exv10w16






Exhibit 10.16




EXECUTION VERSION




DEVELOPMENT AND MANUFACTURING AGREEMENT




     THIS DEVELOPMENT AND MANUFACTURING AGREEMENT (this “Agreement”) is made effective the
27th day of February, 2008, among Cornerstone BioPharma, Inc., a Delaware corporation
(“Company”), NEOS Therapeutics, L.P., a Texas limited partnership (“Manufacturer”)
and Coating Place, Inc., a Wisconsin corporation (“Supplier”). Manufacturer, Supplier, and
Company are sometimes referred to herein individually as a “Party” and collectively as the
“Parties.”



RECITALS




     WHEREAS, Manufacturer is in the business of developing, compounding, processing, filling,
testing and packaging human pharmaceutical products;



     WHEREAS, Supplier is in the business of supplying Wurster fluid bed coating for encapsulation
of solid particulate materials used in the manufacture of human pharmaceutical products and,
additionally, owns certain drug resin complex technologies;



     WHEREAS, Company is in the business of research, development, marketing and sales of human
pharmaceutical products; and



     WHEREAS, the Parties desire to enter into this Agreement pursuant to which each will
contribute its respective expertise and/or technologies with a view towards developing,
manufacturing, marketing, and selling a [***] Hydrocodone/[***] suspension [***] (the
“Product”), subject to obtaining necessary approvals from the United States Food and Drug
Administration (“FDA”) [***].



     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 hereto have agreed and do hereby
agree as follows:



     1. Definitions. In addition to the other terms defined elsewhere herein, the following terms
and phrases shall have the following meanings when used in this Agreement.



     [***]





 




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




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     “CMC” means the chemistry, manufacturing and controls section(s) and data in the
[***].



     “Development Work” means all the activities specified to be performed by Supplier or
Manufacturer under this Agreement including without limitation work related to formulation of the
Product, developing and documenting the manufacturing process related to the Product, preparing the
CMC section of the [***] for the Product, and manufacturing the Product for use in connection with
the [***]submission.



     “DMF” means, in relation to Supplier’s Drug Resin Complex, the Drug Master File
containing all the information on the production and control of the Drug Resin Complex.



     “Drug Resin Complex” means the certain drug resin complex technologies that result in
products with API ionically bound to an ion resin complex that may be coated for sustained release
characteristics, which technologies are the subject of the Supplier Patent Applications (as defined
in Section 9.9).



     “FDCA” means the federal Food, Drug and Cosmetic Act, as amended, and the regulations
promulgated thereunder.



     “GAAP” means United States generally accepted accounting principles.



     “GMP” or “cGMP” means the FDA’s current good manufacturing practices, as
specified in Title 21, Code of Federal Regulations, Part 210, and applicable FDA guidance
documents, as the same shall be amended from time to time.



     “Laws” means any and all federal, state, and local laws, rules, Regulations, orders
and requirements applicable to the Parties in performance of this Agreement including without
limitation the following: the Prescription Drug Marketing Act of 1987, the Federal Food, Drug and
Cosmetic Act, the Federal or State Regulatory Authorities (as defined below), and all regulations
and other guidance or requirements of the FDA or any equivalent agency.



     “Manufacturer Adjusted COGs” means [***], all calculated in accordance with GAAP.



     “Manufacturing Site” means Manufacturer’s facilities where the Product formulation and
manufacturing process are developed and where Product samples and quantities of Product for
commercial sale are manufactured, stored and handled.



     “Net Profits” means [***], all calculated in accordance with GAAP.



     “Supplier Adjusted COGs” means [***], all calculated in accordance with GAAP.





 




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




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     “Territory” means the United States of America and Canada (upon approval by the
Canadian Regulatory Authority), including each of the states, provinces, territories, possessions
and protectorates thereof, the District of Columbia, and the Commonwealth of Puerto Rico.



     2. General.



     2.1 Project Overview. Supplier, Manufacturer and Company each specialize in separate and
distinct processes needed for successful commercialization of the Product, and each Party wishes to
contribute its respective expertise and technologies to further that end. Supplier and
Manufacturer shall license their respective intellectual property necessary to manufacture and
commercialize the Product. Supplier shall supply Manufacturer with the Drug Resin Complex for
manufacture of Product. Manufacturer shall develop, formulate, test and package the Product for
delivery to Company. Company shall prepare and prosecute any applicable FDA approvals and, upon
approval, shall market, sell and distribute the Product in the Territory. In turn, as more
specifically set forth in this Agreement, each Party shall share equally in the Net Profits.



     2.2 Federal or State Regulatory Authorities; Regulations. The Parties are regulated by the
FDA, the U.S. Drug Enforcement Administration (DEA), the Environmental Protection Agency (EPA), the
Occupational Safety and Health Administration (OSHA), the Federal Trade Commission (FTC), 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 their 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 their control. The regulatory
environment under which the Parties operate, 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.” Each of the
Parties shall use reasonable efforts to keep all Parties apprised of statutory or regulatory
changes, changes in non-regulatory guidances and policies issued by such agencies (i.e., changes to
the Regulations) or enforcement actions that could affect the successful achievement of the
objectives of this Agreement.



     2.3 Exclusivity/Non-Competition. During the Term of this Agreement, except as otherwise
permitted hereunder (e.g., bankruptcy of Manufacturer), Company agrees not to purchase the Product,
or any composition that directly competes with the Product, from any person or entity other than
Manufacturer or to designate any other person or entity as a manufacturer of the Product, or any
composition that competes with the Product, in supplemental filings with the FDA. During the Term
of this Agreement, Manufacturer agrees not to (and not to assist any other person or entity to)
develop, formulate, manufacture or supply the Product to any other person or entity, and, except as
otherwise permitted hereunder (e.g., bankruptcy of Supplier), agrees not to purchase the Drug Resin
Complex from any person or entity other than Supplier. During the Term of this Agreement, Supplier
agrees not to supply (or to license any



Page 3 of 24









 







other person or entity to supply) the Drug Resin Complex related to the Product to any other
person or entity.



     3. Formulation and Manufacturing Process Development.



     3.1 Manufacturer’s Site. Manufacturer shall, at its expense, establish the Manufacturing Site
as an FDA certified and approved GMP facility by the date specified in the Product Development Plan
(as defined below) and promptly shall provide Company with a copy of the written GMP facility
approval it receives from the FDA. The Parties acknowledge that Manufacturer is in the process of
GMP recertification by the FDA and that it expects such approval prior to commencing the clinical
[***] study. However, in the event that Manufacturer has not achieved GMP recertification from the
FDA during the development phase, Manufacturer shall provide sufficient technology transfer and
personnel to Supplier to transfer the development and manufacture of Product to Supplier’s facility
or a third-party facility as agreed by the Parties, such approval not to be unreasonably withheld.
If, pursuant to the preceding sentence, Supplier assumes Manufacturer’s manufacturing
responsibility, then Supplier shall assume the rights and obligations of Manufacturer under this
Agreement with respect to the manufacture of the Product.



     3.2 Product Development Plan. The Parties agree to jointly develop a plan of action and
milestones to perform the Development Work (the “Product Development Plan”), which will be
negotiated in good faith, duly executed by the Parties, and attached hereto as Exhibit A to
this Agreement. All development activities shall be performed by Manufacturer in compliance with
all applicable Laws. Manufacturer and Supplier shall use commercially reasonable efforts to
complete the development of the Product in a timely fashion consistent with the Product Development
Plan, and keep Company informed of the progress and status of the development activities. Upon
successful completion of the Development Work, the Parties’ mutually agreed specifications for the
Product (the “Specifications”) will be attached hereto as Exhibit B. Except as set
forth in Section 3.4, fees for the development activities for the Product shall be as provided in
the Product Development Plan. Supplier shall invoice Manufacturer, and Manufacturer shall invoice
Company, for each of its completed steps of the Product Development Plan monthly. Invoices shall
contain details regarding the steps completed and the amount being charged for such completed work.
Payments of invoices shall be in accordance with Section 7.5(a).



     3.3 CMC. Manufacturer shall, in consultation with Company’s development staff, prepare and
provide regulatory data and documentation and draft CMC respecting the manufacture of the Product,
all in compliance with applicable Regulations. Company shall critically review and provide
corrections to the CMC section in a timely fashion. Manufacturer shall use commercially reasonable
efforts to be prepared for any FDA pre-approval inspection of the Manufacturing Site. Manufacturer
shall cooperate with Company to respond to any FDA information requests relating to the CMC section
that may arise during the [***] submission, Federal or State Authorities Regulatory review and
approval processes and, upon Company’s reasonable request, will provide other assistance related to
obtaining [***] approval.





 




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




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     3.4 Retesting; Manufacturer Adjusted COGs; Supplier Adjusted COGs. Company acknowledges and
agrees that, because this is a development project, Manufacturer and Supplier may need to repeat
certain steps in connection with each FDA approval if testing indicates that additional work is
necessary or if additional work is requested by the FDA. In addition, Company acknowledges and
agrees that additional work may be required by the FDA after its inspection or review of the
documents filed with the FDA. Manufacturer and Supplier will attempt to minimize any deviations
from the Product Development Plan; however, if additional steps or work are determined to be
necessary by Manufacturer or Supplier or the FDA to be necessary, Manufacturer or Supplier shall
inform Company of the nature, extent and expected costs associated with such additional steps or
work and Company and Manufacturer or Supplier, as the case may be, shall negotiate in good faith to
amend the Product Development Plan to provide for same.



     3.5 Project Coordination. During the development phase, at least one representative of each
Party will participate in one weekly telephone conference and one quarterly face-to-face conference
at a mutually agreeable location to review, coordinate, and discuss issues and progress regarding
Product development. For the avoidance of doubt, such representatives shall have no authority to
amend or waive compliance with the terms and conditions of this Agreement, to resolve differences
of opinion between the Parties regarding the interpretation of this Agreement or to approve actions
of the Parties that are inconsistent with this Agreement.



     4. Manufacture of the Product.



     4.1 General. Following approval [***] by the FDA, and during the Term of this Agreement,
Manufacturer agrees to manufacture and supply the Product, the Product of which shall conform to
the Specifications, Regulations, and cGMPs. Manufacturer or Supplier shall notify Company if there
is any issue with time lines and delivery of Product under this Agreement. The Specifications may
be amended from time to time by written agreement of the Parties without the necessity of amending
this Agreement.



     4.2 Testing and Documentation. Promptly following each manufacturing run, Manufacturer shall
(a) test each lot of finished Product in accordance with Parties’ agreed upon written Product
Specifications; and (b) certify within a commercially reasonable period of lot release that: (i)
each lot of finished Product shall conform with all Regulations of all applicable Federal or State
Regulatory Authorities, (ii) each lot was produced and tested in accordance with the
Specifications, (iii) each lot is in compliance with cGMP requirements and other applicable
documents including the [***] and DMF for Product, and (iv) each lot complies with any other
regulatory documents that contain procedures agreed upon in writing between the Parties.
Manufacturer shall retain all relevant records pertaining thereto as may be required by GMP and
other applicable Laws.



     4.3 Acceptance of Lots. Company shall have a period of thirty (30) days following receipt of
samples and completed batch records for a Product lot from Manufacturer to notify Manufacturer that
the Product lot is rejected. Rejection of the Product shall be based on: (a) non-





 




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




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conformance to Specifications; (b) adulteration or misbranding within the meaning of the FCDA, or
(c) Product not having been prepared under compliance with cGMP or other applicable Laws. Along
with rejection, Company shall provide an accompanying report of analysis (including the Product
sample and lot number from the lot analyzed) conducted in accordance with the testing protocols in
the Product Specifications set forth in the [***]. If no such notice of rejection of
non-conforming Product is received by Manufacturer in accordance with the procedure and time frame
described herein, Company shall be deemed to have accepted such delivery of Product.




     4.4 Remedies for Rejection of a Lot. Manufacturer shall cooperate in good faith to resolve
the rejection of a lot. Within thirty (30) days from Manufacturer’s receipt of notice of
rejection, Manufacturer shall notify Company whether or not it accepts the basis for Company’s
rejection. If Manufacturer’s and Company’s testing data disagrees, each of Manufacturer and
Company hereby agree to submit a sample of the rejected Product to a mutually agreed upon
third-party laboratory for testing in accordance with the Product Specifications. The fees and
expenses for such laboratory testing shall be borne equally by the Parties if the Product is found
to be non-conforming and otherwise by Company. Upon rejection of Product, Manufacturer shall use
commercially reasonable best efforts to replace such rejected Products.



     5. Supply of Drug Resin Complex and Materials for Commercial Supply.



     5.1 Drug Resin Complex.



          (a) Following approval [***] by the FDA, and during the Term of this Agreement, Supplier
agrees to supply Drug Resin Complex to Manufacturer with all quantities needed to produce Product
in any Firm Zone (as defined below) from time to time, which Drug Resin Complex shall conform to
and be supplied in accordance with the DMF, Laws, and cGMPs. Supplier shall notify both
Manufacturer and Company, if there is any issue with time lines and delivery of Drug Resin Complex
to support quantities in any Firm Zone.




          (b) Supplier shall (i) test each lot of Drug Resin Complex in accordance with the
Specifications; and (ii) certify that: (A) each lot of Drug Resin Complex shall conform with all
Laws, (B) each lot was produced and tested in accordance with the Specifications, (C) each lot is
in compliance with cGMP requirements and other applicable documents including the [***] and DMF for
Product, and (D) each lot complies with any other regulatory documents that contain procedures
agreed upon in writing between the Parties. Supplier shall retain all relevant records pertaining
thereto as may be required by GMP and other applicable Laws.




     5.2 Materials. Manufacturer shall source all bulk materials, active ingredients or inactive
ingredients and other manufacturing and test materials (other than Drug Resin Complex) in order to
manufacture Product in accordance with the Specifications, such items to be in accordance with the
United States Pharmacopeia (“USP”) and other Laws. Manufacturer shall perform all testing
of such Drug Resin Complex required by the applicable Specifications. Supplier shall similarly
source all materials needed by it for production of Drug Resin Product.





 




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




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     6. Regulatory Filings.



     6.1 Filing Fees. Company shall be solely responsible for all costs and expenses directly
related to filings required by the FDA, with the exception of the Pharmaceutical Development
Utility Fee Act (“PDUFA”) fees, which shall be shared equally by the Parties. Upon written
demand by Company, each of Manufacturer and Supplier shall within thirty (30) days reimburse
Company for its share of the PDUFA fees.



     6.2 Designation as Manufacturer. Manufacturer shall be responsible for providing all
documentation necessary for Company to designate Manufacturer as the manufacturer and supplier of
the Product [***]. Manufacturer shall be available for any required FDA inspections of its
facility or its documentation. Manufacturer shall have no obligation to manufacture the Product
unless and until Manufacturer has successfully been designated and approved as a manufacturer
[***].



     6.3 [***] DMF References. Supplier shall be responsible for preparing and filing the DMF for
the Drug Resin Complex at its sole expense. Supplier promptly thereafter shall issue a letter to
FDA Drug Master File Staff granting the Company reference authorization to its DMF for the Drug
Resin Complex used in the manufacture of the Product.



     6.4 [***] Submission. After Manufacturer successfully completes the development and
manufacture of samples of Product, Company shall have [***] studies performed [***]. Company will,
at its sole and exclusive expense, arrange and pay for the performance of the studies that are
necessary, if such studies are successful, to satisfy the requirements of the FDA [***] (including
contracting with, at its sole and exclusive expense, the contract research organization(s)
(“CRO”) and approving the protocols and contracts for applicable [***] studies [***]), and
subject to successful completion of those studies, for preparing and submitting to the FDA [***] to
obtain regulatory approval for the Product. Company shall use commercially reasonable efforts to
receive regulatory approval for the Product within [***] after Company submits [***] for the
Product to the FDA.



     6.5 Remedial Actions. If the [***] study for the Product fails or if [***] the Product is
rejected by the FDA, the Parties will investigate the reasons why the [***] study for the Product
failed or Company’s [***] was rejected by the FDA, and the Parties will discuss the results of the
investigation and the additional research and development work they believe is necessary for the
Product and the anticipated costs to perform the additional research and development work and to
have the additional study or studies performed. If Company decides to proceed with such additional
work and/or studies, then Manufacturer and Supplier will perform at Company’s request such
additional research and development work for the Product, and Company will pay Manufacturer and
Supplier for such additional work Manufacturer and Supplier perform for Company based on a new
Product Development Plan.



     7. Price; Sales.



     7.1 Compensation. Compensation for Parties shall be as follows: (a) Two Hundred Fifty
Thousand Dollars ($250,000) to be paid by Company to Manufacturer upon execution of





 




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




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this Agreement, (b) Two Hundred Fifty Thousand Dollars ($250,000) to be paid by Company to Supplier
upon execution of this Agreement, and (c) after Product is launched, the Parties shall share Net
Profits in equal parts.




     7.2 Cost Determination. [***]



     7.3 Selling Price Determination. Selling price, changes in selling price, or pricing strategy
related to selling price shall be determined by the Company in its sole discretion (a) following a
consultation with Supplier and Manufacturer and (b) using a commercially reasonable methodology.



     7.4 Production Forecasts.



          (a) Manufacturer shall use commercially reasonable efforts to manufacture and supply
sufficient quantities of the Product to fulfill Company’s anticipated requirements as indicated by
actual purchase orders submitted by Company from time to time during the Term; provided, that
Manufacturer shall have at least three (3) months after receipt of a purchase order to deliver the
Product and that Company shall have continued to provide Manufacturer three (3) months in advance
with a noncancellable, firm three (3) month purchase order (the “Firm Zone”) and a
non-binding rolling six (6) month forecast of anticipated orders outside the Firm Zone. In the
event that the Company at any time fails to provide the Manufacturer with such purchase order
and/or forecast, the Manufacturer shall have no obligation to produce any quantities of Products in
excess of the quantities set forth in the last non-binding forecast received by Manufacturer from
the Company.




          (b) From time to time, due to significant unforeseen circumstances, Company may deliver to
Manufacturer a Purchase Order for Product volumes in excess of those specified in any forecast. In
the event that Company delivers a purchase order requesting that Manufacturer provide Product
volumes in excess of the last non-binding forecast received by Manufacturer from the Company,
Manufacturer shall use commercially reasonable efforts to provide Company with such excess Product
volumes.




          (c) Promptly following Manufacturer’s receipt of each purchase order and rolling forecast,
Manufacturer shall place counterpart purchase orders and non-binding forecasts with Supplier
regarding its requirements for Drug Resin Complex.




     7.5 Invoicing; Payments; Audit.



          (a) Supplier and Manufacturer will render invoices in connection with their shipments of Drug
Resin Complex and Product hereunder, which invoices shall be due and payable by Manufacturer or
Company as the case may be within thirty (30) days after receipt.






 




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




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          (b) After Product is launched, a third of Net Profits shall be paid by Company to Supplier and
a third of the Net Profits shall be paid by Company to Manufacturer, which payments shall be
accompanied by a report detailing the calculation of such Net Profits and paid within thirty (30)
days after the end of (i) each of the first six (6) full calendar months following commercial
launch, and (ii) each calendar quarter thereafter.




          (c) In determining the direct costs that any of the Parties attributes to the Product
(“Product Direct Costs”) for purposes of calculating Manufacturer Adjusted COGS, Supplier
Adjusted COGS or Net Profits, as the case may be, the Parties shall not include any costs or
expenses to the extent arising out of or relating to (i) any contract or agreement entered into
prior to the date of this Agreement, or (ii) any event or occurrence happening prior to the date of
this Agreement.




          (d) In the event of a dispute regarding Product Direct Costs, the Parties shall attempt to
resolve the discrepancy in good faith by providing such financial information as may be required,
which information shall be Confidential Information under Section 10. If the Parties are unable to
resolve the dispute informally, each of the Parties shall have the right, at its own expense and at
any reasonable time or times, to cause a third party independent auditor not engaged on a
contingency basis and approved by the audited Party (not to be unreasonably withheld) to inspect
and audit the books and records of the other Party solely to verify Product Direct Costs attributed
to their respective contribution for a period of two (2) years from and after the period in which
such Product Direct Costs were incurred; provided, however, that once Product Direct Costs have
been audited with respect to any period, such Product Direct Costs for such period shall not again
be subject to audit. Any such audit (i) shall be conducted after reasonable prior notice, during
normal business hours and at the location(s) where such books and records are normally kept and
(ii) may not be conducted more than once in any given twelve (12) month period. The auditor shall
only report to the Parties the amount, if any, of any correction (each a “Correction
Amount”) and shall not disclose to the Parties either the detailed or underlying information
supporting such conclusion or any of such auditor’s work papers. The results of the Audit shall be
Confidential Information, shall be shared concurrently with all the Parties, and shall be binding
on the Parties. Notwithstanding the foregoing, in the event that any such audit results in a
Correction Amount, it shall be accounted for in the following monthly or quarterly payment under
Section 7.5(b) as follows:




               (i) If Product Direct Costs originally were overstated by a Party, then such Party’s share of
Net Profits shall be reduced by an amount equal to two-thirds of the Correction Amount and the
other Parties’ respective share of Net Profits for such monthly or quarterly period shall be
increased by an amount equal to one-third of the Correction Amount.



               (ii) If Product Direct Costs originally were understated by a Party, then such Party shall be
entitled to a payment from monthly or quarterly Net Profits prior to and in preference to the other
Parties in an amount equal to the Correction Amount. Following such preferential payment, the
remaining Net Profits for such monthly or quarterly period shall be allocated to the Parties in
equal shares as contemplated by Section 7.5(b).



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     8. Representations and Warranties.



     8.1 Mutual Representations and Warranties. Each Party hereby represents and warrants to each
of the other Parties as follows:



          (a) This Agreement has been duly authorized by all necessary corporate action, has been duly
executed and delivered, and is a legal and valid obligation binding upon such Party and enforceable
in accordance with its terms. Such Party has the full power and authority to enter into this
Agreement and to carry out the obligations contemplated hereby.




          (b) Delivery and performance of this Agreement by such Party does not conflict with any
agreement, instrument or understanding, oral or written, to which it is a party or by which it is
bound, nor violate any Regulations of laws of any court having jurisdiction over it.




     8.2 Manufacturer’s Representations and Warranties. Manufacturer hereby represents and
warrants to Company and Supplier as follows:



          (a) As of the date hereof, Manufacturer has the right to license the Manufacturer IP to
Company for purposes of the Development Work and the commercialization of the Product.
Manufacturer owns all right, title and interest in and to, or otherwise controls, the Manufacturer
IP.




          (b) Manufacturer has not, and during the Term and will not, grant any right to any third party
relating to the Manufacturer IP in a manner, or pursue any other activity that would otherwise
conflict with the rights granted to Company hereunder.




          (c) As of the date hereof, Manufacturer has no actual knowledge that (i) any third party is
infringing any of Manufacturer IP or misappropriating or using Manufacturer IP, and (ii) the
Manufacturer IP, as applied to the Product, infringes any third party intellectual property rights.
Manufacturer has not received any written communication from a third party claiming that
intellectual property rights owned or controlled by such third party would be misappropriated or
infringed by the use of the Manufacturer IP.




          (d) As of the date hereof, Manufacturer has not been served with any interference action or
litigation with respect to the Manufacturer IP and Manufacturer has not received any written
communication that expressly threatens interference actions or other litigation before any patent
office, court, or any other governmental entity in any jurisdiction in regard to any of the
Manufacturer IP. Manufacturer represents and warrants that as of the date of this Agreement it is
not aware of any prior art or other information that would render any patent under the Manufacturer
IP invalid. Manufacturer represents and warrants that as of the date of this Agreement it is not
aware of any patent or any other third party intellectual property right that would be infringed by
Manufacturer in the fulfilling its obligations under this Agreement.




          (e) Without limiting the generality of the foregoing, Manufacturer represents and warrants
that it has the right to provide to Company the Product and information provided by Manufacturer
hereunder, and to grant Company the right to use such Product and information for the conduct of
Company’s rights and obligations hereunder.




Page 10 of 24









 








          (f) Manufacturer will not use, in any capacity associated with or related to the manufacture
of the Product, the services of any persons who have been debarred under 21 U.S.C. § 335a(a) (or
who become the subject of new debarment proceedings commenced after the Effective Date) or any
comparable Law. Furthermore, neither Manufacturer nor, to the knowledge of Manufacturer, any of
its officers, employees, or consultants has been convicted of an offense under (i) either a federal
or state law that is cited in 21 U.S.C. § 335a as a ground for debarment, denial of approval, or
suspension, or (ii) any other Law cited in any comparable regulatory act as a ground for debarment,
denial of approval or suspension.




          (g) Following Manufacturer’ receipt of the FDA’s approval of the Manufacturing Site as a GMP
manufacturing facility, Manufacturer will use its commercially reasonable efforts to thereafter
maintain throughout the remainder of the Term all manufacturing consents necessary for the
performance of its obligations hereunder.




          (h) The manufacture, packaging, processing, storage, disposal and other handling of the
Product by Manufacturer until delivery to Company’s designated carrier or freight forwarder at the
Manufacturing Site shall be in material accordance with and conform to the Specifications, GMP, and
applicable Regulations. Product shall not be adulterated or misbranded within the meaning of the
Federal Food, Drug and Cosmetic Act.




     8.3 Supplier’s Representations and Warranties. Supplier hereby represents and warrants to
Company and Manufacturer as follows:



          (a) As of the date hereof, Supplier has the right to license the Supplier IP to Manufacturer
for purposes of the Development Work and the commercialization of the Product. Supplier owns all
right, title and interest in and to, or otherwise controls, the Supplier IP.




          (b) Supplier has not, and during the Term and will not, grant any right to any third party
relating to the Supplier IP in a manner, or pursue any other activity, that would otherwise
conflict with the rights granted to Company and Manufacturer hereunder.




          (c) As of the date hereof, Supplier has no actual knowledge that (i) any third party is
infringing any of Supplier IP or misappropriating or using Supplier IP, and (ii) the Supplier IP,
as applied to the Drug Resin Complex or the Product, infringes any third party intellectual
property rights. Supplier has not received any written communication from a third party claiming
that intellectual property rights owned or controlled by such third party would be misappropriated
or infringed by the use of the Supplier IP.




          (d) As of the date hereof, Supplier has not been served with any interference action or
litigation with respect to the Supplier IP, and Supplier has not received any written communication
that expressly threatens interference actions or other litigation before any patent office, court,
or any other governmental entity in any jurisdiction in regard to any of the Supplier IP. Supplier
represents and warrants that as of the date of this Agreement it is not aware of any prior art or
other information that would render any patent under the Supplier IP invalid. Supplier represents
and warrants that as of the date of this Agreement it is not aware of any patent or any other third
party intellectual property right that would be infringed by Supplier in the exercise or practice
of this Agreement.




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          (e) As of the time of release of Drug Resin Complex to Manufacturer in accordance with this
Agreement, all Drug Resin Complex released (i) will conform to the applicable Specifications, and
(ii) will have been manufactured in material accordance with GMP (if applicable) and all applicable
Laws and in accordance with the applicable certificates of analysis.




          (f) Without limiting the generality of the foregoing, Supplier represents and warrants that it
has the right to provide to Manufacturer the Drug Resin Complex and information provided by
Supplier hereunder, and to grant Company and Manufacturer the right to use such Drug Resin Complex
and information for the conduct of Company and Manufacturer’s rights and obligations hereunder.




          (g) Supplier will not use, in any capacity associated with or related to the supply of the
Drug Resin Complex, the services of any persons who have been debarred or who are currently under
investigation for possible debarment under 21 U.S.C. § 335a(a) or any comparable Regulations.
Furthermore, neither Supplier nor, to the knowledge of Supplier, any of its officers, employees, or
consultants has been convicted of an offense under (i) either a federal or state law that is cited
in 21 U.S.C. § 335a as a ground for debarment, denial of approval, or suspension, or (ii) any other
Regulations cited in any comparable regulatory act as a ground for debarment, denial of approval or
suspension.




     8.4 Company’s Representations and Warranties. Company hereby represents and warrants to
Supplier and Manufacturer as follows:



          (a) Company is the owner or has the lawful right to use or grant the right to use any and all
trademarks and trademark rights, trade names and trade name rights, service marks and service mark
rights, service names and service name rights, brand names, copyrights and copyright rights, trade
dress, business and Product names, logos, slogans, other proprietary information and related
documentation, and all pending applications for and registrations of trademarks, service marks and
copyrights that (i) it provides to Manufacturer in connection with the manufacture of the Product,
or (ii) it uses in connection with the marketing, sale or distribution of Product.




          (b) Company will not make any claims in any packaging, labeling, advertising or promotional
material regarding the Product that it knows to be false.




          (c) As of the date hereof, Company has not been served with any interference action or
litigation with respect to the Product and Company has not received any written communication that
expressly threatens interference actions or other litigation before any patent office, court, or
any other governmental entity in any jurisdiction in regard to the Product. Company represents and
warrants that as of the date of this Agreement it is not aware of any prior art or other
information that would render any patent under the Supplier IP or the Manufacturer IP invalid.
Company represents and warrants that as of the date of this Agreement it is not aware of any patent
or any other third party intellectual property right that would be infringed by Company in
fulfilling its obligations under this Agreement.




Page 12 of 24









 








          (d) Company will not use, in any capacity associated with or related to the clinical
development and FDA submission of the Product, the services of any persons who have been debarred
or who are currently under investigation for possible debarment under 21 U.S.C. § 335a(a) or any
comparable Regulations. Furthermore, neither Company nor, to the knowledge of Company, any of its
officers, employees, or consultants has been convicted of an offense under (i) either a federal or
state law that is cited in 21 U.S.C. § 335a as a ground for debarment, denial of approval, or
suspension, or (ii) any other Regulations cited in any comparable regulatory act as a ground for
debarment, denial of approval or suspension.




     9. Intellectual Property.



     9.1 Existing Inventions and Know-How. Ownership of existing inventions and know-how of any
Party or future inventions and know-how of any Party made outside the scope of this Agreement shall
remain the sole property of such Party, subject to any licenses granted in this Agreement.



     9.2 Inventions and Know-How Developed Under this Agreement by a Party. Any and all inventions
(including all results and know-how), whether or not patentable, that is conceived, reduced to
practice, or otherwise developed within the scope of this Agreement solely by a single Party’s
officers, employees, contractors and agents shall be owned solely by such Party along with all
related intellectual property rights (“Sole Inventions”), subject to any licenses granted
in this Agreement.



     9.3 Inventions and Know-How Developed Jointly Under this Agreement. All other inventions
(including all results and know-how), whether or not patentable, that is jointly conceived, reduced
to practice, or otherwise developed by officers, employees, contractors and agents of two or more
Parties under the scope of this Agreement shall be owned jointly by such Parties along with all
related intellectual property rights (“Joint Inventions”).



     9.4 Joint Invention Rights. Patent applications on Joint Inventions may be filed only if the
relevant Parties agree to file jointly on them. If such Parties agree to file for and obtain
patents on Joint Inventions, all expenses incurred therein shall be shared equally, except that the
employer of each inventor, if applicable, will pay the inventor’s compensation. If a patent is
obtained on a Joint Invention, no such joint Party shall transfer its interest in such patent to a
third party unless the other Party agrees to do so. Notwithstanding the foregoing, the Parties
shall be entitled to transfer their respective rights to their respective Affiliates and successors
in interest. Subject to the exclusivity arrangements described in this Agreement, each Party is
free to use and sublicense Joint Inventions to third parties without any further obligations or
accounting to any other Party; provided, however, that nothing in this Section 9.4 gives another
Party any rights with respect to intellectual property that is owned solely by the other Party.



     9.5 Assignments of Inventions. Each Party shall, and shall cause its officers, employees,
contractors and agents to, (a) execute, all documents, including, without limitation, assignments
of inventions and discoveries and all related intellectual property rights, and (b) perform such
acts as may be necessary, useful or convenient to secure or enforce for the other Party statutory
protection including patent, trademark, trade secret or copyright protection within the Territory
for all intellectual property assigned to it pursuant to this Section 9.



Page 13 of 24









 





     9.6 Regulatory Files. Company shall own all regulatory files with respect to the Product
including without limitation regulatory data and documentation prepared by Manufacturer respecting
the manufacture of the Product, including without limitation the [***] filing with the FDA related
to the Product.



     9.7 Manufacturer IP. Manufacturer shall provide the intellectual property necessary for each
Party to perform under this Agreement including all applicable know-how, trade secrets and United
States Patent Application Serial Nos. 11/068,124 and 60/940,956 (the “Manufacturer IP”).



     9.8 License of Manufacturer IP. Subject to the terms of this Agreement, Manufacturer hereby
grants to Company, and Company hereby accepts, an exclusive, irrevocable license, with right to
sublicense, under the Manufacturer IP (a) for performance of Company and Supplier’s respective
rights and obligations under this Agreement related to the Product in the Territory, and (b) to
use, make, have made and otherwise to sell, market and commercialize the Product (as successfully
developed under this Agreement) in the Territory; provided, however, that Company and Supplier
shall only have the right under this Section 9.8 to make or have made such Product by a third-party
manufacturer (i) if Manufacturer suffers an Insolvency Event, (ii) if following Manufacturer’s
receipt of the FDA’s approval of the Manufacturing Site as a GMP manufacturing facility, the FDA
revokes such approval, or (iii) if Manufacturer is unable to manufacture such Product for a period
exceeding ninety (90) days due to Force Majeure or other cause.



     9.9 Supplier IP. Supplier shall provide the intellectual property necessary for each Party to
perform under this Agreement including with respect to its technologies which are the subject of
U.S. Patent Application Nos. 11/225,834, 11/674,921, and 11/674,940 (the “Supplier Patent
Applications”), related know-how and trade secrets (collectively, the “Supplier IP”).



     9.10 License of Supplier IP. Subject to the terms of this Agreement, Supplier hereby grants
to Company and Manufacturer, and Company and Manufacturer hereby accept, an exclusive, irrevocable
license, with right to sublicense, under the Supplier IP (a) for performance of Company and
Manufacturer’s rights and obligations under this Agreement related to the Product in the Territory,
and, and (b) to use, make, have made and otherwise commercialize the Product (as successfully
developed under this Agreement) in the Territory.



     9.11 Protection of Licensed IP. Manufacturer and Supplier may, but are not obligated to seek,
in their respective name and sole expense, appropriate patent protection for its intellectual
property. In the event that Manufacturer or Supplier have not sought patent protection for a
particular feature of their respective intellectual property, the Parties may agree that
Manufacturer or Supplier should apply for protection and Manufacturer or Supplier shall take
reasonable steps to obtain such protection, with the out-of-pocket costs of seeking such protection
being borne equally by the Parties.



     9.12 Section 365(n) of the Bankruptcy Code. All rights and licenses granted under or pursuant
to this Agreement by any Party to the other Parties are, and shall otherwise be deemed





 




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




Page 14 of 24









 









to be, for purposes of Section 365(n) of the United States Bankruptcy Code, 11 U.S.C. Section 101,
et seq. (the “Bankruptcy Code”), licenses of rights to “intellectual property” as defined
under Section 101(56) of the Bankruptcy Code. Each Party further agrees that, in the event that
any proceeding shall be instituted by or against it seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief of composition or it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking an entry of an order for relief or the appointment
of a receiver, trustee or other similar official for it or any substantial part of its property or
it shall take any action to authorize any of the foregoing actions, the other Parties as licensees
shall have the right to retain and enforce their rights and license under this Agreement and shall
retain and may fully exercise all of their respective rights and elections under the Bankruptcy
Code.




     9.13 Further Assurances. 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 any of
the above provisions.



     10. Confidential Information.



     10.1 Except as permitted below, each of the Parties (the “Receiving Party”) shall keep
strictly confidential any information disclosed in writing, orally, visually or in any other manner
by the other Party (the “Providing Party”) or otherwise made available to the Receiving
Party which the Providing Party considers to be and treats as proprietary or confidential
(“Confidential Information”). Confidential Information shall not include information (a)
which is or becomes generally available to the public other than as a result of disclosure thereof
by the Receiving Party; (b) which is lawfully received by the Receiving Party on a nonconfidential
basis from a third party that is not itself under any obligation of confidentiality or
nondisclosure to the Providing Party or any other person with respect to such information; (c)
which by written evidence can be shown by the Receiving Party to have been independently developed
by or for the Receiving Party; (d) which the Receiving Party establishes by competent proof was in
its possession at the time of disclosure by the Providing Party and was not acquired, directly or
indirectly from the Providing Party; or (e) which is required to be disclosed by applicable Laws.



     10.2 Scope of Use. The Receiving Party shall not use any portion of the Confidential
Information outside the scope of this Agreement.



     10.3. Restrictions on Use. The Receiving Party shall not directly or indirectly disclose,
display, provide, transfer or otherwise make available all or any part of the Confidential
Information to any person or entity at any time, unless the Receiving Party has received prior
written permission from the Providing Party. The Receiving Party shall not make copies of the
Confidential Information or any portion thereof. The Receiving Party shall not provide access to
the Confidential Information to third parties, including consultants and independent contractors.
The Receiving Party shall not at any time incorporate all or any portion of the Confidential
Information into any other work, presentation, or product.



     10.4. Return of Information. The Receiving Party shall agree upon request of the Providing
Party to return to the Providing Party all copies of the Confidential Information and all notes,
memoranda or analysis relating thereto. In addition, the Receiving Party shall erase,



Page 15 of 24









 







delete or destroy all notes, documents, electronic mail, magnetic media or other computer
storage, including system backups, which contain any Confidential Information.



     10.5. Compelled Disclosure. In the event that the Receiving Party, or anyone to whom
Confidential Information is transmitted, becomes legally compelled to disclose any of the
Confidential Information, the Receiving Party will provide the Providing Party with prompt notice
so that the Providing Party may 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 Providing Party waives compliance in writing with the
provisions of this Agreement, the Receiving Party or its representatives will furnish only that
portion of the Confidential Information that is legally required to be disclosed (by judicial or
similar process that would subject the Receiving Party or its representatives to contempt or
similar penalty for failure to disclose) and will exercise the Receiving Party’s or its
representatives’ best efforts to obtain reliable assurance that confidential treatment will be
afforded to the Confidential Information.



     10.6. Responsibility for Breach by Representatives. The Receiving Party shall be responsible
for any breach of this Agreement by its representatives.



     10.7 Survival. The confidentiality and nondisclosure obligations of this Section 10 shall
survive the expiration or termination of this Agreement and remain in effect for a period of five
(5) years following the expiration or termination of this Agreement.



     11. Term/Termination.



     11.1 Unless sooner terminated pursuant to the terms hereof, this Agreement shall remain in
full force and effect for fifteen (15) years after approval of the [***] (the “Term”).
This Agreement may be extended beyond the Term for successive five (5) year period(s)
(a “Successive Term”) if, at least one hundred eighty (180) days prior to the expiration of
the Term or the expiration of a Successive Term, the Parties agree, in writing, that this Agreement
will be extended for a Successive Term.



     11.2 This Agreement may be terminated by a Party hereto with respect to any other Party if:
(a) such 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 (b) such 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 (c) any order, judgment or decree is entered against such 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 (d) such other Party hereto fails to remove an
involuntary petition in bankruptcy filed against it within forty-five (45) days of the filing
thereof; or (e) any order for relief is entered against such other Party hereto under the
Bankruptcy Code





 




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




Page 16 of 24









 









(each, an “Insolvency Event”). Any such termination shall not affect the rights and
obligations of the other Party hereto that is not subject to such Insolvency Event.




     11.3 This Agreement may be terminated immediately by written notice of any Party to the other
Parties hereto if the Product is not commercially launched within the Territory by the fifth
anniversary of this Agreement. Additionally, if following a failed [***] study for the Product or
Company’s receipt of an FDA rejection of [***] the Product, Company decides not to proceed with
additional work or studies, Company may by written notice to Manufacturer and Supplier immediately
terminate this Agreement.



     11.4 Effects of Termination. Termination or expiration of this Agreement for any reason shall
(a) be without prejudice to any rights that shall have accrued to the benefit of each Party prior
to the effective date of such termination or expiration, including without limitation rights to be
paid any amounts owed to such Party hereunder as of such date, and (b) not relieve either Party
from obligations that are expressly indicated to survive termination or expiration of this
Agreement under Section 10.7.



     12. Dispute Resolution. In the event that a Party to this Agreement perceives the existence
of a dispute with any Party or the other Parties to this Agreement concerning any right or duty
provided for herein, the President, Chief Executive Officer or designee with authority to resolve
the dispute completely of each Party will, as soon as practicable, confer in an attempt to resolve
the dispute.



     13. Indemnification.



     13.1 Company hereby indemnifies and holds Manufacturer and Supplier harmless from and against
any and all direct costs including actions, suits, proceedings, claims, losses, liabilities,
damages and expenses (“Direct Costs”) arising out of or in connection with:



          (a) any breach by Company of any term, provision, covenant, agreement, representation or
warranty contained herein; and




          (b) the sale, distribution or marketing of Product by Company or the administration or use
thereof.




     13.2 Manufacturer hereby indemnifies and holds Company and Supplier harmless from and against
any and all Direct Costs arising out of or in connection with any breach by Manufacturer of any
term, provision, covenant, agreement, representation or warranty contained herein.



     13.3 Supplier hereby indemnifies and holds Manufacturer and Company harmless from and against
any and all Direct Costs arising out of or in connection with any breach by Supplier of any term,
provision, covenant, agreement, representation or warranty contained herein.





 




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




Page 17 of 24









 










     13.4 Notwithstanding Sections 13.1, 13.2 and 13.3, the indemnification obligations under those
Sections shall not apply in each case to the extent any particular Loss is a direct result of (i)
the negligence or intentional misconduct of the Party seeking indemnification or its
representatives, or (ii) any matter for which the Party seeking indemnification is obligated to
provide indemnification under Section 13.1, 13.2 or 13.3 to the other Party.



     13.5 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 and increases the liability of the indemnifying Party. 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 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, 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.



     13.6 Notwithstanding the Parties’ respective rights to indemnification under this Section 13,
no Party, nor any of its Affiliates or their respective directors, officers, employees or agents
shall have any liability to any other Party for any special, incidental, indirect or consequential
damages, including, but not limited to the loss of opportunity, use, revenue or profit, in
connection with or arising out of this Agreement, even if such damages were foreseeable.



     14. 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 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 another 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



Page 18 of 24









 







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 Manufacturer, to:	 	NEOS Therapeutics, Inc.
	 
	 	 	 	2940 N. Hwy. 360, Suite 100
	 
	 	 	 	Grand Prairie, Texas  75050
	 
	 	 	 	 
	 
	 	If to Supplier, to:	 	Coating Place, Inc.
	 
	 	 	 	PO Box 930310
	 
	 	 	 	Verona, WI 53593
	 
	 	 	 	 
	 
	 	If to Company, to:	 	Cornerstone BioPharma, Inc.
	 
	 	 	 	2000 Regency Parkway, Suite 255
	 
	 	 	 	Cary, North Carolina  27511
	 
	 	 	 	Attention:  President






     15. Relationship between the Parties. The Parties acknowledge that they are, and shall at all
times remain, independent contractors. The Parties and their agents, servants, and employees shall
under no circumstances be deemed agents or representatives of each other for any purpose
whatsoever, unless otherwise agreed to in writing, and the Parties 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.



     16. 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.



     17. Assignment. This Agreement and the rights and obligations of the Parties hereunder are
freely assignable by each of the Parties; provided, however, that new assignee shall be required to
accept all the rights and obligations of the assigning Party under this Agreement in a writing
delivered to each of the other two Parties hereto.



     18. 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.



Page 19 of 24









 





     19. Governing Law. All matters arising out of or relating to this Agreement and the
transactions it contemplates shall be governed, construed and enforced in accordance with the laws
of the State of New York, without regard to conflicts-of-laws principles that would require the
application of any other law.



     20. 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.



     21. Entire Agreement; Amendment. This Agreement, the Product Development Plan and the
purchase orders issued in connection herewith and consistent herewith embody the entire agreement
of the Parties on the subject matter herein. No amendment or modification of this Agreement shall
be valid or binding unless made in writing and signed by the Parties hereto. All prior
understandings and agreements relating to the subject matter of this Agreement are hereby expressly
terminated.



     22. Force Majeure. No Party shall be liable for any failure to perform or any delay in
performing its obligations hereunder, when such failure or delay is due to Force Majeure and
without the fault or negligence of the Party so failing or delaying. For purposes of this
Agreement, “Force Majeure” is defined as acts of God; newly interpreted or issued Laws of
any government; war; civil commotion; destruction of production facilities or materials by fire,
flood, earthquake, explosion or storm; labor disturbances; epidemic; failure of public utilities or
common carriers; and other similar extraordinary unforeseen events that are beyond the control of
the affected Party, but shall not include general market or economic conditions and other ordinary
risks of doing business. If, for any of the reasons set forth in this Section 21, any Party shall
be unable to perform its obligations hereunder, it shall immediately notify the other Parties of
such inability and the specific causes thereof and of the period for which such inability is
expected to continue. The Party giving such notice shall thereupon be excused from such of its
obligations under this Agreement as it is thereby disabled from performing during the pendency of
such causes, provided that it uses commercially reasonable efforts to overcome such causes.



     23. Insurance.



     23.1 Product Liability. Company shall, throughout the Term, obtain and maintain at its own
cost and expense from a qualified insurance company with a Moody’s Rating of B+ or better, standard
Product Liability Insurance naming Manufacturer, Supplier, and each of its officers, directors,
employees, agents, and shareholders as additional insureds. 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 Drug Resin Complex used in connection therewith or any use
thereof.



     23.2 Other Insurance. Each Party shall, throughout the Term, obtain and maintain at its own
cost and expense from a qualified insurance company sufficient insurance of the following types to
insure its obligations under this Agreement, including, but not limited to: (i) worker’s
compensation insurance in accordance with the statutory requirements of each state in which
services related to Product or Drug Resin Complex are to be performed; (ii) employer’s



Page 20 of 24









 







liability insurance; and (iii) comprehensive general liability insurance, including
contractual liability. Upon request, a Party shall provide any requesting Party with an original
signed certificate of insurance evidencing all coverage herein required within thirty (30) days
after such request. The certificate must provide that thirty (30) days prior written notice of
cancellation or material change in insurance coverage will be provided to the other Parties hereto.



     23.3 Insurance Primary. An insurer who is otherwise obligated to pay a claim of a Party is
not relieved of the responsibility with respect to such claim and has no subrogation rights with
respect to the claim, in either instance, solely by virtue of the indemnification provisions of
Section 13. Upon payment of an indemnity claim, a Party that provides indemnification hereunder is
subrogated to the rights of an indemnified Party against any insurer otherwise obligated to pay for
such Direct Costs.



     24. Public Announcements. No Party shall use any other Party’s name in any press release,
publicity, advertising, or other disclosure without such other Party’s prior written consent. Any
public announcements or similar publicity with respect to this Agreement shall be at such time and
in such manner as the Parties shall mutually agree, provided that nothing herein shall prevent any
Party from, upon notice to and opportunity to review and comment by the other Parties, making such
public announcements as such Party’s legal obligations require.



     25. Counterparts. This Agreement may be signed in counterparts, each and every one of which
shall be deemed an original, notwithstanding variations in format or file designation which may
result from the electronic transmission, storage and printing of copies of this Agreement from
separate computers or printers. The exchange of copies of this Agreement or amendments thereto and
of signature pages by facsimile transmission or by email transmission in portable document format
(PDF), or similar format, shall constitute effective execution and delivery of such instrument(s)
as to the Parties and may be used in lieu of the original Agreement or amendment for all purposes.
Signatures of the Parties transmitted by facsimile or by email transmission in portable document
format (PDF), or similar format, shall be deemed to be their original signatures for all purposes.



[signature page follows]




Page 21 of 24









 








[Signature Page to Development and Manufacturing Agreement]




     IN WITNESS WHEREOF, Company, Manufacturer and Supplier have each caused this Agreement to be
executed by its duly authorized officer as of the date first shown above.



	 	 	 	 	 
	 	 	COMPANY:
	 
	 	 	 	 
	 	 	Cornerstone BioPharma, Inc.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Craig Collard
	 

	 	 	 	 
	 

	 	Name
	 	Craig Collard
	 

	 	Title:
	 	CEO
	 
	 	 	 	 
	 	 	MANUFACTURER:
	 
	 	 	 	 
	 	 	NEOS Therapeutics, L.P.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Mark Tengle
	 

	 	 	 	 
	 

	 	Name
	 	Mark Tengle
	 

	 	Title:
	 	President
	 
	 	 	 	 
	 	 	SUPPLIER:
	 
	 	 	 	 
	 	 	Coating Place, Inc.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Tim A Breunig
	 

	 	 	 	 
	 

	 	Name
	 	Tim A Breunig
	 

	 	Title:
	 	President






 









 






EXHIBIT A




PRODUCT DEVELOPMENT PLAN




 









 





EXHIBIT B




SPECIFICATIONS