effective as soon as administratively possible after the date that the Participant files the investment option form with the Administrator or otherwise notifies the Administrator of his or her election, and each investment election shall continue in effect until the effective date of a subsequent investment election properly made.  Notwithstanding the foregoing, with respect to any Participant who is required to file reports with the Securities and Exchange Commission under Section 16 of the Securities Exchange Act of 1934, and the rules promulgated thereunder, if the 

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Participant has elected notional shares of Common Stock as an investment option that shall apply to all or a portion of his or her Account, such investment option and Earnings Crediting Rate shall not become effective with respect to any amounts deferred until the earliest of the last Friday (or if such Friday is a New York Stock Exchange holiday, the immediately  preceding day that is not a holiday or weekend day for purposes of the New York Stock Exchange) of the month of April, July, October, or January immediately following the date such amounts were deferred, and during the period from the date of deferral until such April, July, October, or January date, as applicable, the investment options and Earnings Crediting Rate that shall apply to such deferred amounts shall be the fixed income fund investment option, or such other investment option as the Administrator shall determine. 
The Administrator shall adopt and may amend procedures to be followed by Participants in electing Earnings Crediting Rate(s) and, pursuant thereto, the Administrator may, among other actions, format investment option forms and establish deadlines for elections.
(b)    No Election.  The Administrator shall from time to time designate a fixed income fund or other investment option that shall be used to establish the Earnings Crediting Rate that shall apply to the Account of any Participant who has not made an investment option election.
(c)    Earnings Credits.  As of each Valuation Date, the Administrator shall determine the earnings credit applicable to the Account of each Participant since the prior Valuation Date.
(d)    Accounting.  The value of each Participant's Account will be adjusted as of each Valuation Date to reflect contributions, earnings, interest, gains, losses, distributions, and expenses experienced since the prior Valuation Date.

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ARTICLE IV     
 
VESTING OF ACCOUNTS
4.1    Vesting.  A Participant's interest in his or her Account will be nonforfeitable.  

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ARTICLE V     
 
DISTRIBUTION OF BENEFITS
5.1    Establishment of Accounts.
A Deferral Account shall be established for a Participant for each Plan Year with respect to which the Participant completes an enrollment form or election form in accordance with Section 3.1.  At such time, the Participant shall designate the time and form of payment of such Deferral Account from among the following available options:  
(a)    Timing.  Subject to Section 5.1(d) below, the Participant shall designate the Deferral Account to be paid or commence payment upon one of the following payment events:
(i)    Upon the Participant’s Employment Termination Date, with the payment commencing on the first day of the month following such date below as elected by the Participant:
(A)     the Participant’s Employment Termination Date; 
(B)    the last day of the six (6) month period commencing on the Participant’s Employment Termination Date;
(C)    the last day of the twelve (12) month period commencing on the Participant’s Employment Termination Date; or
(D)    the last day of the twenty-four (24) month period commencing on the Participant’s Employment Termination Date.
(ii)    Upon a fixed date not less than three (3) years following the year the Deferral Account is established. 
Notwithstanding the foregoing, if the Participant designates his or her Deferral Account to be paid or commence payment upon a fixed date, and his or her Employment Termination Date occurs prior to such fixed date, the Deferral Account shall be paid upon the payment event designated by the Participant pursuant to subsection (i) above or, if the Participant has not made such a designation, upon the first day of the month following the Participant’s Employment Termination Date.  
If the Administrator determines that the Participant has not properly designated a time of payment for a Deferral Account in accordance with the terms of this Section 5.1 or the procedures established by the Administrator, such Participant shall be deemed to have designated the Deferral Account to be payable upon the first day of the month following the Participant’s Employment Termination Date.
(b)    Form.  With respect to each payment event described in Section 5.1(a), the Participant may designate the Deferral Account to be paid upon such payment event as either:
(i)    A lump sum; or 
(ii)    In annual installments over no more than ten (10) years.

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If the Administrator determines that the Participant has not properly designated a form of payment for a Deferral Account in accordance with the terms of this Section 5.1 or the procedures established by the Administrator, such Participant shall be deemed to have designated the Deferral Account to be payable in a lump sum.
If a Deferral Account is to be distributed in installments, the first installment shall be made on the applicable date described in Section 5.1(a) (including any delay in payment pursuant to Section 5.1(d), if applicable), and each subsequent installment thereafter shall be made on the anniversary of the first installment until all installment payments of the amount have been paid to the Participant. The amount of each installment payment shall equal the quotient of (A) the total remaining balance in the Deferral Account as of the Valuation Date immediately prior to the date on which such installment payment is scheduled to be paid, divided by (B) the number of installment payments remaining in the applicable period of annual installments. The entitlement to a series of installment payments under this Plan shall be treated as the entitlement to a single payment, and each such installment payment shall not be considered a separate payment hereunder.
(c)    Medium. Any portion of a Participant’s Deferral Account that is deemed invested in shares of Common Stock shall be paid in shares of Common Stock.  Any portion of a Participant’s Deferral Account that is not deemed invested in shares of Common Stock shall be paid in cash.
(d)    Special Payment Rule for Specified Employees.  Notwithstanding the foregoing, distributions may not be made to a Specified Employee due to the Participant’s Employment Termination Date other than on account of death before the first day of the month following the last day of the six (6) month period commencing on the Participant’s Employment Termination Date, or, if earlier, the Participant’s date of death.  Installment payments that would have commenced during the period of delay will commence as of the next monthly payment date following the period of delay.  
For purposes of the Plan, “Specified Employee” shall mean an Employee who is a “key employee” as such term is defined in Code section 416(i) without regard to Code section 416(i)(5).  For purposes of determining which Employees are key employees, an Employee is a key employee if the Employee meets the requirements of Code section 416(i)(A)(i), (ii) or (iii) (applied in accordance with the regulations thereunder and disregarding Code section 416(i)(5)) at any time during the 12-month period ending  on an identification date (which shall be December 31st of each calendar year); provided, however, that all Employees who are nonresident aliens during the entire 12-month period ending with the relevant identification date shall be excluded in any such determination.  
5.2    Distributions upon Death. 
(a)    Acceleration of Payment.  Upon the death of a Participant, the Beneficiary or Beneficiaries of the deceased Participant shall receive the remaining unpaid portion of the Participant’s Account as a lump sum as soon as practicable following the Participant’s death, but no later than the last day of the first Plan Year following the Plan Year in which the Participant’s death occurred.   
(b)    Beneficiaries.  The Administrator shall provide to each new Participant a form on which he or she may designate (i) one or more Beneficiaries who shall receive all or a portion of the Participant’s Account upon the Participant's death, including any Beneficiary who shall receive any such amount only in the event of the death of another Beneficiary; and (ii) the percentages to be paid to each such Beneficiary (if there is more than one).  A Participant may 

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change his or her or her Beneficiary designation from time to time by filing a new form with the Administrator.  No such Beneficiary designation shall be effective unless and until the Participant has properly filed the completed form with the Administrator in accordance with procedures established by the Administrator.  A Beneficiary designation form that designates the spouse of a Participant as his or her Beneficiary (whether or not any other Beneficiary is also designated) shall be void with respect to the designation of the spouse upon the divorce of the Participant and the spouse with the result that the Participant's former spouse shall not be a Beneficiary unless the Participant files a new form with the Administrator and designates his or her former spouse as a Beneficiary.  If a deceased Participant is not survived by a designated Beneficiary or if no Beneficiary was effectively designated, the Participant's Beneficiary shall be deemed to be the Participant's spouse and, if there is no spouse, the Participant's estate.  If a designated Beneficiary is living at the death of the Participant but dies before receiving any or all of the portion of the Account to which the Beneficiary was entitled, such remaining portion shall be paid in a lump sum to the estate of the deceased Beneficiary as soon as practicable following the Beneficiary’s death, but no later than the last day of the first Plan Year following the Plan Year in which the Beneficiary’s death occurred.
5.3    In-Service Distribution for Unforeseeable Emergency.  The Administrator may, but shall not be required to, establish procedures under which an in-service distribution may be made to a Participant of all or a part of his Account in the event that the Participant has an unforeseeable emergency, as described in Subsection (a) below, and the distribution is reasonably needed to satisfy the unforeseeable emergency, as described in Subsection (b) below, and the distribution complies with Treasury Regulation section 1.409A-3(a)(6):
(a)    Unforeseeable Emergency.  With respect to a Participant, an unforeseeable emergency is severe financial hardship to the Participant resulting from a sudden and unexpected illness or accident of the Participant or of a "dependent" of the Participant, as such term shall be defined in Code Section 152(a); loss of the Participant's property due to casualty; or another similar extraordinary and unforeseeable set of circumstances arising as a result of events beyond the control of the Participant.
(b)    Distribution Reasonably Necessary to Satisfy Emergency.  A distribution shall be deemed to be reasonably necessary to satisfy a Participant's unforeseeable emergency if the following requirements are met and the distribution otherwise complies with Treasury Regulation section 1.409A-3(i)(3)(ii):
(i)    The distribution does not exceed the amount of the Participant's financial need plus amounts necessary to pay any income taxes or penalties reasonably anticipated to result from the distribution;
(ii)    The Participant's financial need cannot be relieved:
(A)    Through reimbursement or compensation by insurance or otherwise,
(B)    By liquidation of the Participant's assets, to the extent that such liquidation would not itself cause severe financial hardship, or
(C)    By the termination of the Participant’s election (if any) with respect to a Bonus Deferral Amount or Salary Deferral Amounts.

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5.4    Subsequent Changes in Time of Payment and Form of Distribution.  A Participant may elect to delay a payment of a Deferral Account or to change the form of distribution of a Deferral Account provided that the following conditions are met:
(a)    Any election under this Section 5.4 shall not take effect until a date that is at least twelve (12) months after the date on which the election is made.
(b)    The payment with respect to which an election under this Section 5.4 is made shall be deferred for a period of not less than five (5) years from the date such payment would otherwise have been paid.
(c)    Any election under this Section 5.4 shall be made on a date that is not less than twelve (12) months prior to the date the payment is originally scheduled to be made.
A Participant’s election under this Section 5.4 shall only apply to the Deferral Account(s) that are specifically identified by the Participant in the election.  The election will apply to all payment events elected for the applicable Deferral Account(s), unless the election specifies otherwise.
5.5    Permitted Payment Delays.  To the extent compliant with Code section 409A, payment of a Participant’s Account may be delayed to a date after the designated payment date under either of the following two circumstances:
(a)    Where the Plan Sponsor reasonably anticipates that an Employer’s deduction with respect to the payment of an amount would otherwise be limited or eliminated by application of Code section 162(m); provided, however, that such payment shall be made to the Participant  (i) during the Participant's first taxable year in which the Plan Sponsor reasonably anticipates that the deduction of such payment will not be limited or eliminated by the application of Code section 162(m), or, if later, (ii) during the period beginning with the Participant’s Employment Termination Date and ending on the later of (A) the last day of the taxable year of the Plan Sponsor in which the Participant's Employment Termination Date occurs or (B) the fifteenth (15th) day of the third month following the Participant's Employment Termination Date.
(b)    Where the Plan Sponsor reasonably anticipates that the making of the payment of the amount will violate Federal Securities laws or other applicable law; provided, however, that such payment will be made to the Participant at the earliest date at which the Plan Sponsor reasonably anticipates that the making of such payment will not cause such violation.
5.6    Permitted Payment Accelerations.  The Administrator may, in its sole discretion, accelerate the payment timing of all or a portion of a Participant’s Account to the extent permissible under Treasury Regulation section 1.409A-3(j)(4).
    

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ARTICLE VI     
 
CLAIMS AND ADMINISTRATION
6.1    Applications.  A Participant or the Beneficiary of a deceased Participant who is or may be entitled to benefits under this Plan shall apply for such benefits in writing if and as required by the Administrator, in his or her sole discretion.
6.2    Information and Proof.  A Participant or the Beneficiary of a deceased Participant shall furnish all information and proof required by the Administrator for the determination of any issue arising under the Plan including, but not limited to, proof of marriage to a Participant or a certified copy of the death certificate of a Participant.  The failure by a Participant or the Beneficiary of a deceased Participant to furnish such information or proof promptly and in good faith, or the furnishing of false or fraudulent information or proof by the Participant or Beneficiary, shall be sufficient reason for the denial, suspension, or discontinuance of benefits thereto and the recovery of any benefits paid in reliance thereon.
6.3    Notice of Address Change.  Each Participant and any Beneficiary of a deceased Participant who is or may be entitled to benefits under this Plan shall notify the Administrator in writing of any change of his or her address.
6.4    Claims Procedure.  
(a)    Claim Denial.  The Administrator shall provide adequate notice in writing to any Participant or Beneficiary of a deceased Participant whose application for benefits has been wholly or partially denied.  Such notice shall include the reason(s) for denial, including references, when appropriate, to specific Plan provisions; a description of any additional information necessary for the claimant to perfect the claim, if applicable and an explanation of why such information is necessary; and a description of the claimant's right to appeal under Subsection (b) below.
The Administrator shall furnish such notice of a claim denial within ninety (90) days after the date that the Administrator received the claim.  If special circumstances require an extension of time for deciding a claim, the Administrator shall notify the claimant in writing thereof within such ninety (90)-day period and shall specify the date a decision on the claim shall be made, which shall not be more than one hundred eighty (180) days after the date that the Administrator received the claim.  Then, the Administrator shall furnish any denial notice on the claim by the later date so specified.
(b)    Appeal Procedure.  A claimant or his or her duly authorized representative shall have the right to file a written request for review of a claim denial within sixty (60) days after receipt of the denial, to review pertinent documents, records and other information relevant to his or her claim without charge (including items used in the determination, even if not relied upon in making the final determination and items demonstrating consistent application and compliance with this Plan's administrative processes and safeguards), and to submit comments, documents, records, and other information relating to the claim, even if the information was not submitted or considered in the initial determination.
(c)    Decision Upon Appeal.  In considering an appeal made in accordance with Subsection (b) above, the Administrator shall review and consider any written comments, documents, records, and other information relating to the claim, even if the information was not 

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submitted or considered in the initial determination by the claimant or his or her duly authorized representative.  The claimant or his or her representative shall not be entitled to appear in person before any representative of the Administrator.  
The Administrator shall issue a written decision on an appeal within sixty (60) days after the date the Administrator receives the appeal together with any written comments relating thereto.  If special circumstances require an extension of time for a decision on an appeal, the Administrator shall notify the claimant in writing thereof within such sixty (60)-day period.  Then, the Administrator shall furnish a written decision on the appeal as soon as possible but no later than one hundred twenty (120) days after the date that the Administrator received the appeal.  The decision on the appeal shall be written in a manner calculated to be understood by the claimant and shall include specific references to the pertinent Plan provisions on which the decision is based.  If the claimant loses on appeal, the decision shall include the following information provided in a manner calculated to be understood by the claimant:  (1) the specific reason(s) for the adverse determination; (2) reference to the specific Plan provisions on which the determination is based; (3) a statement of the claimant's right to receive at no cost information and copies of documents relevant to the claim, even if such information was not relied upon in making determinations; and (4) a statement of the claimant's rights to sue under ERISA.
6.5    Status, Responsibilities, Authority and Immunity of Administrator.  
(a)    Appointment and Status of Administrator.  The Plan Sponsor shall appoint the Administrator.  The Plan Sponsor may remove the Administrator and appoint another Administrator or, if the Administrator is a committee, the Plan Sponsor may remove any or all members of the committee and appoint new members.  The Administrator shall be the "administrator" of the Plan, as such term shall be defined in Section 3(16)(A) of ERISA.  
(b)    Responsibilities and Discretionary Authority.  The Administrator shall have absolute and exclusive discretion to manage the Plan and to determine all issues and questions arising in the administration, interpretation, and application of the Plan, including, but not limited to, issues and questions relating to a Participant's eligibility for Plan benefits and to the nature, amount, conditions, and duration of any Plan benefits.  Furthermore, the Administrator shall have absolute and exclusive discretion to formulate and to adopt any and all standards for use in calculations required in connection with the Plan and rules, regulations, and procedures that he or she deems necessary or desirable to effectuate the terms of the Plan; provided, however, that the Administrator shall not adopt a rule, regulation, or procedure that shall conflict with this Plan.  Subject to the terms of any applicable contract or agreement, any interpretation or application of this Plan by the Administrator, or any rules, regulations, and procedures duly adopted by the Administrator, shall be final and binding upon Employees, Participants, Beneficiaries, and any and all other persons dealing with the Plan. 
(c)    Delegation of Authority and Reliance on Agents.  The Administrator may, in his or her discretion, allocate ministerial duties and responsibilities for the operation and administration of the Plan to one or more persons, who may or may not be Employees, and employ or retain one or more persons, including accountants and attorneys, to render advice with regard to any responsibility of the Administrator.
(d)    Reliance on Documents.  The Administrator shall incur no liability in relying or in acting upon any instrument, application, notice, request, letter, or other paper or document believed by the Administrator to be genuine, to contain a true statement of facts, and to have been executed or sent by the proper person.  

16

(e)    Immunity and Indemnification of Administrator.  The Administrator shall not be liable for any of his or her acts or omissions, or the acts or omissions of any employee or agent authorized or retained pursuant to Subsection (c) above by the Administrator, except any act of the Administrator or any such person as constitutes gross negligence or willful misconduct.  The Plan Sponsor shall indemnify the Administrator, to the fullest extent permitted by law, if the Administrator is ever made a party or is threatened to be made a party to any threatened, pending, or completed action, suit, claim, or proceeding, whether civil, criminal, administrative, or investigative (including, but not limited to, any action by or in the right of the Plan Sponsor), by reason of the fact that the Administrator is or was, or relating to the Administrator's actions as, the Administrator, against any expenses (including attorneys' fees), judgments, fines, and amounts paid in settlement that the Administrator incurs as a result of, or in connection with, such action, suit, claim, or proceeding, provided that the Administrator had no reasonable cause to believe that his or her conduct was unlawful.  
6.6    Enrollment, Deferral Election and Other Procedures.  The Administrator shall adopt and may amend procedures to be followed by Eligible Employees and Participants in electing to participate in this Plan, in electing to have Bonus Deferral Amounts and Salary Deferral Amounts made on their behalf, in selecting a form of distribution of any amount, and in taking any other actions required thereby under this Plan.  
6.7    Correction of Prior Incorrect Allocations.  Notwithstanding any other provisions of this Plan, in the event that an adjustment to a Deferral Account shall be required to correct an incorrect allocation to such account, the Administrator shall take such actions as he or she deems, in his or her sole discretion, to be necessary or desirable to correct such prior incorrect allocation.
6.8    Facility of Payment.  If the Administrator shall determine that a Participant or the Beneficiary of a deceased Participant to whom a benefit is payable is unable to care for his or her affairs because of illness, accident or other incapacity, the Administrator may, in his or her discretion, direct that any payment otherwise due to the Participant or Beneficiary be paid to the legal guardian or other representative of the Participant or Beneficiary.  Furthermore, the Administrator may, in his or her discretion, direct that any payment otherwise due to a minor Participant or Beneficiary of a deceased Participant be paid to the guardian of the minor or the person having custody of the minor.  Any payment made in accordance with this Section 6.8 to a person other than a Participant or the Beneficiary of a deceased Participant shall, to the extent thereof, be a complete discharge of the Plan's obligation to the Participant or Beneficiary. 
6.9    Unclaimed Benefits. If the Administrator cannot locate a Participant or the Beneficiary of a deceased Participant to whom payment of benefits under this Plan shall be required, following a diligent effort by the Administrator to locate the Participant or Beneficiary, such benefit shall be forfeited.

17

ARTICLE VII     
 
STATUS OF PLAN 
7.1    Unfunded Status of Plan.  The Plan constitutes a mere promise by the Plan Sponsor to pay benefits in accordance with the terms of the Plan, and, to the extent that any person acquires a right to receive benefits from the Plan Sponsor under this Plan, such right shall be no greater than any right of any unsecured general creditor of the Plan Sponsor.  Nothing contained in this Plan and no action taken pursuant to the provisions of this Plan shall create or be construed so as to create a trust of any kind, or a fiduciary relationship between the Plan Sponsor and any Participant, Beneficiary, or other person. 
7.2    Shares to be Issued.  The Common Stock may come from treasury shares, authorized but unissued shares, or previously issued shares that the Plan Sponsor reacquires, including shares it purchases on the open market.  

Subject to any required action by the Plan Sponsor (which it shall promptly take) or its stockholders, and subject to the provisions of applicable corporate law, if the outstanding shares of Common Stock increase or decrease or change into or are exchanged for a different number or kind of security by reason of any recapitalization, reclassification, stock split, reverse stock split, combination of shares, exchange of shares, stock dividend, or other distribution payable in capital stock, or some other increase or decrease in the Common Stock occurs without the Plan Sponsor’s receiving consideration, the Administrator shall make an equitable adjustment as the Administrator in its sole discretion deems to be appropriate to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan to the number and kind of shares of Common Stock credited to each Participant’s Account under the Plan, and the Common Stock Price.
 
In the event of a declaration of an extraordinary dividend on the Common Stock payable in a form other than Common Stock in an amount that has a material effect on the price of the Common Stock, the Administrator shall make an equitable adjustment as the Administrator in its sole discretion deems to be appropriate to the items set forth in the preceding paragraph in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan.

Any issue by the Plan Sponsor of any class of preferred stock, or securities convertible into shares of common or preferred stock of any class, will not affect, and no adjustment by reason thereof will be made with respect to, the number of shares of Common Stock credited to each Participant’s Account under the Plan, or the Common Stock Price, except as this Section 7.2 specifically provides. The crediting of a share of Common Stock under the Plan will not affect in any way the right or power of the Plan Sponsor to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, or to merge or to consolidate, or to dissolve, liquidate, sell, or transfer all or any part of its business or assets.

18

ARTICLE VIII     
 
PLAN AMENDMENT OR TERMINATION
8.1    Right to Amend.  The Plan Sponsor reserves the right to amend the Plan, by action duly taken by its Board of Directors, at any time and from time to time to any extent that the Plan Sponsor may deem advisable, and any such amendment shall take the form of an instrument in writing duly executed by one or more individuals duly authorized by the Board of Directors.  Without limiting the generality of the foregoing, the Plan Sponsor specifically reserves the right to amend the Plan retroactively as may be deemed necessary.  Notwithstanding the foregoing sentences, the Plan Sponsor shall not amend the Plan so as to reduce the balance in the Account of any Participant, or to reduce any Participant’s vested interest in his or her Account, in either case as of the date that such an amendment would otherwise be effective; unless any such amendment shall be reasonably required to comply with applicable law or to preserve the tax treatment of benefits provided under the Plan or is consented to by the affected Participant.
8.2    Right to Terminate.  The Plan Sponsor reserves the right to terminate the Plan, by action duly taken by its Board of Directors, at any time as the Plan Sponsor may deem advisable.  Upon termination of the Plan, the Plan Sponsor shall pay or provide for the payment of all liabilities with respect to Participants and Beneficiaries of deceased Participants by distributing amounts to and on behalf of such Participants and Beneficiaries. Notwithstanding the foregoing, the termination of the Plan shall not accelerate the time and form of payment of any amount except when the Plan Sponsor elects to terminate the Plan in accordance with one of the following:
(a)The Plan Sponsor elects to terminate the Plan within twelve (12) months of a corporate dissolution taxed under Code section 331 or with the approval of a bankruptcy court pursuant to 11 U.S.C. §503(b)(1)(A), provided that the amounts are included in Participants’ gross incomes in the latest of (a) the calendar year in which the Plan termination occurs, (b) the calendar year in which the amount is no longer subject to a substantial risk of forfeiture, or (c) the first calendar year in which the payment of the amount is administratively practical. 
(b)The Plan Sponsor elects to terminate the Plan under the following conditions: (i) the Employer terminates all arrangements sponsored by the Employer that would be aggregated with any terminated arrangements under the regulations promulgated under Code section 409A if the same Participant had deferrals of compensation under all such terminated arrangements; (ii) no payments (other than payments that would be payable under the terms of the arrangements if the termination had not occurred) are made within twelve (12) months of the termination of the arrangements; (iii) all payments are made within twenty-four (24) months of the termination of the arrangements; and (iv) no Employer adopts a new arrangement that would be aggregated with any terminated arrangement under the regulations promulgated under Code section 409A if the same Participant participated in both arrangements, at any time within five (5) years following the date of termination of the Plan.
(c)The Plan Sponsor elects to terminate the Plan in accordance with any such other events and conditions that the Commissioner of the Internal Revenue Service may prescribe in generally applicable guidance published in the Internal Revenue Bulletin.

19

ARTICLE IX     
 
MISCELLANEOUS
9.1    No Guarantee of Employment.  Nothing contained in this Plan shall be construed as a contract of employment between any Employee and the Plan Sponsor or any Employer, as a right of any Employee to be continued in any employment position with, or the employment of, the Plan Sponsor or any Employer, or as a limitation of the right of the Plan Sponsor or any Employer to discharge any Employee.
9.2    Nonalienation of Benefits.  Any benefits or rights to benefits payable under this Plan shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, charge, garnishment, execution, or levy of any kind, either voluntary or involuntary, including any such liability that is for alimony or other payments for the support of a Beneficiary or former Beneficiary, or for the support of any other relative, before payment thereof is received by the Participant, Beneficiary of a deceased Participant, or other person entitled to the benefit under the Plan; and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, charge, or otherwise dispose of any right to benefits payable under this Plan shall be void.  
9.3    Taxes.  Neither the Plan Sponsor nor any Employer represents or guarantees that any particular federal, state, or local income, payroll, personal property or other tax consequence will result from participation in this Plan or payment of benefits under this Plan.  Notwithstanding anything in this Plan to the contrary, the Administrator may, in his or her sole discretion, deduct and withhold applicable taxes from any payment of benefits under this Plan.  For the avoidance of doubt, each Participant and Beneficiary shall be responsible for any and all taxes, interest, and penalties.  The Administrator also may permit such obligations to be satisfied by the transfer to the Plan Sponsor or any Employer of cash, shares of Common Stock, or other property.
9.4    Not Compensation Under Other Benefit Plans.  No amounts in a Participant's Account shall be deemed to be salary or compensation for purposes of the Danaher Corporation & Subsidiaries Savings Plan or any other employee benefit plan of the Plan Sponsor or any Employer except as and to the extent otherwise specifically provided in any such plan.
9.5    Merger or Consolidation of Plan Sponsor.  If the Plan Sponsor is merged or consolidated with another organization, or another organization acquires all or substantially all of the Plan Sponsor's assets, such organization may become the "Plan Sponsor" hereunder by action of its board of directors and by action of the board of directors of the Plan Sponsor if still existent.  Such change in plan sponsors shall not be deemed to be a termination of this Plan.
9.6    Savings Clause.  If any term, covenant, or condition of this Plan, or the application thereof to any person or circumstance, shall to any extent be held to be invalid or unenforceable, the remainder of this Plan, or the application of any such term, covenant, or condition to persons or circumstances other than those as to which it has been held to be invalid or unenforceable, shall not be affected thereby, and, except to the extent of any such invalidity or unenforceability, this Plan and each term, covenant, and condition hereof shall be valid and shall be enforced to the fullest extent permitted by law.  
9.7    Governing Law.  This Plan shall be construed, regulated and administered under the laws of the State of Delaware to the extent not pre-empted by ERISA or any other federal law.

20

9.8    Construction.  As used in this Plan, the masculine and feminine gender shall be deemed to include the neuter gender, as appropriate, and the singular or plural number shall be deemed to include the other, as appropriate, unless the context clearly indicates to the contrary.
9.9    Headings No Part of Agreement.  Headings of articles, sections and subsections of this Plan are inserted for convenience of reference; they constitute no part of the Plan and are not to be considered in the construction of the Plan.
 

21Exhibit 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
AMPHASTAR PHARMACEUTICALS, INC., a Delaware corporation, (“Amphastar”), with a place of business at 11570 6th
Street, Rancho Cucamonga, California 91730, 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           “Amphastar
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           “Amphastar
Development Costs” shall mean the lesser of (a) all of Amphastar’s out of pocket costs directly incurred (and actually
paid to Third Parties) for the Amphastar Development Activities and (b) one million dollars ($1,000,000).

 

1.4           “Amphastar
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 Amphastar (solely or jointly) either unrelated to Amphastar’s
performance of the Amphastar 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 corticotropin.

 

    	 	1	 

     

    

 

1.6           “Certificate
of Analysis” shall mean the certificate to be issued by Amphastar 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 Amphastar 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 Amphastar 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 Amphastar Development Activities.

 

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.

 

    	 	2	 

     

    

 

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 corticotropin as an active pharmaceutical
ingredient with a concentration of 80 USP units/mL, USP, to be developed by Amphastar 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.

 

1.19         
“Purchase Order” shall mean a written purchase order provided by Eton or its Affiliate to Amphastar 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 Amphastar 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, Amphastar or their respective Affiliates.

 

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

 

    	 	3	 

     

    

 

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 Amphastar
Development Activities, whether directly or indirectly or solely or jointly with others.

 

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
Amphastar. Amphastar represents and warrants to Eton as follows:

 

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

 

2.2.2           The
Amphastar 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 Amphastar 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.

 

    	 	4	 

     

    

 

2.2.4           All
Product supplied by Amphastar 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 Amphastar with a copy
of the Specifications, the anticipated formulation for Product, and the initial manufacturing process for Product.

 

3.2          Amphastar
Development.

 

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

 

3.2.2           Amphastar
shall perform the Amphastar Development Activities at its sole expense, provided, however, that Amphastar’s out of pocket
costs directly incurred (and actually paid to Third Parties) for the Amphastar 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 Amphastar.

 

3.2.3           Amphastar
shall keep Eton reasonably informed of its progress in performing the Amphastar Development Activities. Without limiting the generality
of the foregoing, following the end of each calendar quarter, Amphastar 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 Amphastar Development Activities sufficient to enable Eton to understand
and monitor Amphastar’s 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.

 

    	 	5	 

     

    

 

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. Amphastar, 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.

 

3.4          Work
Product.

 

3.4.1           Amphastar
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 Amphastar 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
Amphastar incorporates or permits to be incorporated any Amphastar Technology into the Work Product, or the use or exploitation
of any Amphastar Technology is reasonably necessary for the use or exploitation of the Work Product or the research, development,
commercialization or other exploitation of Product, then Amphastar 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 Amphastar Technology for such purpose.

 

3.4.3           Amphastar
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 Amphastar’s
signature to any document required to file, prosecute, register or memorialize the assignment of any rights under any Work Product,
Amphastar hereby irrevocably designates and appoints Eton as Amphastar’s agent and attorney-in-fact to act for and on Amphastar’s
behalf and instead of Amphastar 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 Amphastar. 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.

 

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.

 

    	 	6	 

     

    

 

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           Amphastar
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           Amphastar
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, Amphastar 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, Amphastar 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 corticotropin; or (c) enter into any agreement to do
any of the foregoing.

 

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, Amphastar is unable to demonstrate to
Eton’s satisfaction that it will be able to timely supply Eton’s requirements for Product hereunder or upon Amphastar’s
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 Amphastar 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.

 

    	 	7	 

     

    

 

4.2.2           Amphastar
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 Amphastar 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 Amphastar 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           Amphastar
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 Amphastar 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 Amphastar.

 

4.3.3           Unless
otherwise agreed to by the parties, the minimum shelf life of Product provided to Eton by Amphastar 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 Amphastar with quantities of API necessary to fulfill orders for Product and otherwise
fulfill its obligations hereunder at no cost to Amphastar. Title and risk of loss shall transfer to Amphastar upon delivery. Amphastar
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. Amphastar 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 Amphastar’s 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) Amphastar 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 Amphastar, and (c) Amphastar shall pay Eton an amount
equal to Eton’s fully-burdened costs to procure and supply such replacement API. Eton shall invoice Amphastar for the replacement
API, and Amphastar 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 Amphastar
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.

 

    	 	8	 

     

    

 

4.6          Quality
Control.

 

4.6.1           Amphastar
(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, Amphastar shall test and release, or cause to be tested and released by Third Party testing
facilities specified in the Quality Agreement and audited by Amphastar, Product manufactured and supplied hereunder.

 

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

 

4.6.4           Amphastar
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           Amphastar
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”). Amphastar shall provide Eton with access
to and portions of the Retention Samples for testing and other purposes upon request.

 

4.6.6           Amphastar
shall maintain all records relating to the manufacture, stability and quality control of all Product and all records reasonably
necessary to support and verify Amphastar’s compliance with this Agreement and the Quality Agreement. Amphastar 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.

 

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. Amphastar 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 Amphastar a non-exclusive, non-transferable, revocable and terminable
license to affix Eton’s Trademarks to Products and Product packaging as contemplated herein.

 

    	 	9	 

     

    

 

4.7.3           Except
as set forth herein, Amphastar 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) Amphastar’s U.S. warehousing facility. Upon learning of any potential delivery delays, Amphastar shall notify
Eton as to the cause of such delays and the actions taken by Amphastar to resolve such delays. If Amphastar fails to make deliveries
at the specified time and such failure is not caused by Eton, Amphastar 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.

 

4.9         Transfer
Price. Subject to the terms and conditions of this Agreement, for any Product purchased from Amphastar hereunder, Eton shall
pay to Amphastar the applicable Transfer Price. Amphastar 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 Amphastar of its rejection
hereunder, within forty-five (45) days after Eton’s receipt of such shipment, specifying the grounds for such rejection.
Amphastar 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. Amphastar shall, within five (5) business days following notification to Amphastar,
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.

 

    	 	10	 

     

    

 

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.
Amphastar 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, Amphastar shall bear all Recall Expenses.

 

4.13        Access
and Inspections.

 

4.13.1         Amphastar
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. Amphastar promptly shall
notify Eton of all results of an inspection that affect the manufacturing processes of Product or that may affect Amphastar’s
ability to supply Products to Eton hereunder.

 

4.13.2         During
the Term and for a period of two (2) years thereafter, Amphastar 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.

 

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 Amphastar
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 Amphastar’s records or the records of the applicable facility.

 

    	 	11	 

     

    

 

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 Amphastar (“Variance Notice”),
and upon receipt of any such notice, Amphastar 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 Amphastar of any liability for the Product later found to be defective
or for Amphastar’s failure to meet its obligations under this Agreement.

 

5.            Financial
Terms.

 

5.1          Remittance
to Amphastar.

 

5.1.1           Subject
to the terms and conditions of this Agreement, Eton shall pay to Amphastar 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.

 

5.2          Reports
and Payments. Within forty-five (45) days after the end of each calendar quarter, Eton shall deliver to Amphastar 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.

 

    	 	12	 

     

    

 

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 Amphastar 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 Amphastar
by Eton or its Affiliates. Eton promptly shall deliver to Amphastar 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).

 

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 Amphastar. Amphastar 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 Amphastar, its agents or Affiliates; (b) any breach of any representation, warranty or covenant of this
Agreement by Amphastar; (c) Amphastar 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 Amphastar or its Affiliates
of any know-how of a Third Party by use or exploitation of the Amphastar 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 Amphastar Indemnitees.

 

    	 	13	 

     

    

 

6.2          Indemnification
by Eton. Eton shall indemnify, defend and hold harmless Amphastar, its Affiliates, and its and their respective officers, directors,
shareholders, employees, agents and representatives (collectively “Amphastar 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
Amphastar 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.

 

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.

 

    	 	14	 

     

    

 

6.5.1           Amphastar
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.

 

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.

 

    	 	15	 

     

    

 

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.

 

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”).

 

    	 	16	 

     

    

 

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 Amphastar for Amphastar’s 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 Amphastar if any of Amphastar’s 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 Amphastar if Amphastar fails to complete the Amphastar
Development Activities and otherwise fulfill its obligations under Section 3.2.1 within two (2) years after the Effective Date.

 

8.2.4           Eton
shall have the right to terminate this Agreement upon thirty (30) days prior written notice to Amphastar 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 Amphastar, 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.

 

    	 	17	 

     

    

 

8.3.2           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 Amphastar the positive remainder, if any, of the Amphastar Development Costs minus the aggregate
amount of Product Profits paid by Eton to Amphastar.

 

9.            Miscellaneous.

 

9.1          Relationship
of Parties. The relationship between Amphastar 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.

 

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.

 

    	 	18	 

     

    

 

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 Amphastar:	Amphastar Pharmaceuticals, Inc.
	 	11570 6th Street
	 	Rancho Cucamonga, California 91730
	 	Attention:  General Counsel
	 	 
	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 Amphastar.

 

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.

 

    	 	19	 

     

    

 

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]

 

    	 	20	 

     

    

 

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

 

 

	 	AMPHASTAR PHARMACEUTICALS, INC.
	 	 
	 	By: 	/s/ Jason Shandell
	 	Name:	Jason Shandell
	 	Title:	President
	 	 	 
	 	ETON PHARMACEUTICALS, INC.
	 	 	 
	 	By:	
        /s/ Sean Brynjelsen

	 	Name:	Sean Brynjelsen
	 	Title:	CEO

 

    	 	21

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