Basic Sale and Purchase Agreement, dated as of August 18, 2021, by and between the Company and Wakamoto Pharmaceutical Co., Ltd

Exhibit 10.3

Portions of this exhibit indicated by bracketed asterisks have been omitted because they are not material and would likely cause competitive harm to Harrow Health, Inc. and Wakamoto Pharmaceutical Co., LTD. if publicly disclosed.

BASIC SALE AND PURCHASE AGREEMENT

This BASIC SALE AND PURCHASE AGREEMENT (hereinafter referred to as this “Agreement”) made and entered into this 18^th day of August, 2021 (hereinafter referred to as the “Effective Date”), by and between WAKAMOTO PHARMACEUTICAL CO., LTD., a corporation duly incorporated and existing under the laws of Japan, having its principal place of business at 2-2, Nihonbashi Honcho 2-chome, Chuo-ku, Tokyo, 103-8330 Japan (hereinafter referred to as “Wakamoto”) and Harrow Health, Inc., a corporation organized and existing under the laws of State of Delaware, having its principal place of business at 102 Woodmont Blvd., Suite 610, Nashville, TN 37205 USA (hereinafter referred to as “Harrow”),

WITNESSETH:

WHEREAS, Wakamoto is a developer, manufacturer, and supplier of products relating to pharmaceuticals and Harrow is a distributor of finished pharmaceutical products;

WHEREAS, Wakamoto and Harrow have been respectively interested in sale by Wakamoto and purchase by Harrow of the certain products and have explored a business opportunity in the United States of America and Canada including their territories and possessions (hereinafter referred to as “Territory”), by using their respective capabilities;

WHEREAS, Wakamoto and Harrow are concurrently executing a License Agreement as of the Effective Date regarding the Development and Commercialization of the Product, as those terms are defined in the License Agreement (the “License Agreement”); and

WHEREAS, Wakamoto and Harrow have basically reached common understanding that it would be beneficial for each party to promote the certain sale and purchase;

NOW, THEREFORE, it is hereby agreed upon by the parties hereto as follows:

In accordance with the provisions of this Agreement, Wakamoto shall continuously sell the products separately agreed upon by the parties following the basic conditions as set forth in Annex 1 attached hereto (hereinafter referred to as the “Product”) to Harrow, and Harrow shall purchase the Product from Wakamoto at the prices as set forth in Annex 1. Both parties agree that Wakamoto shall exclusively supply the Product to Harrow in the Territory and Harrow shall purchase all of its requirements of the Product in the Territory exclusively from Wakamoto. Harrow’s purchases of each order of Product shall be made through purchase orders/individual agreements (hereinafter referred to as the “Individual Agreement”).

The ownership of the Product shall be transferred from Wakamoto to Harrow as soon as the Product has set down inside the ship/airplane, even in the case where the payment of the price amount has not been made yet.

Wakamoto represents and warrants that the quality of the Product to be sold to Harrow hereunder meets the items and the standards with respect to the quality separately agreed upon by the parties hereto, which items and standards shall be in compliance with cGMPs and all Applicable Laws. The separate quality agreement shall be entered into at least nine (9) months prior to delivery of the launch quantities of the Product.

As a result of the quality inspection set forth in Article 7 above, if the rejected Product occurs by incongruence, Harrow shall notify Wakamoto of such effect within [***] after receiving the Product from Wakamoto in the case of apparent defects, or [***] from discovery by Harrow in the case of latent defects, and if that fact is also confirmed by Wakamoto, Wakamoto shall refund or subtract the price amount equivalent to that of the rejected Product from Harrow’s amount of payment. However, if Wakamoto and Harrow have inconsistencies to the incongruence of the Product, Wakamoto and Harrow agree to request the independent third party of recognized repute enough to evaluate the incongruence of the Product to take final confirmation with prior agreement between Wakamoto and Harrow, and the parties shall not have any objections to the result. The fees and expenses of the third party making the determination shall be paid by Harrow if the Product is found to be in compliance with the Specifications and cGMPs; otherwise, such fees and expenses shall be paid by Wakamoto.

After receiving the air waybill for the amount of Product shipped (AWB), Harrow shall pay the total amount for such shipped Product to Wakamoto by telegraphic/wire transfer to Wakamoto’s bank account within [***] from AWB date, provided, however, that the parties may agree upon different payment conditions thereafter with mutual written agreement.

Wakamoto may anytime require the report by Harrow with respect to the performance and the compliance of this Agreement and/or the Individual Agreement and Harrow shall promptly respond to such requirement.

A Party may upon prior written notice to the other Party not more than once per year, except for cause where quality issues are identified, enter the other Party’s facilities for the purpose of the audit of the situation of the performance and the compliance by such other Party of this Agreement and/or the Individual Agreement, and such other Party shall cooperate thereto.

EXCEPT IN THE CASE OF WILLFUL MISCONDUCT, FRAUD OR INDEMNITY OBLIGATIONS, IN NO EVENT SHALL WAKAMOTO AND ITS AFFILIATES, INCLUDING THEIR RESPECTIVE SHAREHOLDERS, DIRECTORS, OFFICERS, EMPLOYEES, AND AGENTS, BE LIABLE FOR ANY SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGE(S), OR SIMILAR THERETO, WHETHER IN CONTRACT, TORT, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE, REGARDLESS OF THE BASIS OF THE CLAIM, ARISING OUT OF OR RELATING TO OR IN CONNECTION WITH THIS AGREEMENT, OR THE BREACH THEREOF, EVEN IF WAKAMOTO OR ITS AFFILIATES, INCLUDING THEIR RESPECTIVE SHAREHOLDERS, DIRECTORS, OFFICERS, EMPLOYEES, AND AGENTS, HAS BEEN ADVISED, KNEW OR SHOULD HAVE KNOWN THE POSSIBILITY OF SUCH DAMAGE(S). EXCEPT IN THE CASE OF WILLFUL MISCONDUCT, FRAUD OR INDEMNITY OBLIGATIONS, IN CASE OF ANY CLAIM BY HARROW AGAINST WAKAMOTO AND/OR ITS AFFILIATE, INCLUDING THEIR RESPECTIVE SHAREHOLDERS, DIRECTORS, OFFICERS, EMPLOYEES, AND AGENTS, ARISING OUT OF OR RELATING TO OR IN CONNECTION WITH THIS AGREEMENT, OR THE BREACH THEREOF, WAKAMOTO’S AND ITS AFFILIATES’ TOTAL LIABILITY SHALL BE LIMITED TO THE PRICE AMOUNT WHICH HAS BEEN ALREADY RECEIVED BY WAKAMOTO FROM HARROW UNDER THIS AGREEMENT DURING A YEAR IN WHICH THE CAUSE OF SUCH DAMAGE(S) OCCURS. THE PARTIES HERETO ACKNOWLEDGE AND AGREE THAT THE LIMITATION OF LIABILITY SET FORTH IN THIS ARTICLE 14 IS A REASONABLE ALLOCATION OF RISK BETWEEN THE PARTIES HERETO AND REFLECTS THE RESPECTIVE REMUNERATION AND POTENTIAL LIABILITIES WHICH THE PARTIES HERETO REASONABLY EXPECT TO RECEIVE AND/OR INCUR. THIS PROVISION SHALL ALSO APPLY FOR THE LICENSE AGREEMENT.

This Agreement shall become effective as of the Effective Date first above written and be in full force until the end of the fifth (5th) year from the date of first approval of the Product in the Territory, with Harrow allowed an option to extend for additional five year renewal terms once [***] units of the Licensed Product are sold by Harrow annually, provided, however, that this Agreement is not terminated earlier in accordance with Article 16. The provisions under this Article 15 and those of Articles 16 and 17 shall also apply for the License Agreement.

If either party meets any one of items (a) through (e) above, such party shall immediately notify the other party of such effect in writing.

All disputes arising out of or in connection with this Agreement shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules. The place of arbitration shall be Delaware if the arbitration is requested by Wakamoto or Tokyo, Japan if the arbitration is requested by Harrow. The language of arbitration shall be the English language. The arbitral award is final and shall be binding on both parties, but if the arbitral award is dissatisfied, each party may apply to the court having jurisdiction over the enforcement of the arbitral award.

A delay in or failure of performance of each party hereto shall not constitute default under this Agreement nor give rise to any claim for damages if any to the extent such delay or failure is caused by force majeure, which means and includes without limitation fire, windstorms, typhoons or cyclones, hurricanes, lightning, landslide, earthquakes, tsunami, volcanic activity, floods, explosion, plagues, epidemics, inevitable accidents, acts of God, lockouts, strikes, sabotages, labor disputes, commotion, riots, insurrection, rebellion, military or usurped power, civil war, terrorism, coup d’état, revolution, hostilities, invasion, acts of foreign enemies, war (whether declared or undeclared), munitions, explosive material, ionizing radiation or contamination by radioactivity, failure or shortage of supply of labor, material, power or utility, transportation difficulty, embargoes, blockades, prohibition of export or import, refusal to issue an export or import license, legal restrictions, actions of the judicial or governmental authority or any de jure or de facto authority or ruler and any other justifiable or unforeseeable cause beyond the reasonable control of the party hereto affected. In the event that either party ceases to perform its obligations under this Agreement due to the occurrence of a Force Majeure event, such party shall: (a) immediately notify the other party in writing of such Force Majeure event and its expected duration; (b) take all reasonable steps to recommence performance of its obligations under this Agreement as soon as possible. In the event that any Force Majeure event delays a party’s performance for more than ninety (90) days following notice by such party pursuant to this Agreement, then the Parties shall discuss in good faith the modification of the Parties’ obligations under this Agreement in order to mitigate the delays caused by such Force Majeure event.

Neither this Agreement nor any of the rights and obligations hereunder may be assigned or transferred by a party hereto to any third party without prior written approval of the other party, which shall not be unreasonably withheld, except that no prior written consent is required in the event of assignment to an Affiliate or a successor in business to which this Agreement pertains. All of the terms, conditions, covenants, and agreements set forth herein shall inure to the benefit of, and be binding upon, any successor and any permitted assignees of the respective parties hereto.

In no event shall any obligation of each party hereto under this Agreement be discharged in whole or in part by waiver or renunciation unless such waiver or renunciation is made in writing and is signed by a duly authorized representative of the other party. No waiver by each party hereto with respect to any breach or default of the other party or with respect to any provision or condition of this Agreement shall be deemed to constitute either a waiver of any subsequent breach or default or continuing waiver with respect to the same or any other provision or condition of this Agreement, unless there is a written document to that express effect signed by a duly authorized representative of either party hereto, as the case may be.

This Agreement and the License Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and shall supersede any previous understandings or agreements relating thereto. This Agreement may be amended only by a written instrument duly signed by the authorized representative of each party hereto.

Should any provision of this Agreement be invalid, illegal or unenforceable in any respect, such provision shall be severed and the parties specifically intend that the remaining provisions shall continue as valid, legal and enforceable, and these provisions shall be integrated and interpreted in such a way as to give them maximum enforceability and validity under the applicable laws, while retaining the original intent of the parties with respect to such provisions.

Each party hereto shall comply with all applicable laws, rules, regulations, orders, licenses, consents, and decrees of any governmental, local, municipal, or any other authority, agency or body and all other requirements having force and applicable at any time with affect in any manner to this Agreement or each party’s performance thereunder. In case of failure, the failing party shall bear any additional cost resulting from such non-compliance, including costs for any remedial work. The provisions of this Article 27 shall also apply for the License Agreement.

The parties hereto acknowledge and agree that this Agreement, but not the License Agreement, shall not be construed as granting or conferring any rights by license, estoppel or otherwise, expressly, impliedly, under any patent, utility model right, design patent, trademark, copyright, trade secret, or other proprietary rights of each party, or for any invention, discovery or improvement made, conceived or acquired prior to or after the date of this Agreement by each party other than those rights expressly granted or conferred under this Agreement. All licenses granted by Wakamoto to Harrow shall be governed by the License Agreement.

The parties hereto acknowledge and agree that this Agreement shall not be construed nor interpreted as creating any franchise, agency, partnership, joint venture, consortium or employment relationship, or similar thereto, between the parties hereto. The relationship between the parties hereto under this Agreement shall be solely that of independent contractors. Neither party shall have nor hold itself out as having any right, power or authority to assume, create or incur any cost, expenses, liability or obligation on behalf of the other party.

The parties hereto acknowledge and agree that this Agreement shall not be construed or interpreted as binding each party hereto to enter into certain contractual, business, or any other relationship than the same expressly provided herein and that each party hereto shall have full option to or not to enter into such other relationship with the other party at such party’s sole discretion.

The heading to the provisions of Articles of this Agreement have been inserted only to facilitate reference and shall not be taken as being of any significance whatsoever in the construction and interpretation of this Agreement.

SIGNATURE PAGE FOLLOWS

IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be signed by their duly authorized representatives in duplicate, each copy to be considered an original, as of the Effective Date first above written and each party respectively retains one (1) original copy hereof.

Annex 1

Basic Conditions for the Product to be sold by Wakamoto and to be purchased by Harrow