Exhibit 10.1

 

EXECUTION COPY

 

LICENSE AGREEMENT

 

BY AND AMONG

 

NEOS THERAPEUTICS, INC.

 

AND

 

SHIRE LLC

 

DATED AS OF MARCH 6, 2017

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[
. . . ]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.

 

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LICENSE AGREEMENT

 

THIS LICENSE AGREEMENT (this “Agreement”) dated this the 6th day of March, 2017
(the “Effective Date”) is hereby entered into by and between Shire LLC, a
Kentucky company with offices located at 9200 Brookfield Court, Florence, KY
41402 (“Shire”), and Neos Therapeutics, Inc., a corporation organized and
existing under the laws of Delaware with offices located at 2940 North Highway
360 #100, Grand Prairie, TX 75050 (“Neos”).  Each of Shire and Neos is sometimes
referred to herein, individually, as a “Party” and, collectively, as the
“Parties.”

 

R E C I T A L S:

 

WHEREAS, Shire Development Inc., an Affiliate of Shire, is the owner of New Drug
Application No. 21-303, which was approved by the FDA (as defined below) for the
manufacture and sale of Adderall® XR for the treatment of attention deficit
hyperactivity disorder;

 

WHEREAS, Neos submitted the Neos NDA (as defined below) to the FDA under §
505(b)(2) of the Act (as defined below) with a paragraph IV certification
seeking approval to engage in the commercial Manufacture, use, and sale of the
Neos Product (as defined below);

 

WHEREAS, Neos is seeking to obtain a license to United States Patent Nos. RE
42,096, RE 41,148 and 6,913,768;

 

WHEREAS, Shire and Neos have received no consideration from the other for their
entry into this Agreement other than that which is described in the this
Agreement; and

 

WHEREAS, this Agreement constitutes both Shire’s and Neos’ best independent
judgment as to the most convenient, effective and expeditious way to avoid
litigation in connection with the filing of the Neos NDA and the Neos Product.

 

NOW THEREFORE, in consideration of the foregoing premises, the mutual covenants
and agreements described herein, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereby agree as follows:

 

1.                                      Definitions

 

1.1.                            “Act” shall mean the United States Federal Food,
Drug, and Cosmetic Act, as amended from time to time, and the rules, regulations
and guidelines promulgated thereunder.

 

1.2.                            “Affiliate” shall mean a Person that controls,
is controlled by or is under common control with a Party.  For the purposes of
this definition, the word “control” (including, with correlative meaning, the
terms “controlled by” or “under common control with”) means the actual power,
either directly or indirectly through one or more intermediaries, to direct the
management and policies of such Person, whether by the ownership of at least
fifty percent (50%) of the voting interest of such Person (it being understood
that the direct or indirect

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[
. . . ]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.

 

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ownership of a lesser percentage of such interest shall not necessarily preclude
the existence of control), or by contract or otherwise.

 

1.3.                            “Business Day” shall mean any day other than a
Saturday, Sunday or a day on which banks in New York, New York are authorized or
required by Law to close.

 

1.4.                            “Commercially Reasonable Efforts” shall mean
efforts and diligence in accordance with the subject Party’s reasonable and
sound business, legal, medical and scientific judgment and in accordance with
the efforts and resources such Party would use in other aspects of its business
that have similar commercial value and market potential, taking into account the
competitiveness of the marketplace, the business life-cycle, the proprietary
position of the company and the profitability of the pertinent product.

 

1.5.                            “Compound” shall mean the amphetamine polistirex
active pharmaceutical ingredient in the Neos Product of the Neos NDA as of the
Effective Date.

 

1.6.                            “Confidential Information” shall mean any
scientific, technical, formulation, process, Manufacturing, clinical,
non-clinical, regulatory, Marketing, financial or commercial information or data
relating to the business, projects, employees or products of either Party and
provided by one Party to the other by written, oral, electronic or other means
in connection with this Agreement.  For the avoidance of doubt, this Agreement
and each of its terms is Confidential Information.

 

1.7.                            “Covenant Not to Sue” shall have the meaning
assigned to such term in Section 3.2.

 

1.8.                            “FDA” shall mean the United States Food and Drug
Administration or any successor agency thereof.

 

1.9.                            “Force Majeure” shall mean any circumstances
reasonably beyond a Party’s control, including, without limitation, acts of God,
civil disorders or commotions, acts of aggression, acts of terrorism, fire,
explosions, floods, drought, war, sabotage, embargo, unexpected safety or
efficacy results obtained with the Neos Product, utility failures, supplier
failures, material shortages, labor disturbances, a national health emergency,
or appropriations of property.

 

1.10.                     “GAAP” shall mean generally accepted accounting
principles in effect in the United States from time to time, consistently
applied.

 

1.11.                     “Governmental Authority” shall mean any court,
tribunal, arbitrator, agency, legislative body, commission, official or other
instrumentality of (i) any government of any country, or (ii) a federal, state,
province, county, city or other political subdivision thereof.

 

1.12.                     “Label” shall mean any Package (immediate container)
labeling designed for use with a product, including the package insert for such
product that is approved by the FDA, and “Labeled” or “Labeling” shall have the
correlated meaning.

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[
. . . ]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.

 

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1.13.                     “Law” or “Laws” shall mean all laws, statutes, rules,
codes, regulations, orders, judgments and/or ordinances of any Governmental
Authority.

 

1.14.                     “License” shall have the meaning assigned to such term
in Section 2.1.

 

1.15.                     “Licensed Patents” shall mean United States Reissued
Patent Nos. RE 42,096 and RE 41,148, and United States Patent No. 6,913,768 and
any patent that issues as a result of a reexamination, inter partes review or
reissue thereof.

 

1.16.                     “Losses” means any liabilities, damages, costs or
expenses, including reasonable attorneys’ fees and expert fees, incurred by any
Party that arise from any claim, lawsuit or other action by a Third Party.

 

1.17.                     “Manufacture” shall mean all activities related to the
manufacturing of a pharmaceutical product, or any ingredient thereof, including
but not limited to manufacturing Compound or supplies for development,
manufacturing Neos Product for commercial sale, packaging, in-process and
finished product testing, release of product or any component or ingredient
thereof, quality assurance activities related to manufacturing and release of
product, ongoing stability tests and regulatory activities related to any of the
foregoing, and “Manufactured” or “Manufacturing” shall have the correlated
meaning.

 

1.18.                     “Market” shall mean to distribute, promote, advertise,
import, market and sell, to a Third Party and “Marketing” or “Marketed” shall
have the correlated meaning.

 

1.19.                     “NDA” shall mean a New Drug Application filed with the
FDA pursuant to and under 21 U.S.C. § 355(b) of the Act, together with the FDA’s
implementing rules and regulations.

 

1.20.                     “Neos NDA” shall mean NDA No. 204325, and any
amendment or supplement thereto.

 

1.21.                     “Neos Product” shall mean the extended release liquid
suspension of the Compound developed, made, used, sold, offered for sale,
imported or exported pursuant to the Neos NDA.

 

1.22.                     “Net Sales” shall mean […]

 

(a)                                 […]

 

(b)                                 […]

 

(c)                                  […]

 

(d)                                 […]

 

(e)                                  […]

 

[…]

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[
. . . ]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.

 

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1.23.                     “Party” or “Parties” shall have the meaning assigned
to such term in the recitals.

 

1.24.                     “Package” shall mean all primary containers, including
bottles, cartons, shipping cases or any other like matter used in packaging or
accompanying a product, and “Packaged” or “Packaging” shall have the correlated
meaning.

 

1.25.                     “Person” shall mean any individual, partnership,
association, corporation, limited liability company, trust, or other legal
person or entity.

 

1.26.                     “Regulatory Approval” shall mean final Marketing
approval by the FDA for the sale and Marketing of a pharmaceutical product in
the Territory.

 

1.27.                     “Shire’s NDA” shall mean Shire’s NDA No. 21-303 and
any amendment or supplement thereto.

 

1.28.                     “Term” shall have the meaning assigned to such term in
Section 12.1.

 

1.29.                     “Territory” shall mean the United States of America,
and its territories, districts and possessions, including the Commonwealth of
Puerto Rico.

 

1.30.                     “Third Party” or “Third Parties” shall mean any Person
or entity other than a Party or its Affiliates.

 

1.31.                     “Valid Claim” shall mean an issued and unexpired
patent claim to the extent such claim has not been revoked, held to be invalid
or unenforceable by a court of competent jurisdiction in a final unappealable
decision and which claim has not been disclaimed, denied or admitted to be
invalid or unenforceable through reissue, re-examination, disclaimer, dedication
to the public or otherwise.

 

2.                                      License

 

2.1.                            Subject to the terms, conditions and limitations
hereof, including the conditions set forth in Section 3, Shire hereby grants to
Neos a non-exclusive license under the Licensed Patents to develop, make, use,
offer to sell, sell, Manufacture, have Manufactured, import, export and Market
the Neos Product in the Territory.

 

2.2.                            The licenses granted in Article 2 of this
Agreement are referred to herein as the “License.” Except to the extent
permitted pursuant to Section 13.3, Neos shall not have the right to sublicense,
assign or transfer any of its rights under the License.

 

3.                                      Conditions

 

3.1.                            (a) Subject to Section 3.1(b), in the event that
during the Term Neos challenges the validity or enforceability of any of the
Licensed Patents, or otherwise actively assists, enables or participates with
any Third Party in challenging the validity or enforceability of any of the
Licensed Patents, Shire shall be free to terminate the License, the Covenant Not
to Sue and/or this Agreement pursuant to Section 12.2.

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[
. . . ]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.

 

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(b)                                 Nothing set forth in Section 3.1(a) shall
prohibit Neos from: (i) filing […] a new regulatory application containing a
Paragraph IV certification to any or all of the Licensed Patents, […].

 

3.2.                            Shire covenants that it will not sue, assert any
claim or counterclaim against, otherwise participate in any action or proceeding
against Neos or any of its shareholders, licensees, sublicensees, customers,
suppliers, importers, manufacturers, distributors, insurers, or any heirs,
administrators, executors, predecessors, successors, or assigns of the
foregoing, or cause or authorize any person or entity to do any of the
foregoing, in each case claiming or otherwise asserting that the development,
Manufacture, use, sale, offer for sale, exportation, importation or Marketing of
the Neos Product under the License infringes the Licensed Patents (the “Covenant
Not to Sue”).  Shire will impose the foregoing Covenant Not to Sue on any Third
Party to which Shire may transfer any of Licensed Patents.  The Covenant Not to
Sue shall not apply in the event that Shire validly terminates this Agreement
because Neos has breached this Agreement.

 

3.3.                            In the event Neos files a new NDA […].  This
Section 3.3 shall not apply to any Abbreviated New Drug Application filed by
Neos that references data from Shire’s NDA.

 

3.4.                            […].  For the avoidance of doubt, Neos
specifically reserves the right to conduct the activities set forth in
Section 3.1(b).

 

4.                                      Marketing of Neos Product

 

4.1.                            Neos shall, at its sole cost and expense,
utilize all Commercially Reasonable Efforts in Marketing the Neos Product in the
Territory to maximize sales of the Neos Product.

 

4.2.                            It is the intent of the Parties that Neos will
seek to sell Neos Product for […].  Neos will have sole discretion, however, in
[…].  Neos also agrees that if it prices Neos Product in order to gain or
maintain sales of other products, then for purposes of calculating the payments
due hereunder, the Net Sales of such Neos Product shall be adjusted to […].

 

5.                                      Approval Fee; Shire Net Sales Share

 

5.1.                            Neos will pay Shire a lump-sum, non-refundable
fee of […] […] due and payable no later than thirty (30) days after receiving
Regulatory Approval for the Neos NDA.

 

5.2.                            Neos shall pay a royalty to Shire of […] of Net
Sales of the Neos Product sold in the Territory during the Term.

 

5.3.                            Payments due under this Section 5 shall be made
[…].  All such payments shall include a report detailing the calculation of
gross sales, Net Sales and the royalties payable hereunder.

 

5.4.                            Maintenance of Records.  During the Term, and
for a period of […] thereafter, Neos shall keep at either its normal place of
business, or at an off-site storage facility, detailed, accurate and up to date:

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[
. . . ]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.

 

5

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(a)                                 records and books of account sufficient to
confirm the calculation of the Net Sales and royalties payable hereunder; and

 

(b)                                 information and data contained in any
invoices or reports accompanying any payment to Shire provided to Shire in
connection with this Agreement.

 

5.5.                            Inspection.  On […] notice from Shire, Neos
shall make all such records, books of account, information and data concerning
this Agreement for a period of […] prior to the date of notice available for
inspection during normal business hours by an independent accounting firm
selected by Shire and reasonably acceptable to Neos (the “external auditor”) for
the purpose of general review or audit; provided that Shire may not request such
inspection more than once in any calendar year.  Upon reasonable belief of
discrepancy or dispute, Shire’s external auditors shall be entitled to take
copies or extracts from such records, books of account, information and data
(but only to the extent related to the contractual obligations set out in this
Agreement) during any review or audit, provided the external auditor signs a
confidentiality agreement with Neos providing that such records, books of
account, information and data shall be treated as Confidential Information which
may be disclosed to Shire.  The external auditor shall only disclose to Shire
the results of the external auditors’ audit, which results shall be concurrently
disclosed to Neos.  Any underpayment or overpayment of amounts due hereunder as
reflected by the external auditor’s results shall be promptly paid or refunded
by the applicable Party.

 

5.6.                            Inspection Costs.  Shire shall be solely
responsible for its costs in making any such review and audit, unless Shire
identifies a discrepancy in the calculation of the royalties paid to Shire under
this Agreement in any calendar year from those properly payable for that
calendar year of […], in which event Neos shall be solely responsible for the
reasonable cost of such review and audit and pay Shire any payment due.  All
information disclosed by Neos pursuant to this Section 5 shall be deemed
Confidential Information.

 

6.                                      Confidentiality

 

6.1.                            Confidentiality Obligation.  The Parties, their
Affiliates and their respective employees, directors, officers, consultants,
attorneys and contractors shall keep and maintain as confidential any
Confidential Information supplied by the other Party during the Term.  The
confidentiality and non-disclosure obligations contained in this Agreement shall
not apply to the extent that such Confidential Information is:

 

(a)                                 at the time of disclosure by one Party to
the other, in the public domain or otherwise publicly known;

 

(b)                                 after disclosure by one Party to the other
becomes part of the public domain, other than by breach by a Party of any
obligation of confidentiality;

 

(c)                                  information which the receiving Party can
establish by competent evidence was already in its possession at the time of
receipt or was independently developed by the receiving Party; or

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[
. . . ]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.

 

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(d)                                 received from a Third Party who was lawfully
entitled to disclose such information free of an obligation of confidentiality.

 

6.2.                            Exceptions.  Notwithstanding Section 6.1, in
addition to any disclosure allowed under Section 13.5 the Party receiving
Confidential Information may disclose such Confidential Information to the
extent that such disclosure has been ordered by a court of law or directed by a
Governmental Authority, provided that, the disclosure is limited to the extent
ordered or directed and wherever practicable, the Party that owns the
Confidential Information has been given sufficient written notice in advance to
enable it to seek protection or confidential treatment of such Confidential
Information.  Additionally, Neos may also disclose the existence of this
Agreement to potential business partners who have agreed to maintain the
confidentiality of such a disclosure.

 

6.3.                            Expiration of Confidentiality.  The
confidentiality obligation contained in this Section 6 shall survive the
termination or expiry of this Agreement for a period of […] from termination or
expiration.

 

6.4.                            Disclosure.  If a Party is subpoenaed or
otherwise requested by any Person including, without limitation, any
Governmental Authority to give testimony or provide information which in any way
relates to this Agreement or discloses the terms of this Agreement, such Party
shall give the other Party prompt notice of such request, and unless otherwise
required by Law, shall make no disclosure until such other Party has had a
reasonable opportunity to contest the right of the requesting Person to such
disclosure.  The Parties shall provide each other with all reasonable
cooperation and generally make its employees available to give testimony or to
provide reasonable assistance in connection with any lawsuits, claims,
proceedings and investigations relating to this Agreement.

 

6.5.                            Relief.  The Parties agree that equitable
relief, including injunctive relief and specific performance, is appropriate in
enforcing the confidentiality provisions of this Agreement.  In the event of any
such action to construe this provision, the prevailing Party will be entitled to
recover, in addition to any charges fixed by the court, its costs and expenses
of suit, including reasonable attorney’s fees.  Such remedies shall not be
deemed to be the exclusive remedies for a breach of this provision, but shall be
in addition to all other remedies available at law or equity.

 

7.                                      Representations and Warranties of Both
Parties

 

With respect to Sections 7.1 and 7.2 below, each of Shire and Neos represents,
warrants, and covenants, to the other Party that:

 

7.1.                            Organization and Authority.  Such Party is a
corporation duly organized, validly existing and in good standing under the Laws
of its jurisdiction of incorporation.  Such Party has the requisite corporate
power and authority to enter into this Agreement.  Such Party has the requisite
corporate power and authority to execute and deliver this Agreement and to
perform all of its obligations hereunder.  The execution and delivery of this
Agreement and the performance by such Party of its obligations hereunder have
been authorized by all requisite corporate action on its part.  This Agreement
has been validly

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[
. . . ]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.

 

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executed and delivered by such Party, and, assuming that such documents have
been duly authorized, executed and delivered by the other Party, constitutes a
valid and binding obligation of such Party, enforceable against such Party in
accordance with its terms.

 

7.2.                            Consents and Approvals; No Violations.

 

(a)                                 Except as otherwise set forth in this
Agreement, no material filing with, and no material permit, authorization,
consent, or approval of or from, any Governmental Authority is required to be
obtained by or on behalf of such Party of the transactions contemplated by this
Agreement, except for those filings, permits, authorizations, consents or
approvals, the failure of which to be made or obtained would not materially
impair such Party’s ability to consummate the transactions contemplated hereby
or materially delay the consummation of the transactions contemplated hereby.

 

(b)                                 Neither the execution nor the delivery of
this Agreement by such Party, nor the performance by such Party of its
obligations hereunder, will (i) violate the certificate of incorporation,
by-laws or other organizational document of such Party; (ii) conflict in any
material respect with or result in a material violation or breach of, or
constitute a material default under, any material contract, agreement or
instrument to which such Party is a party; or (iii) violate or conflict in any
material respect with any material Law, rule, regulation, judgment, order or
decree of any court or Governmental Authority applicable to such Party, except
in the case of clause (ii) or (iii) for violations, breaches or defaults which
would not have a material adverse effect on such Party’s ability to consummate
the transactions contemplated hereby.

 

8.                                      Representations and Warranties of Shire

 

Shire represents, warrants and covenants to Neos that:

 

8.1.                            Licensed Patents.  Shire represents that it is
the owner of the Licensed Patents.  Shire represents that it has the right to
grant to Neos the License to the License Patents as provided hereunder.

 

9.                                      Indemnities

 

9.1.                            Indemnity by Shire.  Shire shall defend,
indemnify and hold harmless each of Neos and its Affiliates and its and their
directors, officers, employees and contractors (“Neos Party”) from and against
any and all Losses, (“Shire Liability”) arising from or in connection with:

 

(a)                                 […]

 

(b)                                 the breach by Shire of any of its
representations or warranties contained in this Agreement;

 

except, in each case, to the extent that the Shire Liability is caused by the
negligence, breach of the terms of this Agreement, or willful misconduct of a
Neos Party.

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[
. . . ]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.

 

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9.2.                            Indemnity by Neos.  Neos shall defend, indemnify
and hold harmless each of Shire and its Affiliates and its and their directors,
officers, employees and contractors (“Shire Party”) from and against any and all
Losses (“Neos Liability”) arising from or in connection with:

 

(a)                                 […]

 

(b)                                 […]

 

(c)                                  the breach by Neos of any of its
representations or warranties contained in this Agreement; or

 

(d)                                 any misuse by a Neos Party of Shire’s
company name or logo or other trademark;

 

except, in each case, to the extent that the Neos Liability is caused by the
negligence, breach of the terms of this Agreement, or willful misconduct of a
Shire Party.

 

9.3.                            Control of Proceedings.  A Party seeking
indemnification hereunder shall provide prompt written notice to the other Party
(and, in any event, within thirty (30) days) of the assertion of any claim
against such Party as to which indemnity is to be requested hereunder.  The
indemnifying Party shall have the sole control over the defense of any Claim,
provided that, the indemnifying Party shall obtain the written consent of the
indemnified Party prior to settling or otherwise disposing of such Claim if as a
result of the settlement or Claim disposal the indemnified Party’s interests are
in any way adversely affected.

 

9.4.                            No Admissions.  The indemnified Party shall not
make any payment or incur any expenses in connection with any Neos Liability or
Shire Liability (as the case may be), or make any admissions or do anything that
may compromise or prejudice the defense of any Claim without the prior written
consent of the indemnifying Party.

 

9.5.                            Claim Information.  Each Party shall promptly:

 

(a)                                 inform the other by written notice of any
actual or threatened Claim to which Sections 9.1 or 9.2 apply;

 

(b)                                 provide to the other Party copies of all
papers and official documents received in respect of any such Claim; and

 

(c)                                  cooperate as reasonably requested by the
other Party in the defense of any such Claim.

 

9.6.                            Contributory Negligence.  If any Shire Liability
or Neos Liability is caused by the negligence of both Shire and Neos, the
apportionment of liability shall be shared equally between the Parties and each
Party shall be responsible for its own defense and its own costs including, but
not limited to, the cost of defense attorneys’ fees and witnesses’ fees and
expenses incident thereto.

 

9.7.                            Limitation of Liability.  […]

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[
. . . ]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.

 

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9.8.                            Limitation on Representations, Warranties and
Indemnification.  NEITHER PARTY SHALL BE DEEMED TO MAKE ANY REPRESENTATIONS OR
WARRANTIES, WHETHER EXPRESS OR IMPLIED, EXCEPT AS SPECIFICALLY SET FORTH
HEREIN.  ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, ARE HEREBY
DISCLAIMED BY EACH PARTY.

 

10.                               Force Majeure

 

10.1.                     Force Majeure.  Neither Party shall be entitled to
terminate this Agreement or shall be liable to the other under this Agreement
for loss or damages attributable to any Force Majeure, provided the Party
affected shall give prompt notice thereof to the other Party.  Subject to
Section 10.2, the Party giving such notice shall be excused from such of its
obligations hereunder for so long as it continues to be affected by Force
Majeure.

 

10.2.                     Continued Force Majeure.  If any Force Majeure
continues unabated for a period of at least ninety (90) days, the Parties shall
meet to discuss in good faith what actions to take or what modifications should
be made to this Agreement as a consequence of such Force Majeure in order to
alleviate its consequences on the affected Party.

 

11.                               Trademarks and Trade Names

 

11.1.                     Neos shall have no right to use any trademark or trade
dress of Shire and shall have no rights to any other intellectual property of
Shire or its Affiliates other than to the extent of the License.  The foregoing
shall not prohibit Neos from making ordinary reference to the products and their
accompanying trademarks identified in Shire’s NDA as may be necessary in filing
and prosecuting any application for regulatory approval for any Neos product.

 

12.                               Term and Termination

 

12.1.                     Term.  Unless sooner terminated in accordance with the
terms hereof, the term of this Agreement shall extend from the Effective Date
until the expiration of the last Valid Claim within the Licensed Patents (the
“Term”).

 

12.2.                     Termination by Shire.  […].

 

12.3.                     Termination by Either Party.  Either Party shall be
entitled to terminate this Agreement by written notice to the other if:

 

(a)                                 the other Party commits a material breach of
this Agreement, and fails to remedy it within sixty (60) days of receipt of
notice from the first Party of such breach and of its intention to exercise its
rights under this Section 12.3; or

 

(b)                                 an order is made or a resolution is passed
for the winding up of the other Party (other than voluntarily for the purposes
of solvent amalgamation or reconstruction) or an order is made for the
appointment of an administrator to manage the other Party’s affairs, business
and property or if a receiver (which expression shall include an administrative
receiver) is appointed over any of the other Party’s assets or undertaking or if

 

Certain confidential portions of this exhibit were omitted and replaced with “[
. . . ]”. A complete version of this exhibit has been filed separately with the
securities and exchange commission pursuant to an application requesting
confidential treatment pursuant to RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, as amended.

 

10

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circumstances arise which entitle the court or a creditor to appoint a receiver
or manager or which entitle the court to make a winding-up order or if a
voluntary arrangement is proposed in respect of the other Party or if the other
Party takes or suffers any similar or analogous action in consequence of debt,
and such order, appointment or similar action is not removed within ninety (90)
days.

 

12.4.                     Effect of Termination.  In the event of expiry or
termination of this Agreement for any reason, each Party shall promptly return
to the other Party all Confidential Information provided to it or its Affiliates
during the Term or destroy and certify the destruction to the other Party of
such Confidential Information.  Each Party may keep one (1) copy of any
Confidential Information in a secure location for compliance purposes.

 

12.5.                     Liability on Termination.  The termination or expiry
of this Agreement shall not release either of the Parties from any liability
which at the time of termination or expiry has already accrued to the other
Party, nor affect in any way the survival of any other right, duty or obligation
of the Parties which is expressly stated elsewhere in this Agreement to survive
such termination or expiry.

 

12.6.                     Surviving Sections.  The provisions of Sections 1, 5,
6, 9, 11, 12 and 13 and any other provisions necessary and proper to give effect
to the intention of the Parties as to the effect of the Agreement after
termination, shall continue in force in accordance with their respective terms
notwithstanding expiry or termination of this Agreement for any reason.

 

13.                               Miscellaneous

 

13.1.                     Notice.

 

(a)                                 Any notice or other document given under
this Agreement shall be in writing in the English language and shall be given by
hand or sent by prepaid airmail, or by confirmed fax transmission to the address
of the receiving Party as set out in Section 13.2 below unless a different
address or fax number has been notified to the other in writing for this
purpose.

 

(b)                                 Each such notice or document shall:

 

(i)                                     if sent by hand, be deemed to have been
given when delivered at the relevant address;

 

(ii)                                  if sent by prepaid mail, be deemed to have
been given five (5) days after posting; or

 

(iii)                               if sent by confirmed fax transmission be
deemed to have been given when transmitted, provided that, a confirmatory copy
of such fax transmission shall have been sent by prepaid overnight mail within
twenty-four (24) hours of such transmission.

 

13.2.                     Address for Notice.  The address for services of
notices and other documents on the Parties shall be:

 

Certain confidential portions of this exhibit were omitted and replaced with “[
. . . ]”. A complete version of this exhibit has been filed separately with the
securities and exchange commission pursuant to an application requesting
confidential treatment pursuant to RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, as amended.

 

11

--------------------------------------------------------------------------------

 

To Shire

 

To Neos

 

 

 

Address:

 

Address:

 

 

 

Shire LLC

 

Neos Therapeutics, Inc.

725 Chesterbrook Boulevard

 

2940 N. Highway 360

Wayne, PA 19087

 

Grand Prairie, TX 75050

 

 

 

Attention:

 

Attention:

 

 

 

Chief IP Counsel

 

Chief Executive Officer

 

 

 

Fax:

 

Fax:

 

 

 

(484) 595-8663

 

(972) 408-1143

 

13.3.                     Assignment.

 

(a)                                 Subject to Section 13.3(b) and (c), Neos
shall not sublicense, assign or transfer the License or any of its rights or
obligations under this Agreement.

 

(b)                                 The License shall, upon Shire’s written
consent, […] in the case where Shire does not consent […], Shire will provide
Neos with written rationale detailing its basis for such non-consent.  […].

 

(c)                                  In addition, Neos shall be entitled,
without prior written consent of Shire […].

 

(d)                                 Subject to the foregoing, this Agreement
shall be binding upon and inure to the benefit of the Parties and their
respective successors and permitted assigns.

 

(e)                                  Any sublicense, assignment or transfer in
contravention of the terms of this Agreement shall be null and void.

 

13.4.                     Amendment.  This Agreement may not be varied, changed,
waived, discharged or terminated, except by an instrument in writing signed by
the Party against which enforcement of such variation, change, waiver, discharge
or termination is sought.

 

13.5.                     Public Announcements.  The terms of this Agreement and
the negotiations of the Parties pertaining thereto, shall be maintained in
confidence by the Parties.  Notwithstanding the above, Neos shall be permitted
to disclose to the FDA the existence of this Agreement and the fact that the
Licensed Patents are licensed for purposes of obtaining Regulatory Approval of
the Neos NDA.  Notwithstanding anything to the contrary in this Agreement, the
Parties understand and agree that either Party, may, if so required, disclose
some or all of the information included in this Agreement or other Confidential
Information of the other Party (i) in order to comply with its obligations under
the Law, including the United States Securities Act of 1933, the United States
Securities Exchange Act of 1934, (ii) the listing standards or agreements of any
national or international securities exchange or The NASDAQ

 

Certain confidential portions of this exhibit were omitted and replaced with “[
. . . ]”. A complete version of this exhibit has been filed separately with the
securities and exchange commission pursuant to an application requesting
confidential treatment pursuant to RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, as amended.

 

12

--------------------------------------------------------------------------------

 

Stock Market or other similar Laws of a Governmental Authority, (iii) to respond
to an inquiry of a Governmental Authority or regulatory authority as required by
Law, or (iv) in a judicial, administrative or arbitration proceeding.  In any
such event the Party making such disclosure shall (A) provide the other Party
with as much advance notice as reasonably practicable of the required
disclosure, (B) cooperate with the other Party in any attempt to prevent or
limit the disclosure, and (C) limit any disclosure to the specific purpose at
issue.

 

13.6.                     Superiority of Agreement.  The Parties agree that the
provisions of this Agreement, together with any amendments hereto, shall prevail
over any inconsistent statements or provisions contained in any prior
discussions, arrangements or comments between the Parties and in any documents
passing between the Parties, including, but not limited to, any forecast,
purchase order, purchase order revision, acknowledgment, confirmation or
notice.  It is agreed that:

 

(a)                                 neither Party has entered into this
Agreement in reliance upon any representation, warranty or undertaking of the
other Party which is not expressly set out in this Agreement;

 

(b)                                 neither Party shall have any remedy in
respect of misrepresentation or untrue statement made by the other Party or for
any breach of warranty which is not contained in this Agreement; and

 

(c)                                  this Section 13.6 shall not exclude any
liability for, or remedy in respect of, fraudulent misrepresentation.

 

13.7.                     Governing Law.  This Agreement shall be governed by
and construed in accordance with the internal Laws of the State of New York,
without giving effect to principles of conflicts of law.  The Parties
irrevocably agree that the federal district courts in the state of New York
shall have exclusive jurisdiction to deal with any disputes arising out of or in
connection with this Agreement and that, accordingly, any proceedings arising
out of or in connection with this Agreement shall be brought in the U.S.
District Court for the Southern District of New York.  Notwithstanding the
foregoing, if there is any dispute for which the federal district courts in the
state of New York do not have subject matter jurisdiction, the state courts in
New York shall have jurisdiction.

 

13.8.                     Agreement Costs.  Each Party shall pay its own costs,
charges and expenses incurred in connection with the negotiation, preparation
and completion of this Agreement.

 

13.9.                     Counterparts.  This Agreement may be executed in any
number of counterparts and may be executed by the Parties on separate
counterparts, each of which is an original but all of which together constitute
the same instrument.

 

13.10.              Severability.  If and to the extent that any provision of
this Agreement is held to be illegal, void or unenforceable, such provision
shall be given no effect and shall be deemed not to be included in this
Agreement but without invalidating any of the remaining provisions of this
Agreement.

 

Certain confidential portions of this exhibit were omitted and replaced with “[
. . . ]”. A complete version of this exhibit has been filed separately with the
securities and exchange commission pursuant to an application requesting
confidential treatment pursuant to RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, as amended.

 

13

--------------------------------------------------------------------------------

 

13.11.              Relationship of the Parties.  In making and performing this
Agreement, the Parties are acting, and intend to be treated, as independent
entities; and nothing contained in this Agreement shall be construed or implied
to create an agency, partnership, joint venture, or employer and employee
relationship between Shire and Neos.  Except as otherwise provided herein,
neither Party may make any representation, warranty or commitment, whether
express or implied, on behalf of or incur any charges or expenses for or in the
name of the other Party.

 

13.12.              Construction.  The language in all parts of this Agreement
shall be construed, in all cases, according to its fair meaning.  Shire and Neos
acknowledge that each Party and its counsel have reviewed and revised this
Agreement and that any rule of construction to the effect that any ambiguities
are to be resolved against the drafting Party shall not be employed in the
interpretation of this Agreement.  The words “hereof,” “herein,” “hereto” and
“hereunder” and words of similar import, when used in this Agreement, shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement.  The terms defined in the singular shall have a comparable meaning
when used in the plural, and vice versa.  Whenever used herein, the words
“include,” “includes” and “including” shall mean “include, without limitation,”
“includes, without limitation” and “including, without limitation,”
respectively.  The masculine, feminine or neuter gender and the singular or
plural number shall each be deemed to include the others whenever the context so
indicates.  With respect to any particular action or agreement, the use of the
words “Shire shall” or “Shire will” herein shall also mean “Shire shall cause”
the particular action to be performed.  Similarly, with respect to any
particular action or agreement, the use of the words “Neos shall” or “Neos will”
herein shall also mean “Neos shall cause” the particular action to be
performed.  Nothing in this Agreement shall operate to exclude any provision
implied into this Agreement by Law and which may not be excluded by Law or limit
or exclude any liability, right or remedy to a greater extent than is
permissible under Law.

 

13.13.              Dispute Resolution.

 

(a)                                 Preliminary Process.  If there is a
disagreement between the Parties as to the interpretation of this Agreement or
in relation to any aspect of the performance by either Party of its obligations
under this Agreement, the Parties shall, within ten (10) Business Days of
receipt of a written request from either Party, meet in good faith and try to
resolve the disagreement without recourse to legal proceedings.

 

(b)                                 Escalation of Dispute.  If resolution of the
disagreement does not occur within five (5) Business Days after such meeting,
the matter shall be escalated to applicable Neos and Shire Presidents (or
similarly ranking senior executive) for resolution.

 

(c)                                  Equitable Relief.  Nothing in this
Section 13.13 restricts either Party from immediately seeking an equitable
remedy or either Party’s freedom to seek urgent relief to preserve a legal right
or remedy, or to protect a proprietary or trade secret right, or to otherwise
seek legal remedies through any available channel if resolution is not otherwise
achieved under this Section 13.13.

 

Certain confidential portions of this exhibit were omitted and replaced with “[
. . . ]”. A complete version of this exhibit has been filed separately with the
securities and exchange commission pursuant to an application requesting
confidential treatment pursuant to RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, as amended.

 

14

--------------------------------------------------------------------------------

 

13.14.              Cumulative Rights.  The rights and remedies of each of the
Parties under or pursuant to this Agreement are cumulative, may be exercised as
often as such Party considers appropriate and are in addition to its rights and
remedies under general law.

 

13.15.              No Third Party Benefit.  This Agreement shall be binding
upon and inure solely to the benefit of the Parties hereto, their successors and
permitted assigns, and nothing in this Agreement, express or implied, is
intended to or shall confer upon any other Person or Persons any right, benefits
or remedies of any nature whatsoever under or by reason of this Agreement.

 

13.16.              Further Assurance.  Each of the Parties shall do, execute
and perform and shall procure to be done and perform all such further acts,
deeds, documents and things as the other Party may reasonably require from time
to time to give full effect to the terms of this Agreement.

 

13.17.              Waiver.  No failure or delay by either Party in exercising
any right or remedy provided by law under or pursuant to this Agreement shall
impair such right or remedy or operate or be construed as a waiver or variation
of it or preclude its exercise at any subsequent time and no single or partial
exercise of any such right or remedy shall preclude any other or further
exercise of it or the exercise of any other right or remedy.

 

[Signature Page Follows]

 

Certain confidential portions of this exhibit were omitted and replaced with “[
. . . ]”. A complete version of this exhibit has been filed separately with the
securities and exchange commission pursuant to an application requesting
confidential treatment pursuant to RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, as amended.

 

15

--------------------------------------------------------------------------------

 

[Signature Page to License Agreement]

 

IN WITNESS WHEREOF, the undersigned have executed this License Agreement as of
the Effective Date.

 

 

SHIRE LLC

 

 

 

 

 

By:

/s/ Mike Chapman

 

Name: Mike Chapman

 

Title: President

 

 

 

 

 

NEOS THERAPEUTICS, INC.

 

 

 

 

 

By:

/s/ Vipin Garg

 

 

Vipin Garg

 

 

President & Chief Executive Officer

 

Certain confidential portions of this exhibit were omitted and replaced with “[
. . . ]”. A complete version of this exhibit has been filed separately with the
securities and exchange commission pursuant to an application requesting
confidential treatment pursuant to RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, as amended.

 

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