Exhibit 10.17
EXECUTION VERSION
AMENDED AND RESTATED PRODUCTS DEVELOPMENT AGREEMENT
     This Amended and Restated Products Development Agreement (this “Agreement”)
is made and dated as of December 29, 2006 (the “Effective Date”), and amended
and restated as of the 27th day of August, 2008, by and between Cornerstone
Biopharma, Inc., a Nevada corporation (“Cornerstone”), and Neos Therapeutics,
L.P., a Texas limited partnership (“Neos”) (Cornerstone and Neos are sometimes
referred to herein individually as a “Party” and collectively as the “Parties”).
     Whereas, Cornerstone desires to engage Neos to develop certain products
(collectively and as further defined below, “Products” and each individually a
“Product”), each in the form of an extended release liquid; and
     Whereas, Cornerstone and Neos desire that Cornerstone will prepare and
prosecute with the United States Food and Drug Administration (“FDA”) a new drug
application or other appropriate regulatory submission (each, an “NDA”) and
other necessary or desirable applications in connection with Products that are
successfully developed hereunder and as provided below; and
     Whereas, Cornerstone and Neos will, with respect to each Product that is
subject of an approved NDA and subject to the other terms hereof, enter into a
separate Manufacturing Agreement related to the manufacture of such Product in
the form attached hereto as Exhibit “A” at or around the time of such approval;
and
     Whereas, Cornerstone, in consideration of this Agreement and Neos’s
performance hereunder, has forgiven all principal and interests amounts owed by
Neos to Cornerstone under that certain Secured Subordinated Promissory Note
dated August 1, 2006, in the principal amount of $500,000.00; and
     Whereas, Cornerstone and Neos desire to define the obligations between the
Parties as respects the development, regulatory application submission process
and manufacture of the Products.
     WHEREAS, Cornerstone and Neos previously entered into a Products
Development Agreement (the “Original Agreement”) on December 29, 2006; and
     WHEREAS, the Parties wish to amend and restate the Original Agreement;
     Now, therefore, in consideration of the premises and the representations,
warranties, covenants and agreements set forth hereby and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows:
 
[***] Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

 

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     1. Products — Generally. The Parties agree that Neos will use its
commercially reasonable efforts to develop the following extended-release liquid
Products to be sold by doctor’s prescription only containing the following
active pharmaceutical ingredients in accordance with the terms hereof using
Neos’ patent-pending Dynamic Time Release Suspension technology as provided
herein, with each of the following Products to be manufactured in a dosage to be
agreed upon by the Parties and with the same active ingredients as listed below
or with active ingredients that are suggested by Cornerstone and approved by
Neos:
          a. [***] (which Product shall not be the subject of an abbreviated new
drug application with FDA based on equivalence with or comparability to the
product sold under the proprietary name [***], Application No. {***]) (sometimes
referred to herein as the “First Product”);
          b. [***];
          c. [***]; and
          d. [***].
     2. Product Development.
          a. Development — Generally.
               i. Product Development Plans. The First Product Development Plan
(hereinafter defined) and any Subsequent Product Development Plan (hereinafter
defined) shall include the following: Neos shall use its commercially reasonable
efforts to develop (and validate a method for the testing of) a commercially
viable subject Product (the “Development”) starting upon Cornerstone’s request.
Contingent upon the successful completion of the Development, Neos will produce
an exhibit batch (each, the “Exhibit Batch”) of the greater of a 1/10 scale of a
batch of the Product or 200 liters of the subject Product and place the
Exhibit Batch on stability (the “Stability Work”). Neos will use its
commercially reasonable efforts to complete adequate Stability Work on the
applicable Product. If adequate Stability Work is completed successfully in
accordance with Neos’ stability protocol, Neos will manufacture a reasonable
amount of the Product designated by Cornerstone to be used in the Clinical
Studies (defined below). If the Clinical Studies are successfully completed for
a Product, Neos shall use its commercially reasonable efforts to validate its
process for manufacturing the Product (the “Process Validation Work”), including
the manufacture of any lots reasonably necessary to complete the Process
Validation Work.
               ii. No Guarantee of Success; Repeated Steps; Additional Steps.
Cornerstone understands, that: (i) there is no guarantee that Neos will be
successful in the Development with respect to the First Product or with respect
to any other Product; (ii) while Neos will use its commercially reasonable
efforts to achieve the Development with respect to the First Product or any
other Product in accordance with the applicable development plan, it may be
 
[***] Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

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necessary or desirable to repeat one or more of the steps contained in an
applicable development plan, and it may also be necessary or desirable to be
perform additional steps in order to prepare any Product for Clinical Studies.
Neos may repeat such steps or perform such additional steps in its reasonable
discretion with the prior consent of Cornerstone, which consent may not be
unreasonably withheld. Neos understands that there is no guarantee that
Cornerstone will be successful in applying for an NDA or commercializing the
First Product or any other Product.
               iii. Termination of Development Obligations. Neos shall have no
obligation to develop any Product for Cornerstone beyond the Exclusivity Period
(defined below).
          b. Development of the First Product. Neos agrees to formulate and
complete stability testing and validation regarding the First Product in
accordance with the outline of actions, processes and procedures as provided by
a product development plan on the First Product which the Parties agree to use
their respective reasonable efforts to complete within forty five (45) days from
a request from Cornerstone to begin drafting the plan (the “First Product
Development Plan”). Once completed, the First Product Development Plan shall be
attached hereto as Appendix I. Neos agrees to use its commercially reasonable
diligent efforts to complete the milestones related to the development of the
First Product by the dates contained in such Appendix.
          c. Consecutive Development. The Products will be developed
consecutively, not concurrently, so that no two Products are in active
development at the same time. However once the first Clinical Study is
successfully completed for a given Product, upon Cornerstone’s request, the
development of the next Product shall commence.
               i. First Product Successfully Developed. If the First Product is
successfully developed in accordance with the First Product Development Plan:
(A) Cornerstone shall, in accordance with the terms of Section 3 hereof, use its
commercially reasonable efforts to prepare and successfully prosecute, in
Cornerstone’s name, a NDA with FDA on the First Product; and (B) Neos and
Cornerstone shall each use their commercially reasonable efforts to agree on a
subsequent Product to be developed by Neos hereunder.
               ii. First Product Not Successfully Developed. If the First
Product is not successfully developed in accordance with the First Product
Development Plan, Cornerstone may elect to go forward with the development
and/or application approval with respect to Subsequent Products by providing
Neos with prompt written notice thereof, which notice must be delivered to Neos
within sixty (60) days after Neos’ notice to Cornerstone that the First Product
cannot reasonably be successfully developed in accordance with the First Product
Development Plan. In the event that Cornerstone does not timely provide such
notice, this Agreement will terminate. In the event that Cornerstone timely
provides such notice, Neos and Cornerstone shall each use their commercially
reasonable efforts to agree on a subsequent Product to be developed by Neos
hereunder.
          d. Development of Subsequent Product(s). If the First Product is
successfully developed in accordance with the First Product Development Plan or
if Cornerstone provides notice to Neos in accordance with Section 2.c.ii.
hereof, Neos agrees to formulate and

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complete stability testing and validation regarding the subsequent Product
chosen by Cornerstone and Neos in accordance with the terms of Section 2.b.i.
hereof. Such work by Neos shall be performed in accordance with a Subsequent
Product Development Plan (hereinafter defined) for such subsequent Product. As
used herein, the term “Subsequent Product Development Plan” shall mean a plan
for the development of a subsequent Product that is agreed on by the Parties
that is substantially in the form of the First Product Development Plan, but
that takes into account the specific characteristics of the subject Product to
be developed and the issues and challenges associated with the development of
such subject Product. The Parties each agree to use their commercially
reasonable efforts to jointly develop and approve each Subsequent Product
Development Plan.
               i. Subsequent Product Successfully Developed. If a subsequent
Product is successfully developed after the Parties proceed with development
based on the successful completion of the first Clinical Study, in accordance
with the applicable Subsequent Product Development Plan: (A) Cornerstone shall,
in accordance with the terms of Section 3. hereof, use its commercially
reasonable efforts to prepare and prosecute, in Cornerstone’s name, a NDA with
FDA on the subject subsequent Product; and (B) Neos and Cornerstone shall each
use their commercially reasonable efforts to choose another subsequent Product
to be developed by Neos hereunder. Such chosen subsequent Product shall be
developed by Neos hereunder in accordance with a new Subsequent Product
Development Plan, which Subsequent Product Development Plan shall be developed
and approved as provided above in this Section 2.c.
               ii. Subsequent Product Not Successfully Developed. If a
Subsequent Product is not successfully developed in accordance with the
applicable Subsequent Product Development Plan, Neos and Cornerstone shall each
use their commercially reasonable efforts to choose a subsequent Product to be
developed by Neos hereunder or, if the Parties agree or if the Parties fail to
agree on a subsequent Product, there shall be no further development obligations
hereunder with respect to any subsequent Product.
               iii. All Products. If the First Product is successfully developed
in accordance with the terms of the First Product Development Plan, the
processes described in Sections 2.d.i. and 2.d.ii. above shall be repeated (as
provided herein) until each subsequent Product is the subject of a Subsequent
Product Development Plan.
          e. Exclusivity. During the License Term (as defined below), each Party
agrees that it will work exclusively with the other Party in developing (or
attempting to develop) the Products for sale in the United States in accordance
with the terms of this Agreement until the earlier of the termination of this
Agreement unless earlier terminated (the “Exclusivity Period”). This obligation
shall not restrict in any way Cornerstone’s ability to engage third parties to
assist Cornerstone in performing its clinical development, regulatory or
commercial activities related to Products that are developed under this
Agreement. This obligation of exclusivity shall commence on the Effective Date
for and shall apply to the First Product and for each of the other Products
identified as provided by Section 1 and expire for any Product if and when the
Parties determine not to continue development of that Product under this
Agreement.
     3. Clinical Trials and Regulatory Filings. With respect to each Product
that is successfully developed beyond the first Clinical Study, in accordance
with its product

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development plan, Cornerstone shall initiate the performance of Clinical Studies
(hereinafter defined) in connection with the First Product with a clinical
research organization (each, a “CRO”) that Cornerstone has contracted with to
perform the Clinical Studies and that has been jointly approved by the Parties
in their respective reasonable discretion. Each contract entered into with a CRO
for each Clinical Study under or in connection with this Agreement shall be
between Cornerstone and such CRO (and Neos shall not be a party thereto), and
each such contract shall require the CRO to maintain such Clinical Studies,
including the results thereof, confidential. Further, with respect to the First
Product, Cornerstone shall, as soon as reasonably possible, enter into an
agreement with a CRO for the Clinical Studies for the First Product and, as soon
as the Process Validation Work is completed and the first study successfully
completed on the First Product, if ever, authorize the Clinical Studies to begin
in order that it is completed as soon as reasonably possible. As used herein,
the term “Clinical Studies” shall mean, collectively and individually, a study
and studies in which a Product is tested in humans in order to confirm that a
Product substantially meets its specifications or is otherwise acceptable to
Cornerstone in its reasonable discretion. Neos shall provide its reasonable
assistance to a CRO in connection with the Clinical Studies, including providing
samples manufactured by Neos necessary for such Clinical Studies. Cornerstone
recognizes and agrees that Clinical Studies may have to be repeated in
connection with any Product and/or Regulatory Approvals (hereinafter defined),
Cornerstone shall, during the pendancy of the Clinical Studies on the First
Product (or any other Product, as applicable), begin assembling materials for a
NDA for the Product. Cornerstone shall, if Clinical Studies show that the First
Product (or another Product) meets its specifications or is otherwise acceptable
to Cornerstone in its reasonable discretion, use its commercially reasonable
efforts to assemble to remainder of the materials and the application for such
NDA. Neos shall have the right to participate and consult in any work relating
to regulatory filings related to any Product at its cost and Neos shall provide
reasonable assistance to Cornerstone, as provided in Section 6. hereof, in
connection with the chemistry, manufacturing and controls section of each
regulatory filing submitted in connection with a Product pursuant to the terms
hereof. If the Clinical Study shows that the First Product (or another Product)
meets its specifications and is otherwise acceptable to Cornerstone in its
reasonable discretion, then Cornerstone shall move forward with the submission
and prosecution of the NDA, which Cornerstone shall use its reasonable efforts
to file and prosecute as soon as reasonably possible. Neos acknowledges that the
continued prosecution of an NDA and related commercialization activities are
subject to the continued generation of favorable data necessary for the NDA
related to the Product as determined by Cornerstone in its reasonable
discretion. In connection with the foregoing, Cornerstone shall determine, in
its reasonable discretion, whether any Investigational New Drug Application
(“IND”), pre-IND meeting or other regulatory submissions, approvals or
requirements are reasonably necessary (all of which, together with each NDA on a
Product, and the applications and submissions in connection with each of the
foregoing, are referred to herein collectively as “Regulatory Approvals”) and
arrange for the completion thereof, with the reasonable assistance of Neos. All
Regulatory Approvals shall be in the name of and owned by Cornerstone and
Cornerstone shall designate Neos as the manufacturer, and no other person or
entity, in each Regulatory Approval or any time thereafter so long as Neos is
able and is approved by the FDA to manufacture in accordance with the terms of
the relevant Manufacturing Agreement the Product that is the subject of a
Regulatory Approval. Cornerstone agrees to use its commercially reasonable
diligent efforts to complete the milestones related to Regulatory Approval of
the First Product by the dates contained in the First Product Development Plan.

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     4. Manufacturing Agreement. A reasonable time prior to the approval of any
NDA submitted on a Product under this Agreement, Cornerstone and Neos will enter
into a separate Manufacturing Agreement related to the manufacture of such
Product substantially in a form mutually acceptable to the parties, which form
the parties agree to negotiate in good faith within forty five (45) days from
the submission date of the applicable NDA. The Parties agree that they will
schedule, in their commercially reasonable discretion, the timing of the
manufacture of the first commercial lots of each Product that is the subject of
a Manufacturing Agreement in order to allow such Product to be commercially sold
as soon as reasonably possible after approval of a NDA hereunder. If Neos is
unwilling or unable, subject to the terms of the applicable Manufacturing
Agreement, to enter into or perform all of its obligations under such a
Manufacturing Agreement, Cornerstone may elect to have Product made by a
contract manufacturer (the “Contract Manufacturer”) during the term of such
unwillingness or inability, as applicable, pursuant to the license grant in
Section 7.d. hereof. The selection of the Contract Manufacturer shall be subject
to the approval of Neos, which shall not be unreasonably withheld as long as the
Contract Manufacturer meets reasonable commercial and industry standards, does
not have a conflict of interest in connection with Neos’ technology and executes
a confidentiality and non-use agreement with Neos that is acceptable to Neos.
Cornerstone must make such election in writing (a “Cornerstone Election”). In
the event that Cornerstone makes such an election: (a) Neos shall, upon
Cornerstone’s request and at Cornerstone’s expense, provide reasonable
technology transfer assistance sufficient to enable Cornerstone or its designee
to manufacture the Product; (b) Neos shall provide Cornerstone and Contract
Manufacturer with a license (as further described in Section 7.d. below) to use
all necessary Intellectual Property belonging to Neos as reasonably necessary
for Contract Manufacturer to manufacture the Product; (c) Cornerstone shall pay
Neos during the term of the license a royalty of the higher of (x) [***] of its
Net Sales (defined below) of the Product if a patent has not issued covering any
material used in or process used for the production of such Product; or (y)
[***] of its Net Sales of the Product if a patent has issued, has not been
invalidated nor expired, and covers any material used in or process used for the
production of the Product; and (d) Cornerstone covenants that all transfers of
the Product shall be in bona fide arm’s length transactions to third parties
(except that Cornerstone may distribute a reasonable amount of samples of the
Product solely to increase sales of the Product in bona fide arm’s length
transactions). As used in this Agreement, the term “Net Sales” shall mean the
gross amount invoiced for any sale of any Product by Cornerstone in a bona fide
arm’s length transaction, less the following allowable deductions to the extent
specifically related to the Product and actually taken or paid: (i) cash
discounts and/or quantity discounts allowed; credits and allowances for returns,
rejections and recalls; (ii) costs incurred for freight, insurance and
transportation; (iii) quantity and other trade discounts, credits or allowances;
(iv) sales and use taxes and other similar taxes incurred and government
mandated rebates; and (v) reasonable accruals for estimated contract rebates and
bid rebates, all of which shall be determined in accordance with United States
generally accepted accounting practices (“GAAP”). In the event that Cornerstone
provides a Cornerstone Election as provided above, Cornerstone shall have no
further rights or remedies against Neos with respect to the Product except to
fulfill its obligations to Cornerstone set forth in this Section 4.
 
[***] Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

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     5. Cornerstone Option on Products Outside of the United States. To the
extent that Neos desires, during the term of this Agreement, to develop any
Product for sale outside of the United States by a third party, Neos must first
offer such development to Cornerstone by giving Cornerstone written notice of
the general business terms, including general financial terms, territory and
term of development, that Neos so intends or desires to pursue (“RFO Notice”),
so that Cornerstone may consider such offer and negotiate a complete development
agreement in such territory outside of the United States. Cornerstone shall,
within a reasonable period of time, not to exceed thirty (30) days after
Cornerstone’s receipt of a RFO Notice, inform Neos, that it does not wish to
enter into such an agreement in such territory, in which case Neos shall be free
to enter into any such agreements under terms that are not materially more
favorable to the third party than those contained in the RFO Notice. Should
Cornerstone notify Neos that is desires to enter into an agreement containing
the terms contained in the RFO Notice, it must provide notice of such desire
within a reasonable period of time, not to exceed thirty (30) days after its
receipt of the RFO Notice, and within thirty (30) days after such notice, the
Parties shall undertake good faith negotiations to conclude a development
agreement. Neos shall not, during the term of this Agreement, enter into an
agreement with a third party related to a territory outside of the United States
for the development of any Product on terms that are materially more favorable
than those contained in the RFO Notice. Neos shall include in any such agreement
with a third party express prohibitions on marketing or selling any such product
in the United States or its territories.
     6. Payment for Development and Regulatory Work.
          a. Execution. Upon execution of this Agreement, all debt owing from
Neos to Cornerstone shall be forgiven, including, without limitation, all
amounts owing (including principal and interest) under that certain Secured
Subordinated Promissory Note dated August 1, 2006, in the principal amount of
$500,000.00 (and Cornerstone’s liens in Neos’ property shall contemporaneously
terminate).
          b. Regular Payments. Neos, at its own expense, will develop the First
Product up to an including completion of the first Clinical Study in humans,
which shall be a pilot study, i.e., a clinical study not suitable to support
submission of an NDA in and of itself without further Clinical Studies (with
each of the costs referenced in this sentence being collectively referred to as
the “Neos First Product Expenses”). The Neos First Product Expenses shall:
(A) begin after the effective date of this Agreement; (B) be approved by
Cornerstone in advance, which consent may not be unreasonably withheld or
delayed; and (C) shall be evidenced by reasonable documentation in accordance
with GAAP (as applicable). After Neos has discharged its obligations under the
first two sentences of this Section 6.b., Cornerstone shall pay Neos, within
thirty (30) days after it receives an invoice from Neos in connection with its
development efforts hereunder, all direct, actual costs and expenses incurred by
Neos plus ten percent (10%) of those costs and expenses, plus $150 per hour for
time spent by scientific and other appropriate-level personnel.
          c. Milestone Payments. Cornerstone shall provide the following
consideration and pay the following milestone payments to Neos within ten
(10) days of its

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receipt of notice that any of the below events have occurred with respect to the
First Product and each subsequent Product (and if any of such payment(s) is/are
due, Cornerstone must have made the preceding milestone payment(s)):

      Milestone   Amount
[***]
  [***]
[***]
  [***]
[***]
  [***]
[***]
  [***]

For clarification, each of the foregoing milestone payments shall be due only
once for each Product, including the First Product and each subsequent Product.
     7. Intellectual Property.
          a. Neos Intellectual Property. Except as specifically provided by
Section 7.b. below, as between Neos and Cornerstone, all intellectual property
owned by Neos or developed by Neos during the term of this Agreement, including,
without limitation, all patents and patent rights, trademarks and trademark
rights, trade names and trade name rights, service marks and service mark
rights, service names and service name rights, inventions, processes, formulae,
copyrights and copyright rights, trade dress, business and product names, logos,
slogans, trade secrets, industrial models, processes, designs, methodologies,
other proprietary information and related documentation, technical information,
manufacturing, engineering and technical drawings, know-how and all pending
applications for and registrations of patents, trademarks, service marks and
copyrights (collectively, “Intellectual Property”) shall remain and be the sole
and exclusive property of Neos. Further, except as specifically provided by
Section 7.b. below, Neos shall be the sole owner of all Intellectual Property,
or any modifications or improvements thereto, developed under or in connection
with this Agreement, whether by Neos, Cornerstone or in combination, Neos makes
no representation or warranty with respect to the validity of any patent,
trademark, or copyright that may be granted with respect to any of its
Intellectual Property.
          b. Cornerstone Intellectual Property. Cornerstone shall have exclusive
rights to: any brand name and trade mark(s) assigned by Cornerstone to Products;
trade dress specifically associated with Products that is developed by
Cornerstone; and data generated from Clinical Studies and pre-Clinical Studies
and post-Regulatory Approval (but not the Intellectual Property of Neos included
therein), filings for Regulatory Approval (but not the Intellectual Property of
Neos included therein) and sales and marketing information. Cornerstone shall
not distribute, market or sell Products under Neos’ proprietary trademarks,
trade names, service marks or use any of Neos’ copyrights, unless such
permission is obtained in advance in writing. Cornerstone will not distribute,
market or sell the Product under any proprietary trademarks, trade names,
service marks, or copyrights to which it is not legally entitled. Intellectual
Property
 
[***] Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

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independently developed by Cornerstone, without exposure to or knowledge of
Neos’ Intellectual Property as established by Cornerstone’s written records,
during the term of this Agreement shall remain the property of Cornerstone.
          c. Further Documentation. Both during the term of this Agreement and
at any time thereafter, the Parties agree to execute any documents reasonably
requested by the other Party to effect the above provisions of this Article 7.
          d. License Grant.
               i. Generally. As used herein, “License Term” shall begin on the
Effective Date and, unless earlier terminated as herein provided, shall end on
the earlier of (A) the expiration or termination of this Agreement, or
(B) December 31, 2026. Neos grants Cornerstone an exclusive license to its
Intellectual Property only to the extent necessary to research, develop, make,
have made, offer for sale, sell Products in the United States and its
territories, but such license shall not exclude Neos. This license shall be on a
Product-by-Product basis (but shall not begin with respect to each Product, on a
Product -by-Product basis until such Product is finally determined in accordance
with Section 1 hereof), provided that the right to make or have made Products
will not be in effect except as specifically provided in Section 4 hereof. The
license does not and will not, under any circumstance, be construed to extend
beyond the Products. Accordingly, the license shall be irrevocable for the term
thereof for any Product that is the subject of an NDA submission by Cornerstone
or its successors, licensees or assigns and shall terminate with respect to any
Product that is abandoned prior to filing an NDA submission. Cornerstone will
have the right to grant sublicenses under the licenses from Neos with Neos’
prior written consent, which consent may not be unreasonably withheld, except
the license to manufacture or have manufactured the Product may only be
sublicensed to a Contract Manufacturer and only as specifically provided by
Section 4 and subject to a Contract Manufacturer Agreement (hereinafter
defined). The grant of any such sublicense hereunder will not relieve
Cornerstone of its obligations under this Agreement. Cornerstone shall have the
right to enforce the Intellectual Property against third party infringement in
the United States and its territories only to the extent that such Intellectual
Property infringement is on a Product and to retain any damages or settlements
resulting from such enforcement, [***]. Neos shall reasonably cooperate in any
such action and Cornerstone shall reimburse Neos for its reasonable costs
incurred in providing such cooperation.
               ii. Contract Manufacturer Agreement. Should Cornerstone properly
make a Cornerstone Election, Cornerstone shall enter into a written sublicense
and manufacturing agreement with the Contract Manufacturer, subject to Section 4
hereof (the “Contract Manufacturer Agreement”) that is reasonable acceptable to
Neos. Cornerstone shall indemnify and hold harmless Neos from all third-party
claims, judgments, and expenses in connection with any breach of the Contract
Manufacturer Agreement by Contract Manufacturer to the extent that Cornerstone
participated in or had knowledge of and could have prevented the breach by
Contract Manufacturer. The Contract Manufacturer Agreement shall include the
following provisions:
 
[***] Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

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                    A. that the use of Neos’ technology shall be restricted to
that necessary to manufacture the Product in the United States for the term of
the Contract Manufacturer Agreement (and for no other purpose);
                    B. that all intellectual property developed under or in
connection with the Contract Manufacturer Agreement and/or Neos’ Intellectual
Property shall be the sole property of Neos, unless any invention thereof or
contribution thereto by Cornerstone or Contract Manufacturer is independent, as
documented by competent written records, of the intellectual property developed
under or in connection with the Contract Manufacturer Agreement and/or Neos’
Intellectual Property;
                    C. that Contract Manufacturer must keep and maintain
adequate financial records in accordance with GAAP which contain information
that is reasonably accessible to or controlled by Contract Manufacturer, which
financial records shall be available for review by Cornerstone on reasonable
notice to Contract Manufacturer and shall be subject to audit by Cornerstone;
                    D. that such license shall expire contemporaneously with the
termination of the Exclusivity Period;
                    E. that Neos’ Intellectual Property shall only be used in
facilities that meet cGMP standards; and
                    F. that New York governing law shall apply.
     8. Confidential Information.
               i. Definitions. Confidential Information. Confidential
information shall include all such information, in whole or in part, that a
Party (each, a “Disclosing Party”) furnishes, demonstrates, presents, discusses,
whether affixed to a tangible medium or not to another Party (each, a “Receiving
Party”) or such Receiving Party’s representatives, whether such information is
furnished before, concurrently with or after this Agreement, together with
analyses, compilations, studies, notes of conversations or other documents
prepared by a Receiving Party or such Receiving Party’s representatives that
contain or otherwise reflect such information (the “Confidential Information”).
Such Confidential Information may include, but is not limited to, ideas,
know-how, procedures, methodologies or techniques, analysis, designs,
inventions, patents, patent applications, specifications or documentation
whether written or not.
               ii. Non-Confidential Information. The following information shall
not be deemed Confidential Information subject to this Section of this Agreement
(the “Non-Confidential Information”):
                    A. information that is or becomes generally available to the
public other than a result of disclosure by a Receiving Party or such Receiving
Party’s representatives;

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                    B. information that was available to a Receiving Party or
such Receiving Party’s representatives on a non-confidential basis prior to its
disclosure by a Disclosing Party or such Disclosing Party’s representatives;
                    C. information that becomes available to a Receiving Party
or such Receiving Party’s representatives on a non-confidential basis from a
person (other than a Disclosing Party or such Disclosing Party’s affiliates) who
is not otherwise obligated to maintain such information in confidence;
                    D. information that a Receiving Party can show was already
independently developed by and in the possession of a Receiving Party at the
time of the disclosure hereunder; or
                    E. information that, before or after disclosure hereunder,
is lawfully acquired by a Receiving Party from a third party who has no
obligation directly or indirectly with respect thereto.
          b. Restrictions on and Scope of Use. Each Party shall not directly or
indirectly disclose, display, provide, transfer or otherwise make available all
or any part of the other Party’s Confidential Information to any person or
entity at any time, unless such Party has received prior written permission from
the other Party. Each Receiving Party shall not make copies of a Disclosing
Party’s Confidential Information or any portion thereof except as necessary to
comply with the terms of this Agreement. A Receiving Party shall not provide
access to a Disclosing Party’s Confidential Information to third parties,
including consultants and independent contractors, without receiving prior
written consent from such Disclosing Party. Each Receiving Party shall not at
any time incorporate all or any portion of the other Party’s Confidential
Information into any other work, presentation or product without the express
prior written approval of such other Party. Each Receiving Party shall not use
any portion of the other Party’s Confidential Information outside the scope of
this Agreement, Each Party agrees that it shall be responsible for any breach of
this Agreement by its representatives.
          c. Return of Information. Each Receiving Party agrees that, upon
request of the Disclosing Party, such Receiving Party shall return to such
Disclosing Party all copies of the Disclosing Party’s Confidential Information
and all notes, memoranda or analysis relating thereto. In addition, upon the
request of the Disclosing Party, the Receiving Party shall erase, delete or
destroy all notes, documents, electronic mail, magnetic media or other computer
storage, including system backups, which contain any of the Disclosing Party’s
Confidential Information and shall certify same in writing to the Disclosing
Party.
          d. Acknowledgments. Cornerstone acknowledges that Neos has superior
rights and/or owns in whole or in part the rights, title and interest in and to
all Intellectual Property rights including, but not limited to, all patents,
trademarks, copyrights and trade secrets relating to any ideas, methodologies,
protocols, procedures or techniques that are a result of any meetings or
disclosure of Confidential Information between the Parties, subject to the
rights of the Cornerstone under Section 7.b. Neos and Cornerstone acknowledge
and reaffirm their respective obligations under that certain Confidentiality
Agreement between the Parties dated March 17, 2006 (the “CA”), and the Parties
each confirm that any and all sensitive business

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information shared between the Parties was shared subject to the terms of the
CA, which CA shall remain in full force and effect. The confidentiality
obligations hereunder expand upon and do not diminish the Parties’ rights and
obligations under the CA.
          e. Use of Information. Notwithstanding the foregoing provisions of
Article 8 and the CA, each Party may disclose Confidential Information belonging
to another Party to the extent such Party determines in good faith that
disclosure is reasonably necessary to:
               i. prosecute or defend litigation relating to this Agreement or
such Party’s rights or obligations hereunder;
               ii. exercise its rights hereunder provided such disclosure is
covered by terms of confidentiality similar to those set forth herein;
               iii. file, pursue or maintain an IND, NDA or other regulatory
filings or approvals necessary or appropriate in connection with the development
or commercialization of one or more Products; and
               iv. to evidence, on a confidential basis, that Neos’ Intellectual
Property is effective as shown in data generated from Clinical Studies and
pre-Clinical Studies and post-Regulatory Approval.
In the event a Party shall deem it reasonably necessary to disclose Confidential
Information belonging to another Party pursuant to this 8.e., the disclosing
Party shall to the extent possible give reasonable advance written notice of
such disclosure to the other Party and take reasonable measures to ensure
confidential treatment of such information.
          f. SEC Filings and Other Disclosures. A Party may disclose the terms
of this Agreement (i) to the extent required, in the reasonable opinion of such
Party’s legal counsel, to comply with applicable laws, including the rules and
regulations promulgated by the United States Securities and Exchange Commission;
(ii) to the extent required, in the reasonable opinion of such Party’s legal
counsel, to comply with other applicable governmental laws and regulations; and
(iii) in connection with a prospective acquisition of, merger by or financing
for such Party, to prospective acquirers or merger candidates or to existing or
potential investors, provided that prior to such disclosure each such candidate
or investor shall be agree in writing to be bound by obligations of
confidentiality and non-use no less restrictive in scope than those set forth in
this Article 8. If a Party discloses this Agreement or any of the terms hereof
in accordance with clause (i) or clause (ii) above, such Party shall, at its own
expense, seek such confidential treatment of portions of this Agreement or such
terms, as may be reasonably requested by the other Parties.
          g. Compelled Disclosure. In the event that a Receiving Party or anyone
to whom such Receiving Party or any of such Receiving Party’s representatives
transmits the Disclosing Party’s Confidential Information becomes legally
compelled to disclose any of such Disclosing Party’s Confidential Information,
the Receiving Party will provide the Disclosing Party with prompt notice so that
the Disclosing Party may have the opportunity to seek a protective order or
other appropriate remedy and/or waive compliance with the provisions of this
Agreement. In the event that such protective order or other remedy is not
obtained, or that the

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Disclosing Party waives compliance in writing with the provisions of this
Agreement, the Receiving Party or the Receiving Party’s representatives will
furnish only that portion of the Disclosing Party’s Confidential Information
that is legally required to be disclosed (by judicial or similar process that
would subject the Receiving Party or the Receiving Party’s representatives to
contempt or similar penalty for failure to disclose) and the Receiving Party
shall exercise its best efforts to assure that, before and after a legally
required disclosure, the disclosed Disclosing Party’s Confidential Information
shall remain as confidential as possible.
     9. Regulatory Environment. The Parties specifically acknowledge that Neos
is regulated by the U.S. Food and Drug Administration, the U.S. Drug Enforcement
Administration, the Environmental Protection Agency, the Occupational Safety and
Health Administration, the Federal Trade Commission, as well as other federal
agencies and ancillary state authorities (hereinafter referred to individually
and collectively as “Federal or State Regulatory Authorities”). The Parties
further acknowledge that each of these Federal or State Regulatory Authorities
has the authority to impose restrictions on Neos’ operations that could result
in the commercial infeasibility of the objectives of this Agreement. Such
restrictions may be the result of statutory or regulatory change, changes in
non-regulatory guidances and policies issued by such federal or state regulatory
authorities, or enforcement actions, all of which are outside of Neos’ and
Cornerstone’s control. The regulatory environment under which Neos operates,
including current statutory and regulatory requirements, guidances, and
policies, as well as any changes to such statutory and regulatory requirements,
guidances, and policies promulgated or otherwise made effective after the date
of execution of this Agreement are hereinafter referred to as the “Regulations.”
Neos warrants that, as of the date of execution of this Agreement, it knows of
no current impediments under the aegis of such Regulations to successful
completion of the objectives of this Agreement.
     10. Term/Termination.
          a. Term. Unless sooner terminated pursuant to the terms hereof, this
Agreement shall remain in full force and effect until December 31, 2026.
          b. Termination.
               i. Breach. This Agreement may be terminated upon written notice
by a Party to another Party that such other Party has materially breached its
obligations to under this Agreement (each, a “Breach Notice”), with each Breach
Notice specifically describing the alleged breach by the receiving Party of its
obligations under this Agreement and why such alleged breach is material, if the
receiving Party fails to materially cure the alleged breach described in the
applicable Breach Notice within sixty (60) days of its receipt of such
applicable Breach Notice, except for non-payment which shall have a ten (10) day
cure period, provided, however, that in the event of a good faith dispute with
respect to the existence of a material breach or cure thereof, the sixty
(60) day or ten (10) day, as applicable, cure period shall be tolled until such
time as the dispute is resolved pursuant to Section 11. hereof. Termination for
breach shall not be a non-breaching Party’s sole remedy against the breaching
Party.
               ii. Regulatory. This Agreement may be terminated upon written
notice by either Party to the other that Federal or State Regulatory Authorities
with jurisdiction

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over a Party and the Products has effected, or will effect at a time certain,
changes to the Regulations or have instituted one or more enforcement actions
that can, in the determination of the relevant Party, be reasonably expected to
result in the commercial infeasibility of the objectives of this Agreement.
               iii. Bankruptcy. This Agreement may be terminated by any Party if
(i) the other Party hereto applies for or consents to the appointment of a
custodian, receiver, trustee, or liquidator of all or a substantial part of its
assets, or makes a general assignment for the benefit of creditors, or (ii) the
other Party hereto files, or submits, a petition or answer seeking an
arrangement with its creditors under any bankruptcy or insolvency law or
proceeding, or (iii) any order, judgment or decree is entered against the other
Party hereto, without the application, consent or approval of such Party
appointing a custodian, receiver, trustee or liquidator or a substantial part of
its assets or approving a petition seeking reorganization of such Party and such
order, judgment, or decree shall continue unstayed and in effect for any period
of sixty (60) days, or (iv) any Party hereto fails to remove an involuntary
petition in bankruptcy filed against it within forty five (45) days of the
filing thereof, or (v) any order for relief is entered against any other Party
hereto under the United States Bankruptcy Code. All rights and licenses granted
under or pursuant to this Agreement by Neos are, and will otherwise be deemed to
be, for purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses of
right to “intellectual property” as defined under Section 101 of the U.S.
Bankruptcy Code, The Parties agree that the Cornerstone, as a licensee of such
rights under this Agreement, will retain and may fully exercise all of its
rights and elections under the U.S. Bankruptcy Code.
               iv. Commercial. This Agreement may be terminated upon written
notice by Cornerstone to Neos if Cornerstone determines that continued
investment in the development or commercialization of the Products is not
commercially advisable, which notice must be sent immediately after Cornerstone
makes such a determination. In the event that Cornerstone terminates this
Agreement pursuant to the terms of this Section l0.b.iv. Neos shall have no
further obligations to Cornerstone hereunder and Cornerstone shall transfer
ownership to Neos of all NDAs applied for (but not received) hereunder in
connection with each Product and all data generated in connection with Products,
including, without limitation, data from Clinical Studies and pre-Clinical
Studies, all of which shall be free and clear of all liens and encumbrances. In
addition, Cornerstone shall, from time to time, deliver all documents and other
recordings, whether electronic or otherwise, related to any and all of the
foregoing, and execute any and all reasonable instruments, documents and things
as reasonably requested by Neos from time to time to evidence Neos’ sole
ownership of each of the foregoing.
               v. Force Majeure. The Parties agree that in the event of a Force
Majeure (hereinafter defined) which renders it impossible for a Party (the “FM
Party”) to perform its obligations under this Agreement, the other Party (the
“non-FM Party”) may terminate this Agreement by providing the FM Party with
written notice identifying such Force Majeure (hereinafter defined) (a “FM
Notice”), which FM Notice shall specify the non-FM Party’s assertion that such
Force Majeure (hereinafter defined) will render it impossible for the FM Party
to perform its obligations under this Agreement, but such termination shall only
be effective if the FM Party fails to materially perform its obligations under
this Agreement as

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specified in the applicable FM Notice within [***] days after the FM Party’s
receipt of such FM Notice. Neither Party shall be liable or responsible for any
Force Majeure. As used herein, the term “Force Majeure” shall mean any delays
and/or defaults hereunder due to strikes, riots, acts of God, shortages of labor
or materials, war, governmental laws, regulations or restrictions, or any other
cause whatsoever beyond the reasonable control of a Party.
          c. Separate Agreements. In the event that this Agreement is terminated
by either Party pursuant to Section l0.b. above, the Parties respective rights
and obligations hereunder shall terminate except for those Surviving Obligations
(hereinafter defined). However, any such termination shall have no effect on any
Manufacturing Agreement entered into under or in connection with this Agreement,
each of which shall be a separate and apart from this Agreement.
          d. Damage Limitation. No Party shall be liable to the other Party for
any indirect, special, incidental, punitive or consequential damages in
connection with any breach of this Agreement. Notwithstanding the foregoing,
there shall be no limitation as to the foregoing damages in connection with a
willful breach of this Agreement or in connection with the misappropriation or
infringement of a Party’s Intellectual Property.
     11. Dispute Resolution. Any dispute under or related to this Agreement
shall be settled by non-binding mediation followed, if necessary, by binding
arbitration.
          a. Mediation. Any dispute, controversy or claim arising out of or
related to this Agreement, or the interpretation, application, breach,
termination or validity thereof, which claim would, but for this provision, be
submitted to arbitration shall, before submission to arbitration, first be
mediated through non-binding mediation conducted by the American Arbitration
Association (the “AAA”) in accordance with Commercial Arbitration Rules and
Mediation Procedures (Including Procedures for Large, Complex Commercial
Disputes) (the “ADR Rules”), except where that procedure conflicts with these
provisions, in which case these provisions control. If the AAA is not in
existence at the time of such dispute, the Parties shall agree upon a method for
mediation or an alternate party to conduct mediation, as applicable. The
mediation shall be conducted in Chicago, Illinois and shall be attended by an
individual or individuals from each Party with authority to resolve the dispute.
               i. Mediator. The mediator shall be neutral, independent,
disinterested and shall be selected from a professional mediation firm.
               ii. Selection of Mediator. The Parties shall promptly confer in
an effort to select a mediator by agreement. In the absence of such an
agreement, within ten (10) days of initiation of the mediation, the mediator
shall be selected by AAA.
               iii. Mediation Procedure. The mediator shall confer with the
Parties to design procedures to conclude the mediation within no more than forty
five (45) days after initiation. Under no circumstances may the commencement of
arbitration above be delayed more than forty five (45) days by the mediation
process specified herein absent contrary agreement of the Parties.
 
[***] Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

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               iv. Effect of Mediation. Each Party agrees not to use the period
or pendency of the mediation to disadvantage the other Party, procedurally or
otherwise. No statements made by either side during the mediation may be used by
the other or referred to during any subsequent proceedings. Notwithstanding
anything to the contrary in this Section 1l.a., each Party has the right to
pursue provisional relief from any court, such as attachment, preliminary
injunction or replevin, to avoid irreparable harm, maintain the status quo, or
preserve the subject matter of the arbitration, even though mediation has not
been commenced or completed.
          b. Arbitration. Should the Parties not settle a dispute pursuant to
mediation in accordance with Section 11.a, above, any such dispute, controversy
or claim arising out of or related to this Agreement, or the interpretation,
application, breach, termination or validity thereof, shall be resolved through
binding arbitration conducted by the AAA in accordance with the ADR Rules,
except where that procedure conflicts with these provisions, in which case these
provisions control. The Parties also agree that the AAA Optional Rules for
Emergency Measures of Protection shall apply to the proceedings. If the AAA is
not in existence at the time of such dispute, the Parties shall agree upon a
method for arbitration or an alternate party to conduct arbitration, as
applicable. The arbitration shall be conducted in Chicago, Illinois.
               i. Initiation of Arbitration and Selection of Arbitrator. Upon
the unsuccessful termination of a mediation conducted in accordance with
Section 11.a. above, a Party shall notify the other Party that it wishes to
proceed with arbitration of the matters mediated in such mediation. The Parties
shall agree upon an arbitrator within ten (10) business days after receipt by
the other Party of such notice. Should the Parties not agree upon an arbitrator
within the ten (10) business day period, then the Parties or any one of them may
immediately, by petition to the AAA, or its successor, request the appointment
of three (3) persons, each of whom shall be qualified to serve as an arbitrator,
and none of whom shall have any interest in or be in any way affiliated with or
related to any Party as a stockholder, officer, employee or agent of a relative
of any such person. From the three (3) persons thus appointed, each Party shall,
within fifteen (15) days after both Parties’ written receipt of such
appointment, strike one (1) name, the Party who initiated the arbitration
striking first, The remaining person shall act as the arbitrator. If any Party
shall fail or refuse within the time provided to strike from the list of the
three (3) persons appointed by the court as set forth above, the other Party
shall proceed to select the third arbitrator from said list, Notwithstanding and
in addition to anything else contained in this Agreement, the arbitrator(s)
shall be chosen from a class of disinterested experts qualified by education,
training and/or experience to resolve the particular issue in dispute in an
informed and efficient manner, By the way of illustration and not limitation, if
the issue in dispute pertains to how a transaction shall be treated under
accounting principles, then the arbitrator(s) shall be certified public
accountant(s) with at least five (5) years experience or, if the issue in
dispute pertains to proper manufacturing procedures, then the arbitrator shall
have at least ten (10) years experience in business similar to that of Neos. In
the event the American Arbitration Association, or its successor, is requested
to designate an arbitrator or arbitrators as aforesaid, and declines to do so,
then the entire issue to be arbitrated may be submitted by either Party to the
American Arbitration Association, or its successor, for binding arbitration.
               ii. Arbitration Procedure. After an arbitrator has been appointed
as provided in Section ll.b.i. above, the arbitrator shall hold such meetings as
a Party may

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reasonably request and at such meetings hear and consider any evidence that a
Party desires to present. Within thirty (30) days after the hearing concludes,
the arbitrator shall make his or determination.
               iii. Determinations Binding. All determinations made by the
arbitrator shall be in writing and signed. Such written determinations shall be
in all respects final. No Party shall have any right to appeal therefrom to the
courts or otherwise, and judgment upon the determination may be entered in any
court of competent jurisdiction.
               iv. Fees and Expenses. The fees and expenses of a mediator or an
arbitrator hereunder shall be borne equally between the Parties. Any fees and
expenses charged by the AAA shall be borne equally between the Parties.
     12. Indemnification.
          a. By Cornerstone. Cornerstone hereby agrees to indemnify and hold
Neos harmless from and against any and all actions, suits, proceedings, claims,
losses, liabilities, damages and expenses (including attorneys’ and experts’
fees and sums reasonably expended in investigation and settlement of litigation,
pending or threatened) arising out of or in connection with third party claims
resulting from: (i) any breach by Cornerstone of any term, provision, covenant,
agreement, representation or warranty contained herein; or (ii) the willful or
knowing infringement by Cornerstone of a third party’s intellectual property
rights or misappropriation of any trade secret related to the Product,
including, without limitation, patents, trademarks and/or copyrights, in
connection with this Agreement or the performance of Cornerstone’s obligations
hereunder except to the extent arising out of or in connection with the willful
or knowing infringement by Neos of a third party’s foregoing intellectual
property rights.
          b. By Neos. Neos hereby agrees to indemnify and hold Cornerstone
harmless from and against any and all actions, suits, proceedings, claims,
losses, liabilities, damages and expenses (including attorneys’ and experts’
fees and sums reasonably expended in investigation and settlement of litigation,
pending or threatened) arising out of or in connection with (i) any breach by
Neos of any term, provision, covenant, agreement, representation or warranty
contained herein or (ii) the willful or knowing infringement of any patent or
misappropriation of any trade secret by Neos in connection with this Agreement
or the performance of Neos’ obligations hereunder except to the extent arising
out of or in connection with the willful or knowing infringement by Cornerstone
of a third party’s patent rights or misappropriation of any trade secret.
          c. Procedure. Upon the occurrence of any event giving rise to a right
to seek indemnification hereunder, the Party seeking indemnification shall give
the indemnifying Party written notice of such claim, action or proceeding within
ten (10) days after it becomes known to such Party, provided, however, that the
failure to give such notice shall not relieve the indemnifying Party of its
obligations to indemnify unless such failure materially and adversely affects
the defense of such action. The indemnifying Party shall, within ten (10) days
after receipt of such notice, notify the other Party as to whether or not it
intends to take over the defense of such action, failing which, the Party
seeking indemnification shall be entitled to take over the defense of the
action. Upon proper notification by the indemnifying Party of its

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intention to defend the claim, the indemnifying Party shall engage counsel
reasonably satisfactory to the indemnified Party to assume the investigation and
defense of the claim, and shall keep the indemnified Party and its counsel
currently informed as to all material aspects of the claim and its investigation
and defense. The indemnified Party may, in such case, engage counsel to assist
in the investigation and defense of the claim, but shall not be entitled to
reimbursement for any expenses related to the engagement of such counsel. If the
indemnifying Party elects not to assume the investigation and defense of the
claim, or fails to make any election within the time period herein provided, or
if in the reasonable opinion of counsel to the indemnified Party, the
indemnified Party has available to it defenses which are contrary to the
interests of the indemnifying Party in any such action, then the indemnified
Party shall be entitled to engage its own counsel for such investigation and
defense, and shall be entitled to the full indemnification therefor.
     13. Representations and Warranties.
          a. Authority. Each Party represents and warrants that as of date
hereof, it has the full right, power and authority to enter into this Agreement
and that this Agreement has been duly executed by such Party and constitutes a
legal, valid and binding obligation of such Party, enforceable in accordance
with its terms.
          b. Duly Organized.
               i. Neos. Neos represents and warrants that it is duly organized
and validly existing as a limited partnership in good standing under the laws of
Texas, with power to conduct any lawful business activity.
               ii. Cornerstone. Cornerstone represents and warrants that it is
duly organized and validly existing as a corporation in good standing under the
laws of Nevada, with corporate power to conduct any lawful business activity.
          c. Intellectual Property. Neos has the full right and power to grant
the licenses set forth in Article 7. Neos is not a party to any outstanding
agreements that are inconsistent with the provisions of this Agreement. Each of
the patents in the Intellectual Property has been prosecuted in a diligent and
professional manner. None of such patents (i) is subject to a pending
interference action, opposition action, re-examination proceeding, litigation or
other similar action by a Third Party challenging such patents or patent
applications, (ii) has been abandoned, (iii) has been asserted to be invalid or
unenforceable in a written communication to Neos or (iv) to the best of Neos’
knowledge, is the subject of an on-going unauthorized use, infringement or
misappropriation claim by a Third Party.
          d. Disclaimer of Warranties. EXCEPT AS SET FORTH ABOVE, NEOS AND
CORNERSTONE MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTIES OR CONDITIONS OF
ANY KIND, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THIS AGREEMENT, INCLUDING,
BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.

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     14. Cornerstone Change of Control. In the event that Cornerstone or the
First Product experiences a Change of Control (defined below), during the
License Term, then [***]. Further, Cornerstone shall, during said term, promptly
inform Neos of any transaction or series of transactions results in a Change of
Control. As used herein, the term Change of Control shall mean that any of the
following occur: (a) (i) ownership of more than fifty percent (50%) of the First
Product is transferred by Cornerstone to a third party; or (ii) Cornerstone
exclusively licenses its rights to the First Product to a third party; and
(b)(i) there shall have been consummated: (A) any merger of Cornerstone wherein
Cornerstone is not the continuing or surviving entity or pursuant to which
shares of Cornerstone’s common stock or similar ownership interests would be
converted to cash, securities or other property, other than a merger of
Cornerstone wherein the holders of Cornerstone’s common stock or other similar
ownership interest immediately prior to the merger collectively have a majority
ownership of common stock or similar ownership interests of the surviving entity
immediately after the merger; (B) any sale, lease, exchange or transfer (in one
transaction or a series of related transactions) of all, or substantially all,
of Cornerstone’s assets; (ii) the owners of Cornerstone approve a plan or
proposal for the liquidation or dissolution of Cornerstone; or (iii) any person
or group (as that term is used in Rule 13d-5 of the Securities and Exchange Act
of 1934, as amended (the “Exchange Act”)), that is not on the date of this
Agreement a beneficial owner (within the meaning of Rule 13d-3 of the Exchange
Act) of more than fifty percent (50%) of Cornerstone’s outstanding common stock,
shall become the beneficial owner (within the meaning of Rule 13d-3 of the
Exchange Act) of more than fifty percent (50%) of Cornerstone’s outstanding
common stock.
     15. Notices. Any and all notices, elections, demands, requests and
responses thereto permitted or required to be given under this Agreement shall
be in writing, signed by or on behalf of the Party giving the same, and shall be
deemed to have been properly given and shall be effective and deemed delivered
upon being personally delivered or delivered by nationally recognized courier
such as Federal Express which maintains a record of receipt and delivery, or
three (3) days after being deposited in the United States mail, postage prepaid,
registered or certified with return receipt requested, to the other Party at the
address of such other Party set forth below or at such other address within the
continental United States as such other Party may designate by notice
specifically designated as a notice of change of address and given in accordance
herewith; provided, however, that the time period in which a response to any
such notice, election, demand or request must be given shall commence on the
earlier of the date of actual or deemed receipt thereof; and provided further
that no notice of change of address shall be effective until the earlier of the
date of actual or deemed receipt thereof. Personal delivery to a Party or to any
officer, agent or employee of such Party at said address shall constitute
receipt. Rejection or other refusal to accept or inability to deliver because of
changed address of which no notice has been received shall also constitute
receipt. Any such notice, election, demand, request or response shall be
addressed as follows:

         
 
  If to Neos, to:   Neos Therapeutics, L.P.
 
      2940 N. Hwy. 360
Grand Prairie, Texas 75050

 
[***] Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

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  If to Cornerstone, to:   Cornerstone Biopharma, Inc.
 
      2000 Regency Parkway, Suite 255
Cary, North Carolina 27511

     16. Continuing Obligations. The termination or expiration of this Agreement
shall not relieve the Parties of any obligations accruing prior to such
termination, and any such termination shall be without prejudice to the rights
of either Party against the other. The provisions of Sections 7 and 8 shall
survive any termination or expiration of this Agreement (with the foregoing
referred to herein as the “Surviving Obligations”).
     17. Relationship between the Parties. Neos and Cornerstone acknowledge that
they are, and shall at all times remain, independent contractors. Cornerstone
and Neos and their agents, servants, and employees shall under no circumstances
be deemed agents or representatives of each for any purpose whatsoever, unless
otherwise agreed to in writing, and Neos and Cornerstone shall have no authority
to enter into any contracts or commitments in the name or on behalf of each
other or to bind the other in any way. No Party hereto is or shall be deemed to
be a franchisee of any other Party hereto, and each covenants and agrees not to
make any representation to any person, express or implied, to the contrary.
     18. Severability. The Parties agree that each of the provisions included in
this Agreement is separate, distinct and severable from the other and remaining
provisions of this Agreement, and that the invalidity or unenforceability of any
Agreement provision shall not affect the validity or enforceability of any other
provision or provisions of this Agreement. Notwithstanding the foregoing, if
from any circumstances whatsoever fulfillment of any term or provision of this
Agreement shall involve transcending the limit of validity of any applicable law
with regard to obligations of like character, then ipso facto the obligation to
be fulfilled shall be reduced to the limit of such validity and such obligation
shall be fulfilled to the limit of such validity.
     19. Assignment. This Agreement and the rights and obligations of
Cornerstone and Neos hereunder may not be assigned by either Party in whole or
in part without the prior written consent of the other Party, which consent may
not be unreasonably withheld, provided that either Party may assign all of its
rights and obligations under this Agreement in connection with a merger or the
sale of all or substantially all of that Party’s assets or in connection with a
sale or other transfer by a Party of all or substantially all of its assets
related to the Products, Notwithstanding the foregoing, this Agreement and the
rights and obligations of Cornerstone and Neos may be wholly assigned by either
Party to its wholly-owned subsidiaries or any entity which is otherwise related
to such Party, provided that in all events the Party that is originally a party
hereto shall financially guarantee the obligations of such assigning Party
hereunder. In the event of an assignment, the obligations under Section 2.e.
shall not apply to activities based on technologies or intellectual property
rights owned or controlled by the assignee or successor at the time of the
assignment or to any products in development or commercialization by the
assignee or successor at the time of the assignment.

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     20. Waiver. The waiver by a Party of any breach of this Agreement shall not
be effective unless in writing, and no such waiver shall operate or be construed
as a waiver of the same or another breach on a subsequent occasion.
     21. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of New York.
     22. Independent Judgment. The Parties acknowledge that: (a) they have read
this Agreement; (b) they understand the terms and conditions of this Agreement;
(c) they have had the opportunity to seek legal counsel and advice; (d) they are
of equal bargaining power; and (e) they have relied on their own judgment in
entering into this Agreement.
     23. Entire Agreement; Recitals. This Agreement embodies the entire
agreement of the Parties concerning the subject matter hereof. No amendment or
modification of this Agreement shall be valid or binding unless made in writing
and signed by the Parties. Except for the CA, all prior understandings and
agreements relating to the subject matter of this Agreement are hereby expressly
terminated. The Parties agree that the recitals to this Agreement are an
integral part hereof.
     24. Insurance. Each party shall, throughout the term of this Agreement,
obtain and maintain at its own cost and expense from a qualified insurance
company appropriate liability insurance naming the other Party as an additional
insured. Such policy shall provide protection against all claims, demands, and
causes of action arising out of any defects or failure to perform, alleged or
otherwise, of the Product or any material used in connection therewith or any
use thereof.
     25. Counterparts. This Agreement may be executed in two or more
counterparts, or facsimile or electronic versions, each of which shall be deemed
to be an original, and all of which together shall be deemed to be one and the
same agreement.
[signature page follows]

21

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[Signature Page to Amended and Restated Products Development Agreement]
     Cornerstone and Neos have each caused this Agreement to be executed by its
duly authorized officer as of the date first shown above.

              Neos:   Cornerstone:
 
            NEOS THERAPEUTICS, L.P.   CORNERSTONE BIOPHARMA, INC.
 
           
By:
  /s/ Mark Tengler    By:   /s/ Craig Collard
 
           
 
  Mark Tengler
President       Craig Collard
President and CEO

 

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APPENDIX I
First Product Development Plan